BlackRock

Unveils Active Equity ETFs for European Investors“

BlackRock has rolled out two actively managed equity exchange-traded funds for European investors. The Ireland-domiciled iShares World Equity High Income and iShares U.S. Equity High Income Ucits ETFs, which have been listed in Frankfurt and Amsterdam, are the US fund giant’s first ETFs aimed at investors in Europe that integrate an active, systematic strategy into the ETF wrapper. According to the world’s largest asset manager, the launch of the two products offers investors “a powerful combination of BlackRock’s active management capabilities and experience with the breadth and scale of the iShares platform”. Both ETFs, which have a total expense ratio of 0.35 per cent, are designed to generate high income through actively managing a “diversified basket of primarily dividend-paying stocks and by selling index call options”. This article was previously published by Ignites Europe, a title owned by the FT Group. In 2020, the firm launched three actively managed multi-asset ETFs that invest in other ETFs. The new ETFs are managed by BlackRock’s systematic team in combination with the iShares ETF platform teams. Raffaele Savi, Robert Fisher and Anna Hawley are the portfolio managers of the global high-income equity strategy, while the US-focused vehicle is managed by Savi, Fisher and Travis Cooke. Commenting on the launch, Jane Sloan, head of global product solutions for Europe, the Middle East and Africa at BlackRock, said: “Our clients’ business models in Europe are rapidly changing — a shift to centralised investment propositions, a focus on whole portfolio outcomes, a rise in digital wealth platforms, a new market regime — all mean our clients require a broader set of investment strategies across index and active, including the wrappers they’re delivered in.” She added that the two active ETF strategies create “an important new avenue of choice and further access to investing”. News of the launches comes after it was reported that Ark Invest, the US-based ETF provider led by Cathie Wood, is to launch its first products, three active ETFs, for the European market in April. BNP Paribas Asset Management launched its first active ETFs in Europe in February. Ignites Europe reported last October that JPMorgan was planning an active ETF expansion in Europe after becoming the region’s biggest provider of this product type. Ignites Europe is a news service published by FT Specialist for professionals working in the asset management industry. Trials and subscriptions are available at Markettrade.in

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Here are some additional points to expand upon the topic of BlackRock’s launch of active equity ETFs in Europe:

Strategic Market Entry: BlackRock’s decision to introduce active equity ETFs in Europe reflects a strategic response to the evolving demands of European investors. By combining active management strategies with the efficiency and transparency of the ETF structure, BlackRock aims to capture a significant share of the European ETF market and meet the diverse needs of investors seeking income-generating solutions.

Competitive Advantage: The launch of these active equity ETFs underscores BlackRock’s competitive advantage in leveraging its extensive research capabilities and investment expertise. With a focus on delivering high income through a disciplined investment approach, BlackRock seeks to differentiate its offerings and provide investors with attractive risk-adjusted returns in a challenging market environment.

Investor Benefits: European investors stand to benefit from the introduction of these active equity ETFs, which offer a compelling combination of income generation, diversification, and cost efficiency. By actively managing a portfolio of dividend-paying stocks and employing options strategies, the ETFs aim to provide investors with a consistent income stream while mitigating downside risk, thereby enhancing the overall investment experience.

Client-Centric Approach: BlackRock’s client-centric approach is evident in its collaboration with institutional clients and wealth managers to develop tailored investment solutions that address specific investment objectives and risk preferences. By offering active equity ETFs alongside its existing suite of index-based ETFs, BlackRock provides clients with a comprehensive range of investment options to build diversified portfolios and achieve their long-term financial goals.

Industry Implications: The launch of BlackRock’s active equity ETFs in Europe is likely to have broader implications for the ETF industry as competitors respond to changing investor preferences and market dynamics. As active management gains traction within the ETF space, asset managers may increasingly explore innovative strategies to differentiate their offerings and capture market share, leading to further product innovation and competition in the European ETF market.

Overall, BlackRock’s rollout of active equity ETFs in Europe represents a significant milestone in the evolution of the ETF industry, offering investors new opportunities to access active management strategies within the ETF wrapper and reinforcing BlackRock’s position as a leading provider of innovative investment solutions in the European market