Exchange traded funds (ETFs) offer diversified, low-cost and tax-efficient access to the world’s investment markets. ETFs are designed to track the performance of specified indexes, less fees.
What are the benefits of ETFs?
iShares Core ETFs have outperformed more than 75% of their mutual fund peers on average over the past 5 years1
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1/3 the price of the average active mutual fund2 |
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1/2 the tax cost of the average active mutual fund3 |
Learn more about why to use ETFs.
Comparing ETFs and mutual funds
Many investors are familiar with mutual funds. How are ETFs similar? And what makes them different?
Learn more about the differences in investment strategy, fees, and tax implications of ETFs vs mutual funds.
| By the numbers 1993 The first ETF was introduced in 1993 1997 iShares has been a leading ETF provider since 1997 3T ETFs are now a $3 trillion industry 300+ iShares provides the widest array of ETFs, with 300+ offering |
1 Morningstar, as of 12/31/2018. Comparison universe is ETFs and mutual funds in the Morningstar category and uses total return. Overall figure is a weighted average of the percentage of funds that the iShares Core ETFs have outperformed in each Morningstar category, weighted based on the number of funds in the Morningstar category. The funds outperformed 67%, 77% and 66% of peers on a 1, 5 and 10 year basis, respectively. Performance may be different for other time periods. Past performance is no guarantee of future results.
2 Morningstar, as of 12/31/18. Comparison is between the average Prospectus Net Expense Ratio for the iShares ETFs (0.34%) and active open-end mutual funds (0.96%).
3 Morningstar, as of 12/31/18. “Tax Cost Ratio” is a Morningstar measure of the impact of taxes on capital gains and income distributions on performance. The average 5-year Tax Cost Ratio of iShares ETFs and actively managed open-end mutual funds available in the U.S. (excluding municipal bond and money market funds) included in the comparison is 0.68% and 1.50%, respectively.
Carefully consider the Funds' investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds' prospectuses or, if available, the summary prospectuses, which may be obtained by visiting the iShares Fund and BlackRock Fund prospectus pages. Read the prospectus carefully before investing.
Investing involves risk, including possible loss of principal.
Fixed income risks include interest-rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in bond values. Credit risk refers to the possibility that the bond issuer will not be able to make principal and interest payments.
International investing involves risks, including risks related to foreign currency, limited liquidity, less government regulation and the possibility of substantial volatility due to adverse political, economic or other developments. These risks often are heightened for investments in emerging/ developing markets or in concentrations of single countries.
There is no guarantee that dividends will be paid.
Transactions in shares of ETFs will result in brokerage commissions and will generate tax consequences. All regulated investment companies are obliged to distribute portfolio gains to shareholders.
Certain traditional mutual funds can also be tax efficient.
Investment comparisons are for illustrative purposes only. To better understand the similarities and differences between investments, including investment objectives, risks, fees and expenses, it is important to read the products' prospectuses.
The strategies discussed are strictly for illustrative and educational purposes and are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. There is no guarantee that any strategies discussed will be effective.
The Funds are distributed by BlackRock Investments, LLC (together with its affiliates, "BlackRock").
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