New BlackRock ETFs Target 'Underestimated Investment Opportunities'

What You Need to Know

The new funds are the iShares Emergent Food and AgTech Multisector ETF (IVEG) and iShares Blockchain and Tech ETF (IBLC).
Millennial consumers, automation and medical breakthroughs are creating
Like the recently announced Fidelity Crypto Industry and Digital Payments ETF, IBLC doesn’t directly invest in crypto.

BlackRock has expanded its line of iShares “megatrends” exchange-traded funds with two new ETFs that the asset manager said Wednesday reflect “underestimated investment opportunities” that have been created by new consumers and technologies resulting in “permanent changes” to the market.

Those trends were also the subject of a 28-page report, “The Great Acceleration,” that BlackRock released Wednesday.

“I think that we are just scratching the surface” when it comes to thematic investing, Armando Senra, head of Americas ETF and Index Investing at BlackRock, said Wednesday, during a roundtable briefing with reporters, held in New York and virtually.

This is still the “very early days” for thematic investing, he said. After all, thematic ETFs account for “only 3% of the total U.S. ETF industry,” he noted. So, despite the “tremendous growth” seen so far, most of the expected thematic ETF growth is “yet to come,” he added.

Senra pointed to three specific areas that he said are experiencing significant permanent changes.

Those areas are the new consumer, an “industrial renaissance” in technology, and health/medical breakthroughs.

New consumers include millennials, who BlackRock said in the report are “emerging from lockdowns as the major spenders driving the global economy.” Their ascendance “means their unique preferences for decentralized digital ecosystems and greener goods will transform commerce as we know it,” the report said.

Automation is a significant part of the industrial renaissance, according to BlackRock. “Just as the leap to lockdowns drove virtual technologies, the leap back will likely drive physical technologies,” the report said. “Global inflation and supply chain disruption could make industrial investments in automation, infrastructure, and the future of transportation immediately critical.”

Medical breakthroughs that BlackRock pointed to were progress made in genomics, immunology and precision medicine technologies.