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Etf industry report april 2011 Etf industry report april 2011 Document Transcript

  • FOR PROFESSIONAL INVESTORS. NOT FOR INVESTORS IN THE US OR CANADA. ETF Landscape Industry Review End April 2011
  • ETF Landscape End April 2011 Industry Review from BlackRock This page has been left blank intentionally.1 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockTable of contentsCurrent ETF and ETP landscape .................................................................................................................................................... 4ETF background ............................................................................................................................................................................. 21Global ............................................................................................................................................................................................. 22 Global ETF and ETP asset growth ................................................................................................................................................ 22 Global ETF and ETP providers ...................................................................................................................................................... 24 Global ETF assets by type of exposure ......................................................................................................................................... 29 Top 20 ETFs by AUM, trading volume and change in AUM ............................................................................................................ 33 Global mutual fund assets and flows ........................................................................................................................................... 48 Global ETF fund flows ................................................................................................................................................................. 49Europe ............................................................................................................................................................................................ 50 European listed ETF and ETP asset growth ................................................................................................................................... 51 European ETF and ETP providers ................................................................................................................................................. 55 European ETF assets by type of exposure .................................................................................................................................... 58 Top 20 ETFs by AUM, trading volume and change in AUM ............................................................................................................ 59 European mutual fund assets and flows ....................................................................................................................................... 62 European ETF fund flows ............................................................................................................................................................. 63 Average expenses of ETFs versus open-end mutual funds ............................................................................................................ 64 European exchange ETF statistics ............................................................................................................................................... 66United States ................................................................................................................................................................................. 69 United States listed ETF and ETP asset growth ............................................................................................................................ 70 United States ETF and ETP net new assets by type of exposure .................................................................................................... 71 Top 20 ETFs by AUM, trading volume and change in AUM ............................................................................................................ 80 United States mutual fund assets and flows ................................................................................................................................ 82 United States ETF fund flows ...................................................................................................................................................... 83 Average expenses of ETFs versus open-end mutual funds ............................................................................................................ 84 United States ETF assets by type of exposure .............................................................................................................................. 85 United States exchanges ............................................................................................................................................................ 89 United States listed ETF and HOLDRS short interest .................................................................................................................... 91Canada ........................................................................................................................................................................................... 92 Canadian listed ETF asset growth ................................................................................................................................................ 93 Canadian ETF providers .............................................................................................................................................................. 93 Canadian ETF assets by type of exposure .................................................................................................................................... 94 Top 20 ETFs by AUM, trading volume and change in AUM ............................................................................................................ 94Asia Pacific (ex-Japan) ................................................................................................................................................................... 97 Asia Pacific (ex-Japan) listed ETF and ETP asset growth ................................................................................................................ 98 Asia Pacific (ex-Japan) ETF providers ........................................................................................................................................... 99 Top 20 ETFs by AUM, trading volume and change in AUM ............................................................................................................ 100 Asia Pacific (ex-Japan) mutual fund flows and ETF fund flows ........................................................................................................ 103This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 2
  • ETF Landscape End April 2011 Industry Review from BlackRockTable of contents (continued)Japan .............................................................................................................................................................................................. 104 Japanese listed ETF and ETP asset growth ................................................................................................................................... 105 Japanese ETF providers ............................................................................................................................................................... 105 Top 20 ETFs by AUM and trading volume ..................................................................................................................................... 107 Japanese mutual fund flows and ETF fund flows ........................................................................................................................... 108Middle East and Africa ................................................................................................................................................................... 109 Middle East and Africa listed ETF and ETP asset growth ............................................................................................................... 109 Middle East and Africa ETF providers ........................................................................................................................................... 110 Top 10 ETFs by AUM and trading volume ..................................................................................................................................... 111Latin America ................................................................................................................................................................................. 112 Latin America ETF asset growth .................................................................................................................................................. 113 Latin America ETF providers ........................................................................................................................................................ 113 Top 10 ETFs by AUM and trading volume ..................................................................................................................................... 114 Latin America net new ETF assets ............................................................................................................................................... 115 Latin America mutual fund industry ............................................................................................................................................. 115Implementing asset allocation with ETFs ..................................................................................................................................... 116 Macro asset allocation and index performance ............................................................................................................................ 119 Core/satellite applications ......................................................................................................................................................... 121 How and why ETFs are used ........................................................................................................................................................ 122 ETF/ETP toolbox ........................................................................................................................................................................ 126 Commodity index comparison ..................................................................................................................................................... 133ETF and ETP launches 2011 .......................................................................................................................................................... 139 Planned new ETFs and ETPs ........................................................................................................................................................ 143Subscribe to ETF Landscape reports ............................................................................................................................................ 156 Global ETF Research and Implementation Strategy TeamDeborah Fuhr Shane KellyManaging Director Vice PresidentGlobal Head of ETF Research and Implementation Strategy Global ETF Research and Implementation Strategy+44 20 7668 4276 +44 20 7668 8426deborah.fuhr@blackrock.com shane.kelly@blackrock.comPublication date: 7 June 2011.3 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockThis is our end of April 2011 version of the ETF Landscape – Industry Review: BlackRock’s comprehensive monthly marketcommentary, which covers Exchange Traded Funds (ETFs) and other Exchange Traded Products (ETPs) across the globe. ETFs are 1typically open-end index funds that provide daily portfolio transparency, are listed and traded on exchanges like stocks on asecondary basis as well as utilising a unique creation and redemption process for primary transactions. ETPs are products thathave similarities to ETFs in the way they trade and settle but they do not use a mutual fund structure. The use of other structuresincluding grantor trusts, partnerships, notes and commodity pools by ETPs can create different tax and regulatory implications forinvestors when compared to ETFs which are funds. This document includes rankings of ETF and ETP providers, ETFs, indexproviders and exchanges globally, in the United States, Europe, Japan, Asia, Latin America, the Middle East and Africa, as well as 2by country. This commentary should not be regarded as a research report .Current ETF and ETP landscape, at the end of April 2011  Leveraged and inverse ETFs/ETPs experienced US$0.3 Bn netGlobal ETF/ETP industry statistics outflows in April 2011, of which leveraged ETFs/ETPs experienced US$1.0 Bn net outflows and inverse ETFs/ETPs At the end of April 2011, the global ETF industry had 2,670 ETFs experienced US$0.1 Bn net outflows, while US$0.9 Bn net inflows with 6,021 listings and assets of US$1,469.8 Bn, from 140 went into leveraged inverse ETFs/ETPs. providers on 48 exchanges around the world. This compares to 2,189 ETFs with 4,354 listings and assets of US$1,113.1 Bn from  In 2011 YTD, assets increased by 12.1% from US$1,311.3 Bn to 122 providers on 42 exchanges at the end of April 2010. US$1,469.8 Bn, which is greater than the 8.5% increase in the MSCI World Index in US dollar terms. This compares to a 7.4% We expect global AUM in ETFs and ETPs to increase by 20–30% increase in assets over the same period in 2010. annually over the next few years, taking the global ETF/ETP industry to approximately US$2 trillion in AUM by early 2012.  In 2011 YTD, US$67.2 Bn of net new assets went into Considering ETFs separately, AUM should reach US$2 trillion ETFs/ETPs3. US$45.1 Bn net inflows went into equity ETFs/ETPs, globally by the end of 2012, US$1 trillion in the United States in of which US$46.8 Bn went into ETFs/ETPs tracking developed 2011 and US$500 Bn in Europe in 2013. market indices while ETFs/ETPs tracking emerging market indices saw net outflows of US$1.7 Bn. Fixed income ETFs/ETPs saw net Taking ETFs and ETPs together, United States AUM should inflows of US$10.5 Bn, of which ETFs/ETPs providing high yield reach US$2 trillion in 2013, with European AUM reaching exposure saw US$3.1 Bn net inflows while Government bond US$500 Bn in 2012. ETFs/ETPs experienced net outflows of US$0.7 Bn. US$9.0 Bn 29 January 2011 marked the 18th anniversary of ETFs in the net inflows went into ETFs/ETPs with commodity exposure, of United States. which ETFs/ETPs providing broad commodity exposure saw US$3.7 Bn net inflows while ETFs/ETPs providing exposure to 9 March 2011 marked the 21st anniversary of the first ETF energy saw net outflows of US$0.5 Bn. globally, which listed in Canada in 1990.  In 2011 YTD, US$2.7 Bn net inflows went into leveraged and 11 April 2011 marked the 11th anniversary of ETFs in Europe. inverse ETFs/ETPs, of which US$3.6 Bn net inflows went into 27 August 2011 will mark the 10th anniversary of ETFs leveraged inverse ETFs/ETPs and US$0.9 Bn net inflows went into in Australia. inverse ETFs/ETPs, while leveraged ETFs/ETPs experienced US$1.8 Bn net outflows. Assets increased by 5.0% from US$1,399.4 Bn in March 2011 to US$1,469.8 Bn in April 2011, which is greater than the 4.0%  The top 100 ETFs, out of 2,670, account for 62.0% of global ETF increase in the MSCI World Index in US dollar terms. AUM. 247 ETFs have greater than US$1.0 Bn in assets, while 3 1,635 ETFs have less than US$100.0 Mn in assets, 1,314 ETFs US$25.3 Bn of net new assets went into ETFs/ETPs in April 2011 . have less than US$50.0 Mn in assets and 462 ETFs have less than US$18.9 Bn net inflows went into equity ETFs/ETPs, of which US$10.0 Mn in assets. US$13.7 Bn went into ETFs/ETPs tracking developed market indices and US$5.2 Bn went into ETFs/ETPs tracking emerging  In April 2011, the number of ETFs increased by 2.5% with 73 new market indices. Fixed income ETFs/ETPs saw net inflows of ETFs launched, while seven ETFs delisted and one ETF merged. In US$2.7 Bn, of which ETFs/ETPs providing corporate bond 2011 YTD, the number of ETFs have increased by 8.5% with 236 exposure saw US$0.8 Bn net inflows while money market new ETFs launched, while seven ETFs have delisted and 19 ETFs ETFs/ETPs saw net outflows of US$0.3 Bn. US$2.8 Bn net inflows have merged. This compares to a 12.4% increase in the number of went into ETFs/ETPs with commodity exposure, of which ETFs over the same period in 2010, when 253 new ETFs launched, ETFs/ETPs with exposure to precious metals saw US$2.9 Bn net while 12 ETFs delisted. inflows while ETFs/ETPs providing exposure to energy  The number of ETFs listed in Europe surpassed the United States experienced net outflows of US$1.0 Bn. in April 2009. At the end of April 2011, Europe had 1,128 ETFs listed, compared to 972 ETFs listed in the United States. There are currently plans to launch 1,055 new ETFs globally compared to 872 at the end of April 2010.1. Most are index-based, but some are active.2. Certain terms used in this publication may differ from those applied by other industry participants.3. Global flows approximated by combining United States and European flows.Source: Various ETF providers, exchanges, Global ETF Research and Implementation Strategy Team, BlackRock.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 4
  • ETF Landscape End April 2011 Industry Review from BlackRock In 2011 YTD, the number of exchanges with official listings  Commodity ETFs/ETPs saw net inflows of US$1.8 Bn, of which increased from 46 to 48. US$2.4 Bn went into ETFs/ETPs providing exposure to precious metals, while ETFs/ETPs providing exposure to energy In the first four months of 2011, the ETF average daily trading experienced US$0.9 Bn net outflows in April 2011. volume in US dollars increased by 17.6% to US$54.5 Bn in April 2011. This compares to an average daily trading volume of  Leveraged and inverse ETFs/ETPs experienced US$0.1 Bn net US$72.5 Bn in April 2010. outflows in April 2011, of which leveraged ETFs/ETPs experienced US$0.8 Bn net outflows and inverse ETFs/ETPs MSCI ranks first in terms of AUM and number of products tracking experienced US$0.1 Bn net outflows, while US$0.8 Bn net inflows its benchmarks with assets of US$374.4 Bn and 418 ETFs went into leveraged inverse ETFs/ETPs in April 2011. reflecting 25.5% market share, while Standard & Poor’s (S&P) ranks second with US$337.5 Bn, 345 ETFs and 23.0% market  In 2011 YTD, assets have increased by 11.9% from US$891.0 Bn share, followed by Barclays Capital with US$119.3 Bn, 90 ETFs to US$997.3 Bn, which is greater than the 8.6% increase in the and 8.1% market share. MSCI US Index in US dollar terms. This compares to a 8.3% increase in assets over the same period in 2010. Globally, iShares is the largest ETF provider in terms of both number of products and assets, 467 ETFs and US$636.9 Bn  US$51.5 Bn of net new assets went into United States listed respectively, reflecting 43.3% market share; State Street Global ETFs/ETPs YTD. US$33.1 Bn net inflows went into equity Advisors is second with 123 ETFs, assets of US$210.2 Bn, and ETFs/ETPs, of which US$13.7 Bn went into ETFs/ETPs tracking 14.3% market share; followed by Vanguard with 66 ETFs, assets of United States equity indices, while ETFs/ETPs tracking broad US$173.1 Bn and 11.8% market share; at the end of April 2011. emerging market indices saw net outflows of US$5.5 Bn. Fixed income ETFs/ETPs saw net inflows of US$9.9 Bn, of which The top three ETF providers, out of 140, account for 69.4% of US$2.3 Bn went into high yield bond ETFs/ETPs and US$2.2 Bn global ETF AUM, while the remaining 137 providers each have less into corporate bond ETFs/ETPs. Commodity ETFs/ETPs than 4.0% market share. This compares to 70.6% market share in experienced net inflows of US$6.2 Bn, of which ETFs/ETPs the top three out of 122 providers, at the end of April 2010. Six providing exposure to agricultural commodities saw net inflows of new providers have entered the industry in 2011, launching their US$3.2 Bn while ETFs/ETPs providing exposure to energy first ETFs, while 39 firms plan to launch their first ETF in the future. experienced US$0.5 Bn net outflows in 2011 YTD. Globally, net sales of mutual funds (excluding ETFs) were negative  iShares is the largest ETF provider in terms of both number of US$4.5 Bn, while net sales of ETFs were positive US$38.4 Bn YTD products and assets, 218 ETFs and US$472.2 Bn respectively, to March 2011 according to Strategic Insight. reflecting 47.3% market share; State Street Global Advisors is Additionally, there were 1,149 other ETPs with 1,872 listings and second with 99 ETFs, assets of US$195.6 Bn and 19.6% market assets of US$201.1 Bn from 57 providers on 23 exchanges. This share; followed by Vanguard with 64 ETFs, assets of US$172.9 Bn compares to 778 ETPs with 1,099 listings and assets of US$182.0 Bn and 17.3% market share, at the end of April 2011. Of the from 45 providers on 18 exchanges, at the end of April 2010. US$20.4 Bn of net new assets in United States listed ETFs in April 2011, iShares gathered the largest net inflows with US$8.7 Bn, Combined, there were 3,819 products with 7,893 listings, assets followed by State Street Global Advisors with US$4.0 Bn net of US$1,670.9 Bn from 176 providers on 52 exchanges around inflows, while Direxion Shares saw US$0.6 Bn net outflows. the world. This compares to 2,967 products with 5,453 listings, assets of US$1,295.1 Bn from 150 providers on 44 exchanges, at  In 2011 YTD, of the US$45.5 Bn net new assets into United the end of April 2010. States listed ETFs, Vanguard gathered the largest net inflows with US$13.2 Bn, followed by iShares with US$12.7 Bn net inflows,United States ETF/ETP industry statistics while Bank of New York had the largest net outflows with US$1.4 Bn in 2011 YTD. At the end of April 2011, the ETF industry in the United States had  The top 100 ETFs, out of 972, account for 81.4% of United States 972 ETFs and assets of US$997.3 Bn, from 29 providers on two ETF AUM. 139 ETFs have greater than US$1.0 Bn in assets, while exchanges. This compares to 839 ETFs and assets of 498 ETFs have less than US$100.0 Mn in assets, 396 ETFs have US$764.0 Bn, from 28 providers on two exchanges at the end of less than US$50.0 Mn in assets and 155 ETFs have less than April 2010. US$10.0 Mn in assets. 29 January 2011 marked the 18th anniversary of ETFs in the  In April 2011, the number of ETFs increased by 2.4% with 23 new United States. ETFs launched. In 2011 YTD, the number of ETFs increased by Assets have increased by 5.0% from US$950.0 Bn in March 2011 8.5% with 76 new ETFs launched. This compares to an 8.7% to US$997.3 Bn in April 2011, which is greater than the 3.0% increase in the number of ETFs over the same period in 2010, increase in the MSCI US Index in US dollar terms. when 78 new ETFs launched while 11 ETFs delisted. US$22.4 Bn of net new assets went into United States listed  In the first four months of 2011, the ETF average daily trading ETFs/ETPs in April 2011. US$16.7 Bn net inflows went into equity volume in US dollars increased by 16.7% to US$47.9 Bn in April ETFs/ETPs, of which US$9.8 Bn went into ETFs/ETPs tracking 2011. This compares to an average daily trading volume of United States equity indices and US$3.5 Bn went into ETFs/ETPs US$67.3 Bn in April 2010. tracking emerging markets equity indices. Fixed income  In April 2011, United States ETF turnover was 20.7% of all United ETFs/ETPs saw net inflows of US$2.9 Bn, of which US$0.7 Bn States equity turnover, which is less than the 21.6% reported in went into corporate bond ETFs/ETPs and US$0.6 Bn went into December 2010. Government bond ETFs/ETPs.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.5 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRock The three ETF providers, out of 29, account for 84.3% of United  In 2011 YTD, assets have increased by 15.5% from US$284.0 Bn States ETF AUM, while the remaining 26 providers each have less to US$328.2 Bn, which is greater than the 14.1% increase in the than 5.0% market share. This compares to 85.0% market share in MSCI Europe Index in US dollar terms. This compares to a 3.3% the top three out of 28 providers, at the end of April 2010. The increase in assets over the same period in 2010. average Total Expense Ratio (TER) for equity ETFs in the United  US$14.0 Bn of net new assets went into European listed States is 32 bps versus 74 bps per annum for the average equity index tracking fund and 157 bps for the average active ETFs/ETPs in 2011 YTD. US$10.6 Bn net inflows went into equity ETFs/ETPs, of which US$4.7 Bn went into ETFs/ETPs providing equity fund1. European single country exposure while ETFs/ETPs providing Net sales of mutual funds (excluding ETFs) in the United States broad European exposure experienced net outflows of US$2.8 Bn. were positive US$3.3 Bn, while net sales of ETFs domiciled in the Fixed income ETFs/ETPs saw net outflows of US$0.04 Bn, of United States were positive US$26.2 Bn YTD to March 2011 which Government bond ETFs/ETPs experienced US$1.9 Bn net according to Strategic Insight. outflows, while US$0.9 Bn net inflows went into money market ETFs/ETPs. US$3.3 Bn net inflows went into commodity In the United States over the last five years to mid year 2010, ETFs/ETPs, of which US$1.6 Bn went into ETFs/ETPs providing the S&P 500 has outperformed 63.8% of actively managed broad commodity exposure and US$0.7 Bn went into ETFs/ETPs large-cap United States equity funds; the S&P MidCap 400 has providing exposure to precious metals. outperformed 76.7% of mid-cap funds and the S&P SmallCap 600 has outperformed 65.2% of small-cap funds according to S&P.  Of the US$2.8 Bn of net new assets in European listed ETFs in April 2011, Source Markets gathered the largest net inflows with The five-year data is unequivocal for fixed income funds. Across US$0.9 Bn, followed by db x-trackers with US$0.6 Bn net inflows, all categories, more than three quarters of active managers have while iShares and Lyxor Asset Management had the largest net failed to beat benchmarks. Similarly, five year asset-weighted outflows with US$0.2 Bn. average returns are lower for active funds in all but three categories2.  The top 100 ETFs, out of 1,128, account for 63.1% of European ETF AUM. 74 ETFs have greater than US$1.0 Bn in assets, while Additionally, there were 244 other ETPs with assets of US$142.9 Bn 696 ETFs have less than US$100.0 Mn in assets, 545 ETFs have from 23 providers on one exchange. This compares to 146 ETPs less than US$50.0 Mn in assets and 155 ETFs have less than with assets of US$91.0 Bn from 17 providers on one exchange, at US$10.0 Mn in assets. the end of April 2010.  In April 2011, the number of ETFs increased by 0.5%, with 14 new Combined, there were 1,216 products with assets of US$1,140.2 Bn, ETFs launched, while seven ETFs delisted and one ETF merged. In from 48 providers on two exchanges in the United States. 2011 YTD, the number of ETFs have increased by 5.2% with 82 This compares to 985 products with assets of US$855.0 Bn from 41 new ETFs launched, while seven ETFs have delisted and 19 ETFs providers on two exchanges, at the end of April 2010. have merged. This compares to a 12.4% increase over the same period in 2010 when 103 new ETFs launched.European ETF/ETP industry statistics  In 2011 YTD, the number of exchanges with official listings has At the end of April 2011, the European ETF industry had 1,128 increased from 22 to 23. ETFs with 3,952 listings and assets of US$328.2 Bn, from 39  iShares is the largest ETF provider in terms of both number of providers on 23 exchanges. This compares to 932 ETFs with products and assets, 167 ETFs and US$115.3 Bn respectively, 2,748 listings and assets of US$234.3 Bn from 36 providers on reflecting 35.1% market share; Lyxor Asset Management is 18 exchanges at the end of April 2010. 11 April 2011 marked the second with 157 products, assets of US$56.5 Bn, and 17.2% 11th anniversary of ETFs in Europe. market share; followed by db x-trackers with 158 ETFs, assets of Assets increased by 6.7% from US$307.5 Bn in March 2011 to US$53.5 Bn, and 16.3% market share; at the end of April 2011. US$328.2 Bn in April 2011, which is less than the 7.4% increase  In the first four months of 2011, the ETF average daily trading in the MSCI Europe Index in US dollar terms. volume in US dollars increased by 30.9% to US$4.1 Bn in April US$3.6 Bn of net new assets went into European listed ETFs/ETPs 2011. This compares to an average daily trading volume of in April 2011. US$2.8 Bn net inflows went into equity ETFs/ETPs, of US$5.1 Bn in April 2010. Most ETF trades are not required to be which US$1.6 Bn went into ETFs/ETPs providing emerging markets reported in Europe as ETFs are not covered by the European exposure while ETFs/ETPs providing broad European exposure saw Union directive on markets in financial instruments (MiFID). net outflows of US$1.2 Bn. Fixed income ETFs/ETPs saw net  In March 2011, reported European ETF turnover was 5.5% of all outflows of US$0.4 Bn, of which money market ETFs/ETPs European equity turnover, which was less than the 5.1% in experienced US$0.3 Bn net outflows while high yield ETFs/ETPs December 2010. saw net inflows of US$0.2 Bn. US$1.1 Bn net inflows went into commodity ETFs/ETPs, of which US$0.5 Bn went into ETFs/ETPs  The top three ETF providers, out of 39, account for 68.7% of providing exposure to precious metals and US$0.4 Bn went into European ETF AUM, while the remaining 36 providers each have ETFs/ETPs providing broad commodity exposure. less than 6.0% market share. This compares to 72.1% market share in the top three out of 36 providers at the end of April 2010. Leveraged and inverse ETFs/ETPs experienced US$30.7 Mn net outflows in April 2011, of which leveraged ETFs/ETPs  The average TER for equity ETFs in Europe is 41 bps versus 96 bps experienced US$48.1 Mn net outflows, while US$13.5 Mn net per annum for the average equity index tracking fund and 187 bps inflows went into leveraged inverse ETFs/ETPs and US$3.9 Mn for the average active equity fund3. net inflows went into inverse ETFs/ETPs in April 2011.1. Source: Strategic Insight Simfund MF, Global ETF Research and Implementation Strategy Team, BlackRock, data as at end January 2011.2. Source: Standard & Poor’s Indices Versus Active Funds (SPIVA) Scorecard, Mid-2010.3. Source: Strategic Insight Simfund Global, Global ETF Research and Implementation Strategy Team, BlackRock, data as at end January 2011.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 6
  • ETF Landscape End April 2011 Industry Review from BlackRock In Europe, net sales of mutual funds (excluding ETFs) were The first modern open-end mutual fund was the Massachusetts US$25.8 Bn while net sales of ETFs domiciled in Europe were Investors Trust which launched in 1924. Assets in United States US$8.7 Bn, YTD to March 2011 according to Lipper FMI. mutual funds reached US$1 trillion in January 1990. Additionally, there were 546 other ETPs with 1,192 listings, and This means that it took the United States mutual fund industry assets of US$36.1 Bn, from 10 providers on eight exchanges. This approximately 66 years to reach US$1 trillion in assets, compared compares to 333 ETPs with 614 listings and assets of US$16.8 Bn, to the United States ETF industry which was only conceived in 1993 from nine providers on five exchanges, at the end of April 2010. and reached US$1 trillion in 2010, taking just 18 years to reach the Combined, there were 1,674 products with 5,144 listings and US$1 trillion milestone. assets of US$364.3 Bn, from 45 providers on 24 exchanges in Europe. This compares to 1,265 products with 3,362 listings and Anniversaries assets of US$251.1 Bn from 40 providers on 18 exchanges at the end of April 2010. In 2010, we celebrated the 20th anniversary since the launch of the very first ETF globally. On 9 March 1990, the first ETF was listed inSource: Global ETF Research and Implementation Strategy Team,BlackRock, Bloomberg. Canada on the Toronto Stock Exchange (TSX): the Toronto 35 Index Participation Fund (TIPs) tracking the TSX 35 Index.2010 was noted for: It was followed by the Hundred Index Participation Fund (HIPs) tracking the TSX 100 Index on 26 September 1995. On 7 MarchThe industry grew on all major dimensions in 2010 and we expect 2000, the TIPs and HIPs ETFs were merged into the iUnits S&P/TSEthis to continue during 2011. With products and assets both Index Participation Fund (XIU CN): an ETF that was originally listedgrowing by 26.6%, the global ETF industry had 2,460 ETFs with on 4 October 1999. This ETF has since been renamed iShares CDN5,555 listings and assets of US$1,311.3 Bn, from 136 providers on S&P/TSX 60 Index Fund (XIU CN).46 exchanges around the world, at year end 2010. This was upsignificantly on 2009’s year end of 1,943 ETFs with 3,827 listings April 2010 marked the 10th anniversary of the first ETFs to beand assets of US$1,036.1 Bn, from 108 providers on 41 exchanges. launched in Europe. The iShares DJ STOXX 50 (EUN1 GY) and iShares DJ Euro STOXX 50 (EUN2 GY) were listed on 11 April 2000Demand for ETFs globally has surged as professional and retail on the Deutsche Boerse, followed by the iShares FTSE 100 (ISF LN)investors alike have discovered their unique combination of benefits, on the London Stock Exchange (LSE) extraMARK segment, onsuch as versatility, transparency and significant cost advantages. 28 April 2000.The availability of cost effective, flexible, liquid, and diversifiedinvestment products that enable rapid implementation of a The first two ETFs were originally branded as ‘LDRS’, sponsored bycomprehensive range of investment strategies has struck a chord Merrill Lynch International and later acquired by iShares inwith investors – during both bull and bear markets. September 2003.Factors driving expanding use of the vehicle include the number andtypes of equity, fixed income, commodity and other indices covered, Educationmore fund platforms embracing ETFs, more active marketing ofETFs by online brokers, greater involvement by fee based advisors, The need for education amongst both institutional and retailthe growing number of exchanges planning to launch new ETF investors was highlighted in the findings from a number of surveystrading segments, and regulatory changes in the United States, during 2010, whereby investors cited that they were not familiarEurope and many emerging markets that allow funds to make larger enough with ETFs to use them. Findings also demonstrated a needallocations to ETFs. for more education with regards to how ETFs really work, their impact on investors and markets, and their size relative to theCapital flows in 2010 within ETFs demonstrated that the products mutual fund industry.are becoming key indicators for shifts in investor sentimentbetween asset classes. During 2010, developed and emerging Growth in the utilisation of ETFs and ETPs, as well as theequity ETFs enjoyed heavy inflows, whilst fixed income and expanding diversity of the product set, is leading to a greatercommodity ETFs/ETPs received smaller net new asset flows than in urgency of market wide educational needs. Investors should2009 since some investors adjusted their risk profiles. understand that under the overall ETF/ETP umbrella, many different product structures, underlying investments (securities,The five and ten year CAGRs of global ETF AUM at the end of 2010 futures, physical commodities, etc.), regulatory regimes and taxwere 26.1% and 33.2% respectively. Compared to the United States treatments are represented.five and ten year ETF AUM CAGRs of 24.4% and 29.8% respectively,while Europe’s ETF AUM was growing at faster rates of 38.9% (five Within the ‘gold’ category for example, an investor can find fundsyear CAGR) and 83.0% (ten year CAGR). and notes based on physical gold, gold futures or gold mining stocks – each with quite different performance, regulatory and tax implications.Trillion dollar milestones As market growth and product innovation proceeds, it will becomeThe global ETF industry broke through the US$1 trillion more essential for all kinds of investors to thoroughly understandmilestone at the start of 2010, starting the year with US$1 trillion the full range of ETF and ETP structures, benchmarks, and(US$1,032 Bn); 45.2% above US$710.9 Bn at the beginning of underlying features and applications, if they are to effectively realise2009, while the US ETF/ETP industry broke through the all the many potential benefits of the ETF/ETP approach.US$1 trillion milestone at the end of 2010, reachingUS$1.003 trillion for the first time on 16 December 2010.7 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockThe risk of confusion, disappointment and disillusionment among A preference for traditional ETFs which are open-end index fundsinvestors would be very negative for the ETF industry. We are at an under UCITS has emerged. These are simple products that trackimportant crossroads in the ETF industry since we are seeing funds indices, provide transparency on costs, underlying basket ofcalling themselves ETFs which: 1) do not provide transparency on securities, real time liquidity on stock exchanges via mosttheir underlying portfolios; 2) do not offer in-kind creation/ brokerage firms/banks like any other equity security plus theredemption; and 3) do not have real-time indicative Net Asset benefit of the unique creation/ redemption process. This meansValues (NAVs). There are also products that are not even funds ETFs are as liquid as their underlying portfolio and do not tend towhich are being called ETFs. trade at significant discounts or premiums.Now that the industry accounts for over US$1 trillion, product Many investors are still expressing concerns over counterparty risk,developers are working hard to find ways to put structured products, transparency and liquidity when using structured products, swaps,hedge funds and active funds into an ETF wrapper without certificates, and notes which has highlighted a preference for ETFsmaintaining the above basic features of an ETF. where the structure is a fund, and often, more specifically for ETFs which invest exclusively in physical securities.As mentioned above, if this pattern is allowed to continue, this couldbe very negative for the ETF industry. Greater transparency around This preference is evidenced by the fact that there are more ETFs inproduct structure, mechanics, tax and regulatory implications, index Europe which use synthetic replication methods such as swaps thanreplication methodology and pricing would prove vital to helping those that use physical replication. However, the physical based ETFsinvestors make informed investment decisions when considering ETFs. have the greater share of assets in Europe. At the end of Q1 2011, there were 714 synthetic based ETFs with US$138.0 Bn in AUM,ETFs are one of the greatest financial innovations of the last compared to 405 physical based ETFs with US$169.1 Bn in AUM.decade in Europe and we expect a bright future but the industry isat a critical crossroads. Agreeing definitions for the various product Continued preference for core-betastructures is one of the pressing needs of the industry in 2011. Preference for core beta ETFs will continue despite growth in theRegulation use of ETFs covering alternative asset class exposures. Investors’ preference will continue to be for ETFs based on broad-marketRegulators and exchanges are taking steps to improve transparency indices which serve as core holdings.on the structures by creating special segments for ETPs. In HongKong recently, they required any ETF using synthetic replication to This is essential, especially in today’s environment of increasedhave a “*” after the product’s name with a footnote in all market volatility, since no single sector, style, or stock consistentlymarketing documents. outperforms its peers. Having core holdings invested in broad- market indices not only helps reduce volatility but can also achieveThe United Kingdom Retail Distribution Review (RDR) proposals competitive returns for the overall portfolio.outline the changes the FSA plans to make to enable the retailinvestment market to establish a new level of consumer trust and Why are investors using ETFs?confidence by distinguishing between independent advice and salesadvice to create better clarity for consumers. The motivations for using ETFs have expanded, including the ever-relevant cost advantage and broad market access, as well asFunds registered under the Investment Company Act of 1940 and themes that have emerged over the past year.structured for tax purposes as Regulated Investment Companies(RICs) under the United States Tax Code were previously allowed a Examples of strategies being implemented include managing assetpackage of United States tax benefits to non-United States allocation, taking tactical positions, and increasing diversification.shareholders (generally called ‘flow-through’ benefits) as a result of Investors are also using ETFs to take negative positions in assetthe 2004 American Jobs Creation Act. These flow-through benefits classes, either to remove existing unwanted exposure or to expressgenerally expired as of 31 December 2009. a negative view.Product development This expansion has been fuelled by the increase in the range of asset classes accessible through ETFs. Moreover, the introductionDevelopment and growth of investment styles that employ products of ETFs covering emerging markets, commodities and property haslike ETFs will be used as building blocks for delivering low cost beta. allowed investors to access some of the best performing assetProduct ranges are beginning to emerge in more specialised areas classes of the past few years. On top of greater asset breadth, theto cater for the growing number of professional and retail investors range of instruments has also grown. This expansion in usage,who want the advantages of ETFs but in a managed investment breadth and product flexibility has driven steady growth in the usesolution such as a funds of ETFs solution. of ETFs over the past decade.ETF providers have continued to expand their product ranges in We expect ETFs to continue to be one of the preferred investmentmore specialised areas to cater for the growing number of vehicles for low cost beta exposure. Factors that are driving thisprofessional and retail investors using ETFs as advanced portfolio growth include:construction tools. The increasing availability of these highly-specialised ETFs across the full spectrum of equities, fixed income  Increase in the number of institutional and retail investors whoand alternative investments now ensures that investors can use use ETFs and view them as useful tools.ETFs to instantly reallocate capital to take advantage of new  Moves to fee based advisory by financial advisors which in someinvestment opportunities. cases are based on requirements under regulatory changes.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 8
