He explained that BlackRock sees three distinct user groups of ETFs in the U.S.
“First are active capital markets participants who need deep liquidity and derivative capabilities. Second are those who look to ETFs for precise specialized exposure. And third are those who are buy and hold investors and broad core exposures. We have a very strong position with clients in the first two segments,” Kapito said.
However, BlackRock has faced “increased competition” with buy and hold investors.
“So we’ve created a new suite of products targeted directly at this market segment. Now, to be clear it is important to understand that by buy and hold, we don’t mean retail. We mean investors of all stripes, large and small, that invest for the long time horizon,” Kapito said.
“So to be the leader in all development segments, we need to tailor products and services to different clients’ needs. Because investors that seek core portfolio products to buy and hold for the long term value price over other attributes, we have created a suite of products tailored just for them,” he added.