BlackRock has launched two new actively managed ETFs on NYSE Arca providing exposure to portfolios of non-core fixed income securities and US large-cap value stocks.
Rachel Aguirre, Head of US iShares Product at BlackRock.
Rachel Aguirre, Head of US iShares Product at BlackRock, commented: “BlackRock has a strong foundation in active ETFs with $13 billion in assets under management across 20 ETFs.
“Today’s launches broaden BlackRock’s active ETF line-up from specialized exposures to active building blocks for the core of investors’ portfolios, opening an important new avenue of choice for clients who no longer have to decide between active management and ETFs.”
The ETFs
The BlackRock Flexible Income ETF (BINC US) leverages the scale of BlackRock’s $2.7 trillion Fixed Income platform in a bid to beat the benchmark Bloomberg US Universal Index.
Designed to complement core bond exposures, the fund aims to deliver long-term income with a secondary focus on capital appreciation by primarily allocating to harder-to-reach fixed income sectors such as high yield bonds, emerging markets debt, and securitized assets.
The strategy is designed for more risk-tolerant investors with only 20% of the portfolio being allocated to investment-grade securities including corporate bonds and US Treasuries.
The fund targets securities at the front end of the yield curve, maintaining a weighted average maturity between one and five years.
The ETF comes with an expense ratio of 0.40%.
Commenting on the fund’s investment strategy, Rick Rieder, CIO of Global Fixed Income at BlackRock, said: “Our core approach is simple: make a little bit of money a lot of times. By staying active, agile, and well-diversified, the BlackRock Flexible Income ETF aims to capture historic opportunities across fixed income markets whenever and wherever they become available.”
The BlackRock Large Cap Value ETF (BLCV US), meanwhile, harnesses the expertise of BlackRock’s $220 billion Fundamental Equities platform as it seeks to outperform the benchmark Russell 1000 Value Index.
The fund may invest in common stock, preferred stock, or convertible securities issued by companies within the market capitalization range of the Russell 1000 Index. Up to 25% of the portfolio may be allocated to non-US companies.
When selecting constituents, BlackRock places particular emphasis on companies with below-average price/earnings ratios that may pay above-average dividends, delivering two potential sources of return.
The ETF comes with an expense ratio of 0.55%.
Antonio DeSpirito, Global CIO of Fundamental Equities at BlackRock, commented: “Active investment management is essential to navigating today’s market volatility. By seeking alpha through the ETF wrapper, we can build liquid and transparent portfolios while digging deep in an effort to uncover investment winners for our clients.”