FIXED INCOME ETFs HIT RECORD LEVELS
Announcement posted by FCR (Financial & Corporate Relations Pty Limited) 23 Feb 2012
Investors seeking less risk and more yield flock to fixed income ETFs in record numbers
SYDNEY - February 23, 2012 – Global asset flows for exchange traded products (ETPs) and fixed income exchange traded funds (ETFs) hit record levels during the month of January, illustrating a continuing market “revolution” globally as investors increasingly turn to fixed income ETFs to help restore investment yield to their portfolios.
According to the BlackRock Investment Institute’s latest “ETP Landscape” report released for January 2012, the global exchange traded product (ETP) industry had its best month of January ever with $34.1 billion of net inflows, representing a 144% increase in inflows over the previous record set in January 2011 and up 116% from December 2011.
The ETP Landscape report found investments in fixed income ETPs set a new global monthly record, attracting $9.0 billion in January 2012 - up from the previous monthly record set of $6.7 billion set in January 2009.
Steve Miller, Head of Fixed Income, BlackRock Australia said, “In an era of uncertainty, the hunt for a combination of defensive resilience, income, as well as positive investment returns more generally, is especially challenging. Many Australians have migrated to bank deposits for safety.”
“But a focus on safety at all costs can have a price. It may mean missing out on the potential for capital gains from fixed income investments that can occur when equity markets are volatile. This potential capital gain feature of fixed income and its negative correlation with equities is absent from bank deposits,” Mr Miller said.
Over the last decade fixed income ETFs have helped democratise access to fixed income markets by creating new centers of liquidity, offering investors a cost efficient way to express a view on specific fixed income sectors.
Mark Oliver, Managing Director of iShares Australia said, “Fixed income ETFs provide a combination of accessibility and transparency for bond investors and offer better market access to debt securities with a low minimum investment.”
“With fixed income ETFs shortly to be launched in Australia, it will soon be possible to build a portfolio out of ETFs. I am expecting that Australian investors will respond as enthusiastically towards fixed income ETFs as overseas investors,” Mr Oliver said.
Mr Miller commented, “Australia is one of only a handful countries that can boast a top-level ranking from each of the three major debt rating agencies, potentially making Australian government bonds must-have assets for the defensive core portfolios.”
According to the latest ASX Listed Managed Investments report for January 2012, average monthly ETF trading volumes increased by 14% over the last 12 months.
“We expect trading volumes to continue to increase into 2012, particularly after fixed income ETFs are launched in Australia,” Mr Oliver said.
About BlackRock
BlackRock is a leader in investment management, risk management and advisory services for institutional
and retail clients worldwide. At December 31, 2011, BlackRock’s AUM was $3.513 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
December 31, 2011, the firm has approximately 10,100 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.
iShares is the global product leader in exchange traded funds with over 460 funds globally across equities,
fixed income and commodities, which trade on 19 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.
Notice to residents in Australia:
Made available in Australia by BlackRock Investment Management (Australia) Limited ABN 13
006 165 975, AFSL 230523 ("BIMAL").
This information is general in nature and has been prepared without taking into account any
individual's objectives, financial situation, or needs. Past performance is not a reliable indicator
of future performance. BIMAL believes this information is correct at the time of issue, but no
warranty of accuracy or reliability is given and no responsibility arising in any way for errors or
omissions. You should seek independent professional legal, financial, taxation, and/or other
professional advice before making an investment decision regarding the iShares funds.
Bonds and bond funds may decrease in value as interest rates rise. An investment in the Fund(s) is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
There can be no assurance that an active trading market for an ETF will develop or be maintained.
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.
According to the BlackRock Investment Institute’s latest “ETP Landscape” report released for January 2012, the global exchange traded product (ETP) industry had its best month of January ever with $34.1 billion of net inflows, representing a 144% increase in inflows over the previous record set in January 2011 and up 116% from December 2011.
The ETP Landscape report found investments in fixed income ETPs set a new global monthly record, attracting $9.0 billion in January 2012 - up from the previous monthly record set of $6.7 billion set in January 2009.
Steve Miller, Head of Fixed Income, BlackRock Australia said, “In an era of uncertainty, the hunt for a combination of defensive resilience, income, as well as positive investment returns more generally, is especially challenging. Many Australians have migrated to bank deposits for safety.”
“But a focus on safety at all costs can have a price. It may mean missing out on the potential for capital gains from fixed income investments that can occur when equity markets are volatile. This potential capital gain feature of fixed income and its negative correlation with equities is absent from bank deposits,” Mr Miller said.
Over the last decade fixed income ETFs have helped democratise access to fixed income markets by creating new centers of liquidity, offering investors a cost efficient way to express a view on specific fixed income sectors.
Mark Oliver, Managing Director of iShares Australia said, “Fixed income ETFs provide a combination of accessibility and transparency for bond investors and offer better market access to debt securities with a low minimum investment.”
“With fixed income ETFs shortly to be launched in Australia, it will soon be possible to build a portfolio out of ETFs. I am expecting that Australian investors will respond as enthusiastically towards fixed income ETFs as overseas investors,” Mr Oliver said.
Mr Miller commented, “Australia is one of only a handful countries that can boast a top-level ranking from each of the three major debt rating agencies, potentially making Australian government bonds must-have assets for the defensive core portfolios.”
According to the latest ASX Listed Managed Investments report for January 2012, average monthly ETF trading volumes increased by 14% over the last 12 months.
“We expect trading volumes to continue to increase into 2012, particularly after fixed income ETFs are launched in Australia,” Mr Oliver said.
About BlackRock
BlackRock is a leader in investment management, risk management and advisory services for institutional
and retail clients worldwide. At December 31, 2011, BlackRock’s AUM was $3.513 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
December 31, 2011, the firm has approximately 10,100 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.
iShares is the global product leader in exchange traded funds with over 460 funds globally across equities,
fixed income and commodities, which trade on 19 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.
Notice to residents in Australia:
Made available in Australia by BlackRock Investment Management (Australia) Limited ABN 13
006 165 975, AFSL 230523 ("BIMAL").
This information is general in nature and has been prepared without taking into account any
individual's objectives, financial situation, or needs. Past performance is not a reliable indicator
of future performance. BIMAL believes this information is correct at the time of issue, but no
warranty of accuracy or reliability is given and no responsibility arising in any way for errors or
omissions. You should seek independent professional legal, financial, taxation, and/or other
professional advice before making an investment decision regarding the iShares funds.
Bonds and bond funds may decrease in value as interest rates rise. An investment in the Fund(s) is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
There can be no assurance that an active trading market for an ETF will develop or be maintained.
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.