  • ETF Landscape End April 2011 Industry Review from BlackRock On-line brokers developing enhanced capabilities to assist  The number and types of equity, fixed income, commodity and retail investors and RIAs to foster education on ETFs/ETPs other indices covered. facilitate the evaluation and comparison of specific products  Development and growth of investment styles that employ and execute trades. products like ETFs that deliver low cost beta. In addition, many on-line brokers are running no commission  The growing number of exchanges, which plan to launch new ETF marketing campaigns for ETFs in an effort to win new accounts trading segments. and cross-sell other products.  The expectation that there will be a number of new issuers/ Fund platforms embracing ETFs which is often driven by current providers of ETFs. clients asking for ETFs to be included. Regulatory changes in the United States and Europe and many emerging markets that allow funds to make larger allocations to ETFs.Figure 1: Summary of compound annual growth rates, as at year end 2010 Global United States Europe 1 year 5 year 10 year 1 year 5 year 10 year 1 year 5 year 10 year ETF AUM 26.6% 26.1% 33.2% 26.3% 24.4% 29.8% 25.2% 38.9% 83.0% ETP assets 42.6% 60.7% 42.2% 36.4% 52.8% 37.4% 99.5% 95.3% N/A Total assets 28.2% 28.2% 34.0% 27.4% 26.4% 30.5% 30.0% 41.3% 84.9% #ETFs 26.6% 39.8% 38.9% 16.1% 34.8% 27.2% 29.5% 45.4% 67.9% #ETPs 43.2% 74.8% 53.9% 30.3% 56.0% 29.5% 87.4% 204.2% N/A #ETFs/ETPs 31.1% 46.2% 41.9% 18.3% 37.4% 27.5% 44.1% 57.0% 74.7% ETF providers 25.9% 29.7% 32.8% -3.4% 28.5% 25.0% 14.7% 15.5% 34.6% ETP providers 42.1% 43.1% 39.0% 17.6% 82.1% 34.9% 125.0% 35.1% N/A Total providers 27.3% 26.4% 32.6% 4.8% 37.4% 27.1% 25.7% 15.9% 36.2%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.The challenging market conditions of 2008 and 2009 caused In a world where investment products come and go with the blink ofa significant shift in investors’ risk appetite and in their desire an eye, ETFs might be considered one of the most innovativefor liquidity. financial products in the last two decades. They have fundamentally changed how both institutional and retail investors construct theirDuring 2010, many investors found that ETFs met their need investment portfolios.for greater transparency regarding cost, holdings, price,liquidity, product structure, and risk and return related to ETF providers have continued to expand their product ranges ininvestment alternatives. more specialised areas to cater for the growing number of professional and retail investors using ETFs as advanced portfolioETFs are index-based1 open-ended funds that can be bought and construction tools.sold as quickly and easily as ordinary shares on a stock exchange –they have become popular and widely used investment vehicles to The increasing availability of these highly-specialised ETFsachieve many investment strategies: across the full spectrum of equities, fixed income and alternative investments now ensures that investors can use ETFs to To gain diversified exposure to a market. instantly reallocate capital to take advantage of new For core/satellite investing. investment opportunities. For buy and hold investing. Over the past decade, through to year end 2010, the compound annual growth rate for ETF assets was 33.2% globally, 29.8% in the For active traders who wish to take advantage of United States, 25.3% in Canada and 83.0% in Europe. There are no market movements. signs that investor interest in ETFs is fading since investors are For investors wishing to hedge the market. finding that they are products which can work well in every market environment. Capital flows in 2010 within ETFs As an alternative to futures and other institutional demonstrated that the products are becoming key indicators for investment tools. shifts in investor sentiment between asset classes.All financial investments involve an element of risk. Therefore, thevalue of an investment in ETFs and the income from it will vary andthe initial investment amount cannot be guaranteed.1. Most are index-based, but some are active.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.9 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockDuring 2010, developed and emerging equity ETFs enjoyed heavyinflows. On the other hand, fixed income and commodity ETFs/ETPsreceived smaller net new asset flows than in 2009 as some Figure 2: Expected change in ETF allocationsinvestors adjusted their risk profiles. Expect noThe use of ETFs is often driven by macro trends and volatility. The changechanges in investor sentiment are illustrated in the net new assetdata into ETFs tracking fixed income indices, equity indices, Asset managers 21% 16% 11% 42%emerging market indices and commodities.At year end 2010, just 100 ETFs out of 2,460 accounted for Institutional funds -2% -2%-5% 17% 10% 5% 49%US$828.1 Bn or 63.1% of the US$1,311.3 Bn total. ETFs providingexposure to key portfolio building blocks accounted forapproximately a quarter of assets. There were 1,516 ETFs with -10% 0% 10% 20% 30% 40% 50%assets below US$100.0 Mn, 1,222 ETFs with assets below Decrease >10% Decrease 5–10% Decrease 1–4%US$50.0 Mn and 418 ETFs with less than US$10.0 Mn in assets,while the top three providers out of 136 account for 70.0% of Increase 1–4% Increase 5–10% Increase >10%assets: iShares with 44.1%, SSgA with 14.5% and Vanguard with Base: 41 institutional funds, 19 asset managers. “Uncertain” responses not shown.11.3% market share. Source: 2011 US Exchange-Traded Funds Study, Greenwich Associates: Institutional Demand for Exchange-Traded Funds Continues to Climb, May 2011.Additionally, there were 1,083 other ETPs with assets ofUS$171.3 Bn from 56 providers on 22 exchanges. Combined, therewere 3,543 products with 7,351 listings, assets of US$1,482.7 Bnfrom 170 providers on 50 exchanges around the world, as at year Institutional priorities: products and providersend 2010. Liquidity is the most important factor for both asset managers andSource: Global ETF Research and Implementation Strategy Team, institutional funds when it comes to selecting an ETF provider. AfterBlackRock, Bloomberg. liquidity, institutional funds focus on providers’ expense ratios and tracking error, followed by the strength and reputation of the fundInstitutional demand for ETFs continues company behind the funds, as well as the track record of theto climb fund itself. Asset managers focus on many of the same factors when picking an ETF provider. However, asset managers place lessA new Greenwich Associates study1 reveals that institutional of an emphasis on the track record of the specific fund and payinvestors in the United States are increasingly bullish on using ETFs more attention to the benchmarks used by competing providers inin their portfolios. Nearly half of the asset management firms and a their funds. Institutional investors apply similar criteria whenthird of the institutional funds taking part in the study of current selecting specific ETF products.institutional ETF users plan to increase the share of portfolio assetsthey invest in ETFs over the next two years.Institutional use of ETFs has increased steadily over the past severalyears. The results of the study indicate a continuation of that trend. Figure 3: ETF applications in institutional portfolios48% of asset management firms interviewed for the study expect toincrease portfolio allocations to ETFs between now and 2013. Of Transitions 63%those, slightly more than half expect to increase ETF allocations by 45%5% or more. Perhaps more telling, not a single asset manager Cash equitisation/interim beta 51% 75%reported plans to cut ETF allocations in the coming two years. 44% Rebalancing 40%Among institutional funds, approximately one-third of study Tactical adjustments 44%participants expect to increase ETF allocations by 2013. Those 40%institutional funds were about evenly divided with roughly half Core/satellite 24% 5%planning to increase allocations by 1-4% and half planning increases 22%by 5% or more. Less than one in 10 institutional funds that currently Portfolio completion 20%use ETFs plan to reduce allocations to these funds over the next Hedging 12%two years. 30% ETF overlay/liquidity sleeve 10% 10%These institutional funds tend to use ETFs during manager Other 7%transitions and expect greater stability of managers in their portfolio 15%moving forward. Though the percentage of total fund assets 0% 20% 40% 60% 80%allocated to ETFs is small, the amount of money invested is notsmall and is growing. Respondents report ETF investments ranging Asset managers Institutional fundsfrom US$10 Mn to US$200 Mn. Base: 41 Institutional funds, 20 asset managers. Source: 2011 US Exchange-Traded Funds Study, Greenwich Associates: InstitutionalIn a separate study conducted in late 2010, Greenwich Associates Demand for Exchange-Traded Funds Continues to Climb, May 2011.research indicated that 15% of large institutional funds in the UnitedStates currently used ETFs in their portfolios.1. Greenwich Associates surveyed United States pension funds, endowments, foundations, and asset managers that identified themselves as ETF users. 70 institutions participated in the survey, including 45 institutional funds and 25 asset managers. The survey was conducted between February and April 2011.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 10
  • ETF Landscape End April 2011 Industry Review from BlackRockTop ETF providers to United States Although all of the leading providers are well regarded in certain aspects of their business, iShares/BlackRock is most frequentlyinstitutional investors cited for providing liquid products, a wide range of products, precise index tracking, a strong service platform, and overall safety as aGiven the importance of scale and trading volume in the ETF choice for an ETF provider. Vanguard and SPDRs/State Street arebusiness, a few very large providers dominate the institutional also well regarded for index tracking and overall good value for themarket. Chief of them is iShares/BlackRock, with 85% of management fees.participating asset managers and 78% of participating institutionalfunds obtaining ETFs from the firm. Among asset managers, 55% ofparticipants use SPDRs/State Street, 45% use Vanguard, and 35% Conclusionuse BLDRs/Powershares/INVESCO. Among institutional funds, 44%use SPDRs/State Street, 29% use Vanguard, and 7% use BLDRs/ ETFs are clearly no longer simply a retail product. They have slowly,Powershares/INVESCO. but steadily, gained acceptance as an important multi-purpose tool in institutional portfolios. Institutional investors are using ETFs for both strategic and tactical purposes, as well as for gaining passive and active exposures.Figure 4: ETF leaders: institutional funds As this research makes clear, institutional investors with experience using ETFs in their portfolios are planning to do more of it in the next few years, a trend that all institutional investors should note. 83%Providing liquid products 31% Source: Greenwich Associates: Institutional Demand for Exchange-Traded Funds 29% Continues to Climb, May 2011. 79%Best range of products 15% 15% 73% Asian institutions build outStrong servicing platform 27% 35% investment capabilities 63%Is a safe choice 23% Asian institutions1 appetite for using external asset managers is 43% growing slowly with the recovery in global markets. 62%Strong index tracking 29% 44% Although a recent flurry of Request for Proposals (RFPs) marked a 42% resumption in manager hiring after a near dead-stop during theGood value 24% market crisis, institutional investors in Asia continue to build out 61% their own investment management capabilities with an eye towards 0% 20% 40% 60% 80% 100% internalising assets for specific investment strategies. iShares/BlackRock SPDRs/State Street Vanguard In addition, Asian institutions are not planning to limit their internalBase: 41 asset managers. management to passive strategies; many are looking to go toe toSource: 2011 US Exchange-Traded Funds Study, Greenwich Associates: InstitutionalDemand for Exchange-Traded Funds Continues to Climb, May 2011. toe with external managers in active strategies with the goal of generating alpha. These conclusions are drawn from the results of Greenwich Associates’ 2010 Asian Investment Management Study1, in whichFigure 5: ETF leaders: asset managers 84 of the largest institutional investors in Hong Kong, Macau, China, Taiwan, South Korea, Singapore and other Asian countries 78% were interviewed.Strong servicing platform 22% 22% These institutions together manage some US$5 trillion in assets, 76%Providing liquid products a sum that was roughly unchanged from 2009 to 2010. 47% 35% 71% About one third of Asian institutions use ETFs as part of theirBest range of products 50% 29% investment strategies. 57%Is a safe choice 50% ETFs are most widely employed due to their relatively high levels 29% of liquidity and flexibility, and for their ability to provide institutions 53% with a means of accessing specific investment strategiesStrong index tracking 40% 20% or exposures. 33%Good value 25% Source: Greenwich Associates: Asian Institutions Build Out Internal Investment 58% Capabilities, Asian Investment Management June 2010. 0% 20% 40% 60% 80% 100% iShares/BlackRock SPDRs/State Street VanguardBase: 19 asset managers.Source: 2011 US Exchange-Traded Funds Study, Greenwich Associates: InstitutionalDemand for Exchange-Traded Funds Continues to Climb, May 2011.1. Greenwich Associates conducted interviews with 84 of the largest institutions in Brunei, China, Hong Kong/Macau, India, Indonesia, Malaysia, the Philippines, Singapore, South Korea, Taiwan and Thailand. Interview topics included asset allocation, product fees paid and compensation.11 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRock Investors need to be aware of the various biases that are inherentWe expect ETF assets to grow by 20–30% in many of these new services. Many are focused on the Unitedin 2011 States listed ETFs, others require the ETF manager/provider to pay to have their ETFs represented/rated, some will require theThe landscape will continue to evolve during 2011 and beyond as ETF to be over a specific size and/or be at least a certain age.we see more products from traditional active asset managers These biases miss factoring in basic requirements for investorsand alternative asset class exposures becoming available to such as ETF structure, domicile, registration and tax reporting to‘mainstream’ retail and institutional investors through standardised name a few important criteria.and regulated fund structures such as UCITS in Europe. The impact of regulatory and tax changes such as the EuropeanHedge funds have historically been difficult for many investors to Union’s MiFID II, UCITS IV, the RDR, the Alternative Investmentaccess with the high minimum subscription levels and maximum Fund Manager Directive (AIFMD), Qualified Interest Income (QII),investor limits, but hedge funds are now noticing the growth and Packaged Retail Investment Products (PRIPs), the Foreign Accountappeal of ETFs which are easy to access, but have powerful Tax Compliance Act (FATCA), the Key Information Document (KID)distribution networks. So we expect to see more hedge funds etc is an area of considerable uncertainty at this time.looking to create ETFs, with their own funds as the underlyingexposure, in an effort to broaden their distribution capabilities. Many regulators around the world are looking at rules regarding short selling, the use of derivatives, the use of commodity futures,This will, on one hand, give more investors access to the asset class and transparency of fees to name a few. Many of these documentsand the ability to do so in small sizes, with daily liquidity, but also are in the consultation phase and/or the specific guidelines formake it challenging for them to understand what they are investing implementation have not yet been defined.in compared to the historical daily transparency of the underlyingportfolio in low-cost index based exposures which ETFs have We are at an important crossroads in the ETF industry. We arebecome known for. seeing funds which 1) do not provide transparency on their underlying portfolios, 2) do not offer in-kind creation/redemptionIt will be important in the coming years to ensure that as new and 3) do not have real time indicative NAVs calling themselvesgenerations of ETFs come to market, investors are educated on ETFs. Products which are not even funds are being called ETFs.their structures and mechanics when they deviate from thetraditional definition of ETFs as exchange listed, open-ended, liquid Now that the industry accounts for over US$1 trillion in AUM,with secondary and primary in-kind creation and redemption (with product developers are working hard to find ways to put structuredsupport from market-makers and other liquidity providers), with real products, hedge funds and active funds into ETFs. Agreeingtime indicative NAV, and transparent where the underlying portfolio definitions for ETFs, ETNs, ETCs, ETVs, ETPs, etc. is one of theis disclosed on a daily basis. growing needs in the industry.One of the reasons larger institutions are embracing ETFs is due tothe fact that many have indicated in various surveys that one oftheir focuses for product development is multi-asset class investing,and given this focus, many firms are embracing the fact that the Figure 6: 2011 ETF ecosystemability to deliver alpha across all segments of all asset classes(equities, fixed income, commodities) is not achieved by most firms.It has become hard for participants in the financial markets toignore a product category which broke through the US$1 trillionAUM milestone for the first time at the end of December 2009.Today there is a growing fan club that cites ETFs as one of thegreatest financial innovations in the past two decades.ChallengesETFs have been embraced because we are in a ‘back to basic’environment where they provide transparency on the portfolio’sholdings, offer daily creation/redemption, have multiple market-makers, and have real-time indicative NAVs, etc. We risk movingaway from this product and description that has been increasinglyembraced by retail and institutional investors and find ourselves atan important crossroads.This new and growing awareness of ETFs is causing more people invarious types of firms and regulators to look at ETFs. Many firms arehoping to find a way to make money from the growing ETF industrysuch as fund ratings firms, consultants, websites, fund platforms,fund research firms to name a few. These new participants and Source: Global ETF Research and Implementation Strategy Team, BlackRock.potential tax and regulatory changes are the new forces impactingthe traditional ETF ecosystem in 2011.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 12
  • ETF Landscape End April 2011 Industry Review from BlackRockFinancial Stability Board’s (FSB’s) note Bank for International Settlements noteon ETFs on ETFsThe FSB published a note on potential financial stability issues The Bank for International Settlements (BIS) recently issued a paperarising from recent trends in ETFs. The note highlights recent on the market structures and system risks of ETFs, noting that crisisdevelopments in the ETF market, which has experienced strong experience has shown that as the financial intermediation chaingrowth and rapid innovation. lengthens, it becomes complicated to assess the risks of financialAlthough most of the ETF market remains plain-vanilla, there has products due to a lack of transparency as to how risks are managedbeen an increase in product variety and, in some cases, complexity. at different levels of the intermediation chain.The note aims at improving understanding of the possible emergingissues for financial stability, and encouraging the financial industry, ETFs, which have become popular among investors seekingearly in the product cycle, to adapt risk management practices, exposure to a diversified portfolio of assets, share thisdisclosure and transparency to the pace of innovation in this market. characteristic, especially when their returns are replicated using derivative products. As the volume of such products grows, suchThe FSB has been established to coordinate at the international replication strategies can lead to a build-up of systemic risks in thelevel the work of national financial authorities and international financial system. The article examines the operational frameworksstandard setting bodies and to develop and promote the of exchange-traded funds and identifies potential channels throughimplementation of effective regulatory, supervisory and other which risks to financial stability can materialise.financial sector policies.It brings together national authorities responsible for financial The Bank for International Settlements (BIS) is an international organisation which fosters international monetary and financialstability in significant international financial centres, international cooperation and serves as a bank for central banks. The economic,financial institutions, sector-specific international groupings of monetary, financial and legal research of the BIS supports itsregulators and supervisors, and committees of central bank experts. meetings and the activities of the Basel-based committees. The BISSource: Press release, Financial Stability Board publishes a note on financial stability is also a hub for sharing statistical information amongst centralissues from exchange-traded funds (ETFs), 12-April-2011, Financial Stability Board. banks, and for publishing statistics on global banking, securities, foreign exchange and derivatives markets.International Monetary Fund’s (IMF’s) note Source: BIS Working Papers, No 343, Market structures and systemic risks ofon ETFs exchange-traded funds, April 2011, Bank for International Settlements.The IMF recently issued their bi-annual Global Financial StabilityReport and included a section on the mechanics and risks of ETFs. Response to the FSB’s report on ETFsThe report notes that ETFs have become increasingly popular overthe past few years. They give investors increased access to Recent efforts by the FSB, the BIS and the IMF have sought toemerging market assets while also offering flexibility and leverage to increase the understanding of the ETFs and ETPs (notes,specialised investors. partnerships, grantor trusts, commodity pools and other non- fund structures).Traditionally, ETFs have physically held underlying assets, but a newbreed of ETFs have emerged in Europe that use synthetic replication The original ETF structure in the United States and what followedtechniques and derivatives to reduce costs and thereby boost originally in London was very simple for investors to understand. Thereturns. A small percentage of these funds also use leverage to first generation ETFs were funds that held an underlying basket ofcater to the hedging needs and speculative positions of their securities designed to track the benchmark of the fund. They offerednonretail client base. daily transparency of the list of securities and their weights, cost efficient, liquidity was supported by multiple market makers andWhile these enhancements have reduced costs, they add a layer of brokers who are authorised to do creation/redemptions brokerscomplexity and increase counterparty and liquidity risks. The allowing all investors access to a diverse tool box of useful exposures.disproportionately large size of some ETFs compared with themarket capitalization of the underlying reference indices poses a After UCITS III introduced greater flexibility in the ability to userisk of disruptions in some markets from heavy ETF trading. derivatives in the way funds and ETFs are managed, many ETF providers along with mutual funds in Europe embraced the use ofThe report surveys the growth and mechanics of ETFs and highlights listed and OTC derivatives as the way they run the funds.some of the key risks pertaining to synthetic replication and the useof leverage and derivatives in ETFs. The move to synthetic ETFs (generation two ETFs) has created many different models of ETFs being offered by various providers.The IMF oversees the international monetary system and monitors This has changed the level of transparency of the underlyingthe financial and economic policies of its members. It keeps track holdings, understanding of the costs and transparency on costs ofof economic developments on a national, regional, and global basis, synthetic ETFs.consulting regularly with member countries and providing them withmacroeconomic and financial policy advice.Source: Global Financial Stability Report, Durable Financial Stability, Getting Therefrom Here, April 2011, International Monetary Fund.13 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockA greater area of concern for me is the practice of many to call This is important in as much as the latter requires an overproducts that are not funds ETFs. This is true even in the United collateralisation of securities which, if properly structured, will beStates where the SEC provides a definition of ETFs as open-end held in the name of the fund under a tripartite arrangement allowingcompanies or Unit Investment Trusts. There is a growing array of for immediate sell-down if required. The basket model means thatnotes, partnerships, grantor trusts, and commodity pools (ETNs, the fund holds securities at the direction of the investment bank butETCs, ETVs, and ETPs) that are often confused with ETFs. These without any over collateralisation or requirement that the securitiesproducts often carry very different, counterparty, regulatory and tax meet minimum collateral requirements as to quality.implications for investors. Consistency in definitions, clarity andtransparency on these products is also vitally important for This does not, as the report suggests, present liquidity issues as inregulators and investors. the correctly structured framework the investment bank has to buy back these securities to meet redemptions, however the fundGreater transparency of ETF trades is also needed. Today, under the holding less liquid securities should the counterparty default mightMarkets in Financial Instruments Directive, ETF trade reporting is not lead to liquidity concerns.required for most trades. MiFID II should require all ETF trades to bereported and provide for a consolidated tape. This will provide a Overall the thrust of this report and those issued by the BIS and IMFgreater level of price discovery, tighter spreads and give all investors last week points to a significant concern around systemic riskbetter transparency into the real secondary liquidity in ETFs. posed especially by synthetic ETFs of the “in house” model and to a lesser extent securities lending.Given the significant success of ETFs and ETPs over the past fewyears and the expectation that this growth will continue it is As ever the solution to these fears is full disclosure andimportant that the regulators and investors understand and transparency to eliminate any conflicts of interest or perceivedconsider the risks. conflict of interest.The Financial Stability report focused on: Clarity, consistency, transparency of product structures, domiciles, underlying holdings, costs, swap counterparties and authorised Risks posed by financial innovation. participants are essential for the future success. The inherent conflicts in swap based ETFs entering derivative Education is very important. We have embraced the need for clarity contracts with their promoters’ investment banking arm. on these issues by providing free of charge the ETF Landscape Securities lending. monthly industry reports and ETF Landscape quarterly handbook which provides details including structure, underlying holdings, AUM The distinction between fund and note structures. etc of all ETFs, ETNs, ETCs, ETVs, ETPs from all providers at no costThis report is the successor to a number of papers that have raised to professional investors.concerns around the types of exposures available through ETPs andfears around systemic risk. While echoing the calls for transparency United Kingdom RDRand disclosure it goes further and calls for promoters to makepublically available detailed information around product In the United Kingdom, as is the trend globally, all types ofcomposition, risk characteristics and the collateral and supporting institutional and retail investors including advisers are increasinglyframeworks for synthetic ETFs and securities lending programmes. embracing ETFs as a tool which should be considered and used when implementing asset allocation. An added impetus encouragingHolding out the prospect that this may come through regulation it is advisers in the United Kingdom to embrace ETFs was the FSA’s RDRinteresting to note that one provider has already seen the writing on regulatory proposals outlined on 25 November 2008.the wall and announced its intention to publish its collateralholdings going forward. The proposals outline the changes the FSA plans to make for the retail investment market to establish a new level of consumer trustThe report perhaps missed a trick in not focusing in more depth on and confidence by distinguishing between independent advice andthe risks posed by ETNs and certificates. Certainly, it was the sales advice to create better clarity for consumers. Financial firmsrealisation that investors had 100% counterparty exposure to AIG will need to implement changes prior to the 31 December 2012that focused many minds in 2008 and while an ETN might trade and deadline for industry compliance.settle like an ETF, it did not have the same type of risks as the latterstructure. While many available ETNs are now collateralised, and the ETFs have been cited by the FSA as one of the packaged productsarguments about disclosure of collateral apply equally to them, it that advisers, which consider themselves as independent, shouldremains the case that neither the investment exposures they offer become educated on which will enable them to consider ETFs innor the robustness – or not – of the delivery structure are anything their reviews prior to recommending products to their clients. ETFsother than very lightly regulated. are noted as an investment tool which can be suitable for retail investment products as they can be a cost efficient and transparentThere is then rightly, as the reports identify, a debate to be had way to access the market.about the type of exposures that a retail investor can accessthrough an ETF. However, it is important that any reform captures The structure of ETFs does not support commission remuneration,also ETNs both in terms of investment exposure but also regulation which is one of the reasons for slow adoption to date amongof the delivery vehicle. advisers in the United Kingdom.The report also omits to draw out the distinction between funds In the United States, fee-based advisers (paid by the consumer)using a basket swap construction and those that utilise fully have embraced the use of ETFs to a greater degree thanfunded swaps. commission-based advisers (paid by the product provider).This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 14
