BlackRock Brings Total Return Strategy to ETF Investors

Expands active ETF platform with launch of the BlackRock Total Return ETF

Today, BlackRock launched the BlackRock Total Return ETF (Nasdaq: BRTR), providing ETF investors with access to the firm’s Total Return strategy. As a diversified core bond strategy, the ETF seeks to uncover alpha opportunities across the fixed income universe and deliver consistent, attractive returns across all market cycles.¹

This launch reinforces BlackRock’s commitment to delivering liquidity, tax efficiency, and alpha in the convenience of an ETF. Managed by Rick Rieder, CIO of Global Fixed Income at BlackRock and winner of the 2023 Morningstar Outstanding Portfolio Manager Award, David Rogal, and Chi Chen, BRTR has the same investment objective, benchmark, and portfolio managers as the Gold Rated BlackRock Total Return Mutual Fund. ²

“With over 60,000 global fixed income securities, it can be incredibly complex for the everyday investor to differentiate between the winners and losers,” said Rieder.³ “Through the ETF wrapper, we seek to take advantage of dispersion in markets, target durable alpha for our clients, and aim to deliver it in an efficient, transparent manner.”

BRTR leverages the scale of BlackRock’s $2.6 trillion Fundamental Fixed Income platform, with 89% of BlackRock’s actively managed taxable fixed income assets under management outperforming the benchmark or peer median over the last five years.⁴

Furthers BlackRock’s commitment to Active ETFs

Active ETFs currently have $500 billion in assets under management,⁵ with demand particularly strong among fee-based advisers who are using these products as building blocks for model portfolios.⁶ In addition, active ETFs are helping provide end investors with new access points to active management. In the third quarter of 2023, individual investors accounted for nearly 31% of all actively managed ETF volumes, up from 24% in 2022.⁷

“The rapid growth of active ETFs has proved that ETFs are no longer limited to index management,” said Dominik Rohe, Head of Americas ETF and Index Investments business at BlackRock. “Today’s launch represents iShares’ commitment to innovation and helping our clients achieve new sources of alpha in a more efficient and convenient way. More investors can now access BlackRock’s premier active management capabilities in an investment vehicle that best suits their needs.”

BRTR is the second active ETF managed by BlackRock’s Fundamental Fixed Income team, following the launch of the BlackRock Flexible Income ETF (BINC) in May. Since launch, BINC has gathered $330 million in flows.⁸

BlackRock has a strong foundation in active ETFs, with $13 billion in assets under management across 36 products.⁹ With over 1,000 ETFs and mutual funds in the U.S., BlackRock provides clients with a comprehensive and complementary set of portfolio tools across active and index strategies in their wrapper of choice.

About BlackRock

BlackRock’s purpose is to help more and more people experience financial well-being. As a fiduciary to investors and a leading provider of financial technology, we help millions of people build savings that serve them throughout their lives by making investing easier and more affordable. For additional information on BlackRock, please visit www.blackrock.com/corporate

Carefully consider the Funds' investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds' prospectuses or, if available, the summary prospectuses which may be obtained by visiting www.iShares.com or www.blackrock.com. Read the prospectus carefully before investing.

Investing involves risk, including possible loss of principal.

Fixed income risks include interest-rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in bond values. Credit risk refers to the possibility that the bond issuer will not be able to make principal and interest payments. Non-investment-grade debt securities (high-yield/junk bonds) may be subject to greater market fluctuations, risk of default or loss of income and principal than higher-rated securities. There may be less information on the financial condition of municipal issuers than for public corporations. The market for municipal bonds may be less liquid than for taxable bonds. Some investors may be subject to federal or state income taxes or the Alternative Minimum Tax (AMT). Capital gains distributions, if any, are taxable. Securities with floating or variable interest rates may decline in value if their coupon rates do not keep pace with comparable market interest rates. The Fund’s income may decline when interest rates fall because most of the debt instruments held by the Fund will have floating or variable rates. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency and its return and yield will fluctuate with market conditions.

Collateralized Debt Obligations ("CDOs") carry additional risks including, but not limited to: (i) the possibility that distributions from collateral securities will not be adequate to make interest or other payments; (ii) the risk that the collateral may default or decline in value or be downgraded, if rated by a nationally recognized statistical rating organization; (iii) the Fund may invest in tranches of CDOs that are subordinate to other tranches; (iv) the lack of a readily available secondary market for CDOs. Asset-backed securities are subject to credit, interest rate, call, extension, valuation and liquidity risk and are subject to the risk of default on the underlying asset or mortgage, particularly during periods of economic downturn. Small movements in interest rates may quickly and significantly reduce the value of certain ABS. Mortgage-backed securities ("MBS") and commercial mortgage-backed securities ("CMBS") are subject to prepayment and extension risk and therefore react differently to changes in interest rates than other bonds. Small movements in interest rates may quickly and significantly reduce the value of certain mortgage-backed securities.

