BlackRock Strengthens Thematic Equity Offering with U.S. Manufacturing ETF

Rhea-AI Summary

BlackRock has launched the iShares U.S. Manufacturing ETF (NYSE: MADE), expanding its thematic equity suite. This ETF aims to capture opportunities arising from the U.S. manufacturing renaissance, driven by recent policy initiatives that incentivize reshoring manufacturing activities.

The fund targets companies potentially benefiting from supportive policies and secular trends in American manufacturing. With an expense ratio of 0.40%, MADE tracks the S&P U.S. Manufacturing Select Index. Recent policies like the Infrastructure Investment and Jobs Act, Inflation Reduction Act, and Chips and Science Act have allocated $2.1 trillion to improve infrastructure and incentivize critical industries.

Since 2020, construction spending on U.S. manufacturing has nearly tripled from $78 billion to $234 billion as of May 2024. MADE invests in companies across various sectors, including consumer cyclicals, technology, automotive, defense, and construction.

Positive

• Launch of new ETF (MADE) targeting U.S. manufacturing renaissance
• Potential to benefit from $2.1 trillion in policy allocations for infrastructure and critical industries
• U.S. manufacturing construction spending nearly tripled since 2020, reaching $234 billion
• Diversified exposure across multiple sectors related to manufacturing

Negative

• None.

Insights

Financial Analyst

BlackRock's launch of the iShares U.S. Manufacturing ETF (NYSE: MADE) is a significant move, tapping into the expanding focus on reshoring manufacturing within the U.S. The ETF aims to capitalize on a surge in domestic production fueled by substantial policy initiatives. These policies, such as the Infrastructure Investment and Jobs Act, the Inflation Reduction Act and the Chips and Science Act, involve a combined allocation of $2.1 trillion, providing a robust tailwind for U.S. manufacturing sectors. This sector-targeted ETF could become a strategic tool for investors looking to benefit from long-term structural trends in U.S. manufacturing. The ETF's focus on companies benefiting from these supportive policies is a compelling proposition for those seeking exposure to the manufacturing renaissance without delving into specific stocks.

However, investors should consider the expense ratio of 0.40%. This is relatively higher than broad-based ETFs, reflecting its targeted approach. While this fee may be justified by the specialized nature of the fund, it's important to evaluate whether the potential returns outweigh the costs.

For retail investors, the ETF provides a convenient way to gain diversified access to the manufacturing sector, mitigating the risks associated with individual stock investments. However, they should be aware of market volatility, especially given the current economic uncertainties. In the short term, the ETF's performance will likely hinge on the implementation and effects of the policy measures mentioned. Long-term prospects appear favorable, though, given the ongoing emphasis on supply chain resilience and domestic production.

Market Research Analyst

The introduction of the iShares U.S. Manufacturing ETF (NYSE: MADE) aligns with a notable trend towards thematic investing, where investors seek opportunities based on broader economic and societal trends. In this case, the ETF targets the resurgence of U.S. manufacturing, driven by policy incentives and supply chain realignments. The reconfiguration of global supply chains, especially after the disruptions witnessed during the pandemic, underscores the relevance of such focused investment vehicles.

From a market perspective, MADE offers a unique exposure that transcends traditional sector boundaries, encompassing consumer cyclicals, technology, automotive, defense and construction companies. This broad yet targeted approach is appealing as it captures diverse opportunities within the manufacturing renaissance. It's particularly interesting for investors looking to diversify their portfolios with sector-specific ETFs while maintaining a thematic focus.

Nevertheless, it's essential to monitor the industrial and economic indicators, such as manufacturing PMI (Purchasing Managers' Index) and policy developments that could impact the performance of these manufacturing firms. Also, investors should stay informed about global trade dynamics, as they could influence the long-term efficacy of domestic manufacturing policies.

Provides access to companies which could be poised to benefit from boost in U.S. manufacturing

NEW YORK--(BUSINESS WIRE)-- Today, BlackRock expanded its thematic equity suite with the launch of the iShares U.S. Manufacturing ETF (NYSE: MADE). The Fund takes a targeted approach to investing in companies that may be at the forefront of the U.S. manufacturing renaissance, seeking to capture opportunities arising from various drivers, including recent policy initiatives that incentivize reshoring manufacturing activities.