  • ETF Landscape End April 2011 Industry Review from BlackRockIn the United Kingdom, the use of ETFs among advisers is very The four key aims of this FSA policy are to:limited as they are typically multi-tied and tied (meaning that theycan only advise on products from one or a limited range of  Improve the clarity with which firms describe their servicesproduct providers). ETFs are not currently included in the tied or to consumers.multi-tied product sets.  Make sure the cost of advisor services is agreed between adviser and client, rather than determined by product providers.ETFs are RDR ready and fit into the new adviser charging modelproposed by the FSA. As such, we have seen an increasing number  Increase the professional standards of investment advisors.of requests for information on ETFs which are both listed andregistered for sale in the United Kingdom as well as having United  Ensure personal investment firms have adequate capitalKingdom tax status which can make them more efficient for United resources for complaint redress.Kingdom domiciled investors1. The good news is that the LSE was The RDR is designed to provide a clean and sustainable market forone of the first exchanges to list ETFs in Europe over ten years ago. the future. It will ensure that customers get good quality advice, products and services suited to their needs, from advisorsETFs can be eligible investments for Individual Savings Accounts displaying higher standards of professionalism and expertise. The(ISAs), Self Invested Personal Pensions (SIPPs), Child Trust Funds regime needs to change and this change will be supported by the(CTFs) and offshore bonds. FSA’s intensive supervisory approach which will include a greater focus on individuals.The use of ETFs within assembled products such as Fund of Funds/Fund of ETFs is growing as product providers see value in using Source: Policy Statement 11/1, Distribution of retail investments: Delivering the RDRETFs as low cost beta building blocks to deliver asset allocation. A – professionalism – feedback to CP10/14 and CP10/22 and final rules, Financial Services Authority, BlackRock.popular approach has been to create a series of fund of funds withranging risk/return objectives, i.e. conservative, balanced, growth Clarity of advice servicesand dynamic portfolios by strategically allocating among assetclasses allowing their clients to switch between products as their On 26 March 2010, the FSA published its feedback statementbroad market views and attitudes to risk change. (Policy Statement 10/6) to its Consultation Paper of June 2009Creating portfolios built around an asset allocation framework (CP09/18) relating to proposals to improve the clarity with whichwithout specific active investment decisions (security selection advisor firms describe their services to consumers.and/or market timing) has been a topic of some debate for The FSA proposals required that firms describe their advice servicesmany years. as either ‘independent’ or ‘restricted’. Firms offering independentMost notably, the study published in 1986 entitled “Determinants of advice would need to demonstrate that their recommendationsPortfolio Performance” by Brinson, Hood and Beebower concluded were based on a comprehensive and unbiased analysis of thethat asset allocation is the primary determinant of a portfolio’s market and that any products selected were made in the interestsreturn variability, with security selection and market-timing playing of clients.minor roles. If a firm elected to limit its product range to certain investmentsThe majority of ETFs registered for sale in the United Kingdom are or strategies, it needed to describe the services it offered asregulated collective investment schemes and as such fall under the ‘restricted’ and this fact must needed to be clearly disclosed todefinition of packaged investment products. the consumer.We have a very large and diverse tool box available with 239 The FSA also noted that it may be possible for certain advisorsdifferent ETFs on the LSE providing exposure to equity, fixed servicing specialist client groups to retain the independence ‘label’income and commodity indices at the end of Q1 2010. Of this, 183 even where certain products were excluded from the scope of theirhad United Kingdom Distributor Status (UKDS). In total there were advice, although the firm would have to demonstrate that the363 ETF listings on the LSE as the multi-currency platform on the product or strategy was not appropriate for their clients.LSE allows a single ETF to be listed in multiple currencies. In addition, the FSA observed that this exception was unlikely to beThe use of ETFs is likely to increase significantly by Independent of benefit to most firms since most retail investment products wereFinancial Advisors (IFAs) in the United Kingdom based on the likely to be appropriate for the vast majority of retail investors.regulatory proposals outlined in RDR feedback statement by the Separately, the FSA noted it was clear from responses received thatUnited Kingdom’s FSA. it was not widely understood that ETFs already fell within the currentIn January 2011, the FSA published its feedback statement and the definition of packaged products and for the avoidance of doubt, itfinal rules on professional standards (Policy Statement 11/1) made clear that any products which might achieve similar outcomesrelating to the professional standards of investment advisers. This as more traditional retail investment products were potentiallypaper completes the rules on RDR along with those on advisor caught by the new rules.charging and the labelling of services, which were finalised in March2010. The new framework will come into effect at the end of 2012.1. BlackRock does not and cannot provide tax advice. Tax treatment of ETFs including rates and reliefs may change and will depend upon an investor’s own tax circumstances. BlackRock recommends that all clients seek specialist tax advice from their own tax advisers.15 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockRemuneration The FSA confirmed that, after extensive consultation, retail investment advisers will need to hold a Statement of ProfessionalThe aforementioned feedback statement also relates to the Standing (SPS) if they want to give independent or restricted adviceintroduction of a system of ‘adviser-charging’ to remove the after January 2013. The statement will provide customers withpotential commission-bias through the influence of evidence that the adviser subscribes to a code of ethics, is qualified,product providers. and has kept their knowledge up to date.The FSA stated they would modernise the way that advice was paid When the RDR comes into force in January 2013, the FSA will startfor by requiring advisers to agree the cost of financial advice with collecting information about individual advisers, such as thecustomers up-front, removing the possibility of commission bias and qualifications they hold and which accredited body they use.ensuring the cost of all advice was clear to consumers whenever it However, in preparation for 2013, the first of the Professionalismwas given. rules will come into force in July 2011, and from this point firms will be obliged to notify the FSA if any adviser falls below the requiredThe FSA also noted that it wanted adviser firms to have charging standard of competence or ethical behaviour.structures that were product neutral in that the charges reflectedthe services provided to the client, not the particular product Initial and ongoing knowledgeprovider or type of product. Advisers that were deemed competent on or before 30 June 2009The Policy Statement contained final rules in relation to ‘adviser- need to attain an appropriate qualification by the end of 2012.charging’ and ‘service-labelling’ and the FSA stated that they would Advisers who are assessed as competent after that date must attainproceed with the proposals set out in the consultation. As a result an appropriate qualification within 30 months of starting.of this, it was expected that with effect from 1 January 2013,advisers would be prevented from receiving commissions paid by Advisers holding certain appropriate qualifications do not need toproduct providers. take further exams to meet RDR standards, but are likely to need to carry out qualifications gap-fill using relevant structured ContinuingProduct providers are no longer required to monitor ‘appropriate Professional Development (CPD). CPD activity carried out in theadviser-charging’ (with reference to so-called ‘decency limits’) past can be used towards this gap filling, where it meets a learningthough there remains a requirement to obtain and validate outcome set out in the gap fill template. Advisers will need to haveinstructions from the client if the charge is deducted (by the this qualification gap fill verified by an accredited body.provider) from the client’s investment. SPSThis creates a significant challenge for providers as due to a resultof increasing disintermediation, in part due to the growth of From 1 January 2013, advisers will be required to have obtained anplatforms, the end-consumer will not be a direct client of the firm. annual SPS from an accredited body. The statement will provideThe FSA accepts that bespoke share classes to provide for a full customers with evidence that the adviser has subscribed to a coderange of possible adviser charges (when taken from funds) is of ethics, is qualified, and has kept their knowledge up-to-date. Theimpractical and recognises the value of cash accounts provided by FSA has not introduced a rule requiring firms or advisers to presentplatforms or other third-parties to collect adviser charges. the adviser’s SPS to consumers, but expects that some advisers will choose to do this to help raise consumers’ awareness ofThese changes would be significant as many IFAs were ‘tied’ and the profession.‘multi-tied’, which respectively described those selling only theproducts of one provider, such as in a bank, and those selling Source: Retail Distribution Review Newsletter, February 2011, Financial Services Authority. Policy Statement 11/1, Distribution of retail investments: Delivering theproducts from a limited range of providers. RDR – professionalism, Feedback to CP10/14 and CP10/22 and final rules, Financial Services Authority, BlackRock.This is a particularly important development for factory-gate pricedproducts such as most ETFs, however, it is uncertain whether the RDR timetablecurrent practice of rebating a proportion of the annual managementcharge (if this is used to fund the consumer cash account) will be 2011 publicationsacceptable and the FSA states that it intends to consult further onwhether any rebates should be prohibited.  Consultation Paper – RDR-related changes to complaints reporting.In addition, the FSA will proceed with proposals for advisers todescribe the advice provided as either independent or ‘restricted’.  Consultation Paper – product disclosure changes to reflect adviser charging.Source: Policy Statement 10/6, Distribution of retail investments: Delivering the RDR– feedback to CP09/18 and final rules, Financial Services Authority, BlackRock.  Policy Statement – platforms.Professional standards of advisers  Consultation Paper – capital requirements: how to apply a consistent approach to the Expenditure BasedThe scope of the changes set out in the final rules (Policy Statement Requirements (EBR).11/1) cover all investment advisers, whether they will offer Actions for firms, advisers and providersindependent or restricted advice, covering advisers within all typesof firms (e.g. banks, product providers, and Independent Financial  End 2011 – Personal Investment Firms (PIFs) should hold aAdvisers or wealth managers). minimum of one-month EBR (minimum £15,000).  End 2012 – advisers should hold an appropriate qualification including gap-filling, where required.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 16
  • ETF Landscape End April 2011 Industry Review from BlackRock End 2012 – all advisers and product providers must be ready to The following paragraphs are also taken from the notice: operate adviser charging and consultancy charging and meet the associated requirements. “Exchange-traded funds (ETFs) that offer leverage or that are designed to perform inversely to the index or benchmark they track End 2012 – all advisers should describe their services as either – or both – are growing in number and popularity. While such independent or restricted. products may be useful in some sophisticated trading strategies, End 2013 – PIFs should hold a minimum of three-months EBR they are highly complex financial instruments that are typically (minimum £20,000). designed to achieve their stated objectives on a daily basis. Due to the effects of compounding, their performance over longer periodsSource: Retail Distribution Review Newsletter, February 2011, Financial of time can differ significantly from their stated daily objective.Services Authority.In the United States, fee-based advisers (paid by the consumer) Therefore, inverse and leveraged ETFs that are reset daily, typically,have embraced the use of ETFs to a greater degree than are unsuitable for retail investors who plan to hold them for longercommission-based advisers (paid by the product provider). than one trading session, particularly in volatile markets.In the United Kingdom the use of ETFs among IFAs is very limited as This notice reminds firms of their sales practice obligations inthey are typically tied and multi-tied. connection with leveraged and inverse ETFs. In particular, recommendations to customers must be suitable and based on aETFs are not currently included in the tied or multi-tied product sets. full understanding of the terms and features of the productInvestors who are expressing concerns over counterparty risk, recommended; sales materials related to leveraged and inversetransparency and liquidity when using structured products, swaps, ETFs must be fair and accurate; and firms must have adequatecertificates, and notes are showing a preference for ETFs where the supervisory procedures in place to ensure that these obligationsstructure is a fund, and often, more specifically for ETFs which are met.invest exclusively in physical securities. Most leveraged and inverse ETFs ‘reset’ daily, meaning that they are designed to achieve their stated objectives on a daily basis. Due toThe role of platforms in a RDR world the effect of compounding, their performance over longer periods of time can differ significantly from the performance (or inverse of theOne area of growing importance is the platforms market. performance) of their underlying index or benchmark during theIn November 2010, the FSA published a Consultation Paper same period of time. For example, between 1 December 2008 and(CP10/29) on this topic. 30 April 2009:The FSA’s aim is to:  The Dow Jones U.S. Oil & Gas Index gained 2%, while an ETF Prevent product providers from making payments that advisers seeking to deliver twice the indexs daily return fell 6% and the could use to disguise the charge the customer is paying for advice, related ETF seeking to deliver twice the inverse of the indexs daily which could influence advisers in recommending one product over return fell 26%. another. Allowing such payments could undermine what the FSA  An ETF seeking to deliver three times the daily return of the has set out to achieve for consumers by removing commission Russell 1000 Financial Services Index fell 53% while the index bias and could leave product charges at an artificially high level. actually gained around 8%. The related ETF seeking to deliver Ensure platforms and other nominee services allow their customers three times the inverse of the indexs daily return declined by 90% to transfer their investments elsewhere without having to cash them over the same period. in first (re-registration). This effect can be magnified in volatile markets. Using a two-day Require platforms to be upfront about the income they receive example, if the index goes from 100 to close at 101 on the first day from fund managers or product providers. This will make it easier and back down to close at 100 on the next day, the two-day return for advisers and consumers to compare different types of platform of an inverse ETF will be different than if the index had moved up to and the services provided. close at 110 the first day but then back down to close at 100 on the next day. In the first case with low volatility, the inverse ETF loses Make sure that customers who invest in funds through 0.02%; but in the more volatile scenario the inverse ETF loses 1.82%. platforms and other nominee services are provided with The effects of mathematical compounding can grow significantly information about the fund from their fund managers, and over time, leading to scenarios such as those noted above.” maintain their voting rights. Source: Regulatory Notice 09-31, Financial Industry Regulatory Authority.The consultation period closed on 17 February 2011 and the FSAplans to issue a Policy Statement later this year. SEC-FINRA investor alert on leveraged andSource: Retail Distribution Review Newsletter, February 2011, FinancialServices Authority. inverse ETFs The Securities and Exchange Commission (SEC) and the FINRAFINRA Regulatory Notice 09-31 issued an investor alert on Tuesday 18 August 2009 entitled ‘Leveraged and Inverse ETFs: Specialized Products with Extra RisksThe Financial Industry Regulatory Authority (FINRA) which regulates for Buy-and-Hold Investors’:all securities firms doing business in the United States issued aregulatory notice in June 2009 to provide guidance on leveraged “The SEC staff and FINRA are issuing this Alert because we believeand inverse ETFs. The notice stated that “...inverse and leveraged individual investors may be confused about the performanceETFs that are reset daily typically are unsuitable for retail investors objectives of leveraged and inverse ETFs. Leveraged and inversewho plan to hold them for longer than one trading session, ETFs typically are designed to achieve their stated performanceparticularly in volatile markets...”. objectives on a daily basis.17 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockSome investors might invest in these ETFs with the expectation thatthe ETFs may meet their stated daily performance objectives over SEC approves rules expanding stock-by-the long term as well. Investors should be aware that performance stock circuit breakers and clarifyingof these ETFs over a period longer than one day can differsignificantly from their stated daily performance objectives.” process for breaking erroneous tradesSource: Leveraged and Inverse ETFs: Specialized Products with Extra Risks for Buy- On 10 September 2010, the SEC approved new rules submitted byand-Hold Investors, Financial Industry Regulatory Authority. the national securities exchanges and FINRA to expand a recently- adopted circuit breaker program to include all stocks in the RussellUnited States Commodity Futures Trading 1000 Index and certain exchange-traded funds. The SEC also approved new exchange and FINRA rules that clarify the process forCommission (CFTC) hearings on energy breaking erroneous trades.position limits and hedge exemptions The circuit breaker pilot program was approved in June 2010 inThe CFTC held hearings regarding Energy Position Limits and Hedge response to the market disruption of 6 May 2010 and applied toExemptions on 28 July 2009, 29 July 2009 and 5 August 2009, stocks listed in the S&P 500 Index. Trading in a security included indiscussing whether federal position limits should be set on the the program was paused for a five-minute period if the securityenergy markets. The hearings provided critical input from a wide experienced a 10 % price change over the preceding five minutes.range of industry participants and academics to the CFTC’s effortsto examine different approaches to regulate energy markets. The pause gave the markets a opportunity to attract new trading interest in an affected stock, establish a reasonable market price,The Commodity Exchange Act states that the CFTC shall impose and resume trading in a fair and orderly fashion. The circuitlimits on trading and positions as necessary to eliminate, diminish breaker program was in effect on a pilot basis through toor prevent the undue burdens on interstate commerce that may 10 December 2010.result from excessive speculation. Source: Press Release: SEC Approves Rules Expanding Stock-by-Stock Circuit Breakers and Clarifying Process for Breaking Erroneous Trades, 2010-167, U.S.The CFTC’s hearings examined the role of position limits in energy Securities and Exchange Commission.markets in fulfilling the CFTC’s mission to ensure the fair, open andefficient functioning of futures markets. Goldman Sachs, JPMorgan SEC announces proposal on limit-up,Chase and other leading banks are exempt from most commodity-trading limits in order to manage risks as they serve as market limit-downmakers. The CFTC is looking into whether those exemptions shouldstand, as it considers blanket limits on a variety of commodity The SEC announced on 6 April 2011 the coordinated filing of a limitmarkets. As a result of this, a number of ETPs/ETFs providing up-limit down proposal to address extraordinary market volatility.exposure to commodities issued notices stating that they The national securities exchanges, including NYSE Arca, and thesuspended their creation process. Financial Industry Regulatory Authority (FINRA) filed to establish a plan pursuant to Rule 608 of Regulation NMS to adopt a limit up-Source: Hearings on Energy Position Limits and Hedge Exemptions, U.S. Commodity limit down mechanism that seeks to address extraordinary volatilityFutures Trading Commission. in equity securities, including ETPs.SEC evaluating the use of derivatives As proposed, the new market-wide limit up-limit down requirements will prevent trades in equity securities from occurring outsideby funds specified price bands and are designed to work in conjunction with single stock circuit breakers.The following paragraphs are taken from the SEC’s press releasethat was released on 25 March 2010: The proposed plan is currently available on the SEC’s website, and the SEC will be publishing a release that will open the plan to a 21-“The SEC staff is conducting a review to evaluate the use of day public comment period, after which the SEC will decide whetherderivatives by mutual funds, ETFs and other investment companies. or not to approve the plan.The review will examine whether and what additional protections arenecessary for those funds under the Investment Company Act Once approved, Phase I of the plan will be applicable to theof 1940. securities currently included in the single stock circuit breaker pilot program, including all securities in the S&P 500 Index, the RussellPending the review’s completion, the SEC has determined to defer 1000 Index and 344 specified ETPs.consideration of exemptive requests under the InvestmentCompany Act to permit ETFs that would make significant In Phase II of the plan, the limit up-limit down requirements will beinvestments in derivatives. The staff’s decision will affect new and applicable to all equity securities, including all ETPs. Pendingpending exemptive requests from certain actively-managed and approval of the plan, the current single stock circuit breaker pilotleveraged ETFs that particularly rely on swaps and other derivative has been extended to 11 August 2011 (or earlier if the limit up-limitinstruments to achieve their investment objectives. The deferral down mechanism is implemented prior to 11 August 2011).does not affect any existing ETFs or other types of fund applications. Source: ETP Landscape, NYSE Euronext, 7 April, 2011.“It’s appropriate to engage in a more thorough review of the use ofderivatives by ETFs and mutual funds given the questionssurrounding the risks associated with the derivative instrumentsunderlying many funds,” said SEC Chairman Mary Schapiro.”Source: Press Release: SEC Staff Evaluating the Use of Derivatives by Funds,2010-45, U.S. Securities and Exchange Commission.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 18
  • ETF Landscape End April 2011 Industry Review from BlackRockThe legal and structural strength of ETFs Australia’s Future of Financial AdviceThe Financial Times Alphaville blog posting, ‘Can ETFs Collapse?’ (FOFA) reformand subsequent media coverage on CNBC explored a theory that The Minister for Financial Services, Superannuation and CorporateBlackRock had researched and addressed many times in the past. Law, Chris Bowen MP, said that the ‘Future of Financial Advice’It is our assessment that the blogs conclusions regarding the reforms are designed to tackle conflicts of interest that have‘unfunded liability’ caused by ETF short selling is incorrect and does threatened the quality of financial advice that has been provided tonot take into account the general mechanics of the ETF structure Australian investors, and the mis-selling of financial products.and marketplace. The primary reasons for their inaccuracies are  No more new commissions from 2012. Ban on commissionsas follows: and volume-based payments and any other type of remunerationThe legal and structural design of ETFs protects structure that creates a conflict of interest for the adviser. The ban applies to all retail investment products including managedETF shareholders investments, superannuation and margin loans but the ban won’t apply to risk insurance products.All orders for creation and redemption of shares of a fund must bein proper form when placed to ensure that such orders will be  Must act in the best interests of clients. From 1 July 2012,settled. The requirements for proper form are addressed in each all financial advisers will be subject to a statutory fiduciary duty toETF’s prospectus and Statement of Additional Information (SAI) and act in the best interests of clients. Under no circumstances willprovide the funds with the right to refuse any order (creation or financial advisers be allowed to place their own interests ahead ofredemption) that is deemed to be placed in improper form. a client’s interests.Requirements for proper form may be impacted based on size of the  Simpler disclosure information for clients. Financial Servicesorder, market and volatility conditions. Any concern regarding the Guides (FSGs) must be more effective at disclosing anyform of an AP’s order may cause the ETF provider to request restrictions on the adviser when providing advice, any potentialadditional information from the AP to validate the AP’s ability to conflicts of interest and how the adviser is remunerated.settle an order prior to accepting that order.  Introduction of ‘product neutral’ adviser charging regime. The details on this change are yet to be determined, but basicallyDifferences in ‘naked’ and bona fide short selling any fee must be paid by the client rather than the product provider, although the financial adviser and client can choose toNaked short selling is when the seller does not borrow or arrange to deduct the fee from the amount being invested. Also, each year,borrow for the securities in time to make delivery to the buyer within the client has to consent to continuing the client/adviserthe standard three-day settlement period. While naked shorting may arrangement before another fee can be charged. The newoccur for bona fide market making, it is not legal to sell securities charging regime should be operating by 1 July 2012.short and fail to deliver shares at the time of settlement with thepurpose of driving down a security’s price.  Advisers can charge asset-based fees, but not on borrowed money. The client must agree with the asset-basedBona fide short selling is a necessary part of functioning market fee. One of the greediest tactics used by some commission-basedmaking practices. This activity improves secondary market liquidity advisers was to recommend that a client borrow money to invest,for an ETF represented through tighter bid/ask spreads, which and then charge a commission on the borrowed money as well.benefit all investors seeking to buy or sell a fund.  Remove exemption for accountants to provide adviceCounter party risk is minimised in ETFs on SMSFs. This change will cause quite a few ripples in the accounting profession, but there is positive news for this sector:The assets in an exchange traded fund are separate and distinct the Government also mentions introducing a streamlined licensingfrom the assets of the various service providers such as asset regime for accountants advising on SMSFs.managers, index providers, custodians, etc. Generally, the ETF is  ASIC to be given more powers to ban individuals fromnot directly subject to the credit risk of a service provider. providing advice.Source: BlackRock: The Legal and Structural Strengths of ETFs, September 2010.  Review definitions of retail (unsophisticated) or wholesale (sophisticated) clients.  Review of professional standards for financial advisers. The Government will appoint a panel to review professional standards, including conduct and competency standards, and potentially a code of ethics.  Consider possibility of introducing a statutory compensation scheme to compensate clients of financial advisers. Source: Super Guide, Treasury Ministers Portal, The Future of Financial Advice, Information Pack, 26 April 2010.19 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRock In order to encourage compliance with this legislation, fromChanges to the United States tax law may 1 January 2013, the United State will impose a 30% withholding taxaffect non-United States resident holders on the gross sales proceeds (as well as income) derived by any part of that financial institution from holdings of United States financialof United States ETFs assets, unless that institution agrees to enter the reporting regime.Flow-through benefits Funds and fund managers are included in the definition of ‘Foreign Financial Institutions’ (FFIs), therefore the FATCA goes much widerFunds registered under the Investment Company Act of 1940 and in reach than the existing ‘Qualified Intermediary’ system, withstructured for tax purposes as Regulated Investment Companies which it will coexist.(RICs) under the United States Tax Code were previously allowed apackage of United States tax benefits to non-United States The impacts on the financial world will undoubtedly be complex andshareholders (generally called ‘flow-through’ benefits) as a result of potentially far reaching. The basic wording of the HIRE Act stillthe 2004 American Jobs Creation Act. These flow-through benefits leaves many questions unanswered and the financial institutions aregenerally expired as of 31 December 2009. keenly waiting for draft regulations to be issued by the United States Treasury.The three affected flow-through benefits are: However, it does appear that holdings of United States ETFs by non- Exemption from United States withholding tax (30% or lower treaty United States investors would be subject to the 30% withholding rate) on fund distributions where such distributions represent from gross sales proceeds, where held through a non-United States Qualified Interest Income (QII). QII is certain fund income derived financial intermediary who does not become FATCA compliant when from interest income on debt of United States resident issuers the regime goes live in 2013. (i.e., obligations issued by Treasury and United States Source: BlackRock, April 2010. corporations). This applied to fixed income ETFs. Exemption from United States withholding tax on any short-term SEC proposal to replace rule 12b-1 capital gains included in fund distributions. This applied to fixed income and equity ETFs. The SEC is proposing a new rule and rule amendments that would replace rule 12b–1 under the Investment Company Act, the rule that Relief from United States Estate Tax on fund holdings by non- has permitted registered open-end management investment United States resident persons, where the underlying assets companies (‘‘mutual funds’’ or ‘‘funds’’) to use fund assets to pay would have been exempt from Estate Tax if held directly by the for the cost of promoting sales of fund shares. non-United States resident person.The purpose of these three flow-through benefits was to allow a The new rule and amendments would continue to allow funds tonon-United States resident RIC shareholder the same treatment on bear promotional costs within certain limits, and would alsoa flow-through basis as if the investments were owned directly by preserve the ability of funds to provide investors with alternativesthe non-United States resident RIC shareholder. for paying sales charges. Unlike the current rule 12b–1 framework, the proposed rules would limit the cumulative sales charges eachOn 17 December 2010, the United States President signed the Tax investor pays, no matter how they are imposed.Relief, Unemployment Insurance Reauthorization, and Job CreationAct of 2010 into law. To help investors make better-informed choices when selecting a fund that imposes sales charges, the Commission is also proposingAccording to this legislation, the items mentioned in first two bullets to require clearer disclosure about all sales charges in fundabove have been extended with respect to financial years of the prospectuses, annual and semi-annual reports to shareholders, andfund beginning before 1 January 2012. The estate tax flow-through in investor confirmation statements.mentioned in the final bullet has been extended to apply to estatesof descendants dying before 1 January 2012. As part of the new regulatory framework, the Commission is proposing to give funds and their underwriters the option of offeringSource: BlackRock. classes of shares that could be sold by dealers with sales charges set at competitively established rates – rates that could betterFATCA (foreign account withholding provisions in the reflect the services offered by the particular intermediary and theHIRE Act) value investors place on those services. For funds electing this option, the proposal would provide relief from restrictions thatOn 18 March 2010, the United States Congress passed the Hiring currently limit retail price competition for distribution services.Incentives to Restore Employment Act of 2010 (the HIRE Act). ThisAct contains provisions still commonly known as the FATCA (the The proposed rule and rule amendments are designed to protectForeign Account Tax Compliance Act). individual investors from paying disproportionate amounts of sales charges in certain share classes, promote investor understanding ofThe FATCA is a system designed to request financial institutions of fees, eliminate outdated requirements, provide a more appropriateall descriptions around the world to identify United States investors role for fund directors, and allow greater competition among funds– even where they hold indirectly via non-United States entities – and intermediaries in setting sales loads and distributionand report details of these to the United States Internal Revenue fees generally.Service (IRS). Source: Federal Register, Mutual Fund Distribution Fees; Confirmations; Proposed Rule, 4 August 2010, Securities and Exchange Commission.This initiated in response to high levels of political concern inthe United States with regards to tax evasion, particularly bywealthy individuals.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 20
  • ETF Landscape End April 2011 Industry Review from BlackRockETF backgroundETFs are one of the more innovative new financial products to ETFs may prove as liquid as the underlying basket of securities asemerge from the financial industry in the last two decades. Since they have a unique daily creation and redemption process. Thethe launch of the first ETF in the Canada in 1990, ETFs have opened ability to continually create or redeem shares helps keep an ETF’sa new panorama of investment opportunities. market price in line with its underlying NAV. A key feature that distinguishes ETFs is that the shares are created by AuthorisedEssentially, ETFs are open-end index funds that are listed and Participants (APs) or creation/redemption brokers in block-sizetraded on exchanges like stocks. They allow investors to gain broad ‘creation units’.exposure to stock markets of different countries, emerging markets,sectors and styles as well as fixed income and commodity indices The creator of ETF shares typically deposits into the applicable fundwith relative ease on a real-time basis and at a lower cost than a portfolio of securities closely approximating the holdings of themany other forms of investing. ETFs are more transparent than index in exchange for an institutional block of ETF shares (usuallytraditional funds as the managers provide the ETF portfolio 50,000). Similarly, they can only be redeemed in redemption units,composition to the market on a daily basis. mainly ‘in-kind’ for a portfolio of securities held by the fund. The redemption and creation processes are very similar.ETFs are bought on a commission basis, just like many other shares.Generally: 1) they can be purchased on margin and are lendable, A key benefit of the in-kind distribution of securities is that it does2) they can be bought and sold at market, limit or as stop orders, not create a tax event in the United States, which could occur if theand 3) they do not have any sales loads, although they do have fund sold securities and delivered cash. This is a special advantageannual expenses that range from 0.00% to 1.90%1. ETFs have some of ETFs versus an open-end mutual fund, which might have to sellof the lowest expense ratios among registered investment products. securities to meet cash redemptions.ETFs possess characteristics that make them an alternative to In the United States, the term ETFs is increasingly being used tofutures and portfolios of shares for investors who are seeking to cover a broad set of products with dissimilar characteristics fromgain or reduce country, regional, sector and style as well as fixed those described above including products such as closed-end funds,income and commodity exposure. ETFs are index funds and not Holding Company Depository Receipts (HOLDRS) and notes.synthetic derivatives. They trade and settle like single shares andare typically backed by baskets of securities designed to track These product structures do not fall within the following the SEC’sindices. On most exchanges ETFs can be used to go long and short2. definition of an ETF: “Exchange-traded funds, or ETFs, areETFs offer diversified exposure and generally have lower expense investment companies that are legally classified as open-endratios than traditional active and index funds. companies or Unit Investment Trusts (UITs), but that differ from traditional open-end companies and UITs...”. This definition,The growth in beta investments in recent years has been driven by a together with the ways in which ETFs differ, can be found at:number of factors. While market conditions have had a noteworthy www.sec.gov/answers/etf.htm.influence, some other key factors are driving a more permanentshift towards beta, including: Many institutional investors, intermediaries, family offices and self- directed retail investors have embraced the idea that ETFs are tools Access: beta products are providing access to an expanding that can help them to equitise cash, establish a core holding, use range of market and asset classes, and through a much wider for Tactical Asset Allocation (TAA) and which can be a substitute for range of instruments. a program trade or using futures. They can be used to gain exposure to equity sectors, styles, country, regional, international and Diversification: increasingly investors are widening the scope of emerging market indices, government, corporate bond, money their investments and looking for exposure to new asset classes market indices as well as commodity indices at real-time prices and markets. during the trading day. The changing role of beta: as investors are altering the way they view their investment objectives, alpha and beta decisions are being combined in different ways.The range of beta tools available to investors has also grown withtraditional index funds, index futures, OTC derivatives and ETFs.ETFs share many characteristics with traditional index funds.Importantly, they also offer intra-day liquidity and enhancedflexibility, allowing investors to take both long and short positions.1. Source: Various ETF providers, Global ETF Research and Implementation Strategy Team, BlackRock, as at end January 2011.2. With short sales, the investor risks paying more for a security than the investor received from the sale.21 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockGlobalFigure 7: Global ETF and ETP asset growth, as at end April 2011 Assets US$ Bn # products 1,600 3,000 1,400 2,500 1,200 2,000 1,000 800 1,500 600 1,000 400 500 200 0 0 Assets (US$ Bn) 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Apr-11 ETF total $8.2 $17.6 $39.6 $74.3 $104.8 $141.6 $212.0 $309.8 $412.1 $565.6 $796.7 $711.1 $1,036.0 $1,311.3 $1,469.8 ETF equity $8.2 $17.6 $39.6 $74.3 $104.7 $137.5 $205.9 $286.3 $389.6 $526.5 $729.9 $596.4 $841.6 $1,053.8 $1,182.7 ETF fixed income - - - $0.1 $0.1 $4.0 $5.8 $23.1 $21.3 $35.8 $59.9 $104.0 $167.0 $207.3 $225.4 ETF commodity - - - - $0.0 $0.1 $0.3 $0.5 $1.2 $3.4 $6.3 $10.0 $25.6 $45.7 $55.8 ETP total - - $2.0 $5.1 $3.9 $4.1 $6.3 $9.3 $15.9 $32.5 $54.6 $61.2 $119.7 $171.3 $201.1 ETF/ETP total $8.2 $17.6 $41.6 $79.4 $108.7 $145.7 $218.3 $319.1 $428.0 $598.1 $851.3 $772.3 $1,155.8 $1,482.7 $1,670.9 # ETFs 21 31 33 92 202 280 282 336 461 713 1,170 1,595 1,944 2,460 2,670 # ETPs - - 2 14 17 17 18 21 63 170 371 625 750 1,083 1,149 # ETF/ETP total 21 31 35 106 219 297 300 357 524 883 1,541 2,220 2,694 3,543 3,819Note: The first ETF was listed in Canada on 9 March 1990. Pre-1997 historical data has been removed to allow for additional space for easier review.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 22
