5 min readBy Ron Koren ETF Insider
How does the AOM ETF work?
The AOM ETF is a specialized investment fund that focuses on a specific sector. This exchange-traded fund offers investors exposure to a range of companies in this sector.
The AOM issuer, the First BlackRock-advised Funds, introduces an innovative fund of funds strategy aimed at achieving a balanced investment approach. Primarily investing in Underlying Funds corresponding to their respective indexes, the Fund emphasizes diverse asset classes such as U.S. or non-U.S. equity, aggregate bond markets, and U.S. Treasury bonds. Tracking the S&P Target Risk Moderate Index, the Fund prioritizes a blend of equity and fixed-income securities, aiming to offer current income, capital preservation, and moderate to low capital appreciation opportunities. With a strategic allocation of 40% in equity-focused Underlying Funds and 60% in bonds as of July 31, 2023, the Fund seeks to mirror the Underlying Index's composition while leveraging BlackRock's expertise. Employing a representative sampling indexing strategy, the Fund aims to mirror the performance of its Underlying Index, fostering lower costs and improved after-tax returns. While maintaining a focus on tracking its benchmark, the Fund may also utilize derivatives and lending strategies, aligning its investment approach with the market dynamics overseen by the independent Index Provider, SPDJI.
AOM Dividend, a product within the First BlackRock-advised Funds lineup, offers investors an opportunity to focus on dividend-oriented investment strategies. Leveraging the expertise of BlackRock, this fund seeks to provide a steady income stream through investments primarily in dividend-paying securities. AOM Dividend aims to achieve its investment objective by strategically allocating assets across a diversified portfolio of equities and fixed-income securities, with a particular emphasis on companies with a history of consistent dividend payments. By utilizing a combination of equity and bond Underlying Funds, the fund endeavors to balance income generation with capital preservation, catering to investors seeking reliable dividend income alongside potential for moderate to low capital appreciation. With a disciplined approach to dividend investing and a commitment to tracking its benchmark, AOM Dividend offers investors a vehicle to participate in the potential long-term benefits of dividend-focused strategies within a professionally managed and diversified fund structure
AOM Tracking, part of the First BlackRock-advised Funds series, is tailored for investors seeking a passive investment approach with a focus on tracking specific market indexes. Designed to mirror the performance of its designated benchmark, AOM Tracking invests primarily in a diversified portfolio of Underlying Funds that correspond to their respective indexes. This fund employs a representative sampling indexing strategy, aiming to replicate the investment characteristics and risk profile of its benchmark while minimizing costs and optimizing after-tax returns. By maintaining a close alignment with its Underlying Index, AOM Tracking seeks to provide investors with efficient exposure to targeted market segments without attempting to outperform the benchmark. With a transparent and disciplined investment strategy, AOM Tracking offers investors a straightforward avenue to access market returns while mitigating the risks associated with active management.
AOM Correlation, a component of the First BlackRock-advised Funds series, is structured to address the needs of investors looking to manage portfolio risk through diversification and correlation analysis. This fund is crafted to invest across a spectrum of asset classes, including equities, bonds, and alternative investments, with the aim of constructing a portfolio that exhibits low correlation to traditional market indices. By strategically allocating assets across Underlying Funds with diverse correlation profiles, AOM Correlation seeks to mitigate the impact of market volatility and enhance portfolio stability. The fund utilizes sophisticated correlation modeling techniques to identify and capitalize on investment opportunities across different market environments, aiming to deliver consistent risk-adjusted returns over time. With a focus on minimizing correlation to traditional asset classes while maintaining the potential for capital appreciation, AOM Correlation provides investors with a valuable tool for building resilient and well-diversified portfolios in an ever-changing market landscape.
AOM Sector, a component of the First BlackRock-advised Funds series, is designed to cater to investors seeking targeted exposure to specific sectors or industries within the market. This fund offers a focused approach by investing primarily in Underlying Funds that concentrate on particular sectors, such as technology, healthcare, energy, or consumer discretionary. By strategically allocating assets across sector-specific funds, AOM Sector aims to capture the potential growth opportunities and unique dynamics of each industry while diversifying risk. Whether investors are looking to capitalize on emerging trends, hedge against sector-specific risks, or express a thematic investment view, AOM Sector provides a convenient and efficient vehicle to gain exposure to desired sectors within a professionally managed and diversified fund structure. With a disciplined investment approach and a commitment to tracking sector performance, AOM Sector offers investors the flexibility to tailor their portfolio allocations according to their sector preferences and investment objectives.
AOM Exposure, a vital component of the First BlackRock-advised Funds series, is crafted to provide investors with strategic exposure to various asset classes and market segments. This fund adopts a dynamic investment approach, leveraging a diversified portfolio of Underlying Funds to capture opportunities across multiple asset classes, including equities, fixed income, and alternative investments. By tactically allocating assets based on market conditions and investment objectives, AOM Exposure seeks to optimize risk-adjusted returns while maintaining a balanced risk profile. Whether investors are seeking growth, income, or capital preservation, this fund offers a versatile solution to tailor exposure to their desired asset classes and investment themes. With a focus on adaptability and responsiveness to changing market dynamics, AOM Exposure serves as a valuable tool for investors looking to build robust and well-diversified portfolios suited to their long-term financial goals.
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