BlackRock launches actively managed ‘Future of Finance’ ETF

Aug 24th, 2022 | By | Category: Equities

BlackRock has launched a new actively managed thematic equity ETF targeting companies delivering innovative technologies used in the financial services industry.

BlackRock launches actively managed ‘Future of Finance’ ETF

The ETF targets innovative companies within the financial services industry.

The BlackRock Future Financial and Technology ETF (BPAY US) has been listed on NYSE Arca with an expense ratio of 0.70%.

The fund is managed by BlackRock’s Fundamental Equity (FE) franchise with day-to-day operations led by Vasco Moreno who has over two decades of financial industry experience including seven years at BlackRock.

The ETF invests in US-listed equities, including American Depository Receipts, of companies from across the market capitalization spectrum. Eligible constituents are sourced from a diverse range of financial services segments including IT services, software, banking, thrifts and mortgage finance, diversified financial services, capital markets, consumer finance, and insurance.

Firms involved in the burgeoning blockchain and digital assets segment may also be included, although the fund will not invest in cryptocurrencies directly.

According to the ETF’s prospectus, BlackRock may manage the fund defensively during volatile market conditions including shifting all of the ETF’s assets into cash or cash equivalents such as short-term US Treasuries.

As of 17 August, the portfolio contained 37 holdings. Notable positions included Charles Schwab (5.9%), SVB Financial (5.4%), Fidelity (5.1%), Signature Bank (5.0%), Global Payments (4.9%), PayPal (4.6%), Fiserv (4.5%), American Express (3.9%), Network International (3.7%), and Kaspi Bank (3.6%).

Vasco Moreno said: “In the United States alone, the use of fintech increased by 30% during the pandemic. Through BPAY, investors are granted direct access to global companies that are driving the next leg of growth and leading the digital revolution in areas across the entire value chain such as payment systems, banking, investments, lending, and insurance and software.”

Jay Jacobs, US Head of Thematics and Active Equity ETFs at BlackRock, added: “With a long history in thematic investing, BlackRock is committed to providing access to forward-looking investment themes via targeted, transparent, and cost-effective vehicles. BPAY is representative of the firm’s deep fundamental research expertise, strong active and index platforms, and focus on innovation.”

BPAY is BlackRock’s sixth actively managed thematic ETF and the fifth from the firm’s FE franchise. The other ETFs in the suite target disruptive technologies, technological innovators, healthcare technologies, and the environmental economy.

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