BlackRock ETF Targets Future of the Financial Industry

Today BlackRock launched the sixth actively managed ETF in its Megatrends suite, which includes 22 funds in all. The BlackRock Future Financial and Technology ETF (BPAY) is global in nature and will focus on companies that are offering disruptive innovation in the financial services space.

BPAY lists on the NYSE Arca and comes with an expense ratio of 0.70%.

Managed by London-based Vasco Moreno, who is currently in charge of $1.8 billion in equity strategies focused on financials and fintech, the fund targets companies that are involved in the areas of payment systems, banking, investments, lending, insurance and software, according to BPAY’s prospectus.

Jay Jacobs, head of thematics and active equity ETFs at BlackRock, notes that financial services company Plaid found that there was a 30% increase in the usage of fintech during the pandemic. He said adoption is growing at the consumer and enterprise levels.

“This is a really broad theme that impacts the entire financial sector and cuts across both the enterprise and the consumer space, which gives us a lot of conviction behind this theme that there's a lot of opportunity,” Jacobs said, calling it one of the largest themes out there.

BPAY doesn’t focus specifically on cryptocurrency or blockchain, though Jacobs said that doesn’t mean there isn’t any blockchain or crypto equity exposure in the fund. It simply takes a broader perspective on fintech opportunities.

A list of the fund’s 37 portfolio holdings includes such major names as Visa Inc., Charles Schwab Corp., PayPal Holdings Inc., American Express, JP Morgan Chase & Co., Mastercard Inc. and Capital One Financial Corp. However, the remainder are not household names. Jacobs noted that while there are many smaller disruptive companies entering the space, large and established financial institutions are investing heavily in technology.

“There's a depth to the theme that I think the average consumer probably is not aware of because of the enterprise solutions and infrastructure solutions happening behind the scenes,” Jacobs said.

Contact Heather Bell at [email protected]