BlackRock U.S. Carbon Transition Readiness ETF
BlackRock World ex U.S. Carbon Transition Readiness ETF
BlackRock U.S. Carbon Transition Readiness ETF
Ticker: LCTU
Exchange: NYSE Arca
Expense ratio: 0.30%
Original filing date: January 07, 2021
Effective date: March 23, 2021
Listing Date: Week of April 5
CUSIP: 09290C509
Active: Yes
Index / Benchmark: FTSE Russell 3000 Index
Investment Objective:
Seeks long-term capital
appreciation by investing in large- and mid-capitalization U.S. equity
securities that may be better positioned to benefit from the transition to a
low-carbon economy.
Investment Strategy:
Proprietary BlackRock Low Carbon Economy Transition Readiness Score "LCETR" derived for each component of FTSE Russell 3000 Index to overweight those with higher score and underweight those with lower scores, while maintaining investment risk profile of the FTSE Russell 3000 Index.
Methodology focuses on "Five Pillars":
1. Fossil fuels
2. Clean technology
3. Energy management
4. Waste management
5. Water management
BlackRock World ex U.S. Carbon Transition Readiness
ETF
Ticker: LCTD
Exchange: NYSE Arca
Expense ratio: 0.35%
Original filing date: January 7, 2021
Effective date: March 23, 2021
Listing Date: TBD
CUSIP: 09290C608
Active: Yes
Index / Benchmark: MSCI World ex USA Index
Investment Objective:
Seeks long-term capital
appreciation by investing in large- and mid-capitalization World ex U.S. equity
securities that may be better positioned to benefit from the transition to a
low-carbon economy.
Investment Strategy:
Proprietary BlackRock Low Carbon Economy Transition Readiness Score "LCETR" derived for each component of MSCI World ex USA Index to overweight those with higher score and underweight those with lower scores, while maintaining investment risk profile of the MSCI World ex USA Index.
Methodology focuses on "Five Pillars":
1. Fossil fuels
2. Clean technology
3. Energy management
4. Waste management
5. Water management
Adviser: BlackRock Fund Advisors
Adminstrator: State Street Bank and Trust Company
Fund accountant: State Street Bank and Trust Company
Custodian: State Street Bank and
Trust Company
Adviser: BlackRock Fund Advisors
Adminstrator: State Street Bank and Trust Company
Fund accountant: State Street Bank and Trust Company
Custodian: State Street Bank and
Trust Company
Prospectus is here.
MORE ETF HEARSAY
Investment Process. BFA considers a variety of factors when choosing investments for the Funds. As part of its transition readiness strategy, BFA assigns a transition readiness score to each issuer by aggregating research-driven insights across five “pillars” (i.e., Fossil Fuels, Clean Technology, Energy Management, Waste Management and Water Management). The types of analyses conducted for each pillar are summarized below:
•
Fossil Fuels – Analyzes whether an issuer is in the business of fossil fuel extraction, refinery and generation or owns fossil fuel reserves.
•
Clean Technology – Analyzes whether an issuer is in the business of renewable energy, energy efficiency, green building and low carbon transport.
•
Energy Management – Analyzes an issuer’s energy use, mix, efficiency and indirect emissions through electricity consumption.
•
Water Management – Analyzes an issuer’s water consumption, withdrawal, efficiency, physical stress and recycling practices.
•
Waste Management – Analyzes an issuer’s waste generation, recycling, and toxic emissions management.
BFA then weights the five pillar scores for each industry according to what BFA believes are their relative importance for that industry. Weights among constituent pillars are chosen by BFA, reflecting the relative research-driven conviction in each constituent pillar. Some indicators are chosen to be “prioritized,” or weighted more than others, where the research is more confident in the connection between that pillar and transition-ready language. Finally, the precise weights are chosen using a Principal Components Analysis that slightly upweights pillars that are more correlated with the others, and down weights apparent outliers. The weights are evaluated for sensibility whenever the model is reviewed.
BFA seeks to utilize exclusionary screens in determining the investment universe and to incorporate investment insights related to environmental, social and governance (“ESG”) characteristics in the portfolio construction process.
To determine each Fund’s investable universe, BFA will first seek to screen out certain companies based on certain ESG criteria determined by BFA. Such screening criteria includes certain companies with exposure to controversial weapons, civilian firearms, tobacco and fossil fuels beyond specified thresholds, as determined by BFA. To identify screened companies, Fund management may use information that may be sourced from public disclosures, company websites, academic institutions, government agencies, the media and third-party service providers. Fund management adheres to a standard research and review process to assess any external information which may be utilized in the investment process.
Each Fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.
An investment in a Fund is not a bank deposit and it is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency, BFA or any of its affiliates.
Each Fund’s investment objective and Underlying Index may be changed without shareholder approval.
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