EVERY STEP COUNTS

The benefits to investors after 50 years of index investing

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

 

Fifty years ago, two inventions set in motion changes that would upend whole industries. The first commercial microchip was released in Silicon Valley, and the first index investment product was created not far north, in San Francisco, by one of BlackRock’s predecessor firms.1 Microchips were revolutionary from the start and are essential building blocks for devices that enable modern life. The influence of index investing has proven to be evolutionary — step by step, it reshaped the money management industry by methodically breaking down barriers to investment. Even five decades later, index investing has a long way to ascend. We estimate that indexed assets account for a mere 10% of total public investment assets globally, and that potentially hundreds of millions more people could experience the benefits of index investing.2

Index investing is beneficial because it has shown that investing doesn’t need to be complex, or an exclusive preserve for the connected and ultra-wealthy. It has provided easy access to the building blocks of investment returns, made investing more affordable, and offered a transparent line of sight into what investors own and how much they pay. More recently, indexation and index-following exchange traded funds (ETFs) have expanded choices for investing sustainably, and are driving new standards of quality in markets, and a longer-term orientation for companies and economies.

iShares is proud to help advance index investing across the globe. In the hallways of our offices and on our home-office screen savers are reminders that we aspire to be “Champions for Investor Progress.” It’s an articulation of the iShares mission, which furthers BlackRock’s purpose of helping more and more people experience financial well-being.

We believe lots of businesses have inspirational mantras that can lack substance because they aren’t supported by commitment. This inaugural iShares Report on Investor Progress is about making our commitments clear: We want to make investing easier, more affordable, more sustainable, and more resilient for the long term. To realize these ambitions is to uphold the hopes and expectations of the many millions of investors around the world whose money BlackRock has been entrusted to manage.

 

We estimate that indexed assets account for a mere 10% of total public investment assets globally.3

Salim Ramji
Global Head of iShares and Index Investments
Salim Ramji, Senior Managing Director, is Global Head of iShares and Index Investments for BlackRock and a member of the firm’s Global Executive Committee.