Press Release Amid Market Turmoil ETFs Continue to Attract Strong Investor Interest: Trading Volumes for ETFs Eclipse New Highs in October
San Francisco, CA, November 14, 2008 - In the current credit crisis and volatile market environment, trading volume in ETFs continues to grow and has spiked to historical highs, according to Barclays Global Investors, the world's largest Exchange Traded Funds (ETF) provider1. In October, ETFs accounted for nearly 40% of all equity trading volume in the U.S. This is an increase from the 28% daily average in August and the 35% average in September2. Eight out of the ten most actively traded securities in the U.S. are ETFs, including the iShares Russell 2000 Index Fund (IWM) and the iShares MSCI Emerging Markets Index Fund (EEM)3.
High ETF trading volumes demonstrate how easily investors can implement investment decisions during any period and despite market conditions. Many investors are reducing the level of single-stock risk, as well as counterparty risk, in their portfolios by taking long-term index exposures using ETFs. In September and October individual and institutional investors put $61 billion into U.S. ETFs, of which $19.2 billion went into iShares ETFs, whereas $126.7 billion came out of equity and bond mutual funds4.
"There's a flight to transparency. As investors and their financial advisors combine a focus on generating returns with the need to understand their portfolio risks, ETFs provide them with timely insights regarding the funds' underlying holdings and actionable prices throughout the market day," said Lee Kranefuss, Global CEO of iShares at Barclays Global Investors.
He added, "This is a pivotal time for investors and the fund industry. Our recent inquiries from a wide set of investors indicate that they are using ETFs for transparency, diversification, trading liquidity and flexibility, and their relative tax efficiency. Going forward we believe investors will rebuild their portfolios using more ETFs because the product's strengths are resoundingly important in what is expected to be a low return environment."
"I think the surging trading volumes suggest a high degree of comfort with ETFs offered by established providers," said Rick Kraich, CIO of Homrich Berg, an Atlanta-based wealth management firm.
1Source: "ETF Landscape - Industry Review from Barclays Global Investors," October 2008. "The structure of ETFs offers many benefits, including tax efficiency and trading liquidity. The trading liquidity allows for flexibility, enabling us to change our asset allocation quickly. Additionally, the availability of style indices and capitalization indices provides ample diversification options. For these reasons, we have recently allocated a greater percentage of our clients' portfolios to ETFs," said Kraich.
Kranefuss commented, "Through their secondary market trading, iShares have provided a liquid investment option for investors during periods of volatility. During this recent market cycle, the fixed income iShares Funds are helping to fill liquidity and pricing gaps found in the underlying bond market. The fixed income iShares Funds have generally delivered tighter bid-ask spreads than the underlying securities held by iShares Funds and actionable prices where all market participants can buy or sell a basket of bonds." 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
Barclays Global Investors is one of the world's largest asset managers and a leading global provider of investment management products and services with more than 3,000 institutional clients and over $1.9 trillion of assets under management as of June 30, 2008. BGI transformed the investment industry by creating the first index strategy in 1971 and the first quantitative active strategy in 1979. BGI is the global product leader in exchange traded funds (iShares® exchange traded funds) with over 330 funds for institutions and individuals globally.
Investing involves risks, including possible loss of principal. Transactions in shares of the iShares Funds will result in brokerage commissions and will generate tax consequences. iShares Funds are obliged to distribute portfolio gains to shareholders. Bonds and bond funds will decrease in value as interest rates rise. Diversification may not protect against market risk. The iShares Funds ("Funds") are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors (BGFA) serves as an 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. The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc. or Frank Russell Company. Neither of these companies make any representation regarding the advisability of investing in the Funds. Neither SEI nor BGI, nor any of their affiliates, are affiliated with the companies listed above, nor are they affiliated with Homrich Berg. ©2008 Barclays Global Investors, N.A. 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. As of December 1, 2009, the former Barclays Global Investors entities referred to in this publication are owned and controlled ultimately by BlackRock Inc. and neither Barclays nor any Barclays affiliate is responsible for, or associated with, the contents of this publication. Help for Journalists iShares offers insights on ETFs and financial news topics. Journalists may request information, photos or media support by contacting the PR Group. Experts Members of the press can select from a list of investment categories to find iShares experts who can assist with stories. Please contact a member of Public Relations to speak with any of our experts. About iShares Learn more about the past, present and future of iShares. The Idea The Facts The Timeline The Growth |
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