BlackRock Shutters 8 ETFs Including BECO ESG Fund

BlackRock Shutters 8 ETFs Including BECO ESG Fund

The funds covered a range of sectors including gold and technology.

ETF.com
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Contributing Editor
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Reviewed by: etf.com Staff
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Edited by: Ron Day

BlackRock Inc., whose iShares unit is the world's biggest manager of ETFs, will shutter eight exchange-traded funds that cover a range of areas including sustainability, technology, commodities, and fixed income, the company said Monday.  

The closings, which will be effective at the end of trading on Aug. 12, will include the BlackRock Future Climate and Sustainable Economy ETF (BECO), the BlackRock Future Tech ETF (BTEK), iShares Gold Strategy ETF (IAUF), and iShares USD Systematic Bond ETF (USBF).

Trading of the funds will end prior to market open on August 13 and proceeds from the liquidation will be sent to shareholders "on or around August 15," the firm said.

"As we evolve our platform and launch new strategies, we also constantly assess the regulatory and operating environment as well as how our funds are meeting investors' investment objectives," BlackRock said in a statement.

The closures represent a tiny piece of the iShares franchise, which manages $2.82 trillion in 414 ETFs.

Investor appetite for ETFs has been strong this year, although it has created fierce competition for assets. The eight funds have failed to ignite investor interest, noted etf.com Senior Analyst Sumit Roy.

"What these ETFs have in common is that they all failed to catch on with investors," Roy said. "Each of these funds has AUM of less than $50 million, with some less than $5 million. That's peanuts for BlackRock."

The shuttering of BECO also comes amid a spotty performance among different types of funds focused on the environment, sustainability, and governance (ESG). 

BlackRock's iShares MSCI EAFE Growth ETF (EFG) remains the largest ESG-focused fund with more than $12.4 billion in assets. BlackRock's iShares ESG Aware MSCI USA ETF (ESGU) had $9 billion in outflows in 2023, according to Morningstar

Separately, last September, BlackRock, which offers more than 600 mutual funds and ETFs, closed two ESG-focused mutual funds. 

BECO Shares Slide

Actively managed BECO holds globally listed companies from small to large market values that are believed to help further the transition to a lower carbon economy, including those involved in sustainable energy, circulated economy, and the future of transport and nutrition. It debuted in August 2021 has about $3.3 million in AUM. On Monday, BECO shares were down about 1.5%, according to etf.com data. 

Other funds on the list were the iShares Currency Hedged MSCI Germany ETF (HEWG), the iShares MSCI Intl Sze Factor ETF (ISZE), the Virtual Work and Life Multisector ETF (IWFH), and the iShares International Developed Property ETF (WPS)

CORRECTION (June 11, 2024, 12:12 ET): Some of the funds that BlackRock intends to close were under $5 million. 

CORRECTION and UPDATE (June 11, 2024, 12:12 ET): ESGU continues to trade. The story now also includes full-year 2023 net flows for the fund. 

James Rubin is a contributing editor for etf.com, where he produces the Morning Exchange and Weekly Exchange newsletters. A longtime financial writer, editor and book author, he formerly held positions as a news and markets editor for the Americas at CoinDesk, where he focussed on cryptocurrencies. 

He provided editorial guidance for a Wall Street Journal best-selling book on Bitcoin and oversaw a startup newsroom focused on digital financial assets. He has edited for TheStreet and Unchained, where he wrote daily news stories about the trial of fallen crypto entrepreneur Sam Bankman-Fried. His writing has also appeared in The Hollywood Reporter, Forbes.com, AdWeek, Bankrate, The Financial Brand and The Wall Street Journal. He has also written for Forbes Insights and the Economist Intelligence Unit, including papers presented at World Economic Forums in Davos and Mumbai. 

James is the co-author of The Urban Cyclist’s Survival Guide (Triumph Books) and has been interviewed about bike safety on a number of NPR affiliates. In a prior career, Rubin was a world-ranked tennis player, once competing in Wimbledon’s qualifying rounds. He speaks fluent German and is a graduate of the Columbia University Graduate School of Journalism and received his BA at Columbia University.