DISTRIBUTION TRADES

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.

Overview of distribution trades

When an iShares ETF needs to pay out a dividend - or 'distribution' - to investors, it needs cash. Traditionally the fund would sell some of its component equity or bonds to raise the required amount of cash, however this incurs transaction costs.


Through the distribution trade process iShares can offer current or new investors the opportunity to exchange cash for ETF shares without needing to pay the usual trading costs, resulting in lower expenses for the fund and lower fees for investors.


So, whether you are a new investor, a current investor building your ETF portfolio or an investor waiting for an opportunity to switch into an iShares ETF, the distribution trade process could provide you with an even more cost-efficient method of investment.

How do they work?

When buying ETFs, trading costs are typically externalised i.e. often reflected as a percentage spread above the net asset value (NAV) of the fund and paid by the Investor.

With a distribution trade, instead of paying a spread above NAV you can save money and invest at NAV flat, (NAV+0bps).

This is especially relevant for ETFs where underlying securities are subject to:

a) Stamp and financial taxes (e.g. UK equity, Emerging market equity or European equity)

b) Wide underlying spreads (e.g. Emerging market debt or credit)

Reference to individual investments mentioned in this communication is for illustrative purposes only and should not be construed as investment advice or investment recommendation.

IEMB
NAV+50bps

(monthly
distributing fund)

iShares JP Morgan $
EM Bond UCITS ETF

IEEM
NAV+30bps

(quarterly
distributing fund)

iShares MSCI
EM UCITS ETF

IEAC
NAV+20bps

(semi-annually
distributing fund)

iShares Core € Corp
Bond UCITS ETF

dividend icon

All at NAV + 0bps (+ commission), the targeted NAV date will be one day before the ETF ex-dividend date.

trade icon

If your timing is flexible and you can align to the relevant dates you could save trading costs.

IEMB
NAV+50bps

(monthly
distributing fund)

iShares JP Morgan $
EM Bond UCITS ETF

IEEM
NAV+30bps

(quarterly
distributing fund)

iShares MSCI
EM UCITS ETF

IEAC
NAV+20bps

(semi-annually
distributing fund)

iShares Core € Corp
Bond UCITS ETF

Which iShares ETFs offer
distribution trades and when?

Distribution trades are possible on all distributing European Domiciled or UCITS iShares ETFs, however only those considered suitable by the portfolio manager are presented for distribution.

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Although not all iShares ETFs will be available as distribution trades, our distribution calendar will give you a forward looking view of upcoming distribution trades.

How to participate in the
distribution trade process

1

Confirm your buying interest to either your iShares sales contact or via the iShares Client Implementation team via e-mail.

2

iShares will then earmark the trade on a “first come, first served” basis and attempt to connect you with an appropriate facilitating broker.

3

You will then receive the iShares ETF shares via the facilitating broker (generally at NAV + standard broker commission - without incurring standard iShares transaction fees).

Stay in the know on distribution trades

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distribution trades

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If you have any questions that you need answered feel free to get in touch.

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