US Equity

US Equity: Investment Overview

The U.S. stock market is the largest, most liquid equity market in the world, and as a result U.S. equities generally make up a significant portion of investors' portfolios.

Many investors use a combination of actively managed funds, which seek to outperform a market index, ETFs, which seek to track a market index, and individual securities to gain U.S. equity exposure.

Why iShares ETFs for US Equity Exposure?

Returns are often the only criterion used to judge a fund's success or failure. What's less often recognized is that a fund's return is only part of the equation. A fund may experience positive returns, but if its fees and taxes outweigh those returns, or it experiences style drift exposing a portfolio to unintended asset allocations, the outcome can fall short of investor expectations.

As with all of our products, at iShares we manage our extensive US Equity suite for Total Performance^SM. This means that we measure the success of every ETF by its ability to optimize return while also managing risks, costs, and taxes. Delivering only return – without regard to these other factors – may not be enough to help investors meet their goals while staying true to a carefully designed investment plan.

• Total Performance in IVV
• Total Performance in IWM
• Total Performance in DVY
• Total Performance in OEF
• Total Performance in IWV

US Equity: Investment Solutions

With 38 diversified U.S. equity index ETFs from which to choose, iShares offers a comprehensive and modular product set that allows investors to fine tune their U.S. equity exposure. Below are a few of the key iShares solutions we see investors turning to in the U.S. equity space. Note that we use a five-year time period because it captures a full market cycle. Other asset classes and time periods may have different results.

Large-Cap: The iShares S&P 500 Index Fund (IVV)

Tracking one of the most widely-used benchmark indexes in the large-cap space, the iShares S&P 500 Index Fund (IVV) is often used as a core portfolio holding, or blended with a large cap active manager to help manage risk and costs.

Total Performance in IVV

Sources: BlackRock, Morningstar, as of 12/31/10. Large cap blend fund universe defined by the Large Cap Blend Morningstar Category. Analysis is based on the oldest share class of active open-end mutual funds to avoid double-counting of multiple share classes. Standard deviation is defined as the annual volatility of investment returns. Past performance does not guarantee future results. For standardized performance of IVV please click here.

Small-Cap: The iShares Russell 2000 Index Fund (IWM)

The iShares Russell 2000 Index Fund (IWM), was the most highly-traded ETF in the mid/small-cap category in 2010. Source: NYSE Arca.

Sources: BlackRock, Morningstar, as of 12/31/10. Small cap blend fund universe defined by the Small Cap Blend Morningstar Category. Analysis is based on the oldest share class of active open-end mutual funds to avoid double-counting of multiple share classes. Standard deviation is defined as the annual volatility of investment returns. Past performance does not guarantee future results. For standardized performance of IWM please click here

Dividends: The iShares Dow Jones Select Dividend Index Fund (DVY)

For many equity investors, dividends can be an important source of portfolio income. Benchmarked to a well-constructed index, the iShares Dow Jones Select Dividend Index Fund (DVY) provides exposure to both dividend quality and growth.

Total Performance in DVY

Sources: BlackRock, Morningstar, as of 12/31/10. Dividend fund universe defined as US stock funds with a prospectus objective of Equity Income, acoording to Morningstar. Analysis is based on the oldest share class of active open-end mutual funds to avoid double-counting of multiple share classes. Standard deviation is defined as the annual volatility of investment returns. Past performance does not guarantee future results. For standardized performance of DVY please click here

Mega-Cap: The iShares S&P 100 Index Fund (OEF)

OEF gives you access to the top blue-chip names within the S&P 500 Index. Many investors use OEF as a thematic overlay on top of S&P exposure to access high-quality names that may provide better volume/liquidity.

Total Performance in OEF

Sources: BlackRock, Morningstar, as of 12/31/10. Mega cap fund universe defined by the Giant Core Morningstar Institutional Category. Analysis is based on the oldest share class of active open-end mutual funds to avoid double-counting of multiple share classes. Standard deviation is defined as the annual volatility of investment returns. Past performance does not guarantee future results. For standardized performance of OEF please click here

Broad Market: The iShares Russell 3000 Index Fund (IWV)

Benchmarked to the Russell 3000, IWV is part of an interlocking set of Russell-indexed products.

Total Performance in IWV

Sources: BlackRock, Morningstar, as of 12/31/10. All cap fund universe defined by the All Cap Core Morningstar Institutional Category. Analysis is based on the oldest share class of active open-end mutual funds to avoid double-counting of multiple share classes. Standard deviation is defined as the annual volatility of investment returns. Past performance does not guarantee future results. For standardized performance of IWV please click here