iShares Predicts Global Fixed Income ETF Market Will Exceed $2 Trillion in Next Decade
Firm Develops Growth Projection To Mark 10th Anniversary of Launch of First Fixed Income ETFs
San Francisco, July 10, 2012 – The global market for fixed income exchange traded funds (ETFs) will likely grow to more than $2 trillion in assets over the next decade, compared with $302 billion today, according to a new market analysis released today by iShares, the ETF business of BlackRock, Inc. (NYSE: BLK). Over the same period, the US fixed income ETF category will likely grow to $1.4 trillion in assets, compared with $222 billion today, iShares projects.
Global market growth will be driven by the impact of changing demographics as more investors seek income producing investments, the ongoing evolution of the global bond markets and the discovery of fixed income ETFs by a widening investor universe, according to the firm’s analysis.
"The dynamic forces driving the long-term expansion of the fixed income ETF market have been especially evident this year, with the market attracting some of its strongest asset flows to date," said Jennifer Grancio, Head of iShares Global Business Development at BlackRock. "Yet even after a decade of continuous growth, fixed income ETFs are still just scratching the surface of their potential."
During 2012's first half, fixed income exchange traded products (ETPs) attracted $40.8 billion in net new assets, with flows into the products accounting for 40 percent of all ETP inflows worldwide, according to BlackRock's latest ETP Landscape Report.
"When iShares launched the iBoxx $ Investment Grade Corporate Bond Fund (LQD) in July 2002, it forever changed the way investors could access the bond markets -- on an exchange, with clarity of pricing and observable liquidity," said Matthew Tucker, Head of iShares Fixed Income Investment Strategy at BlackRock. "As fixed income ETFs continue to be more fully embraced by individuals, advisors and financial institutions, they will solidify their standing as an essential fixed income capital market instrument, in a truly evolutionary step for the market."
iShares' analysis and projections for the fixed income ETF market worldwide are contained in the paper, "Transforming the Bond Markets with Fixed Income ETFs," authored by Tucker and Grancio to mark the 10th anniversary of the introduction of the industry's first such ETFs by iShares in July 2002. Tucker and Grancio were both members of the iShares team working to develop and bring the first fixed income ETFs to market in 2002.
For the complete "Transforming the Bond Markets with Fixed Income ETFs" paper, go to www.iShares.com.
About BlackRock: BlackRock is a leader in investment management, risk management and advisory services for institutional and retail clients worldwide. At March 31, 2012, BlackRock’s AUM was $3.684 trillion. BlackRock offers products that span the risk spectrum to meet clients' needs, including active, enhanced and index strategies across markets and asset classes. Products are offered in a variety of structures including separate accounts, mutual funds, iShares® (exchange-traded funds), and other pooled investment vehicles. BlackRock also offers risk management, advisory and enterprise investment system services to a broad base of institutional investors through BlackRock Solutions®. Headquartered in New York City, as of March 31, 2012, the firm has approximately 9,900 employees in 27 countries and a major presence in key global markets, including North and South America, Europe, Asia, Australia, and the Middle East and Africa. For additional information, please visit the Company's website at www.blackrock.com
About iShares: iShares is the global product leader in exchange traded funds with over 500 funds globally across equities, fixed income and commodities, which trade on 20 exchanges worldwide. The iShares Funds 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. The iShares customer base consists of the institutional segment of pension plans and fund managers, as well as the retail segment of financial advisors and high net worth individuals.
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Carefully consider the iShares 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 (1-800-474-2737) or by visiting www.iShares.com. Read the prospectus carefully before investing. Investing involves risk, including possible loss of principal.
Bonds and bond funds generally decrease in value as interest rates rise.
This material represents an assessment of the market environment at a specific time and is not intended to be a forecast of future events or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding the funds or any security in particular.
The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. There is no guarantee that any strategies discussed will be effective.
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. Shares of the iShares Funds may be sold throughout the day on the exchange through any brokerage account. However, shares may only be redeemed directly from a Fund by Authorized Participants, in very large creation/redemption units. There can be no assurance that an active trading market for shares of an ETF will develop or be maintained.
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The iShares Funds are not sponsored, endorsed or issued by Markit Indices Limited, nor does this company make any representation regarding the advisability of investing in the Funds. BlackRock is not affiliated with the company listed above.
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