First ETFs Managed by BlackRock’s Strategic Equity and High Yield Teams
NEW YORK, June 18, 2024--(BUSINESS WIRE)--Today, BlackRock expanded access to its alpha-seeking expertise with the launch of the BlackRock Long-Term U.S. Equity ETF (Nasdaq: BELT) and the BlackRock High Yield ETF (Nasdaq: BRHY). These launches reinforce BlackRock’s commitment to delivering liquidity, tax efficiency, and alpha in the convenience of an ETF.
"Active ETFs are becoming an integral part of investor portfolios around the world, with financial advisors increasingly incorporating them into their models-based practice," said Jessica Tan, Head of Americas for Global Product Solutions at BlackRock. "As a fiduciary, we’re listening to our clients and creating new products and capabilities to meet their needs. We are excited for the journey ahead and look forward to decades of innovation to come."
Evolving market conditions and changes in distribution dynamics have catalyzed the growth of active ETFs. For example, registered investment advisors are using active ETFs as building blocks in model portfolios, accounting for nearly 50% of all active ETF assets, up from 31% in 2019.1 In addition, active ETFs 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.
Alpha-seeking expertise, accessible through ETFs
As adoption continues to grow, BlackRock has nearly doubled its number of active ETFs in the past year, managing $25 billion in assets under management (AUM) across 40 active ETFs in the U.S.2
BlackRock has a strong track record of delivering alpha, with 93% and 79% of BlackRock’s actively managed taxable fixed income and fundamental equity AUM, respectively, outperforming the benchmark or peer median over the last five years.3 In addition, in the first quarter of 2024, clients entrusted BlackRock with $15 billion of active net inflows globally, generating positive active flows in 17 of 21 quarters since 2019.4
Bloomberg U.S. Corporate High Yield 2% Issuer Capped Index
David Delbos
Mitchell Garfin
BlackRock Long-Term U.S. Equity ETF (BELT)
BELT seeks long-term growth by investing in a high conviction portfolio of U.S. equities. The investment team focuses on a company’s ability to sustain high returns, its reinvestment opportunity, and its ability to differentiate itself from the competition over the long-term. This fundamentally driven investment process results in a concentrated portfolio of 20 to 25 positions that the investment team believes can compound growth in a way that is underappreciated by the market.
"To generate compelling returns in public equities, we believe a long-term approach is required," said Alister Hibbert, Head of BlackRock's Strategic Equity Team and Fundamental Equity Alpha Manager Hall of Fame. "True business value is unlocked over years, not quarters; and companies that can deliver high returns over time are often undervalued by the market today. A high-conviction strategy like BELT is essential to helping investors capture this significant alpha opportunity."
Managed by Alister Hibbert and Michael Constantis, BELT benefits from the global expertise of BlackRock’s $238 billion Fundamental Equities platform.5 The portfolio managers also run the BlackRock Unconstrained Equity Fund.
BlackRock High Yield ETF (BRHY)
Managed by David Delbos and Mitchell Garfin, BRHY has the same investment objective, benchmark, and portfolio managers as the BlackRock High Yield Fund. The Fund aims to maximize total return by investing primarily in non-investment grade bonds with maturities of 10 years or less. BRHY leverages the scale of BlackRock’s $2.8 trillion Fixed Income platform, providing clients with unparalleled market access.6
"A nimble investment approach is essential to navigating today’s shifting credit conditions," said David Delbos, Co-Head of U.S. Leveraged Finance at BlackRock. "By delivering alpha opportunities through the ETF wrapper, we aim to capture the upside in rallying markets while protecting assets when high yield markets decline."
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.
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.
Alpha is a measure of performance on a risk-adjusted basis. Alpha takes the volatility (price risk) of a mutual fund and compares its risk-adjusted performance to a benchmark index. The excess return of the fund relative to the return of the benchmark index is a fund's alpha.
Fixed income risks include interest-rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in bond values. Credit risk refers to the possibility that the bond issuer will not be able to make principal and interest payments. Non-investment-grade debt securities (high-yield/junk bonds) may be subject to greater market fluctuations, risk of default or loss of income and principal than higher-rated securities.
Actively managed funds do not seek to replicate the performance of a specified index. Actively managed funds may have higher portfolio turnover than index funds. Buying and selling shares of ETFs may result in brokerage commissions.
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. This material does not constitute any specific legal, tax or accounting advice. Please consult with qualified professionals for this type of advice.
The BlackRock Funds are not sponsored, endorsed, issued, sold or promoted by Bloomberg or S&P Dow Jones Indices LLC. Neither of these companies make any representation regarding the advisability of investing in the Funds. BlackRock is not affiliated with the companies listed above.
The iShares and BlackRock Funds are distributed by BlackRock Investments, LLC (together with its affiliates, "BlackRock").
____________________ 1 Source: Broadridge Global Market Intelligence as of Dec. 31, 2023. In 2023, Registered Investment Advisors in the U.S. had total net assets in active ETFs of $233.6 billion, or about 48% of the total industry net assets of active ETFs, the largest percentage out of any other group, including banks, broker-dealers, discount platforms, and wirehouses. 2 BlackRock as of June 18, 2024 3 BlackRock Q1 2024 Earnings, as of March 31, 2024. Past performance is not indicative of future results. For more information, see page 2 of BlackRock’s Q1-24 Earnings Release. 4 BlackRock Q1 2024 Earnings, as of March 31, 2024. 5 BlackRock, as of March 2024 6 BlackRock, as of March 2024
