BlackRock Launches Actively Managed ETF Targeting Emerging Market Bonds

The fund seeks to maximize total return by investing in sovereign and corporate debt across emerging economies while navigating heightened credit and geopolitical risks.

October 13, 2025

BlackRock has introduced a new ETF focused on emerging markets fixed income. The iShares Emerging Markets Bond Active ETF (ticker: BREM) offers investors access to sovereign and corporate bonds in developing economies, with the flexibility of an active strategy.

BREM is managed by BlackRock Fund Advisors (BFA) and trades on NASDAQ. The goal: maximize total return through a mix of income and capital appreciation. To get there, the fund invests primarily in hard-currency bonds issued by entities that are either located in—or economically tied to—emerging markets.

How It Works

BREM targets dollar-, euro-, and sterling-denominated bonds across sovereign, public sector, and private sector issuers. These include traditional government bonds, mortgage- and asset-backed securities, and corporate debt. The portfolio can span a wide range of durations and maturities, giving the management team room to shift based on market conditions.

At least 80% of net assets(plus any borrowing) will be allocated to emerging market issuers. That includes issuers with a significant portion of their business, assets, or revenues tied to emerging economies. Investments in derivatives also count toward this allocation when they provide similar exposure or risk characteristics.

Unlike index-tracking ETFs, BREM is actively managed. That means BlackRock’s portfolio managers have the ability to adjust positions daily based on macroeconomic trends, market signals, or individual credit opportunities. The team uses the J.P. Morgan EMBI Global Diversified Index as a reference—not a benchmark to replicate, but a tool for calibrating risk and positioning.

Key Features

Active flexibility: The fund isn’t restricted to index components, allowing room for discretionary trades when attractive pricing or issuer-specific catalysts emerge.

Derivatives toolkit: BREM can use options, futures, swaps, and credit default swaps for hedging, tactical exposure, or managing interest rate and currency risk.

High-yield tolerance: Up to 10% of net assets may be allocated to securities rated CCC or lower, or to unrated equivalents.

What to Expect on Costs and Structure

The fund charges a management fee of 0.50%, with estimated total operating expenses currently matching that rate. BlackRock has agreed to waive fees tied to investments in affiliated mutual funds and ETFs through June 30, 2027. Shareholders buy and sell shares on the open market through brokers, and BREM may trade at a premium or discount to its net asset value, especially during periods of market stress.

Risks to Watch

BREM comes with a wide range of risks tied to its exposure, structure, and strategy. These include:

Interest rate sensitivity: Bond values typically decline as rates rise, especially in longer-duration assets. BREM’s NAV may fluctuate meaningfully in response.

Emerging markets volatility: Political instability, lower liquidity, currency devaluations, and sudden regulatory shifts can increase downside risk.

Sovereign debt exposure: Government defaults or restructuring efforts in emerging markets can impact returns.

Liquidity and execution risk: Because BREM handles creations and redemptions in cash rather than in-kind, it may face higher transaction costs and wider bid-ask spreads.

The fund is classified as non-diversified under the Investment Company Act of 1940, which means a significant portion of its assets may be concentrated in fewer issuers or regions. This can increase volatility and exposure to country-specific developments.

Who’s Managing the Portfolio

The fund is led by three portfolio managers: Michel Aubenas, Silvio Zanardini, and Pablo Goldberg. All three bring global fixed-income experience and have been with BlackRock for several years. The management team combines top-down macro analysis with bottom-up credit research to shape positioning.

Daily holdings are disclosed on BlackRock’s website. The fund is administered by State Street Bank and Trust Company.

BREM is designed for investors looking for emerging markets exposure within a flexible, actively managed structure. With a focus on credit opportunities, macro signals, and hard-currency bonds, the fund gives asset allocators another way to approach global bond markets.