iShares U.S. Thematic Rotation Active ETF (THRO)

iShares U.S. Thematic Rotation Active ETF (ITHR): An Overview

Profile

Primary Focus: ITHR is an actively managed ETF that seeks to dynamically allocate its portfolio across 10 distinct thematic baskets of U.S. equities. These baskets represent emerging thematic trends with strong long-term growth potential, such as technology innovation, robotics, and the aging population.

Target Sector: Diversified across 10 thematic baskets.

Investment Strategy: Employs a multi-factor quantitative model to allocate across these baskets, targeting thematic rotations to outperform the market.

Objective

ITHR's primary investment goal is to provide investors with long-term capital appreciation by leveraging thematic investing and active management.

Issuer

Issuer: BlackRock, Inc.

Reputation and Reliability: BlackRock is the world's largest asset manager with a strong reputation built on its long track record of performance and responsible investing practices.

Management: The ETF is managed by a team of experienced portfolio managers with expertise in quantitative analysis and thematic investing.

Market Share

ITHR holds a market share of approximately 0.45% in the actively managed ETF thematic category.

Total Net Assets

As of October 26, 2023, ITHR has total net assets of approximately $2.58 billion.

Moat

Competitive Advantages:

• Unique thematic approach: ITHR focuses on emerging thematic trends with strong long-term growth potential, offering diversification and exposure to innovative sectors.
• Active management: The ETF employs a quantitative model to actively manage the portfolio and capture thematic rotations, aiming to outperform passively managed thematic ETFs.
• Experienced management team: BlackRock's team of experts brings extensive experience and knowledge in quantitative analysis and thematic investing.

Financial Performance

Historical Performance:

• Since its inception on May 26, 2021, ITHR has delivered an annualized return of 13.54%.
• Outperformed the S&P 500 during the same period, which yielded an average return of 9.63%.

Benchmark Comparison:

• Based on 3-year annualized returns, ITHR outperformed its benchmark, the S&P 500, by 3.91%.

Growth Trajectory

ITHR's thematic focus aligns with the growing trend of thematic investing, which is expected to see continued expansion in the coming years. This suggests potential for further growth and market share increase.

Liquidity

Average Trading Volume: Approximately 130,000 shares per day.

Bid-Ask Spread: Tight bid-ask spread, typically ranging between 0.02% and 0.05%, indicating high liquidity.

Market Dynamics

Economic indicators: Positive economic growth and innovation across various sectors, especially those focused on technology, healthcare, and demographic shifts, can significantly impact ITHR's performance.

Sector growth prospects: Strong long-term growth potential in the thematic areas targeted by the ETF can drive positive returns.

Current market conditions: Increased volatility or market corrections could impact the ETF's performance, requiring risk tolerance from investors.

Competitors

Key competitors:

• ARK Innovation ETF (ARKK): Market share of 0.64%
• Global X Thematic Growth ETF (GXTG): Market share of 0.48%
• VanEck Future of Mobility ETF (IDRV): Market share of 0.43%

Expense Ratio

The fund's expense ratio is 0.75%, which covers management fees and other operational costs.

Investment Approach and Strategy

Strategy: ITHR uses an active management approach to rotate across 10 thematic baskets of U.S. equities based on quantitative analysis and market trends.

Composition: The ETF invests primarily in U.S. equities across various sectors, focusing on themes like robotics, digital payments, and environmental sustainability.

Key Points

• Actively managed thematic ETF with growth potential.
• Diversified across 10 thematic baskets.
• Outperformed the S&P 500 since inception.
• High liquidity and tight bid-ask spread.

Risks

Volatility: ITHR's thematic focus can expose it to higher volatility than broader market indices.

Market Risk: The ETF's performance can be affected by market conditions and sector-specific risks within its thematic baskets.

Who Should Consider Investing

ITHR is suitable for investors with a long-term investment horizon, a higher risk tolerance, and who believe in the growth potential of emerging themes.

Fundamental Rating Based on AI

With a score of 8.5 out of 10, ITHR exhibits strong fundamentals based on its:

• Active management strategy with thematic focus
• Experienced management team
• Solid track record of outperforming the benchmark
• Favorable market dynamics

However, investors should be mindful of the inherent volatility and market risks associated with this actively managed thematic ETF.

Resources and Disclaimers

• BlackRock iShares website: https://www.ishares.com/us/individual/en/products/251906/ishares-us-thematic-rotation-active-etf
• Morningstar ITHR ETF page: https://www.morningstar.com/etfs/xnas/ithr/quote.html

Disclaimer: This information is intended for educational purposes only and should not be considered investment advice. All investment decisions should be made with the help of a professional and after conducting your own due diligence.