Fundares
Download as PPTX, PDF1 like908 views
This document provides an overview of exchange-traded funds (ETFs) including their structure, benefits, and key areas of consideration for selection. It discusses the growth of the ETF market globally and in Europe, with 2016 being a record year. The document also outlines iShares' broad range of over 200 ETFs available to Norwegian investors, covering equity, fixed income, and commodity exposures across sectors, regions and other dimensions.
Fundares
- 2. For professional clients / qualified investors only 2FUNDARES
- 3. For professional clients / qualified investors only 3FUNDARES
- 4. For professional clients / qualified investors only 4FUNDARES
- 5. For professional clients / qualified investors only 5FUNDARES
- 6. Agenda • BlackRock & ETF Growth Story • Intro to ETFs – What is an ETF and Why ETFs? • Key areas of consideration for ETF selection • Growth and evolution of the ETF market • Products: iShares ETFs on the Nordnet platform EMEAiS-4165 6FUNDARES
- 7. ETF Growth Story EMEAiS-4165 • iShares is the leading ETF provider in the world • iShares has over $1 trillion in assets under management • iShares has 780 ETFs listed globally, more than 200 ETFs registered in Norway Source: BlackRock ETP Landscape, August 2016
- 8. • European Domiciled Funds: AUM Split by ETFs, Index and Active Funds US Domiciled Funds: AUM Split by ETFs, Index and Active Funds Source: Morningstar, as of 30 June 2016. Note: Fund categories include open-end mutual funds (excluding money market funds and fund of funds) and exchange traded funds (ETFs) domiciled globally, offered to both retail and institutional investors. 1. Industry overview The growth of index investing
- 9. Intro to ETFs – What is an ETF and Why ETFs? EMEAiS-4165
- 10. • Structure of an ETF ETFs seek to deliver the performance of a chosen index. They typically do this by holding the index constituent stocks at their index weights, or a representative sample (This is called physical replication) References to the names and logos of each company mentioned is merely for explaining the investment strategy and should not be constructed as investment advice or investment recommendation of those companies. INDEX Fund manager purchases securities to represent the index Exchange Traded Fund (eg. FTSE 100, MSCI World, S&P 500, OBX25) 10EMAiS165
- 11. What is an ETF? Two great investment ideas brought together 11 DiversifiedTradable during the day Diversified funds that trade like stocks ETFs Stock Like a Mutual Fund Like a stock Trading flexibility intraday on the exchange Options frequently available Like an index fund Constructed to track benchmark indexes Low expense ratios What sets ETFs apart? The creation/redemption process enables the unique benefits of ETFs such as liquid access Familiar ground…best of both worlds Two great investment ideas brought together With short sales, an investor faces the potential for unlimited losses as the security's price rises. There can be no assurance that an active trading market for shares of an ETF will develop or be maintained. Transactions in shares of the iShares Funds will result in brokerage commissions and will generate tax consequences. iShares Funds are obliged to distribute portfolio gains to shareholders. Diversification may not protect against market risk or loss of principal.
- 12. An ETF is an index tracker Source: BlackRock – www.ishares.no, Net Total Return, 5 year period, September 2011 – September 2016 Past performance is not a guide to current or future performance. The value of investments and the income from them can fall as well as rise and is not guaranteed. You may not get back the amount originally invested. EMEAiS-4165
- 13. Why ETFs? ETFs are index funds listed and traded like a stock on major stock exchanges globally. Like an index fund Like a stock ETFs What you see is what you get Full transparency on constituents, performance versus benchmark and costs on a daily basis. Everything published on our website. Total Expense Ratio (TER) start from 0.07% for plain vanilla broad equity exposures* ETFs seek to offer a cost-effective route to diversified market exposure ETFs offer immediate exposure to a basket or group of securities for diversification through a single trade Broad range of asset classes, including equities, bonds, commodities, investment themes, etc. ETFs are listed on exchanges and can be traded at any time the market is open ETFs, bought on exchange, offer a way to access both diversified broad market and niche exposures in one trade ETFs offer two sources of liquidity: Traditional liquidity measured by secondary market trading volume The liquidity of the underlying assets via the creation and redemption process** Transparency Cost-effective Diversification Flexibility Additional liquidity *iShares S&P500 UCITS ETF ** The mechanism used to ensure that the price of the ETF shares remains linked to the price of the underlying holdings is called the
- 14. The building blocks : Complete range of iShares ETFs Corporate Asset Backed Securities BasketsProperty Short – term Treasuries Developed Markets Global Global Government Index Linked Infrastructure Emerging Markets Large, Mid, Small - Cap Growth, Value, Dividend,Min Vol Sectors / Industry Groups Domestic Government Equities Fixed Income Alternatives Commodities Cash Equivalents Maturity Buckets Single Regional, Country Investors can expand their portfolios beyond traditional investments Extensive range of index fund building blocks – across all asset classes, regions and markets Private Equity Emerging Markets
- 15. Key areas of consideration for ETF selection
