iShares fixed income ETFs receive ‘Recommended’ rating by Lonsec
Announcement posted by FCR (Financial & Corporate Relations Pty Limited) 22 Mar 2012
Sydney, March 22, 2012 – BlackRock Investment Management (Australia) Limited (BIMAL) today announced that its iShares business has received recommended ratings from research house Lonsec for all three of the newly launched iShares fixed income exchange traded funds (ETFs).
The iShares UBS Composite Bond Index Fund (IAF), iShares UBS Government Inflation Index Fund (ILB) and iShares UBS Treasury Index Fund (IGB), were launched on the Australian Securities Exchange (ASX) last week.
The ‘Recommended’ ratings indicate that Lonsec has conviction that the funds can achieve their objectives and, if applicable, outperform peers over an appropriate investment timeframe.
Tom Keenan, Director, iShares said, “We are delighted to receive such positive feedback from Lonsec, one of Australia’s top research houses. The recommended ratings confirm the robust nature of our products which provide investors with the ability to more easily access Australia’s fixed income market.”
Michael Elsworth, Research Manager, Lonsec commented, “ETFs have well and truly arrived and are an important product category for advisers and their clients. That’s why we moved so quickly to analyse and rate the three iShares fixed income ETFs.”
“In our opinion, all the funds represent an efficient, liquid and cost effective means for investors to gain index exposure to Australia’s fixed income market. BlackRock is a leading global manager of ETFs, enjoying the benefits of scale, experience and resources. iShares has also secured a comprehensive range of authorised participants and market makers to facilitate liquidity for investors.”
The Lonsec reviews highlighted that typical fees for actively managed fixed income funds reviewed by Lonsec range from 0.45% p.a. to 0.70% p.a., while fees for iShares’ fixed income ETFs are materially lower reflecting the passive nature of the investment process.
Independent Advisory firm, Financial Choice develops model portfolios consisting of term deposits, hybrids, cash and ASX-listed ETFs for clients, and has already made an allocation to the iShares UBS Composite Bond Index (IAF).
CEO Russell Medraft said, “A typical fixed income allocation for a client’s portfolio ranges from 5 - 10%, depending on the risk profile of the client. Using the iShares UBS Composite Bond Fund allowed us to instantly achieve cost effective and efficient exposure to investment grade fixed income securities for our clients. We replaced a portion of our clients’ exposure to term deposits because we believe an allocation to high quality fixed income can help reduce volatility due to its recent negative correlation to equities.”
Mr Keenan said, “There has been strong demand for our new fixed income products in the first week of trading as investors seek more efficient access to Australia’s fixed income market. We expect demand will continue to increase as investors’ awareness of fixed income ETFs grows, and positive ratings affirm the benefits of these funds.”
BACKGROUND INFORMATION
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. In Australia, iShares has 26 ETFs listed on the Australian Securities Exchange (ASX), across both domestic and international indices. The first iShares ETF was listed on the ASX in October 2007. The iShares funds are bought and sold like common securities on securities exchanges. The iShares funds are attractive to many individual and institutional investors and financial intermediaries because of their relative low cost, liquidity and trading flexibility. Investors can purchase and sell shares or units (as the case may be) through any brokerage firm, financial adviser, or online broker, and hold the funds in any type of brokerage account. The iShares customer base consists of the institutional segment of superannuation plans and fund managers, as well as the retail segment of financial advisers and individual investors. Visit iShares.com.au for further information.
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
IMPORTANT INFORMATION
Before investing in an iShares exchange traded fund, you should carefully consider whether such products are appropriate for you, read the applicable product disclosure statement (“PDS”) available at iShares.com.au and consult an investment adviser. Issued by BlackRock Investment Management (Australia) Limited ABN 13 006 165 975 AFSL 230523 (“BIMAL”). BIMAL is a wholly-owned subsidiary of BlackRock, Inc. (collectively “BlackRock”). BlackRock believes the information in this document 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 (including responsibility to any person by reason of negligence) is accepted by BlackRock.
This information is general in nature, and has been prepared without taking into account any individual’s objectives, financial situation, or needs.
