On Thursday, BlackRock released a new fund into its active ETF roster with the BlackRock U.S. Industry Rotation ETF (INRO).
The fund is actively managed and has a net expense ratio of 0.42%. INRO seeks positive industry exposure by utilizing a rotation strategy.
“We believe bundling tactical asset allocation insights within an active structure can unlock additional alpha opportunities while offering the tax efficiency, liquidity, and transparency benefits of the ETF wrapper,” BlackRock head of research for U.S. Model Portfolio Solutions Michele Freed said.
INRO is benchmarked to the MSCI USA Index. The index in particular tracks the performance of both mid and large-cap companies in the U.S. market.
Primarily, the fund will invest assets into equity securities listed in the U.S. market, along with derivatives with similar features. Additionally, the fund aims to own stocks in companies present in the MSCI USA Index. However, INRO may also have investment exposure to companies present in the Russell 3000 Index.
Versatile Movement
BlackRock’s sector rotation strategy allows the fund to recalibrate asset exposure to better reflect the index’s assets. When choosing investments for INRO, the fund prospectus notes that five factors for potential return are taken into consideration. These factors include value, quality metrics, analyst expectations, industry trends, and the current economic cycle.
The fund may also take defensive positions during times of economic strife or market disruption, temporarily abandoning the primary investment plan. Instead, the prospectus notes that the fund may instead push assets toward short-term liquid investments.
“ETFs are becoming the vehicle of choice in model portfolios as demand continues to grow among
fee-based advisors,” BlackRock head of U.S. iShares Product Rachel Aguirre noted. “INRO
expands the investment toolkit for advisors looking to help their clients build resilient portfolios and
achieve new sources of alpha in a more efficient and convenient way,” Aquirre added.
INRO is the latest fund to join BlackRock’s ever-expanding active ETF library. BlackRock currently operates 39 active ETFs, representing roughly $22 billion in assets under management.
“BlackRock’s active ETF lineup has been in high demand in 2024. This new ETF will allow tax-efficient rotation from semiconductors to biotechnology based on macroeconomic developments and fundamentals,” VettaFi head of research Todd Rosenbluth noted.
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