BlackRock US Equity Factor Rotation ETF (DYNF)

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On this episode of the “ETF of the Week” podcast, VettaFi’s Head of Research Todd Rosenbluth discussed the BlackRock U.S. Equity Factor Rotation ETF (DYNF) with Chuck Jaffe of “Money Life.” The pair talked about several topics regarding the fund to give investors a deeper understanding of the ETF overall.

BlackRock U.S. Equity Factor Rotation ETF (DYNF)

Chuck Jaffe: One fund, on point for today. The expert to talk about it. Welcome to the ETF of the Week, where we examine trending new, newsworthy, unique, and intriguing exchange traded funds with the help of Todd Rosenbluth. He’s head of research at VettaFi, and at, you’ll find all the tools and research you need to be a savvy and smart investor in exchange traded funds.

Todd, it’s great to chat with you again.

Todd Rosenbluth: It’s great to be with you again, Chuck.

Chuck Jaffe: Your ETF of the Week is. …

Todd Rosenbluth: The BlackRock U.S. Equity Factor Rotation ETF, DYNF.

Chuck Jaffe: The BlackRock U.S. Equity Factor Rotation ETF. Now, factor and rotation are the key words there. But why this fund now?

Todd Rosenbluth: So we wanted to spotlight this fund. We’ve been talking about some under-the-radar, actively managed ETFs. This fund used to be under the radar, but no longer. It now has $7 billion. Almost all of that money has come in just 2024, in the first quarter. This is actively managed by the BlackRock team. It can rotate, as it currently is exposed to more quality-oriented companies towards value, towards lower volatility, momentum, or small size, based on the market environment in a dynamic manner.

As opposed to tracking an index, it has securities selection from the BlackRock team. So we really wanted to spotlight this fast-growing ETF.

Chuck Jaffe: OK. But, when you talk about it, it can be a little more value, a little more quality, etc., that basically means it’s a blend fund. Is there something in the secret sauce here that you particularly like?

Todd Rosenbluth: When I think of a blend fund, I think of the S&P 500 index-based strategies, that have a combination of growth stocks and value stocks, and some that have a mixture of both. This fund is going to tilt towards quality companies, or towards value, or towards momentum, or a combination of those factors using the in-house expertise that BlackRock offers.

And it’s worked. This fund has outperformed not only this year, but over its three-plus year track record since it’s been in existence. It’s now just getting the attention it deserves.

Chuck Jaffe: The performance is a key element here. Because to me, this is a hard fund to gauge. And I’ll tell you why. For you at VettaFi, or for Morningstar, or for Lipper, this winds up being categorized as a large blend fund. And the performance of this fund, great over the long-term track record, but below average when it got out of the box. Very much above average, like right at the top of the peer group, last year.

And again, top decile this year. But is that because they’ve hit the rotations right. When they weren’t at the top of the peer group a couple of years ago, was that because they weren’t hitting the rotations right? And now, are they hitting the rotations right? Because that’s a really tough thing to judge. I’m trying to look at them to see if they do their job well.

And I get it. They’re doing their job well against other blend-ish kind of funds. But their job is a little different, isn’t it?

Todd Rosenbluth: It is. This is different than a number of ETFs. One is that it is actively managed. So, their securities selection and the rotation of individual companies based on the fundamentals, the valuation characteristics of those companies and how that environment works. But as opposed to some of the actively managed ETFs that we’ve talked about that are core-oriented, they will consistently have exposure to certain characteristics. And they’ll rotate through within companies within those characteristics.

This one is going to bounce from certain characteristics, like quality towards lower volatility, or towards momentum, or smaller size companies. So we currently see a lot of mega-cap companies within the portfolio. We won’t always see mega-cap companies in the top 10 holdings. We will probably see some smaller size companies rise to the top in certain market environments.

So, I do agree with you. You want to look at the totality of performance. You want to judge whether or not BlackRock is equipped to be running this strategy and how have they done. But there’s going to be time periods when this fund doesn’t do as well. Because the factors that management is favoring are not as in favor going forward.

