BlackRock launches stock ETF with 100% downside hedge

Exchange-traded funds (ETFs) have majorly boosted cryptocurrency prospects in 2024. Major economies and stock markets have expressed interest in ETFs. BlackRock now becomes the latest asset manager to launch ETFs with a 100 per cent downside hedge for investors looking to tap into this booming market.

These risk-managed ETFs help maximise returns and also provide security over a specific period. Investors are now eyeing multiple options as concerns over a slowing economy can potentially hurt market sentiments. Buffer ETFs typically see lower redemption requests during volatility in contrast to traditional ETFs.

The iShares large Cap Max Buffer Jun ETF started trading on Monday under the symbol, 'MAXJ', with a net expense ratio of 0.50 per cent. The asset manager will provide a 100 per cent hedge to all downside for almost a year. Bloomberg Intelligence data shows that assets in buffer ETFs have tripled since October 2022. The first buffer ETF was launched in 2018 and comprises over $46 billion across 270 funds.

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BlackRock currently manages $25 billion in assets under management across more than 40 active ETFs in the US, according to Reuters. The company is reportedly planning to issue the ETF in a series, with the next one expected to debut on Oct 1, according to MoneyControl.