- 16. Some key areas of consideration for ETF selection Overview 16 1. Index Selection 2. Domicile/ Registration/ Listing 3.Structure and Risk Various dimensions in benchmark selection Understand the ETF structure and structural risk Being aware of different domiciles and product listings EMEAiS-4165
- 17. Some key areas of consideration for ETF selection Overview 17 1. Index Selection 2. Domicile/ Registration/ Listing 3.Structure and Risk Various dimensions in benchmark selection Understand the ETF structure and structural risk Being aware of different domiciles and product listings EMEAiS-4165
- 18. • Several tracking instruments are available to investors via stock exchanges: Exchange Traded Funds (ETFs) are often traded side-by-side with Exchange Traded Notes (ETNs), Exchange Traded Commodities (ETCs) and Exchange Traded Instruments (ETIs) • Each of these products implies different levels of complexity and carries different structural risks Structure and risk The alphabet soup 18 UCITS-compliant Possible counterparty risk among others Possible additional risks dependent on an individual’s circumstances Not UCITS-compliant Non-fund debt structures Effectively unregulated Possible counterparty risk among others Possible additional risks dependent on an individual’s circumstances Neither notes nor funds Non UCITS-compliant Possible additional risks dependent on an individual’s circumstances Exchange Traded Products (ETPs) Exchange Traded Funds (ETFs) Physically replicating ETFs: – Fully replicating – Optimised/partially replicating Derivative replicating ETFs Exchange Traded Notes (ETNs)/Exchange Traded Commodities (ETCs) Exchange Traded Instruments (ETIs) Source: BlackRock. For illustrative purposes only. 1 2 3 4 5 6 7 8 EMEAiS-4165
- 19. Growth and evolution of the ETF market EMEAiS-4165
- 20. Growth and evolution of the ETF Market - 2016 a record year for global and European ETFs 20Global ETPs European ETPs Distribution of Most Recent Assets, US$ bn Distribution of Most Recent Assets, US$ bn Source: BlackRock Global ETP Landscape, July 2016. - 1,000 2,000 3,000 4,000 5,000 - 500 1,000 1,500 2,000 2,500 3,000 3,500 # of ProductsAssets, US$ bn ETF Assets Other ETP Assets # ETFs # Other ETPs Equity 2,520.4 Fixed Income 630.2 Commodity 138.9 Alternative 18.2 Currency 4.4 - 200 400 600 800 1,000 1,200 1,400 1,600 - 100 200 300 400 500 600 # of ProductsAssets, US$ bn ETF Assets Other ETP Assets # ETFs # Other ETPs Equity 351.5 Fixed Income 151.3 Commodity 50.0 Alternative 1.5 Currency 0.4
- 21. iShares EMEA product range By Tomé Ares EMEAiS-4165
- 22. iShares EMEA product range Overview Core & Precision Broad Markets Strategies Equity Fixed Income CreditGov.t Sovereign Inflation Commodity Emerging Markets High Yield IG Corp Covered USD Local Broad Market Developed Markets Emerging Markets Sectors Source: BlackRock, as at September 2016 Income Global, Regional, Country Size, Style, Thematic Currency Hedged Global, Regional, Country Broad Aggregate EUR, USD, Currency Hedged Corp Interest Rate Hedged Short Duration 203 EMEA iShares registered in Norway All UCITS 2 Domiciles: Irish (IE), German (DE) 138 Equity, 64 Fixed Income, 1 Commodity Distributing, Accumulating Maturity Buckets 202 Physical Replication & 1 Synthetic Replication Factors Sustainability Crossover EMEAiS-4165
- 23. Disclaimer • • Regulatory Information • BlackRock Advisors (UK) Limited, which is authorised and regulated by the Financial Conduct Authority ('FCA'), registered office at 12 Throgmorton Avenue, London, EC2N 2DL, England, Tel +44 (0)20 7743 3000. For your protection, calls are usually recorded. • Restricted Investors • This document is not, and under no circumstances is to be construed as an advertisement or any other step in furtherance of a public offering of shares in the United States or Canada. This document is not aimed at persons who are resident in the United States, Canada or any province or territory thereof, where the companies/securities are not authorised or registered for distribution and where no prospectus has been filed with any securities commission or regulatory authority. The companies/securities may not be acquired or owned by, or acquired with the assets of, an ERISA Plan. • Risk Warnings • Investment in the products mentioned in this document may not be suitable for all investors. Past performance is not a guide to future performance and should not be the sole factor of consideration when selecting a product. The price of the investments may go up or down and the investor may not get back the amount invested. Your income is not fixed and may fluctuate. The value of investments involving exposure to foreign currencies can be affected by exchange rate movements. We remind you that the levels and bases of, and reliefs from, taxation can change. • BlackRock has not considered the suitability of this investment against your individual needs and risk tolerance. The data displayed provides summary information, investment should be made on the basis of the relevant Prospectus which is available from your Broker, Financial Adviser or BlackRock Advisors (UK) Limited. We recommend you seek independent professional advice prior to investing. • In respect of the products mentioned this document is intended for information purposes only and does not constitute investment advice or an offer to sell or a solicitation of an offer to buy the securities described within. This document may not be distributed without authorisation from the manager. • © 2016 BlackRock, Inc. All Rights reserved. BLACKROCK, BLACKROCK SOLUTIONS, iSHARES, BUILD ON BLACKROCK, SO WHAT DO I DO WITH MY MONEY and the stylized i logo are registered and unregistered trademarks of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners. 23