Dec 14, 2023
BlackRock’s Rieder Launches Second ETF After $400 Million Debut
, Bloomberg News
(Bloomberg) -- BlackRock Inc. bond chief Rick Rieder is expanding his footprint in the $7.8 trillion ETF industry with the launch of his second fund.
The BlackRock Total Return ETF, which began trading Thursday under the ticker BRTR, is actively managed by a team led by Rieder, according to a press release. It launches roughly seven months after Rieder, BlackRock’s chief investment officer of global fixed income, brought the $413 million BlackRock Flexible Income ETF (ticker BINC) to market.
While BlackRock is the world’s largest ETF issuer, it has a relatively small presence in actively managed ETFs, which have attracted a record share of industry inflows this year. The asset manager has warmed up to active ETFs amid that booming demand, with the firm’s global CIO of fundamental equities, Tony DeSpirito, also launching a debut ETF this year alongside Rieder. With today’s launch, 36 of the more than 400 ETFs in BlackRock’s US lineup are actively managed, according to the press release.
“The rapid growth of active ETFs has proved that ETFs are no longer limited to index management,” Dominik Rohe, head of Americas ETF and index investments business at BlackRock, said in the release.
BRTR charges a net expense ratio of 38 basis points, according to the firm’s website. Its portfolio will “typically” invest more than 90% of its holdings in fixed-income securities such as corporate debt, mortgage- and asset-backed securities as well as convertibles, according to the fund’s prospectus.
Rieder’s sophomore ETF follows BINC’s impressive start. The fund has posted total returns of 5.7% since setting sail in late May, outperforming its benchmark by roughly 3 percentage points, data compiled by Bloomberg show.
The bulk of its gains have come since mid-October. The rally has been fueled by falling Treasury yields — with the 10-year US yield falling below 4% this week — as conviction grows that the Federal Reserve’s hiking cycle is finished.
(Adds recent bond action. A previous version corrected CIO title)
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