iShares

Blending Index and Active Investment Strategies

Blending index-investing based ETFs with active management strategies can offer a number of benefits, including reducing overall costs versus an all-active portfolio and improving benchmark tracking. For many investors, blending ETF investment strategies takes the form of a "core/satellite" portfolio. For example, a "core" asset allocation such as large-cap domestic equity is implemented with ETFs, while active managers are used for "satellite" investments for a portion of the allocation seeking higher return and therefore warranting greater potential risk.

Having part of an asset class allocated to an ETF investment frees up the investor's active manager(s) to dial up their risk exposure in pursuit of greater returns while helping to keep the portfolio in line with the investor's risk/return objectives. Investors seeking to be closer to their asset allocation targets can incorporate index tracking ETFs alongside active managers, particularly if the active managers "drift" from their stated styles.

See the differences between mutual funds and ETFs.

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 viewing or downloading a prospectus. Read the prospectus carefully before investing.

Investing involves risk, including possible loss of principal. Asset allocation and diversification may not protect against market risk.

Buying and selling shares of iShares Funds will result in brokerage commissions.

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.

Neither BlackRock Institutional Trust Company, N.A., and its affiliates nor SEI and its affiliates provide investment or tax advice.

The iShares Funds ("Funds") are distributed by SEI Investments Distribution Co. ("SEI"). BlackRock Fund Advisors ("BFA") serves as the investment advisor to the Funds. BFA is a subsidiary of BlackRock Institutional Trust Company, N.A., neither of which is affiliated with SEI.

© 2000-2012 BlackRock Institutional Trust Company, N.A. All rights reserved. iShares® is a registered trademark of BlackRock Institutional Trust Company, N.A. BlackRock® is a registered trademark of BlackRock, Inc. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.

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