BlackRock's venture into synthetic ETFs 'surprising' but 'not hypocritical'

iShares S&P 500 Swap UCITS ETF launched in September

BlackRock's venture into the synthetic exchange traded fund (ETF) market has surprised many who remember the criticism of the structure from the US giant's CEO Larry Fink.

BlackRock's ETF business iShares launched the iShares S&P 500 Swap UCITS ETF in September, a synthetic product designed to track the index of the S&P 500 using a swap-backed replication rather than a physical one. The launch caught some, who still recall Fink's 2011 claim that an investor who buys a Lyxor product is just "an unsecured creditor of SocGen", off-guard. Gary Buxton, head of EMEA ETFs at Invesco, recalled that the synthetic ETF market was "hugely popular" between 2004 and 2006, but began to receive criticism, "heavily led" by BlackRock, in the wake of the 2008 Global Finan...