July 1 (Reuters) - BlackRock ( BLK ) has launched a

'buffer' exchange-traded fund that seeks to offer a 100%

downside hedge to risk-shy investors looking to tap the equity

markets, the world's largest asset manager said on Monday.

So-called buffer or risk-managed ETFs help maximize returns

from an asset for investors and simultaneously provide downside

protection over a specific period.

The novel product will likely appeal to investors who are

hoping to ride a rally in the stock markets as they continue to

trade near record highs, but are concerned that a slowing

economy and higher-for-longer interest rates can together hurt

sentiment going forward.

Buffer ETFs also typically see lower redemption requests

during times of heavy market volatility versus traditional ETFs

tracking stock indexes.

"With record levels of cash sitting on the sidelines, many

investors are looking for tools to help navigate market

volatility before they step back into the market," said Rachel

Aguirre, head of U.S. iShares product, BlackRock ( BLK ).

The iShares Large Cap Max Buffer Jun ETF started

trading on Monday under the ticker symbol 'MAXJ' with a net

expense ratio - expenses after waivers and reimbursements - of

0.50%.

The asset manager said the ETF will track the returns of the

benchmark S&P 500 using options with an upside cap, while

providing a 100% hedge to all downside for roughly a year.

BlackRock ( BLK ) added that it now manages $25 billion in assets

under management across more than 40 active ETFs in the United

States, as of June 30.