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BlackRock Intends to Launch Factor-based Commodities Exchange-Traded Products
[November 02, 2018]

BlackRock Intends to Launch Factor-based Commodities Exchange-Traded Products


BlackRock (NYSE: BLK) today announced the intention to expand its iShares suite of exchange-traded products (ETPs) to include factor-based commodity funds. Initially, iShares, a global leader in ETPs, intends to add two broad-based commodity ETPs with carry and multi-factor strategies. Consistent with BlackRock's advocacy and leadership in developing a clear classification system for ETPs, BlackRock considers these products to be "Exchange Traded Commodities" (ETCs).

Led by Dr. Andrew Ang, BlackRock's factor-based investing platform manages more than $200 billion globally across active and index strategies and fund vehicles, including absolute return strategies, mutual funds, target-date funds and single and multi-factor ETFs.

The proposed factor-based funds are expected to be the first in a series of enhancements to iShares' line-up of commodity ETPs. iShares plans to continue to develop new products to meet investors' needs and demands.

According to the Investment Company Institute, ETP net assets grew six-fold over the last decade to $3.5 trillion (as of 9/30/2018). "Commodities and commodity ETPs have traditionally played an important role in asset allocation decisions due to their diversification benefits, as well as being used as a potential means of inflationary hedging," said Mark Alberici, Head of iShares Commodities Product Development. "Given recent market volatility, diversification across commodities is becoming even more important in portfolio construction."

Additionally, iShares intends to retain Bank of America Merrill Lynch and Morgan Stanley as index providers for commodities strategies, in conjunction with a third-party calculation agent. With this arrangement, BlackRock is seeking to enhance its commodity offerings by providing a more comprehensive suite of products.

"We are thrilled to engage with both Bank of America Merrill Lynch and Morgan Stanley as we provide clients with more comprehensive solutions. We envisage the potential for a broader panel and syndicate of service providers over time, where new commodity strategies can be brought to the market via iShares ETPs," said Mark Alberici.

"We are excited to be selected by iShares in launching two new broad-based Commodity Carry and Multi-Factor ETPs and to support iShares in their development of the global ETP ecosystem. iShares' engagement of Bank of America Merrill Lynch on these products reflects our shared expertise in Commodity Fator investing and our ability to provide comprehensive solutions to our strategic clients," said Karen Fang, Head of BofAML Americas FICC Sales & Solutions.



"We're delighted to help BlackRock expand its suite of commodities-based exchange traded products,'' said Nikki Tippins, Managing Director at Morgan Stanley. ``Our firm's in-depth knowledge of the commodities markets combined with the expertise and commitment of iShares will give investors differentiated access to this important asset class in their portfolios."

In its recent comment letter to the Securities and Exchange Commission, BlackRock reiterated its recommendation that a more comprehensive approach to ETP classification be considered to improve investors' abilities to understand and analyze the risks of individual ETPs.


About BlackRock

BlackRock helps investors build better financial futures. As a fiduciary to our clients, we provide the investment and technology solutions they need when planning for their most important goals. As of September 30, 2018, the firm managed approximately $6.44 trillion in assets on behalf of investors worldwide. For additional information on BlackRock, please visit www.blackrock.com

About iShares

iShares unlocks opportunity across markets to meet the evolving needs of investors. With more than twenty years of experience, a global line-up of 800+ exchange traded funds (ETFs) and $1.8 trillion in assets under management as of September 30, 2018. iShares continues to drive progress for the financial industry. iShares funds are powered by the expert portfolio and risk management of BlackRock, trusted to manage more money than any other investment firm.1

1 Based on $6.44 trillion in AUM as of 9/30/18

Carefully consider the iShares Funds' investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds' prospectuses and, if available, summary prospectuses, which may be obtained by calling 1-800-iShares (1-800-474-2737) or by visiting www.iShares.com. Read the prospectus carefully before investing.

Investing involves risk, including possible loss of principal.

Commodities' prices may be highly volatile. Prices may be affected by various economic, financial, social and political factors, which may be unpredictable and may have a significant impact on the prices of precious metals. There can be no assurance that performance will be enhanced or risk will be reduced for funds that seek to provide exposure to certain quantitative investment characteristics ("factors"). Exposure to such investment factors may detract from performance in some market environments, perhaps for extended periods. In such circumstances, a fund may seek to maintain exposure to the targeted investment factors and not adjust to target different factors, which could result in losses.

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 iShares Funds are distributed by BlackRock Investments, LLC (together with its affiliates, "BlackRock").

©2018 BlackRock. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock. All other marks are the property of their respective owners. BlackRock is not affiliated with Bank of America Merrill Lynch or Morgan Stanley.


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