Transaction costs are incurred when buying or selling units of an iShares fund on the Australian Securities Exchange (“ASX”) and brokerage commissions may be charged if such trades are done through a broker. Neither the performance nor the repayment of capital or any income (distributions) of an iShares fund is guaranteed by any BlackRock entity. Past performance is not a reliable indicator of future performance. An iShares fund is not actively managed. You cannot invest directly in an index. Current performance may be higher or lower than the performance shown.
Units of an iShares fund trade on ASX at market price (not, net asset value ("NAV")). Units may only be redeemed directly from an iShares fund by persons called “Authorised Participants”. BIMAL is the Responsible Entity for the iShares funds quoted on ASX, and is the issuer of units in those iShares funds. Each fund constitution provides that the liability of each unit holder is limited to its investment in the fund. In addition to the normal risks associated with investing, there may be risks associated with investments made by an iShares fund in smaller companies and those whose activities are narrowly focused.
The Lonsec Limited (“Lonsec”) ABN 56 061 751 102 rating (assigned March 2012) presented in this document is limited to “General Advice” and based solely on consideration of the investment merits of the financial products. It is not a recommendation to purchase, sell or hold the relevant products, and you should seek independent financial advice before investing in these products. The rating is subject to change without notice and Lonsec assumes no obligation to update this document following publication. Lonsec receives a fee from the fund manager for researching the products using comprehensive and objective data. The marks and names “UBS Treasury Index”, ”UBS Composite Bond Index” and “UBS Government Inflation Index” are proprietary to UBS AG (“UBS”).
UBS has agreed to the use of, and reference to the UBS Treasury Index, UBS Composite Bond Index and UBS Government Inflation Index (the “Indices”) by us in connection with the iShares UBS Treasury Index Fund, iShares UBS Composite Bond Fund, iShares UBS Government Inflation Index Fund and this document, but the funds are not in any way sponsored, endorsed or promoted by UBS. The key symbol and UBS are among the registered and unregistered trademarks of UBS. “UBS Treasury Index”, ”UBS Composite Bond Index” and “UBS Government Inflation Index” are services marks of UBS AG. BIMAL alone has produced this marketing material, which has not been reviewed by UBS AG. UBS AG assumes no responsibility for this marketing material.
2012 BlackRock. All rights reserved. iShares is a registered trademark of BlackRock Institutional Trust Company, N.A. All other trademarks, servicemarks, or registered trademarks are the property of their respective owners.
The iShares UBS Composite Bond Index Fund (IAF), iShares UBS Government Inflation Index Fund (ILB) and iShares UBS Treasury Index Fund (IGB), were launched on the Australian Securities Exchange (ASX) last week.
The ‘Recommended’ ratings indicate that Lonsec has conviction that the funds can achieve their objectives and, if applicable, outperform peers over an appropriate investment timeframe.
Tom Keenan, Director, iShares said, “We are delighted to receive such positive feedback from Lonsec, one of Australia’s top research houses. The recommended ratings confirm the robust nature of our products which provide investors with the ability to more easily access Australia’s fixed income market.”
Michael Elsworth, Research Manager, Lonsec commented, “ETFs have well and truly arrived and are an important product category for advisers and their clients. That’s why we moved so quickly to analyse and rate the three iShares fixed income ETFs.”
“In our opinion, all the funds represent an efficient, liquid and cost effective means for investors to gain index exposure to Australia’s fixed income market. BlackRock is a leading global manager of ETFs, enjoying the benefits of scale, experience and resources. iShares has also secured a comprehensive range of authorised participants and market makers to facilitate liquidity for investors.”
The Lonsec reviews highlighted that typical fees for actively managed fixed income funds reviewed by Lonsec range from 0.45% p.a. to 0.70% p.a., while fees for iShares’ fixed income ETFs are materially lower reflecting the passive nature of the investment process.
Independent Advisory firm, Financial Choice develops model portfolios consisting of term deposits, hybrids, cash and ASX-listed ETFs for clients, and has already made an allocation to the iShares UBS Composite Bond Index (IAF).
CEO Russell Medraft said, “A typical fixed income allocation for a client’s portfolio ranges from 5 - 10%, depending on the risk profile of the client. Using the iShares UBS Composite Bond Fund allowed us to instantly achieve cost effective and efficient exposure to investment grade fixed income securities for our clients. We replaced a portion of our clients’ exposure to term deposits because we believe an allocation to high quality fixed income can help reduce volatility due to its recent negative correlation to equities.”
