BlackRock makes active ETF debut in Europe

Apr 3rd, 2024 | By | Category: ETF and Index News

BlackRock has unveiled its first actively managed ETFs in Europe with the introduction of two income-enhanced equity funds.

Jane Sloan, EMEA Head of Global Product Solutions at BlackRock

Jane Sloan, EMEA Head of Global Product Solutions at BlackRock.

The iShares World Equity High Income UCITS ETF (WINC) and iShares US Equity High Income UCITS ETF (INCU) have been listed on London Stock Exchange in pound sterling, on Xetra in euros, and on Euronext Amsterdam in US dollars.

WINC and INCU deliver access to ESG-considered portfolios of primarily dividend-paying stocks from global developed or US equity markets, respectively, while also utilizing options-based overlays to generate additional yield.

Administered by BlackRock Systematic, a team that boasts over three decades of proficiency in harnessing data-driven insights, the funds seek a combination of current income and capital growth while also maintaining volatility profiles that are lower than their respective reference benchmarks.

BlackRock’s systematic stock-picking process combines data analysis and machine learning, as well as human oversight, to identify companies that appear mispriced by the market. Each portfolio is carefully curated to neutralize style and sector biases and control for incremental risk.

BlackRock also incorporates baseline ESG criteria, removing firms operating in certain controversial industries, as well as constructing the portfolios to deliver lower carbon footprints compared to their respective benchmarks.

To generate additional income, each ETF will opportunistically sell call options on mainstream equity indices. Both WINC and INCU will typically sell call options on the S&P 500, while WINC may also sell call options on the FTSE 100, Euro Stoxx 50, and Nikkei.

Each ETF comes with an expense ratio of 0.35% and is classified as an Article 8 product under the European Union’s Sustainable Finance Disclosure Regulation (SFDR).

Commenting on the new listings, Jane Sloan, EMEA Head of Global Product Solutions at BlackRock, said: “Our clients’ business models in Europe are rapidly changing – a shift to centralized investment propositions, a focus on whole portfolio outcomes, a rise in digital wealth platforms, a new market regime – all mean our clients require a broader set of investment strategies across index and active, including the wrappers they’re delivered in. We are excited to bring active ETF strategies to Europe, creating an important new avenue of choice and further access to investing.”

Tags: , , , , , , , ,

Leave a Comment