The new fund aims to increase investor access to harder-to-reach fixed income sectors
NEW YORK, January 30, 2025--(BUSINESS WIRE)--Today, BlackRock expanded its active ETF platform with the launch of the iShares BBB-B CLO Active ETF (Nasdaq: BCLO). The ETF leverages the expertise of BlackRock’s CLO team to provide access to a hard-to-reach asset class in the convenience and efficiency of an ETF.
"CLOs present one of the most compelling opportunities in fixed income today, offering lower correlation to traditional fixed income assets and the potential for higher yields," said Saffet Ozbalci, Global Head of Structured Credit at BlackRock. "In the convenience of an ETF, BCLO aims to generate income and capture alpha opportunities, driven by the wide dispersion across CLOs."
BCLO aims to deliver capital preservation and current income by investing primarily in a portfolio composed of CLOs rated from BBB+ to B-. The Fund is managed by BlackRock’s dedicated CLO investment team that manages over $30 billion in assets globally1, including the $680 million iShares AAA CLO Active ETF (CLOA).2
Fund Name
Ticker
Portfolio Managers
Total Expense Ratio
Benchmark
iShares BBB-B CLO Active ETF
BCLO
Saffet Ozbalci, Jason Choi, Nidhi Patel
0.45%
JP Morgan CLO High Quality Mezzanine Index
Furthers BlackRock’s commitment to active ETFs
BlackRock projects that global active ETF assets under management will surge to $4 trillion by 2030 — a more than four-fold increase in about six years.3
Advisors are continuing to use active ETFs as building blocks in model portfolios, with fixed income ETFs making up the largest segment of active ETF model usage.4 In addition, active ETFs can help enable portfolio managers to react to changing market conditions, providing flexibility to adjust their holdings as they seek to outperform benchmarks or target certain investment outcomes.
"Active ETFs have earned a place in portfolios by offering investors a broader range of strategies and differentiated returns through the convenience of the ETF wrapper," said Steve Laipply, Global Co-Head of iShares Fixed Income ETFs for BlackRock. "By providing access to BBB-B rated CLOs, BCLO can help investors modulate credit quality and income profiles based on the evolving macro environment."
BlackRock manages $37 billion in assets across over 40 active ETFs in the U.S.5
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 1500+ 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.
Important Information
Carefully consider the Funds' investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds' 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.
While the iShares BBB-B CLO Active ETF (the "Fund") will invest primarily in CLO tranches that are rated BBB -B, such ratings do not constitute a guarantee of credit quality and may be downgraded. In stressed market conditions, it is possible that even senior CLO debt tranches could experience losses due to actual or perceived defaults, and rating downgrades and forced liquidations of underlying collateral. CLO securities may be less liquid than other types of securities and there is no guarantee that an active secondary market will exist or be maintained. The CLO securities in which the Fund invests are managed by investment advisers independent of BlackRock Fund Advisors, the Fund’s investment manager, and an affiliate of BlackRock Investments, LLC. Any adverse developments with respect to the CLO manager may adversely impact the CLO securities held within the Fund.
The Fund is actively managed and does not seek to replicate the performance of a specified index. The Fund may have a higher portfolio turnover than funds that seek to replicate the performance of an index.
Fixed income risks include interest-rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in the value of debt securities. Credit risk refers to the possibility that the debt issuer will not be able to make principal and interest payments.
Securities with floating or variable interest rates may decline in value if their coupon rates do not keep pace with comparable market interest rates. The Fund’s income may decline when interest rates fall because most of the debt instruments held by the Fund will have floating or variable rates
This information should not be relied upon as research, investment advice, or a recommendation regarding any products, strategies, or any security in particular. This material is strictly for illustrative, educational, or informational purposes and is subject to change.
The iShares and BlackRock Funds are distributed by BlackRock Investments, LLC (together with its affiliates, "BlackRock").
_______________________________________ 1 Source: BlackRock, as of December 31, 2024 2 Source: BlackRock, as of January 23, 2025. 3 Source: BlackRock, as of March 31, 2024. Estimates are for global figures and include 2027 and 2030 scenario calculations based on proprietary research by BlackRock Global Product Solutions. Subject to change. The figures are for illustrative purposes only and there is no guarantee the projections will come to pass 4 Based on the number of model providers that use active fixed income ETFs (49) vs. the number that use active equity ETFs (38) in the Morningstar Categories Conservative Allocation, Moderately Conservative Allocation, Moderate Allocation, Moderately Aggressive Allocation, and Aggressive Allocation as of June 30, 2024. 5 BlackRock, as of January 23, 2025.
