First active ETFs managed by Rick Rieder and Tony DeSpirito
Leverages full-breadth of BlackRock’s alpha-seeking expertise and ETF capabilities to deliver choice, transparency, and flexibility to clients
Today, BlackRock expanded access to its award-winning investment platform with the launch of two active ETFs managed by Rick Rieder and Tony DeSpirito. This milestone provides clients with the best of BlackRock’s investment insights in a liquid, transparent, and tax-efficient ETF wrapper.
Alpha-seeking expertise, accessible through ETFs
Alpha is at the heart of BlackRock, starting as an active bond manager in 1988. Since the firm’s founding, clients have continued to turn to BlackRock’s active platform to seek to capture investment opportunities and manage risk. In the first quarter of 2023, clients entrusted the firm with approximately $68 billion of active net inflows.1
In addition, BlackRock has a strong track record of delivering alpha. 90% and 81% of BlackRock’s actively managed taxable fixed income and fundamental equity assets under management, respectively, have outperformed the benchmark or peer median over the last five years.2
Lead Portfolio Manager
Bloomberg U.S. Universal Index
Russell 1000 Value Index
BlackRock Flexible Income ETF (BINC)
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 is designed to complement core bond exposures and leverages the scale of BlackRock’s $2.7 trillion Fixed Income platform, providing clients with unparalleled market access.3
“Our core investment approach is simple: make a little bit of money a lot of times,” said Rieder, CIO of Global Fixed Income at BlackRock and winner of the 2023 Morningstar Outstanding Portfolio Manager Award. “By staying active, agile, and well-diversified, the BlackRock Flexible Income ETF aims to capture historic opportunities across fixed income markets whenever and wherever they become available.”
BlackRock Large Cap Value ETF (BLCV)
BLCV seeks to maximize total return by investing in U.S. large-cap value companies. The fund provides investors with a differentiated product offering from BlackRock’s Income & Value team, led by DeSpirito, and harnesses the expertise of BlackRock’s $220 billion Fundamental Equities platform.4
“Active investment management is essential to navigating today’s market volatility,” said DeSpirito, Global CIO of Fundamental Equities at BlackRock. “By seeking alpha through the ETF wrapper, we can build liquid and transparent portfolios while digging deep in an effort to uncover investment winners for our clients.”
Providing clients with choice and flexibility
Active ETFs currently have $402 billion in assets under management, with a 54% compound annual growth rate over the last three years.5 Demand has been particularly strong among fee-based advisers using model portfolios, who are turning to ETFs to efficiently access an expanding world of investments.
“BlackRock has a strong foundation in active ETFs, with $13 billion in assets under management across 20 BlackRock ETFs,”6 said Rachel Aguirre, Head of U.S. iShares Product at BlackRock. “Today’s launches broaden BlackRock’s active ETF lineup from specialized exposures to active building blocks for the core of investors’ portfolios, opening an important new avenue of choice for clients who no longer have to decide between active management and ETFs.”
BlackRock is uniquely positioned to deliver liquidity, tax efficiency, and now alpha in the convenience and accessibility of the ETF wrapper. With over 1,000 ETFs and mutual funds in the U.S., BlackRock provides clients with comprehensive and complementary portfolio tools across active and index strategies in their wrapper of choice.
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.
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. There may be less information on the financial condition of municipal issuers than for public corporations. The market for municipal bonds may be less liquid than for taxable bonds. Some investors may be subject to federal or state income taxes or the Alternative Minimum Tax (AMT). Capital gains distributions, if any, are taxable. 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. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency and its return and yield will fluctuate with market conditions.
Collatoralized Debt Obligations ("CDOs") carry additional risks including, but not limited to: (i) the possibility that distributions from collateral securities will not be adequate to make interest or other payments; (ii) the risk that the collateral may default or decline in value or be downgraded, if rated by a nationally recognized statistical rating organization; (iii) the Fund may invest in tranches of CDOs that are subordinate to other tranches; (iv) the lack of a readily available secondary market for CDOs. Asset-backed securities are subject to credit, interest rate, call, extension, valuation and liquidity risk and are subject to the risk of default on the underlying asset or mortgage, particularly during periods of economic downturn. Small movements in interest rates may quickly and significantly reduce the value of certain ABS. Mortgage-backed securities ("MBS") and commercial mortgage-backed securities ("CMBS") are subject to prepayment and extension risk and therefore react differently to changes in interest rates than other bonds. Small movements in interest rates may quickly and significantly reduce the value of certain mortgage-backed securities.
International investing involves risks, including risks related to foreign currency, limited liquidity, less government regulation and the possibility of substantial volatility due to adverse political, economic or other developments. These risks often are heightened for investments in emerging/developing markets and in concentrations of single countries. A fund's use of derivatives may reduce a fund's returns and/or increase volatility and subject the fund to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. A fund could suffer losses related to its derivative positions because of a possible lack of liquidity in the secondary market and as a result of unanticipated market movements, which losses are potentially unlimited. There can be no assurance that any fund's hedging transactions will be effective.
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. Convertible securities are subject to the market and issuer risks that apply to the underlying common stock.
Funds that concentrate investments in specific industries, sectors, markets or asset classes may underperform or be more volatile than other industries, sectors, markets, asset classes or the general securities market.
Diversification and asset allocation may not protect against market risk or loss of principal. Buying and selling shares of ETFs may result in brokerage commissions. There can be no assurance that an active trading market for shares of an ETF will develop or be maintained.
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 Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).
© 2023 BlackRock, Inc. or its affiliates. All Rights Reserved. BLACKROCK and iSHARES are trademarks of BlackRock, Inc. or its affiliates. All other trademarks are those of their respective owners.
1 BlackRock Q1 2023 Earnings, as of March 31, 2023
2 BlackRock Q1 2023 Earnings, as of March 31, 2023. Past performance is not indicative of future results. For more information, see BlackRock’s Q1-23 Earnings Release.
3 BlackRock Q1 2023 Earnings, as of March 31, 2023
4 BlackRock, as of March 2023
5 Simfund, as of April 2023
6 BlackRock, as of May 2023