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ETF Performance

When low cost funds post solid performance,
investors keep more of what they earn.

Want to keep more of what you earn?

Investment fees and taxes matter. See how much you could save if you invest with iShares ETFs (Exchange Traded Funds) versus a typical mutual fund.

Potential savings

When you combine the impact of lower fees, potential tax savings, and performance that seeks to match an index, ETFs may potentially earn you nearly $66,000 over 10 years.

ETF potential tax savings and performance

Chart reflects the hypothetical growth of a fictional investment of $250,000 with an 8% return and assumes the reinvestment of dividends and capital gains. Total expenses calculated are a combination of the Tax Cost Ratio and average Prospectus Net Expense Ratios as of 12/31/2017. 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) is 0.76% and 1.46%, respectively. The average Prospectus Net Expense Ratio for the iShares ETFs is 0.35% and active open-end mutual funds 1.14%. The graph is for illustrative purposes only and is not indicative of the performance of any actual fund or investment portfolio.

How iShares ETFs can help you keep more


1/3 the cost of a typical mutual fund1: Most ETFs aim to match the performance of a benchmark index. This strategy generally requires less frequent turnover of holdings within the fund, so fund fees tend to be lower.

Capital gains

About 1/2 the tax cost of the average active mutual fund2: When you sell your mutual fund or ETF at a gain, you will have to pay taxes on that gain. But capital gains taxes can be incurred even if you don’t sell your shares, due to trading activity within your fund. Active mutual funds that frequently buy and sell securities are often subject to higher capital gains distributions. Because most ETFs track an index, they tend to generate fewer undesirable capital gains distributions.

Fees and taxes

Only 12% of active managers beat their benchmarks after fees and taxes over the last five years3: Because of the more frequent trading and complex strategies in actively-managed funds, fund expenses are higher – so performance has to be good enough to compensate for those higher fees.

Percent of comparable mutual funds that iShares Core ETFs outperformed

ETF performance in the last 5 years

Morningstar, as of 12/31/2017. Post-tax comparison between the 3, 5 and 10 year returns at NAV of the iShares Core ETFs and the oldest share class of active open-end mutual funds within the same Morningstar categories as the iShares Core ETFs. Mutual funds are generally more tax inefficient than ETFs and, as a result, are typically more negatively impacted than ETFs when comparing performance based on post-tax returns rather than total returns. The number of ETFs and mutual funds used for each period varies based on the inception date of the iShares Core ETFs. iShares Core ETFs included in this comparison vary based on the time period analyzed: 3 year (18 Core ETFs existed for the full 3-year period beginning 1/1/15); 5 year (14 Core ETFs existed for the full 5-year period beginning 1/1/13); and 10 year (8 Core ETFs existed for the full 10-year period beginning 1/1/08). iShares Core ETFs outperformed their active mutual fund peers by 84% (1752/2085), 79% (1062/1348) and 89% (498/558) over the 3, 5 and 10 year periods ended 12/31/17, respectively. Performance was averaged for Morningstar categories containing more than one iShares fund, and may be different for other time periods. Returns are calculated after taxes on distributions, including capital gains and dividends, assuming the highest federal tax rate for each type of distribution in effect at the time of the distribution. Past performance is no guarantee of future results. Review the differences between iShares ETFs and mutual funds for more information.