Mr Keenan said, “There has been strong demand for our new fixed income products in the first week of trading as investors seek more efficient access to Australia’s fixed income market. We expect demand will continue to increase as investors’ awareness of fixed income ETFs grows, and positive ratings affirm the benefits of these funds.”
BACKGROUND INFORMATION
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. In Australia, iShares has 26 ETFs listed on the Australian Securities Exchange (ASX), across both domestic and international indices. The first iShares ETF was listed on the ASX in October 2007. The iShares funds are bought and sold like common securities on securities exchanges. The iShares funds are attractive to many individual and institutional investors and financial intermediaries because of their relative low cost, liquidity and trading flexibility. Investors can purchase and sell shares or units (as the case may be) through any brokerage firm, financial adviser, or online broker, and hold the funds in any type of brokerage account. The iShares customer base consists of the institutional segment of superannuation plans and fund managers, as well as the retail segment of financial advisers and individual investors. Visit iShares.com.au for further information.
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
IMPORTANT INFORMATION
Before investing in an iShares exchange traded fund, you should carefully consider whether such products are appropriate for you, read the applicable product disclosure statement (“PDS”) available at iShares.com.au and consult an investment adviser. Issued by BlackRock Investment Management (Australia) Limited ABN 13 006 165 975 AFSL 230523 (“BIMAL”). BIMAL is a wholly-owned subsidiary of BlackRock, Inc. (collectively “BlackRock”). BlackRock believes the information in this document 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 (including responsibility to any person by reason of negligence) is accepted by BlackRock.
This information is general in nature, and has been prepared without taking into account any individual’s objectives, financial situation, or needs.
Transaction costs are incurred when buying or selling units of an iShares fund on the Australian Securities Exchange (“ASX”) and brokerage commissions may be charged if such trades are done through a broker. Neither the performance nor the repayment of capital or any income (distributions) of an iShares fund is guaranteed by any BlackRock entity. Past performance is not a reliable indicator of future performance. An iShares fund is not actively managed. You cannot invest directly in an index. Current performance may be higher or lower than the performance shown.
Units of an iShares fund trade on ASX at market price (not, net asset value ("NAV")). Units may only be redeemed directly from an iShares fund by persons called “Authorised Participants”. BIMAL is the Responsible Entity for the iShares funds quoted on ASX, and is the issuer of units in those iShares funds. Each fund constitution provides that the liability of each unit holder is limited to its investment in the fund. In addition to the normal risks associated with investing, there may be risks associated with investments made by an iShares fund in smaller companies and those whose activities are narrowly focused.
The Lonsec Limited (“Lonsec”) ABN 56 061 751 102 rating (assigned March 2012) presented in this document is limited to “General Advice” and based solely on consideration of the investment merits of the financial products. It is not a recommendation to purchase, sell or hold the relevant products, and you should seek independent financial advice before investing in these products. The rating is subject to change without notice and Lonsec assumes no obligation to update this document following publication. Lonsec receives a fee from the fund manager for researching the products using comprehensive and objective data. The marks and names “UBS Treasury Index”, ”UBS Composite Bond Index” and “UBS Government Inflation Index” are proprietary to UBS AG (“UBS”).
UBS has agreed to the use of, and reference to the UBS Treasury Index, UBS Composite Bond Index and UBS Government Inflation Index (the “Indices”) by us in connection with the iShares UBS Treasury Index Fund, iShares UBS Composite Bond Fund, iShares UBS Government Inflation Index Fund and this document, but the funds are not in any way sponsored, endorsed or promoted by UBS. The key symbol and UBS are among the registered and unregistered trademarks of UBS. “UBS Treasury Index”, ”UBS Composite Bond Index” and “UBS Government Inflation Index” are services marks of UBS AG. BIMAL alone has produced this marketing material, which has not been reviewed by UBS AG. UBS AG assumes no responsibility for this marketing material.
2012 BlackRock. All rights reserved. iShares is a registered trademark of BlackRock Institutional Trust Company, N.A. All other trademarks, servicemarks, or registered trademarks are the property of their respective owners.