The iShares Large Cap Accelerated ETF (TWOX) aims to boost return potential up to an approximate cap of 5.82%
Simplifies access to a sophisticated accelerated return strategy through the ETF wrapper
NEW YORK, January 16, 2025--(BUSINESS WIRE)--The outcome-oriented ETFs space has seen exponential growth from $5bn to over $160bn in the past five years as more investors seek differentiated outcomes through the liquidity and transparency of ETFs.1 This market has also witnessed significant progress in product innovation. Today, BlackRock expands its outcome-oriented product suite with the launch of the iShares Large Cap Accelerated ETF (CBOE:TWOX) to help investors seek enhanced returns up to an approximate cap ("the cap") as represented by the price return of the underlying ETF, the iShares Core S&P 500 ETF (NYSE: IVV).
As the first accelerated return-focused strategy in the firm’s outcome-oriented ETF suite, TWOX is designed to help investors seek better returns in a moderate growth environment and offer a differentiated source of returns given its unique structure.
TWOX combines an underlying ETF with options to create an "acceleration zone" for higher return potential up to a certain point if held over the entire outcome period. This unique structure enables TWOX to seek to offer the highest caps and the lowest fees within the accelerated ETF category.
The new ETF employs an options strategy that seeks to provide investors approximately twice the upside price return (the accelerated return) of IVV up to an approximate cap, while aiming to approximately track the downside price return of IVV when held for an entire outcome period (a calendar quarter). Given the launch date of January 16, 2025, the first outcome period is shorter than a full quarter outcome period. The approximate cap for TWOX’s first outcome period is 5.82% net of management fees. The outcome period resets quarterly at which time the cap will change according to market conditions.
As uncertainty associated with trade and international policy could lead to slower growth, TWOX offers investors a new tool for targeting enhanced return and clearer outcomes.
"A moderating market could be a hurdle for investors seeking attractive returns. As investors increasingly turn to precision tools to express their views on the equity market, they now have products ranging from protection to enhanced return to do so," said Rachel Aguirre, Head of U.S. iShares Products at BlackRock. "TWOX represents the latest step in our product innovation journey and our ambition in the outcome-oriented ETF space."
Fund Name
Ticker
Expense Ratio*
Cap At Launch
iShares Large Cap Accelerated ETF
TWOX
0.53%/0.50%
5.82%
*The gross expense ratio is 0.53% and the net expense ratio is 0.50%. BlackRock Fund Advisors ("BFA"), the investment advisor to the Fund and affiliate of BlackRock investments, LLC has a contractual fee waiver in effect until 11/30/30. Please see the Fund’s prospectus for more details.
About BlackRock
BlackRock’s purpose is to help more and more people experience financial well-being. As a fiduciary to investors and a leading provider of financial technology, we help millions of people build savings that serve them throughout their lives by making investing easier and more affordable. For additional information on BlackRock, please visit www.blackrock.com/corporate | Twitter: @blackrock | LinkedIn: www.linkedin.com/company/blackrock
About iShares
iShares unlocks opportunity across markets to meet the evolving needs of investors. With more than twenty years of experience, a global line-up of over 1,500+ exchange-traded funds (ETFs) and $4.2 trillion in assets under management as of December 31, 2024, iShares continues to drive progress for the financial industry. iShares funds are powered by the expert portfolio and risk management of BlackRock.
Carefully consider the Fund’s investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Fund’s prospectuses or, if available, the summary prospectuses which may be obtained by visiting www.iShares.com or www.blackrock.com. Read the prospectus carefully before investing.
Investing involves risk, including possible loss of principal.
There can be no guarantee that the Accelerated Funds will be successful in their investment strategy, and investors may lose some or all of their money. The outcomes are intended to be realized only by investors who hold Fund shares at the outset of the Outcome Period (as defined in the prospectus) and continue to hold the shares through the end of the Outcome Period. An investor who buys Fund shares after the start of an Outcome Period may experience lesser returns and may be exposed to greater losses than that of the Underlying ETF. An investor who sells Fund shares before the end of an Outcome Period may not fully realize the Accelerated Return. The Accelerated Funds do not provide a buffer, floor or other protection against losses experienced by the Underlying ETF. The Funds are subject to an Approximate Cap (the "Cap"), whose level depends on prevailing market conditions at the time the Cap is set at the beginning of the Outcome Period and may vary, sometimes significantly, from one Outcome Period to the next. The Accelerated Funds will not participate in gains of the Underlying ETF that are above the Cap.
Accelerated ETFs invest in FLEX Options that reference the Underlying ETF. FLEX Options are subject to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation, and they may be less liquid than other instruments. The value of FLEX Options may be affected by interest rate changes, dividends, actual and implied volatility levels of the Underlying ETF’s share price, and the remaining time until the FLEX Options expire. Because of these factors, the Funds' NAV may not increase or decrease at the same rate as the Underlying ETF’s share price.
Funds that concentrate investments in specific industries, sectors, markets or asset classes may underperform or be more volatile than other industries, sectors, markets or asset classes and the general securities market.
Actively managed funds do not seek to replicate the performance of a specified index, may have higher portfolio turnover, and may charge higher fees than index funds due to increased trading and research expenses.
The strategies discussed are strictly for illustrative and educational purposes and are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. There is no guarantee that any strategies discussed will be effective. The information presented does not take into consideration commissions, tax implications, or other transactions costs, which may significantly affect the economic consequences of a given strategy or investment decision.
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by S&P Dow Jones Indices LLC, New York Stock Exchange LLC (NYSE) or Cboe Global Markets, Inc. (Cboe), which do not make any representation regarding the advisability of investing in the Funds.
The Funds are distributed by BlackRock Investments, LLC (together with its affiliates, "BlackRock").
