iShares Introduces Frontier Markets ETF (FM)
BlackRock, Inc. (NYSE:BLK) announced today that its iShares Exchange Traded Funds (ETFs) business, the world’s largest manager of ETFs, launched the iShares MSCI Frontier 100 Index Fund (NYSEArca: FM). This is the first ETF available to U.S. investors benchmarked to the MSCI Frontier Markets 100 Index. The Index provides exposure to frontier market securities that are specifically screened for liquidity. The frontier markets that are currently included in the Index are Argentina, Bangladesh, Croatia, Estonia, Jordan, Kazakhstan, Kenya, Kuwait, Lebanon, Mauritius, Nigeria, Oman, Pakistan, Qatar, Romania, Serbia, Sri Lanka, Ukraine, the United Arab Emirates, and Vietnam.
“Frontier markets are a relatively untapped and exciting investment opportunity that more investors are starting to consider”
“For investors who are seeking broader equity market exposures, this fund is a logical extension of investing globally,” said Daniel Gamba, Head of iShares Americas Institutional Business at BlackRock. Representing 30% of the global population, frontier markets are forecast to be among the world’s fastest growing economies. Driven by a growing consumer class and a rich supply of natural resources, frontier markets are moving along the same path that led global emerging markets to be one of the strongest asset classes of the last 25 years.1
“Frontier markets are a relatively untapped and exciting investment opportunity that more investors are starting to consider,” added Mr. Gamba.
The fund is the latest example of iShares expanding the ETF marketplace for investors to new asset classes and geographies. Earlier this year, iShares launched the iShares Emerging Markets Corporate Bond Fund, the first index-based ETF to offer broad access to investment grade and high yield bonds issued by corporations based in Latin America, Eastern Europe, the Middle East, and Africa. In 2012 iShares also launched 10 single country ETFs, including the first ETFs to seek investable market exposure in Denmark and Finland.
Mr. Gamba continued, “Introducing this frontier markets ETF highlights iShares commitment to providing access to unique, growing equity markets through transparent, liquid and cost efficient products. BlackRock has been a manager of frontier markets since 2008, managing approximately $530 million benchmarked to frontier markets today. BlackRock began offering the first international ETFs for U.S. investors in 1996. The iShares MSCI Frontier 100 ETF (NYSEARCA:FM) can provide an important diversification role in our clients’ global investment portfolios.”
“We are delighted to have licensed another of our market-leading equity indices to BlackRock for the creation of the iShares MSCI Frontier 100 Index Fund,” said Diana Tidd, Managing Director and Head of the MSCI Index Business in the Americas. “As a tradable proxy for its broader parent index, the MSCI Frontier Markets 100 Index aims to cover the largest and most liquid securities across the frontier markets.”
The MSCI Frontier Markets 100 Index is a subset of the broader MSCI Frontier Markets Index. The MSCI Frontier Markets 100 Index puts a strong emphasis on tradability in a number of ways including requiring a minimum liquidity level for securities.
BlackRock is a leader in investment management, risk management and advisory services for institutional and retail clients worldwide. At June 30, 2012, BlackRock’s AUM was $3.560 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 June 30, 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.
iShares is the global product leader in exchange traded funds with over 600 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.
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. In addition to the normal risks associated with investing, international investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. Frontier markets involve heightened risks related to the same factors and may be subject to a greater risk of loss than investments in more developed and emerging markets. Diversification may not protect against market risk.
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.
The iShares Funds (“Funds”) are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).
* Not FDIC Insured * No Bank Guarantee * May Lose Value
1 Source: CIA World Fact Book, Morgan Stanley Estimates, Feb 2011.