International investing involves risks, including risks related to foreign currency, limited liquidity, less government regulation and the possibility of substantial volatility due to adverse political, economic or other developments. These risks often are heightened for investments in emerging/developing markets and in concentrations of single countries. A fund's use of derivatives may reduce a fund's returns and/or increase volatility and subject the fund to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. A fund could suffer losses related to its derivative positions because of a possible lack of liquidity in the secondary market and as a result of unanticipated market movements, which losses are potentially unlimited. There can be no assurance that any fund's hedging transactions will be effective.

Actively managed funds do not seek to replicate the performance of a specified index. Actively managed funds may have higher portfolio turnover than index funds. Convertible securities are subject to the market and issuer risks that apply to the underlying common stock.

Funds that concentrate investments in specific industries, sectors, markets or asset classes may underperform or be more volatile than other industries, sectors, markets, asset classes or the general securities market.

Diversification and asset allocation may not protect against market risk or loss of principal. Buying and selling shares of ETFs may result in brokerage commissions. There can be no assurance that an active trading market for shares of an ETF will develop or be maintained.

This information should not be relied upon as research, investment advice, or a recommendation regarding any products, strategies, or any security in particular. This material is strictly for illustrative, educational, or informational purposes and is subject to change.

‡The Morningstar Analyst Rating™ is not a credit or risk rating. It is a subjective evaluation performed by Morningstar’s manager research group, which consists of various Morningstar, Inc. subsidiaries (“Manager Research Group”). In the United States, that subsidiary is Morningstar Research Services LLC, which is registered with and governed by the U.S. Securities and Exchange Commission. The Manager Research Group evaluates funds based on five key pillars, which are process, performance, people, parent, and price. The Manager Research Group uses this five-pillar evaluation to determine how they believe funds are likely to perform relative to a benchmark over the long term on a risk adjusted basis. They consider quantitative and qualitative factors in their research. For actively managed strategies, people and process each receive a 45% weighting in their analysis, while parent receives a 10% weighting. For passive strategies, process receives an 80% weighting, while people and parent each receive a 10% weighting. For both active and passive strategies, performance has no explicit weight as it is incorporated into the analysis of people and process; price at the share-class level (where applicable) is directly subtracted from an expected gross alpha estimate derived from the analysis of the other pillars. The impact of the weighted pillar scores for people, process and parent on the final Analyst Rating is further modified by a measure of the dispersion of historical alphas among relevant peers. For certain peer groups where standard benchmarking is not applicable, primarily peer groups of funds using alternative investment strategies, the modification by alpha dispersion is not used.

The Analyst Rating scale is Gold, Silver, Bronze, Neutral, and Negative. For active funds, a Morningstar Analyst Rating of Gold, Silver, or Bronze reflects the Manager Research Group’s expectation that an active fund will be able to deliver positive alpha net of fees relative to the standard benchmark index assigned to the Morningstar category. The level of the rating relates to the level of expected positive net alpha relative to Morningstar category peers for active funds. For passive funds, a Morningstar Analyst Rating of Gold, Silver, or Bronze reflects the Manager Research Group’s expectation that a fund will be able to deliver a higher alpha net of fees than the lesser of the relevant Morningstar category median or 0. The level of the rating relates to the level of expected net alpha relative to Morningstar category peers for passive funds. For certain peer groups where standard benchmarking is not applicable, primarily peer groups of funds using alternative investment strategies, a Morningstar Analyst Rating of Gold, Silver, or Bronze reflects the Manager Research Group’s expectation that a fund will deliver a weighted pillar score above a predetermined threshold within its peer group. Analyst Ratings ultimately reflect the Manager Research Group’s overall assessment, are overseen by an Analyst Rating Committee, and are continuously monitored and reevaluated at least every 14 months.

For more detailed information about Morningstar’s Analyst Rating, including its methodology, please go to https://shareholders.morningstar.com/investor-relations/governance/Compliance--Disclosure/default.aspx.

The Morningstar Analyst Rating (i) should not be used as the sole basis in evaluating a fund, (ii) involves unknown risks and uncertainties which may cause the Manager Research Group’s expectations not to occur or to differ significantly from what they expected, and (iii) should not be considered an offer or solicitation to buy or sell the fund.

The Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).

BLACKROCK and iSHARES are trademarks of BlackRock, Inc. or its affiliates. All other trademarks are those of their respective owners.

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¹ Alpha is defined as generating outperformance over a specific index.

² Morningstar. Effective November 22, 2022.

³ SIFMA, BlackRock 2023.

⁴ BlackRock Q3 2023 Earnings, as of September 30, 2023. Past performance is not indicative of future results. For more information, see BlackRock’s Q3-23 Earnings Release.

⁵ Morningstar. Ended November 30, 2023.

⁶ Morningstar as of June 30, 2023. 33% of all model portfolios hold at least 1 active ETF, and among these models the average allocation to active ETFs is 28% of the portfolio. Universe is all 2,758 model portfolios in Morningstar’s database.

⁷ As of September 30, 2023. Source: BlackRock analysis of SEC Rule 605 data.

⁸ BlackRock, November 30, 2023.

⁹ BlackRock, November 30, 2023.

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