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 8: Global ETF and ETP net new assets by type of exposure, as at end April 2011 Apr-11 # ETFs ADV Assets NNA YTD-11 NNA 2010 NNAExposure /ETPs (US$ Mn) (US$ Mn) (US$ Mn) (US$ Mn) (US$ Mn)Equity 2,275 51,533.1 1,192,973.0 18,882.6 45,126.2 105,540.6 Developed markets 1,748 43,974.6 944,397.3 13,700.9 46,811.4 65,086.4 North America 694 38,984.6 607,398.2 10,103.4 29,061.8 42,852.5 Broad 10 14.1 2,237.0 (62.6) 81.1 669.5 Canada 54 594.2 31,471.0 (568.6) 3,043.5 1,803.7 United States 630 38,376.3 573,690.2 10,734.6 25,937.2 - 40,379.3 United States sectors 245 8,064.9 129,524.7 685.6 8,343.0 10,786.8 Consumer goods/services 29 1,018.8 11,004.9 (56.2) (254.2) 2,283.4 Energy 38 2,304.5 29,377.7 (610.5) 4,046.9 2,754.7 Financials 34 1,675.0 18,842.1 (767.4) (930.8) 1,334.6 Healthcare 25 312.9 9,997.2 449.9 585.2 (582.1) Industrials 17 578.9 6,949.4 313.6 546.5 1,035.2 Materials 13 827.7 7,581.1 354.6 529.3 859.8 Other 13 20.5 3,121.7 29.1 129.1 215.0 Real estate 23 537.9 18,816.0 328.3 1,133.7 1,157.1 Technology 34 617.4 16,785.9 386.1 2,252.3 1,401.1 Telecommunications 7 10.4 1,247.6 57.6 (34.3) 88.6 Utilities 12 161.0 5,801.0 200.5 339.3 239.3 United States non-sector 385 30,311.3 444,165.4 10,049.0 17,594.2 29,592.5 Europe 513 2,666.5 147,348.4 1,284.4 6,920.9 8,683.0 Broad 174 653.1 62,357.0 (759.4) (1,977.8) 1,770.7 Country 177 1,553.8 68,136.3 1,558.8 7,069.2 6,588.5 Sectors 162 459.6 16,855.1 485.0 1,829.4 323.8 STOXX 600 sectors 97 406.3 11,679.3 335.1 777.5 (119.9) Automobiles and parts 5 41.2 380.8 70.7 (60.1) 75.7 Banks 6 57.4 1,795.2 (160.3) 309.4 78.0 Basic resources 6 70.2 1,224.0 (161.5) (186.4) (223.1) Chemicals 4 10.4 289.4 92.5 (23.3) 18.2 Construction and materials 5 8.4 385.4 (10.1) 53.2 89.1 Financial services 4 10.4 233.2 (3.9) 122.3 3.4 Food and beverage 5 16.1 527.9 157.9 107.3 (179.2) Healthcare 6 14.4 1,096.5 113.2 127.3 (121.4) Industrial goods and services 5 43.1 571.8 90.8 (60.8) 25.9 Insurance 6 33.8 681.0 (45.6) (35.6) (72.2) Media 5 3.0 145.9 (7.1) (29.3) 15.3 Oil and gas 7 24.3 1,687.6 75.9 510.4 11.0 Personal and household goods 4 1.1 281.4 12.9 (72.6) 122.7 Real estate 2 0.8 98.5 7.9 22.9 (21.8) Retail 4 24.3 218.9 45.5 (57.0) 78.2 Technology 6 3.1 322.7 18.9 59.1 (1.7) Telecommunications 6 19.0 879.2 (46.4) 83.2 (153.6) Travel and leisure 4 5.9 152.5 44.1 1.0 41.1 Utilities 7 19.4 707.4 39.7 (93.4) 94.8 Other sectors 65 53.3 5,175.9 149.9 1,052.0 443.7 Asia Pacific 219 1,017.2 84,327.8 742.4 3,201.5 4,913.3 Israel 87 70.1 130.4 3.0 (16.7) (28.3) Global 159 216.7 30,757.7 444.9 2,878.9 3,929.5 Global (ex-US) 76 1,019.3 74,434.9 1,122.8 4,764.9 4,736.5 Emerging markets 527 7,558.5 248,575.7 5,181.7 (1,685.2) 40,454.2 Broad 75 3,665.4 121,243.2 3,408.6 (6,182.0) 32,957.4 Global emerging markets 36 3,579.9 110,638.5 3,160.4 (5,653.7) 28,767.6 Frontier 3 1.8 396.6 4.5 22.1 285.4 Sector 10 7.4 894.2 (53.8) 82.9 426.0 Other 26 76.3 9,313.9 297.6 (633.3) 3,478.3 Regional 48 139.9 9,641.9 251.0 (265.1) 1,451.2 Asia emerging markets 7 18.0 2,297.7 25.2 26.5 621.9 Eastern Europe 13 33.7 2,268.9 255.6 484.5 309.5 Middle East and Africa 10 3.2 620.0 (15.5) 2.3 284.2 Latin America 18 85.0 4,455.3 (14.3) (778.5) 235.6 continued…Note: Global ETF/ETP flows are approximated by combining flows available for the United States, Europe, Canada and Latin America. Product level assets for ETPs listed in Israelare not currently available. An aggregate value has been included in the total assets. Latest data for Israel ETP assets sourced from Bank of Israel, March 2011. NNA – Net NewAssets. Data as at end April 2011.23 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 8: Global ETF and ETP net new assets by type of exposure, as at end April 2011 (continued) Apr-11 # ETFs ADV Assets NNA YTD-11 NNA 2010 NNAExposure /ETPs (US$ Mn) (US$ Mn) (US$ Mn) (US$ Mn) (US$ Mn) Emerging markets (continued) Country 404 3,753.2 117,690.6 1,522.0 4,761.9 6,045.7 Argentina 1 0.1 3.8 - 3.8 - Brazil 37 1,004.2 20,677.1 126.2 952.7 2,647.0 Chile 2 15.3 980.8 - (52.1) 528.1 China 109 1,143.9 40,511.0 201.7 (457.7) (1,140.6) Colombia 2 3.0 154.1 9.5 (15.9) 158.2 Egypt 1 1.5 67.6 12.4 63.7 (0.2) Hungary 1 0.1 21.2 0.1 (0.3) (0.6) India 47 125.0 8,414.0 (33.3) (235.7) 1,745.0 Indonesia 5 15.6 851.0 20.1 428.8 600.7 Kuwait 1 0.0 51.9 - - 14.6 Malaysia 6 20.5 1,345.3 4.4 (79.1) 324.8 Mexico 18 305.0 8,801.1 85.9 210.8 (2,961.8) Peru 1 30.0 422.6 (84.5) (19.8) 299.8 Philippines 2 1.7 52.3 12.4 23.6 16.0 Poland 4 12.5 451.1 132.9 162.4 209.8 Russia 15 276.2 8,563.8 442.7 2,789.6 1,911.7 Saudi Arabia 2 0.1 29.1 - - - South Africa 28 41.9 3,380.6 (28.3) (73.3) 123.1 South Korea 75 463.7 12,601.2 341.8 807.9 825.7 Taiwan 25 204.3 7,168.5 43.8 203.2 (396.2) Thailand 5 18.7 821.4 62.8 (51.3) 280.0 Turkey 14 61.3 1,635.7 141.0 (68.3) 516.6 UAE 1 0.0 5.1 - - (13.2) Vietnam 2 8.4 680.4 30.3 168.8 357.2Fixed income 523 2,704.7 225,755.4 2,657.2 10,509.8 40,054.1 Active 13 27.2 1,775.9 (187.1) 525.2 1,119.6 Broad/aggregate 9 110.9 21,430.3 56.3 137.0 2,831.3 Convertible 1 14.1 898.0 109.3 328.9 271.7 Corporate 76 312.6 43,200.8 836.0 2,610.8 7,943.2 Covered 8 9.0 1,097.8 (32.0) (21.1) 360.3 Credit spreads 13 4.1 849.8 (78.3) (137.1) (25.3) Emerging markets 33 94.2 8,511.9 523.0 921.8 3,317.6 Government 289 1,557.4 77,052.9 283.8 (708.3) 14,828.1 Govt/corp 13 57.0 9,699.4 116.8 647.5 2,726.2 High yield 18 219.5 18,802.2 627.6 3,059.4 6,469.7 Inflation 24 143.4 28,936.5 579.0 1,839.8 738.1 Money market 22 133.5 9,019.8 (342.4) 929.5 (1,026.9) Mortgage 4 21.8 4,480.1 165.4 376.3 500.6Commodities 768 8,957.1 220,662.1 2,763.0 9,039.9 21,620.1 Broad 118 316.7 27,930.3 671.2 3,765.8 2,809.7 Alternative 2 0.1 6.1 0.8 0.0 (0.9) Agriculture 148 260.4 16,036.3 10.7 3,569.5 (45.8) Energy 151 1,028.3 14,259.0 (1,062.6) (532.8) (1,183.6) Industrial metals 115 81.8 5,804.0 287.3 1,372.8 788.9 Livestock 26 3.6 249.8 (0.1) 45.4 (21.9) Precious metals 208 7,266.2 156,376.6 2,855.7 819.2 19,273.8Currency 142 382.6 7,835.7 389.7 935.2 (1,835.2)Alternative 42 560.7 4,931.1 578.5 1,199.6 4,438.1Mixed 69 15.6 1,586.5 48.6 343.2 502.5Total 3,819 64,153.8 1,670,916.2 25,319.5 67,153.8 170,320.3Note: Global ETF/ETP flows are approximated by combining flows available for the United States, Europe, Canada and Latin America. Product level assets for ETPs listed in Israelare not currently available. An aggregate value has been included in the total assets. Latest data for Israel ETP assets sourced from Bank of Israel, March 2011. NNA – Net NewAssets. Data as at end April 2011.Source: Global ETF Research and Implementation Strategy Team, BlackRock, National Stock Exchange (NSX), Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 24
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 9: ETF/ETP providers around the world, ranked by assets, as at end April 2011 Apr-11 YTD change # ETFs/ Assets % ADV # # ETFs/ % ETFs/ Assets % % marketProvider ETPs (US$ Bn) total (US$ Mn) planned ETPs ETPs (US$ Bn) assets shareiShares 475 $662.8 39.7% $19,117.6 21 -2 -0.4% $66.1 11.1% -0.6%State Street Global Advisors 124 $271.9 16.3% $25,414.8 49 10 8.8% $22.8 9.2% -0.5%Vanguard 66 $173.1 10.4% $1,479.7 1 1 1.5% $24.6 16.6% 0.3%PowerShares/Deutsche Bank 168 $66.9 4.0% $38,235.3 53 7 4.3% $11.6 20.9% 0.3%Lyxor Asset Management 159 $57.4 3.4% $832.3 1 3 1.9% $4.1 7.6% -0.2%db x-trackers/db ETC 223 $56.9 3.4% $38,235.3 18 12 5.7% $6.7 13.4% 0.0%ETF Securities 260 $29.4 1.8% $442.8 44 17 7.0% $3.3 12.5% 0.0%ProShares 121 $26.7 1.6% $3,639.0 131 9 8.0% $3.1 13.2% 0.0%Van Eck Associates Corp 33 $23.2 1.4% $913.5 36 4 13.8% $3.3 16.3% 0.0%Credit Suisse Asset Management 58 $18.1 1.1% $90.7 0 4 7.4% $2.5 15.9% 0.0%Nomura Asset Management 35 $15.4 0.9% $84.6 2 0 0.0% -$1.3 -7.5% -0.2%Zurich Cantonal Bank 7 $14.2 0.9% $84.8 0 0 0.0% $2.4 20.5% 0.1%WisdomTree Investments 46 $12.2 0.7% $155.9 71 2 4.5% $2.3 23.0% 0.1%Bank of New York 1 $12.1 0.7% $481.6 0 0 0.0% -$0.1 -0.9% -0.1%UBS Global Asset Management 42 $10.8 0.6% $46.5 3 13 44.8% $4.2 64.3% 0.2%Barclays (iPath) 83 $10.1 0.6% $620.1 28 20 31.7% $1.5 17.1% 0.0%Amundi ETF 95 $9.9 0.6% $99.0 0 3 3.3% $2.7 38.1% 0.1%Commerzbank 90 $9.8 0.6% $56.1 0 0 0.0% $1.2 13.5% 0.0%Source Markets 93 $9.3 0.6% $427.2 15 9 10.7% $3.1 50.7% 0.1%Rydex SGI 34 $8.8 0.5% $289.8 108 1 3.0% $1.3 17.8% 0.0%HSBC/Hang Seng 32 $8.3 0.5% $64.3 3 14 77.8% $0.8 11.1% 0.0%First Trust Advisors 57 $8.0 0.5% $78.5 4 14 32.6% $2.6 47.6% 0.1%ETFlab Investment 40 $7.4 0.4% $87.1 0 5 14.3% $0.7 9.8% 0.0%Nikko Asset Management 20 $6.6 0.4% $59.0 0 3 17.6% $0.1 1.2% 0.0%Claymore Investments 30 $6.5 0.4% $28.7 5 1 3.4% $1.0 18.5% 0.0%Direxion Shares 42 $6.5 0.4% $1,975.6 174 3 7.7% -$0.1 -1.2% -0.1%EasyETF 48 $6.4 0.4% $18.3 1 -1 -2.0% $0.9 16.1% 0.0%Swiss & Global Asset Management 16 $5.5 0.3% $33.7 0 0 0.0% $1.2 28.6% 0.0%Merrill Lynch 17 $5.4 0.3% $1,113.6 0 0 0.0% $0.7 14.0% 0.0%Daiwa Asset Management 23 $5.4 0.3% $21.0 1 0 0.0% -$1.5 -21.7% -0.1%United States Commodity Funds 9 $4.9 0.3% $551.2 4 0 0.0% -$0.1 -1.6% 0.0%UBS AG 199 $4.8 0.3% $5.7 0 3 1.5% $0.9 22.9% 0.0%Societe Generale 42 $4.7 0.3% $2.5 0 0 0.0% $0.7 16.3% 0.0%Charles Schwab Investment Management 13 $4.2 0.3% $40.5 1 2 18.2% $1.5 55.6% 0.1%Guggenheim Funds 42 $4.0 0.2% $47.6 29 4 10.5% $0.5 13.0% 0.0%China Asset Management 2 $3.9 0.2% $135.4 2 0 0.0% $0.3 8.9% 0.0%Samsung Investment Trust Management 22 $3.7 0.2% $183.0 0 4 22.2% $0.9 29.5% 0.0%XACT Fonder 24 $3.7 0.2% $149.7 0 3 14.3% $0.4 13.8% 0.0%BetaPro Management 66 $3.0 0.2% $514.6 6 6 10.0% $0.0 -1.5% 0.0%E Fund Management 2 $3.0 0.2% $61.9 1 0 0.0% -$0.2 -5.0% 0.0%BBVA Asset Management 15 $2.9 0.2% $13.0 0 2 15.4% $0.1 3.2% 0.0%JPMorgan Chase 4 $2.9 0.2% $20.0 1 0 0.0% $0.6 25.2% 0.0%Polaris 10 $2.9 0.2% $52.8 2 2 25.0% $0.4 15.8% 0.0%PIMCO 13 $2.7 0.2% $34.4 8 0 0.0% $0.5 24.6% 0.0%Absa Capital 8 $2.6 0.2% $12.2 3 0 0.0% $0.1 3.3% 0.0%BMO Asset Management 40 $2.4 0.1% $18.1 0 10 33.3% $0.9 59.4% 0.0%Mitsubishi UFJ Asset Management 6 $2.1 0.1% $7.6 0 1 20.0% -$0.2 -8.4% 0.0%RBS 43 $2.0 0.1% $18.5 1 14 48.3% $0.4 26.7% 0.0%Swedish Export Credit Corp 7 $1.9 0.1% $15.9 0 0 0.0% $0.6 43.7% 0.0%Global X Funds 27 $1.8 0.1% $51.5 33 10 58.8% $0.5 37.8% 0.0%Satrix Managers 7 $1.7 0.1% $7.7 1 0 0.0% $0.0 2.9% 0.0%Hua An Fund Management 2 $1.3 0.1% $47.1 3 1 100.0% $0.4 43.5% 0.0%Itau Unibanco 2 $1.3 0.1% $2.7 1 1 100.0% $0.0 -2.4% 0.0%ALPS ETF Trust 3 $1.2 0.1% $10.0 7 0 0.0% $0.5 67.6% 0.0%Woori Asset Management 12 $1.1 0.1% $12.0 5 2 20.0% $0.1 13.9% 0.0%BOCI-Prudential Asset Management 5 $1.1 0.1% $4.0 0 2 66.7% $0.1 7.4% 0.0% continued…25 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 9: ETF/ETP providers around the world, ranked by assets, as at end April 2011 (continued) Apr-11 YTD change # ETFs/ Assets % ADV # # ETFs/ % ETFs/ Assets % % marketProvider ETPs (US$ Bn) total (US$ Mn) planned ETPs ETPs (US$ Bn) assets shareMirae Asset MAPS Global Investments 33 $0.9 0.1% $14.6 0 17 106.3% $0.4 77.8% 0.0%GreenHaven Commodity Services 1 $0.9 0.1% $5.3 0 0 0.0% $0.3 62.1% 0.0%Benchmark Asset Management 9 $0.8 0.0% $8.1 7 0 0.0% $0.2 29.6% 0.0%RevenueShares 6 $0.6 0.0% $3.7 8 0 0.0% $0.1 16.4% 0.0%Bank of Communications 1 $0.6 0.0% $0.3 0 0 0.0% $0.0 1.3% 0.0%China Southern Fund Management 2 $0.6 0.0% $4.0 0 0 0.0% -$0.1 -10.5% 0.0%Emerging Global Advisors 9 $0.6 0.0% $4.2 26 0 0.0% $0.1 29.4% 0.0%IndexIQ Advisors 10 $0.5 0.0% $6.6 34 1 11.1% $0.2 69.9% 0.0%STANLIB 6 $0.5 0.0% $0.3 3 0 0.0% $0.4 1030.4% 0.0%KB Asset Management 7 $0.4 0.0% $2.4 0 3 75.0% $0.1 23.3% 0.0%Huatai-PineBridge Fund Management 2 $0.4 0.0% $5.6 0 1 100.0% $0.0 4.1% 0.0%DBS Asset Management 2 $0.4 0.0% $2.4 0 0 0.0% $0.1 33.2% 0.0%ICBC Credit Suisse Asset Management 2 $0.4 0.0% $1.9 0 1 100.0% $0.2 130.3% 0.0%Marshall Wace LLP 3 $0.4 0.0% $10.8 0 0 0.0% $0.0 10.6% 0.0%Korea Investment Trust Management 6 $0.4 0.0% $1.4 0 0 0.0% $0.0 3.6% 0.0%Da Cheng International Asset Management 4 $0.4 0.0% $0.3 0 1 33.3% $0.3 450.2% 0.0%Mitsubishi UFJ Trust and Banking Corporation 4 $0.3 0.0% $11.3 0 0 0.0% $0.2 144.8% 0.0%DnB NOR Asset Management 3 $0.3 0.0% $5.1 0 0 0.0% $0.0 13.5% 0.0%Seligson & Co Fund Management 1 $0.3 0.0% $0.8 0 0 0.0% $0.0 5.9% 0.0%Smartshares Limited 5 $0.3 0.0% $0.3 0 0 0.0% $0.0 9.1% 0.0%AdvisorShares 6 $0.3 0.0% $3.5 9 1 20.0% $0.1 86.8% 0.0%Credit Suisse 5 $0.3 0.0% $1.6 1 1 25.0% $0.1 36.0% 0.0%Fortune SGAM Fund Management 1 $0.3 0.0% $4.7 0 0 0.0% $0.1 55.9% 0.0%Bosera Asset Management 1 $0.2 0.0% $1.3 3 0 0.0% $0.0 -10.6% 0.0%China Merchants Fund Management 1 $0.2 0.0% $0.2 0 1 100.0% $0.2 100.0% 0.0%Reliance Capital Asset Management 2 $0.2 0.0% $0.2 4 0 0.0% $0.1 159.7% 0.0%Jefferies Asset Management 4 $0.2 0.0% $2.7 4 0 0.0% $0.1 59.8% 0.0%GTJA Allianz 1 $0.2 0.0% $28.0 0 1 100.0% $0.2 100.0% 0.0%Bips Investment Managers 2 $0.2 0.0% $1.8 0 0 0.0% $0.0 20.7% 0.0%i-VCAP Management 1 $0.2 0.0% $0.1 0 0 0.0% $0.0 -3.4% 0.0%AmInvestment Management 2 $0.2 0.0% $0.2 0 0 0.0% $0.0 4.1% 0.0%Lyxor 3 $0.2 0.0% $0.1 0 0 0.0% $0.0 10.3% 0.0%Fidelity Management & Research 1 $0.2 0.0% $0.7 0 0 0.0% $0.0 22.5% 0.0%CIMB-Principal Asset Management 2 $0.2 0.0% $0.2 1 0 0.0% $0.0 0.6% 0.0%Russell Investments 3 $0.2 0.0% $0.6 43 1 50.0% $0.1 55.1% 0.0%VelocityShares 6 $0.2 0.0% $48.4 0 0 0.0% $0.1 297.8% 0.0%Morgan Stanley 5 $0.2 0.0% $3.1 0 1 25.0% $0.1 43.6% 0.0%BetaShares Capital 3 $0.2 0.0% $1.0 3 1 50.0% $0.1 101.7% 0.0%DBX Strategic Advisors 5 $0.1 0.0% $0.3 39 0 0.0% $0.0 4.8% 0.0%Fubon Asset Management 4 $0.1 0.0% $1.2 0 0 0.0% -$0.2 -60.7% 0.0%Finans Portfoy Yonetimi 7 $0.1 0.0% $19.0 0 0 0.0% $0.0 5.2% 0.0%AMP 1 $0.1 0.0% $0.1 0 0 0.0% $0.0 -9.8% 0.0%Sensible Asset Management 2 $0.1 0.0% $0.8 0 0 0.0% $0.0 28.1% 0.0%Hanwha Investment Trust Management 1 $0.1 0.0% $0.3 0 0 0.0% $0.1 91.7% 0.0%Teucrium Trading 3 $0.1 0.0% $7.6 4 2 200.0% $0.1 177.4% 0.0%UTI Asset Management 2 $0.1 0.0% $0.3 1 0 0.0% $0.0 11.5% 0.0%Kotak Mahindra Asset Management 4 $0.1 0.0% $1.2 0 0 0.0% $0.0 46.8% 0.0%SEB 3 $0.1 0.0% $4.4 0 3 100.0% $0.1 100.0% 0.0%Yurie Asset Management 2 $0.1 0.0% $0.4 0 0 0.0% $0.0 -3.0% 0.0%Barclays Capital 9 $0.1 0.0% $4.9 0 0 0.0% $0.0 87.8% 0.0%Motilal Oswal Asset Management 3 $0.1 0.0% $0.2 2 2 200.0% $0.0 65.1% 0.0%HFT Investment Management 1 $0.1 0.0% $1.7 1 0 0.0% $0.0 -8.0% 0.0%JP Morgan Mansart Investments 6 $0.1 0.0% $0.2 0 0 0.0% $0.0 -4.1% 0.0%Goldman Sachs 2 $0.1 0.0% $0.8 0 0 0.0% $0.0 18.9% 0.0%Ping An 1 $0.1 0.0% $0.0 0 0 0.0% $0.0 7.1% 0.0%Simplex Asset Management 3 $0.1 0.0% $2.7 0 0 0.0% $0.0 10.3% 0.0% continued…This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 26
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 9: ETF/ETP providers around the world, ranked by assets, as at end April 2011 (continued) Apr-11 YTD change # ETFs/ Assets % ADV # # ETFs/ % ETFs/ Assets % % marketProvider ETPs (US$ Bn) total (US$ Mn) planned ETPs ETPs (US$ Bn) assets shareOne Asset Management 2 $0.1 0.0% $0.2 0 0 0.0% $0.0 4.8% 0.0%Fullgoal Fund Management 1 $0.1 0.0% $0.6 0 1 100.0% $0.1 100.0% 0.0%FocusShares 15 $0.1 0.0% $0.8 6 15 100.0% $0.1 100.0% 0.0%CCB Principal Asset Management 1 $0.1 0.0% $0.5 0 0 0.0% $0.0 1.1% 0.0%HDFC Mutual Fund 1 $0.1 0.0% $0.2 0 0 0.0% $0.0 4.0% 0.0%Penghua Fund Management 1 $0.1 0.0% $0.4 3 0 0.0% $0.0 -26.2% 0.0%ThinkCapital 9 $0.1 0.0% $1.3 0 4 80.0% $0.0 174.0% 0.0%Standard Commodities 1 $0.1 0.0% $0.4 0 0 0.0% $0.0 6.9% 0.0%Alpha Asset Management 1 $0.1 0.0% $0.2 0 0 0.0% $0.0 -3.3% 0.0%UOB Asset Management 1 $0.1 0.0% $0.5 0 0 0.0% $0.0 -40.6% 0.0%Fortress Asset Managers 1 $0.0 0.0% $0.1 1 0 0.0% $0.0 -3.5% 0.0%SBI Funds Management 1 $0.0 0.0% $0.3 0 0 0.0% $0.0 16.8% 0.0%Daishin Investment Trust Management 1 $0.0 0.0% $0.2 0 0 0.0% $0.0 17.1% 0.0%Investec Fund Management 1 $0.0 0.0% $0.4 0 0 0.0% $0.0 -2.1% 0.0%Prudential Asset Management 2 $0.0 0.0% $0.1 0 0 0.0% $0.0 11.1% 0.0%Midas Asset Management 1 $0.0 0.0% $0.1 0 1 100.0% $0.0 100.0% 0.0%Grail Advisors 5 $0.0 0.0% $0.3 3 0 0.0% $0.0 46.4% 0.0%Falcom Financial Services 2 $0.0 0.0% $0.1 0 0 0.0% $0.0 63.5% 0.0%KTB Asset Management 2 $0.0 0.0% $0.2 0 1 100.0% $0.0 -1.4% 0.0%NCB Investment Services 1 $0.0 0.0% $0.1 0 0 0.0% $0.0 15.6% 0.0%Australian Index Investments 6 $0.0 0.0% $0.2 0 0 0.0% $0.0 20.3% 0.0%FactorShares 5 $0.0 0.0% $2.3 22 5 100.0% $0.0 100.0% 0.0%PRUDENTIAL ICICI 2 $0.0 0.0% $0.0 0 0 0.0% $0.0 9.7% 0.0%OTP Fund Management 1 $0.0 0.0% $0.1 0 0 0.0% $0.0 29.7% 0.0%Tong Yang Investment Trust Management 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 -2.3% 0.0%Kokusai Asset Management 1 $0.0 0.0% $0.7 0 0 0.0% $0.0 147.7% 0.0%Deutsche Bank 5 $0.0 0.0% $0.0 0 0 0.0% $0.0 37.6% 0.0%Is Investment 2 $0.0 0.0% $2.1 0 0 0.0% $0.0 2.6% 0.0%Axis Mutual Fund 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 8.4% 0.0%Javelin Investment Management 1 $0.0 0.0% $0.1 0 0 0.0% $0.0 27.6% 0.0%Protego 2 $0.0 0.0% $0.1 0 0 0.0% $0.0 18.5% 0.0%FaithShares 5 $0.0 0.0% $0.1 0 0 0.0% $0.0 -5.7% 0.0%NBG Asset Management 2 $0.0 0.0% $0.0 0 0 0.0% $0.0 5.1% 0.0%Citigroup 6 $0.0 0.0% $0.3 0 0 0.0% $0.0 -26.4% 0.0%Krung Thai Asset Management 1 $0.0 0.0% $0.1 0 0 0.0% $0.0 -20.3% 0.0%Osmosis Investment Management 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 3.7% 0.0%Hyundai Investments 2 $0.0 0.0% $0.0 0 0 0.0% $0.0 29.0% 0.0%Troika Dialog Asset Management 1 $0.0 0.0% $5.1 0 0 0.0% $0.0 16.3% 0.0%Religare India Asset Management 1 $0.0 0.0% $0.0 1 0 0.0% $0.0 -12.0% 0.0%Dubai Commodities Asset Management 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 8.3% 0.0%Garanti Bank 1 $0.0 0.0% $1.2 0 0 0.0% $0.0 1.5% 0.0%Quantum Asset Management 2 $0.0 0.0% $0.0 0 0 0.0% $0.0 8.8% 0.0%TMB Asset Management 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 -2.1% 0.0%Nedbank Capital 1 $0.0 0.0% $0.0 1 0 0.0% $0.0 3.4% 0.0%Pax World Management 2 $0.0 0.0% $0.0 1 1 100.0% $0.0 103.5% 0.0%National Bank of Abu Dhabi 1 $0.0 0.0% $0.0 2 0 0.0% $0.0 2.5% 0.0%Mizuho Asset Management 1 $0.0 0.0% $0.1 0 0 0.0% $0.0 -41.9% 0.0%Medvesek Pusnik AM 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 3.4% 0.0%Indo Premier Securities 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 5.5% 0.0%China International Capital Corp 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 -92.0% 0.0%Bizim Menkul Degerler 1 $0.0 0.0% $0.5 0 0 0.0% $0.0 -7.8% 0.0%Goldman Sachs Asset Management 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 0.0% 0.0%ESAF 1 $0.0 0.0% $0.4 0 0 0.0% $0.0 0.0% 0.0%FirstRand Bank 1 $0.0 0.0% $0.2 0 0 0.0% $0.0 0.0% 0.0%Kuveyt Turk Katilim Bankasi 1 $0.0 0.0% $0.1 0 0 0.0% $0.0 0.0% 0.0%Clade Investment Management 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 0.0% 0.0% continued…27 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 9: ETF/ETP providers around the world, ranked by assets, as at end April 2011 (continued) Apr-11 YTD change # ETFs/ Assets % ADV # # ETFs/ % ETFs/ Assets % % marketProvider ETPs (US$ Bn) total (US$ Mn) planned ETPs ETPs (US$ Bn) assets shareCarnegie Fonder 0 $0.0 0.0% $0.0 0 -7 -100.0% $0.0 -100.0% 0.0%Israel ETPs¹ 317 $17.2 1.0% $121.6 0 -2 -0.6% $2.2 14.4% 0.0% Harel 21 N/A N/A $5.1 0 0 0.0% N/A N/A N/A Index 20 N/A N/A $7.2 0 0 0.0% N/A N/A N/A KSM 101 N/A N/A $37.8 0 0 0.0% N/A N/A N/A Mabat 59 N/A N/A $15.9 0 -1 -1.7% N/A N/A N/A Meitav 14 N/A N/A $4.0 0 0 0.0% N/A N/A N/A Psagot 52 N/A N/A $16.9 0 0 0.0% N/A N/A N/A Tachlit 50 N/A N/A $34.8 0 -1 0.0% N/A N/A N/AAl Mal Capital - - - - 1 - - - - -AllianceBernstein - - - - 1 - - - - -Allianz SE - - - - 1 - - - - -Arrow Investment Advisors - - - - 2 - - - - -Birla Sun Life Mutual Fund - - - - 2 - - - - -Bombay Bullion Association - - - - 2 - - - - -Capital Synergy Investment Management - - - - 1 - - - - -Cydinar Sdn Bhd - - - - 1 - - - - -Dreyfus Corp - - - - 1 - - - - -Eaton Vance - - - - 5 - - - - -Exchange Traded Spreads Trust - - - - 5 - - - - -First Asset Management - - - - 4 - - - - -Firsthand Capital - - - - 1 - - - - -Florentez Investment - - - - 1 - - - - -GAM Holding - - - - 4 - - - - -Gaon Investment House - - - - 2 - - - - -Georgetown Investment Management - - - - 5 - - - - -Government Service Insurance Systems - - - - 1 - - - - -Guotai Asset Management - - - - 2 - - - - -Hartford - - - - 1 - - - - -Hinduja Bank (Switzerland) - - - - 1 - - - - -Huntington Asset Advisors - - - - 3 - - - - -ING OptiMix - - - - 1 - - - - -Janus Capital Management - - - - 1 - - - - -John Hancock - - - - 1 - - - - -JP Morgan Asset Management - - - - 2 - - - - -Legg Mason - - - - 1 - - - - -Lion Fund Management - - - - 1 - - - - -Macro Securities Depositor - - - - 2 - - - - -Millington Securities - - - - 1 - - - - -Neuberger Berman - - - - 1 - - - - -Next Investments - - - - 2 - - - - -Northern Trust - - - - 2 - - - - -OppenheimerFunds - - - - 1 - - - - -Ossiam - - - - 5 - - - - -Qbasis Invest - - - - 1 - - - - -QuantShares - - - - 7 - - - - -RiddiSiddhi Bullions - - - - 1 - - - - -RiverPark Advisors - - - - 4 - - - - -RUSAL - - - - 1 - - - - -ShariahShares - - - - 2 - - - - -T Rowe Price - - - - 1 - - - - -Tata Mutual Fund - - - - 2 - - - - -WealthNotes Capital Management - - - - 1 - - - - -Other (planned) - - - - 21 - - - - -Total 3,819 $1,670.9 100.0% $64,153.8 1,218 276 7.8% $188.2 12.7%1. Individual assets of Israeli providers are temporarily unavailable. An aggregate value for Israeli ETPs has been included in the total assets. Latest data for Israel ETP assets from Bank of Israel is March 2011.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 28
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 10: Global ETF assets by type of exposure, as at end April 2011 Apr-11 YTD change # total AUM ADV # total AUM % %Region of exposure # ETFs listings (US$ Bn) % total (US$ Bn) # ETFs listings (US$ Bn) AUM totalEquity 2,006 4,628 $1,182.7 80.5% $50.3 121 304 $128.9 12.2% 0.1% North America 615 1,076 $598.4 40.7% $37.8 36 83 $75.2 14.4% 0.8% Emerging markets 490 1,035 $247.8 16.9% $7.5 60 114 $10.1 4.3% -1.3% Europe 487 1,520 $147.3 10.0% $2.7 -3 14 $26.0 21.4% 0.8% Asia Pacific 196 455 $84.2 5.7% $1.0 12 42 $1.9 2.3% -0.5% Global (ex-US) 74 95 $74.6 5.1% $1.0 3 5 $10.8 17.0% 0.2% Global 144 447 $30.5 2.1% $0.2 13 46 $4.9 19.0% 0.1%Fixed income 423 974 $225.4 15.3% $2.7 46 95 $18.2 8.8% -0.5% Fixed income – all (ex-cash) 398 900 $216.5 14.7% $2.5 41 80 $16.7 8.4% -0.5% Fixed income – cash (money market) 25 74 $8.9 0.6% $0.1 5 15 $1.5 19.6% 0.0%Commodities 158 319 $55.8 3.8% $1.5 28 47 $10.1 22.1% 0.3%Alternative 23 32 $2.4 0.2% $0.0 7 10 $0.4 20.9% 0.0%Currency 19 25 $2.0 0.1% $0.0 4 5 $0.5 31.7% 0.0%Mixed 41 43 $1.4 0.1% $0.0 4 5 $0.4 38.0% 0.0%Total 2,670 6,021 $1,469.8 100.0% $54.5 210 466 $158.4 12.1% North America – equity 40.7% Emerging markets – equity 16.9% Fixed income – all (ex-cash) 14.7% Europe – equity 10% Asia Pacific – equity 5.7% Global (ex-US) – equity 5.1% Commodities 3.8% Global – equity 2.1% Fixed income – cash (money market) 0.6% Alternative 0.2% Currency 0.1% Mixed 0.1%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.29 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 11: Global leveraged and inverse ETFs assets by type of exposure, as at end April 2011 Apr-11 # ETFs # total ADV Assets NNA YTD-11 NNA 2010 NNAExposure /ETPs listings (US$ Mn) (US$ Mn) (US$ Mn) (US$ Mn) (US$ Mn)Leveraged 205 386 3,990.4 20,944.4 (1,039.8) (1,806.9) (3,117.4) Equity 113 208 2,792.8 15,629.6 (774.5) (1,416.5) (2,628.2) North America 57 77 2,377.8 11,720.0 (652.7) (953.9) (2,993.2) Europe 32 105 217.4 2,776.6 (27.9) (393.2) 338.6 Asia Pacific 2 2 3.5 53.8 (3.9) 34.4 3.0 Middle East and Africa 3 3 4.5 - - - - Global 1 1 0.4 29.6 7.6 28.6 - Global (ex-US) 3 3 1.8 57.6 - 10.4 (3.9) Emerging markets 15 17 187.3 992.0 (97.6) (142.7) 27.3 Fixed income 12 15 7.7 156.0 11.4 38.2 45.3 Commodities 54 137 1,157.9 5,023.2 (333.3) (558.5) (569.4) Currency 18 18 2.3 39.1 9.8 17.1 (1.7) Alternative 3 3 27.5 72.2 49.4 90.7 36.7 Mixed 5 5 2.3 24.4 (2.6) 22.2 -Inverse 199 491 333.1 9,369.8 (90.9) 936.0 2,507.1 Equity 80 190 234.6 5,203.3 (308.9) 174.5 953.8 North America 20 31 113.7 2,590.1 (203.5) 148.4 882.2 Europe 33 128 78.7 2,066.7 (104.6) (17.1) (90.0) Asia Pacific 1 3 0.3 20.0 - 0.4 16.9 Middle East and Africa 16 16 3.4 - - - - Global (ex-US) 1 1 1.8 91.0 3.5 (2.2) 93.5 Emerging markets 9 11 36.7 435.5 (4.3) 45.0 51.2 Fixed income 35 74 37.1 2,937.4 122.8 423.1 1,370.1 Commodities 47 130 24.7 589.3 53.1 214.7 121.5 Currency 32 92 12.3 451.1 46.2 42.8 40.2 Alternative 5 5 24.4 188.8 (4.0) 80.8 21.6Leveraged inverse 158 239 2,629.3 18,345.0 850.7 3,578.5 7,124.3 Equity 106 174 1,745.1 8,450.4 (209.0) 1,214.9 3,310.6 North America 53 73 1,559.0 6,383.2 (190.6) 917.1 2,657.4 Europe 27 73 141.2 1,560.9 7.6 227.2 465.0 Asia Pacific 2 2 3.3 48.1 (6.5) 39.5 (0.5) Middle East and Africa 9 9 1.9 - - - - Global 1 1 0.2 31.0 1.1 6.6 21.3 Global (ex-US) 3 3 1.6 28.5 3.5 0.6 31.1 Emerging markets 11 13 37.9 398.8 (24.2) 23.9 136.2 Fixed income 12 19 407.7 7,699.6 539.2 1,337.3 2,994.0 Commodities 23 29 439.2 1,438.6 522.1 878.6 313.0 Currency 17 17 37.3 756.3 (1.6) 147.7 506.7Total 562 1,116 6,952.7 48,659.2 -280.1 2,707.5 6,514.0Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 30
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 12: Global ETF listings, as at end April 2011 8 16 24 19 13 28 15 6 2 9 7 10 12 25 21 5 23 14 11 26 38 34 30 4 27 31 39 20 32 40 35 37 33 1 3 22 29 36 Americas EMEA Asia/Pacific 1 Brazil 6 Austria 14 Italy 22 South Africa 29 Australia 35 Malaysia P listings: 8 P listings: 1 P listings: 23 P listings: 26 P listings: 24 P listings: 4 T listings: 8 T listings: 21 T listings: 530 T listings: 26 T listings: 45 T listings: 5 Providers: 2 Providers: 1 Providers: 4 Providers: 8 Providers: 6 Providers: 3 AUM: US$1.9 Bn AUM: US$0.1 Bn AUM: US$3.0 Bn AUM: US$2.8 Bn AUM: US$4.0 Bn AUM: US$0.4 Bn 2 Canada 7 Belgium 15 Netherlands 23 Spain 30 China 36 New Zealand P listings: 180 P listings: 1 P listings: 16 P listings: 12 P listings: 22 P listings: 6 T listings: 211 T listings: 28 T listings: 115 T listings: 68 T listings: 22 T listings: 6 Providers: 4 Providers: 1 Providers: 4 Providers: 2 Providers: 16 Providers: 2 AUM: US$43.1 Bn AUM: US$0.0 Bn AUM: US$0.4 Bn AUM: US$1.5 Bn AUM: US$11.7 Bn AUM: US$0.4 Bn 3 Chile 8 Finland 16 Norway 24 Sweden 31 Hong Kong 37 Singapore P listings: – P listings: 1 P listings: 7 P listings: 23 P listings: 47 P listings: 23 T listings: 50 T listings: 1 T listings: 15 T listings: 78 T listings: 76 T listings: 81 Providers: – Providers: 1 Providers: 2 Providers: 2 Providers: 10 Providers: 8 AUM: – AUM: US$0.3 Bn AUM: US$0.8 Bn AUM: US$1.5 Bn AUM: US$27.9 Bn AUM: US$3.7 Bn 4 Mexico 9 France 17 Poland 25 Switzerland 32 India 38 South Korea P listings: 19 P listings: 262 P listings: 1 P listings: 120 P listings: 18 P listings: 87 T listings: 349 T listings: 477 T listings: 1 T listings: 651 T listings: 18 T listings: 87 Providers: 3 Providers: 9 Providers: 1 Providers: 7 Providers: 7 Providers: 13 AUM: US$8.6 Bn AUM: US$66.6 Bn AUM: US$0.1 Bn AUM: US$47.8 Bn AUM: US$0.6 Bn AUM: US$6.8 Bn 5 United States 10 Germany 18 Portugal 26 Turkey 33 Indonesia 39 Taiwan P listings: 972 P listings: 397 P listings: 3 P listings: 12 P listings: 1 P listings: 14 T listings: 972 T listings: 1,193 T listings: 3 T listings: 12 T listings: 1 T listings: 17 Providers: 29 Providers: 10 Providers: 2 Providers: 5 Providers: 1 Providers: 2 AUM: US$997.3 Bn AUM: US$126.8 Bn AUM: US$0.0 Bn AUM: US$0.2 Bn AUM: US$0.0 Bn AUM: US$3.0 Bn 11 Greece 19 Russia 27 UAE 34 Japan 40 Thailand P listings: 3 P listings: 1 P listings: 1 P listings: 84 P listings: 4 T listings: 3 T listings: 1 T listings: 1 T listings: 88 T listings: 4 Providers: 2 Providers: 1 Providers: 1 Providers: 7 Providers: 3 AUM: US$0.1 Bn AUM: US$0.0 Bn AUM: US$0.0 Bn AUM: US$29.4 Bn AUM: US$0.1 Bn 12 Hungary 20 Saudi Arabia 28 United Kingdom P listings: 1 P listings: 2 P listings: 229 T listings: 1 T listings: 2 T listings: 739 Providers: 1 Providers: 1 Providers: 9 AUM: US$0.0 Bn AUM: US$0.0 Bn AUM: US$76.9 Bn 13 Ireland 21 Slovenia P listings: 14 P listings: 1 T listings: 14 T listings: 1 Providers: 2 Providers: 1 AUM: US$0.4 Bn AUM: US$0.0 BnP listings = # primary listings. T listings = # total listings. Providers = # primary ETF providers. Assets = Assets Under Management in primary listings only.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.31 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockIndex providers do not issue products or manage assets. However, ETFs are designed to track indices so investors do consider theunderlying index methodology and how representative the index is of the desired exposure. Globally, MSCI ranked first in terms of ETFassets and number of ETFs tracking their indices, with US$374.4 Bn in 418 ETFs, reflecting 25.5% market share, while Standard & Poor’s(S&P) ranked second with US$337.5 Bn in 345 ETFs, reflecting 23.0% market share, followed by Barclays Capital with US$119.3 Bn and8.1% market share in 90 ETFs, at the end of April 2011.Figure 13: Global ETF assets by index provider, as at end of April 2011 Apr-11 YTD change # total AUM % ADV # total AUM % %Index provider # ETFs listings (US$ Bn) total (US$ Bn) # ETFs listings (US$ Bn) AUM totalMSCI 418 1,485 $374.4 25.5% $8.1 28 155 $36.6 10.8% -0.3%S&P 345 619 $337.5 23.0% $25.5 30 53 $36.4 12.1% 0.0%Barclays Capital 90 217 $119.3 8.1% $1.8 6 6 $8.1 7.3% -0.4%STOXX 275 930 $105.4 7.2% $1.9 -8 -51 $15.7 17.5% 0.3%Russell 74 110 $88.5 6.0% $6.5 4 9 $8.0 9.9% -0.1%FTSE 170 414 $63.3 4.3% $1.2 9 29 $8.4 15.2% 0.1%Dow Jones 149 276 $56.2 3.8% $2.0 11 18 $8.6 18.1% 0.2%Markit 123 350 $48.6 3.3% $0.3 11 38 $3.5 7.7% -0.1%NASDAQ OMX 61 119 $38.8 2.6% $3.5 -2 16 $7.0 22.2% 0.2%NYSE Euronext 45 88 $17.4 1.2% $0.7 4 4 $0.8 4.7% -0.1%Hang Seng 13 34 $16.2 1.1% $0.1 0 0 $0.9 5.8% -0.1%Topix 54 67 $14.8 1.0% $0.0 1 3 -$1.8 -10.7% -0.3%Nikkei 10 18 $14.0 0.9% $0.1 1 2 -$0.7 -4.7% -0.2%EuroMTS 29 113 $10.4 0.7% $0.1 0 2 $1.0 10.3% 0.0%WisdomTree 35 42 $9.8 0.7% $0.1 0 0 $1.4 16.2% 0.0%PC-Bond 18 22 $8.3 0.6% $0.0 0 1 $0.7 8.5% 0.0%Grupo Bolsa 13 14 $7.9 0.5% $0.2 0 0 $0.2 3.2% 0.0%SSE 19 20 $7.7 0.5% $0.2 5 5 $1.2 18.8% 0.0%Indxis 6 11 $7.6 0.5% $0.0 0 4 $1.8 32.0% 0.1%Structured Solutions 31 40 $6.8 0.5% $0.2 6 9 $1.0 17.9% 0.0%Intellidex 36 46 $3.4 0.2% $0.0 0 7 $0.6 19.4% 0.0%CSI 32 38 $3.4 0.2% $0.1 1 5 -$0.2 -5.3% 0.0%Morningstar 26 26 $2.3 0.2% $0.0 16 16 $0.4 21.8% 0.0%S-Network 15 36 $2.3 0.2% $0.0 0 3 $0.6 35.3% 0.0%BNY Mellon 18 19 $2.3 0.2% $0.0 0 0 -$0.4 -13.6% 0.0%ISE 10 10 $1.9 0.1% $0.0 0 0 $0.9 83.1% 0.1%Zacks 11 13 $1.0 0.1% $0.0 0 1 $0.2 21.6% 0.0%Other 544 844 $100.2 6.8% $1.7 87 131 $17.5 21.1% 0.5%Total 2,670 6,021 $1,469.8 100.0% $54.5 210 466 $158.4 12.1% MSCI 25.5% NYSE Euronext 1.2% Structured Solutions 0.5% S&P 23% Hang Seng 1.1% Intellidex 0.2% Barclays Capital 8.1% Topix 1% CSI 0.2% STOXX 7.2% Nikkei 0.9% Morningstar 0.2% Russell 6% EuroMTS 0.7% S-Network 0.2% FTSE 4.3% WisdomTree 0.7% BNY Mellon 0.2% Dow Jones 3.8% PC-Bond 0.6% ISE 0.1% Markit 3.3% Grupo Bolsa 0.5% Zacks 0.1% NASDAQ OMX 2.6% SSE 0.5% Other 6.8% NYSE Euronext 1.2% Indxis 0.5%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 32
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 14: Top 20 ETFs worldwide by AUM, as at end April 2011 Country AUM ADV ADV ETF listed Ticker (US$ Mn) (‘000 shares) (US$ Mn) SPDR S&P 500 US SPY US $95,287.1 131,642 $17,532.1 Vanguard MSCI Emerging Markets ETF US VWO US $49,449.5 15,088 $752.5 iShares MSCI Emerging Markets Index Fund US EEM US $41,760.0 51,364 $2,536.2 iShares MSCI EAFE Index Fund US EFA US $41,350.5 12,886 $791.2 iShares S&P 500 Index Fund US IVV US $29,024.4 2,830 $384.5 PowerShares QQQ Trust US QQQ US $27,244.7 47,605 $2,748.6 iShares Barclays TIPS Bond Fund US TIP US $20,475.7 673 $73.9 Vanguard Total Stock Market ETF US VTI US $20,237.9 1,292 $89.1 iShares Russell 2000 Index Fund US IWM US $19,144.0 46,905 $3,946.7 iShares Russell 1000 Growth Index Fund US IWF US $13,859.9 1,748 $106.2 iShares iBoxx $ Investment Grade Corporate Bond Fund US LQD US $13,433.2 815 $88.8 iShares MSCI Brazil Index Fund US EWZ US $13,348.4 11,481 $893.0 iShares S&P/TSX 60 Index Fund Canada XIU CN $12,559.3 15,201 $322.2 S&P 400 MidCap SPDR US MDY US $12,097.4 2,686 $481.6 iShares Russell 1000 Value Index Fund US IWD US $12,096.3 1,165 $80.4 iShares S&P MidCap 400 Index Fund US IJH US $12,019.8 866 $85.7 iShares Barclays Aggregate Bond Fund US AGG US $10,986.7 542 $57.1 Energy Select Sector SPDR Fund US XLE US $10,448.1 15,351 $1,198.0 SPDR Dow Jones Industrial Average ETF US DIA US $10,370.3 5,928 $736.6 iShares S&P 500 UK IUSA LN $9,933.5 7,338 $96.8Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 15: Top 20 ETFs worldwide by average daily US dollar trading volume, as at end April 2011 Country ADV ADV AUM ETF listed Ticker (US$ Mn) (‘000 shares) (US$ Mn) SPDR S&P 500 US SPY US $17,532.1 131,642 $95,287.1 iShares Russell 2000 Index Fund US IWM US $3,946.7 46,905 $19,144.0 PowerShares QQQ Trust US QQQ US $2,748.6 47,605 $27,244.7 iShares MSCI Emerging Markets Index Fund US EEM US $2,536.2 51,364 $41,760.0 Energy Select Sector SPDR Fund US XLE US $1,198.0 15,351 $10,448.1 iShares MSCI Brazil Index Fund US EWZ US $893.0 11,481 $13,348.4 iShares MSCI EAFE Index Fund US EFA US $791.2 12,886 $41,350.5 Vanguard MSCI Emerging Markets ETF US VWO US $752.5 15,088 $49,449.5 SPDR Dow Jones Industrial Average ETF US DIA US $736.6 5,928 $10,370.3 Financial Select Sector SPDR Fund US XLF US $686.1 42,119 $7,965.5 iShares Barclays 20+ Year Treasury Bond Fund US TLT US $626.2 6,774 $2,187.6 iShares FTSE China 25 Index Fund US FXI US $543.5 11,905 $8,219.2 Market Vectors Gold Miners US GDX US $511.3 8,295 $7,221.6 ProShares Ultra S&P500 US SSO US $509.3 9,523 $1,820.9 Direxion Daily Small Cap Bull 3x Shares US TNA US $492.7 5,655 $710.5 Industrial Select Sector SPDR Fund US XLI US $482.9 12,838 $4,525.0 S&P 400 MidCap SPDR US MDY US $481.6 2,686 $12,097.4 Materials Select Sector SPDR Trust US XLB US $416.8 10,431 $2,915.0 SPDR S&P Retail ETF US XRT US $403.6 7,727 $618.4 Direxion Daily Financial Bull 3x Shares US FAS US $401.1 13,373 $1,682.7Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.33 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 16: Top 20 ETFs worldwide with largest change in AUM, as at end April 2011 AUM AUM Country (US$ Mn) (US$ Mn) Change ETF listed Ticker Apr-11 Dec-10 (US$ Mn) iShares MSCI Emerging Markets Index Fund US EEM US $41,760.0 $47,551.5 -$5,791.5 SPDR S&P 500 US SPY US $95,287.1 $89,915.3 $5,371.8 PowerShares QQQ Trust US QQQ US $27,244.7 $22,069.9 $5,174.8 Vanguard MSCI Emerging Markets ETF US VWO US $49,449.5 $44,569.8 $4,879.7 iShares MSCI EAFE Index Fund US EFA US $41,350.5 $36,923.1 $4,427.4 iShares S&P 500 Index Fund US IVV US $29,024.4 $25,799.2 $3,225.2 db x-trackers DAX ETF Germany XDAX GY $6,638.8 $3,693.1 $2,945.8 iShares MSCI Japan Index Fund US EWJ US $7,625.8 $4,883.3 $2,742.5 iShares S&P MidCap 400 Index Fund US IJH US $12,019.8 $9,332.0 $2,687.8 iShares DAX (DE) Germany DAXEX GY $8,316.5 $5,917.7 $2,398.8 iShares MSCI Germany Index Fund US EWG US $4,222.0 $1,881.7 $2,340.3 Energy Select Sector SPDR Fund US XLE US $10,448.1 $8,396.4 $2,051.7 iShares S&P 500 UK IUSA LN $9,933.5 $7,905.8 $2,027.7 Vanguard Total Stock Market ETF US VTI US $20,237.9 $18,236.0 $2,001.9 iShares MSCI Canada Index Fund US EWC US $6,591.7 $4,622.1 $1,969.6 Vanguard REIT ETF US VNQ US $9,274.4 $7,503.7 $1,770.8 Technology Select Sector SPDR Fund US XLK US $7,570.3 $5,849.3 $1,721.0 Vanguard Dividend Appreciation ETF US VIG US $6,308.9 $4,608.9 $1,700.1 iShares Russell 2000 Index Fund US IWM US $19,144.0 $17,498.4 $1,645.6 Vanguard Europe Pacific ETF US VEA US $6,946.5 $5,304.0 $1,642.5Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 17: ETF providers worldwide ranked by AUM, as at end April 2011 Apr-11 YTD change % # AUM % ADV # # % AUM % marketProvider ETFs (US$ Bn) total (US$ Bn) planned ETFs ETFs (US$ Bn) AUM shareiShares 467 $636.9 43.3% $16.1 19 -6 -1.3% $58.3 10.1% -0.8%State Street Global Advisors 123 $210.2 14.3% $23.4 49 10 8.8% $19.5 10.2% -0.2%Vanguard 66 $173.1 11.8% $1.5 1 1 1.5% $24.6 16.6% 0.5%Lyxor Asset Management 159 $57.4 3.9% $0.8 1 3 1.9% $4.1 7.6% -0.2%db x-trackers 187 $54.8 3.7% $0.7 18 8 4.5% $5.7 11.6% 0.0%PowerShares 131 $50.7 3.5% $2.9 48 1 0.8% $7.9 18.5% 0.2%Van Eck Associates Corp 33 $23.2 1.6% $0.9 36 4 13.8% $3.3 16.3% 0.1%ProShares 107 $23.2 1.6% $2.6 93 7 7.0% $1.6 7.3% -0.1%Credit Suisse Asset Management 58 $18.1 1.2% $0.1 0 4 7.4% $2.5 15.9% 0.0%Nomura Asset Management 32 $15.2 1.0% $0.1 2 0 0.0% -$1.2 -7.6% -0.2%Zurich Cantonal Bank 7 $14.2 1.0% $0.1 0 0 0.0% $2.4 20.5% 0.1%WisdomTree Investments 46 $12.2 0.8% $0.2 71 2 4.5% $2.3 23.0% 0.1%Bank of New York 1 $12.1 0.8% $0.5 0 0 0.0% -$0.1 -0.9% -0.1%UBS Global Asset Management 42 $10.8 0.7% $0.0 3 13 44.8% $4.2 64.3% 0.2%Amundi ETF 95 $9.9 0.7% $0.1 0 3 3.3% $2.7 38.1% 0.1%Commerzbank 90 $9.8 0.7% $0.1 0 0 0.0% $1.2 13.5% 0.0%HSBC/Hang Seng 31 $8.2 0.6% $0.1 3 14 82.4% $0.9 11.5% 0.0%First Trust Advisors 57 $8.0 0.5% $0.1 4 14 32.6% $2.6 47.6% 0.1%Source Markets 62 $7.8 0.5% $0.4 15 6 10.7% $2.9 57.9% 0.2%ETFlab Investment 40 $7.4 0.5% $0.1 0 5 14.3% $0.7 9.8% 0.0% continued…This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 34
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 17: ETF providers worldwide ranked by AUM, as at end April 2011 (continued) Apr-11 YTD change % # AUM % ADV # # % AUM % marketProvider ETFs (US$ Bn) total (US$ Bn) planned ETFs ETFs (US$ Bn) AUM shareNikko Asset Management 20 $6.6 0.5% $0.1 0 3 17.6% $0.1 1.2% 0.0%Claymore Investments 30 $6.5 0.4% $0.0 5 1 3.4% $1.0 18.5% 0.0%Direxion Shares 42 $6.5 0.4% $2.0 174 3 7.7% -$0.1 -1.2% -0.1%EasyETF 48 $6.4 0.4% $0.0 1 -1 -2.0% $0.9 16.1% 0.0%Rydex SGI 25 $5.6 0.4% $0.1 95 1 4.2% $0.6 12.6% 0.0%Swiss & Global Asset Management 16 $5.5 0.4% $0.0 0 0 0.0% $1.2 28.6% 0.0%Daiwa Asset Management 23 $5.4 0.4% $0.0 1 0 0.0% -$1.5 -21.7% -0.2%Charles Schwab Investment Management 13 $4.2 0.3% $0.0 1 2 18.2% $1.5 55.6% 0.1%Guggenheim Funds 42 $4.0 0.3% $0.0 29 4 10.5% $0.5 13.0% 0.0%China Asset Management 2 $3.9 0.3% $0.1 2 0 0.0% $0.3 8.9% 0.0%Samsung Investment Trust Management 19 $3.7 0.3% $0.2 0 2 11.8% $0.8 29.1% 0.0%XACT Fonder 24 $3.7 0.2% $0.1 0 3 14.3% $0.4 13.8% 0.0%BetaPro Management 66 $3.0 0.2% $0.5 6 6 10.0% $0.0 -1.5% 0.0%E Fund Management 2 $3.0 0.2% $0.1 1 0 0.0% -$0.2 -5.0% 0.0%BBVA Asset Management 15 $2.9 0.2% $0.0 0 2 15.4% $0.1 3.2% 0.0%Polaris 10 $2.9 0.2% $0.1 2 2 25.0% $0.4 15.8% 0.0%PIMCO 13 $2.7 0.2% $0.0 8 0 0.0% $0.5 24.6% 0.0%BMO Asset Management 40 $2.4 0.2% $0.0 0 10 33.3% $0.9 59.4% 0.0%Mitsubishi UFJ Asset Management 6 $2.1 0.1% $0.0 0 1 20.0% -$0.2 -8.4% 0.0%Global X Funds 27 $1.8 0.1% $0.1 33 10 58.8% $0.5 37.8% 0.0%RBS 22 $1.7 0.1% $0.0 1 12 120.0% $0.3 24.1% 0.0%Satrix Managers 7 $1.7 0.1% $0.0 1 0 0.0% $0.0 2.9% 0.0%Hua An Fund Management 2 $1.3 0.1% $0.0 3 1 100.0% $0.4 43.5% 0.0%Itau Unibanco 2 $1.3 0.1% $0.0 1 1 100.0% $0.0 -2.4% 0.0%ALPS ETF Trust 3 $1.2 0.1% $0.0 7 0 0.0% $0.5 67.6% 0.0%Woori Asset Management 12 $1.1 0.1% $0.0 5 2 20.0% $0.1 13.9% 0.0%BOCI-Prudential Asset Management 5 $1.1 0.1% $0.0 0 2 66.7% $0.1 7.4% 0.0%ETF Securities 30 $0.9 0.1% $0.0 0 4 15.4% $0.2 22.7% 0.0%Mirae Asset MAPS Global Investments 33 $0.9 0.1% $0.0 0 17 106.3% $0.4 77.8% 0.0%RevenueShares 6 $0.6 0.0% $0.0 8 0 0.0% $0.1 16.4% 0.0%Bank of Communications 1 $0.6 0.0% $0.0 0 0 0.0% $0.0 1.3% 0.0%China Southern Fund Management 2 $0.6 0.0% $0.0 0 0 0.0% -$0.1 -10.5% 0.0%Emerging Global Advisors 9 $0.6 0.0% $0.0 26 0 0.0% $0.1 29.4% 0.0%IndexIQ Advisors 10 $0.5 0.0% $0.0 34 1 11.1% $0.2 69.9% 0.0%STANLIB 2 $0.5 0.0% $0.0 3 0 0.0% $0.4 1030.4% 0.0%KB Asset Management 7 $0.4 0.0% $0.0 0 3 75.0% $0.1 23.3% 0.0%Benchmark Asset Management 8 $0.4 0.0% $0.0 6 0 0.0% $0.1 45.6% 0.0%Huatai-PineBridge Fund Management 2 $0.4 0.0% $0.0 0 1 100.0% $0.0 4.1% 0.0%DBS Asset Management 2 $0.4 0.0% $0.0 0 0 0.0% $0.1 33.2% 0.0%ICBC Credit Suisse Asset Management 2 $0.4 0.0% $0.0 0 1 100.0% $0.2 130.3% 0.0%Marshall Wace LLP 3 $0.4 0.0% $0.0 0 0 0.0% $0.0 10.6% 0.0%Korea Investment Trust Management 6 $0.4 0.0% $0.0 0 0 0.0% $0.0 3.6% 0.0%Da Cheng International Asset Management 4 $0.4 0.0% $0.0 0 1 33.3% $0.3 450.2% 0.0%DnB NOR Asset Management 3 $0.3 0.0% $0.0 0 0 0.0% $0.0 13.5% 0.0%Seligson & Co Fund Management 1 $0.3 0.0% $0.0 0 0 0.0% $0.0 5.9% 0.0%Smartshares Limited 5 $0.3 0.0% $0.0 0 0 0.0% $0.0 9.1% 0.0%AdvisorShares 6 $0.3 0.0% $0.0 9 1 20.0% $0.1 86.8% 0.0%Fortune SGAM Fund Management 1 $0.3 0.0% $0.0 0 0 0.0% $0.1 55.9% 0.0%Bosera Asset Management 1 $0.2 0.0% $0.0 3 0 0.0% $0.0 -10.6% 0.0% continued…35 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 17: ETF providers worldwide ranked by AUM, as at end April 2011 (continued) Apr-11 YTD change % # AUM % ADV # # % AUM % marketProvider ETFs (US$ Bn) total (US$ Bn) planned ETFs ETFs (US$ Bn) AUM shareChina Merchants Fund Management 1 $0.2 0.0% $0.0 0 1 100.0% $0.2 100.0% 0.0%Jefferies Asset Management 4 $0.2 0.0% $0.0 2 0 0.0% $0.1 59.8% 0.0%GTJA Allianz 1 $0.2 0.0% $0.0 0 1 100.0% $0.2 100.0% 0.0%Bips Investment Managers 2 $0.2 0.0% $0.0 0 0 0.0% $0.0 20.7% 0.0%i-VCAP Management 1 $0.2 0.0% $0.0 0 0 0.0% $0.0 -3.4% 0.0%AmInvestment Management 2 $0.2 0.0% $0.0 0 0 0.0% $0.0 4.1% 0.0%Fidelity Management & Research 1 $0.2 0.0% $0.0 0 0 0.0% $0.0 22.5% 0.0%CIMB-Principal Asset Management 2 $0.2 0.0% $0.0 1 0 0.0% $0.0 0.6% 0.0%Russell Investments 3 $0.2 0.0% $0.0 43 1 50.0% $0.1 55.1% 0.0%BetaShares Capital 3 $0.2 0.0% $0.0 3 1 50.0% $0.1 101.7% 0.0%DBX Strategic Advisors 5 $0.1 0.0% $0.0 39 0 0.0% $0.0 4.8% 0.0%Fubon Asset Management 4 $0.1 0.0% $0.0 0 0 0.0% -$0.2 -60.7% 0.0%Finans Portfoy Yonetimi 7 $0.1 0.0% $0.0 0 0 0.0% $0.0 5.2% 0.0%AMP 1 $0.1 0.0% $0.0 0 0 0.0% $0.0 -9.8% 0.0%Hanwha Investment Trust Management 1 $0.1 0.0% $0.0 0 0 0.0% $0.1 91.7% 0.0%SEB 3 $0.1 0.0% $0.0 0 3 100.0% $0.1 100.0% 0.0%Yurie Asset Management 2 $0.1 0.0% $0.0 0 0 0.0% $0.0 -3.0% 0.0%Absa Capital 7 $0.1 0.0% $0.0 0 0 0.0% -$0.1 -44.9% 0.0%Motilal Oswal Asset Management 3 $0.1 0.0% $0.0 2 2 200.0% $0.0 65.1% 0.0%HFT Investment Management 1 $0.1 0.0% $0.0 1 0 0.0% $0.0 -8.0% 0.0%JP Morgan Mansart Investments 6 $0.1 0.0% $0.0 0 0 0.0% $0.0 -4.1% 0.0%Ping An 1 $0.1 0.0% $0.0 0 0 0.0% $0.0 7.1% 0.0%One Asset Management 2 $0.1 0.0% $0.0 0 0 0.0% $0.0 4.8% 0.0%Fullgoal Fund Management 1 $0.1 0.0% $0.0 0 1 100.0% $0.1 100.0% 0.0%FocusShares 15 $0.1 0.0% $0.0 6 15 100.0% $0.1 100.0% 0.0%CCB Principal Asset Management 1 $0.1 0.0% $0.0 0 0 0.0% $0.0 1.1% 0.0%Penghua Fund Management 1 $0.1 0.0% $0.0 3 0 0.0% $0.0 -26.2% 0.0%ThinkCapital 9 $0.1 0.0% $0.0 0 4 80.0% $0.0 174.0% 0.0%Alpha Asset Management 1 $0.1 0.0% $0.0 0 0 0.0% $0.0 -3.3% 0.0%UOB Asset Management 1 $0.1 0.0% $0.0 0 0 0.0% $0.0 -40.6% 0.0%Fortress Asset Managers 1 $0.0 0.0% $0.0 1 0 0.0% $0.0 -3.5% 0.0%Sensible Asset Management 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 -13.9% 0.0%Kotak Mahindra Asset Management 3 $0.0 0.0% $0.0 0 0 0.0% $0.0 30.1% 0.0%Daishin Investment Trust Management 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 17.1% 0.0%Investec Fund Management 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 -2.1% 0.0%Prudential Asset Management 2 $0.0 0.0% $0.0 0 0 0.0% $0.0 11.1% 0.0%Midas Asset Management 1 $0.0 0.0% $0.0 0 1 100.0% $0.0 100.0% 0.0%Grail Advisors 5 $0.0 0.0% $0.0 3 0 0.0% $0.0 46.4% 0.0%Falcom Financial Services 2 $0.0 0.0% $0.0 0 0 0.0% $0.0 63.5% 0.0%KTB Asset Management 2 $0.0 0.0% $0.0 0 1 100.0% $0.0 -1.4% 0.0%Simplex Asset Management 2 $0.0 0.0% $0.0 0 0 0.0% $0.0 0.1% 0.0%NCB Investment Services 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 15.6% 0.0%Australian Index Investments 6 $0.0 0.0% $0.0 0 0 0.0% $0.0 20.3% 0.0%OTP Fund Management 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 29.7% 0.0%Tong Yang Investment Trust Management 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 -2.3% 0.0%Kokusai Asset Management 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 147.7% 0.0%Is Investment 2 $0.0 0.0% $0.0 0 0 0.0% $0.0 2.6% 0.0%Javelin Investment Management 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 27.6% 0.0%Protego 2 $0.0 0.0% $0.0 0 0 0.0% $0.0 18.5% 0.0% continued…This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 36
