BlackRock, the world’s largest asset manager, is set to launch a new exchange-traded fund (ETF) managed by Rick Rieder, the firm’s chief investment officer of global fixed income. This new ETF, called the BlackRock Total Return ETF (BRTR), follows the successful launch of Rieder’s previous actively managed ETF, the BlackRock Flexible Income ETF (BINC).

In a recent phone interview, Rieder expressed his astonishment at the growing demand for ETFs. Actively managed ETFs, which have seen significant growth in the almost $7.8 trillion U.S.-listed ETF industry, account for 21% of total inflows this year. Despite this growth, they represent only 6.1% of the industry’s assets overall.

The BlackRock Total Return ETF, which tracks the Bloomberg US Aggregate Bond Index, will be managed by a team consisting of Rieder, David Rogal, and Chi Chen – the same portfolio managers responsible for the firm’s successful total return mutual fund, MPHQX.

Investors are drawn to ETFs due to their ease of trading and tax efficiency. With the introduction of the BlackRock Total Return ETF, BlackRock is providing investors with yet another choice in their search for diversified core bond funds.

Stay tuned for the launch of the BlackRock Total Return ETF on Thursday under the ticker BRTR. With its similar strategy and expert management team, this new offering is expected to attract significant attention from investors in the ETF space.

BlackRock Flexible Income ETF Outperforms iShares Core U.S. Aggregate Bond ETF

The BlackRock Flexible Income ETF has proven to be a strong performer since its inception on May 23, according to FactSet data. With a total return of 5.7%, it has surpassed the 2.3% total return of the iShares Core U.S. Aggregate Bond ETF, which tracks U.S. investment-grade bonds.

BlackRock aims to provide higher yields compared to core fixed income with its Flexible Income ETF, which boasts an impressive 7% annual yield. The fund’s portfolio, as of Dec. 12, includes a mix of investment-grade and high-yield corporate bonds, securitized debt, agency mortgage-backed securities, and emerging-market debt.

With an impressive $411 million in assets under management within seven months of launching, the BlackRock Flexible Income ETF has gained significant investor interest. BofA Global Research analysts have noted the growing appetite for actively managed ETFs, making them a larger share of new fund launches.

BlackRock is a major player in the active ETF space, managing $13 billion across 36 products. According to CFRA’s Ullal, active bond ETFs make up about a third of all U.S.-listed exchange-traded funds. Looking ahead to 2024, increased flows and competition for assets are expected in the active bond ETF sector.

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