BlackRock U.S. Equity Factor Rttn ETF's Average People Pillar and Process Pillar ratings result in a Morningstar Medalist Rating of Neutral. The portfolio maintains a sizable cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The strategy benefits from high portfolio manager retention, providing continuity on the strategy. This earns the team an Average People Pillar rating. The strategy earns an Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight liquidity exposure and volatility exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And high volatility exposure is rooted in stocks that have a higher standard deviation of returns. The strategy's parent organization earns the firm an Above Average Parent Pillar rating, and this rating is inherited from vehicles belonging to the same branding entity and is indirectly assigned by an analyst.

Analyst Rating

Microsoft

Apple

NVIDIA

Amazon

JPMorgan Chase & Co

Visa

Berkshire Hathaway Inc. - Ordinary Shares - Class B

Alphabet

Broadcom

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. BlackRock U.S. Eq Fctr Rttn ETF earns an Average Process Pillar rating. 

The main driver of the rating is the parent firm's five-year risk-adjusted success ratio of 58%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. Excellent risk-adjusted performance also influences the rating. This can be seen in the fund's five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk. Lastly, the process is limited by the experience of the management team, which averages seven years at this fund.

 This strategy prefers smaller market-cap companies compared with the average fund in its peer group, the Large Blend Morningstar Category.  But in terms of style (value/growth) exposure, it is similar. Examining additional factor exposure, this strategy has held more highly liquid stocks compared to Morningstar Category Peers in the past few years. More-liquid assets are easier to buy and sell without adversely moving their prices and tend to provide some ballast during market selloffs. They also are easier to sell to meet redemptions if a host of investors decide to leave the fund in a short period of time. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy also has had an overweight bias to the volatility factor over these years, meaning it has owned companies that have a higher historical standard deviation of returns. Such stocks tend to rise faster and fall harder than the broad market. High-volatility exposure contributes to stronger performance during bull markets, but often at the cost of losing more during downturns. Compared with category peers, the strategy also had more exposure to the Volatility factor in the most recent month. In addition, this strategy has taken on exposure to high-momentum stocks in these years. Momentum strategies wager that market outperformers will continue to outperform, and laggards will continue to lag. Higher exposure to the former could mean the managers are overweighting stocks on winning streaks. In this month, the strategy also had more exposure to the Momentum factor over its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section. 

 The portfolio is overweight in technology and consumer cyclical relative to the category average by 9.7 and 3.1 percentage points, respectively. The sectors with low exposure compared to category peers are healthcare and industrials, with healthcare underweighting the average portfolio by 7.0 percentage points of assets and industrials similar to the average. The portfolio is positioned across 115 holdings and is diversified among those holdings. In its most recent portfolio, 47.1% of the strategy's assets were concentrated in the top 10 fund holdings, compared to the category’s 49.5% average. And in closing, in terms of portfolio turnover, this portfolio's holdings turn over more often than comparable products in its peer group, possibly resulting in higher costs for investors and a drag on performance.

Average

Process

BlackRock U.S. Eq Fctr Rttn ETF earns an Average People Pillar rating. The leading factor affecting the rating is its parent firm's five-year success ratio of 59%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median return for the period. The stability of the management team also supports the rating. Specifically, the fund has not seen a manager change in the last three years. Lastly, the rating is limited by the combined average five-year excess return of each manager, which suggests that the funds they manage have trailed their respective category average.


The team is backed by Philip Hodges, the longest-tenured manager on the strategy, who provides 11 years of listed portfolio management experience. The average Morningstar Rating of the strategies they currently manage is 3.0 stars, reflecting average risk-adjusted performance versus category peers. The team is small but adequately equipped, with only one other supporting manager. Together, the two listed managers have seven years of average listed portfolio management experience. None of the portfolio managers here invest in this fund. This hurts the rating because manager investment would align their interests with the strategy's investors.

People

BlackRock offers compelling options across asset classes and vehicles. It earns an Above Average rating for Parent. 
The firm’s approximately USD 8 trillion in assets under management, as of Sept. 30, 2022, gives it unparalleled scale and influence. It is a market-leading index fund provider globally, and its iShares exchange-traded fund franchise offers a low-cost lineup of core funds that investors can use to build a well-diversified portfolio for dirt cheap. The firm can be more adventurous in its ETF launches than some peers, so not everything it launches is appropriate for the masses. As a result, it is likely to have more ETF closures than peers that stick to the basic building blocks.  
The firm’s active fixed-income and multi-asset efforts also stand out as some of the best in the industry. Those benefit from BlackRock’s commitment to building a first-class risk management system via its Aladdin analytics software. The software is also available for sale to other firms and has proved to be a popular option for competitors, a testament to its usefulness. 
More recently, the firm has shifted its focus to ESG offerings and incorporating ESG across its investment lineup, leading to a political backlash in the United States.
BlackRock isn’t the best at everything it tries to do, but retail investors, financial advisors, and large institutions could all build robust portfolios using BlackRock’s products.

