The new ETFs allow investors to focus on domestic or international revenues in UK and European markets.
BlackRock has listed four iShares exchange-traded funds (ETFs) that use company revenue data to separate domestic and internationally-focused businesses within UK and European markets.
The “first-to-market” UCITS ETFs track the STOXX Focus indices and apply a revenue-based methodology to divide UK and European equities into domestic and foreign earnings categories. The iShares UK Domestic Focus UCITS ETF and iShares UK Foreign Focus UCITS ETF are listed on the London Stock Exchange, while the iShares Europe Domestic Focus UCITS ETF and iShares Europe Foreign Focus UCITS ETF are on Euronext Amsterdam. All four carry a total expense ratio of 0.25%.
The Domestic Focus ETFs hold companies that generate at least 50% of revenues within their home region, and Foreign Focus invests in those that generate more than 50% of revenues internationally.
The approach uses FactSet GeoRevenue data, which tracks revenue across approximately 50,000 companies and 280 regions. BlackRock said the methodology draws on over a decade of academic and industry research.
Vincent Denoiseux, head of product research and innovation at iShares EMEA, said: “BlackRock is expanding client access to enable investors to better express views in a more fragmented global environment.
“As the macro environment becomes more granular, the toolkit needs to evolve beyond traditional country classifications. Revenue-based approaches offer a clearer lens on where returns are generated and where risks lie, enabling more precise diversification in portfolios.”
iShares UK Domestic Focus has 84% UK revenue exposure, with its top sector weights being banks (30.9%), utilities (12.8%) and insurance (11%). The UK Foreign Focus ETF has 28% UK revenue exposure, with healthcare (17.3%), industrial goods and services (15.3%) and energy (14.4%) as its top sectors.
iShares Europe Domestic Focus carries 78% European revenue exposure. Top sectors are banks (27.6%), utilities (13%) and energy (8.9%), while top country weights include France (19.6%), UK (15.6%), Italy (12.5%), Germany (12.3%) and Spain (9.5%).
The Europe Foreign Focus ETF has 26% European revenue exposure. Healthcare (19.2%), industrial goods and services (18.5%) and technology (11%) are its largest sectors, while UK (28.1%), Switzerland (18.8%), Germany (13.8%), France (13.6%) and Netherlands (9.1%) are the biggest country weights.