BlackRock Australia will launch its first active exchange-traded fund (ETF) in the Australian market, basing it on a United States-based fund that has delivered strong long-term returns.
The iShares US Factor Rotation Active ETF, carrying the Australian Securities Exchange code IACT, will list in the middle of next month with a management fee of 0.45 per cent and base its allocations on the financial health of firms, as well as their size and valuation, alongside consideration of their market momentum, growth and volatility.
“By taking a bottom-up, data-driven stock selection approach, the portfolio is actively managed to favour stocks that exhibit these return characteristics, with the goal of reducing short-term cyclical volatility and delivering outperformance relative to the broader market over time,” BlackRock stated.
The new ETF is based on a fund of the same name in the US that has returned 10.8 per cent over the past year and 19.4 per cent over five years, outperforming its benchmark and the active large blend category average.
BlackRock iShares ETF specialist Tamara Haban-Beer Stats said: “US equities remain a core allocation for many Australian advisers and investors, underpinned by the strength of US corporates and the momentum of structural themes like AI (artificial intelligence).
“IACT offers a differentiated source of return across market cycles for Australian investors seeking a long-term holding that provides access to an active US equity strategy – at a lower cost than other active equity options available in Australia.”
BlackRock head of investments for enhanced factors Philip Hodges added: “IACT showcases the power of combining deep research, real-time data and machine learning with BlackRock’s active management expertise – now delivered in a convenient, cost-effective ETF wrapper.
“This gives investors an accessible way to navigate shifting market conditions while aiming to deliver consistent outperformance over time.”
The new fund will increase the number of listed ETFs offered by BlackRock Australia to 53 with its funds spread across the classifications of core, multi-asset, fixed income, factors, gold, and emerging markets.