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 17: ETF providers worldwide ranked by AUM, as at end April 2011 (continued) Apr-11 YTD change % # AUM % ADV # # % AUM % marketProvider ETFs (US$ Bn) total (US$ Bn) planned ETFs ETFs (US$ Bn) AUM shareFaithShares 5 $0.0 0.0% $0.0 0 0 0.0% $0.0 -5.7% 0.0%NBG Asset Management 2 $0.0 0.0% $0.0 0 0 0.0% $0.0 5.1% 0.0%Krung Thai Asset Management 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 -20.3% 0.0%Osmosis Investment Management 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 3.7% 0.0%Troika Dialog Asset Management 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 16.3% 0.0%Garanti Bank 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 1.5% 0.0%TMB Asset Management 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 -2.1% 0.0%Nedbank Capital 1 $0.0 0.0% $0.0 1 0 0.0% $0.0 3.4% 0.0%Pax World Management 2 $0.0 0.0% $0.0 1 1 100.0% $0.0 103.5% 0.0%National Bank of Abu Dhabi 1 $0.0 0.0% $0.0 2 0 0.0% $0.0 2.5% 0.0%Medvesek Pusnik AM 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 3.4% 0.0%Indo Premier Securities 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 5.5% 0.0%Reliance Capital Asset Management 1 $0.0 0.0% $0.0 4 0 0.0% $0.0 -8.9% 0.0%China International Capital Corp 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 -92.0% 0.0%Hyundai Investments 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 11.7% 0.0%Bizim Menkul Degerler 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 -7.8% 0.0%PRUDENTIAL ICICI 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 106.6% 0.0%Quantum Asset Management 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 18.1% 0.0%UTI Asset Management 1 $0.0 0.0% $0.0 1 0 0.0% $0.0 -28.8% 0.0%Goldman Sachs Asset Management 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 0.0% 0.0%Kuveyt Turk Katilim Bankasi 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 0.0% 0.0%ESAF 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 0.0% 0.0%Carnegie Fonder 0 $0.0 0.0% $0.0 0 -7 -100.0% $0.0 -100.0% 0.0%Al Mal Capital - - - - 1 - - - - -AllianceBernstein - - - - 1 - - - - -Allianz SE - - - - 1 - - - - -Arrow Investment Advisors - - - - 1 - - - - -Birla Sun Life Mutual Fund - - - - 1 - - - - -Capital Synergy Investment Management - - - - 1 - - - - -Dreyfus Corp - - - - 1 - - - - -Eaton Vance - - - - 5 - - - - -Exchange Traded Spreads Trust - - - - 5 - - - - -FactorShares - - - - 22 - - - - -First Asset Management - - - - 4 - - - - -Firsthand Capital - - - - 1 - - - - -Florentez Investment - - - - 1 - - - - -Gaon Investment House - - - - 2 - - - - -Georgetown Investment Management - - - - 5 - - - - -Government Service Insurance Systems - - - - 1 - - - - -Guotai Asset Management - - - - 2 - - - - -Hartford - - - - 1 - - - - -Hinduja Bank (Switzerland) - - - - 1 - - - - -Huntington Asset Advisors - - - - 3 - - - - -Janus Capital Management - - - - 1 - - - - -John Hancock - - - - 1 - - - - -JP Morgan Asset Management - - - - 2 - - - - -Legg Mason - - - - 1 - - - - -Lion Fund Management - - - - 1 - - - - -Macro Securities Depositor - - - - 2 - - - - - continued…37 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 17: ETF providers worldwide ranked by AUM, as at end April 2011 (continued) Apr-11 YTD change % # AUM % ADV # # % AUM % marketProvider ETFs (US$ Bn) total (US$ Bn) planned ETFs ETFs (US$ Bn) AUM shareMillington Securities - - - - 1 - - - - -Neuberger Berman - - - - 1 - - - - -Next Investments - - - - 2 - - - - -Northern Trust - - - - 2 - - - - -OppenheimerFunds - - - - 1 - - - - -Ossiam - - - - 5 - - - - -Qbasis Invest - - - - 1 - - - - -QuantShares - - - - 7 - - - - -Religare India Asset Management - - - - 1 - - - - -RiverPark Advisors - - - 4 - - - - -ShariahShares - - - - 2 - - - - -T Rowe Price - - - - 1 - - - - -Tata Mutual Fund - - - - 1 - - - - -Other (planned) - - - - 17 - - - - -Total 2,670 $1,469.8 100.0% $54.5 1,055 210 8.5% $158.4 12.1%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 18: Top five global ETF providers by average daily turnover, as at end April 2011 Average daily turnover (US$ Mn) % % market market Change % SSgA 43.0% Provider Dec-10 share Apr-11 share (US$ Mn) change iShares 29.6% SSgA $18,667.3 40.3% $23,424.8 43.0% $4,757.5 25.5% PowerShares 5.3% iShares $14,028.5 30.3% $16,100.5 29.6% $2,071.9 14.8% PowerShares $2,413.3 5.2% $2,904.1 5.3% $490.8 20.3% ProShares 4.7% ProShares $2,660.7 5.7% $2,567.9 4.7% -$92.8 -3.5% Direxion Shares 3.6% Direxion Shares $1,860.7 4.0% $1,975.6 3.6% $114.9 6.2% Others 13.8% Others $6,710.2 14.5% $7,501.8 13.8% $791.6 11.8% Total $46,340.7 100.0% $54,474.7 100.0% $8,133.9 17.6%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 38
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 19: New ETF providers in 2011 Apr-11 # AUM # Provider ETFs (US$ Bn) planned China Merchants Fund Management 1 $0.2 0 GTJA Allianz 1 $0.2 0 SEB 3 $0.1 0 Fullgoal Fund Management 1 $0.1 0 FocusShares 15 $0.1 6 Midas Asset Management 1 $0.0 0Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 20: New exchanges in 2011 Apr-11 # AUM 20 day ADV Exchange listings (US$ Bn) (US$ Mn) Burgundy 15 $0.0 $23.8 Nagoya Stock Exchange 1 $0.0 $0.1Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 21: ETF listings by exchange, as at end April 2011 # primary # total AUM ADV Region/country Exchange ETF listings ETF listings (US$ Bn) (US$ Mn) Asia Pacific 334 450 $87.9 $1,107.6 Australia Australian Securities Exchange 24 45 $4.0 $34.0 China Shanghai Stock Exchange 17 17 $7.3 $214.1 Shenzhen Stock Exchange 5 5 $4.3 $79.7 Hong Kong Hong Kong Stock Exchange 47 76 $27.9 $309.3 India Bombay Stock Exchange 2 2 $0.0 $0.0 National Stock Exchange 16 16 $0.6 $5.9 Indonesia Indonesia Stock Exchange 1 1 $0.0 $0.0 Japan Osaka Securities Exchange 11 11 $10.6 $70.6 Tokyo Stock Exchange 72 76 $18.7 $101.7 Nagoya Stock Exchange 1 1 $0.0 $0.1 Malaysia Bursa Malaysia Securities Berhad 4 5 $0.4 $0.3 New Zealand New Zealand Stock Exchange 6 6 $0.4 $0.4 Singapore Singapore Stock Exchange 23 81 $3.7 $23.1 South Korea Korea Stock Exchange 87 87 $6.8 $214.1 Taiwan Taiwan Stock Exchange 14 17 $3.0 $54.0 Thailand Stock Exchange of Thailand 4 4 $0.1 $0.3 continued…39 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 21: ETF listings by exchange, as at end April 2011 (continued) # primary # total AUM ADV Region/country Exchange ETF listings ETF listings (US$ Bn) (US$ Mn) Americas 1,179 1,590 $1,050.8 $49,249.1 Brazil BM&F Bovespa 8 8 $1.9 $30.3 Canada Toronto Stock Exchange 180 211 $43.1 $1,023.9 Chile Bolsa Comercio Santiago 0 50 $0.0 $0.2 Mexico Mexican Stock Exchange 19 349 $8.6 $262.3 United States BATS 0 0 $0.0 $8,364.9 NASDAQ OMX BX 0 0 $0.0 $701.5 CBOE 0 0 $0.0 $299.7 Chicago 0 0 $0.0 $528.4 NSX (Cincinnati) 0 0 $0.0 $203.1 FINRA-ADF 0 0 $0.0 $13,732.3 NASDAQ 77 77 $43.0 $11,286.9 Philadelphia 0 0 $0.0 $1,043.7 NYSE AMEX 0 0 $0.0 $6.3 NYSE Arca 895 895 $954.3 $11,765.7 Europe, Middle East and Africa (EMEA) 1,157 3,981 $331.0 $4,118.0 Austria Wiener Borse 1 21 $0.1 $0.1 Belgium NYSE Euronext Brussels 1 28 $0.0 $0.2 Finland NASDAQ OMX Helsinki 1 1 $0.3 $0.7 France NYSE Euronext Paris 262 477 $66.6 $426.9 Germany Deutsche Boerse 397 799 $126.8 $1,037.3 Boerse Stuttgart - 394 $0.0 $15.2 Greece Athens Exchange 3 3 $0.1 $0.2 Hungary Budapest Stock Exchange 1 1 $0.0 $0.1 Ireland Irish Stock Exchange 14 14 $0.4 $0.1 Italy Borsa Italiana 23 530 $3.0 $377.7 Netherlands NYSE Euronext Amsterdam 16 115 $0.4 $75.0 Norway Oslo Stock Exchange 7 15 $0.8 $46.0 Poland Warsaw Stock Exchange 1 1 $0.1 $0.5 Portugal NYSE Euronext Lisbon 3 3 $0.0 $0.6 Russia RTS Stock Exchange 1 1 $0.0 $5.1 Saudi Arabia Saudi Stock Exchange 2 2 $0.0 $0.1 Slovenia Ljubljana Stock Exchange 1 1 $0.0 $0.0 South Africa Johannesburg Stock Exchange 26 26 $2.8 $16.5 Spain Bolsa de Madrid 12 67 $1.5 $12.6 Latibex 0 1 $0.0 $0.0 Sweden NASDAQ OMX Stockholm 23 63 $3.2 $76.1 Burgundy - 15 $0.0 $23.8 Switzerland SIX Swiss Exchange 120 651 $47.8 $310.5 Turkey Istanbul Stock Exchange 12 12 $0.2 $22.9 UAE Abu Dhabi 1 1 $0.0 $0.0 United Kingdom London Stock Exchange 229 655 $76.9 $644.0 Turquoise (not an official exchange) - 34 - $0.0 Chi-X (not an official exchange) - 50 - $15.3 European Reported OTC - - - $1,010.5 Total 2,670 6,021 $1,469.8 $54,474.7Note: To avoid double counting, assets shown above refer only to primary listings.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 40
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 22: Global ETP listings, as at end April 2011 14 7 10 1 6 12 4 9 20 18 8 3 13 16 17 19 5 11 2 15 Americas EMEA Asia/Pacific 1 Canada 5 Botswana 10 Netherlands 15 Australia 18 Japan P listings: – P listings: – P listings: – P listings: 5 P listings: 9 T listings: 24 T listings: 1 T listings: 33 T listings: 5 T listings: 29 Providers: – Providers: – Providers: – Providers: 1 Providers: 4 Assets: – Assets: – Assets: – Assets: US$0.7 Bn Assets: US$0.6 Bn 2 Chile 6 France 11 South Africa 16 Hong Kong 19 Singapore P listings: – P listings: 2 P listings: 7 P listings: 6 P listings: – T listings: 2 T listings: 45 T listings: 7 T listings: 7 T listings: 2 Providers: – Providers: 1 Providers: 4 Providers: 2 Providers: – Assets: – Assets: US$0.1 Bn Assets: US$2.5 Bn Assets: US$0.1 Bn Assets: – 3 Mexico 7 Germany 12 Switzerland 17 India 20 South Korea P listings: – P listings: 94 P listings: 111 P listings: 10 P listings: 4 T listings: 27 T listings: 408 T listings: 141 T listings: 10 T listings: 4 Providers: – Providers: 7 Providers: 1 Providers: 10 Providers: 2 Assets: – Assets: US$2.5 Bn Assets: US$3.7 Bn Assets: US$1.0 Bn Assets: US$0.0 Bn 4 United States 8 Israel 13 UAE P listings: 244 P listings: 317 P listings: 1 T listings: 244 T listings: 317 T listings: 1 Providers: 23 Providers: 7 Providers: 1 Assets: US$142.9 Bn Assets: US$17.2 Bn Assets: US$0.0 Bn 9 Italy 14 United Kingdom P listings: 12 P listings: 327 T listings: 97 T listings: 468 Providers: 1 Providers: 6 Assets: US$0.0 Bn Assets: US$29.8 BnNote: P listings = # primary listings. T listings = # total listings. Providers = # primary ETP providers. Assets = assets in primary listings only.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.41 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 23: ETP providers around the world ranked by assets, as at end April 2011 Apr-11 YTD change # Assets % ADV # # % Assets % % market Provider ETPs (US$ Bn) total (US$ Mn) planned ETPs ETPs (US$ Bn) assets share State Street Global Advisors 1 $61.8 30.7% $1,990.0 0 0 0.0% $3.3 5.6% -3.6% ETF Securities 230 $28.5 14.2% $421.0 44 13 6.0% $3.1 12.2% -0.7% iShares 8 $25.9 12.9% $3,017.2 2 4 100.0% $7.8 43.1% 2.3% Deutsche Bank 42 $16.2 8.1% $346.8 5 6 16.7% $3.7 29.5% 0.7% Barclays (iPath) 83 $10.1 5.0% $620.1 28 20 31.7% $1.5 17.1% 0.0% Merrill Lynch 17 $5.4 2.7% $1,113.6 0 0 0.0% $0.7 14.0% -0.1% United States Commodity Funds 9 $4.9 2.4% $551.2 4 0 0.0% -$0.1 -1.6% -0.5% UBS AG 199 $4.8 2.4% $5.7 0 3 1.5% $0.9 22.9% 0.5% Societe Generale 42 $4.7 2.3% $2.5 0 0 0.0% $0.7 16.3% 0.0% ProShares 14 $3.6 1.8% $1,071.1 38 2 16.7% $1.5 75.6% 0.6% Rydex SGI 9 $3.2 1.6% $238.0 13 0 0.0% $0.7 28.3% 0.1% JPMorgan Chase 4 $2.9 1.4% $20.0 1 0 0.0% $0.6 25.2% 0.1% Absa Capital 1 $2.5 1.2% $7.3 3 0 0.0% $0.2 7.2% -0.1% db ETC 36 $2.2 1.1% $28.4 0 4 12.5% $1.0 91.6% 0.4% Swedish Export Credit Corp 7 $1.9 1.0% $15.9 0 0 0.0% $0.6 43.7% 0.2% Source Markets 31 $1.4 0.7% $9.7 0 3 10.7% $0.2 20.6% 0.0% GreenHaven Commodity Services 1 $0.9 0.4% $5.3 0 0 0.0% $0.3 62.1% 0.1% Benchmark Asset Management 1 $0.4 0.2% $3.1 1 0 0.0% $0.1 16.0% 0.0% Mitsubishi UFJ Trust and Banking Corporation 4 $0.3 0.2% $11.3 0 0 0.0% $0.2 144.8% 0.1% RBS 21 $0.3 0.1% $1.9 0 2 10.5% $0.1 45.0% 0.0% Credit Suisse 5 $0.3 0.1% $1.6 1 1 25.0% $0.1 36.0% 0.0% Reliance Capital Asset Management 1 $0.2 0.1% $0.2 0 0 0.0% $0.1 165.8% 0.1% Lyxor 3 $0.2 0.1% $0.1 0 0 0.0% $0.0 10.3% 0.0% Nomura Asset Management 3 $0.2 0.1% $2.0 0 0 0.0% $0.0 -5.2% 0.0% VelocityShares 6 $0.2 0.1% $48.4 0 0 0.0% $0.1 297.8% 0.1% Morgan Stanley 5 $0.2 0.1% $3.1 0 1 25.0% $0.1 43.6% 0.0% Teucrium Trading 3 $0.1 0.1% $7.6 4 2 200.0% $0.1 177.4% 0.0% UTI Asset Management 1 $0.1 0.1% $0.3 0 0 0.0% $0.0 11.6% 0.0% Barclays Capital 9 $0.1 0.1% $4.9 0 0 0.0% $0.0 87.8% 0.0% Sensible Asset Management 1 $0.1 0.0% $0.5 0 0 0.0% $0.0 64.2% 0.0% Goldman Sachs 2 $0.1 0.0% $0.8 0 0 0.0% $0.0 18.9% 0.0% Kotak Mahindra Asset Management 1 $0.1 0.0% $0.5 0 0 0.0% $0.0 56.4% 0.0% HDFC Mutual Fund 1 $0.1 0.0% $0.2 0 0 0.0% $0.0 4.0% 0.0% Simplex Asset Management 1 $0.1 0.0% $2.4 0 0 0.0% $0.0 15.8% 0.0% Standard Commodities 1 $0.1 0.0% $0.4 0 0 0.0% $0.0 6.9% 0.0% HSBC/Hang Seng 1 $0.0 0.0% $0.3 0 0 0.0% $0.0 -35.4% 0.0% SBI Funds Management 1 $0.0 0.0% $0.3 0 0 0.0% $0.0 16.8% 0.0% FactorShares 5 $0.0 0.0% $2.3 0 5 100.0% $0.0 100.0% 0.0% Prudential ICICI 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 8.5% 0.0% Samsung Investment Trust Management 3 $0.0 0.0% $0.6 0 2 200.0% $0.0 216.7% 0.0% Axis Mutual Fund 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 8.4% 0.0% Citigroup 6 $0.0 0.0% $0.3 0 0 0.0% $0.0 -26.4% 0.0% Religare India Asset Management 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 -12.0% 0.0% Dubai Commodities Asset Management 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 8.3% 0.0% Hyundai Investments 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 33.7% 0.0% Quantum Asset Management 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 8.3% 0.0% Mizuho Asset Management 1 $0.0 0.0% $0.1 0 0 0.0% $0.0 -41.9% 0.0% FirstRand Bank 1 $0.0 0.0% $0.2 0 0 0.0% $0.0 0.0% 0.0% Clade Investment Management 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 0.0% 0.0% continued…This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 42
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 23: ETP providers around the world ranked by assets, as at end April 2011 (continued) Apr-11 YTD change # Assets % ADV # # % Assets % % market Provider ETPs (US$ Bn) total (US$ Mn) planned ETPs ETPs (US$ Bn) assets share STANLIB 4 $0.0 0.0% $0.2 0 0 0.0% $0.0 0.0% 0.0% Israel ETPs¹ 317 $17.2 8.5% $121.6 0 -2 -0.6% $2.2 14.4% -0.3% KSM 101 N/A N/A $37.8 0 0 0.0% N/A N/A N/A Mabat 59 N/A N/A $15.9 0 -1 -1.7% N/A N/A N/A Tachlit 51 N/A N/A $34.8 0 0 0.0% N/A N/A N/A Psagot 52 N/A N/A $16.9 0 0 0.0% N/A N/A N/A Meitav 14 N/A N/A $4.0 0 0 0.0% N/A N/A N/A Index 20 N/A N/A $7.2 0 0 0.0% N/A N/A N/A Harel 21 N/A N/A $5.1 0 0 0.0% N/A N/A N/A Arrow Investment Advisors - - - - 1 - - - - - Birla Sun Life Mutual Fund - - - - 1 - - - - - Cydinar Sdn Bhd - - - - 1 - - - - - Bombay Bullion Association - - - - 2 - - - - - GAM Holding - - - - 4 - - - - - ING OptiMix - - - - 1 - - - - - Jefferies Asset Management - - - - 2 - - - - - Other (planned ETP) - - - - 3 - - - - - RiddiSiddhi Bullions - - - - 1 - - - - - RUSAL - - - - 1 - - - - - Tata Mutual Fund - - - - 1 - - - - - WealthNotes Capital Management - - - - 1 - - - - - Total 1,466 $201.1 100.0% $9,679.1 163 66 35.4% $29.8 17.4%1. Individual assets of Israeli providers are temporarily unavailable. An aggregate value for Israeli ETPs has been included in the total assets. Latest data for Israel ETP assets from Bank of Israel is March 2011.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, Bank of Israel.Figure 24: Top 20 ETPs worldwide by assets, as at end April 2011 Country Assets ADV ADV ETP listed Ticker (US$ Mn) (‘000 shares) (US$ Mn) SPDR Gold Trust US GLD US $61,770.8 13,630 $1,976.7 iShares Silver Trust US SLV US $17,008.1 67,425 $2,934.8 PowerShares DB Commodity Index Tracking Fund US DBC US $6,807.5 1,864 $58.3 iShares Gold Trust US IAU US $6,765.4 4,440 $64.5 ETFS Physical Gold UK PHAU LN $6,127.9 270 $39.5 GBS Bullion Securities UK GBS LN $5,590.4 187 $27.2 PowerShares DB Agriculture Fund US DBA US $3,780.7 2,361 $80.7 iPath Dow Jones-UBS Commodity Index Total Return ETN US DJP US $3,451.0 319 $16.6 Oil Services HOLDRS US OIH US $3,140.9 3,747 $599.5 JPMorgan Alerian MLP Index ETN US AMJ US $2,842.0 516 $20.0 NewGold ETF South Africa GLD SJ $2,485.1 479 $7.3 United States Natural Gas Fund LP US UNG US $2,204.5 11,083 $123.9 iShares S&P GSCI Commodity-Indexed Trust US GSG US $2,019.0 379 $14.5 ProShares Ultra Silver US AGQ US $1,669.2 2,285 $711.9 United States Oil Fund LP US USO US $1,589.3 9,267 $404.6 ETFS Physical Swiss Gold Shares US SGOL US $1,405.1 170 $25.2 iPath S&P 500 VIX Short-Term Futures ETN US VXX US $1,353.4 16,054 $436.6 ETFS Agriculture DJ-UBSCI UK AIGA LN $1,272.7 890 $8.6 ETFS Physical Silver UK PHAG LN $1,132.8 739 $31.6 Gold Source P-ETC UK SGLD LN $1,083.8 50 $7.3Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.43 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 25: Top 20 ETPs worldwide by average daily US dollar trading volume, as at end April 2011 Country ADV ADV Assets ETP listed Ticker (US$ Mn) (‘000 shares) (US$ Mn) iShares Silver Trust US SLV US $2,934.8 $17,008.1 $17,008.1 SPDR Gold Trust US GLD US $1,976.7 $61,770.8 $61,770.8 ProShares Ultra Silver US AGQ US $711.9 $1,669.2 $1,669.2 Oil Services HOLDRS US OIH US $599.5 $3,140.9 $3,140.9 iPath S&P 500 VIX Short-Term Futures ETN US VXX US $436.6 $1,353.4 $1,353.4 United States Oil Fund LP US USO US $404.6 $1,589.3 $1,589.3 Semiconductor HOLDRS US SMH US $316.8 $604.0 $604.0 ProShares UltraShort Silver US ZSL US $163.9 $345.0 $345.0 Retail HOLDRS US RTH US $150.5 $234.8 $234.8 Euro Currency Trust US FXE US $139.2 $383.6 $383.6 United States Natural Gas Fund LP US UNG US $123.9 $2,204.5 $2,204.5 PowerShares DB Agriculture Fund US DBA US $80.7 $3,780.7 $3,780.7 iShares Gold Trust US IAU US $64.5 $6,765.4 $6,765.4 ProShares Ultra DJ-UBS Crude Oil US UCO US $62.9 $197.3 $197.3 PowerShares DB US Dollar Index Bullish Fund US UUP US $62.5 $817.1 $817.1 PowerShares DB Commodity Index Tracking Fund US DBC US $58.3 $6,807.5 $6,807.5 ProShares UltraShort DJ-UBS Crude Oil US SCO US $53.6 $212.8 $212.8 ETFS Physical Silver Shares US SIVR US $44.4 $969.5 $969.5 ETFS Physical Gold UK PHAU LN $39.5 $6,127.9 $6,127.9 PowerShares DB Crude Oil Double Short ETN US DTO US $37.3 $186.0 $186.0Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 26: Top 20 ETPs worldwide with largest change in assets, as at end April 2011 Assets Assets Country (US$ Mn) (US$ Mn) Change ETP listed Ticker Apr-11 Dec-10 (US$ Mn) iShares Silver Trust US SLV US $17,008.1 $10,840.7 $6,167.4 SPDR Gold Trust US GLD US $61,770.8 $58,498.2 $3,272.6 PowerShares DB Commodity Index Tracking Fund US DBC US $6,807.5 $5,102.3 $1,705.2 iShares Gold Trust US IAU US $6,765.4 $5,378.6 $1,386.8 ProShares Ultra Silver US AGQ US $1,669.2 $555.1 $1,114.1 PowerShares DB Agriculture Fund US DBA US $3,780.7 $2,710.9 $1,069.7 Oil Services HOLDRS US OIH US $3,140.9 $2,133.2 $1,007.8 iPath Dow Jones-UBS Commodity Index Total Return ETN US DJP US $3,451.0 $2,853.5 $597.5 JPMorgan Alerian MLP Index ETN US AMJ US $2,842.0 $2,271.9 $570.1 db Physical Gold Euro Hedged ETC Germany XAD1 GY $919.2 $390.1 $529.2 United States Natural Gas Fund LP US UNG US $2,204.5 $2,720.7 -$516.2 ETFS Physical Silver Shares US SIVR US $969.5 $513.2 $456.3 United States Commodity Index Fund US USCI US $508.2 $103.2 $405.0 iPath MSCI India ETN US INP US $823.3 $1,171.4 -$348.1 PowerShares DB Silver Fund US DBS US $540.1 $207.1 $333.0 GreenHaven Continuous Commodity Index US GCC US $868.1 $535.4 $332.7 ELEMENTS Linked to the RICI - Total Return US RJI US $978.3 $669.4 $308.9 iPath Dow Jones-UBS Agriculture Total Return Sub-Index US JJA US $423.7 $142.1 $281.6 ETFS Physical Silver UK PHAG LN $1,132.8 $856.0 $276.9 CurrencyShares Swiss Franc Trust US FXF US $652.9 $393.1 $259.8Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 44
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 27: ETP listings by exchange, as at end April 2011 Region/ # primary # total Assets ADV country Exchange ETP listings ETP listings (US$ Bn) (US$ Mn) Asia Pacific 34 57 $2.4 $38.5 Australia Australian Securities Exchange 5 5 $0.7 $3.2 Hong Kong Hong Kong Stock Exchange 6 7 $0.1 $5.1 India National Stock Exchange 10 10 $1.0 $4.7 Japan Osaka Securities Exchange 4 4 $0.2 $4.2 Tokyo Stock Exchange 5 25 $0.3 $16.8 Singapore Singapore Stock Exchange - 2 - $3.9 South Korea Korea Stock Exchange 4 4 $0.0 $0.6 Americas 224 297 $142.9 $9,152.6 Canada Toronto Stock Exchange - 24 - $2.4 Chile Bolsa Comercio Santiago - 2 - $0.0 Mexico Mexican Stock Exchange - 27 - $2.1 United States BATS - - - $1,309.3 Boston - - - $154.1 CBOE - - - $82.4 Chicago - - - $346.7 Cincinnati - - - $48.5 FINRA-ADF - - - $2,771.1 NASDAQ - - - $2,103.0 Philadelphia - - - $164.5 NYSE Arca 244 244 $142.9 $2,168.5 Europe, Middle East and Africa (EMEA) 871 1,518 $55.8 $488.0 Botswana Botswana Stock Exchange - 1 - $0.0 France NYSE Euronext Paris 2 45 $0.1 $7.1 Germany Deutsche Boerse 94 216 $2.5 $55.5 Boerse Stuttgart 0 192 $8.6 Israel Tel Aviv Stock Exchange 317 317 $17.2 $121.6 Italy Borsa Italiana 12 97 $0.0 $81.9 Netherlands NYSE Euronext Amsterdam - 33 - $2.4 South Africa Johannesburg Stock Exchange 7 7 $2.5 $7.7 Switzerland Scoach SWX 111 111 $3.7 $0.0 SIX Swiss Exchange - 30 - $0.8 UAE NASDAQ Dubai 1 1 $0.0 $0.0 United Kingdom London Stock Exchange 327 380 $29.8 $194.3 Turquoise (not an official exchange) - 43 - $0.0 Chi-X (not an official exchange) - 45 - $2.4 Total 1,149 1,872 $201.1 $9,679.1Note: To avoid double counting, assets shown above refer only to primary listings.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, Bank of Israel.45 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 28: ETF and ETP listings, as at end April 2011 # # AUM (US$ Bn) Change in AUM # # primary New in New in total # exchanges plannedLocation listings 2010 2011 YTD listings 2010 Apr-11 US$ Bn % providers (official) newExchange Traded Funds (ETFs)United States 972 173 76 972 $891.0 $997.3 $106.2 11.9% 29 2 886Europe 1,128 268 82 3,952 $284.0 $328.2 $44.2 15.5% 39 23 63¹ Austria 1 - - 21 $0.1 $0.1 $0.0 -18.4% 1 1 Belgium 1 - - 28 $0.1 $0.0 $0.0 -2.8% 1 1 Finland 1 - - 1 $0.3 $0.3 $0.0 5.9% 1 1 France 262 55 5 477 $59.9 $66.6 $6.7 11.3% 9 1 Germany 397 59 27 1,193 $110.7 $126.8 $16.1 14.5% 10 2 Greece 3 1 - 3 $0.1 $0.1 $0.0 -2.0% 2 1 Hungary 1 - - 1 $0.0 $0.0 $0.0 29.7% 1 1 Ireland 14 - - 14 $0.4 $0.4 $0.0 8.4% 2 1 Italy 23 12 - 530 $2.5 $3.0 $0.5 18.8% 4 1 Netherlands 16 2 4 115 $0.3 $0.4 $0.1 16.4% 4 1 Norway 7 - 1 15 $0.7 $0.8 $0.1 17.3% 2 1 Poland 1 1 - 1 $0.1 $0.1 $0.0 15.2% 1 1 Portugal 3 3 - 3 $0.0 $0.0 $0.0 10.5% 2 1 Russia 1 1 - 1 $0.0 $0.0 $0.0 16.3% 1 1 Slovenia 1 - - 1 $0.0 $0.0 $0.0 3.4% 1 1 Spain 12 - 2 68 $1.2 $1.5 $0.2 19.0% 2 2 Sweden 23 13 5 78 $2.8 $3.2 $0.4 15.7% 2 2 Switzerland 120 58 9 651 $38.0 $47.8 $9.8 25.7% 7 1 Turkey 12 3 - 12 $0.2 $0.2 $0.0 4.6% 5 1 United Kingdom 229 60 22 739 $66.7 $76.9 $10.2 15.3% 9 1Canada 180 51 23 211 $38.4 $43.1 $4.7 12.3% 4 1 18Japan 84 12 4 88 $32.2 $29.4 -$2.8 -8.8% 7 3 2Hong Kong 47 18 7 76 $26.3 $27.9 $1.7 6.3% 10 1 1China 22 8 7 22 $10.1 $11.7 $1.6 15.7% 16 2 20Mexico 19 6 - 349 $8.2 $8.6 $0.3 4.0% 3 1 1South Korea 87 15 25 87 $5.3 $6.8 $1.4 27.1% 13 1 5Australia 24 15 5 45 $3.9 $4.0 $0.1 3.7% 6 1 6Singapore 23 12 2 81 $3.6 $3.7 $0.1 2.9% 8 1 3Taiwan 14 - 2 17 $2.8 $3.0 $0.2 6.3% 2 1 4South Africa 26 3 - 26 $2.3 $2.8 $0.5 20.8% 8 1 15Brazil 8 3 1 8 $1.9 $1.9 $0.0 -0.7% 2 1 1India 18 4 2 18 $0.4 $0.6 $0.2 47.1% 7 2 16New Zealand 6 - - 6 $0.4 $0.4 $0.0 2.3% 2 1 0Malaysia 4 1 - 5 $0.4 $0.4 $0.0 0.3% 3 1 3Thailand 4 1 - 4 $0.1 $0.1 $0.0 1.3% 3 1 0Indonesia 1 - - 1 $0.0 $0.0 $0.0 5.5% 1 1 0UAE 1 1 - 1 $0.0 $0.0 $0.0 2.5% 1 1 4Saudi Arabia 2 2 - 2 $0.0 $0.0 $0.0 63.5% 1 1 1Chile - - - 50 - - - - - 1 0Israel - - - - - - - - - - 2Botswana - - - - - - - - - - 1Egypt - - - - - - - - - - 1Sri Lanka - - - - - - - - - - 1Philippines - - - - - - - - - - 1ETF total 2,670 593 236 6,021 $1,311.3 $1,469.8 $158.4 12.1% 140 48 1,055 continued…1. Includes five undisclosed Ossiam ETFs.Note: To avoid double counting, assets shown above refer only to primary listings. New in 2010, new in 2011, and # providers also refer only to primary listings.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 46
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 28: ETF and ETP listings, as at end April 2011 (continued) # # Assets (US$ Bn) Change in assets # # primary New in New in total # exchanges plannedLocation listings 2010 2011 YTD listings 2010 Apr-11 US$ Bn % providers (official) newExchange Traded Products (ETPs)United States ETPs (commodity) 119 7 23 119 $104.6 $124.6 $20.0 19.1% 14 1 88United States ETPs (currency) 27 - - 27 $4.8 $5.5 $0.7 13.8% 6 1 28United States ETPs (HOLDRS) 17 - - 17 $4.7 $5.4 $0.7 14.0% 1 1 0United States ETPs (equity) 42 23 4 42 $4.1 $4.5 $0.4 10.6% 10 1 1United States ETPs (alternative) 15 10 3 15 $2.3 $2.4 $0.1 6.0% 5 1 0United States ETPs (fixed income) 18 12 6 18 $0.2 $0.3 $0.2 100.0% 3 1 6United States ETPs (mixed) 6 - - 6 $0.1 $0.1 $0.0 100.0% 2 1 0Europe ETPs (commodity) 445 147 13 956 $30.6 $35.3 $4.7 15.4% 10 8 19Europe ETPs (currency) 86 58 12 203 $0.3 $0.4 $0.1 26.0% 1 4 6Europe ETPs (equity) 11 15 - 16 $0.3 $0.3 $0.0 8.5% 2 3 0Europe ETPs (alternative) 4 2 - 14 $0.1 $0.1 $0.0 13.7% 1 4 0Europe ETPs (HOLDRS) - - - 3 - - - - - 1 0Israel ETPs 317 23 - 317 $15.0 $17.2 $2.2 14.4% 7 1 0India ETPs (commodity) 10 4 - 10 $0.7 $1.0 $0.2 33.0% 10 1 7South Africa ETPs (commodity) 6 4 - 6 $2.3 $2.5 $0.2 7.2% 3 1 3South Africa ETPs (fixed income) 1 - - 1 $0.0 $0.0 $0.0 0.0% 1 1 0Australia ETPs (commodity) 5 - - 5 $0.7 $0.7 $0.1 10.0% 1 1 0Japan ETPs (commodity) 9 7 - 29 $0.4 $0.6 $0.2 47.4% 4 2 1Hong Kong ETPs (commodity) 1 1 - 2 $0.1 $0.1 $0.0 - 1 1 1Hong Kong ETPs (Equity) 5 - - 5 $0.0 $0.0 $0.0 - 1 1 0UAE ETPs (commodity) 1 - - 1 $0.0 $0.0 $0.0 8.3% 1 1 1South Korea ETPs (commodity) 4 1 2 4 $0.0 $0.0 $0.0 100.0% 2 1 0Mexico ETPs (commodity) - - - 15 - - - - - 1 0Mexico ETPs (Currency) - - - 12 - - - - - 1 0Chile ETPs (commodity) - - - 2 - - - - - 1 0Canada ETPs (alternative) - - - 4 - - - - - 1 0Canada ETPs (commodity) - - - 6 - - - - - 1 0Canada ETPs (equity) - - - 2 - - - - - 1 0Canada ETPs (fixed income) - - - 4 - - - - - 1 0Canada ETPs (currency) - - - 8 - - - - - 1 0Malaysia ETPs (commodity) - - - - - - - - - - 1Singapore ETPs (commodity) - - - 2 - - - - - 1 0Thailand ETPs (commodity) - - - - - - - - - - 1Botswana ETPs (commodity) - - - 1 - - - - - 1 0ETPs (commodities) total 610 175 38 1,168 $139.4 $164.9 $25.4 18.2% 45 23 122ETPs total 1,149 314 63 1,872 $171.3 $201.1 $29.8 17.4% 57 23 163ETF/ETP total 3,819 907 299 7,893 $1,482.7 $1,670.9 $188.2 12.7% 176 52 1,218Note: To avoid double counting, assets shown above refer only to primary listings. New in 2010, new in 2011, and # providers also refer only to primary listings.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, Bank of Israel.47 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockAccording to the Investment Company Institute (ICI), at the end of 2010, there were 69,519 mutual funds worldwide with assets ofUS$24.70 trillion, up from US$22.95 trillion in 67,552 funds at the end of 2009.Figure 29: Global mutual fund industry Assets US$ Bn # mutual funds 28,000 80,000 24,000 70,000 60,000 20,000 50,000 16,000 40,000 12,000 30,000 8,000 20,000 4,000 10,000 0 0Assets (US$ Bn) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Total 11,655 11,324 14,048 16,165 17,757 21,809 26,132 18,920 22,953 24,699 Equity 5,134 4,204 5,923 7,219 8,336 10,512 12,443 6,498 8,948 10,250 Bond 2,212 2,534 3,047 3,313 3,450 3,872 4,279 3,389 4,546 5,231 Money market 2,986 3,190 3,206 3,323 3,351 3,848 4,940 5,786 5,317 4,531 Balanced/mixed 942 918 1,198 1,445 1,563 2,046 2,636 1,772 2,345 2,672 Other 190 229 311 398 512 676 884 676 840 1,002 # funds 52,849 54,110 54,569 54,982 56,867 61,855 66,348 68,574 67,552 69,519Source: Investment Company Institute (ICI).This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 48
  • ETF Landscape End April 2011 Industry Review from BlackRockGlobally, open-end mutual funds (excluding ETFs) saw US$4.5 Bn net outflows YTD to March 2011 according to data from Strategic Insight.International/offshore (which includes Dublin and Luxembourg) funds were the most popular with US$28.9 Bn net inflows, followed byfunds in Japan with US$14.2 Bn net inflows while Asia Pacific (ex-Japan) funds experienced net outflows of US$32.5 Bn.Figure 30: Global mutual fund flows (excluding ETFs) Net new flows US$ Bn 1,000 800 600 400 200 0 -200 -400 Region (US$ Bn) 2005 2006 2007 2008 2009 2010 YTD Mar-11 Asia Pacific (ex-Japan) 45.6 76.9 328.1 20.0 37.1 -68.5 -32.5 Japan 73.9 113.2 127.1 17.7 38.8 65.1 14.2 Europe 230.2 114.8 -130.0 -347.3 76.6 -54.0 -18.4 International/offshore 319.3 331.1 239.7 -249.5 90.0 221.3 28.9 United States 272.6 453.1 874.8 423.8 -144.3 -270.3 3.3 Total 941.6 1089.1 1439.8 -135.4 98.2 -106.4 -4.5Source: Strategic Insight Simfund Global.Globally, ETFs saw US$38.4 Bn net inflows YTD to March 2011 according to data from Strategic Insight. United States listed ETFs were themost popular with US$26.2 Bn net inflows, followed by international/offshore (which includes Dublin and Luxembourg) with US$9.0 Bn.Figure 31: Global ETF fund flows Net new flows US$ Bn 180 160 140 120 100 80 60 40 20 0 -20 Region (US$ Bn) 2005 2006 2007 2008 2009 2010 YTD Mar-11 Asia Pacific (ex-Japan) 2.1 2.2 0.4 15.5 3.6 9.1 2.1 Japan -4.9 2.3 3.1 3.3 -5.3 4.0 -0.2 Europe 9.3 14.5 7.0 34.7 17.5 14.6 1.2 International/offshore 5.1 7.7 18.0 42.8 35.6 34.4 9.0 United States 53.7 68.7 149.7 176.0 117.5 110.4 26.2 Total 65.3 95.4 178.3 272.3 168.9 172.4 38.4Note: Includes ETFs of all legal structures (open-end, UIT, Grantor Trusts, Partnerships) and ETPs.Source: Strategic Insight Simfund Global.49 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockEurope11 April 2011 marked the 11th anniversary of ETFs in Europe. ETFs providing exposure to fixed income were the most popular withThe first ETFs to launch in Europe were the iShares DJ STOXX 50 18.7% of assets followed by ETFs covering European country indices(EUN1 GY) and iShares DJ Euro STOXX 50 (EUN2 GY) on 11 April with 17.1% of the assets in Europe. YTD, 82 new ETFs were2000 on the Deutsche Boerse, followed by the iShares FTSE 100 launched in Europe, with a further 63 planned in the future.(ISF LN) on the LSE extraMARK segment on 28 April 2000. Thefirst two ETFs were originally branded as ‘LDRS’, sponsored by iShares is the largest provider of ETFs in Europe in terms of bothMerrill Lynch International and later acquired by iShares in number of products (167) and AUM (US$115.3 Bn), reflectingSeptember 2003. 35.1% market share; Lyxor Asset Management is second with 157 products, AUM of US$56.5 Bn, and 17.2% market share; and db x-In Europe, there were 1,128 ETFs and assets of US$328.2 Bn, with trackers is third with 158 products, AUM of US$53.5 Bn and 16.3%3,952 listings from 39 providers on 23 exchanges at end of April market share.2011. European ETF AUM increased by 15.5% which is greater thanthe 14.1% increase in the MSCI Europe Index in US dollar terms. Additionally, there were 546 other ETPs, assets of US$36.1 Bn, withAccording to Lipper FMI, YTD to March 2011, net sales of mutual 1,192 listings from ten providers on eight exchanges. YTD, ETPfunds (excluding ETFs) in Europe were US$25.8 Bn, whilst net sales assets in Europe increased by 15.5% to US$36.1 Bn.of ETFs domiciled in Europe were US$8.7 Bn.Figure 32: ETF listings in Europe, as at end April 2011 3 11 14 17 8 20 10 12 2 5 4 1 7 15 18 13 9 16 19 6 1 Austria 5 Germany 9 Italy 13 Portugal 17 Sweden P listings: 1 P listings: 397 P listings: 23 P listings: 3 P listings: 23 T listings: 21 T listings: 1,193 T listings: 530 T listings: 3 T listings: 78 Providers: 1 Providers: 10 Providers: 4 Providers: 2 Providers: 2 AUM: US$0.1 Bn AUM: US$126.8 Bn AUM: US$3.0 Bn AUM: US$0.0 Bn AUM: US$3.2 Bn 2 Belgium 6 Greece 10 Netherlands 14 Russia 18 Switzerland P listings: 1 P listings: 3 P listings: 16 P listings: 1 P listings: 120 T listings: 28 T listings: 3 T listings: 115 T listings: 1 T listings: 651 Providers: 1 Providers: 2 Providers: 4 Providers: 1 Providers: 7 AUM: US$0.0 Bn AUM: US$0.1 Bn AUM: US$0.4 Bn AUM: US$0.0 Bn AUM: US$47.8 Bn 3 Finland 7 Hungary 11 Norway 15 Slovenia 19 Turkey P listings: 1 P listings: 1 P listings: 7 P listings: 1 P listings: 12 T listings: 1 T listings: 1 T listings: 15 T listings: 1 T listings: 12 Providers: 1 Providers: 1 Providers: 2 Providers: 1 Providers: 5 AUM: US$0.3 Bn AUM: US$0.0 Bn AUM: US$0.8 Bn AUM: US$0.0 Bn AUM: US$0.2 Bn 4 France 8 Ireland 12 Poland 16 Spain 20 United Kingdom P listings: 262 P listings: 14 P listings: 1 P listings: 12 P listings: 229 T listings: 477 T listings: 14 T listings: 1 T listings: 68 T listings: 739 Providers: 9 Providers: 2 Providers: 1 Providers: 2 Providers: 9 AUM: US$66.6 Bn AUM: US$0.4 Bn AUM: US$0.1 Bn AUM: US$1.5 Bn AUM: US$76.9 BnNote: P listings = # primary listings. T listings = # total listings. Providers = # primary ETF providers. Assets = Assets Under Management in primary listings only.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 50
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 33: European listed ETF and ETP asset growth Assets US$ Bn # products 350 1,200 300 1,000 250 800 200 600 150 400 100 50 200 0 0 Assets (US$ Bn) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Apr-11 ETF total $0.7 $5.7 $10.7 $20.4 $34.0 $54.9 $89.7 $128.5 $142.7 $226.9 $284.0 $328.2 ETF equity $0.7 $5.7 $10.7 $19.4 $31.0 $49.3 $75.7 $103.5 $96.6 $159.8 $198.5 $230.0 ETF fixed income - - - $1.0 $2.9 $5.2 $12.1 $21.0 $41.1 $51.6 $57.1 $62.3 ETF commodity - - - - - $0.4 $2.0 $3.3 $4.9 $15.2 $26.4 $33.2 ETP assets - - - - $0.7 $1.1 $2.1 $4.9 $6.9 $15.7 $31.3 $36.1 ETF/ETP total $0.7 $5.7 $10.7 $20.4 $34.7 $56.0 $91.8 $133.3 $149.6 $242.6 $315.3 $364.3 # ETFs 6 71 118 104 114 165 273 423 636 827 1,072 1,128 # ETPs 1 2 32 80 218 278 521 546 # ETFs/ETPs total 6 71 118 104 115 167 305 503 854 1,105 1,593 1,674Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.51 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 34: European ETF and ETP net new assets by type of exposure, as at end April 2011 Apr-11 #ETFs/ # total ADV Assets NNA YTD 2011 NNA 2010 NNAExposure ETPs listings (US$ Mn) (US$ Mn) (US$ Mn) (US$ Mn) (US$ Mn)Equity 813 3,011 3,385.0 230,329.5 2,842.5 10,597.2 31,136.8 Europe 458 1,452 2,326.5 132,284.3 19.8 3,777.0 7,820.3 Broad 146 575 565.2 55,577.2 (1,162.6) (2,750.0) 1,932.6 Country 152 408 1,302.0 59,882.2 697.4 4,690.5 5,586.7 Sectors 160 469 459.2 16,825.0 485.0 1,836.5 300.9 STOXX 600 sectors 97 285 406.3 11,679.3 335.1 777.5 (119.9) Automobiles and parts 5 12 41.2 380.8 70.7 (60.1) 75.7 Banks 6 22 57.4 1,795.2 (160.3) 309.4 78.0 Basic resources 6 21 70.2 1,224.0 (161.5) (186.4) (223.1) Chemicals 4 11 10.4 289.4 92.5 (23.3) 18.2 Construction and materials 5 12 8.4 385.4 (10.1) 53.2 89.1 Financial services 4 11 10.4 233.2 (3.9) 122.3 3.4 Food and beverage 5 15 16.1 527.9 157.9 107.3 (179.2) Healthcare 6 18 14.4 1,096.5 113.2 127.3 (121.4) Industrial goods and services 5 15 43.1 571.8 90.8 (60.8) 25.9 Insurance 6 16 33.8 681.0 (45.6) (35.6) (72.2) Media 5 12 3.0 145.9 (7.1) (29.3) 15.3 Oil and gas 7 25 24.3 1,687.6 75.9 510.4 11.0 Personal and household goods 4 11 1.1 281.4 12.9 (72.6) 122.7 Real estate 2 6 0.8 98.5 7.9 22.9 (21.8) Retail 4 11 24.3 218.9 45.5 (57.0) 78.2 Technology 6 16 3.1 322.7 18.9 59.1 (1.7) Telecommunications 6 18 19.0 879.2 (46.4) 83.2 (153.6) Travel and leisure 4 11 5.9 152.5 44.1 1.0 41.1 Utilities 7 22 19.4 707.4 39.7 (93.4) 94.8 Other sectors 63 184 52.9 5,145.7 149.9 1,059.1 420.8 North America 84 378 253.0 27,333.8 885.4 4,050.7 4,794.8 Broad 3 14 13.1 2,080.9 (64.7) 29.5 595.1 Canada 6 29 7.5 596.7 89.1 197.6 298.1 United States 75 335 232.4 24,656.2 861.0 3,823.6 3,901.5 Asia Pacific 61 277 119.1 13,988.7 73.8 348.0 3,693.6 Global 77 335 101.0 14,685.8 260.3 1,036.8 2,522.3 Global (ex-US) - 1 - - - - - Emerging markets 133 568 585.3 42,036.9 1,603.2 1,384.7 12,305.9 Broad 27 114 204.4 19,223.3 827.1 (704.6) 7,253.6 Global emerging markets 13 65 172.4 16,811.5 730.4 (838.5) 6,379.0 Frontier 2 8 0.7 209.3 6.7 65.3 99.1 Sector 2 7 1.6 177.4 (91.7) (53.0) 120.3 Other 10 34 29.7 2,025.1 181.6 121.6 655.2 Regional 25 118 54.6 4,850.8 188.5 340.6 1,160.5 Asia Pacific 3 20 12.2 1,330.0 26.6 85.4 442.8 Eastern Europe 9 50 23.6 1,841.7 170.6 348.7 305.8 Middle East and Africa 5 14 1.0 265.7 (15.5) (3.1) 184.2 Latin America 8 34 17.8 1,413.5 6.8 (90.3) 227.7 Country 81 336 326.4 17,962.7 587.6 1,748.7 3,891.8 Brazil 10 46 44.4 2,784.2 (6.9) (52.6) 329.1 Chile 1 6 0.8 53.6 - 9.6 41.8 China 12 53 46.4 3,423.6 50.1 (138.0) 427.1 Egypt - - - - - - (9.0) Hungary 1 1 0.1 21.2 0.1 (0.3) (0.6) India 8 35 23.4 3,034.6 7.9 (35.8) 690.6 Indonesia 1 5 1.7 6.9 - 6.3 - Kuwait 1 2 0.0 51.9 - - 14.6 Malaysia 2 9 1.8 128.6 - (21.8) 99.0 Mexico 3 15 1.5 82.6 14.4 32.6 41.8 Poland 2 3 0.8 107.3 2.7 7.6 77.5 Russia 9 35 111.5 4,276.6 360.9 1,628.1 951.8 South Africa 6 23 6.3 333.0 (13.3) (19.3) 87.5 South Korea 6 30 32.4 1,541.5 106.9 187.8 488.9 Taiwan 6 35 14.1 844.3 - 45.6 252.5 Thailand - 3 0.8 - - - - Turkey 12 27 38.3 907.9 55.1 17.1 215.1 UAE - - - - - - (13.2) Vietnam 1 8 2.2 364.9 9.6 81.9 197.4Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 52
