The Invesco International Developed Dynamic Multifactor ETF applies a proprietary strategy to investing in non-U.S. companies. Invesco starts with a FTSE index of large- and mid-cap stocks, then assesses the prevailing economic environment and market conditions, and then scores companies based on the factors that are most relevant given the overall outlook. Invesco looks at economic and market barometers such as consumer sentiment, construction activity, manufacturing gauges and labor market conditions to determine whether the economy is expanding, slowing, contracting or recovering, and then scores stocks accordingly. During recovery or expansion, the fund targets company size and value, while during a slowdown or contraction the fund focuses on stocks with healthier balance sheets and reduced susceptibility to market swings. In both expanding or contracting conditions, the fund also targets momentum stocks. The methodology excludes stocks whose multi-factor score falls below certain relative thresholds. The remaining stocks are weighted based on both the multi-factor score and the company’s weight in the baseline index. To prevent concentration, individual company’s are capped at 5 percent of the portfolio. Money managers have long recognized that certain factors, when deployed during certain market conditions, consistently reward investors. Factor ETFs have proliferated in recent years and there are many active and passive ETF options that target different factors. Some funds combine factors while others target a single factor. It’s important to note that IMFL’s baseline index includes South Korea among developed markets, whereas other indices classify the country as an emerging market. Investors who mix and match funds from different providers should make sure they’re not unintentionally overweighting or underweighting South Korea. Investors should also note that IMFL owns a significantly narrower universe of companies than broadly diversified plain-vanilla international equity ETFs like the ultra-low cost options from iShares and Vanguard. For investors looking for a factor-based approach to international investing, IMFL could be a good complement to a core portfolio allocation. However, IMFL would not be a good fit to replace a core position due to the fund’s relatively narrow holdings. The fund’s fees are reasonable for an international multi-factor fund, but they are higher than competing plain-vanilla international equity funds. Investors should compare price, performance and portfolio against other developed market ETFs, both plain-vanilla and factor strategies.