Above Average

Parent

Blackrock US Equity Factor Rotation ETF

DYNF is an actively-managed fund of large- and mid-cap US stocks that uses five equity style factors.

DYNF uses an actively managed strategy to rotate holdings based on market conditions. The fund has delivered a solid return over the past year, but its historical record is underwhelming. We're not convinced DYNF is a better alternative compared to a broader market index fund.

DYNF: Factor Rotation Strategy Has The Right Idea, But Missing Alpha

BlackRock U.S. Equity Factor Rotation ETF aims to outperform U.S. equity markets by rotating factors based on forward-looking insights. The DYNF ETF provides diversified exposure to quality, value, size, minimum volatility, and momentum factors through a multifaceted approach. The fund's sector composition, particularly its heavy allocation to technology, raises concerns about potential reversals and crowded trades.

DYNF: Interesting But Not Living Up To The Hype In Practice

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JPMorgan Nasdaq Equity Premium Income ETF

Active ETF strategies have stormed the scene over the past year and are growing at a dizzying pace. First-quarter net inflows into actively managed ETFs surged past the previous record to $66 billion.

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Vanguard S&P 500 ETF

Interpreting flows into ETFs and mutual funds sometimes feels an awful lot like reading tea leaves, but I love it. As an ETF nerd, I find it deeply thrilling to parse where investors are putting their money and why.

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Talk about a friendly market. Not even an uptick in inflation or lofty stock valuations could keep the bulls at bay in the first quarter.

The ETF Flowdown: Q1 2024

On this episode of the “ETF of the Week” podcast, VettaFi's Head of Research Todd Rosenbluth discussed the BlackRock U.S. Equity Factor Rotation ETF (DYNF) with Chuck Jaffe of “Money Life.” The pair talked about several topics regarding the fund to give investors a deeper understanding of the ETF overall.

VIDEO: ETF of the Week: BlackRock U.S. Equity Factor Rotation ETF (DYNF)

VettaFi's Head of Research Todd Rosenbluth discussed the BlackRock US Equity Factor Rotation ETF (DYNF) on this week's “ETF of the Week” podcast with Chuck Jaffe of “Money Life.” For more news, information, and analysis, visit VettaFi | ETF Trends.

ETF of the Week: BlackRock US Equity Factor Rotation ETF (DYNF)

Pacer US Small Cap Cash Cows 100 ETF

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On this week's episode of ETF Prime, host Nate Geraci brought on VettaFi's Lara Crigger to discuss the most interesting ETF flow stories that have occurred this year. Afterward, Geraci was joined by Rob Harvey of Dimensional Fund Advisors to break down the perks of systematic active investing.

ETF Prime: Crigger on Biggest ETF Flows Stories and More

iShares 20+ Year Treasury Bond ETF

Financial Select Sector SPDR Fund

The hotter-than-expected inflation data took away some sheen from the stock market yesterday, resulted in enough liquidity in the ETF space. We have highlighted five ETFs that exchanged more than 50 million shares in hand.

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Blackrock Flexible Income ETF

JPMorgan Equity Premium Income ETF

Engine No 1 Transform Supply Chain ETF

Motley Fool Small-Cap Growth ETF

T.Rowe Price Small-Mid Cap ETF

Actively managed ETFs continue to gain traction. After a strong 2023, active ETFs gathered 34% of the net inflows in the first two months of 2024.

Another Strong Start For Active ETFs

DYNF is an actively managed ETF that rotates between style factors to maximize returns and outpace U.S. large- and mid-caps. At this juncture, DYNF is heavy in high-quality mega-caps with robust growth characteristics. Most holdings are momentum stocks; low-beta names are underrepresented. Even though I am impressed by its massive alpha delivered since the previous article, I remain neutral on DYNF's active factor-rotation strategy as its history of outperformance is too short.

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Overall, ETFs pulled in $15 billion in capital last week, taking year-to-date inflows to $588.6 billion.

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The BlackRock U.S. Equity Factor Rotation ETF (DYNF) is approaching its fourth birthday. The active ETF outperformed the S&P 500 over the past one- and three-year periods.

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DYNF is an actively managed fund designed to generate excess returns by opportunistically utilizing factors prevailing in the U.S. stock market, be it value, quality, momentum, etc. The strategy has significant limitations.

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iShares Short Maturity Municipal Bond ETF

iShares Short Maturity Bond ETF

On Thursday, iShares released three new transparent actively managed ETFs, and an index ETF offer client choice and flexibility to access BlackRock’s best thinking on long-term, transformative growth trends. These funds are the first active transparent ETFs from BlackRock’s Fundamental Active Equity portfolio managers.

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It has taken some time, but actively managed exchange-traded funds (ETFs) are finally gaining traction with investors.

News for Blackrock US Equity Factor Rotation ETF ETF (DYNF)