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 34: European ETF and ETP net new assets by type of exposure, as at end April 2011 (continued) Apr-11 #ETFs ADV Assets NNA YTD 2011 NNA 2010 NNAExposure /ETPs (US$ Mn) (US$ Mn) (US$ Mn) (US$ Mn) (US$ Mn)Fixed income 219 506.9 62,315.0 (379.0) (35.9) 8,275.9 Active 3 0.1 93.6 12.4 88.2 - Broad/aggregate 2 2.1 584.1 (8.7) 20.6 421.8 Corporate 19 96.2 11,969.6 127.4 189.5 2,400.8 Covered 8 9.0 1,097.8 (32.0) (21.1) 360.3 Credit spreads 13 4.1 849.8 (78.3) (137.1) (25.3) Emerging 6 19.7 1,532.1 (76.6) (162.0) 1,120.0 Government 131 193.9 29,332.2 (327.4) (1,870.7) 4,649.0 High yield 2 12.6 1,158.1 186.1 537.6 472.8 Inflation 15 32.5 5,015.2 165.7 459.7 (122.4) Money market 19 132.5 8,958.8 (347.6) 924.4 (994.8) Mortgage 1 4.1 1,723.7 - (65.1) (6.4)Commodities 524 532.4 68,568.2 1,091.8 3,289.1 9,429.3 Broad 86 54.0 11,303.0 379.5 1,625.2 1,707.1 Alternative 1 0.0 1.9 0.3 0.3 (0.9) Agriculture 115 44.8 5,473.1 110.9 335.5 (352.5) Energy 102 69.7 5,441.9 43.2 415.7 510.0 Industrial metals 77 21.1 2,495.8 113.9 163.4 330.5 Livestock 23 1.0 136.3 (8.4) 4.2 14.5 Precious metals 120 341.8 43,716.2 452.5 744.8 7,220.6Currency 90 12.9 630.7 49.7 (26.0) 344.7Alternative 22 22.2 2,338.0 (32.3) 175.5 1,043.6Mixed 6 0.8 150.6 - 20.1 35.4Total 1,674 4,460.1 364,331.9 3,572.7 14,020.1 50,265.6Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 35: European leveraged and inverse ETF and ETP net new assets by type of exposure, as at end April 2011 Apr-11 #ETFs ADV Assets NNA YTD 2011 NNA 2010 NNAExposure /ETPs (US$ Mn) (US$ Mn) (US$ Mn) (US$ Mn) (US$ Mn)Leveraged 87 280.0 4,021.7 (48.1) (357.1) 708.7 Equity 34 220.7 2,845.2 (28.8) (391.4) 346.2 North America 3 3.4 73.1 (0.9) 1.9 10.4 Europe 31 217.4 2,772.0 (27.9) (393.2) 335.8 Fixed income 1 0.6 59.4 - - 56.6 Commodities 38 57.3 1,101.0 (27.4) 18.3 305.7 Currency 14 1.4 16.2 8.1 15.9 0.2Inverse 123 117.4 4,722.2 3.9 327.5 900.8 Equity 37 84.7 2,300.9 (121.1) 21.7 (18.5) North America 2 4.8 191.0 (18.5) 13.1 54.6 Europe 33 78.7 2,066.7 (104.6) (17.1) (90.0) Asia Pacific 1 0.3 20.0 - 0.4 16.9 Emerging markets 1 0.9 23.2 1.9 25.3 - Fixed income 19 8.6 1,663.5 (2.9) 58.7 650.0 Commodities 37 19.6 526.9 93.3 210.3 119.1 Currency 29 4.6 221.8 34.5 36.8 169.0 Alternative 1 - 9.1 - - (18.8)Leveraged inverse 47 150.3 2,004.0 13.5 266.2 706.3 Equity 27 140.2 1,536.1 5.3 232.2 375.7 North America 1 0.4 11.8 - 4.9 11.2 Europe 26 139.8 1,524.2 5.3 227.3 364.4 Fixed income 2 8.6 397.6 - - 329.2 Commodities 4 - 21.1 - 13.6 - Currency 14 1.5 49.3 8.1 20.5 1.5Total 257 547.7 10,747.8 (30.7) 236.6 2,315.8Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.53 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape Q1 2011 Industry Review from BlackRockFigure 36: STOXX 600 Sector ETF Net Flows, for the week ending 29 April 2011 The week ending 29 April 2011 saw US$409.5 Mn net inflows to STOXX Europe 600 sector ETFs.  Year to date, STOXX Europe 600 sector ETFs have seen US$940.2 Mn net inflows. The largest sector ETF net inflows last week were in food and beverage with US$152.2 Mn followed by  Oil and gas has seen the largest net inflows with US$510.4 Mn, followed by banks with automobiles and parts with US$82.9 Mn net inflows while basic resources experienced net outflows US$333.7 Mn net inflows while basic resources experienced the largest net outflows of US$16.1 Mn. with US$155.7 Mn. Futures Index US$ total return performance open ETF AUM (US$ Mn) ETF # % interest YTD % 5-day ADV Weekly ETF net flows MTD ETF net flows YTD ETF net flowsSector Ticker stocks weight Weekly Rank YTD Rank (US$ Mn) 29-Apr-11 change (US$ Mn) (US$ Mn) (US$ Mn) (US$ Mn)Automobiles and parts SXAR 14 2.4% 7.0% 1 19.9% 5 219.3 381.6 -1.8% 2.2 82.9 70.7 -60.1Banks SX7R 51 14.1% 2.9% 14 15.8% 11 967.5 1,824.1 41.1% 17.6 -4.7 -136.1 333.7Basic resources SXPR 31 5.6% -0.2% 19 5.0% 19 571.2 1,257.7 -7.3% 12.3 -16.1 -130.8 -155.7Chemicals SX4R 23 4.5% 5.1% 2 21.7% 2 140.5 292.5 5.9% 2.4 66.8 92.5 -23.3Construction and materials SXOR 24 2.8% 3.2% 11 19.8% 6 105.2 420.1 56.1% 2.0 -14.2 22.9 86.2Financial services SXFR 30 1.6% 2.9% 13 16.5% 10 30.1 233.4 160.2% 0.2 0.0 -3.9 122.3Food and beverage SX3R 28 6.9% 1.7% 18 10.7% 16 267.5 529.9 37.0% 3.2 152.2 157.9 107.3Healthcare SXDR 34 9.0% 2.5% 16 14.5% 13 502.4 1,101.5 29.8% 4.7 53.7 113.2 127.3Industrial goods and services SXNR 95 10.4% 4.0% 5 17.7% 8 621.6 540.9 -3.2% 2.6 9.2 58.4 -93.1Insurance SXIR 32 5.8% 4.4% 3 27.6% 1 560.2 759.4 36.5% 3.4 -11.0 31.1 41.1Media SXMR 30 2.4% 3.7% 8 13.4% 14 179.7 146.0 -6.6% 0.5 -1.3 -7.1 -29.3Oil and gas SXER 33 9.4% 2.5% 15 17.7% 7 748.2 1,692.1 73.8% 5.7 -11.9 75.9 510.4Personal and household goods SXQR 29 5.1% 2.3% 17 11.5% 15 167.6 282.5 -13.8% 1.4 11.8 12.9 -72.6Real estate SX86R 21 1.2% 4.0% 4 20.5% 4 35.6 99.0 61.0% 0.1 0.0 7.9 22.9Retail SXRR 25 3.2% 3.5% 9 10.2% 17 195.0 248.5 -2.1% 1.9 56.2 75.3 -27.2Technology SX8R 26 3.4% 3.8% 7 20.7% 3 242.1 322.9 53.4% 2.0 0.0 18.9 59.1Telecommunications SXKR 21 5.7% 3.3% 10 15.1% 12 335.2 881.4 28.2% 6.1 12.0 -46.4 83.2Travel and leisure SXTR 21 1.2% 3.1% 12 6.9% 18 106.7 152.6 6.8% 1.3 3.6 44.1 1.0Utilities SX6R 32 5.5% 3.9% 6 17.3% 9 371.2 708.4 1.0% 1.3 20.4 40.4 -92.7Total 600 100.0% 3.1% 16.0% 6,366.9 11,874.8 24.5% 70.8 409.5 497.9 940.2Note: Index returns are for illustrative purposes only and do not represent actual fund performance. Index performance returns do not reflect any management fees, transaction costs or expenses. Indices are unmanaged and one cannot invest directly in an index.Past performance does not guarantee future results. Index YTD returns reflect US dollar total return performance from 30 December 2010 to 29 April 2011.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 54
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 37: ETF/ETP providers in Europe ranked by assets, as at end April 2011 Apr-11 Apr-11 2011 YTD change # ETFs/ # Assets % ADV # NNA YTD NNA # ETFs/ % ETFs/ Assets % % marketProvider ETPs listings (US$ Bn) total (US$ Bn) planned (US$ Bn) (US$ Bn) ETPs ETPs (US$ Bn) assets shareiShares 171 747 $115.4 31.7% $1.4 1 -$0.2 $4.0 -10 -5.5% $13.6 13.4% -0.6%Lyxor Asset Management 157 652 $56.5 15.5% $0.8 0 -$0.2 -$1.7 3 1.9% $4.1 7.9% -1.1%db x-trackers/db ETC 194 740 $55.6 15.3% $0.7 16 $0.9 $1.7 10 5.4% $6.6 13.5% -0.3%ETF Securities 248 843 $24.2 6.6% $0.3 20 $0.3 $0.3 16 6.9% $2.2 10.2% -0.3%Credit Suisse Asset Management 58 298 $18.1 5.0% $0.1 0 $0.5 $1.0 4 7.4% $2.5 15.9% 0.0%Zurich Cantonal Bank 7 12 $14.2 3.9% $0.1 0 -$0.1 $0.1 0 0.0% $2.4 20.5% 0.2%UBS Global Asset Management 42 161 $10.8 3.0% $0.0 3 $0.2 $3.1 13 44.8% $4.2 64.3% 0.9%Amundi ETF 95 285 $9.9 2.7% $0.1 0 $0.3 $1.8 3 3.3% $2.7 38.1% 0.4%Commerzbank 90 364 $9.8 2.7% $0.1 0 $0.0 $0.2 0 0.0% $1.2 13.5% 0.0%Source Markets 93 135 $9.3 2.5% $0.4 15 $0.9 $2.3 9 10.7% $3.1 50.7% 0.6%ETFlab Investment 40 76 $7.4 2.0% $0.1 0 $0.4 -$0.2 5 14.3% $0.7 9.8% -0.1%EasyETF 48 70 $6.4 1.8% $0.0 0 $0.0 $0.1 -1 -2.0% $0.9 16.1% 0.0%Swiss & Global Asset Management 16 32 $5.5 1.5% $0.0 0 $0.2 $0.4 0 0.0% $1.2 28.6% 0.2%Societe Generale 42 44 $4.7 1.3% $0.0 0 $0.0 $0.0 0 0.0% $0.7 16.3% 0.0%UBS AG 180 180 $4.0 1.1% $0.0 0 $0.0 $0.0 2 1.1% $0.8 23.2% 0.1%XACT Fonder 24 52 $3.7 1.0% $0.1 0 $0.2 $0.0 3 14.3% $0.4 13.8% 0.0%RBS 40 134 $1.9 0.5% $0.0 1 $0.0 $0.3 12 42.9% $0.4 22.5% 0.0%PowerShares 19 66 $1.5 0.4% $0.0 1 $0.0 $0.2 0 0.0% $0.3 20.4% 0.0%BBVA Asset Management 10 10 $1.3 0.4% $0.0 0 $0.0 $0.0 2 25.0% $0.2 15.0% 0.0%State Street Global Advisors 13 51 $1.2 0.3% $0.0 17 $0.0 $0.0 0 0.0% $0.2 14.9% 0.0%HSBC/Hang Seng 23 70 $1.1 0.3% $0.0 2 $0.1 $0.4 10 76.9% $0.5 73.2% 0.1%Marshall Wace LLP 3 4 $0.4 0.1% $0.0 0 $0.0 $0.0 0 0.0% $0.0 10.6% 0.0%DnB NOR Asset Management 3 8 $0.3 0.1% $0.0 0 $0.0 $0.0 0 0.0% $0.0 13.5% 0.0%Seligson & Co Fund Management 1 1 $0.3 0.1% $0.0 0 $0.0 $0.0 0 0.0% $0.0 5.9% 0.0%Lyxor 3 7 $0.2 0.1% $0.0 0 $0.0 $0.0 0 0.0% $0.0 10.3% 0.0%Finans Portfoy Yonetimi 7 7 $0.1 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 5.2% 0.0%Barclays (iPath) 13 32 $0.1 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 15.3% 0.0%SEB 3 3 $0.1 0.0% $0.0 0 $0.1 $0.1 3 100.0% $0.1 100.0% 0.0%JP Morgan Mansart Investments 6 12 $0.1 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 -4.1% 0.0%ThinkCapital 9 9 $0.1 0.0% $0.0 0 $0.0 $0.0 4 80.0% $0.0 174.0% 0.0%Standard Commodities 1 6 $0.1 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 6.9% 0.0%Alpha Asset Management 1 1 $0.1 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 -3.3% 0.0%NCB Investment Services 1 1 $0.0 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 15.6% 0.0%OTP Fund Management 1 1 $0.0 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 29.7% 0.0%Is Investment 2 2 $0.0 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 2.6% 0.0%NBG Asset Management 2 2 $0.0 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 5.1% 0.0%Osmosis Investment Management 1 2 $0.0 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 3.7% 0.0%Troika Dialog Asset Management 1 1 $0.0 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 16.3% 0.0%Garanti Bank 1 1 $0.0 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 1.5% 0.0%Medvesek Pusnik AM 1 1 $0.0 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 3.4% 0.0%Bizim Menkul Degerler 1 1 $0.0 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 -7.8% 0.0%ESAF 1 1 $0.0 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 0.0% 0.0%Goldman Sachs Asset Management 1 1 $0.0 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 0.0% 0.0%Kuveyt Turk Katilim Bankasi 1 1 $0.0 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 0.0% 0.0%Carnegie Fonder 0 0 $0.0 0.0% $0.0 0 $0.0 $0.0 -7 -100.0% $0.0 -100.0% 0.0%Direxion Shares - 4 - - $0.0 0 - - - - - - -Merrill Lynch - 3 - - $0.0 0 - - - - - - -ProShares - 8 - - $0.0 0 - - - - - - -Van Eck Associates Corp - 1 - - $0.0 0 - - - - - - -Vanguard - 1 - - $0.0 0 - - - - - - -Credit Suisse - - - - - 1 - - - - - - -GAM Holding - - - - - 4 - - - - - - -Hinduja Bank (Switzerland) - - - - - 1 - - - - - - -Ossiam - - - - - 5 - - - - - - -Qbasis Invest - - - - - 1 - - - - - - -Total 1,674 5,144 $364.3 100.0% $4.5 88 $3.6 $14.0 81 5.1% $49.0 15.5%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.55 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 38: ETF providers in Europe ranked by AUM, as at end April 2011 Apr-11 Apr-11 2011 YTD change # AUM % ADV # NNA YTD NNA AUM % % marketProvider # ETFs listings (US$ Bn) total (US$ Bn) planned (US$ Bn) (US$ Bn) # ETFs % ETFs (US$ Bn) AUM shareiShares 167 738 $115.3 35.1% $1.4 1 -$0.2 $4.0 -14 -7.7% $13.6 13.3% -0.7%Lyxor Asset Management 157 652 $56.5 17.2% $0.8 0 -$0.2 -$1.7 3 1.9% $4.1 7.9% -1.2%db x-trackers 158 667 $53.5 16.3% $0.7 16 $0.6 $1.1 6 3.9% $5.6 11.7% -0.6%Credit Suisse Asset Management 58 298 $18.1 5.5% $0.1 0 $0.5 $1.0 4 7.4% $2.5 15.9% 0.0%Zurich Cantonal Bank 7 12 $14.2 4.3% $0.1 0 -$0.1 $0.1 0 0.0% $2.4 20.5% 0.2%UBS Global Asset Management 42 161 $10.8 3.3% $0.0 3 $0.2 $3.1 13 44.8% $4.2 64.3% 1.0%Amundi ETF 95 285 $9.9 3.0% $0.1 0 $0.3 $1.8 3 3.3% $2.7 38.1% 0.5%Commerzbank 90 364 $9.8 3.0% $0.1 0 $0.0 $0.2 0 0.0% $1.2 13.5% -0.1%Source Markets 62 62 $7.8 2.4% $0.4 15 $0.9 $2.2 6 10.7% $2.9 57.9% 0.6%ETFlab Investment 40 76 $7.4 2.3% $0.1 0 $0.4 -$0.2 5 14.3% $0.7 9.8% -0.1%EasyETF 48 70 $6.4 2.0% $0.0 0 $0.0 $0.1 -1 -2.0% $0.9 16.1% 0.0%Swiss & Global Asset Management 16 32 $5.5 1.7% $0.0 0 $0.2 $0.4 0 0.0% $1.2 28.6% 0.2%XACT Fonder 24 52 $3.7 1.1% $0.1 0 $0.2 $0.0 3 14.3% $0.4 13.8% 0.0%RBS 22 101 $1.7 0.5% $0.0 1 $0.0 $0.3 12 120.0% $0.3 24.1% 0.0%PowerShares 19 66 $1.5 0.5% $0.0 1 $0.0 $0.2 0 0.0% $0.3 20.4% 0.0%BBVA Asset Management 10 10 $1.3 0.4% $0.0 0 $0.0 $0.0 2 25.0% $0.2 15.0% 0.0%State Street Global Advisors 13 50 $1.2 0.4% $0.0 17 $0.0 $0.0 0 0.0% $0.2 14.9% 0.0%HSBC/Hang Seng 23 70 $1.1 0.3% $0.0 2 $0.1 $0.4 10 76.9% $0.5 73.2% 0.1%ETF Securities 30 112 $0.9 0.3% $0.0 0 $0.0 $0.1 4 15.4% $0.2 22.7% 0.0%Marshall Wace LLP 3 4 $0.4 0.1% $0.0 0 $0.0 $0.0 0 0.0% $0.0 10.6% 0.0%DnB NOR Asset Management 3 8 $0.3 0.1% $0.0 0 $0.0 $0.0 0 0.0% $0.0 13.5% 0.0%Seligson & Co Fund Management 1 1 $0.3 0.1% $0.0 0 $0.0 $0.0 0 0.0% $0.0 5.9% 0.0%Finans Portfoy Yonetimi 7 7 $0.1 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 5.2% 0.0%SEB 3 3 $0.1 0.0% $0.0 0 $0.1 $0.1 3 100.0% $0.1 100.0% 0.0%JP Morgan Mansart Investments 6 12 $0.1 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 -4.1% 0.0%ThinkCapital 9 9 $0.1 0.0% $0.0 0 $0.0 $0.0 4 80.0% $0.0 174.0% 0.0%Alpha Asset Management 1 1 $0.1 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 -3.3% 0.0%NCB Investment Services 1 1 $0.0 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 15.6% 0.0%OTP Fund Management 1 1 $0.0 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 29.7% 0.0%Is Investment 2 2 $0.0 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 2.6% 0.0%NBG Asset Management 2 2 $0.0 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 5.1% 0.0%Osmosis Investment Management 1 2 $0.0 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 3.7% 0.0%Troika Dialog Asset Management 1 1 $0.0 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 16.3% 0.0%Garanti Bank 1 1 $0.0 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 1.5% 0.0%Medvesek Pusnik AM 1 1 $0.0 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 3.4% 0.0%Bizim Menkul Degerler 1 1 $0.0 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 -7.8% 0.0%ESAF 1 1 $0.0 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 0.0% 0.0%Goldman Sachs Asset Management 1 1 $0.0 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 0.0% 0.0%Kuveyt Turk Katilim Bankasi 1 1 $0.0 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 0.0% 0.0%Carnegie Fonder 0 0 $0.0 0.0% $0.0 0 $0.0 $0.0 -7 -100.0% $0.0 -100.0% 0.0%Direxion Shares - 4 - - $0.0 0 - - - - - - -ProShares - 8 - - $0.0 0 - - - - - - -Van Eck Associates Corp - 1 - - $0.0 0 - - - - - - -Vanguard - 1 - - $0.0 0 - - - - - - -Hinduja Bank (Switzerland) - - - - - 1 - - - - - - -Ossiam - - - - - 5 - - - - - - -Qbasis Invest - - - - - 1 - - - - - - -Total 1,128 3,952 $328.2 100.0% $4.1 63 $2.8 $12.9 56 5.2% $44.2 15.5%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 56
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 39: Top five European ETF providers by average daily US dollar turnover, as at end April 2011 Average daily turnover (US$ Mn) % market % market Change % Provider iShares 33.6% Dec-10 share Apr-11 share (US$ Mn) change iShares $884.0 28.2% $1,376.6 33.6% $492.6 55.7% Lyxor Asset Management 20.2% Lyxor AM $727.6 23.2% $827.9 20.2% $100.3 13.8% db x-trackers 16.3% db x-trackers $574.1 18.3% $667.5 16.3% $93.4 16.3% Source Markets 10.2% Source Markets $287.9 9.2% $417.5 10.2% $129.7 45.0% XACT Fonder 3.7% XACT Fonder $136.5 4.4% $149.7 3.7% $13.3 9.7% Others 16.1% Others $522.6 16.7% $662.1 16.1% $139.5 26.7% Total $3,132.6 100.0% $4,101.4 100.0% $968.8 30.9%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 40: ETP providers in Europe ranked by assets, as at end April 2011 Apr-11 YTD change Apr-11 2011 % # # Assets % ADV # NNA YTD NNA # % Assets % marketProvider ETPs listings (US$ Bn) total (US$ Bn) planned (US$ Bn) (US$ Bn) ETPs ETPs (US$ Bn) assets share ETF Securities 218 731 $23.2 64.3% $0.3 20 $0.3 $0.2 12 5.8% $2.1 9.7% -3.4% Societe Generale 42 44 $4.7 13.0% $0.0 0 $0.0 $0.0 0 0.0% $0.7 16.3% 0.1% UBS AG 180 180 $4.0 11.0% $0.0 0 $0.0 $0.0 2 1.1% $0.8 23.2% 0.7% db ETC 36 73 $2.2 6.0% $0.0 0 $0.3 $0.7 4 12.5% $1.0 91.6% 2.4% Source Markets 31 73 $1.4 4.0% $0.0 0 $0.1 $0.2 3 10.7% $0.2 20.6% 0.2% RBS 18 33 $0.2 0.6% $0.0 0 $0.0 $0.0 0 0.0% $0.0 10.0% 0.0% Lyxor 3 7 $0.2 0.5% $0.0 0 $0.0 $0.0 0 0.0% $0.0 10.3% 0.0% Barclays (iPath) 13 32 $0.1 0.3% $0.0 0 $0.0 $0.0 0 0.0% $0.0 15.3% 0.0% Standard Commodities 1 6 $0.1 0.2% $0.0 0 $0.0 $0.0 0 0.0% $0.0 6.9% 0.0% iShares 4 9 $0.0 0.1% $0.0 0 $0.0 $0.0 4 100.0% $0.0 100.0% 0.1% Merrill Lynch - 3 - - $0.0 0 - - - - - - - State Street Global Advisors - 1 - - $0.0 0 - - - - - - - Credit Suisse - - - - - 1 - - - - - - - GAM Holding - - - - - 4 - - - - - - - Total 546 1,192 $36.1 100.0% $0.4 25 $0.8 $1.1 25 4.8% $4.8 15.5%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.57 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 41: European ETF assets by type of exposure, as at end April 2011 Apr-11 YTD change AUM % ADV AUM % % market Exposure # ETFs (US$ Bn) total (US$ Bn) # ETFs % ETFs (US$ Bn) AUM share Equity – total 727 $224.7 68.5% $2.9 10 1.4% $31.3 16.2% 0.4% Country exposure Europe 111 $56.1 17.1% $0.9 5 4.7% $11.9 27.1% 1.6% Emerging markets 124 $41.9 12.8% $0.6 12 10.7% $2.8 7.1% -1.0% Regional Exposure Eurozone 40 $33.4 10.2% $0.4 0 0.0% $1.7 5.3% -1.0% Country exposure United States 53 $22.5 6.9% $0.2 2 3.9% $5.0 28.7% 0.7% International – equity 75 $19.0 5.8% $0.2 2 2.7% $1.1 6.2% -0.5% Regional exposure Europe 55 $15.7 4.8% $0.1 1 1.9% $2.7 20.6% 0.2% Global exposure 70 $12.9 3.9% $0.1 7 11.1% $1.5 12.9% -0.1% European sector exposure 121 $12.6 3.8% $0.4 -22 -15.4% $2.3 22.7% 0.2% Style 46 $7.2 2.2% $0.1 2 4.5% $1.3 21.3% 0.1% Eurozone sector exposure 20 $3.0 0.9% $0.0 1 5.3% $0.9 45.0% 0.2% US sector exposure 12 $0.2 0.1% $0.0 0 0.0% $0.1 34.9% 0.0% Fixed income 202 $61.4 18.7% $0.5 17 9.2% $5.0 8.9% -1.1% Commodities 76 $33.1 10.1% $0.2 8 11.8% $7.0 26.9% 0.9% Inverse 50 $2.7 0.8% $0.1 2 4.2% $0.3 10.3% 0.0% Alternative 17 $2.2 0.7% $0.0 7 70.0% $0.4 19.1% 0.0% Leveraged 25 $1.9 0.6% $0.2 5 25.0% $0.0 1.1% -0.1% Leveraged inverse 21 $1.7 0.5% $0.1 5 31.3% $0.2 12.6% 0.0% Currency 4 $0.3 0.1% $0.0 0 0.0% $0.0 -9.8% 0.0% Mixed (equity & fixed income) 6 $0.2 0.0% $0.0 2 50.0% $0.0 30.7% 0.0% Total 1,128 $328.2 100.0% $4.1 56 5.2% $44.2 15.5% Fixed income 18.7% Style – equity 2.2% Country exposure Europe – equity 17.1% Eurozone sector exposure – equity 0.9% Emerging markets – equity 12.8% Inverse 0.8% Regional Exposure Eurozone – equity 10.2% Alternative 0.7% Commodities 10.1% Leveraged 0.6% Country exposure United States – equity 6.9% Leveraged inverse 0.5% International – equity 5.8% Currency 0.1% Regional exposure Europe – equity 4.8% US sector exposure – equity 0.1% Global exposure – equity 3.9% Mixed (equity & fixed income) 0% European sector exposure – equity 3.8%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 58
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 42: European ETF assets by index provider, as at end April 2011 Apr-11 YTD change AUM % ADV AUM % % market Index provider # ETFs (US$ Bn) total (US$ Bn) # ETFs % ETFs (US$ Bn) AUM share STOXX 268 $97.0 29.6% $1.7 -8 -2.9% $13.1 15.7% 0.0% MSCI 259 $75.9 23.1% $0.7 15 6.1% $6.9 10.0% -1.2% FTSE 92 $24.6 7.5% $0.3 8 9.5% $4.0 19.5% 0.2% Markit 109 $22.7 6.9% $0.1 7 6.9% $1.5 7.0% -0.6% S&P 61 $16.9 5.2% $0.2 6 10.9% $3.8 28.5% 0.5% EuroMTS 29 $10.4 3.2% $0.1 0 0.0% $1.0 10.3% -0.2% Barclays Capital 19 $9.3 2.8% $0.1 0 0.0% $1.2 15.3% 0.0% NYSE Euronext 33 $8.8 2.7% $0.2 0 0.0% $0.8 10.2% -0.1% Dow Jones 39 $6.5 2.0% $0.1 9 30.0% $1.8 39.4% 0.3% NASDAQ OMX 28 $5.8 1.8% $0.1 -4 -12.5% $0.8 16.5% 0.0% Hang Seng 6 $1.9 0.6% $0.0 0 0.0% $0.0 0.3% -0.1% Topix 5 $0.8 0.3% $0.0 1 25.0% $0.0 -0.6% 0.0% Russell 5 $0.7 0.2% $0.0 1 25.0% $0.3 93.2% 0.1% Nikkei 3 $0.5 0.2% $0.0 0 0.0% -$0.1 -12.3% -0.1% Structured Solutions 2 $0.2 0.1% $0.0 0 0.0% $0.0 15.9% 0.0% S-Network 3 $0.1 0.0% $0.0 0 0.0% $0.0 3.3% 0.0% Intellidex 1 $0.0 0.0% $0.0 0 0.0% $0.0 7.5% 0.0% Other 166 $45.95 14.0% $0.5 21 14.5% $8.9 24.1% 1.0% Total 1,128 $328.2 100.0% $4.1 56 5.2% $44.2 15.5% STOXX 29.6% NASDAQ OMX 1.8% MSCI 23.1% Hang Seng 0.6% FTSE 7.5% Topix 0.3% Markit 6.9% Russell 0.2% S&P 5.2% Nikkei 0.2% EuroMTS 3.2% Structured Solutions 0.1% Barclays Capital 2.8% S-Network 0% NYSE Euronext 2.7% Intellidex 0% Dow Jones 2% Other 14%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.59 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 43: Top 20 ETFs in Europe by AUM, as at end April 2011 Country AUM ADV ADV ETF listed Ticker (US$ Mn) (‘000 shares) (US$ Mn) iShares S&P 500 UK IUSA LN $9,933.5 7,338 $96.8 ZKB Gold ETF (CHF) Switzerland ZGLD SW $8,547.4 11 $25.9 iShares DAX (DE) Germany DAXEX GY $8,316.5 2,886 $287.1 Lyxor ETF Euro STOXX 50 France MSE FP $7,321.5 2,164 $95.4 iShares MSCI Emerging Markets UK IEEM LN $7,080.7 1,509 $72.6 db x-trackers DAX ETF Germany XDAX GY $6,638.8 1,236 $131.8 iShares FTSE 100 UK ISF LN $6,306.9 7,416 $74.6 iShares EURO STOXX 50 (DE) Germany SX5EEX GY $5,976.7 1,455 $63.8 db x-trackers MSCI Emerging Market TRN Germany XMEM GY $5,606.7 1,476 $67.2 iShares Markit iBoxx Euro Corporate Bond Germany IBCS GY $4,849.0 134 $23.5 Lyxor ETF CAC 40 France CAC FP $4,427.9 770 $45.9 iShares EURO STOXX 50 Germany EUN2 GY $4,324.1 1,229 $53.8 CS ETF (CH) on SMI Switzerland CSSMI SW $3,923.0 175 $13.1 iShares MSCI World UK IWRD LN $3,783.8 1,239 $36.0 ZKB Silver ETF (CHF) Switzerland ZSIL SW $3,464.1 11 $44.6 db x-trackers Euro Stoxx 50 ETF Germany XESX GY $3,395.3 932 $42.3 db x-trackers MSCI World TRN ETF Germany XMWO GY $2,773.2 322 $10.8 Lyxor ETF MSCI India France INR FP $2,375.0 768 $13.6 db x-trackers II EONIA TR Index ETF Germany XEON GY $2,229.1 292 $59.9 db x-trackers MSCI USA TRN ETF Germany XMUS GY $2,225.9 574 $20.6Note: AUM reflects total fund AUM. ADV reflects total of all exchange listings and OTC volumes.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 44: Top 20 ETFs in Europe by average daily US dollar trading volume, as at end April 2011 Country ADV ADV AUM ETF listed Ticker (US$ Mn) (‘000 shares) (US$ Mn) iShares DAX (DE) Germany DAXEX GY $287.1 2,886 $8,316.5 db x-trackers DAX ETF Germany XDAX GY $131.8 1,236 $6,638.8 iShares S&P 500 UK IUSA LN $96.8 7,338 $9,933.5 Lyxor ETF Euro STOXX 50 France MSE FP $95.4 2,164 $7,321.5 iShares FTSE 100 UK ISF LN $74.6 7,416 $6,306.9 iShares MSCI Emerging Markets UK IEEM LN $72.6 1,509 $7,080.7 ETFlab DAX Germany ETFDAX GY $69.8 667 $2,192.5 db x-trackers MSCI Emerging Market TRN Germany XMEM GY $67.2 1,476 $5,606.7 Lyxor ETF DAX Germany LYXDAX GY $65.3 620 $1,556.7 iShares EURO STOXX 50 (DE) Germany SX5EEX GY $63.8 1,455 $5,976.7 db x-trackers II EONIA TR Index ETF Germany XEON GY $59.9 292 $2,229.1 Lyxor ETF Leverage CAC 40 France LVC FP $55.4 4,142 $511.7 iShares EURO STOXX 50 Germany EUN2 GY $53.8 1,229 $4,324.1 Lyxor ETF Euro Cash (EONIA) France CSH FP $47.8 304 $1,918.8 Lyxor ETF XBEAR CAC 40 France BX4 FP $47.4 888 $376.3 Lyxor ETF CAC 40 France CAC FP $45.9 770 $4,427.9 STOXX 600 Optimised Basic Resources Germany XPPS GY $45.7 83 $156.5 ZKB Silver ETF (CHF) Switzerland ZSIL SW $44.6 11 $3,464.1 RDX Source ETF UK RDXS LN $44.0 196 $992.9 db x-trackers Euro Stoxx 50 ETF Germany XESX GY $42.3 932 $3,395.3Note: AUM reflects total fund AUM. ADV reflects total of all exchange listings and OTC volumes.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 60
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 45: Top 20 ETFs in Europe with largest change in AUM, as at end April 2011 AUM AUM Country YTD NNA (US$ Mn) (US$ Mn) Change ETF listed Ticker (US$ Mn) Apr-11 Dec-10 (US$ Mn) db x-trackers DAX ETF Germany XDAX GY $2,042.3 $6,638.8 $3,693.1 $2,945.8 iShares DAX (DE) Germany DAXEX GY $1,059.4 $8,316.5 $5,917.7 $2,398.8 iShares S&P 500 UK IUSA LN $1,439.9 $9,933.5 $7,905.8 $2,027.7 ZKB Silver ETF (CHF) Switzerland ZSIL SW -$295.4 $3,464.1 $2,338.8 $1,125.4 ETFlab EURO STOXX 50 Germany ETFSX5E GY -$1,304.6 $1,051.7 $2,120.3 -$1,068.6 Lyxor ETF Russia (DJ RusIndex Titans 10) France RUS FP $779.8 $2,195.4 $1,204.9 $990.5 ETFlab DAX Germany ETFDAX GY $685.1 $2,192.5 $1,217.1 $975.4 Lyxor ETF Euro STOXX 50 France MSE FP -$2,420.9 $7,321.5 $8,278.6 -$957.1 iShares EURO STOXX 50 (DE) Germany SX5EEX GY $161.1 $5,976.7 $5,030.7 $946.0 UBS ETF FTSE 100 SF Switzerland F1GBAS SW $855.8 $940.0 $12.3 $927.7 ZKB Gold ETF (CHF) Switzerland ZGLD SW $5.5 $8,547.4 $7,810.8 $736.7 UBS-ETF MSCI USA Switzerland USACHA SW $471.4 $1,907.1 $1,241.5 $665.6 RDX Source ETF UK RDXS LN $603.2 $992.9 $331.3 $661.6 db x-trackers MSCI Emerging Market TRN Germany XMEM GY -$842.7 $5,606.7 $6,263.3 -$656.5 iShares STOXX Europe 600 (DE) Germany SXXPIEX GY $410.2 $2,131.7 $1,493.9 $637.8 iShares Markit iBoxx Euro High Yield Bond UK IHYG LN $517.7 $1,084.1 $477.0 $607.2 AMUNDI ETF DJ EURO STOXX 50 France C50 FP $403.0 $1,184.0 $607.6 $576.4 db x-trackers DJ STOXX 600 Germany XSX6 GY -$646.9 $685.4 $1,237.7 -$552.3 db x-trackers DBLCI - OY Balanced ETF Germany XDBC GY $139.9 $1,987.7 $1,449.4 $538.3 Lyxor ETF Euro Cash (EONIA) France CSH FP $340.8 $1,918.8 $1,397.6 $521.2Note: AUM reflects total fund AUM. ADV reflects total of all exchange listings and OTC volumes. NNA reflects the total fund NNA.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 46: Top 20 ETFs in Europe with largest YTD net inflows, as at end April 2011 Country YTD NNA AUM ADV ETF listed Ticker (US$ Mn) (US$ Mn) (US$ Mn) db x-trackers DAX ETF Germany XDAX GY $2,042.3 $6,638.8 $131.8 iShares S&P 500 UK IUSA LN $1,439.9 $9,933.5 $96.8 iShares DAX (DE) Germany DAXEX GY $1,059.4 $8,316.5 $287.1 UBS ETF FTSE 100 SF Switzerland F1GBAS SW $855.8 $940.0 $1.4 Lyxor ETF Russia (DJ RusIndex Titans 10) France RUS FP $779.8 $2,195.4 $33.4 ETFlab DAX Germany ETFDAX GY $685.1 $2,192.5 $69.8 RDX Source ETF UK RDXS LN $603.2 $992.9 $44.0 iShares Markit iBoxx Euro High Yield Bond UK IHYG LN $517.7 $1,084.1 $11.8 UBS-ETF MSCI USA Switzerland USACHA SW $471.4 $1,907.1 $5.8 STOXX 600 Source ETF Germany SDJ600 GY $428.3 $620.8 $5.7 iShares STOXX Europe 600 (DE) Germany SXXPIEX GY $410.2 $2,131.7 $8.5 AMUNDI ETF Dow Jones EURO STOXX 50 France C50 FP $403.0 $1,184.0 $18.8 MAN GLG Europe Plus Source ETF Germany MPFE GY $396.6 $436.4 $2.6 Lyxor ETF Euro Cash (EONIA) France CSH FP $340.8 $1,918.8 $47.8 CS ETF (Lux) on MSCI Emerging Markets Switzerland CSEM SW $337.3 $1,432.3 $18.1 UBS-ETF MSCI Pacific (ex Japan) A Switzerland PACUSA SW $324.2 $461.0 $0.9 UBS-ETF MSCI Japan A Switzerland JPNCHA SW $311.5 $1,137.8 $5.5 Lyxor ETF Commodities CRB France CRB FP $292.6 $1,770.7 $9.3 Lyxor ETF DAX Germany LYXDAX GY $261.0 $1,556.7 $65.3 CS ETF (IE) on MSCI EMU Switzerland CSEMU SW $255.3 $984.3 $6.1Note: AUM reflects total fund AUM. ADV reflects total of all exchange listings and OTC volumes. NNA reflects the total fund NNA.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.61 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockAccording to the European Fund and Asset Management Association (EFAMA), UCITS registered net inflows during the first quarter of 2011amounting to €30 Bn, up from net inflows of €26 Bn in the last quarter of 2010. Equity funds witnessed a sharp fall in net inflows during thequarter, dropping to €5 Bn, triggered by a renewed bout of financial tensions, while balanced and bond funds enjoyed an increase in netinflows to €20 Bn and €7 Bn respectively. Money market funds experienced a reduced level of net outflows during the quarter of €9 Bn.Figure 47: Net assets of European investment funds Assets € Bn # funds 7,000 40,000 6,000 35,000 30,000 5,000 25,000 4,000 20,000 3,000 15,000 2,000 10,000 1,000 5,000 0 0Assets (€ Bn) 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Total assets 4,156 4,561 4,619 4,296 4,835 5,373 6,569 7,574 7,924 6,123 7,039 8,028 UCITS 3,195 3,550 3,619 3,346 3,785 4,212 5,172 5,974 6,201 4,575 5,299 5,993 Non-UCITS 961 1,011 1,000 950 1,050 1,161 1,397 1,600 1,723 1,548 1,740 2,035 Total # funds 43,212 44,342 47,341 51,166 53,806 52,064 53,351 # UCITS funds – – – – – 30,167 30,837 33,600 36,079 37,643 35,946 36,477 # Non-UCITS funds – – – – – 9,345 13,505 13,741 15,087 16,163 16,118 16,874 2009 2010 YTD change # % # % # %Country funds € Mn US$ Mn share funds € Mn US$ Mn share funds € Mn shareAustria 2,181 136,603 199,672 1.9% 2,198 147,677 197,326 1.8% 17 11,074 -0.1%Belgium 1,992 92,523 133,289 1.3% 1,953 97,229 129,918 1.2% -39 4,706 -0.1%Bulgaria 86 180 259 0.0% 92 229 306 0.0% 6 49 0.0%Czech Republic 109 4,426 6,376 0.1% 116 4,883 6,525 0.1% 7 457 0.0%Denmark 835 109,608 157,901 1.6% 831 135,442 180,978 1.7% -4 25,834 0.1%Finland 511 54,251 78,513 0.8% 489 61,506 82,184 0.8% -22 7,255 0.0%France 11,708 1,426,395 2,054,865 20.3% 11,711 1,401,625 1,872,851 17.5% 3 -24,770 -2.8%Germany 5,957 1,017,356 1,465,603 14.5% 5,979 1,125,853 1,504,365 14.0% 22 108,497 -0.4%Greece 245 10,338 14,893 0.1% 251 9,128 12,197 0.1% 6 -1,210 0.0%Hungary 413 11,088 15,974 0.2% 453 13,541 18,093 0.2% 40 2,453 0.0%Ireland 4,627 748,629 1,078,475 10.6% 4,743 963,326 1,287,196 12.0% 116 214,697 1.4%Italy 1,049 249,952 360,081 3.6% 1,010 232,059 310,077 2.9% -39 -17,893 -0.7%Liechtenstein 561 22,375 32,234 0.3% 665 31,078 41,527 0.4% 104 8,703 0.1%Luxembourg 12,232 1,840,993 2,652,135 26.2% 12,937 2,198,994 2,938,296 27.4% 705 358,001 1.2%Netherlands 522 79,000 113,807 1.1% 728 78,066 104,312 1.0% 206 -934 -0.1%Norway 487 49,403 71,170 0.7% 507 63,243 84,505 0.8% 20 13,840 0.1%Poland 493 22,349 32,196 0.3% 542 28,757 38,426 0.4% 49 6,408 0.0%Portugal 538 28,477 41,024 0.4% 550 25,793 34,465 0.3% 12 -2,684 -0.1%Romania 69 2,586 3,726 0.0% 78 2,968 3,966 0.0% 9 382 0.0%Slovakia 75 3,418 4,924 0.0% 78 3,763 5,029 0.0% 3 345 0.0%Slovenia 132 2,195 3,163 0.0% 135 2,251 3,008 0.0% 3 56 0.0%Spain 2,650 194,520 280,225 2.8% 2,552 169,568 226,577 2.1% -98 -24,952 -0.7%Sweden 571 126,402 182,094 1.8% 574 166,089 221,928 2.1% 3 39,687 0.3%Switzerland 717 157,247 228,631 2.2% 873 253,216 340,526 3.2% 156 95,969 0.9%Turkey 338 15,912 22,923 0.2% 365 17,565 23,470 0.2% 27 1,653 0.0%United Kingdom 2,966 631,000 909,019 9.0% 2,941 793,957 1,060,885 9.9% -25 162,957 0.9%All funds 52,064 7,039,226 10,142,811 100.0% 53,351 8,027,805 10,728,932 100.0% 1,287 988,579UCITS 35,946 5,298,768 7,635,506 75.3% 35,842 5,992,612 8,009,508 74.6% -104 693,844 -0.6%Non-UCITS 16,118 1,740,459 2,507,305 24.7% 16,781 2,035,193 2,719,424 25.4% 663 294,734 0.6%Source: European Fund and Asset Management Association (EFAMA, formerly FEFSI).This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 62
  • ETF Landscape End April 2011 Industry Review from BlackRockIn Europe, open-end mutual funds (excluding ETFs) saw US$25.8 Bn net new inflows YTD to March 2011, according to data from LipperFMI. Mixed asset class funds were the most popular with US$17.4 Bn net inflows, while money market funds experienced net outflowsof US$20.7 Bn.Figure 48: European mutual fund flows (excluding ETFs) Net new flows US$ Bn 500 400 300 200 100 0 -100 -200 -300 -400 -500 -600 -700 Exposure (US$ Bn) 2002 2003 2004 2005 2006 2007 2008 2009 2010 YTD Mar-11 Equity 31.8 65.9 72.8 120.4 124.4 -32.3 -229.2 131.2 83.9 8.2 Bond 9.8 87.5 60.8 158.7 -17.0 -109.3 -260.7 111.3 158.6 5.8 Mixed -26.0 -10.0 7.9 44.0 54.7 40.4 -60.6 43.4 78.9 17.4 Money market 104.8 73.4 29.4 46.0 122.9 178.1 138.0 -65.9 -146.6 -20.7 Money market-enhanced 1.7 14.5 15.6 36.4 46.0 -35.9 -59.5 -12.6 -6.1 -1.8 Other 29.0 58.7 46.8 40.5 67.5 63.6 -23.1 13.3 17.8 16.9 Total 151.2 290.1 233.2 445.9 398.5 104.7 -495.1 220.6 186.5 25.8Source: Lipper FMI.YTD to March 2011, ETFs in Europe saw US$8.7 Bn net new inflows, according to data from Lipper FMI. Equity funds were the most popularwith US$6.5 Bn net inflows, while bond funds experienced net outflows of US$0.9 Bn.Figure 49: European ETF fund flows Net new flows US$ Bn 80 70 60 50 40 30 20 10 0 -10 Exposure (US$ Bn) 2002 2003 2004 2005 2006 2007 2008 2009 2010 YTD Mar-11 Equity 7.1 4.0 8.8 10.1 13.1 14.5 54.3 29.5 29.7 6.5 Bond 1.7 0.1 3.0 2.3 4.7 2.4 8.2 13.1 9.1 -0.9 Mixed 0.1 -0.0 0.0 -0.0 0.3 0.2 0.0 Money market 3.4 11.0 -5.1 -1.6 1.2 Other 0.6 1.6 0.8 3.1 9.5 6.4 1.9 Total 8.8 4.1 11.8 13.1 19.4 21.0 76.5 47.2 43.8 8.7Source: Lipper FMI.63 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 50: Average expenses of ETFs versus open-end mutual funds in Europe Average Exposure TER (bps) Exchange Traded Funds (ETFs) Alternative 104 Commodities 44 Country exposure Europe – equity 30 Country exposure United States – equity 36 Currency 30 Emerging markets – equity 70 European sector exposure – equity 34 Eurozone sector exposure – equity 42 Fixed income 19 Global exposure – equity 49 International – equity 55 Inverse 33 Leveraged 50 Leveraged inverse 53 Mixed 72 Regional exposure Europe – equity 31 Regional exposure Eurozone – equity 23 Style – equity 37 United States sector exposure – equity 36 Total – equity ETFs 41 Total – fixed income ETFs 19 Total – all 37 Open-end mutual funds Passive/index european equity 96 Passive/index international equity 87 Passive/index fixed income 39 Active/non-index european equity 187 Active/non-index international equity 185 Active/non-index fixed income 99Source: Strategic Insight Simfund Global, Global ETF Research and Implementation Strategy Team, BlackRock, data as at end January 2011.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 64
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 51: European ETF turnover as a percentage of European equity turnover ETF turnover (US$ Mn) ETF turnover as % of European equity turnover 120,000 7% 100,000 6% 5% 80,000 4% 60,000 3% 40,000 2% 20,000 1% 0 0% Sep-08 Dec-08 Jan-09 Mar-09 Apr-09 May-09 Aug-09 Sep-09 Dec-09 Mar-10 Apr-10 May-10 Aug-10 Sep-10 Dec-10 Mar-11 Apr-11 Oct-08 Nov-08 Feb-09 Jun-09 Jul-09 Jan-10 Jun-10 Jul-10 Jan-11 Oct-09 Nov-09 Feb-10 Oct-10 Nov-10 Feb-11 ETF turnover (US$ Mn) ETF turnover as % of European equity turnoverNote: European equity turnover from main market and multilateral trading facilities includes electronic order book equity trading, off-electronic order book equity trading, reportingtransactions and dark pool equity trading. Data as at end April 2011.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, Federation of European Stock Exchanges (FESE).65 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 52: European exchange ETF statistics, as at end April 2011 Turnover in € Mn Average daily turnover in € Mn % % market % marketExchange Apr-11 Dec-10 % change share Apr-11 Dec-10 change share Deutsche Boerse 13,288.4 11,336.0 17.2% 25.5% 700.5 539.8 29.8% 25.3% NYSE Euronext 6,450.6 7,602.7 -15.2% 12.4% 339.5 330.6 2.7% 12.3% NYSE Euronext Paris 5,477.9 6,636.5 -17.5% 10.5% 288.3 288.5 -0.1% 10.4% NYSE Euronext Amsterdam 962.8 954.1 0.9% 1.8% 50.7 41.5 22.2% 1.8% NYSE Euronext Brussels 2.5 2.0 23.1% 0.0% 0.1 0.1 49.0% 0.0% NYSE Euronext Lisbon 7.4 10.1 -26.4% 0.0% 0.4 0.4 -11.0% 0.0% London Stock Exchange 7,828.2 5,782.8 35.4% 15.0% 434.9 275.4 57.9% 15.7% Borsa Italiana 4,845.9 5,486.3 -11.7% 9.3% 255.0 261.3 -2.4% 9.2% SIX Swiss Exchange 3,983.8 3,670.8 8.5% 7.6% 209.7 159.6 31.4% 7.6% NASDAQ OMX 985.7 1,159.2 -15.0% 1.9% 51.9 55.2 -6.0% 1.9% NASDAQ OMX Stockholm 976.7 1,152.0 -15.2% 1.9% 51.4 54.9 -6.3% 1.9% NASDAQ OMX Helsinki 9.1 7.2 26.3% 0.0% 0.5 0.4 33.0% 0.0% Oslo Stock Exchange 559.7 743.2 -24.7% 1.1% 31.1 35.4 -12.1% 1.1% Istanbul Stock Exchange 293.6 471.9 -37.8% 0.6% 15.5 20.5 -24.7% 0.6% Burgundy 289.9 - 0.0% 0.6% 16.1 - 0.0% 0.6% Boerse Stuttgart 215.2 376.7 -42.9% 0.4% 10.2 17.9 -42.9% 0.4% Bolsa De Madrid 162.0 182.0 -11.0% 0.3% 8.5 8.7 -1.6% 0.3% RTS Stock Exchange 72.3 154.9 -53.3% 0.1% 3.4 7.0 -51.1% 0.1% Warsaw Stock Exchange 6.3 5.4 16.8% 0.0% 0.3 0.2 34.3% 0.0% Athens Exchange 2.2 2.6 100.0% 0.0% 0.1 0.1 6.4% 0.0% Wiener Borse 1.1 4.8 -77.6% 0.0% 0.1 0.2 -76.5% 0.0% Budapest Stock Exchange 0.9 0.2 399.6% 0.0% 0.0 0.0 449.6% 0.0% Irish Stock Exchange 0.7 0.6 16.0% 0.0% 0.0 0.0 28.3% 0.0% Latibex 0.6 0.7 -10.5% 0.0% - - 0.0% 0.0% Ljubljana Stock Exchange - 0.0 -100.0% 0.0% - 0.0 -100.0% 0.0% Scoach SWX - - 0.0% 0.0% - - 0.0% 0.0% Turquoise (not an official exchange) - - 0.0% 0.0% - - 0.0% 0.0% Chi-X (not an official exchange) 196.2 216.6 -9.4% 0.4% 10.3 9.4 9.6% 0.4% European reported OTC 12,966.0 14,236.1 -8.9% 24.9% 682.4 619.0 10.3% 24.6% BOAT 10,534.4 11,345.0 -7.1% 20.2% 554.4 493.3 12.4% 20.0% Other 2,431.6 2,891.1 -15.9% 4.7% 128.0 125.7 1.8% 4.6%European ETF market 52,149 51,433 1.4% 100.0% 2,770 2,340 18.3% 100.0%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 66
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 53: European exchange accumulated turnover market share, 2011 # total ETFExchange listings Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11Deutsche Boerse 799 23.4% 19.5% 24.4% 25.5%NYSE Euronext 623 16.0% 13.2% 14.2% 12.4% NYSE Euronext Paris 477 14.3% 11.6% 12.6% 10.5% NYSE Euronext Amsterdam 115 1.7% 1.5% 1.6% 1.8% NYSE Euronext Brussels 28 0.0% 0.0% 0.0% 0.0% NYSE Euronext Lisbon 3 0.0% 0.0% 0.0% 0.0%Borsa Italiana 530 10.6% 8.9% 8.2% 9.3%London Stock Exchange 655 10.9% 18.1% 14.6% 15.0%SIX Swiss Exchange 651 7.0% 5.9% 6.4% 7.6%Oslo Stock Exchange 15 1.6% 1.2% 1.2% 1.1%NASDAQ OMX 64 2.1% 1.7% 2.1% 1.9% NASDAQ OMX Stockholm 63 2.0% 1.7% 2.1% 1.9% NASDAQ OMX Helsinki 1 0.0% 0.0% 0.0% 0.0%Istanbul Stock Exchange 12 0.6% 0.5% 0.4% 0.6%Bolsa De Madrid 67 0.6% 0.5% 0.4% 0.3%Latibex 1 0.0% 0.0% 0.0% 0.0%Boerse Stuttgart 394 0.6% 0.7% 0.7% 0.4%Budapest Stock Exchange 1 0.0% 0.0% 0.0% 0.0%Athens Exchange 3 0.0% 0.0% 0.0% 0.0%Wiener Borse 21 0.0% 0.0% 0.0% 0.0%Irish Stock Exchange 14 0.0% 0.0% 0.0% 0.0%Ljubljana Stock Exchange 1 0.0% 0.0% 0.0% 0.0%RTS Stock Exchange 1 0.3% 0.3% 0.2% 0.1%Latibex 1 0.0% 0.0% 0.0% 0.0%Turquoise 34 0.6% 0.6% 0.0% 0.0%Burgundy 15 0.0% 0.0% 0.5% 0.6%Chi-X (not an official exchange) 50 0.5% 0.4% 0.4% 0.4%European reported OTC – 25.3% 28.4% 26.2% 24.9%Total 3,952 100.0% 100.0% 100.0% 100.0%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.67 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 54: European exchange accumulated turnover market share, 2010Exchange Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10Deutsche Boerse 28.8% 25.8% 26.2% 26.2% 23.1% 24.4% 24.2% 23.8% 22.3% 21.7% 20.6% 22.0%NYSE Euronext 14.7% 15.4% 14.2% 14.9% 15.2% 15.2% 14.5% 13.9% 13.8% 13.5% 14.5% 14.8% NYSE Euronext Paris 12.6% 13.1% 11.9% 12.6% 13.1% 13.0% 12.6% 12.0% 12.1% 11.5% 12.8% 12.9% NYSE Euronext Amsterdam 2.1% 2.3% 2.4% 2.3% 2.2% 2.2% 1.9% 2.0% 1.7% 2.0% 1.7% 1.9% NYSE Euronext Brussels 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% NYSE Euronext Lisbon 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Borsa Italiana 10.4% 10.7% 11.3% 11.3% 9.1% 10.6% 10.6% 10.8% 10.5% 9.5% 10.3% 10.7%London Stock Exchange 11.8% 11.7% 11.1% 9.6% 8.8% 12.9% 11.0% 11.8% 11.4% 14.6% 15.7% 11.2%SIX Swiss Exchange 5.8% 5.9% 6.1% 5.3% 5.8% 6.5% 5.2% 5.9% 6.0% 6.5% 6.2% 7.1%Oslo Stock Exchange 2.4% 2.4% 2.1% 2.1% 1.8% 2.2% 1.5% 2.7% 2.0% 1.9% 1.6% 1.4%NASDAQ OMX 1.7% 1.9% 2.4% 2.4% 2.8% 2.9% 2.3% 2.7% 2.9% 2.8% 2.2% 2.3% NASDAQ OMX Stockholm 1.7% 1.9% 2.3% 2.4% 2.8% 2.9% 2.2% 2.7% 2.8% 2.7% 2.2% 2.2% NASDAQ OMX Helsinki 0.0% 0.0% 0.1% 0.0% 0.1% 0.0% 0.1% 0.0% 0.1% 0.1% 0.0% 0.0%Istanbul Stock Exchange 1.4% 1.3% 1.4% 1.2% 0.7% 1.0% 1.0% 1.0% 1.0% 1.3% 0.8% 0.9%Bolsa De Madrid 0.8% 1.8% 0.8% 1.3% 1.4% 1.3% 0.6% 0.6% 0.4% 0.7% 0.4% 0.4%Latibex 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Boerse Stuttgart 0.5% 0.5% 0.5% 0.5% 0.4% 0.4% 0.7% 0.5% 0.5% 0.6% 0.6% 0.7%Budapest Stock Exchange 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Athens Exchange 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Wiener Borse 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Irish Stock Exchange 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Ljubljana Stock Exchange 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%RTS Stock Exchange 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.1% 0.2% 0.1% 0.1% 0.3%Warsaw Stock Exchange 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Turquoise (not an official exchange) 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Chi-X (not an official exchange) 0.9% 1.2% 1.0% 0.7% 0.8% 1.1% 1.7% 0.6% 0.6% 0.4% 0.5% 0.4%European Reported OTC 20.7% 21.5% 22.8% 24.5% 30.1% 21.4% 26.6% 25.5% 28.5% 26.3% 26.5% 27.7%Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 68
