EXCLUSIVE: iShares Head Of Americas On Thematic ETF Trends And Retail's Maturation Beyond "Memes"

ETFs are gaining momentum, with global assets under management poised to reach $12 trillion by the end of 2023—more than double 2019’s $5 trillion, according to iShares research.

Armando Senra, Head of iShares Americas at BlackRock, recently took questions from retail investors via Public.com. Here’s an exclusive recap of the Town Hall event for Benzinga readers.

What are some trends you’re seeing in thematic ETFs at iShares and what are some examples of themes that you’re prioritizing in your funds?

Armando Senra: A broad trend we’re seeing is the “Great Acceleration,” which is the exponential growth of longer-term trends in technology, the industrial renaissance, consumer behavior, and health care. For example, electric vehicle and robotics usage is growing, and millennial and emerging market consumer behavior is revolutionizing spending and consumption. We believe the market may be underestimating opportunities in these sectors for investors.

How has the increased participation of retail investors changed how you approach ETFs?

AS: We’ve witnessed some remarkable shifts in the market this year — especially the rise of the retail investor. At iShares, we’ve seen that ETFs have helped bring investing tools that were previously limited to institutions to retail investors, who hold a ton of power and influence in the market (yes, beyond just boosting “meme stocks”). This new generation is already driving significant change in reporting standards for companies, too, impacting the way the companies themselves operate.

How does iShares come up with a new ETF and what does the process look like?

AS: Ultimately our goal at iShares is to champion progress for investors. So, when we think about creating new ETFs we ultimately are trying to deliver market exposures that our clients need, in the convenient wrapper of an ETF. As a recent example, we’ve just filed a new ETF that seeks to help investors seek income in this low interest rate environment. We’ve also innovated around thematic solutions, like making innovation around the crypto market accessible through an ETF ($IBLC), and delivering a suite of climate change focused ETFs that eliminate fossil fuel exposure. From there, the process is pretty simple. We talk to our clients, hear about their needs and look at the marketplace for where we see gaps. Then we think about how we can make those opportunities investible given liquidity and the marketplace. We are constantly innovating new ETFs to make investing more accessible for all investors.

What is the thinking behind sustainable ETFs, and how do you balance recognizing the impact of climate change with a desire to produce returns for investors?

AS: We believe climate change is an investment risk over the long term and how companies adapt to that will impact their economic success. We also believe the net zero transition presents significant opportunities as more investments are made in net zero technology and infrastructure. We believe this is something investors may want to consider as they weigh risks and opportunities over the long term.

Public.com members can view the full Q&A in the app. Open To The Public Investing is a member of FINRA and SIPC. This content is not investment advice. Investing involves risk of loss.