A strong management team and sound investment process underpin Blackrock Future US Themes ETF's Morningstar Medalist Rating of Silver. The portfolio maintains a cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The strategy’s management team earns an Above Average People Pillar rating. The strategy's effective investment approach earns an Above Average Process Pillar rating.  High yield exposure is attributed to holding more stocks with high dividend or buyback yields. And low volatility exposure is rooted in stocks that have a lower standard deviation of returns. The strategy's parent organization earns the firm an Above Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

NVIDIA

Microsoft

Apple

Amazon

Berkshire Hathaway Inc. - Ordinary Shares - Class B

Broadcom

Boston Scientific

Amphenol

Costco

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. Blackrock Future U.S. Themes ETF earns an Above Average Process Pillar rating. 

The most significant contributor to the rating is the parent firm's five-year risk-adjusted success ratio of 59%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. The size of the portfolio management team also bolsters the rating. With four portfolio managers, the fund is reasonably well-resourced. Lastly, the process is limited by the parent firm's five-year retention rate of 80%, which suggests it could do more to retain its portfolio managers.

 This strategy skews toward smaller, more value-oriented companies compared with its average peer in the Large Growth Morningstar Category. Examining additional factor exposure, this strategy has continually displayed high-yield exposure compared with Morningstar Category peers during recent years, holding more companies returning cash to shareholders via dividends or buybacks. Stocks with high yields can be more stable, mature companies, but at times extreme market pressure or fundamental deterioration may prompt them to cut their dividends, which tends to hurt stock performance. In recent months, the strategy was more exposed to the Yield factor compared with its Morningstar Category peers as well. This strategy has also exhibited a tilt toward low-volatility stocks in recent years, meaning companies with a lower historical standard deviation of returns. These low-risk stocks are typically at their best when markets are not. Low volatility exposure contributes to limited loss on the downside at the cost of a lag in bull markets. Compared with category peers, however, the strategy had more exposure to the Volatility factor in the most recent month. In addition, this strategy has taken on exposure to high-momentum stocks in these years. Momentum is based on the premise that market outperformers will continue to outperform, and laggards will continue to lag. This means that managers are overweighting stocks currently on a winning streak. In recent months, however, the strategy had less Momentum factor exposure over its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section. 

 The portfolio is overweight in industrials and energy relative to the category average by 5.8 and 4.3 percentage points, respectively. The sectors with low exposure compared to category peers are healthcare and communication services, underweight the average by 7.5 and 4.8 percentage points of assets, respectively. The strategy owns 156 securities and is less top-heavy than peers. Specifically, 37.5% of the strategy's assets are concentrated within the top 10 fund holdings, as opposed to the category average's 54.8%. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 87% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Above Average

Process

Blackrock Future U.S. Themes ETF earns an Above Average People Pillar rating. Raffaele Savi, the longest-tenured manager on the strategy, boasts over 25 years of listed portfolio management experience. The average Morningstar Rating of the strategies they currently manage is 3.2 stars, demonstrating average risk-adjusted performance. Raffaele Savi is supported by an experienced team, being able to draw on three additional listed managers, who average 15 years of listed portfolio management experience.  None of the portfolio managers here invest in this fund. This hurts the rating because manager investment would align their interests with the strategy's investors.

 Note: The People Pillar rating is indirectly assigned by an analyst. The longest-tenured manager of the fund also manages a different product rated by an analyst. Their analyst-assigned People Pillar rating is combined here with the People scores (algorithmic or analyst-assigned) for the fund’s other managers on a tenure-weighted basis.

People

BlackRock offers compelling options across asset classes and vehicles. It earns an Above Average rating for Parent. 
The firm’s approximately USD 8 trillion in assets under management, as of Sept. 30, 2022, gives it unparalleled scale and influence. It is a market-leading index fund provider globally, and its iShares exchange-traded fund franchise offers a low-cost lineup of core funds that investors can use to build a well-diversified portfolio for dirt cheap. The firm can be more adventurous in its ETF launches than some peers, so not everything it launches is appropriate for the masses. As a result, it is likely to have more ETF closures than peers that stick to the basic building blocks.  
The firm’s active fixed-income and multi-asset efforts also stand out as some of the best in the industry. Those benefit from BlackRock’s commitment to building a first-class risk management system via its Aladdin analytics software. The software is also available for sale to other firms and has proved to be a popular option for competitors, a testament to its usefulness. 
More recently, the firm has shifted its focus to ESG offerings and incorporating ESG across its investment lineup, leading to a political backlash in the United States.
BlackRock isn’t the best at everything it tries to do, but retail investors, financial advisors, and large institutions could all build robust portfolios using BlackRock’s products.

Parent

BlackRock Future U.S. Themes ETF

BTHM is an actively managed fund of US stocks selected to provide exposure to multiple themes, including emerging and structural trends.

On Thursday, BlackRock launched its newest ETF, the BlackRock Future U.S. Themes ETF (BTHM), a fund that seeks to invest in a broad range of market themes within the U.S and includes structural trends that are long reaching as well as shorter-term trends that are impacting markets. The fund seeks long-term capital appreciation by investing [.

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