Providing investors a differentiated income strategy which couples high income potential with long term growth
BlackRock today announced the launch of the BlackRock Advantage Large Cap Income ETF (Cboe: BALI), which seeks to generate a high level of monthly income with upside market participation1 to optimize income and growth within a risk managed framework.
The actively managed ETF provides investors with greater access to the breadth of BlackRock's active investment platform, which combines the big data-empowered insights of BlackRock's Systematic portfolio management team alongside premium income streams.
“In the face of turbulent market conditions, we continue to see more client demand for active ETF strategies,” said Rachel Aguirre, U.S. Head of iShares Product at BlackRock. "As a powerful addition to our active ETF lineup, BALI is another testament to the firm’s ability to match our unparalleled expertise in ETFs with seasoned portfolio managers to meet our clients’ evolving needs."
“BALI also marks the latest offering in our growing suite of options-based ETFs which includes fixed income BuyWrite strategies and buffer strategies, reflecting the growing demand for solutions that help investors achieve specific outcomes. The Fund furthers our commitment to providing choice and enhancing access to innovate solutions for our clients.”
Unique offering with high income potential and long-term market appreciation
The Fund provides investors income from two sources – a dynamic basket of U.S. dividend-paying stocks and option premiums from selling call options on the S&P 500 Index.
Managed by a portfolio team led by Raffaele Savi, Global Head of BlackRock Systematic and Co-CIO and Co-Head of Systematic Active Equity, BALI combines its income strategy while deploying a flexible process in managing market exposure, enabling investors to maintain upside market participation in market rallies, while seeking to generate option premium income. This helps investors seek high current income and potentially benefit from long-term market appreciation.
“As investors seek new solutions to achieve clearer outcomes in their portfolio, BALI offers differentiated income and returns that complement traditional asset classes through a unique and disciplined investment process,” said Raffaele Savi. “The Fund takes an innovative approach to product construction by combining the power of big data, data science and deep investor expertise to seek to deliver high current income and long-term growth opportunity.”
With over 35 years of experience, BlackRock Systematic Investing is an investment approach that emphasizes data-driven insights, scientific testing of investment ideas, and disciplined portfolio construction techniques that focuses on varied investment outcomes. Our Systematic strategies are built on the principle of leveraging data and technology to seek differentiated excess returns, robust risk management, and portfolio optimization.
BALI exemplifies BlackRock’s commitment to the fast-growing active ETF category and is reflective of the firm’s deep understanding of market trends, risk management and investor’s needs.
As demand for active ETF strategies continue to grow, BlackRock is uniquely positioned to deliver liquidity, tax efficiency, and alpha in the convenience and accessibility of the ETF wrapper. With over 1,000 ETFs and mutual funds in the U.S.2, BlackRock provides clients with a comprehensive and complementary set of 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 | Twitter: @blackrock | LinkedIn: www.linkedin.com/company/blackrock
iShares unlocks opportunity across markets to meet the evolving needs of investors. With more than twenty years of experience, a global line-up of 1300+ exchange traded funds (ETFs) and $3.21 trillion in assets under management as of June 30, 2023, iShares continues to drive progress for the financial industry. iShares funds are powered by the expert portfolio and risk management of BlackRock.
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.
When the Fund sells call options on a large cap equity index, it receives a premium but it takes on the risk that these options may reduce any profit from increases in the market value of the long equity positions held by the Fund. Any such reduction in profits would be the difference between the payoff of the call option and the premium received. The Fund would also retain the risk of loss if the long equity positions decline in value. The premiums received from the options may not be sufficient to offset any losses sustained from the long equity positions. Factors that may influence the value of the options generally include the underlying asset’s price, interest rates, dividends, the actual and implied volatility levels of the underlying asset’s price, and the remaining time until the options expire, among others. The value of the options written by the Fund typically do not increase or decrease at the same rate as the underlying asset’s price on a day-to-day basis due to these factors.
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.
Fixed income risks include interest-rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in the value of debt securities. Credit risk refers to the possibility that the debt issuer will not be able to make principal and interest payments.
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 and BlackRock Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).
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1 As compared to minimum volatility equity strategies; according to data from BlackRock, September 2023. Upside market participation could potentially offer market appreciation in the long run.
2 Source: BlackRock, September 2023