iShares ETF Family - Where ETF Innovations Have No Limits
iShares ETF provider is known as the home of Exchange Traded Fund innovation, with a suite of ETFs trading across the worldwide exchanges and covering different asset classes.
Exchange Traded Funds are one of the fastest growing products on stock markets in US and also abroad in the last 10 years. They are gaining attention of not only private investors, but professional investors and financial advisors as well. Today it is hard to find a client portfolio without any ETF and that is because of all the benefits like transparency, flexibility and cost effectiveness.
iShares ETF Family is one of the world best known family of exchange traded funds. iShares funds are managed by BlackRock, one of the largest managers on the world with more than 10 years of experience in the ETF industry. An iShares ETF is designed to track an index that can represent different asset class (for example Financial sector). To do this with the lowest possible tracking error ETFs holds dozens of stocks or bonds from that asset class. You as investor can buy the completely diversified basket of stocks or bonds representing the index with one single trade of one single share.
iShares are Covering Different Asset Classes
iShares Exchange Traded Funds are all you need to manage today for tomorrow's opportunities, since they are covering different asset classes. There are more than 200 iShares Exchange Traded Funds on the market today and new ones are still on the way. With iShares funds you can build a portfolio of US Large, Mid and Small-Cap stocks, bond market, different sectors and industries (consumer staples, energy, financials, healthcare, industrials, materials, technology, telecommunications, utilities), real estates (US and international), international markets segregated by region (emerging markets, Middle East, Americas, Europe, Asia), fixed income (treasury, credit, mortgages, municipal bonds), commodities (gold, silver, agricultures, industrial metals) and more.
iShares are Traded on Worldwide Exchanges
iShares ETF funds are traded across the world markets exchanges. You can find their shares listed on NY Stock Market (NYSE), AMEX Stock Exchange (AMEX), London Stock Market (LSE), Hong Kong Stock Exchange (HKEx), Toronto Stock Market (TSE), and Australian Securities Exchange (ASX). iShares Exchange Traded Funds present significant volume traded on this exchanges and they have one of the highest market share among ETF trading segment as well.
Low Management Fees are iShares Great Advantage
One of the greatest advantages of iShares is their low average expense ratio, especially when compared to cost of mutual funds ownership. The cost of owning iShares is significantly lower than owning mutual funds and this is true for each asset class. Because of live tracking the indices, the brokerage commission's result in higher transaction costs of ETFs, but since their annual management are substantially lower, they offset this costs and provide you great savings.
Passive vs. Active Investing Strategy
There is another important fact you should understand when deciding for the investment product that would best suit your needs - the success of managers who are actively managing their portfolios. There are some interesting figures resulting from the analysis performed by Morningstar as of 12/31/2009. Most of people believe that professional investors do their job as professional should, better than average. But the truth is far from that. In the five year's period starting from 1/1/2004 only 30% of active large-cap US managers have outperformed the Russel 1000 Blend index, only 44% of active small-cap US managers have outperformed the Russel 2000 Blend index and only 36% of international managers have outperformed the MSCI EAFE index. What does that tell you about viability of investing in indices?
Written by: Goran Dolenc
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