BlackRock has listed two actively managed ETFs on the New York Stock Exchange. The BlackRock Large Cap Value ETF (NYSE Arca: BLCV) invests in large-cap U.S. equities that exhibit value characteristics. Meanwhile, the BlackRock Flexible Income ETF (NYSE Arca: BINC) targets debt and income-producing securities.
BLCV seeks to maximize total return by investing in U.S. equities typically found in the Russell 1000 Value Index. It invests in companies thought to be undervalued that provide true value exposure. Tony DeSpirito, global CIO of fundamental equities, will be lead manager of the fund.
BINC aims to deliver long-term income by primarily allocating to harder-to-reach fixed income sectors, such as high yield, emerging markets debt, and securitized assets. The fund, managed by BlackRock’s CIO of global fixed income Rick Rieder, is designed to complement core bond exposures.
Dispersion in fixed income is skyrocketing, together with yields. BINC’s active management style can take advantage of unique opportunities amidst a complex landscape.
“For the average investor, it’s pretty hard to differentiate in fixed income,” Rieder said during a presentation. “Fixed income is complex.”
A Strong Active Alternative
Active ETFs currently have $402 billion in assets under management, with a 54% compound annual growth rate over the last three years. Demand has been particularly strong among fee-based advisers using model portfolios, who are turning to ETFs for more efficient access.
BlackRock has seen remarkable success with such index funds as the iShares Russell 1000 Value ETF (IVE ), the iShares Russell 1000 Value ETF (IWD ), and the iShares MSCI USA Value Factor ETF (VLUE ). But the firm also has a strong active presence, managing $13 billion in assets across 20 active ETFs.
“Advisors continue to embrace actively managed ETFs in 2023. Despite offering some of the most popular index-based large-cap value ETFs under its iShares brand, it is great to see BlackRock give advisors an active alternative,” said VettaFi’s head of research Todd Rosenbluth.
BLCV and BINC carry expense ratios of 0.55% and 0.40%, respectively.
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