UC Investments, the University of California’s systemwide investment arm, has committed as an early investor in one of three new BlackRock ETFs designed to offer investors the ability to customize their exposure to U.S. large-cap stocks, BlackRock announced Oct. 24.
UC Investments, Oakland, has committed as an investor in the iShares Nasdaq Top 30 Stocks ETF, according to a BlackRock news release.
That ETF along with the iShares Top 20 U.S. Stocks ETF and the iShares Nasdaq-100 ex-Top 30 ETF are part of the iShares Build ETFs, a newly created series designed to provide investors with portfolio building blocks they can use to customize their U.S. market-cap exposure via “the convenience and flexibility of an ETF,” the news release said.
In an interview, Rachel Aguirre, a managing director and head of U.S. iShares product at BlackRock, declined to say how much UC Investments was investing in the new ETF, which has the ticker symbol QTOP.
“We’re really pleased (UC Investments) has joined with us to be an early investor of QTOP, which is one of the three products that we’re launching on Thursday,” Aguirre said. “This is really about putting in the hands of investors new tools to customize their exposure to … the mega-cap portion of the U.S. equity large-cap universe.”
The U.S equity market has “undergone a massive change,” she said.
“Back in 2000, the entire U.S. stock market was valued at $15 trillion,” Aguirre said. “If you fast forward to today, the largest eight companies alone are worth $15 trillion.”
But even more important than just their sheer size “is that these largest companies are also having an outsized impact on market returns themselves,” she said. The 20 largest companies in the S&P 500 index have contributed more than two-thirds —68% — of the index’s return over the past three years, she said.
“And it’s even more pronounced if you look at the Nasdaq-100,” Aguirre said, adding that the 30 largest companies in the Nasdaq-100 have contributed 89% of that index’s return over the past five years.
The three new ETFs as well as two established products — the iShares MSCI USA Equal Weighted ETF and the iShares S&P 100 ETF — are being brought together to create the iShares Build ETFs series, she said.
“And as a series, they’re designed to really enable investors to invest precisely within the U.S. large-cap equity universe and get that targeted exposure to mega caps or … broader exposure to large, well-known companies,” Aguirre said.
Each of the three new ETFs has an expense ratio of 0.2%, according to the release.
“At the University of California, we believe in empowering individual investors, particularly young investors, with straight-forward tools to gain exposure to innovative companies that are poised to grow,” said Jagdeep Singh Bachher, the University of California’s chief investment officer, in the release. “That’s why we are pleased to be an early investor in QTOP, which allows investors big and small to easily add growth companies to their portfolios.”
BlackRock, the world’s largest asset manager, had $11.48 trillion in assets under management as of Sept. 30.
