About eight years after BlackRock CEO Larry Fink reportedly said the company ‘wouldn’t do a bank-lending ETF’, a filing with the Securities and Exchange Commission indicates it is set to launch one. .
BlackRock, the world’s largest asset manager, plans to offer the BlackRock Floating Rate Loan ETF, according to a July 15 filing with the SEC. The fund is generally expected to invest at least 80% of its assets in floating rate loans and investments that are the economic equivalent of those loans, according to the filing.
Among the items the fund could potentially invest in are senior secured floating rate loans or debt as well as subordinated or unsecured floating rate loans or debt, depending on the filing.
“Given the scale of BlackRock, they could price the SRLN competitively,” said Todd Rosenbluth, head of research at VettaFi, a data and analytics provider, referring to the SPDR Blackstone Senior Loan. ETF from State Street Global Advisors by its ticker symbol.
With assets totaling $8.1 billion, the SPDR Blackstone Senior Loan ETF ranked as the largest bank loan ETF in VettaFi’s database on Monday. The fund, launched in 2013, has a gross expense ratio of 0.7%, according to the SSGA website.
BlackRock ETF’s draft filing did not show an expense ratio.
In an April report, Rosenbluth predicted that BlackRock was setting the stage to launch its own active senior loan ETF. He cited a BlackRock report titled “An Evolution of the U.S. Floating Rate Bank Lending Market,” which referred to ETFs.