BlackRock Inc. has launched a new exchange-traded fund (ETF) to compete with JPMorgan Chase & Co.’s successful active strategy. The BlackRock Advantage Large Cap Income ETF (ticker BALI) trades dividend-paying stocks and sells S&P 500 call options to generate additional payout streams. This move by BlackRock highlights the growing popularity of active ETFs and the competition among fund issuers to capture a piece of this market.
The actively managed BALI ETF aims to offer investors an attractive income stream by combining dividend-paying stocks with call options. By selling call options, the fund generates additional income, potentially boosting overall returns. This strategy allows investors to benefit from both stock dividends and option premiums. With a management fee of 35 basis points, this new ETF is a competitive option for investors seeking an active income-focused approach.
BlackRock’s entrance into the active ETF market comes as more investors are looking for alternatives to traditional passive index funds. The success of JPMorgan’s similar strategy has demonstrated the demand for actively managed ETFs that can provide consistent income. By offering a unique combination of dividend-paying stocks and call options, BlackRock aims to attract investors seeking reliable income streams while also capitalizing on market volatility. As the competition among fund issuers heats up, investors can enjoy a wider range of options to meet their income-focused investment goals.
