ETF Launches: LCTU

BlackRock’s carbon transition ETF is the biggest launch ever.

Reviewed by: Heather Bell
Edited by: Heather Bell


BlackRock U.S. Carbon Transition Readiness ETF

BlackRock rolled out a pair of actively managed ETFs in April, with one quickly becoming the largest ETF launch ever. The BlackRock U.S. Carbon Transition Readiness ETF (LCTU) debuted alongside the BlackRock World ex U.S. Carbon Transition Readiness ETF (LCTD), but it was LCTU that ended the day with $1.25 billion in assets.

Both of the funds invest in companies that are likely to benefit from the transition to a low-carbon economy, with LTCU focusing on the U.S. and LCTD focusing on foreign developed markets.

LCTU’s asset intake on its first day is the biggest on record for an ETF. It comes with an expense ratio of 0.15% and lists on the NYSE Arca.

The ETF selects its components from the Russell 1000. Companies in the parent index are scored based on five “pillars” aimed at evaluating how well-equipped a company is to face the challenges of transitioning to a low-carbon economy: fossil fuels, clean technology, energy management, waste management and water management, the prospectus says.

From there, LCTU’s managers use the scores to overweight or underweight the companies while incorporating governance criteria into their final determinations.

Source: Data and information as of 4/30/2021.
The above sidebar covers launches for the month of April 2021.

Heather Bell is a former managing editor of She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.