BlackRock Tweaked Some Models. It Triggered a Wave of Buying and Selling.

In late May, an obscure BlackRock Inc. commodities fund took in more than $1 billion in new money in less than a week.

The iShares GSCI Commodity Dynamic Roll Strategy exchange-traded fund was a relatively small fund in BlackRock’s larger suite of funds. But on the week of May 26, the ETF—which trades under the ticker COMT and tracks futures contracts tied to commodities from energy to metals to agriculture—scored its biggest one-day influx of new cash on record, according to FactSet data.

The surge helped the ETF more than double its assets under management to more than $2 billion.

The answer for why so much money flowed into the fund wasn’t solely because Wall Street traders were up in arms with inflation fears that were helping to drive idle funds into commodity investments. According to BlackRock documents and people familiar with the matter, BlackRock had sent instructions to brokerages and other financial platforms to alter a series of “model portfolios” to include this fund.

Model portfolios are ready-made fund combos delivered through financial advisers and brokerages to everyday investors. Brokerages can design their own model portfolios, or rely on guidance from fund companies like BlackRock. The May surge in the BlackRock fund shows just how powerful that guidance can be.

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