BlackRock's Newest ETFs: Metaverse to Emerging Markets

• iShares ESG Aware MSCI USA Value ETF | Ticker: EVUS | Expense Ratio: 0.18%

In launching these ETFs, BlackRock has provided investment solutions that (i) offer investors pure-play access to the Value and Growth factors of U.S. large- and mid-capitalization equities and (ii) reflect positive Environment, Social, and Governance characteristics due to a sustainable screening overlay that is utilized in managing these solutions.  

These two ETFs are an expansion of BlackRock’s ‘ESG Aware’ suite, which currently focuses on broad market exposure to specific regions, namely MSCI USA, MSCI EAFE, and MSCI EM. BlackRock’s launch of these two funds is quite timely, given the style leadership changeover that has occurred in recent years – with value investing making a performance resurgence, post-2020 (Read: What’s occurring with Value Investing?). Against the backdrop of a higher interest rate environment and rising market uncertainty due to recessionary fears – investors are pivoting towards the investment styles they believe are best suited to preserve their wealth. With BlackRock making these two style-focused solutions available to the market, they are broadening their ETF optionality for investors, while simultaneously highlighting the risk-mitigation capabilities derived from using ESG screening.  

• iShares Future Metaverse Tech & Communications ETF | Ticker: IVRS | Expense Ratio: 0.47%

The idea of the ‘metaverse’ has gained mainstream awareness in recent years, as devices that place individuals within augmented or virtual realities have grown in popularity – oh, and Mark Zuckerberg renaming Facebook, Inc to Meta Platforms, Inc may have also raised public discourse on the topic.  

This iShares fund allows investors to gain exposure to diverse parts of the metaverse ecosystem, enabling access to U.S. and non-U.S. companies that provide products and services that are expected to contribute to the metaverse in areas including virtual platforms, social media, gaming, 3D software, digital assets, and virtual and augmented reality. Additionally, IVRS will also invest in companies that produce the necessary hardware and technical components needed to power the metaverse. 

For early adopters and investors that believe in the potential of the metaverse, this solution is a comprehensive way to gain access to the current key companies operating within the space. 

• iShares J.P. Morgan Broad USD Emerging Markets Bond ETF | Ticker: BEMB |Expense Ratio^: 0.20%

In launching this new emerging market fixed income solution, BlackRock is again broadening the ETF optionality of their product line-up, as the iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB) has a 10-year track record. Interested investors could use EMB as a reference point to understand BlackRock’s efficacy in managing emerging market debt.   

The iShares J.P. Morgan Broad USD Emerging Markets Bond ETF will have a much broader sector focus than its counterpart, EMB, as the solution will invest in debt issued from emerging market sovereign, quasi-sovereign, and corporate entities. Emerging markets in general moved much quicker than the U.S. and other developed markets to increase rates to stay ahead of inflation, which has resulted in higher nominal and real yields. Using EMD as a reference, the 30-Day SEC Yield was 6.98% as of February 2023. 

For investors interested in USD-denominated emerging market debt, this new ETF allows for broad exposure within said investment arena. 

*As of January 2023. 

+As of February 2023

^ Net Expense Ratio: 0.18%. BlackRock Fund Advisors, the investment adviser to the Fund and an affiliate of BlackRock Investments, LLC, has contractually agreed to waive a portion of its management fees through Feb 29, 2024. Please see the Fund’s prospectus for additional details.