And then the good thing is management will likely adjust. If the environment stays the same, they’ll adjust to it.

Chuck Jaffe: We’ve had this discussion about quality, value growth and blend. So I’ve got to ask, as somebody who evaluates funds, we’re now using quality as a factor. That’s a relatively new thing. But every time I see somebody talking about quality, I hear blend, I hear you can buy a value stock and as it gets growth, it hits. It’s a quality company, you can stick with it. And if you’ve got a growth company and it starts to change its metrics a little bit, but it’s a quality company, you can stick with it. Is quality for you, just as we’re looking at factors, kind of another way of saying blend? Have we just kind of sussed it out differently now?

Todd Rosenbluth: I think of quality in more of these are what people that used to call blue chip companies, companies with strong balance sheets, with consistent earnings records, with perhaps strong free cash flow generation balance sheets that look strong overall. So some of those companies will become blend. But many of them are going to have growth characteristics and some are going to have value characteristics.

When I look inside the portfolio, I see JPMorgan and Berkshire Hathaway that are more value-oriented companies. I see Microsoft and Nvidia, I believe is in the portfolio, that certainly are more growth as opposed to value-oriented companies. So when you look at the portfolio in totality, it’s probably going to look more blend or core strategy. But because it’s going to have higher — or I want to use high quality without defining it — companies with strong fundamentals across the board. That, for many people, is going to end up being core.

But it’s there are certain characteristics. These are not all S&P 500 companies. This is a subset of that large-cap universe today.

Chuck Jaffe: So you mentioned this is a core potential fund. Let’s be perfectly honest. Most people start with a core fund, so people already have one. And my concern when I talk about a fund that’s actively managed and you say, oh, I’m going to have multiple funds in the same basic cap space is that we’re going to wind up with an investor layering funds together and creating basically a closet index fund.

You buy this fund in part because it’s active, but if you know this fund is buying X, Y, Z. But it’s buying that from some other fund you have in your portfolio that is selling X, Y, Z, you’re paying the transaction costs and you still have whatever a closet index fund and the rest. So, how does this play with other funds in your portfolio?

If this is your core fund, are you getting rid of the one you’ve got to get this?

Todd Rosenbluth: Well, that’s what’s happened so far. So, this fund has become in use from BlackRock’s model allocation portfolios that they run for advisors that use InvestNet and other platforms. And what BlackRock has done is they’ve rotated out of some of their S&P 500 Index-based strategy and added this into the portfolio.

So, whether it’s a combination with the S&P 500 or for some, is a replacement for the S&P 500, you’re of course taking on greater risk in the opportunity for higher reward with active management. So I would think that advisors, investors that are looking at DYNF, they want to look at it first in combination with their core index-based strategy, and if as they gain comfort, this could be a replacement over time.

Chuck Jaffe: It’s the BlackRock U.S. Equity Factor Rotation ETF, DYNF. The ETF of the Week from Todd Rosenbluth at VettaFI. Todd, always great to chat with you. We’ll do this again next week.

Todd Rosenbluth: Thanks, Chuck. Go blue!

Chuck Jaffe: The ETF of the Week is a joint production of VettaFi and Money Life with Chuck Jaffe. And yes, I’m Chuck Jaffe. You can check out my hour-long weekday podcast by going to or by searching for it wherever you find your favorite podcasts.

And if you’re searching for information on your favorite exchange traded funds, or even just the ones you want to add to your portfolio, make sure you’re looking at Because they’ve got a full suite of tools and research that’s going to help you out and make you a better investor. They’re on Twitter at @Vetta_Fi. And Todd Rosenbluth, VettaFi’s head of research and my guest — well, he’s on Twitter or X at @ToddRosenbluth. The ETF of the Week is here for you every Thursday. Make sure you’re back next week, and until then, happy investing, everybody!

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