BlackRock is broadening its offerings in the artificial intelligence and technology space with the two new activel ETFs.
On Tuesday, the firm launched the iShares A.I. Innovation and Tech Active ETF and the iShares Technology Opportunities Active ETF on the New York Stock Exchange, are aimed at giving investors enhanced access to a range of AI and tech-driven opportunities.
The $11.5-trillion investment colossus, which currently manages $32 billion in assets across more than 40 active ETFs in the US, believes the already-booming AI industry still has the potential for significant long-term growth.
“We are at the dawn of an intelligence revolution,” Tony Kim, head of the fundamental equities technology group at BlackRock, said in a statement. “These active ETFs can help investors seize outsized and overlooked investment opportunities across the full stack of AI and advanced technologies.”
Both ETFs are part of BlackRock’s broader strategy to leverage its expertise in seeking alpha across rapidly evolving technology trends while continuing to provide tax-efficient and transparent ETF structures to investors.
Listed as BAI, The iShares A.I. Innovation and Tech Active ETF focuses on a concentrated portfolio of 20 to 40 global AI and technology companies, covering a broad range of market capitalizations. The ETF will target companies across the AI stack – including AI infrastructure, intelligence models, and application services – whose revenues are tied to the growth of AI.
Meanwhile, the iShares Technology Opportunities Active ETF, listed as TEK, mirrors the strategy of BlackRock’s Technology Opportunities Fund by investing in 50 to 70 global companies from industries such as semiconductors, software, and hardware, aiming for long-term capital appreciation. The fund's portfolio will also include companies in emerging sectors and those focused on internet services, content, and infrastructure.
“The asset management industry has reached an inflection point as active ETFs become the next frontier in investment innovation,” said Rachel Aguirre, head of US iShares product at BlackRock. “Today’s launches expand BlackRock’s active ETF platform to more investors, enabling our clients to harness the long-term potential of AI and technology within the convenience of an ETF.”
The active ETF space has shown extremely dynamic growth, capturing 23 percent of ETF inflows in the past year compared to just 9 percent five years ago, according to a recent Deloitte study.
Another study by Morningstar this year shows there's more room to run: by the end of 2023, active ETFs represented just 8.5 percent of the total US ETF market with $530 billion in assets, with the opportunity to take more share from the comparatively gargantuan $13 trillion mutual fund space.
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