Per a Bloomberg report, BlackRock, Inc. BLK has filed to license the structure of Precidian Investments’ ActiveShares product. The world’s largest asset manager is pushing to launch the active non-transparent exchange-traded fund (“ETF”) structure, which does not report holding on a daily basis.
The new model requires funds to publish an indicative value of the holdings every second. The structure uses an agency broker to buy and sell securities confidentially.
Unlike the daily disclosure of traditional ETFs, the active non-transparent funds keep portfolios hidden. This helps in preventing potential front-running and copycat strategies.
Notably, the asset management division of JPMorgan JPM decided to test the active non-transparent model this year. In fact, Legg Mason LM also kicked off a value-focused product last week.
BlackRock also planned to launch three actively managed funds. The first is a Future Health ETF that will invest in equities in the health-sciences industry. The second is a Future Innovators ETF, which will track mid- and small-cap companies with earnings growth potential. The last one is a Future Tech ETF that will focus on firms with rapid and sustainable growth prospects.
BlackRock’s continued efforts to strengthen the iShares and ETF operations, and increased focus on the active equity business will likely continue to aid revenue growth in the near term. Its strong global presence, broad product diversification and steadily improving assets under management (AUM) balance are expected to enable it to boost revenues further. The company’s inorganic growth strategy remains impressive.
So far this year, shares of BlackRock have gained 9% against a decline of 7.1% recorded by the industry.
Currently, the company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A better-ranked stock from the finance space is GAIN Capital Holdings GCAP. Its current-year earnings estimates have moved up significantly over the past 60 days. The company’s shares have gained 56.2% year to date. At present, it carries a Zacks Rank #2 (Buy).
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