Along with the increasing number of active ETF launches this year, conversions from mutual funds to ETFs have been another prevailing trend. This time, one of the biggest in the industry is converting a pair of mutual funds to ETFs — BlackRock. They introduced the actively managed iShares Dynamic Equity Active ETF (BDYN) and the iShares Disciplined Volatility Equity Active ETF (BDVL) today.
With already over 100 active ETFs globally, the ETF provider continues to add to its ever-expanding iShares ETF roster. These new ETFs build upon the $50 billion Global Allocation platform, and more specifically, the eight-year performance record and a combined $3 billion in assets under management (AUM) of the previous mutual funds.
“iShares has increasingly seen demand for their actively managed equity ETFs such as (DYNF ) and (THRO )," said TMX VettaFi Head of Research Todd Rosenbluth. “It is great to see them expand their ETF lineup and leverage their in-house expertise.”
Core Global Exposure
Both funds offer broad global exposure to equities, making them ideal options for investors looking for ETFs that can serve as core components of their portfolios. BDYN, in particular, provides an all-encompassing option, with its focus on stock holdings dispersed across various regions, sectors, and industries. BDVL offers a more defensive approach, by targeting stocks that exhibit lower volatility to mitigate heavy price fluctuations. In terms of benchmarks, BDYN seeks to outperform the MSCI World Index while BDVL looks to outpace the MSCI ACWI Minimum Volatility Index.
Both funds leverage the expertise and experience of BlackRock’s Global Allocation team. BDYN’s portfolio managers use a fundamental approach to its holdings with the application of quantitative and thematic views analyses. BDVL’s screening process takes a quantitative and fundamental approach to handpick companies with low volatility characteristics, but can also maximize risk-adjusted returns.
A Changing Investment Landscape
As mentioned, more ETF providers have been making the switch from mutual funds to ETFs, tapping into the latter’s flexibility, tax-efficiency, and low costs.
“The investment landscape is changing rapidly, and we see compelling opportunities to unlock alpha for our clients through a globally diversified, actively managed approach,” said Russ Koesterich, portfolio manager within BlackRock’s Global Allocation Team, in a press release. “The launches of BDYN and BDVL demonstrate our ability to deliver the full strength of BlackRock’s investment platform — proven strategies, global scale, and deep expertise — in the wrapper of choice for many investors today.”
BDYN has an expense ratio of 0.42% (0.40% net), and BDVL’s expense ratio is 0.41% (0.40% net).
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