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1Morningstar, as of 6/30/14. Comparison is between the average Prospectus Net Expense Ratio for the oldest share class of iShares ETFs (0.37%) and active Open-End Mutual Funds (1.12%) that are available in the U.S. and have 10 year track records (excluding municipal bond and money market funds).
"Tax cost" is a Morningstar measure of the impact of taxes on capital gains and income distributions on performance. The average tax cost of the iShares ETFs and active Open-End Mutual Funds included in the comparison = 0.53% and 1.05%, respectively.
2Shares of iShares Funds may be bought and sold throughout the day on the exchange through any brokerage account. However, shares may only be created or redeemed directly from the Fund by Authorized Participants-- typically large institutional investors--in very large creation/redemption units. When comparing stocks or bonds and iShares Funds, it should be remembered that management fees associated with fund investments, like iShares Funds, are not borne by investors in individual stocks or bonds.
3Morningstar Direct as of 9/30/2014.
4Source: Morningstar, as of 2/28/14. Post-tax comparison made between the returns at NAV of IVV and the oldest share class of all active Open-End Mutual Funds within the U.S. Large Cap Blend Morningstar category that were available in the U.S. at the beginning of the investment period. Returns assume the highest federal tax rate, but no state or local taxes, on distributions and assume that investors did not sell the funds at period end. If a Mutual Fund closed during the timeframe, it is assumed to have underperformed. Actual after-tax performance depends on an investor's tax situation and may differ from that shown. Performance may be different for other time periods.
Good to Know
iShares ETFs cost about 1/3 as much as the typical mutual fund and have 1/2 of the average tax cost when compared to similar mutual funds.1