iShares Debuts ‘Pure’ US Revenue ETF

Today BlackRock’s iShares is rolling out an ETF that will seek to provide exposure to stocks of companies that generate most of their revenues within the U.S. The iShares Russell 1000 Pure U.S. Revenue ETF (AMCA) tracks a benchmark derived from the Russell 1000 Index.

The fund comes with an expense ratio of 0.15% and lists on the Nasdaq exchange.

“There’s been, over the last few decades, a profound alteration of just exposure within the U.S. from multinational companies. If you think about Apple and Microsoft and Facebook, some of the top names in the S&P 500 really have global revenue. It’s really difficult to access a pure U.S. economic exposure by buying something like [the iShares Core S&P 500 ETF (IVV)]. That gives you access to U.S. stocks, but not necessarily to U.S. dollars or revenue,” said Daniel Prince, head of product consulting for BlackRock's U.S. iShares wealth advisory business, in reference to the fund.

AMCA’s underlying index covers companies that are components of the Russell 1000 that also source at least 90% of their total revenue from the U.S., according to the prospectus. Components are weighted by market capitalization, with weights capped at 5% for individual holdings and at 33% for individual sectors, he says.

The Under & Over

Prince notes that the fund’s underlying index included 428 components as of the end of July, or less than half of the total components of the Russell 1000. He also points out that the index is underweight technology stocks but overweight financials, consumer services and utilities relative to the original Russell 1000.

“I think a lot of investors just don’t know how much their companies are impacted by global economics versus U.S. economics,” he said, adding that AMCA offers a stronger tie to U.S. economics than a standard domestic-exposure fund.

AMCA brings the total launches for the year-to-date period up to 133, and the number of iShares launches to 10.

Contact Heather Bell at [email protected]