  • ETF Landscape End April 2011 Industry Review from BlackRockUnited StatesIn the United States, there were 972 ETFs and assets of iShares is the largest ETF provider in terms of both number ofUS$997.3 Bn from 29 providers on two exchanges at the end products and assets, 218 ETFs and US$472.2 Bn respectively,of April 2011. This compares to 839 ETFs and assets of reflecting 47.3% market share; State Street Global Advisors isUS$764.0 Bn, from 28 providers on two exchanges at the end second with 99 ETFs, assets of US$195.6 Bn and 19.6% marketof April 2010. share; followed by Vanguard with 64 ETFs, assets of US$172.9 Bn and 17.3% market share, at the end of April 2011.ETF AUM in the United States listed ETFs increased by 11.9% fromUS$891.0 Bn to US$997.3 Bn, which is greater than the 8.6% Additionally, there were 244 other ETPs with assets of US$142.9 Bnincrease in the MSCI US Index in US dollar terms. This compares to from 23 providers on one exchange. This compares to 146 ETPsa 8.3% increase in assets over the same period in 2010. with assets of US$91.0 Bn from 17 providers on one exchange, at the end of April 2010.YTD, 76 new ETFs have launched in the United States with 886planned in the future. This compares to 78 new ETFs launched over 29 January 2011 marked the 18th anniversary of ETFs in the Unitedthe same period in 2010. States. Since the launch of the SPDR S&P 500 (SPY US) on 29 January 1993, it has grown to be the largest ETF globally and the most liquid equity security traded anywhere in the world.Figure 55: ETF listings in the United States, as at end April 2011 1 1 United States P listings: 972 T listings: 972 Providers: 29 AUM: US$997.3 BnNote: P listings = # primary listings. T listings = # total listings. Providers = # primary ETF providers. Assets = Assets Under Management in primary listings only.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.69 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 56: United States listed ETF and ETP asset growth Assets (US$ Bn) # products 1,000 1,000 900 900 800 800 700 700 600 600 500 500 400 400 300 300 200 200 100 100 0 0Assets (US$ Bn) 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Apr-11 ETF assets $1.1 $2.4 $6.7 $15.6 $33.9 $65.6 $84.6 $102.3 $150.7 $227.7 $299.4 $406.8 $580.7 $497.1 $705.5 $891.0 $997.3 ETP assets – – – – $2.0 $5.0 $3.8 $4.0 $6.1 $8.9 $14.4 $25.9 $40.5 $45.3 $88.1 $120.8 $142.9ETF/ETP total $1.1 $2.4 $6.7 $15.6 $35.8 $70.6 $88.4 $106.3 $156.8 $236.6 $313.8 $432.8 $621.2 $542.5 $793.6 $1,011.9$1,140.2 # ETFs 2 19 19 29 30 81 101 113 117 152 201 343 601 698 772 896 972 # ETPs 2 14 17 17 17 17 20 38 72 146 153 203 244# ETFs/ETPs total 2 19 19 29 32 95 118 130 134 169 221 381 673 844 925 1,099 1,216Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 70
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 57: United States ETF and ETP net new assets by type of exposure, as at end April 2011 Apr-11 #ETFs ADV Assets NNA YTD-11 NNA 2010 NNAExposure /ETPs (US$ Mn) (US$ Mn) (US$ Mn) (US$ Mn) (US$ Mn)Equity 827 46,208.2 838,053.6 16,715.7 33,140.7 75,146.8 North America 510 38,178.4 553,541.5 9,955.7 23,759.4 37,300.8 Broad 1 0.1 13.6 - 2.1 1.9 Canada 4 109.2 7,001.4 106.6 1,762.8 1,046.0 United States 505 38,069.2 546,526.6 9,849.1 21,994.5 - 36,253.0 United States sectors 226 8,040.0 129,092.8 683.5 8,294.0 10,658.0 Consumer goods/services 27 1,018.8 10,999.5 (56.2) (253.9) 2,278.4 Energy 36 2,297.6 29,351.1 (612.0) 4,026.9 2,751.1 Financials 32 1,661.9 18,790.1 (767.4) (926.1) 1,281.8 Healthcare 22 311.2 9,990.7 449.9 585.2 (587.1) Industrials 16 578.7 6,947.3 313.6 548.7 1,031.7 Materials 12 827.6 7,578.4 354.6 529.3 857.5 Other 10 20.5 3,121.7 29.1 129.1 215.0 Real estate 20 536.3 18,532.7 328.3 1,125.8 1,119.6 Technology 33 616.7 16,737.2 383.9 2,217.3 1,389.4 Telecommunications 7 10.4 1,247.6 57.6 (34.3) 88.6 Utilities 11 160.2 5,796.6 202.1 345.9 232.0 United States non-sector 279 30,029.2 417,433.8 9,165.6 13,700.5 25,595.0 Asia Pacific 30 620.5 25,324.3 664.2 2,847.3 1,231.1 Europe 29 334.3 14,941.4 1,264.6 3,143.9 862.7 Israel 1 1.1 130.4 3.0 (16.7) (28.3) Global 59 111.6 15,297.8 170.2 1,783.9 1,282.7 Global (ex-US) 73 1,015.2 73,120.6 1,115.1 4,744.4 4,693.7 Emerging markets 125 5,947.0 155,697.6 3,542.9 (3,121.6) 29,804.2 Broad 38 3,453.1 101,105.9 2,580.6 (5,507.3) 25,512.0 Global emerging markets 16 3,401.5 93,319.8 2,427.3 (4,851.7) 22,214.5 Frontier 1 1.1 187.3 (2.3) (43.2) 186.3 Sector 8 5.8 716.8 37.8 136.0 305.6 Other 13 44.8 6,881.9 117.7 (748.4) 2,805.6 Regional 16 83.9 4,700.1 62.5 (606.8) 283.6 Asia emerging markets 2 5.5 933.1 (1.4) (58.8) 179.1 Eastern Europe 2 9.9 420.4 85.0 135.8 3.7 Middle East and Africa 5 2.2 354.3 - 5.4 100.0 Latin America 7 66.3 2,992.2 (21.1) (689.2) 0.8 Country 71 2,410.0 49,891.6 899.8 2,992.5 4,008.6 Argentina 1 0.1 3.8 - 3.8 - Brazil 10 909.9 14,603.2 17.2 1,159.9 951.2 Chile 1 14.4 927.1 - (61.7) 486.4 China 24 582.5 10,744.9 153.8 (328.4) (1,612.1) Colombia 2 3.0 154.1 9.5 (15.9) 158.2 Egypt 1 1.5 67.6 12.4 63.7 8.8 India 9 89.2 3,273.7 (43.5) (222.0) 1,028.4 Indonesia 2 13.9 718.4 20.1 422.4 600.7 Malaysia 1 17.9 968.1 4.4 (57.2) 225.8 Mexico 3 145.6 1,818.1 152.9 33.8 288.3 Peru 1 29.9 422.6 (84.5) (19.8) 299.8 Philippines 1 1.7 41.8 12.4 23.6 16.0 Poland 2 11.6 343.8 130.3 154.8 132.3 Russia 4 163.3 4,216.8 81.8 1,161.5 960.0 South Africa 1 21.0 661.1 (15.0) (53.9) 35.7 South Korea 3 221.1 5,481.7 234.9 620.0 336.8 Taiwan 2 139.8 3,700.5 43.8 157.6 (648.8) Thailand 1 17.2 700.9 62.8 (51.3) 280.0 Turkey 1 22.8 727.8 85.9 (85.4) 301.5 Vietnam 1 3.5 315.5 20.7 87.0 159.8 continued…71 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 57: United States ETF and ETP net new assets by type of exposure, as at end April 2011 (continued) Apr-11 #ETFs ADV Assets NNA YTD-11 NNA 2010 NNAExposure /ETPs (US$ Mn) (US$ Mn) (US$ Mn) (US$ Mn) (US$ Mn)Fixed income 158 2,086.6 148,764.4 2,890.3 9,919.3 29,424.8 Active 8 25.6 1,292.6 (221.3) 375.3 836.5 Aggregate 5 108.3 20,781.1 60.3 90.3 2,373.6 Convertible 1 14.1 898.0 109.3 328.9 271.7 Corporate 24 188.9 28,625.6 658.3 2,227.2 5,034.3 Emerging markets 5 66.0 4,961.9 593.7 1,014.2 2,172.2 Government 85 1,297.2 39,296.2 621.7 1,132.7 9,096.2 High yield 10 201.6 16,932.1 374.9 2,289.8 5,597.1 Inflation 9 110.8 23,921.3 413.3 1,380.1 860.5 Mortgage 3 17.7 2,756.5 165.4 441.4 506.9 Govt/Corp 8 56.5 9,299.2 114.8 639.4 2,675.8Commodities 147 7,871.5 142,456.7 1,847.1 6,151.3 13,368.9 Broad 24 232.0 16,095.2 289.4 2,121.5 1,068.5 Alternative 1 0.1 4.3 0.5 (0.3) 0.0 Agriculture 28 213.3 10,165.9 (107.4) 3,164.6 344.2 Energy 28 653.9 7,505.1 (959.2) (477.7) (1,136.0) Industrial metals 26 59.0 3,164.3 169.3 1,186.0 422.0 Livestock 3 2.6 113.5 8.4 41.1 (36.4) Precious metals 37 6,710.7 105,408.4 2,446.2 116.0 12,706.6Currency 36 367.7 7,104.3 333.0 956.2 (2,169.7)Alternative 17 535.2 2,561.2 605.8 1,020.4 3,375.0Mixed 31 11.3 1,269.0 42.7 307.0 441.8Total 1,216 57,080.6 1,140,209.3 22,434.6 51,494.8 119,587.7Source: Global ETF Research and Implementation Strategy Team, BlackRock, National Stock Exchange (NSX), Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 72
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 58: United States leveraged and inverse ETF and ETP net new assets by type of exposure, as at end April 2011 Apr-11 #ETFs ADV Assets NNA YTD-11 NNA 2010 NNAExposure /ETPs (US$ Mn) (US$ Mn) (US$ Mn) (US$ Mn) (US$ Mn)Leveraged 95 3,287.4 15,402.5 (779.5) (745.3) (2,990.4) Equity 66 2,411.4 12,209.5 (738.4) (1,013.6) (2,824.3) North America 49 2,319.4 11,469.5 (646.6) (944.5) (2,854.0) Europe 1 0.1 4.5 - 0.0 2.8 Asia Pacific 2 3.5 53.8 (3.9) 34.4 3.0 Global 1 0.4 29.6 7.6 28.6 - Global (ex-US) 3 1.8 57.6 - 10.4 (3.9) Emerging markets 10 86.2 594.5 (95.5) (142.4) 27.7 Fixed income 10 7.0 95.2 11.4 40.8 (8.9) Commodities 9 839.3 2,993.9 (94.2) 121.6 (183.3) Currency 3 0.5 14.0 - (3.2) (1.0) Alternative 2 26.9 65.5 44.4 86.9 27.0 Mixed 5 2.3 24.4 (2.6) 22.2 -Inverse 40 172.9 4,368.9 (92.9) 617.2 1,572.4 Equity 16 108.9 2,638.1 (187.4) 156.2 948.1 North America 13 105.3 2,336.9 (182.2) 138.1 810.1 Global (ex-US) 1 1.8 91.0 3.5 (2.2) 93.5 Emerging markets 2 1.8 210.2 (8.7) 20.3 44.5 Fixed income 11 27.0 1,268.7 124.6 364.4 715.3 Commodities 7 5.0 58.0 (37.8) 9.9 (2.7) Currency 2 7.6 224.4 11.7 6.0 (128.7) Alternative 4 24.4 179.7 (4.0) 80.8 40.4Leveraged inverse 85 2,284.8 15,581.0 811.0 3,141.3 6,407.8 Equity 64 1,583.6 6,680.7 (193.1) 1,000.9 2,910.8 North America 47 1,540.2 6,140.8 (169.4) 931.2 2,621.9 Europe 1 1.4 36.7 2.3 (0.1) 100.6 Asia Pacific 2 3.3 48.1 (6.5) 39.5 (0.5) Global 1 0.2 31.0 1.1 6.6 21.3 Global (ex-US) 3 1.6 28.5 3.5 0.6 31.1 Emerging markets 10 37.0 395.6 (24.2) 23.1 136.4 Fixed income 9 398.8 7,285.7 537.3 1,334.8 2,665.5 Commodities 10 267.0 917.2 476.6 673.8 316.9 Currency 2 35.4 697.5 (9.8) 131.8 514.6Total 220 5,745 35,352.4 -61.4 3,013.1 4,989.8Source: Global ETF Research and Implementation Strategy Team, BlackRock, National Stock Exchange (NSX), Bloomberg.73 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 59: Sector ETF net new assets Index total return ETF NAV ETF AUM ETF short (US$) performance (US$) (US$ Mn) interest ETF Index YTD % (US$ Mn) ETF ADV Apr-11 net flows YTD 2011 net flows 2010 net flowsSector ticker ticker Apr-11 YTD Mar-11 YTD Apr-11 change 15-Apr (US$ Mn) (US$ Mn) (US$ Mn) (US$ Mn)Dow Jones United States sector ETFs 7,434.3 13.6% 191.7 147.4 -18.3 388.1 -112.4iShares Dow Jones U.S. Basic Materials IYM US DJUSBM 8.9% 8.9% 2.8% 8.5% 1,213.9 8.2% 59.6 86.7 -41.8 18.0 85.0iShares Dow Jones U.S. Consumer Goods IYK US DJUSNC 7.9% 7.9% 4.5% 7.1% 332.1 7.1% 12.6 4.2 40.3 7.9 -62.5iShares Dow Jones U.S. Consumer Services IYC US DJUSCY 9.2% 9.2% 4.2% 8.8% 209.6 0.0% 20.2 1.3 -3.5 -17.8 19.3iShares Dow Jones U.S. Energy IYE US DJUSEN 18.6% 18.6% 1.2% 18.1% 1,177.2 46.1% 5.0 10.2 6.8 210.0 -21.1iShares Dow Jones U.S. Financial IYF US DJUSFN 4.1% 4.1% 0.7% 3.7% 544.8 17.1% 26.3 18.7 -11.9 56.4 -54.5iShares Dow Jones U.S. Healthcare IYH US DJUSHC 13.2% 13.2% 6.5% 12.7% 644.3 16.7% 27.7 3.0 3.5 16.4 -70.1iShares Dow Jones U.S. Industrial IYJ US DJUSIN 12.1% 12.1% 2.6% 11.6% 532.5 44.2% 5.3 5.0 -3.3 87.0 16.1iShares Dow Jones U.S. Technology IYW US DJUSTC 6.4% 6.4% 2.8% 6.2% 1,581.8 9.0% 12.0 9.8 -26.4 106.0 -35.7iShares Dow Jones U.S. Telecommunications IYZ US DJSTELT 5.8% 5.8% 2.9% 4.9% 686.8 -9.5% 19.3 6.6 30.0 -91.8 16.3iShares Dow Jones U.S. Utilities IDU US DJUSUT 8.0% 8.0% 3.8% 6.9% 511.0 2.7% 3.8 1.8 -12.0 -3.8 -5.1S&P equal weight sector ETFs 511.5 48.5% 4.6 5.4 22.2 50.9 26.2Rydex S&P Equal Weight Consumer Discretionary RCD US S25 4.4% 9.7% 4.4% 9.7% 25.1 -8.6% 2.3 0.4 0.0 -4.8 5.0Rydex S&P Equal Weight Consumer Staples RHS US S30 5.7% 10.2% 5.8% 10.4% 18.9 32.5% 0.0 0.5 0.0 0.1 2.5Rydex S&P Equal Weight Energy RYE US S10 -0.1% 19.7% -0.1% 19.7% 124.1 464.2% 0.2 1.3 15.0 24.1 0.1Rydex S&P Equal Weight Financial RYF US S40 1.8% 6.2% 1.8% 5.6% 19.1 5.6% 0.2 0.3 -1.4 2.9 1.9Rydex S&P Equal Weight Health Care RYH US S35 5.7% 14.8% 5.7% 14.8% 54.1 7.7% 0.1 0.7 0.0 -3.1 -22.3Rydex S&P Equal Weight Industrial RGI US S20 1.6% 9.4% 1.7% 9.4% 50.3 3.3% 0.1 0.5 0.0 -2.9 21.5Rydex S&P Equal Weight Materials RTM US S15 2.1% 7.8% 2.1% 7.9% 50.9 24.5% 0.0 0.6 0.0 3.2 0.2Rydex S&P Equal Weight Technology RYT US S45 3.0% 9.7% 2.9% 9.4% 144.4 41.1% 1.6 0.9 8.7 28.9 9.9Rydex S&P Equal Weight Utilities RYU US S55 4.2% 7.5% 3.9% 6.8% 24.5 20.2% 0.0 0.2 0.0 2.5 7.4S&P select sector ETFs 47,405.1 18.2% 10,250.0 4,112.6 888.7 2,651.8 4,791.3Consumer Discretionary Select Sector SPDR XLY US IXY 8.9% 8.9% 3.9% 8.4% 2,330.8 -6.0% 1,125.1 248.0 -64.7 -451.6 641.7Consumer Staples Select Sector SPDR XLP US IXR 8.3% 8.3% 5.3% 7.6% 3,956.6 27.5% 514.6 204.2 321.6 230.5 521.7Energy Select Sector SPDR XLE US IXE 18.6% 18.6% 0.9% 18.1% 10,449.2 24.6% 2,980.1 1,259.5 -671.1 845.0 1,392.0Financial Select Sector SPDR XLF US IXM 3.1% 3.1% 0.0% 2.7% 7,966.0 6.6% 1,485.9 827.2 -175.5 -71.1 87.0Health Care Select Sector SPDR XLV US IXV 12.6% 12.6% 6.5% 12.0% 3,361.4 24.2% 993.4 212.0 209.3 205.7 -274.5Industrial Select Sector SPDR XLI US IXI 11.6% 11.6% 2.7% 11.0% 4,524.9 20.8% 1,084.7 533.1 308.0 214.3 1,136.7Materials Select Sector SPDR XLB US IXB 6.7% 6.7% 2.1% 6.3% 2,913.8 12.3% 872.5 443.2 325.3 228.6 499.1Technology Select Sector SPDR XLK US IXT 6.6% 6.6% 2.7% 6.2% 7,573.5 29.5% 600.5 205.8 406.9 1,234.2 730.5Utilities Select Sector SPDR XLU US IXU 6.9% 6.9% 4.0% 5.8% 4,328.9 15.2% 593.3 179.7 228.9 216.3 57.2Note: Index returns are for illustrative purposes only and do not represent actual fund performance. Index performance returns do not reflect any management fees, transaction costs or expenses. Indices are unmanaged and one cannot invest directly in an index.Past performance does not guarantee future results. ADV – Average Daily Volume, AUM – Assets Under Management, NNA – Net New Assets. Data as at end April 2011.Source: Global ETF Research and Implementation Strategy Team, BlackRock, National Stock Exchange (NSX), Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 74
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 59: Sector ETF net new assets (continued) Index total return ETF NAV ETF AUM ETF short (US$) performance (US$) (US$ Mn) interest ETF Index YTD % (US$ Mn) ETF ADV Apr-11 net flows YTD 2011 net flows 2010 net flowsSector ticker ticker Apr-11 YTD Mar-11 YTD Apr-11 change 15-Apr (US$ Mn) (US$ Mn) (US$ Mn) (US$ Mn)MSCI United States investable market sector ETFs 9,063.9 26.0% 64.1 57.7 201.1 1,669.3 2,588.0Vanguard Consumer Discretionary VCR US MZUSI0CD 8.4% 8.4% 3.9% 8.7% 387.5 8.7% 0.5 2.6 -12.7 -0.6 97.7Vanguard Consumer Staples VDC US MZUSI0CS 7.5% 7.5% 5.2% 8.5% 676.0 11.1% 6.7 4.4 23.1 22.7 -32.3Vanguard Energy VDE US MSCIEN 17.9% 17.9% 1.1% 18.4% 2,223.8 44.5% 11.2 18.3 1.4 347.2 274.2Vanguard Financials VFH US MZUSI0FN 3.5% 3.5% 0.7% 3.9% 680.7 18.1% 2.7 3.2 0.0 71.1 13.4Vanguard Health Care VHT US MZUSI0HC 13.0% 13.0% 6.5% 13.6% 723.1 18.8% 1.5 4.6 12.8 41.7 -9.4Vanguard Industrials VIS US MSCIIN 11.0% 11.0% 2.5% 11.4% 591.9 34.4% 11.2 3.9 7.2 96.1 27.8Vanguard Information Technology VGT US MZUSI0IT 7.3% 7.3% 3.0% 7.4% 1,918.2 28.8% 6.0 9.4 32.2 280.1 361.8Vanguard Materials VAW US MZUSI0MT 8.1% 8.1% 2.5% 8.6% 756.7 23.2% 18.9 5.9 26.7 85.9 32.0Vanguard Telecommunication Services VOX US MSCITC 4.2% 4.2% 2.3% 6.7% 392.4 24.5% 4.4 3.3 27.5 35.7 73.2Vanguard Utilities VPU US MZUSI0UT 6.7% 6.7% 3.8% 7.0% 713.6 10.3% 1.1 2.2 0.0 13.7 169.3Vanguard REIT VNQ US RMZ 12.6% 12.6% 5.7% 11.8% 9,277.4 23.7% 138.1 99.4 82.8 675.6 1,580.4S&P global sector ETFs 5,330.5 11.6% 15.6 31.7 29.0 166.2 -25.9iShares S&P Global Consumer Discretionary RXI US SGD 8.1% 8.1% 5.0% 7.5% 154.7 18.4% 0.1 1.2 10.9 8.2 25.5iShares S&P Global Consumers Staples KXI US SGCS 8.7% 8.7% 6.8% 8.3% 344.5 5.2% 0.5 2.4 9.7 -2.6 -15.4iShares S&P Global Energy IXC US SGES 16.8% 16.8% 2.2% 16.3% 1,541.3 17.4% 3.2 9.3 -6.5 79.6 112.9iShares S&P Global Financials IXG US SGFS 8.3% 8.3% 3.2% 8.0% 298.3 3.6% 0.4 1.9 -7.4 -7.2 -44.1iShares S&P Global Healthcare IXJ US SGH 12.9% 12.9% 7.6% 12.4% 518.8 8.8% 1.4 3.2 2.7 -15.9 -46.3iShares S&P Global Industrials EXI US SGN 11.5% 11.5% 3.7% 11.1% 259.8 30.6% 1.0 1.4 11.6 36.8 10.1iShares S&P Global Materials MXI US SGM 7.1% 7.1% 4.5% 6.4% 877.9 12.9% 5.3 6.0 7.8 44.7 -252.1iShares S&P Global Technology IXN US SGI 5.3% 5.3% 3.0% 4.9% 627.5 4.4% 0.4 2.7 0.0 17.2 98.1iShares S&P Global Telecommunications IXP US SGT 9.7% 9.7% 3.0% 9.2% 440.8 7.7% 2.8 2.5 0.0 2.8 67.0iShares S&P Global Utilities JXI US SGU 7.2% 7.2% 5.0% 6.6% 266.9 5.6% 0.5 1.3 0.0 2.6 18.4MSCI ACWI ex. United States sector ETFs 52.2 1.6% 0.3 2.1 -3.0 -3.0 43.1iShares MSCI ACWI ex US Consumer Discretionary AXDI US MSWDUCDN 6.9% 6.8% 6.7% 5.6% 6.8 5.6% 0.0 0.2 0.0 0.0 5.3iShares MSCI ACWI ex US Consumer Staples AXSL US MSWDUCSN 7.8% 7.9% 8.0% 8.1% 3.3 8.1% 0.0 0.1 0.0 0.0 2.4iShares MSCI ACWI ex US Energy AXEN US MSWDUENN 2.2% 13.7% 2.2% 13.3% 7.0 13.3% 0.1 0.1 0.0 0.0 5.1iShares MSCI ACWI ex US Health Care AXHE US MSWDUHCN 7.9% 10.3% 7.9% 10.8% 3.1 -44.6% 0.0 0.2 -3.0 -3.0 5.0iShares MSCI ACWI ex US Industrials AXID US MSWDUINN 4.5% 9.0% 4.3% 8.4% 6.6 8.4% 0.0 0.6 0.0 0.0 5.0iShares MSCI ACWI ex US Information Technology AXIT US MSWDUITN 3.6% 2.3% 3.4% 1.5% 6.1 1.5% 0.1 0.1 0.0 0.0 5.1iShares MSCI ACWI ex US Materials AXMT US MSWDUMTN 4.8% 6.7% 4.6% 5.7% 7.2 5.7% 0.1 0.5 0.0 0.0 5.1iShares MSCI ACWI ex US Telecommunication Services AXTE US MSWDUTCN 4.0% 10.6% 4.0% 10.5% 6.3 10.5% 0.0 0.2 0.0 0.0 5.1iShares MSCI ACWI ex US Utilities AXUT US MSWDUUTN 4.4% 4.8% 4.7% 5.3% 5.7 5.3% 0.0 0.1 0.0 0.0 5.0Note: Index returns are for illustrative purposes only and do not represent actual fund performance. Index performance returns do not reflect any management fees, transaction costs or expenses. Indices are unmanaged and one cannot invest directly in an index.Past performance does not guarantee future results. ADV – Average Daily Volume, AUM – Assets Under Management, NNA – Net New Assets. Data as at end April 2011.Source: Global ETF Research and Implementation Strategy Team, BlackRock, National Stock Exchange (NSX), Bloomberg.75 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 60: Top five United States ETF providers by average daily turnover, as at end April 2011 Average daily turnover (US$ Mn) % market % market Change % Provider Dec-10 share Apr-11 share (US$ Mn) change State Street Global Advisors 48.7% SSgA $18,614.3 45.3% $23,320.5 48.7% $4,706.2 25.3% iShares 28.9% iShares $12,338.9 30.0% $13,836.5 28.9% $1,497.6 12.1% PowerShares 6% PowerShares $2,400.9 5.8% $2,884.4 6.0% $483.6 20.1% ProShares 5.4% ProShares $2,660.7 6.5% $2,564.4 5.4% -$96.3 -3.6% Direxion Shares 4.1% Direxion Shares $1,860.7 4.5% $1,962.5 4.1% -$698.2 5.5% Others 7% Others $3,201.3 7.8% $3,364.1 7.0% $162.8 5.1% Total $41,076.8 100.0% $47,932.4 100.0% $6,855.6 16.7%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 61: ETF/ETP providers in the United States ranked by assets, as at end April 2011 Apr-11 Apr-11 YTD-11 YTD change # ETFs/ Assets % ADV # NNA NNA # ETFs/ % ETFs/ Assets % % marketProvider # ETPs (US$ Bn) total (US$ Bn) planned (US$ Bn) (US$ Bn) ETPs ETPs (US$ Bn) assets shareiShares 222 $498.1 43.7% $16.9 16 $8.9 $13.7 2 0.9% $48.6 10.8% -0.7%State Street Global Advisors 100 $257.4 22.6% $25.3 28 $4.9 $2.1 7 7.5% $22.1 9.4% -0.7%Vanguard 64 $172.9 15.2% $1.5 1 $2.8 $13.2 1 1.6% $24.6 16.6% 0.5%PowerShares 112 $49.2 4.3% $2.9 47 $2.5 $4.5 1 0.9% $7.6 18.4% 0.2%ProShares 121 $26.7 2.3% $3.6 131 $0.4 $2.9 9 8.0% $3.1 13.2% 0.0%Van Eck Associates Corp 33 $23.2 2.0% $0.9 36 $0.8 $3.1 4 13.8% $3.3 16.3% 0.1%Deutsche Bank 42 $16.2 1.4% $0.3 5 $0.4 $2.2 6 16.7% $3.7 29.5% 0.2%WisdomTree Investments 46 $12.2 1.1% $0.2 71 $0.5 $1.7 2 4.5% $2.3 23.0% 0.1%Bank of New York 1 $12.1 1.1% $0.5 0 $0.3 -$1.4 0 0.0% -$0.1 -0.9% -0.1%Barclays (iPath) 70 $9.9 0.9% $0.6 28 $0.5 $2.0 20 40.0% $1.5 17.1% 0.0%Rydex SGI 34 $8.8 0.8% $0.3 108 $0.5 $0.6 1 3.0% $1.3 17.8% 0.0%First Trust Advisors 57 $8.0 0.7% $0.1 4 $0.5 $1.9 14 32.6% $2.6 47.6% 0.2%Direxion Shares 42 $6.5 0.6% $2.0 174 -$0.6 -$0.3 3 7.7% -$0.1 -1.2% -0.1%Merrill Lynch 17 $5.4 0.5% $1.1 0 -$0.1 $0.2 0 0.0% $0.7 14.0% 0.0%United States Commodity Funds 9 $4.9 0.4% $0.6 4 -$0.8 -$0.5 0 0.0% -$0.1 -1.6% -0.1%ETF Securities 7 $4.5 0.4% $0.1 24 $0.2 $0.4 1 16.7% $1.0 27.0% 0.0%Charles Schwab Investment Management 13 $4.2 0.4% $0.0 1 $0.3 $1.2 2 18.2% $1.5 55.6% 0.1%Guggenheim Funds 42 $4.0 0.4% $0.0 29 $0.1 $0.3 4 10.5% $0.5 13.0% 0.0%JPMorgan Chase 4 $2.9 0.3% $0.0 1 $0.2 $0.4 0 0.0% $0.6 25.2% 0.0%PIMCO 13 $2.7 0.2% $0.0 8 -$0.3 $0.5 0 0.0% $0.5 24.6% 0.0%Swedish Export Credit Corp 7 $1.9 0.2% $0.0 0 $0.0 $0.5 0 0.0% $0.6 43.7% 0.0%Global X Funds 27 $1.8 0.2% $0.1 33 $0.1 $0.5 10 58.8% $0.5 37.8% 0.0%ALPS ETF Trust 3 $1.2 0.1% $0.0 7 $0.1 $0.4 0 0.0% $0.5 67.6% 0.0%GreenHaven Commodity Services 1 $0.9 0.1% $0.0 0 $0.0 $0.3 0 0.0% $0.3 62.1% 0.0%UBS AG 19 $0.8 0.1% $0.0 0 $0.0 $0.1 1 5.6% $0.1 20.8% 0.0%RevenueShares 6 $0.6 0.1% $0.0 8 $0.0 $0.0 0 0.0% $0.1 16.4% 0.0%Emerging Global Advisors 9 $0.6 0.0% $0.0 26 $0.0 $0.1 0 0.0% $0.1 29.4% 0.0%IndexIQ Advisors 10 $0.5 0.0% $0.0 34 $0.0 $0.2 1 11.1% $0.2 69.9% 0.0%AdvisorShares 6 $0.3 0.0% $0.0 9 $0.0 $0.1 1 20.0% $0.1 86.8% 0.0%Credit Suisse 5 $0.3 0.0% $0.0 0 $0.0 $0.1 1 25.0% $0.1 36.0% 0.0%Jefferies Asset Management 4 $0.2 0.0% $0.0 4 $0.0 $0.1 0 0.0% $0.1 59.8% 0.0%Fidelity Management & Research 1 $0.2 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 22.5% 0.0%VelocityShares 6 $0.2 0.0% $0.0 0 $0.0 $0.1 0 0.0% $0.1 297.8% 0.0%Morgan Stanley 5 $0.2 0.0% $0.0 0 $0.0 $0.0 1 25.0% $0.1 43.6% 0.0%DBX Strategic Advisors 5 $0.1 0.0% $0.0 39 $0.0 $0.0 0 0.0% $0.0 4.8% 0.0%Teucrium Trading 3 $0.1 0.0% $0.0 4 $0.0 $0.1 2 200.0% $0.1 177.4% 0.0%Barclays Capital 9 $0.1 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 87.8% 0.0%Goldman Sachs 2 $0.1 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 18.9% 0.0% continued…This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 76
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 61: ETF/ETP providers in the United States ranked by assets, as at end April 2011 (continued) Apr-11 Apr-11 YTD-11 YTD change # ETFs/ Assets % ADV # NNA NNA # ETFs/ % ETFs/ Assets % % marketProvider # ETPs (US$ Bn) total (US$ Bn) planned (US$ Bn) (US$ Bn) ETPs ETPs (US$ Bn) assets shareFocusShares 15 $0.1 0.0% $0.0 6 $0.0 $0.1 15 100.0% $0.1 100.0% 0.0%RBS 3 $0.1 0.0% $0.0 0 $0.0 $0.1 2 200.0% $0.1 100.0% 0.0%HSBC/Hang Seng 1 $0.0 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 -35.4% 0.0%Grail Advisors 5 $0.0 0.0% $0.0 3 $0.0 $0.0 0 0.0% $0.0 46.4% 0.0%FactorShares 5 $0.0 0.0% $0.0 22 $0.0 $0.0 5 100.0% $0.0 100.0% 0.0%Javelin Investment Management 1 $0.0 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 27.6% 0.0%Russell Investments 1 $0.0 0.0% $0.0 43 $0.0 $0.0 0 0.0% $0.0 39.0% 0.0%FaithShares 5 $0.0 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 -5.7% 0.0%Citigroup 1 $0.0 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 -27.6% 0.0%Pax World Management 2 $0.0 0.0% $0.0 1 $0.0 $0.0 1 100.0% $0.0 103.5% 0.0%AllianceBernstein - - - - 1 - - - - - - -Arrow Investment Advisors - - - - 2 - - - - - - -Dreyfus Corp - - - - 1 - - - - - - -Eaton Vance - - - - 5 - - - - - - -Exchange Traded Spreads Trust - - - - 5 - - - - - - -Firsthand Capital - - - - 1 - - - - - - -Florentez Investment - - - - 1 - - - - - - -Georgetown Investment Management - - - - 5 - - - - - - -Hartford - - - - 1 - - - - - - -Huntington Asset Advisors - - - - 3 - - - - - - -Janus Capital Management - - - - 1 - - - - - - -John Hancock - - - - 1 - - - - - - -JP Morgan Asset Management - - - - 2 - - - - - - -Legg Mason - - - - 1 - - - - - - -Macro Securities Depositor - - - - 2 - - - - - - -Millington Securities - - - - 1 - - - - - - -Neuberger Berman - - - - 1 - - - - - - -Next Investments - - - - 2 - - - - - - -Northern Trust - - - - 2 - - - - - - -OppenheimerFunds - - - - 1 - - - - - - -QuantShares - - - - 7 - - - - - - -RiverPark Advisors - - - - 4 - - - - - - -ShariahShares - - - - 2 - - - - - - -T Rowe Price - - - - 1 - - - - - - -WealthNotes Capital Management - - - - 1 - - - - - - -Total 1,216 $1,140.2 100.0% $57.1 1009 $22.4 $51.5 117 10.6% $128.3 12.7%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).77 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 62: ETF providers in the United States ranked by AUM, as at end April 2011 Apr-11 Apr-11 YTD-11 YTD change # AUM % ADV # NNA NNA # % AUM % % marketProvider ETFs (US$ Bn) total (US$ Bn) planned (US$ Bn) (US$ Bn) ETFs ETFs (US$ Bn) AUM share iShares 218 $472.2 47.3% $13.8 14 $8.7 $12.7 2 0.9% $40.8 9.5% -1.1% State Street Global Advisors 99 $195.6 19.6% $23.3 28 $4.0 $4.2 7 7.6% $18.8 10.6% -0.2% Vanguard 64 $172.9 17.3% $1.5 1 $2.8 $13.2 1 1.6% $24.6 16.6% 0.7% PowerShares 112 $49.2 4.9% $2.9 47 $2.5 $4.5 1 0.9% $7.6 18.4% 0.3% Van Eck Associates Corp 33 $23.2 2.3% $0.9 36 $0.8 $3.1 4 13.8% $3.3 16.3% 0.1% ProShares 107 $23.2 2.3% $2.6 93 $0.1 $2.0 7 7.0% $1.6 7.3% -0.1% WisdomTree Investments 46 $12.2 1.2% $0.2 71 $0.5 $1.7 2 4.5% $2.3 23.0% 0.1% Bank of New York 1 $12.1 1.2% $0.5 0 $0.3 -$1.4 0 0.0% -$0.1 -0.9% -0.2% First Trust Advisors 57 $8.0 0.8% $0.1 4 $0.5 $1.9 14 32.6% $2.6 47.6% 0.2% Direxion Shares 42 $6.5 0.7% $2.0 174 -$0.6 -$0.3 3 7.7% -$0.1 -1.2% -0.1% Rydex SGI 25 $5.6 0.6% $0.1 95 $0.3 $0.1 1 4.2% $0.6 12.6% 0.0% Charles Schwab Investment Management 13 $4.2 0.4% $0.0 1 $0.3 $1.2 2 18.2% $1.5 55.6% 0.1% Guggenheim Funds 42 $4.0 0.4% $0.0 29 $0.1 $0.3 4 10.5% $0.5 13.0% 0.0% PIMCO 13 $2.7 0.3% $0.0 8 -$0.3 $0.5 0 0.0% $0.5 24.6% 0.0% Global X Funds 27 $1.8 0.2% $0.1 33 $0.1 $0.5 10 58.8% $0.5 37.8% 0.0% ALPS ETF Trust 3 $1.2 0.1% $0.0 7 $0.1 $0.4 0 0.0% $0.5 67.6% 0.0% RevenueShares 6 $0.6 0.1% $0.0 8 $0.0 $0.0 0 0.0% $0.1 16.4% 0.0% Emerging Global Advisors 9 $0.6 0.1% $0.0 26 $0.0 $0.1 0 0.0% $0.1 29.4% 0.0% IndexIQ Advisors 10 $0.5 0.1% $0.0 34 $0.0 $0.2 1 11.1% $0.2 69.9% 0.0% AdvisorShares 6 $0.3 0.0% $0.0 9 $0.0 $0.1 1 20.0% $0.1 86.8% 0.0% Jefferies Asset Management 4 $0.2 0.0% $0.0 2 $0.0 $0.1 0 0.0% $0.1 59.8% 0.0% Fidelity Management & Research 1 $0.2 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 22.5% 0.0% DBX Strategic Advisors 5 $0.1 0.0% $0.0 39 $0.0 $0.0 0 0.0% $0.0 4.8% 0.0% FocusShares 15 $0.1 0.0% $0.0 6 $0.0 $0.1 15 100.0% $0.1 100.0% 0.0% Grail Advisors 5 $0.0 0.0% $0.0 3 $0.0 $0.0 0 0.0% $0.0 46.4% 0.0% Javelin Investment Management 1 $0.0 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 27.6% 0.0% Russell Investments 1 $0.0 0.0% $0.0 43 $0.0 $0.0 0 0.0% $0.0 39.0% 0.0% FaithShares 5 $0.0 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 -5.7% 0.0% Pax World Management 2 $0.0 0.0% $0.0 1 $0.0 $0.0 1 100.0% $0.0 103.5% 0.0% AllianceBernstein - - - - 1 - - - - - - - Arrow Investment Advisors - - - - 1 - - - - - - - Dreyfus Corp - - - - 1 - - - - - - - Eaton Vance - - - - 5 - - - - - - - Exchange Traded Spreads Trust - - - - 5 - - - - - - - FactorShares - - - - 22 - - - - - - - Firsthand Capital - - - - 1 - - - - - - - Florentez Investment - - - - 1 - - - - - - - Georgetown Investment Management - - - - 5 - - - - - - - Hartford - - - - 1 - - - - - - - Huntington Asset Advisors - - - - 3 - - - - - - - Janus Capital Management - - - - 1 - - - - - - - John Hancock - - - - 1 - - - - - - - JP Morgan Asset Management - - - - 2 - - - - - - - Legg Mason - - - - 1 - - - - - - - Macro Securities Depositor - - - - 2 - - - - - - - Millington Securities - - - - 1 - - - - - - - Neuberger Berman - - - - 1 - - - - - - - Next Investments - - - - 2 - - - - - - - Northern Trust - - - - 2 - - - - - - - OppenheimerFunds - - - - 1 - - - - - - - QuantShares - - - - 7 - - - - - - - RiverPark Advisors - - - - 4 - - - - - - - ShariahShares - - - - 2 - - - - - - - T Rowe Price - - - - 1 - - - - - - - Total 972 $997.3 100.0% $47.9 886 $20.4 $45.5 76 8.5% $106.2 11.9%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 78
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 63: ETP providers in the United States ranked by assets, as at end April 2011 Apr-11 Apr-11 YTD-11 YTD change # Assets % ADV # NNA NNA # % Assets % % marketProvider ETFs (US$ Bn) total (US$ Bn) planned (US$ Bn) (US$ Bn) ETFs ETFs (US$ Bn) AUM share State Street Global Advisors 1 $61.8 43.2% $2.0 0 $0.9 -$2.1 0 0.0% $3.3 5.6% -5.2% iShares 4 $25.9 18.1% $3.0 2 $0.2 $0.9 0 0.0% $7.8 42.9% 3.1% Deutsche Bank 42 $16.2 11.3% $0.3 5 $0.4 $2.2 6 16.7% $3.7 29.5% 1.0% Barclays (iPath) 70 $9.9 7.0% $0.6 28 $0.5 $2.0 20 40.0% $1.5 17.1% -0.1% Merrill Lynch 17 $5.4 3.8% $1.1 0 -$0.1 $0.2 0 0.0% $0.7 14.0% -0.1% United States Commodity Funds 9 $4.9 3.4% $0.6 4 -$0.8 -$0.5 0 0.0% -$0.1 -1.6% -0.7% ETF Securities 7 $4.5 3.2% $0.1 24 $0.2 $0.4 1 16.7% $1.0 27.0% 0.2% ProShares 14 $3.6 2.5% $1.1 38 $0.3 $0.8 2 16.7% $1.5 75.6% 0.8% Rydex SGI 9 $3.2 2.2% $0.2 13 $0.3 $0.5 0 0.0% $0.7 28.3% 0.2% JPMorgan Chase 4 $2.9 2.0% $0.0 1 $0.2 $0.4 0 0.0% $0.6 25.2% 0.1% Swedish Export Credit Corp 7 $1.9 1.3% $0.0 0 $0.0 $0.5 0 0.0% $0.6 43.7% 0.2% GreenHaven Commodity Services 1 $0.9 0.6% $0.0 0 $0.0 $0.3 0 0.0% $0.3 62.1% 0.2% UBS AG 19 $0.8 0.5% $0.0 0 $0.0 $0.1 1 5.6% $0.1 20.8% 0.0% Credit Suisse 5 $0.3 0.2% $0.0 0 $0.0 $0.1 1 25.0% $0.1 36.0% 0.0% VelocityShares 6 $0.2 0.1% $0.0 0 $0.0 $0.1 0 0.0% $0.1 297.8% 0.1% Morgan Stanley 5 $0.2 0.1% $0.0 0 $0.0 $0.0 1 25.0% $0.1 43.6% 0.0% Teucrium Trading 3 $0.1 0.1% $0.0 4 $0.0 $0.1 2 200.0% $0.1 177.4% 0.0% Barclays Capital 9 $0.1 0.1% $0.0 0 $0.0 $0.0 0 0.0% $0.0 87.8% 0.0% Goldman Sachs 2 $0.1 0.1% $0.0 0 $0.0 $0.0 0 0.0% $0.0 18.9% 0.0% RBS 3 $0.1 0.0% $0.0 0 $0.0 $0.1 2 200.0% $0.1 1625.3% 0.0% HSBC/Hang Seng 1 $0.0 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 -35.4% 0.0% FactorShares 5 $0.0 0.0% $0.0 0 $0.0 $0.0 5 100.0% $0.0 100.0% 0.0% Citigroup 1 $0.0 0.0% $0.0 0 $0.0 $0.0 0 0.0% $0.0 -27.6% 0.0% Arrow Investment Advisors - - - - 1 - - - - - - - Jefferies Asset Management - - - - 2 - - - - - - - WealthNotes Capital Management - - - - 1 - - - - - - - Total 244 $142.9 100.0% $9.1 123 $2.1 $6.0 41 20.2% $22.1 18.3%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.79 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 64: Top 20 ETFs in the United States by AUM, as at end April 2011 AUM ADV ADV ETF Ticker (US$ Mn) (‘000 shares) (US$ Mn) SPDR S&P 500 SPY US $95,287.1 131,642 $17,532.1 Vanguard MSCI Emerging Markets ETF VWO US $49,449.5 15,088 $752.5 iShares MSCI Emerging Markets Index Fund EEM US $41,760.0 51,364 $2,536.2 iShares MSCI EAFE Index Fund EFA US $41,350.5 12,886 $791.2 iShares S&P 500 Index Fund IVV US $29,024.4 2,830 $384.5 PowerShares QQQ Trust QQQ US $27,244.7 47,605 $2,748.6 iShares Barclays TIPS Bond Fund TIP US $20,475.7 673 $73.9 Vanguard Total Stock Market ETF VTI US $20,237.9 1,292 $89.1 iShares Russell 2000 Index Fund IWM US $19,144.0 46,905 $3,946.7 iShares Russell 1000 Growth Index Fund IWF US $13,859.9 1,748 $106.2 iShares iBoxx $ Investment Grade Corporate LQD US $13,433.2 815 $88.8 iShares MSCI Brazil Index Fund EWZ US $13,348.4 11,481 $893.0 S&P 400 MidCap SPDR MDY US $12,097.4 2,686 $481.6 iShares Russell 1000 Value Index Fund IWD US $12,096.3 1,165 $80.4 iShares S&P MidCap 400 Index Fund IJH US $12,019.8 866 $85.7 iShares Barclays Aggregate Bond Fund AGG US $10,986.7 542 $57.1 Energy Select Sector SPDR Fund XLE US $10,448.1 15,351 $1,198.0 SPDR Dow Jones Industrial Average ETF DIA US $10,370.3 5,928 $736.6 Vanguard Total Bond Market ETF BND US $9,553.3 618 $49.6 Vanguard REIT ETF VNQ US $9,274.4 1,606 $95.1Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 65: Top 20 ETFs in the United States by average daily US dollar trading volume, as at end April 2011 ADV ADV AUM ETF Ticker (US$ Mn) (‘000 shares) (US$ Mn) SPDR S&P 500 SPY US $17,532.1 131,642 $95,287.1 iShares Russell 2000 Index Fund IWM US $3,946.7 46,905 $19,144.0 PowerShares QQQ Trust QQQ US $2,748.6 47,605 $27,244.7 iShares MSCI Emerging Markets Index Fund EEM US $2,536.2 51,364 $41,760.0 Energy Select Sector SPDR Fund XLE US $1,198.0 15,351 $10,448.1 iShares MSCI Brazil Index Fund EWZ US $893.0 11,481 $13,348.4 iShares MSCI EAFE Index Fund EFA US $791.2 12,886 $41,350.5 Vanguard MSCI Emerging Markets ETF VWO US $752.5 15,088 $49,449.5 SPDR Dow Jones Industrial Average ETF DIA US $736.6 5,928 $10,370.3 Financial Select Sector SPDR Fund XLF US $686.1 42,119 $7,965.5 iShares Barclays 20+ Year Treasury Bond TLT US $626.2 6,774 $2,187.6 iShares FTSE China 25 Index Fund FXI US $543.5 11,905 $8,219.2 Market Vectors Gold Miners GDX US $511.3 8,295 $7,221.6 ProShares Ultra S&P500 SSO US $509.3 9,523 $1,820.9 Direxion Daily Small Cap Bull 3x Shares TNA US $492.7 5,655 $710.5 Industrial Select Sector SPDR Fund XLI US $482.9 12,838 $4,525.0 S&P 400 MidCap SPDR MDY US $481.6 2,686 $12,097.4 Materials Select Sector SPDR Trust XLB US $416.8 10,431 $2,915.0 SPDR S&P Retail ETF XRT US $403.6 7,727 $618.4 Direxion Daily Financial Bull 3x Shares FAS US $401.1 13,373 $1,682.7Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 80
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 66: Top 20 ETFs in the United States with largest change in AUM, as at end April 2011 AUM AUM YTD-11 NNA (US$ Mn) (US$ Mn) Change ETF Ticker (US$ Mn) Apr-11 Dec-10 (US$ Mn) iShares MSCI Emerging Markets EEM US -$7,447.0 $41,760.0 $47,551.5 -$5,791.5 SPDR S&P 500 SPY US -$2,210.0 $95,287.1 $89,915.3 $5,371.8 PowerShares QQQ Trust QQQ US $3,249.4 $27,244.7 $22,069.9 $5,174.8 Vanguard MSCI Emerging Markets ETF VWO US $2,519.4 $49,449.5 $44,569.8 $4,879.7 iShares MSCI EAFE Index Fund EFA US $1,001.2 $41,350.5 $36,923.1 $4,427.4 iShares S&P 500 Index Fund IVV US $1,016.5 $29,024.4 $25,799.2 $3,225.2 iShares MSCI Japan Index Fund EWJ US $2,887.2 $7,625.8 $4,883.3 $2,742.5 iShares S&P MidCap 400 Index Fund IJH US $1,500.9 $12,019.8 $9,332.0 $2,687.8 iShares MSCI Germany Index Fund EWG US $1,774.0 $4,222.0 $1,881.7 $2,340.3 Energy Select Sector SPDR Fund XLE US $585.9 $10,448.1 $8,396.4 $2,051.7 Vanguard Total Stock Market ETF VTI US $385.6 $20,237.9 $18,236.0 $2,001.9 iShares MSCI Canada Index Fund EWC US $1,512.1 $6,591.7 $4,622.1 $1,969.6 Vanguard REIT ETF VNQ US $825.2 $9,274.4 $7,503.7 $1,770.8 Technology Select Sector SPDR Fund XLK US $1,318.3 $7,570.3 $5,849.3 $1,721.0 Vanguard Dividend Appreciation ETF VIG US $1,202.0 $6,308.9 $4,608.9 $1,700.1 iShares Russell 2000 Index Fund IWM US $70.4 $19,144.0 $17,498.4 $1,645.6 Vanguard Europe Pacific ETF VEA US $1,067.5 $6,946.5 $5,304.0 $1,642.5 SPDR Dow Jones Industrial Average ETF DIA US $641.4 $10,370.3 $8,729.2 $1,641.1 iShares iBoxx $ High Yield Corporate Bond HYG US $1,328.4 $8,941.5 $7,376.7 $1,564.8 iShares Russell 1000 Value Index Fund IWD US $443.3 $12,096.3 $10,697.1 $1,399.2Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).Figure 67: Top 20 ETFs in the United States with largest net inflows, as at end April 2011 AUM ADV YTD-11 NNA (US$ Mn) (US$ Mn) ETF Ticker (US$ Mn) Apr-11 Apr-11 PowerShares QQQ Trust QQQ US $3,249.4 $27,244.7 $2,748.6 iShares MSCI Japan Index Fund EWJ US $2,887.2 $7,625.8 $296.1 Vanguard MSCI Emerging Markets ETF VWO US $2,519.4 $49,449.5 $752.5 iShares MSCI Germany Index Fund EWG US $1,774.0 $4,222.0 $152.8 iShares MSCI Canada Index Fund EWC US $1,512.1 $6,591.7 $101.7 iShares S&P MidCap 400 Index Fund IJH US $1,500.9 $12,019.8 $85.7 iShares iBoxx $ High Yield Corporate Bond HYG US $1,328.4 $8,941.5 $92.9 Technology Select Sector SPDR Fund XLK US $1,318.3 $7,570.3 $187.3 iShares MSCI Brazil Index Fund EWZ US $1,222.8 $13,348.4 $893.0 Vanguard Dividend Appreciation ETF VIG US $1,202.0 $6,308.9 $24.7 iShares S&P US Preferred Stock Index Fund PFF US $1,155.4 $7,497.2 $47.3 Market Vectors Agribusiness ETF MOO US $1,072.8 $3,899.9 $50.9 Vanguard Europe Pacific ETF VEA US $1,067.5 $6,946.5 $100.2 Market Vectors Russia ETF RSX US $1,055.0 $3,948.2 $157.0 iShares S&P 500 Index Fund IVV US $1,016.5 $29,024.4 $384.5 iShares MSCI EAFE Index Fund EFA US $1,001.2 $41,350.5 $791.2 ProShares UltraShort 20+ Year Treasury TBT US $997.6 $6,157.6 $356.0 Vanguard S&P 500 ETF VOO US $913.2 $1,230.5 $10.7 SPDR Barclays Capital High Yield Bond ETF JNK US $827.0 $7,391.6 $102.8 Vanguard REIT ETF VNQ US $825.2 $9,274.4 $95.1Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).81 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 68: United States mutual fund industry, as at end February 2011 Assets US$ Bn # mutual funds 14,000 10,000 12,000 8,000 10,000 6,000 8,000 6,000 4,000 4,000 2,000 2,000 0 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Mar-11 Assets (US$ Bn) 4,468 5,525 6,846 6,965 6,975 6,391 7,414 8,107 8,905 10,413 12,020 9,602 1,120 11,817 12,171 # funds 6,684 7,314 7,791 8,156 8,307 8,250 8,126 8,042 7,975 8,117 8,119 8,020 7,689 7,579 7,599Source: Investment Company Institute (ICI).In the United States, Bank of New York, DBX Strategic Advisors, Section 12(d)(1) of the Investment Company Act of 1940 prohibitsGuggenheim Funds, Emerging Global Advisors, Global X Funds, an investment company from 1) acquiring more than 3% of the totaliShares, PowerShares, ProShares, Rydex, State Street Global outstanding voting securities of another investment company,Advisors, Van Eck Associates Corp, Vanguard and WisdomTree 2) investing more than 5% of its total assets in a single investmentInvestments are among the ETF providers who have been granted company, and 3) investing more than 10% of its total assets in twothe exemptive order from the United States SEC permitting mutual or more investment companies.funds to invest in their ETFs in excess of the limits of sections12(d)(1). The combined assets of the nation’s 7,599 mutual funds increased by US$350 Bn in 2011 YTD (3.0%) to US$12.2 trillion, according to the Investment Company Institute’s official survey of the mutual fund industry.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 82
  • ETF Landscape End April 2011 Industry Review from BlackRockIn the United States, according to data from Strategic Insight, open-end mutual funds (excluding ETFs) have seen US$3.3 Bn net inflowsYTD to March 2011. Domestic equity funds were the most popular with US$35.0 Bn net inflows, followed by international equity withUS$29.6 Bn net inflows, while the least popular were money market funds which experienced net outflows of US$81.0 Bn.Figure 69: United States mutual fund flows (excluding ETFs) Net new flows US$ bn 1,000 800 600 400 200 0 -200 -400 -600 YTD Exposure (US$ Bn) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Mar-11 Domestic equity 208.4 78.1 14.8 137.7 132.2 53.4 3.5 -37.6 -135.9 -27.1 -52.0 35.0 International equity 46.4 -16.7 6.2 37.9 90.0 128.0 162.8 161.6 -57.1 40.7 71.1 29.6 Bond -47.0 78.6 132.1 36.1 -8.0 28.1 58.2 97.7 22.2 348.0 219.9 19.7 Money market 170.6 397.3 -13.0 -222.1 -137.1 63.1 228.6 653.2 594.6 -505.9 -509.4 -81.0 Total 378.4 537.4 140.1 -10.3 77.2 272.6 453.1 874.8 423.8 -144.3 -270.3 3.3Note: Includes United States registered open-end funds (excluding ETFs, ETNs and variable annuities).Source: Strategic Insight Simfund MF.In the United States, ETFs have seen US$26.2 Bn net new inflows YTD to March 2011, according to data from Strategic Insight. Domesticequity funds were the most popular with US$14.2 Bn net inflows, followed by bond funds with US$6.9 Bn net inflows.Figure 70: United States ETF fund flows Net new flows US$ bn 180 160 140 120 100 80 60 40 20 0 -20 YTD Exposure (US$ Bn) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Mar-11 Domestic equity 41.9 27.7 36.5 8.4 35.6 24.3 35.7 87.8 133.5 30.5 43.5 14.2 International equity 0.7 1.3 3.8 5.7 15.3 23.0 26.8 46.6 19.6 37.0 38.8 4.4 Bond 0.0 0.0 3.8 0.6 3.6 6.3 5.1 13.1 22.5 46.1 29.7 6.9 Money market 0.0 0.0 0.0 0.0 0.0 0.1 1.1 2.2 0.4 4.0 -1.7 0.6 Total 42.6 29.1 44.0 14.7 54.6 53.7 68.7 149.7 176.0 117.5 110.4 26.2Note: Includes ETFs of all legal structures (open-end, UIT, Grantor Trusts, Partnerships) and ETNs.Source: Strategic Insight Simfund MF.83 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 71: Average expenses of ETFs versus open-end mutual funds in the United States Average Exposure TER (bps) Exchange Traded Funds (ETFs) Active 51 Broad market – equity 20 Commodities 57 Currency 48 Custom 43 Emerging markets – equity 54 Fixed income 23 Growth – equity 21 International – equity 41 Inverse 95 Large-cap – equity 13 Leveraged 95 Leveraged inverse 95 Mid-cap – equity 22 Sector – equity 31 Small-cap – equity 25 Value – equity 23 Total – equity ETFs 32 Total – fixed income ETFs 27 Total – all 32 Open-end mutual funds Passive/index domestic equity 72 Passive/index international equity 86 Passive/index fixed income 36 Active/non-index domestic equity 154 Active/non-index international equity 166 Active/non-index fixed income 92Source: Strategic Insight Simfund MF, Global ETF Research and Implementation Strategy Team, BlackRock, data as at end January 2011.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 84
