As a Bob Dylan song once said, “The Times They Are A-Changin’” and that could be said today for investors’ tastes in ETFs. From the growth-fueled funds to now value-oriented funds, there’s also a market shift to active fund offerings as of late as evidenced by new ETF products like BlackRock’s Megatrends ETFs.
Per a ThinkAdvisor article, these new funds “are part of an expansion of the firm’s suite of Megatrend ETFs, which are designed to capitalized on structural shifts in the global economy. Of the four new Megatrend ETFs, three are actively managed and carry the BlackRock name, and one is a passive index fund using the iShares label.”
The three active funds are comprised of the BlackRock Future Innovators ETF (BFTR), BlackRock Future Health ETF (BMED), and BlackRock Future Tech ETF (BTEK). BFTR comes with an expense ratio of 0.80%, while BMED and BTEK are 85% and 0.88%, respectively.
“In order to help our clients better navigate our offerings, our index-based strategies will continue to be branded as iShares funds, and our alpha-seeking ETFs will be branded as BlackRock funds, reflecting the firm’s history as a premier active investor,” said Martin Small, head of BlackRock’s U.S. Wealth Advisory business, in a statement.
More Active Funds on the Way?
BlackRock isn’t the only firm seeing a shift towards active management. J.P. Morgan is also sensing this turn to actively-managed funds based on their latest ETF report.
Passive ETFs have been the beneficiaries of an extended bull run the past decade plus, but global investment firm J.P. Morgan says the tide could be turning in favor of active funds. Recent survey results show that investor interest is growing for more active funds that can navigate the current uncertainty in the markets.
“While only 2% of ETFs were actively-managed as of about a year ago, 2020 has seen a flurry of new launches of active products a MarketWatch article noted last month. “And investor interest – and expectations for more widespread adoption – are strong, according to a survey out Monday.”
“J. P. Morgan Asset Management’s Global ETF Study for 2020 was conducted during a particularly fraught moment: late March to early April 2020, when global financial markets were unnerved by the novel coronavirus the article added. “Still, the firm found 320 firms globally to survey, ranging from independent wealth managers to insurance companies to private banks. Survey respondents see allocations to active and smart-beta funds rising to nearly 40% of their client portfolios over the next few years.”