BlackRock's Latest ETF Launch Is the Biggest Ever

By Bernice Napach

News April 12, 2021 at 11:34 AM

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BlackRock launched two actively managed sustainable equity ETFs on Thursday which together attracted more than $1.5 billion in assets, primarily from global institutions such as pension funds.

The BlackRock U.S. Carbon Transition Readiness ETF (LCTU) pulled in $1.25 billion in assets, more than any other ETF debut in history. Its international counterpart, the BlackRock World ex U.S. Carbon Transition Readiness ETF (LCTD) attracted about $250 million.

"The energy transition is central to all companies' growth," BlackRock chairman and CEO Larry Fink said in a statement. "Many of our clients share their conviction, and we are helping them be at the forefront of the energy transition through next-generation climate analysts and sustainable strategies."

A consortium of global institutional investors invested in the two new ETFs including the California State Teachers' Retirement System (CalSTRS) and RenaissanceRe in the U.S.; Temasek, a Singapore investment company; the Varma Mutual Pension Insurance Co. in Finland; and the Profuturo Group, a Mexican retirement fund administrator.

The new ETFs seek to outperform their benchmarks over the long term and choose their equity holdings based on data, analytics and insights focusing on fossil fuels, clean technology and energy, waste and water management.

LCTU is benchmarked to the Russell 1000 index and has a 0.30% expense ratio. LCTD is benchmarked to the MSCI world ex USA Index and has a 0.35% expense ratio.

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