How your peers use ETFs
ETFs are the preferred index vehicle for 78% of institutions1. All institutions, from pension funds to hedge funds, share in the benefits of ETFs: flexibility, operational efficiency and low cost. ETFs are changing the way institutions build portfolios, fine-tune risk, and manage operational aspects of their portfolios. ETFs are employed in a growing number of portfolio functions, ranging from short-term and tactical to strategic.2
Top institutional uses of ETFs
ETFs as Financial Instruments
A subset of ETFs has evolved to serve many functions for institutional investors. These utility players, known as Financial Instruments, are often used interchangeably with derivatives. Institutions use financial instrument ETFs in three main ways: risk transfer, market access, and multi-directional exposure.
For insurance professionals
BlackRock offers a range of iShares ETFs with National Association of Insurance Commissioners (NAIC) designations to help insurance professionals.
1 Source: 9th Annual Greenwich Associates Institutional ETF Study, 2019. Based on 181 and 94 U.S. respondents respectively. Usage figures come from a survey of asset managers, insurers, consultants, and institutional funds. This study was sponsored by BlackRock. BlackRock is not affiliated with Greenwich Associates, LLC, or any of their affiliates.
2 Source: 9th Annual Greenwich Associates Institutional ETF Study, 2019. Based on 144 U.S. respondents respectively. Usage figures come from a survey of asset managers, insurers, consultants, and institutional funds. This study was sponsored by BlackRock. BlackRock is not affiliated with Greenwich Associates, LLC, or any of their affiliates.
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.
Buying and selling shares of ETFs may result in brokerage commissions.
Diversification and asset allocation may not protect against market risk or loss of principal.
There can be no assurance that an active trading market for shares of an ETF will develop or be maintained.
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.
Shares of iShares ETFs may be bought and sold throughout the day on the exchange through any brokerage account. Shares are not individually redeemable from the ETF, however, shares may be redeemed directly from an ETF by Authorized Participants, in very large creation/redemption units.
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.
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.
No proprietary technology or asset allocation model is a guarantee against loss of principal. There can be no assurance that an investment strategy based on the tools will be successful.
The information presented does not take into consideration commissions, tax implications, or other transactions costs, which may significantly affect the economic consequences of a given strategy or investment decision.
This information should not be relied upon by the reader as research or investment advice regarding the funds or any issuer or security in particular. The services described 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. Services described may not be available to all investors.
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 Funds are distributed by BlackRock Investments, LLC (together with its affiliates, "BlackRock").
The NAIC does not endorse or recommend any securities or products, including iShares ETFs. NAIC designations are issued for specific regulatory purposes and these designations are not equivalent to credit ratings issued by nationally recognized statistical rating organizations. NAIC designations are suitable only for NAIC members.
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