iShares
Get the active advantage
Today's complex economic landscape requires a more granular approach to building investment portfolios. Using active management through cost-efficient ETFs can help make portfolios stronger and potentially boost returns during market volatility.
iShares US Factor Rotation Active ETF (IACT)
https://www.blackrock.com/au/products/343627/
This product is likely to be appropriate for a consumer:
• who is seeking capital growth and/or income distribution
• using the product for a core component of their portfolio or less
• with a minimum investment timeframe of 5 years, and
• with a high to very high risk/return profile
What are active ETFs?
Rather than tracking an index like a traditional index ETF, active ETFs are actively managed by BlackRock portfolio managers who seek superior returns to the broad market.
Active ETFs offer a more cost-efficient, liquid and transparent way for investors to access actively managed strategies.
Active management can give investors access to stocks beyond the traditional index and potentially incorporate greater risk management as portfolio managers seek to actively respond to market events in real time.
Investors can trade in and out of an active ETF on the exchange at any time during market hours.
37%
of ETFs listed in Australia are active ETFs
15%
of Australian ETF industry AUM is from Active ETFs
$4
trillion Projected AUM of global active ETFs by 2030
Source: TrackInsight Global ETF Report May 2025, BlackRock data as of 30 June 2024
JUST LAUNCHED: iShares U.S. Factor Rotation Active ETF
We’re excited to announce the launch of our first systematic active ETF, the iShares U.S. Factor Rotation Active ETF (ASX: IACT). IACT seeks to outperform the broad U.S. equity market by tactically allocating to six economic drivers of return, or factors, based on changing market conditions.
To learn more about these factors, visit our factor investing hub.
The Australian ETF will invest in the existing US$17.4bn U.S. ETF (DYNF) which has a strong track record of delivering long-term positive returns for clients1. The investment process is based on collaborative research and aims to tactically allocate to historically successful factors using proprietary insights.
By leveraging our established ETF, we provide clients with the confidence in a live track record through different market environments and the mechanism via the U.S. ETF market where portfolio manager trading/turnover does not impact distributable capital gains for clients.
The IACT strategy benefits from two sources of return from the six factors mentioned above:
1. The long-run premiums associated with the factors.
2. Tactical returns from adjusting allocations to the factors over time.
How does factor rotation work?
01. Determine factor outlook
Regime – Where are we in the current market cycle? Which factors are the most appropriate to the current regime?
Valuation – Is the factor cheap or expensive?
Sentiment – Is sentiment on the factor positive or negative?
Growth timing – Are growth firms presently profitable and is growth priced in?
02. Measure every stock’s factor exposure
Source: BlackRock, as of 31 March 2025. For illustrative purposes only.
03. Construct portfolio
Source: BlackRock, as of 31 March 2025. For illustrative purposes only.
Stock snapshot
Top three drivers of factor rotation strategy performance, year to March 20252
Cisco
This networking infrastructure provider reported above-consensus revenue of US$15 billion in the final quarter of 2024.3
The Travelers Companies
One of the largest property and casualty insurance companies in the US4, Travelers has consistently beaten consensus earnings over the last four quarters to Q1 2025.5
T Mobile US
Majority owned by Europe’s biggest telecommunications provider, T-Mobile is the second largest wireless carrier in the United States, with 131 million subscribers.6
Why invest?
Performance
In the US, iShares' U.S. Factor Rotation active strategy (DYNF) has outperformed its Morningstar category average by 6.1% annually.7
Differentiated
A unique strategy with low correlation to other active managers8 that can complement both broad market and active investments.
Invest with the best
Powered by one of the world’s largest asset manager, with over 40 years’ experience and more than US$300 billion invested across systematic strategies.9
