BlackRock lists first ever ETF under BlackRock name
BlackRock is making its first move that suggests it may be altering its reliance on active management and that the future is in ETFs.
In a first ever in the US, BlackRock is listing an ETF under the BlackRock brand rather than its iShares sub-brand. The move ends the previously sharp separation between the BlackRock active (high margin) brand, which claimed to offer alpha, and the iShares ETF (low margin) brand which claimed to offer mere “exposures”.
The BlackRock US Equity Factor Rotation ETF (DYNF) will be actively managed and invest in US large and mid cap companies based on a proprietary model. The model looks at the standard factors: momentum, quality, value, size and minimum volatility and picks those “with the strongest near-term return prospects,” the prospectus says.
The model starts with an equal-weighted allocation across the five factors. But then makes tilts based on the model’s assessment of the economic cycle and factor valuations. The model may allocate a maximum of 35% to a factor.
It will charge 0.30%.
Amundi lists ultra cheap funds to compete with Lyxor
The race to zero is digging in deeper in Europe with Amundi listing a suite of plain vanilla ETFs targeting core markets that charge a mere 0.05%.
- Amundi Prime Global UCITS ETF
- Amundi Prime Eurozone UCITS ETF
- Amundi Prime Europe UCITS ETF
- Amundi Prime USA UCITS ETF
- Amundi Prime Japan UCITS ETF
- Amundi Prime Global Goviews UCITS ETF
- Amundi Prime Euro Govies UCITS ETF
- Amundi Prime Euro Corporates UCITS ETF
- Amundi Prime US Treasury UCITS ETF
All of the funds will track Solactive indexes. Solactive charges a flat fee in order to help keep indexing costs low and does not take basis point fees on assets managed. While these funds will be some of the cheapest on offer in Europe, they will come in second behind Lyxor, which put out two ETFs costing a mere 4 basis points last year.
In our estimation, funds this cheap would need more than $1 billion under management to hit breakeven.
To Russia with love
Lyxor is listing a new Russia tracker in Switzerland, that gives plain vanilla exposure to the world’s market with the best PE ratio. The Multi Units Luxembourg-Lyxor MSCI Russia UCITS ETF will not be Lyxor’s first Russia tracker. That honour goes to the Lyxor Russia (Dow Jones Russia GDR) UCITS ETF, which has more than CHF 400 million. However, it will be first physically replicating Lyxor Russia ETF in Switzerland. The other older product is synthetic.
From Russia with love
Moscow-based asset manager VTB Capital Asset Management is listing what we believe to be the first Russian smart beta corporate bond ETF in Moscow. The VTBB ETF Corp Bonds Smart Beta (VTBB) is the name of the fund. More information can be found on the Moscow Exchange’s website.
The fund will charge 0.80%.