BLACKROCK LAUNCHES STOCK ETF WITH 100% DOWNSIDE HEDGE
BlackRock has launched a 'buffer' exchange-traded fund that seeks to offer a 100% downside hedge to risk-shy investors looking to tap the equity markets, the world's largest asset manager said on Monday. So-called buffer or risk-managed ETFs help maximize returns from an asset for investors and simultaneously provide downside protection over a specific period.
The novel product will likely appeal to investors who are hoping to ride a rally in the stock markets as they continue to trade near record highs, but are concerned that a slowing economy and higher-for-longer interest rates can together hurt sentiment going forward. Buffer ETFs also typically see lower redemption requests during times of heavy market volatility versus traditional ETFs tracking stock indexes.
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