BlackRock Converts Two Mutual Funds to Exchange-Traded Funds

BlackRock is converting two mutual funds into exchange-traded funds (ETFs). The company, which provides investment management and technology services to institutional and retail clients, offers a range of investment strategies across asset classes and has a diverse platform of alpha-seeking active, index, and cash management investment strategies. BlackRock's product offerings include single- and multi-asset portfolios investing in equities, fixed income, alternatives, and money market instruments.

BlackRock Inc. has announced the conversion of two actively managed mutual funds into exchange-traded funds (ETFs) to better fit within the firm's booming model-portfolio ecosystem. The move is a response to increasing demand from clients within the Global Allocation Selects model portfolio platform for active ETFs BlackRock Flips $3 Billion of Rieder’s Mutual Funds Into ETFs^[1].

The mutual funds, managed by Chief Investment Officer of global fixed income Rick Rieder, will become the iShares Dynamic Equity Active ETF (ticker BDYN) and the iShares Disciplined Volatility Equity Active ETF (BDVL). Both funds will retain their original investment objectives and manage a combined $3 billion in assets BlackRock Flips $3 Billion of Rieder’s Mutual Funds Into ETFs^[1].

Russ Koesterich, a portfolio manager within the Global Allocation team, explained that the conversion was driven by the growing popularity of model portfolios and the increasing demand for active ETFs within these portfolios. The Global Allocation Selects platform has seen a significant increase in assets, growing from under $1 billion in January 2023 to $10 billion currently BlackRock Flips $3 Billion of Rieder’s Mutual Funds Into ETFs^[1].

The BDYN ETF will track global equities with a focus on total returns and will be managed by a team that includes Rieder, Koesterich, Randy Berkowitz, and Sarah Thompson. The BDVL ETF is a volatility-managed stock fund managed by Rieder, Koesterich, and Berkowitz BlackRock Flips $3 Billion of Rieder’s Mutual Funds Into ETFs^[1].

This conversion follows the successful launch of the BlackRock Flexible Income ETF (BINC), which has amassed $12 billion in assets since its May 2023 debut. The Flexible Income ETF is also managed by Rieder and has benefited from tweaks to model allocation portfolios that can cause billions of dollars to flow between funds BlackRock Flips $3 Billion of Rieder’s Mutual Funds Into ETFs^[1].

BlackRock alone commands about $150 billion in model assets, making adjustments to model allocation portfolios significant in terms of asset distribution. The conversion of these mutual funds into ETFs is expected to enhance the firm's ability to meet client demands and optimize asset allocation within the model portfolios BlackRock Flips $3 Billion of Rieder’s Mutual Funds Into ETFs^[1].