Press Release iShares® Funds Announces Estimated Year-End Capital Gains Distributions
SAN FRANCISCO - November 12, 2008 - iShares Funds announced today that only two out of 178 iShares Exchange Traded Funds (ETFs) are expected to pay out year-end capital gains. The iShares Cohen & Steers Realty Majors Index Fund (ICF) and iShares Lehman Short Treasury Bond Fund (SHV) realized low capital gains distributions as noted below. The estimated capital gains are based on preliminary calculations and subject to change, due to changes in the number of outstanding shares and certain tax adjustments that may affect this calculation. Final dividends and tax characteristics will be available by end of year. "In a challenging year such as this one, taxes matter more than ever and iShares ETFs continue to prove their tax efficiency," said Lee Kranefuss, Global CEO of BGI's Intermediary and Exchange Traded Funds Business. "The estimates assist investors with year-end tax planning and repositioning portfolios long term in transparent, flexible, tax efficient investments."
Estimates provided are subject to change until ex-date. * NAV price will not change as the amount has already been distributed and is solely being reclassified as a long term capital gain. ** Based on NAV and outstanding shares as of 11/7/08. "Many actively managed fund investors are likely going to get a double whammy of underperformance and capital gains this year," said Kranefuss. "A lot of the gains are being logged this year as the result of investor redemptions that forced portfolio managers to liquidate positions." Approximately 3% of the market value of actively managed mutual funds was paid out via capital gains in 20071, whereas iShares paid out less than 0.02% of the market value of its ETFs last year.2 Kranefuss noted, "iShares ETF structure helps investors create more tax efficient portfolios for two key reasons. ETF investors buy and sell shares on an exchange, which doesn't trigger capital gains for anyone except the selling investor and does not directly require the ETF to incur portfolio transaction costs. Like an index fund, iShares ETFs generally have low turnover and thus low distributions. On the other hand, an actively managed mutual fund may have to sell fund securities in order to meet shareholder redemptions, which has possible capital gains consequences for all remaining shareholders at year-end. As with any investment, if an investor sells an ETF at a gain, normal tax laws still apply." The iShares Funds are index funds that are bought and sold like common stocks on securities exchanges. The iShares Funds are attractive to many individual and institutional investors and financial intermediaries because of their relative low cost, tax efficiency and trading flexibility. Investors can purchase and sell shares through any brokerage firm, financial advisor, or online broker, and hold the funds in any type of brokerage account. 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, which may be obtained by calling 1-800-iShares or by visiting www.ishares.com. Read the prospectus carefully before investing. About Barclays Global Investors
1 Tom Roseen, Taxes in the Mutual Fund Industry - 2008: Assessing the Impact of Taxes on Shareholders Returns," Lipper Inc., April 2008. Includes equity and bond funds, excludes money market funds. Past distributions are not indicative of future distributions. 2 BGI
Investing involves risks, including possible loss of principal.
Investment comparisons are for illustrative purposes only and not meant to be all-inclusive. There may be significant differences between the investments that are not discussed here.
All registered investment companies, including iShares Funds, are obliged to distribute substantially all of their portfolio gains to shareholders at year-end regardless of performance. Trading iShares Funds will also generate tax consequences and transaction expenses. Certain traditional mutual funds can be tax efficient as well. The information provided is not intended to be tax advice. Tax consequences of distributions may vary by individual taxpayer.
To receive a distribution, you must be a registered shareholder of the fund on the record date. Distributions are paid to shareholders on the payment date. Past distributions are not indicative of future distributions.
This material represents an estimate of the distribution per share as of 11/10/08. This estimate does not take into account any possible tax reclassifications, nor does this estimate contemplate changes in income or shares outstanding that may occur prior to record date. This estimate is for informational purposes only. Please consult your tax professional or financial adviser for more information regarding your tax situation.
Neither Barclays Global Investors, N.A. and its affiliates nor SEI and its affiliates provide tax advice. Please note that (i) any discussion of U.S. tax matters contained in this communication cannot be used by you for the purpose of avoiding tax penalties; (ii) this communication was written to support the promotion or marketing of the matters addressed herein: and (iii) you should seek advice based on your particular circumstances from an independent tax advisor.
The iShares Funds ("Funds") are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors (BGFA) serves as the investment advisor to the Funds. BGFA is a subsidiary of Barclays Global Investors, N.A., a majority-owned subsidiary of Barclays Bank PLC, none of which is affiliated with SEI.
©2008 Barclays Global Investors. All rights reserved. iShares® is a registered trademark of Barclays Global Investors, N.A. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.
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