BlackRock Advantage Large Cap Income ETF (BALI)

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In a nod to JPMorgan Chase & Co.’s highly successful options-writing exchange-traded fund (ETF), BlackRock Inc. has launched the BlackRock Advantage Large Cap Income ETF (BALI) on September 28. BALI tracks dividend-paying companies and provides investors with exposure to income generated from call options on the S&P 500, as stated in a press release.

This move by BlackRock takes inspiration from the playbook of JPMorgan’s Equity Premium Income ETF (JEPI), which reigned as the dominant bond fund last year. JEPI’s remarkable success has attracted nearly $30 billion in assets since May 2020, with over $16 billion pouring in during the past year alone.

“JEPI is the envy of the industry because of how successful it’s been,” remarked Todd Sohn, an ETF analyst at Strategas Securities. BlackRock is not the only firm looking to emulate JEPI’s success. In June, Goldman Sachs unveiled plans to launch two option-writing fixed-income strategies—the Goldman Sachs U.S. Equity Premium Income ETF and the Goldman Sachs U.S. Tech Index Equity Premium Income ETF, both of which are yet to debut.

 

ETF Newz Says:

BlackRock’s BALI also mirrors JEPI regarding fees, with both ETFs charging 0.35%. Sumit Roy, an analyst at etf.com, observed, “Most investors who want this type of strategy are going to gravitate towards the more established fund—for now. That said, longer-term, BALI could differentiate itself.”

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