BlackRock US Equity Factor Rotation ETF

DYNF

Market cap $32.4B

Actively managed ETFs in the U.S. gathered $73 billion of new money in February and, thanks to model allocation changes made by BlackRock last week, are poised for another strong month. BlackRock's strategy of increasingly leaning into active ETFs via its model portfolios has become a powerful catalyst.

With no end in sight to the macroeconomic uncertainty on both the domestic and global fronts, is now the time to pivot to the flexibility of active ETFs? Many advisors and investors seem to think so.

How has the ETF handled the moment it was seemingly designed for? So far, the results are “meh.

The iShares U.S. Equity Factor Rotation Active ETF has taken huge bets on tech and communications stocks.

Retirees need predictable income and protection from large drawdowns during withdrawal years.

DYNF is an actively managed factor rotation ETF with a 0.26% expense ratio and $31B in assets under management. Factor emphasis is assigned based on the perceived economic regime. Currently, DYNF appears in the "expansion phase" of the economic cycle, where momentum and growth are favored. However, it's not an "all-or-nothing" system. DYNF also slightly emphasizes value right now. I like its current factor mix, and I anticipate solid returns moving forward. However, DYNF's track record is mixed, and through September 2022, it lagged SPY by 3.45% per year.

The iShares U.S. Equity Factor Rotation Active ETF rotates between style factors, including value, growth, quality, size, momentum, and minimum volatility. Despite having a relatively weak start, DYNF has beaten IVV for three consecutive years, validating its strategy's ability to deliver durable alpha in a bull market. Its impressive performance, together with the GARP tilt (i.e., a PEG ratio of 1.01), secures a rating upgrade to a Buy.

On this special episode of the “ETF of the Week” podcast, VettaFi's Head of Research, Todd Rosenbluth, discussed record ETF inflows with Chuck Jaffe of Money Life. The pair discussed why this might be happening, highlighted some standout funds, and more.

iShares U.S. Equity Factor Rotation Active ETF (DYNF) earns a strong buy rating for its market-beating returns and dynamic portfolio strategy. DYNF outperformed the S&P 500 over three and five years, leveraging active management and diversified sector exposure, especially in technology and growth stocks. The ETF offers attractive characteristics: low expense ratio, lower valuations than growth peers, strong liquidity, and a per-share price accessible to retail investors.

It's October, and ETFs are closing in on the $1 trillion mark for net inflows in 2025 (We have $997 billion as of October 9). This is a monumental achievement given this milestone was first crossed in a calendar year only last December.