Episode summary
Inside the Latest iShares ETF Trends with BlackRock’s Jay Jacobs
ETF Prime
· · 52 min · Hosts: Nate Geraci, Simeon Hyman · Guests: Jay Jacobs, Tal Schwartz
Summary
BlackRock’s Jay Jacobs says iShares is seeing broad ETF demand across the platform, but especially in “precision” exposures and risk-managed strategies. He points to the Systematic Alternatives Active ETF (IALT) as a standout, arguing that high dispersion in stocks and high correlation between stocks and bonds has increased demand for liquid alternatives that can diversify portfolios and deliver a differentiated return stream. He also says model portfolios are an important distribution channel as advisors shift toward outsourced portfolio construction.
Jacobs also discusses iShares’ newer launches, including the Nasdaq 100 ETF (IQQ), which he says was designed to expand access with a lower share price and low fees, plus AI- and robotics-related funds that reflect investor appetite for innovation. He frames AI as a dominant market theme and says BlackRock is offering both full-value-chain AI exposure and more granular ways to play the theme, from semiconductors and data centers to AI beneficiaries and robotics.
The episode then turns to AI Funds and its AI-managed ETF, HIAI. The guest argues that AI should be treated as a third investment pillar alongside passive indexing and human active management, with the model focusing on downside risk, weekly rebalancing, and portfolio construction rather than index tracking. He says AI management can still generate alpha because human investors remain biased, while also acknowledging that market efficiency should rise over time.
Key takeaways
- BlackRock says IALT is resonating because investors want diversification beyond stocks and bonds in a market marked by high dispersion and high correlations.
- Jay Jacobs says model portfolios are a major driver of ETF adoption, especially as advisors outsource more of portfolio construction to BlackRock.
- BlackRock is using IQQ to compete in the Nasdaq 100 space with a lower share price and a 10 basis point fee after launch.
- The guest says AI Funds’ HIAI is meant to be a true AI-managed portfolio, not just AI-assisted research.
- The guest expects AI-managed investing to grow into a third pillar of asset management as markets become more efficient over time.
Notable quotes
“We have equity and fixed income reaching trillions of dollars on these on different asset classes”
“this is an everything story and I think part of that is really reflecting the state of the markets today where there isn't one singular consensus in the markets”
“we think of it that there's three pillars. The first pillar is human active”
“I think the one that will grow the most during that period will be AI managed, but I think you'll have all three”
How the episode opens
Uh if you go back one or two years ago, liquid alts was a relatively small category in the context of ETFs are growing in all different kinds of ways. We have equity and fixed income reaching trillions of dollars on these on different asset classes. All right, joining me will be Jay Jacobs, US head of equity ETFs at BlackRock, who currently offers over 480 ETFs, nearly $4.6 trillion in US listed ETF assets, including one of the most successful ETF launches over the past couple of years, which is the EyesShare Systematic Alternatives Active ETF, ticker Ialt.
Uh this is a multist strategy liquid alt product that is turning some heads given the current market environment. Uh I think more and more investors and advisers are looking to strategies outside of traditional stock and bond exposure and clearly this ETF is resonating already around $8 billion in assets. And then along with that, uh, just on the topic of ETF launches, iShares rolled out a NASDAQ 100 ETF over the summer, ticker IQQ, uh, which added some competition to that category.
Uh, they also have several new robotics and AI related ETFs, including their most recent launch a few weeks ago, which is the Eyesshares Future Robotics and Related Technologies Active ETF, ticker RBTX. The bottom line is that Eyesshares has a lot going on right now as they always do. And so we're going to get into all of these ETFs along with a few broader industry trends as well.
I always enjoy visiting with Jay. So he will join me here momentarily. Now later I'll be joined by Tal Schwarz, founder and CEO of AI Funds, who back in August they launched their first ETF.
It's called the AI funds high conviction US equity AI managed ETF ticker HI AI and this ETF is powered by a proprietary AI investment model called BA which stands for Beijian AI learning algorithm and in the uh press release for this ETF TAL said and I quote investors have largely had two choices passive indexing or active human management AI management investing represents a third approach and that third approach is obviously what AI funds is bringing to the table with this ETF.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ishares etf trends
- systematic alternatives
- risk management in etfs
- nasdaq 100 etf
- ai-managed investing
Companies and tickers mentioned
- BLK
- BlackRock
- Ai Funds
Watch the episode
Watch “Inside the Latest iShares ETF Trends with BlackRock’s Jay Jacobs” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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