“Evolving trade relations and a call for enhancing supply chain resiliency have paved the way for the concerted effort across the public and private sectors to reestablish the U.S. as a leader in manufacturing,” said Jay Jacobs, U.S. Head of Thematic and Active ETFs at BlackRock. “MADE is designed to capture these long-term themes by providing targeted access to companies that could be poised to benefit from supportive policies and secular trends, enabling investors to potentially capture the renaissance in American manufacturing in the convenience of an ETF.”

Fund Name	Ticker	Underlying Index	Expense Ratio
iShares U.S. Manufacturing ETF	NYSE: MADE	S&P U.S. Manufacturing Select Index	0.40%

Policy efforts to increase domestic production have accelerated the growth story for U.S. manufacturers. For example, recent policies, such as the Infrastructure Investment and Jobs Act, the Inflation Reduction Act, and the Chips and Science Act, have already allocated $2.1 trillion to improve infrastructure and incentivize companies in critical industries, like semiconductors, to build factories in the U.S..¹

In addition to policy efforts, the rewiring of global supply chains for resilience could bolster continued growth among U.S. manufacturers. Since 2020, construction spending on U.S. manufacturing has nearly tripled from $78 billion to $234 billion as of May 2024,² demonstrating an accelerating effort to reestablish the U.S.’s production of goods from automobiles and chips to aerospace & defense equipment.

MADE is designed to invest in companies that could benefit from boost in manufacturing regardless of traditional sector classifications, encompassing companies directly involved in manufacturing across consumer cyclicals, technology, automotive, defense, and construction. MADE can be added to a portfolio either as differentiated exposure for traditional sectors like Industrials, or as a satellite exposure alongside other long term structural themes for portfolio diversification.

About iShares

iShares unlocks opportunity across markets to meet the evolving needs of investors. With more than twenty years of experience, a global line-up of 1400+ exchange traded funds (ETFs) and $3.86 trillion in assets under management as of June 30, 2024, iShares continues to drive progress for the financial industry. iShares funds are powered by the expert portfolio and risk management of BlackRock.

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.

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

Technologies perceived to displace older technologies or create new markets may not in fact do so. Companies that initially develop a novel technology may not be able to capitalize on the technology.

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. This material does not constitute any specific legal, tax or accounting advice. Please consult with qualified professionals for this type of advice.

The iShares Funds are not sponsored, endorsed, issued, sold or promoted by S&P Dow Jones Indices LLC, nor does this company make any representation regarding the advisability of investing in the Funds. BlackRock is not affiliated with S&P Dow Jones Indices LLC.

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

©2024 BlackRock, Inc. or its affiliates. All rights reserved. iSHARES and BLACKROCK are trademarks of BlackRock, Inc. or its affiliates. All other trademarks are those of their respective owners.

¹ Deloitte, October 2022.
² Federal Reserve Economic Data, Jan 2020 – May 2024, as of May 2024.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240718728377/en/

MEDIA

Joanna Yau

Joanna.Yau@BlackRock.com

646.856.7274

Source: BlackRock

FAQ

What is the ticker symbol and expense ratio for BlackRock's new U.S. Manufacturing ETF (BLK)?

The ticker symbol for BlackRock's new U.S. Manufacturing ETF is NYSE: MADE, and its expense ratio is 0.40%.

How much has U.S. manufacturing construction spending increased since 2020 according to BlackRock (BLK)?

According to BlackRock, U.S. manufacturing construction spending has nearly tripled from $78 billion in 2020 to $234 billion as of May 2024.

What policy initiatives are driving the U.S. manufacturing renaissance mentioned in BlackRock's ETF launch (BLK)?

The U.S. manufacturing renaissance is driven by policy initiatives such as the Infrastructure Investment and Jobs Act, the Inflation Reduction Act, and the Chips and Science Act, which have allocated $2.1 trillion to improve infrastructure and incentivize critical industries.

What sectors does BlackRock's new MADE ETF (BLK) invest in?

BlackRock's MADE ETF invests in companies across various sectors related to manufacturing, including consumer cyclicals, technology, automotive, defense, and construction.