BlackRock expands its arsenal of active ETFs

What is happening here?

BlackRock, the largest in the world active manager, just launched two new actively managed exchange-traded funds (ETFs), strengthening its $2.8 trillion ETF portfolio.

What does that mean?

BlackRock’s ETF lineup is already formidable, with over 400 ETFs under its belt. The introduction of the BlackRock Long-Term US Equity ETF and the BlackRock High Yield ETF signals the company’s intention to offer more targeted investment options. The stock ETF focuses on 20 to 24 high-performing stocks like Intuitive Surgical and Chipotle Mexican Grill, focusing on companies that generate consistent cash flow. Meanwhile, the high yield bind The ETF will primarily invest in bonds rated BB to CCC, but will also venture into bank loans and investment grade bonds. These products are aimed at investors looking for targeted and flexible investments, with active ETFs – now numbering 40 for BlackRock – constituting a large and growing part of their offering.

Why should I care?

For the markets: An increase orient yourself in active management.

Actively managed ETFs are becoming a big trend. This year, they accounted for about 85% of new ETF launches and nearly a third of all capital flows in the United States, according to Goldman Sachs Asset Management. BlackRock, which owns $25 billion in active ETFs, is tapping into this growing market to attract more investors looking for actively managed solutions rather than passive investing.

The big picture: A strategic change.

These new ETFs are managed by the same teams that execute similar strategies in mutual funds, making them a seamless addition for BlackRock. And with the growing shift toward ETFs in the investing world, BlackRock’s expansion is a nod to broader market trends that favor more diversified, actively managed investment offerings.

Source