A sound investment process and strong management team underpin iShares Neuroscience and Healthcare ETF's Morningstar Medalist Rating of Gold. The portfolio maintains a cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The strategy's sensible investment philosophy merits a High Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant overweight position in liquidity exposure and an underweight in quality exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And a low quality exposure is rooted in stocks with higher financial leverage and lower profitability. The strategy’s management team earns an Above Average People Pillar rating. 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

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Sarepta Therapeutics

Biogen

Xenon Pharmaceuticals

Integra LifeSciences Holdings

PTC Therapeutics

Alkermes

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. iShares Neuroscience and Healthcare ETF earns a High Process Pillar rating. The primary contributor to the rating is that this fund tracks an index. Historical data, like Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. The firm's five-year retention rate of 92% also underpins the process. The parent firm's five-year risk-adjusted success ratio of 55% supports the process. 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. Their relatively high success ratio suggests that this firm does well for investors and that this fund may benefit from that.

The investment strategy as stated in the fund's prospectus is:  The investment seeks to track the NYSE FactSet Global Neuro Biopharma and MedTech Index composed of U.S. and non-U.S. companies that could benefit from the growth and innovation in neuroscience.  The fund will invest at least 80% of its assets in the component securities of its index and in investments that have economic characteristics that are substantially identical to the component securities of its index and may invest up to 20% of its assets in certain futures, options and swap contracts, cash and cash equivalents as well as in securities not included in the index, and but which BFA believes will help the fund track the index. It is non-diversified. 

 The portfolio has allocations in its top two sectors, healthcare and financial services, that are similar to the category. The sectors with low exposure compared to category peers are basic materials and technology; however, the allocations are similar to the category. The strategy owns 50 securities and is relatively top-heavy. Of the strategy's assets, 44.9% are concentrated within the top 10 holdings, as opposed to the category’s 38.7% average. And finally, in terms of portfolio turnover, on a year-over-year basis, 61% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

High

Process

iShares Neuroscience and Healthcare ETF's strong team drives the strategy's Above Average People Pillar rating. There are three managers listed on the fund: Paul Whitehead, Jennifer Hsui, Greg Savage. Experience on the team is abundant, with 18 years of average portfolio management experience. Together, they manage a total of 257 strategies, with a Silver asset-weighted average Morningstar Medalist Rating, demonstrating their potential to deliver positive alpha relative to the category median in aggregate.  

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

Above Average

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

iShares Neuroscience And Healthcare ETF

IBRN tracks a market cap-weighted index that provides global equity exposure to companies that are positioned to benefit from neuroscience advancements. The index may hold securities from large- to small-cap.

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Recognition that aging populations will give rise to new healthcare needs and heightened awareness of mental health issues are bringing renewed focus to neurological health. Recent advances in genomics and immunology, new diagnostics and surgeries, and reductions in stigma associated with mental health are unlocking radical progress in neuroscience this decade akin to the genomics revolution of the past two decades.

Why Now Could Be The Time To Consider Neuroscience Investments

BlackRock has launched the iShares Neuroscience and Healthcare ETF (IBRN), enhancing its lineup of thematic ETFs available to investors. The new fund, listed on the NYSE on August 26, is the first ETF focused on neuroscience and the growth and innovation related to the treatment of neurological diseases.

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News for iShares Neuroscience And Healthcare ETF ETF (IBRN)