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 72: United States ETF assets by type of exposure, as at end April 2011 Apr-11 YTD change # AUM % ADV # % AUM % % market Exposure ETFs (US$ Bn) total (US$ Bn) ETFs ETFs (US$ Bn) AUM share Equity 597 $784.7 78.7% $40.8 48 8.7% $83.5 11.9% 0.0% Large-cap 41 $184.3 18.5% $21.6 1 2.5% $18.9 11.4% -0.1% Emerging markets 102 $153.7 15.4% $5.8 13 14.6% $2.5 1.6% -1.6% International 165 $134.6 13.5% $2.2 10 6.5% $21.5 19.0% 0.8% Sector 162 $111.8 11.2% $5.7 16 11.0% $18.2 19.4% 0.7% Growth 33 $48.5 4.9% $0.4 2 6.5% $6.4 15.3% 0.1% Value 33 $40.8 4.1% $0.3 2 6.5% $4.7 13.0% 0.0% Broad market 23 $40.5 4.1% $0.2 3 15.0% $4.0 10.8% 0.0% Mid-cap 18 $36.0 3.6% $0.6 2 12.5% $4.1 13.0% 0.0% Small-cap 20 $34.6 3.5% $4.0 1 5.3% $3.3 10.5% 0.0% Fixed income 113 $138.8 13.9% $1.6 9 8.7% $10.2 7.9% -0.5% Custom 57 $23.0 2.3% $0.1 0 0.0% $4.5 24.3% 0.2% Commodities 26 $17.8 1.8% $0.8 4 18.2% $5.5 45.2% 0.4% Leveraged inverse 63 $13.9 1.4% $2.0 2 3.3% $0.3 2.5% -0.1% Leveraged 64 $12.1 1.2% $2.4 2 3.2% $1.0 8.8% 0.0% Inverse 21 $3.7 0.4% $0.1 6 40.0% $0.1 3.0% 0.0% Active 22 $1.7 0.2% $0.0 3 15.8% $0.6 55.9% 0.1% Currency 9 $1.6 0.2% $0.0 0 0.0% $0.4 35.7% 0.0% Total 972 $997.3 100.0% $47.9 76 8.5% $106.2 11.9% Large-cap – equity 18.5% Small-cap – equity 3.5% Emerging markets – equity 15.4% Custom 2.3% Fixed income 13.9% Commodities 1.8% International – equity 13.5% Leveraged inverse 1.4% Sector – equity 11.2% Leveraged 1.2% Growth – equity 4.9% Inverse 0.4% Value – equity 4.1% Active 0.2% Broad market – equity 4.1% Currency 0.2% Mid-cap – equity 3.6%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.85 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 73: United States ETF assets by index provider, as at end April 2011 Apr-11 YTD change # AUM % ADV # % AUM % % market Index provider ETFs (US$ Bn) total (US$ Bn) ETFs ETFs (US$ Bn) AUM share MSCI 122 $294.1 29.5% $7.3 6 5.2% $29.5 11.1% -0.2% S&P 185 $290.7 29.1% $24.7 7 3.9% $30.4 11.7% -0.1% Barclays Capital 69 $109.8 11.0% $1.7 6 9.5% $6.8 6.6% -0.5% Russell 65 $87.5 8.8% $6.5 2 3.2% $7.6 9.5% -0.2% Dow Jones 84 $46.3 4.6% $1.9 2 2.4% $6.3 15.7% 0.2% NASDAQ OMX 27 $32.8 3.3% $3.4 1 3.8% $6.2 23.2% 0.3% FTSE 42 $25.1 2.5% $0.6 1 2.4% $2.9 13.2% 0.0% Markit 6 $22.4 2.2% $0.2 4 200.0% $1.9 9.2% -0.1% WisdomTree 35 $9.8 1.0% $0.1 0 0.0% $1.4 16.2% 0.0% NYSE Euronext 12 $8.6 0.9% $0.6 4 50.0% $0.0 -0.5% -0.1% STOXX 6 $8.3 0.8% $0.2 0 0.0% $2.5 44.2% 0.2% Indxis 6 $7.6 0.8% $0.0 0 0.0% $1.8 32.0% 0.1% Structured Solutions 29 $6.6 0.7% $0.2 6 26.1% $1.0 18.0% 0.0% Intellidex 35 $3.4 0.3% $0.0 0 0.0% $0.6 19.5% 0.0% Morningstar 26 $2.3 0.2% $0.0 16 160.0% $0.4 21.8% 0.0% S-Network 12 $2.2 0.2% $0.0 0 0.0% $0.6 37.6% 0.0% ISE 10 $1.9 0.2% $0.0 0 0.0% $0.9 83.1% 0.1% BNY Mellon 13 $1.8 0.2% $0.0 0 0.0% -$0.4 -18.4% -0.1% Zacks 10 $0.9 0.1% $0.0 0 0.0% $0.1 20.3% 0.0% Value Line 3 $0.4 0.0% $0.0 0 0.0% $0.1 24.8% 0.0% Other 175 $34.8 3.5% $0.5 21 13.6% $5.7 19.6% 0.2% Total 972 $997.3 100.0% $47.9 76 8.5% $106.2 11.9% MSCI 29.5% Indxis 0.8% S&P 29.1% Structured Solutions 0.7% Barclays Capital 11% Intellidex 0.3% Russell 8.8% Morningstar 0.2% Dow Jones 4.6% S-Network 0.2% NASDAQ OMX 3.3% ISE 0.2% FTSE 2.5% BNY Mellon 0.2% Markit 2.2% Zacks 0.1% WisdomTree 1% Value Line 0% NYSE Euronext 0.9% Other 3.5% STOXX 0.8%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 86
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 74: Top 25 brokers trading United States listed ETFs/ETPs: ranked by traded volume, as at end April 2011 Apr-11 Monthly change Broker % broker % broker # broker advertised advertised % total # broker Broker advertised % total reported volume market exchange reported advertised market exchange Broker trades (US$ Mn) share volume trades (%) volume (%) share volume Credit Suisse 13,288 $97,888.4 13.6% 7.8% -7.9% -15.4% 0.6% 1.4% Knight Securities 129,147 $94,038.3 13.1% 7.5% -17.6% -18.5% 0.1% 1.1% UBS 31,371 $71,968.6 10.0% 5.7% -5.4% -22.6% -0.5% 0.6% BofA Merrill Lynch 28,612 $57,608.8 8.0% 4.6% -14.7% -19.4% 0.0% 0.6% Barclays Capital 15,028 $54,419.2 7.6% 4.3% -2.1% -1.9% 1.3% 1.2% Citigroup Global Markets 12,550 $50,467.5 7.0% 4.0% 3.1% -17.5% 0.1% 0.6% JPMorgan Chase Bank 8,812 $39,854.2 5.5% 3.2% -44.2% -29.3% -0.8% 0.0% Citadel Securities 112,918 $35,230.1 4.9% 2.8% -10.7% -12.2% 0.4% 0.6% Deutsche Bank Securities 6,330 $31,260.0 4.3% 2.5% -26.4% -27.5% -0.5% 0.1% Morgan Stanley 7,833 $28,727.3 4.0% 2.3% -39.3% -30.5% -0.7% 0.0% Goldman Sachs 31,499 $27,029.3 3.8% 2.1% -18.1% -5.4% 0.5% 0.6% Susquehanna 15,763 $22,120.7 3.1% 1.8% -33.8% -25.8% -0.3% 0.1% Fidelity Capital Markets 14,588 $20,490.0 2.8% 1.6% -25.1% -22.9% -0.1% 0.2% BNP Paribas Securities 1,822 $16,808.4 2.3% 1.3% -6.9% -9.0% 0.3% 0.3% Royal Bank Of Canada 5,870 $6,923.0 1.0% 0.6% -11.8% 0.0% 0.2% 0.2% BTIG 949 $5,981.0 0.8% 0.5% -17.7% -24.3% -0.1% 0.0% Instinet 1,827 $5,376.6 0.7% 0.4% -12.5% -36.2% -0.2% 0.0% GFI Group Inc. 7,410 $5,231.1 0.7% 0.4% -42.7% -7.1% 0.1% 0.1% Bloomberg Tradebook 1,139 $5,172.8 0.7% 0.4% -26.2% 2.3% 0.2% 0.1% Jefferies & Co 1,773 $3,968.8 0.6% 0.3% -41.4% -46.2% -0.3% -0.1% Cantor, Fitzgerald 2,716 $2,591.6 0.4% 0.2% 8.6% 26.4% 0.1% 0.1% HSBC Bank 1,793 $2,237.4 0.3% 0.2% -7.4% -11.3% 0.0% 0.0% State Street Bank & Trust Co. 1,357 $2,195.4 0.3% 0.2% -10.0% -21.3% 0.0% 0.0% Momentum Trading Partners 135 $2,172.1 0.3% 0.2% 8.0% 4.8% 0.1% 0.1% ITG 4,411 $1,963.4 0.3% 0.2% -27.6% -19.0% 0.0% 0.0% Others 53,072 $27,511.2 3.8% 2.1% -31.8% -29.5% -0.6% 0.0% Total 512,013 $719,235.2 100.0% 56.9% -18.8% -19.1% 7.8% Credit Suisse 13.6% BNP Paribas Securities 2.3% Knight Securities 13.1% Royal Bank Of Canada 1.0% UBS 10.0% BTIG 0.8% BofA Merrill Lynch 8.0% Instinet 0.7% Barclays Capital 7.6% GFI Group Inc. 0.7% Citigroup Global Markets 7.0% Bloomberg Tradebook 0.7% JPMorgan Chase Bank 5.5% Jefferies & Co 0.6% Citadel Securities 4.9% Cantor, Fitzgerald 0.4% Deutsche Bank Securities 4.3% HSBC Bank 0.3% Morgan Stanley 4.0% State Street Bank & Trust Co. 0.3% Goldman Sachs 3.8% Momentum Trading Partners 0.3% Susquehanna 3.1% ITG 0.3% Fidelity Capital Markets 2.8% Others 3.8%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.87 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 75: United States ETF turnover as a percentage of United States equity turnover ETF turnover (US$ Mn) ETF turnover as % of US equity turnover 3,500,000 45% 40% 3,000,000 35% 2,500,000 30% 2,000,000 25% 1,500,000 20% 15% 1,000,000 10% 500,000 5% 0 0% Jan-08 Feb-08 Mar-08 Apr-08 May-08 Sep-08 Jun-08 Jul-08 Aug-08 Oct-08 Dec-08 Apr-09 Jan-09 Feb-09 Mar-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Sep-10 Feb-11 Jun-10 Jul-10 Aug-10 Oct-10 Dec-10 Jan-11 Mar-11 Apr-11 Nov-08 Nov-09 Nov-10 US ETF turnover (USD Mn) ETF turnover as % of US equity turnoverNote: Data as at end April 2011.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, NYSE Arca.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 88
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 76: United States exchanges average percentage of market share per ETF exposure, as at end April 2011 Total ADV Total Average % market share # AUM (# ‘000) ADV NYSE NASDAQ FINRA- NYSEExposure ETFs (US$ Bn) shares (US$ Mn) AMEX BATS OMX BX CBOE Chicago NSX ADF NASDAQ Arca PhiladelphiaInternational – equity 165 $134.6 77,877 $2,168 0.0% 8.1% 0.4% 1.4% 0.1% 0.3% 41.6% 9.2% 38.8% 0.0%Emerging markets – equity 102 $153.7 119,980 $5,812 0.0% 7.4% 0.4% 1.0% 0.1% 0.3% 33.6% 10.2% 46.8% 0.2%Large-cap – equity 41 $184.3 190,919 $21,559 0.0% 10.3% 0.5% 1.1% 0.2% 0.2% 41.6% 13.8% 32.1% 0.2%Sector – equity 162 $111.8 149,985 $5,739 0.0% 12.6% 0.8% 0.8% 0.2% 0.3% 42.4% 14.1% 28.3% 0.5%Fixed Income 113 $138.8 21,302 $1,626 0.0% 6.1% 1.3% 1.6% 0.0% 0.4% 43.2% 12.9% 34.4% 0.0%Growth – equity 33 $48.5 5,410 $397 0.0% 7.0% 0.3% 0.2% 0.1% 0.2% 45.9% 11.2% 35.0% 0.1%Value – equity 33 $40.8 4,599 $296 0.0% 8.0% 0.3% 0.3% 0.0% 0.2% 40.6% 12.8% 37.7% 0.1%Broad market – equity 23 $40.5 3,192 $187 0.0% 12.5% 0.9% 0.6% 0.0% 0.3% 37.5% 13.3% 34.8% 0.1%Mid-cap – equity 18 $36.0 4,392 $637 0.0% 15.4% 0.2% 0.8% 0.1% 0.6% 39.1% 8.9% 34.9% 0.2%Small-cap – equity 20 $34.6 48,456 $4,042 0.0% 12.0% 0.3% 0.9% 0.1% 0.2% 45.4% 9.7% 31.2% 0.2%Custom 57 $23.0 3,720 $122 0.0% 9.3% 0.3% 1.0% 0.0% 0.2% 49.2% 8.5% 31.4% 0.1%Leveraged 64 $12.1 43,388 $2,416 0.0% 14.9% 1.5% 0.2% 0.2% 0.6% 32.9% 19.0% 30.4% 0.3%Inverse 21 $3.7 3,380 $130 0.0% 14.2% 1.7% 0.2% 0.0% 1.0% 34.4% 14.3% 34.1% 0.0%Leveraged Inverse 63 $13.9 63,563 $1,982 0.0% 14.3% 1.4% 0.1% 0.1% 0.7% 33.4% 17.6% 31.8% 0.5%Commodities 26 $17.8 14,933 $770 0.0% 5.6% 0.2% 2.0% 0.1% 0.3% 38.8% 12.3% 40.6% 0.1%Active 22 $1.7 495 $31 0.0% 4.3% 0.1% 3.9% 0.0% 0.3% 40.6% 9.1% 41.7% 0.0%Currency 9 $1.6 749 $19 0.0% 7.1% 0.6% 2.8% 0.0% 0.1% 37.4% 6.3% 45.7% 0.0%Total 972 $997.3 756,339 $47,932 0.0% 10.5% 0.9% 1.1% 0.1% 0.3% 43.7% 12.2% 30.9% 0.3%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 77: United States exchanges total average daily turnover (US$ Mn) per ETF exposure, as at end April 2011 NYSE NASDAQ FINRA- NYSEExposure AMEX BATS OMX BX CBOE Chicago NSX ADF NASDAQ Arca PhiladelphiaInternational – equity $0.2 $392.3 $46.3 $15.4 $12.9 $3.5 $655.4 $289.6 $736.6 $16.3Emerging markets – equity $0.0 $889.0 $148.3 $11.2 $72.5 $13.7 $1,429.9 $870.6 $2,246.6 $130.3Large-cap – equity $5.2 $3,965.8 $168.4 $164.4 $279.6 $102.6 $5,864.5 $6,103.2 $4,364.3 $540.6Sector – equity $0.9 $1,097.6 $138.4 $9.4 $80.3 $14.2 $1,615.8 $1,072.1 $1,530.7 $179.5Fixed income $0.0 $229.9 $42.0 $21.3 $1.7 $3.1 $617.4 $282.4 $417.8 $10.2Growth – equity $0.0 $57.6 $4.8 $1.0 $0.6 $0.7 $151.4 $76.4 $101.5 $2.6Value – equity $0.0 $48.0 $2.7 $1.6 $0.0 $0.4 $107.8 $65.1 $68.3 $1.7Broad market – equity $0.0 $27.2 $1.4 $0.4 $0.0 $0.5 $92.0 $22.3 $42.7 $0.7Mid-cap – equity $0.0 $100.8 $3.1 $14.4 $8.7 $1.8 $207.6 $123.7 $171.9 $5.3Small-cap – equity $0.0 $629.1 $51.9 $34.1 $50.5 $12.8 $1,208.1 $1,069.4 $898.7 $87.7Custom $0.0 $13.2 $1.7 $0.6 $0.0 $0.4 $69.7 $12.6 $23.6 $0.2Leveraged $0.0 $430.0 $38.9 $16.6 $12.0 $29.4 $735.6 $639.4 $486.2 $27.8Inverse $0.0 $20.9 $3.1 $0.6 $0.1 $0.5 $54.4 $19.9 $30.3 $0.2Leveraged inverse $0.0 $334.6 $37.4 $4.2 $5.9 $18.2 $683.3 $460.1 $409.2 $28.7Commodities $0.0 $124.7 $12.7 $1.5 $3.5 $1.2 $213.6 $175.4 $225.8 $11.8Active $0.0 $1.6 $0.1 $2.6 $0.0 $0.0 $17.0 $3.0 $6.4 $0.0Currency $0.0 $2.6 $0.3 $0.3 $0.0 $0.0 $8.9 $1.6 $5.1 $0.0Total $6.3 $8,364.9 $701.5 $299.7 $528.4 $203.1 $13,732.3 $11,286.9 $11,765.7 $1,043.7Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.89 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 78: United States exchanges accumulated volume market share: 2011Exchange Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11BATS 18.3% 18.9% 18.0% 17.5%NASDAQ OMX BX 1.7% 1.5% 1.4% 1.5%CBOE 0.6% 0.6% 0.6% 0.6%Chicago 1.0% 1.1% 1.3% 1.1%NSX (Cincinnati) 0.4% 0.4% 0.4% 0.4%FINRA-ADF 27.9% 28.6% 28.3% 28.6%NASDAQ 22.5% 22.7% 23.7% 23.5%NYSE AMEX 0.0% 0.0% 0.0% 0.0%NYSE Arca 25.9% 24.6% 24.3% 24.5%Philadelphia 1.5% 1.5% 1.8% 2.2%Total 100.0% 100.0% 100.0% 100.0%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 79: United States exchanges accumulated volume market share: 2010Exchange Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10BATS 17.3% 17.6% 17.6% 18.6% 18.4% 19.0% 19.9% 18.6% 17.7% 17.6% 18.1% 17.0%NASDAQ OMX BX 1.7% 1.9% 2.4% 3.1% 3.1% 2.8% 2.8% 2.8% 3.1% 3.2% 3.2% 2.9%CBOE 0.3% 0.3% 0.5% 0.5% 0.4% 0.4% 0.3% 0.5% 0.5% 0.4% 0.6% 0.4%Chicago Stock Exchange 1.2% 1.5% 1.2% 1.1% 1.6% 1.2% 1.1% 1.1% 1.3% 1.4% 1.1% 1.5%NSX (Cincinnati) 0.2% 0.2% 0.3% 0.4% 0.4% 0.4% 0.5% 0.6% 0.6% 0.6% 0.3% 0.3%ISE 28.2% 27.1% 29.1% 27.3% 25.9% 27.6% 24.5% 24.7% 25.7% 25.2% 25.6% 30.6%FINRA-ADF 0.9% 0.8% 0.8% 0.7% 0.7% 0.5% 0.2% 0.0% 0.0% 0.0% 0.0% 0.0%NASDAQ 27.9% 27.6% 25.2% 25.3% 26.7% 24.7% 26.1% 26.2% 25.4% 24.8% 24.2% 21.8%NYSE 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%NYSE AMEX 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%NYSE Arca 22.3% 22.9% 22.9% 23.0% 22.8% 23.3% 24.4% 25.6% 25.7% 26.4% 26.1% 24.5%Philadelphia 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.4% 0.7% 1.0%Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 80: United States exchanges accumulated volume market share: 2009Exchange Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09BATS 15.5% 16.0% 16.4% 14.5% 14.2% 14.5% 14.9% 13.8% 14.3% 14.4% 15.0% 15.5%NASDAQ OMX BX 0.1% 0.4% 0.9% 1.4% 1.3% 1.6% 1.9% 2.0% 2.4% 2.2% 2.2% 1.8%CBOE 0.6% 0.4% 0.5% 0.6% 0.6% 0.6% 0.5% 0.5% 0.4% 0.3% 0.3% 0.6%Chicago 0.6% 0.5% 0.9% 0.8% 1.1% 1.6% 1.4% 1.5% 1.6% 1.6% 1.8% 1.4%NSX (Cincinnati) 0.4% 0.5% 0.3% 0.5% 0.5% 0.5% 0.4% 0.5% 0.4% 0.4% 0.4% 0.3%FINRA-ADF 0.9% 1.0% 1.0% 1.4% 1.2% 1.2% 1.1% 1.2% 1.1% 0.9% 0.8% 0.9%ISE 22.7% 23.9% 23.9% 26.6% 28.3% 28.5% 29.3% 28.3% 27.8% 26.8% 27.5% 30.2%NASDAQ 33.3% 32.4% 31.2% 28.9% 28.2% 27.1% 27.6% 29.1% 29.8% 31.3% 30.4% 27.1%NYSE 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%NYSE AMEX 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%NYSE Arca 25.8% 24.9% 24.9% 25.3% 24.5% 24.5% 23.0% 23.2% 22.1% 22.1% 21.6% 22.2%Philadelphia 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 90
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 81: United States listed ETF and HOLDRS short interest Figure 82: Top 20 United States listed ETFs and ETPs based onversus S&P 500 index levels (based on mid-month statistics) short interest, as at mid April 2011 Short Shares interest outstanding Short Short interest % of shares S&P 500 Bloomberg (000’ (000’ interest Period # of shares (Mn) outstanding Index level ETF ticker shares) shares) ratio (%) 2003 avg 812 27.1% 983 SPDR S&P 500 SPY US 313,036 698,432 44.8% 2004 avg 952 26.3% 1,127 iShares Russell 2000 Index IWM US 238,106 221,600 107.4% 2005 avg 781 17.2% 1,206 PowerShares QQQ Trust QQQ US 92,712 461,150 20.1% 2006 avg 837 13.5% 1,283 Financial Select Sector SPDR XLF US 90,711 486,295 18.7% 2007 avg 1,242 16.1% 1,475 SPDR S&P Retail ETF XRT US 82,494 11,600 711.2% 2008 avg 1,693 17.0% 1,209 iShares MSCI Emerging Markets EEM US 66,239 835,200 7.9% 2009 avg 1,653 12.4% 948 iShares DJ US Real Estate IYR US 61,863 57,900 106.8% 2010 avg 1,703 10.8% 1,145 iShares MSCI Japan Index Fund EWJ US 46,302 724,200 6.4% SPDR S&P Oil & Gas XOP US 42,286 18,700 226.1% Jan-11 1,564 8.9% 1,293 SPDR KBW Regional Banking KRE US 38,969 25,753 151.3% Feb-11 1,786 10.2% 1,328 Energy Select Sector SPDR XLE US 37,025 129,824 28.5% Mar-11 1,667 9.3% 1,282 iShares Silver Trust SLV US 36,713 362,800 10.1% Apr-11 1,761 9.6% 1,282 Semiconductor HOLDRS SMH US 35,154 16,462 213.6% 2011 avg 1,694 9.5% 1,306 iPath S&P 500 VIX Short-Term VXX US 30,790 58,436 52.7% iShares FTSE China 25 Index FXI US 29,620 181,800 16.3%Note: Mid-month data captured from Bloomberg. Health Care Select Sector SPDR XLV US 28,183 95,365 29.6%Source: Global ETF Research and Implementation Strategy Team,BlackRock, Bloomberg. Industrial Select Sector SPDR XLI US 28,029 116,926 24.0% Consumer Discretionary SPDR XLY US 27,732 57,453 48.3% iShares MSCI EAFE Index Fund EFA US 27,628 651,600 4.2% iShares Barclays 20+ Treasury TLT US 23,997 23,300 103.0% Based on data through to mid April 2011, the average number of ETF shares short during 2011 YTD was 1,694 Mn, with an average Note: Mid-month data captured from Bloomberg. of 1,703 in 2010, 1,653 Mn in 2009 and 1,693 Mn in 2008. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.  The April 2011 short interest level for United States-listed ETFs was 9.6% of shares outstanding or 1,761 Mn shares, up 7.1% from 1,644 Mn in December 2010.Figure 83: United States listed ETF and HOLDRS short interest versus S&P 500 index levels, as at mid March 2011 30% 2,200 2,000 25% 1,800 1,600 20% 1,400 1,200 15% 1,000 10% 800 600 5% 400 Aug-04 Apr-05 Dec-05 Aug-06 Apr-07 Dec-07 Aug-08 Apr-09 Dec-09 Aug-10 Apr-11 % of shares outstanding S&P 500 index level Short interest (Mn shares)Note: Mid-month data captured from Bloomberg. With short sales, the investor risks paying more for a security than the investor received from the sale.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.91 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockCanada9 March 2011 marked the 21st anniversary of the first ETF globally, In the first four months of 2011, the ETF average daily tradingwhich listed in Canada in 1990. Twenty one years ago on 9 March volume in US dollars decreased by 1.2% to US$1.0 Bn in April 2011.1990, the first ETF was listed in Canada on the Toronto Stock This compares to an average daily trading volume of US$1.1 Bn inExchange (TSX): the TIPs (Toronto 35 Index Participation Fund) April 2010.tracking the TSX 35 Index. It was followed by the HIPs (HundredIndex Participation Fund) tracking the TSX 100 Index on 26 iShares is the largest ETF provider in terms of assets with US$31.2 BnSeptember 1995. 11 years ago on 7 March 2000, the TIPs and HIPs in 44 ETFs, reflecting 72.4% market share; Claymore Investments isETFs were merged into the iUnits S&P/TSE Index Participation Fund second with 30 ETFs, assets of US$6.5 Bn, and 15.1% market share;(XIU CN): an ETF that was originally listed on 4 October 1999. followed by BetaPro Management with 66 ETFs, assets of US$3.0 Bn and 6.9% market share at the end of April 2011.At the end of April 2011, the Canadian ETF industry had 180 ETFs,211 exchange listings, and assets of US$43.1 Bn from four In Canada, for the first quarter of 2010, only 40% of active mutualproviders on one exchange. This compares to 134 ETFs and assets funds in the Canadian Equity category were able to outperform theof US$33.0 Bn from four providers on one exchange at the end of S&P/TSX Composite Index according to S&P. The CanadianApril 2010. Small/Mid Cap Equity category of mutual funds showed similar results against the S&P/TSX Completion Index. For the CanadianIn 2011 YTD, assets have increased by 12.3%, from US$38.4 Bn to Focused Equity category, 58% of active funds outpaced the blendedUS$43.1 Bn, greater than the 8.5% increase in the MSCI Canada index (comprised of 50% S&P/TSX Composite, 25% S&P 500 andIndex in US dollar terms. This compares to a 15.8% increase in assets 25% S&P EPAC BMI LargeMidCap).over the same period in 2010. Source: Index Versus Active Funds Scorecard for Canadian Funds. Standard & Poor’s Indices Versus Active Funds (SPIVA) Scorecard, First Quarter 2010.In 2011 YTD, the number of ETFs have increased by 14.6% with 23new ETFs launched. This compares to a 22.9% increase over thesame period in 2010, when 25 new ETFs launched.Figure 84: ETF listings in Canada, as at end April 2011 1 1 Canada P listings: 180 T listings: 211 Providers: 4 AUM: US$43.1 BnNote: P listings = # primary listings. T listings = # total listings. Providers = # primary ETF providers. Assets = Assets Under Management in primary listings only.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 92
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 85: Canada listed ETF asset growth Assets (US$ Bn) # products 50 200 45 180 40 160 35 140 30 120 25 100 20 80 15 60 10 40 5 20 0 0 Assets (US$ Bn) 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Apr-11 ETF Assets $0.4 $4.0 $3.1 $3.4 $5.5 $7.4 $10.6 $13.0 $18.0 $15.7 $28.5 $38.4 $43.1 # ETFs 1 3 14 15 16 16 20 25 45 76 108 157 180Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 86: ETF providers in Canada ranked by AUM, as at end April 2011 Apr-11 YTD change Apr-11 YTD-11 % # AUM % ADV # NNA NNA # % AUM % market Provider ETFs (US$ Bn) total (US$ Bn) planned (US$ Bn) (US$ Bn) ETFs ETFs (US$ Bn) AUM share iShares 44 $31.2 72.4% $0.5 3 -$1.0 $0.3 6 15.8% $2.9 10.1% -1.46% Claymore Investments 30 $6.5 15.1% $0.0 5 $0.1 $0.6 1 3.4% $1.0 18.5% 0.78% BetaPro Management 66 $3.0 6.9% $0.5 6 $0.0 $0.0 6 10.0% $0.0 -1.5% -0.97% BMO Asset Management 40 $2.4 5.6% $0.0 0 $0.2 $0.7 10 100.0% $0.9 100.0% 1.65% First Asset Management - - - - 4 - - - - - - - Total 180 $43.1 100.0% $1.0 18 -$0.7 $1.6 23 14.6% $4.7 12.3%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 87: ETF providers in Canada by average daily US dollar turnover, as at end April 2011 Average daily turnover (US$ Mn) % market % market Change % BetaPro Management 50.3% Provider Dec-10 share Apr-11 share (US$ Mn) change BetaPro $502.7 48.5% $514.6 50.3% $11.9 2.4% iShares 45.2% iShares $500.9 48.3% $462.6 45.2% -$38.3 -7.6% Claymore Investments 2.8% Claymore $23.6 2.3% $28.7 2.8% $5.1 21.5% BMO AM $9.1 0.9% $18.1 1.8% $9.0 98.3% BMO Asset Management 1.8% Total $1,036.3 100.0% $1,023.9 100.0% -$12.4 -1.2%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.93 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 88: Canadian ETF assets by type of exposure, as at end April 2011 Apr-11 Apr-11 YTD-11 YTD change # AUM % ADV NNA NNA # % AUM % % market Exposure ETFs (US$ Bn) total (US$ Bn) (US$ Bn) (US$ Bn) ETFs ETFs (US$ Bn) AUM share North America – equity 62 $26.4 61.2% $0.5 -$0.7 $1.3 5 8.8% $3.31 14.4% 1.1% Fixed income – all (ex-cash) 35 $9.5 22.0% $0.0 $0.1 $0.6 6 20.7% $1.02 12.1% -0.1% Commodities 41 $4.3 9.9% $0.5 -$0.2 -$0.4 9 28.1% $0.01 0.2% -1.2% Global (ex-US) – equity 2 $1.3 3.0% $0.0 $0.0 $0.0 0 0.0% $0.12 10.0% -0.1% Emerging markets – equity 13 $1.0 2.3% $0.0 $0.0 $0.1 0 0.0% $0.13 16.1% 0.1% Global – equity 10 $0.5 1.1% $0.0 $0.0 $0.1 1 11.1% $0.10 26.3% 0.1% Mixed 10 $0.2 0.4% $0.0 $0.0 $0.0 1 11.1% $0.03 20.4% 0.0% Fixed income – cash (money market) 1 $0.0 0.1% $0.0 $0.0 $0.0 0 0.0% $0.01 19.8% 0.0% Currency 3 $0.0 0.1% $0.0 $0.0 $0.0 1 50.0% $0.01 33.4% 0.0% Asia Pacific – equity 1 $0.0 0.0% $0.0 $0.0 $0.0 0 0.0% $0.01 62.2% 0.0% Alternative 2 $0.0 0.0% $0.0 $0.0 $0.0 0 0.0% -$0.01 -30.2% 0.0% Total 180 $43.1 100.0% $1.0 -$0.7 $1.6 23 14.6% $4.74 12.3% North America – equity 61.2% Fixed income – all (ex-cash) 22% Commodities 9.9% Global (ex-US) – equity 3% Emerging markets – equity 2.3% Global – equity 1.1% Mixed 0.4% Fixed income – cash (money market) 0.1% Currency 0.1% Asia Pacific – equity 0% Alternative 0%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 89: Top 20 ETFs in Canada ranked by AUM, as at end April 2011 AUM ADV ADV ETF Ticker (US$ Mn) (‘000 shares) (US$ Mn) iShares S&P/TSX 60 Index Fund XIU CN $12,559.3 15,201 $322.2 iShares DEX Short Term Bond Index Fund XSB CN $2,066.2 282 $8.6 iShares S&P 500 Index Fund (CAD-Hedged) XSP CN $1,700.6 462 $7.6 iShares DEX Universe Bond Index Fund XBB CN $1,535.2 269 $8.4 iShares S&P/TSX Capped Composite Index Fund XIC CN $1,493.4 408 $9.5 iShares DEX All Corporate Bond Index Fund XCB CN $1,362.7 230 $5.0 iShares S&P/TSX Capped REIT Index Fund XRE CN $1,310.6 242 $3.8 iShares S&P/TSX Global Gold Index Fund XGD CN $1,281.9 1,043 $27.9 iShares S&P/TSX Capped Energy Index Fund XEG CN $1,169.2 1,392 $32.0 iShares MSCI EAFE Index Fund (CAD-Hedged) XIN CN $1,161.1 161 $3.2 iShares S&P/TSX Capped Financials Index Fund XFN CN $1,100.9 347 $9.0 iShares Dow Jones Canada Select Dividend Index Fund XDV CN $1,044.1 207 $4.7 Claymore 1-5 Yr Laddered Corporate Bond ETF CBO CN $990.1 190 $4.1 Claymore 1-5 Yr Laddered Government Bond ETF CLF CN $774.1 188 $4.0 Claymore S&P/TSX CDN Preferred Share ETF CPD CN $704.8 117 $2.1 iShares DEX Real Return Bond Index Fund XRB CN $689.1 145 $3.5 BMO Dow Jones Canada Titans 60 Index ETF ZCN CN $670.5 29 $0.6 Claymore S&P/TSX Canadian Dividend ETF CDZ CN $619.9 90 $2.0 Claymore Gold Bullion ETF CGL CN $535.3 197 $2.9 Horizons BetaPro NYMEX Natural Gas Bull Plus HNU CN $449.4 14,773 $102.4Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 94
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 90: Top 20 ETFs in Canada ranked by average US dollar trading volume, as at end April 2011 ADV ADV AUM ETF Ticker (US$ Mn) (‘000 shares) (US$ Mn) iShares S&P/TSX 60 Index Fund XIU CN $322.2 15,201 $12,559.3 Horizons BetaPro NYMEX Natural Gas Bull Plus HNU CN $102.4 14,773 $449.4 Horizons BetaPro NYMEX Natural Gas Bear Plus HND CN $82.7 10,884 $163.3 Horizons BetaPro NYMEX Crude Oil Bull Plus HOU CN $56.8 5,245 $131.9 Horizons BetaPro NYMEX Crude Oil Bear Plus HOD CN $56.4 10,618 $232.8 Horizons BetaPro COMEX Silver Bull Plus ETF HZU CN $51.6 855 $117.7 Horizons BetaPro S&P/TSX Global Gold Bull Plus ETF HGU CN $46.4 2,757 $158.1 Horizons BetaPro S&P/TSX 60 Bull Plus Fund HXU CN $35.9 1,415 $87.4 iShares S&P/TSX Capped Energy Index Fund XEG CN $32.0 1,392 $1,169.2 iShares S&P/TSX Global Gold Index Fund XGD CN $27.9 1,043 $1,281.9 Horizons BetaPro S&P/TSX Global Gold Bear Plus ETF HGD CN $16.9 1,737 $59.0 Horizons BetaPro COMEX Silver Bear Plus ETF HZD CN $15.0 3,398 $20.2 Horizons BetaPro S&P/TSX 60 Index ETF HXT CN $11.7 967 $347.0 Horizons BetaPro S&P/TSX 60 Bear Plus Fund HXD CN $11.5 1,321 $134.8 iShares S&P/TSX Capped Composite Index Fund XIC CN $9.5 408 $1,493.4 iShares S&P/TSX Capped Financials Index Fund XFN CN $9.0 347 $1,100.9 iShares DEX Short Term Bond Index Fund XSB CN $8.6 282 $2,066.2 iShares DEX Universe Bond Index Fund XBB CN $8.4 269 $1,535.2 iShares S&P 500 Index Fund (CAD-Hedged) XSP CN $7.6 462 $1,700.6 BMO Covered Call Canadian Banks ETF ZWB CN $5.1 305 $168.3Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 91: Top 20 ETFs in Canada with largest change in AUM, as at end April 2011 AUM AUM YTD-11 NNA (US$ Mn) (US$ Mn) Change ETF Ticker (US$ Mn) Apr-11 Dec-10 (US$ Mn) iShares S&P/TSX 60 Index Fund XIU CN -$194.1 $12,559.3 $11,659.0 $900.2 Horizons BetaPro NYMEX Natural Gas Bull Plus HNU CN -$520.7 $449.4 $921.2 -$471.9 iShares S&P/TSX Capped Energy Index Fund XEG CN $157.1 $1,169.2 $882.6 $286.5 iShares S&P/TSX Capped Composite Index Fund XIC CN $130.1 $1,493.4 $1,239.2 $254.2 iShares S&P 500 Index Fund (CAD-Hedged) XSP CN $24.4 $1,700.6 $1,463.8 $236.8 iShares S&P/TSX Capped REIT Index Fund XRE CN $11.4 $1,310.6 $1,108.1 $202.5 BMO Covered Call Canadian Banks ETF ZWB CN $164.8 $168.3 $0.0 $168.3 Horizons BetaPro NYMEX Natural Gas Bear Plus HND CN $126.6 $163.3 $22.9 $140.3 Claymore S&P/TSX Canadian Dividend ETF CDZ CN $97.8 $619.9 $480.2 $139.7 iShares Dow Jones Canada Select Dividend Index Fund XDV CN $22.3 $1,044.1 $919.9 $124.2 Claymore 1-5 Yr Laddered Corporate Bond ETF CBO CN $76.6 $990.1 $869.5 $120.5 BMO S&P/TSX Equal Weight Banks Index ETF ZEB CN $105.7 $165.1 $49.2 $115.9 Claymore S&P/TSX CDN Preferred Share ETF CPD CN $65.3 $704.8 $599.4 $105.4 iShares DEX Real Return Bond Index Fund XRB CN $41.9 $689.1 $592.2 $96.8 Horizons BetaPro S&P/TSX 60 Index ETF HXT CN $407.9 $347.0 $252.4 $94.7 iShares DEX All Corporate Bond Index Fund XCB CN $31.1 $1,362.7 $1,270.9 $91.8 iShares MSCI EAFE Index Fund (CAD-Hedged) XIN CN $5.8 $1,161.1 $1,069.6 $91.5 Horizons BetaPro NYMEX Crude Oil Bull Plus HOU CN -$208.6 $131.9 $221.9 -$89.9 BMO Dow Jones Canada Titans 60 Index ETF ZCN CN $34.9 $670.5 $583.1 $87.4 Claymore Global Agriculture ETF COW CN $63.2 $356.2 $270.0 $86.1Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.95 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 92: Top 20 ETFs in Canada with largest 2011 net inflows, as at end April 2011 YTD-11 NNA AUM ADV ETF Ticker (US$ Mn) (US$ Mn) (US$ Mn) Horizons BetaPro S&P/TSX 60 Index ETF HXT CN $407.9 $347.0 $11.7 BMO Covered Call Canadian Banks ETF ZWB CN $164.8 $168.3 $5.1 iShares S&P/TSX Capped Energy Index Fund XEG CN $157.1 $1,169.2 $32.0 iShares S&P/TSX Capped Composite Index Fund XIC CN $130.1 $1,493.4 $9.5 Horizons BetaPro NYMEX Natural Gas Bear Plus HND CN $126.6 $163.3 $82.7 Horizons BetaPro NYMEX Crude Oil Bear Plus HOD CN $116.1 $232.8 $56.4 BMO S&P/TSX Equal Weight Banks Index ETF ZEB CN $105.7 $165.1 $3.3 Claymore S&P/TSX Canadian Dividend ETF CDZ CN $97.8 $619.9 $2.0 Claymore 1-5 Yr Laddered Corporate Bond ETF CBO CN $76.6 $990.1 $4.1 Claymore S&P/TSX CDN Preferred Share ETF CPD CN $65.3 $704.8 $2.1 Claymore Global Agriculture ETF COW CN $63.2 $356.2 $1.2 iShares U.S. High Yield Bond Index Fund (CAD-Hedged) XHY CN $61.2 $293.9 $1.2 Claymore Short Duration High Income ETF CSD CN $54.1 $49.4 $1.5 Claymore Advantaged High Yield Bond ETF CHB CN $53.2 $203.0 $1.1 Claymore 1-5 Yr Laddered Government Bond ETF CLF CN $46.2 $774.1 $4.0 BMO Short Corporate Bond Index ETF ZCS CN $44.1 $102.4 $0.9 iShares DEX Real Return Bond Index Fund XRB CN $41.9 $689.1 $3.5 BMO High Yield US Corporate Bond Hedged to CAD ZHY CN $38.7 $100.2 $0.8 iShares Diversified Monthly Income Fund XTR CN $36.6 $296.0 $1.3 iShares S&P/TSX SmallCap Index Fund XCS CN $36.6 $225.1 $1.7Note: AUM reflects total fund AUM. ADV reflects total of all exchange listings. NNA reflects the total fund NNA.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 96
  • ETF Landscape End April 2011 Industry Review from BlackRockAsia Pacific (ex-Japan)At the end of April 2011, the Asia Pacific (ex-Japan) ETF industry In the first four months of 2011, the ETF average daily tradinghad 250 ETFs, 362 exchange listings, and assets of US$58.6 Bn volume in US dollars increased by 16.8% to US$0.9 Bn in April 2011.from 63 providers on 13 exchanges. This compares to 168 ETFs This compares to an average daily trading volume of US$0.7 Bn inwith 267 listings and assets of US$44.4 Bn, from 53 providers on April 2010.13 exchanges at the end of April 2010. State Street Global Advisors is the largest ETF provider in terms of27 August 2011 will mark the 10th anniversary of ETFs in Australia. assets with US$13.3 Bn, in 11 ETFs, reflecting 22.8% market share; iShares is second with 19 ETFs, assets of US$10.6 Bn, and 18.1%In 2011 YTD, assets have increased by 10.0% from US$53.3 Bn to market share; followed by HSBC/Hang Seng with eight ETFs, assetsUS$58.6 Bn, greater than the 5.7% increase in the MSCI AC Asia of US$7.2 Bn and 12.2% market share at the end of April 2011.Pacific ex-Japan Index in US dollar terms. This compares to anincrease in assets of 14.2% over the same period in 2010. Additionally, there were 25 other ETPs1 with 28 listings and assets of US$1.8 Bn from 15 providers on five exchanges. This comparesIn 2011 YTD, the number of ETFs increased by 25.0% with 50 new to 13 ETPs with 16 listings and assets of US$0.9 Bn from nineETFs launched. This compares to a 29.2% increase over the same providers on five exchanges at the end of April 2010.period in 2010, when 38 new ETFs launched.Figure 93: ETF listings in Asia Pacific (ex-Japan), as at end April 2011 9 2 10 3 4 11 6 8 5 1 7 1 Australia 4 India 7 New Zealand 10 Taiwan P listings: 24 P listings: 18 P listings: 6 P listings: 14 T listings: 45 T listings: 18 T listings: 6 T listings: 17 Providers: 6 Providers: 7 Providers: 2 Providers: 2 AUM: US$4.0 Bn AUM: US$0.6 Bn AUM: US$0.4 Bn AUM: US$3.0 Bn 2 China 5 Indonesia 8 Singapore 11 Thailand P listings: 22 P listings: 1 P listings: 23 P listings: 4 T listings: 22 T listings: 1 T listings: 81 T listings: 4 Providers: 16 Providers: 1 Providers: 8 Providers: 3 AUM: US$11.7 Bn AUM: US$0.0 Bn AUM: US$3.7 Bn AUM: US$0.1 Bn 3 Hong Kong 6 Malaysia 9 South Korea P listings: 47 P listings: 4 P listings: 87 T listings: 76 T listings: 5 T listings: 87 Providers: 10 Providers: 3 Providers: 13 AUM: US$27.9 Bn AUM: US$0.4 Bn AUM: US$6.8 BnNote: P listings = # primary listings. T listings = # total listings. Providers = # primary ETF providers. Assets = Assets Under Management in primary listings only.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.97 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 94: Asia Pacific (ex-Japan) listed ETF and ETP asset growth Assets (US$ Bn) # products 70 300 60 250 50 200 40 150 30 100 20 10 50 0 0 Assets (US$ Bn) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Apr-11 ETF assets $3.7 $3.8 $6.6 $8.6 $10.5 $18.1 $27.0 $23.8 $38.5 $53.3 $58.6 ETP assets $0.1 $0.5 $0.8 $1.4 $1.8 ETF/ETP total $3.7 $3.8 $6.6 $8.6 $10.5 $18.1 $27.2 $24.2 $39.3 $54.7 $60.4 # ETFs 4 11 20 27 32 49 68 96 128 200 250 # ETPs 4 11 16 23 25 # ETFs/ETPs total 4 11 20 27 32 49 72 107 144 223 275Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 95: Top five Asia Pacific (ex-Japan) ETF providers by average daily US dollar turnover, as at end April 2011 Average daily turnover (US$ Mn) % % market market Change % Samsung ITM 19.5% Provider Dec-10 share Apr-11 share (US$ Mn) change iShares 18.6% Samsung ITM $78.7 9.8% $182.4 19.5% $103.7 131.8% China AM 14.5% iShares $168.1 21.0% $173.7 18.6% $5.5 3.3% China AM $132.2 16.5% $135.4 14.5% $3.3 2.5% SSgA 9.7% SSgA $48.9 6.1% $90.3 9.7% $41.3 84.4% E Fund Management 6.6% E Fund Management $125.9 15.7% $61.9 6.6% -$64.0 -50.9% Others 31.2% Others $247.1 30.8% $291.6 31.2% $44.5 18.0% Total $801.0 100.0% $935.2 100.0% $134.3 16.8%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 98
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 96: ETF providers in Asia Pacific (ex-Japan) ranked by AUM, as at end April 2011 Apr-11 YTD change # # total AUM % ADV # # % AUM % % market Provider ETFs listings (US$ Bn) total (US$ Mn) planned ETFs ETFs (US$ Bn) AUM share State Street Global Advisors 11 13 $13.3 22.8% $0.1 4 3 37.5% $0.6 4.5% -1.2% iShares 19 43 $10.6 18.1% $0.2 0 0 0.0% $0.6 5.9% -0.7% HSBC/Hang Seng 8 10 $7.2 12.2% $0.0 0 4 100.0% $0.4 5.8% -0.5% China Asset Management 2 2 $3.9 6.7% $0.1 2 0 0.0% $0.3 8.9% -0.1% Samsung Investment Trust Management 19 19 $3.7 6.3% $0.2 0 2 11.8% $0.8 29.1% 0.9% E Fund Management 2 2 $3.0 5.1% $0.1 1 0 0.0% -$0.2 -5.0% -0.8% Polaris 10 11 $2.9 4.9% $0.1 2 2 25.0% $0.4 15.8% 0.2% Hua An Fund Management 2 2 $1.3 2.2% $0.0 3 1 100.0% $0.4 43.5% 0.5% Woori Asset Management 12 12 $1.1 1.9% $0.0 5 2 20.0% $0.1 13.9% 0.1% BOCI-Prudential Asset Management 5 6 $1.1 1.8% $0.0 0 2 66.7% $0.1 7.4% 0.0% db x-trackers 24 67 $1.0 1.8% $0.1 2 2 9.1% $0.1 5.5% -0.1% Mirae Asset MAPS Global Investments 33 33 $0.9 1.6% $0.0 0 17 106.3% $0.4 77.8% 0.6% Lyxor Asset Management 2 38 $0.9 1.5% $0.0 1 0 0.0% -$0.1 -7.6% -0.3% Bank Of Communications 1 1 $0.6 1.0% $0.0 0 0 0.0% $0.0 1.3% -0.1% China Southern Fund Management 2 2 $0.6 1.0% $0.0 0 0 0.0% -$0.1 -10.5% -0.2% KB Asset Management 7 7 $0.4 0.7% $0.0 0 3 75.0% $0.1 23.3% 0.1% Benchmark Asset Management 8 8 $0.4 0.7% $0.0 6 0 0.0% $0.1 45.6% 0.2% Huatai-PineBridge Fund Management 2 2 $0.4 0.7% $0.0 0 1 100.0% $0.0 4.1% 0.0% DBS Asset Management 2 2 $0.4 0.6% $0.0 0 0 0.0% $0.1 33.2% 0.1% ICBC Credit Suisse Asset Management 2 2 $0.4 0.6% $0.0 0 1 100.0% $0.2 130.3% 0.3% Korea Investment Trust Management 6 6 $0.4 0.6% $0.0 0 0 0.0% $0.0 3.6% 0.0% Da Cheng International Asset Management 4 4 $0.4 0.6% $0.0 0 1 33.3% $0.3 450.2% 0.5% Smartshares Limited 5 5 $0.3 0.5% $0.0 0 0 0.0% $0.0 9.1% 0.0% Fortune SGAM Fund Management 1 1 $0.3 0.4% $0.0 0 0 0.0% $0.1 55.9% 0.1% Vanguard 2 4 $0.3 0.4% $0.0 0 0 0.0% $0.0 6.3% 0.0% Bosera Asset Management 1 1 $0.2 0.4% $0.0 3 0 0.0% $0.0 -10.6% -0.1% China Merchants Fund Management 1 1 $0.2 0.4% $0.0 0 1 100.0% $0.2 100.0% 0.4% GTJA Allianz 1 1 $0.2 0.4% $0.0 0 1 100.0% $0.2 100.0% 0.4% i-VCAP Management 1 1 $0.2 0.3% $0.0 0 0 0.0% $0.0 -3.4% 0.0% AmInvestment Management 2 2 $0.2 0.3% $0.0 0 0 0.0% $0.0 4.1% 0.0% CIMB-Principal Asset Management 2 3 $0.2 0.3% $0.0 1 0 0.0% $0.0 0.6% 0.0% Russell Investments 2 2 $0.2 0.3% $0.0 0 1 100.0% $0.1 56.5% 0.1% BetaShares Capital 3 3 $0.2 0.3% $0.0 3 1 50.0% $0.1 101.7% 0.1% Fubon Asset Management 4 4 $0.1 0.2% $0.0 0 0 0.0% -$0.2 -60.7% -0.4% AMP 1 1 $0.1 0.2% $0.0 0 0 0.0% $0.0 -9.8% -0.1% Hanwha Investment Trust Management 1 1 $0.1 0.2% $0.0 0 0 0.0% $0.1 91.7% 0.1% Yurie Asset Management 2 2 $0.1 0.2% $0.0 0 0 0.0% $0.0 -3.0% 0.0% Motilal Oswal Asset Management 3 3 $0.1 0.2% $0.0 2 2 200.0% $0.0 65.1% 0.1% HFT Investment Management 1 1 $0.1 0.2% $0.0 1 0 0.0% $0.0 -8.0% 0.0% Ping An 1 1 $0.1 0.2% $0.0 0 0 0.0% $0.0 7.1% 0.0% One Asset Management 2 2 $0.1 0.1% $0.0 0 0 0.0% $0.0 4.8% 0.0% Fullgoal Fund Management 1 1 $0.1 0.1% $0.0 0 1 100.0% $0.1 100.0% 0.1% CCB Principal Asset Management 1 1 $0.1 0.1% $0.0 0 0 0.0% $0.0 1.1% 0.0% Penghua Fund Management 1 1 $0.1 0.1% $0.0 3 0 0.0% $0.0 -26.2% -0.1% UOB Asset Management 1 1 $0.1 0.1% $0.0 0 0 0.0% $0.0 -40.6% -0.1% Sensible Asset Management 1 1 $0.0 0.1% $0.0 0 0 0.0% $0.0 -13.9% 0.0% Kotak Mahindra Asset Management 3 3 $0.0 0.1% $0.0 0 0 0.0% $0.0 30.1% 0.0% Daishin Investment Trust Management 1 1 $0.0 0.1% $0.0 0 0 0.0% $0.0 17.1% 0.0% Prudential Asset Management 2 2 $0.0 0.1% $0.0 0 0 0.0% $0.0 11.1% 0.0% Midas Asset Management 1 1 $0.0 0.1% $0.0 0 1 100.0% $0.0 100.0% 0.1% KTB Asset Management 2 2 $0.0 0.0% $0.0 0 1 100.0% $0.0 -1.4% 0.0% Australian Index Investments 6 6 $0.0 0.0% $0.0 0 0 0.0% $0.0 20.3% 0.0% Tong Yang Investment Trust Management 1 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 -2.3% 0.0% Daiwa Asset Management 1 1 $0.0 0.0% $0.0 1 0 0.0% $0.0 -4.7% 0.0% continued…Note: To avoid double counting, assets shown above refer only to primary listings.99 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 96: ETF providers in Asia Pacific (ex-Japan) ranked by AUM, as at end April 2011 (continued) Apr-11 YTD change # # total AUM % ADV # # % AUM % % market Provider ETFs listings (US$ Bn) total (US$ Mn) planned ETFs ETFs (US$ Bn) AUM share Krung Thai Asset Management 1 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 -20.3% 0.0% TMB Asset Management 1 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 -2.1% 0.0% Indo Premier Securities 1 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 5.5% 0.0% Reliance Capital Asset Management 1 1 $0.0 0.0% $0.0 4 0 0.0% $0.0 -8.9% 0.0% China International Capital Corp 1 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 -92.0% 0.0% Hyundai Investments 1 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 11.7% 0.0% PRUDENTIAL ICICI 1 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 106.6% 0.0% Quantum Asset Management 1 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 18.1% 0.0% UTI Asset Management 1 1 $0.0 0.0% $0.0 1 0 0.0% $0.0 -28.8% 0.0% Allianz SE - - - - - 1 - - - - - Capital Synergy Investment Management - - - - - 1 - - - - - EasyETF - - - - - 1 - - - - - Birla Sun Life Mutual Fund - - - - - 1 - - - - - Government Service Insurance Systems - - - - - 1 - - - - - Guotai Asset Management - - - - - 2 - - - - - Lion Fund Management - - - - - 1 - - - - - Religare India Asset Management - - - - - 1 - - - - - Tata Mutual Fund - - - - - 1 - - - - - Other (planned) - - - - - 5 - - - - - Total 250 362 $58.6 100.0% $0.9 60 50 25.0% $5.3 10.0%Note: To avoid double counting, assets shown above refer only to primary listings.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 97: Top 20 ETFs in Asia Pacific (ex-Japan) by AUM, as at end April 2011 Country AUM ADV ADV ETF listed Ticker (US$ Mn) (‘000 shares) (US$ Mn) iShares FTSE A50 China Index ETF* Hong Kong 2823 HK $7,900.2 88,878 $151.5 Tracker Fund of Hong Kong (TraHK) Hong Kong 2800 HK $7,419.8 20,636 $63.6 Hang Seng Index ETF Hong Kong 2833 HK $3,996.9 48 $1.5 China AMC SSE 50 China 510050 CH $3,266.3 367,639 $119.4 Hang Seng H-Share Index ETF Hong Kong 2828 HK $2,726.3 1,834 $31.6 E Fund SZSE 100 China 159901 CH $2,679.7 489,427 $59.6 SPDR S&P/ASX 200 Fund Australia STW AU $2,529.9 360 $18.1 ABF Pan Asia Bond Index Fund Hong Kong 2821 HK $2,434.8 4 $0.5 Samsung Kodex200 ETF South Korea 069500 KS $2,275.0 1,356 $36.9 Polaris Taiwan Top 50 Tracker Taiwan 0050 TT $1,958.6 19,597 $42.6 iShares MSCI India ETF Singapore INDIA SP $1,219.5 684 $5.2 SHANGHAI SSE180 ETF China 510180 CH $1,091.7 440,853 $45.6 World Index Shares ETFs - CSI 300* Hong Kong 2827 HK $993.6 773 $3.7 China SME ETF China 159902 CH $632.3 37,390 $16.1 Bank Of Communications Schroder SSE180 China 510010 CH $603.8 2,060 $0.3 db x-trackers CSI300 Index ETF Singapore XCSI SP $553.9 72 $0.8 SSE Component Stock Index ETF China 159903 CH $513.0 16,454 $3.1 W.I.S.E. Polaris CSI 300 Investment Trust Taiwan 0061 TT $497.3 7,384 $4.7 Samsung KODEX Samsung Group ETF South Korea 102780 KS $473.9 879 $5.2 Woori KOSEF 200 - KOSPI 200 South Korea 069660 KS $357.2 316 $8.6* This is a synthetic ETF. The relevant annotation that the fund is a synthetic ETF is a Hong Kong regulatory requirement. As such, for funds that are not authorised in Hong Kong, they may not carry the same annotation even though they may invest substantially in financial derivatives instruments.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 100
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 98: Top 20 ETFs in Asia Pacific (ex-Japan) by average daily US dollar trading volume, as at end April 2011 Country ADV ADV AUM ETF listed Ticker (US$ Mn) (‘000 shares) (US$ Mn) iShares FTSE A50 China Index ETF* Hong Kong 2823 HK $151.5 88,878 $7,900.2 China AMC SSE 50 China 510050 CH $119.4 367,639 $3,266.3 Samsung KODEX Leverage ETF South Korea 122630 KS $97.8 5,855 $337.3 Tracker Fund of Hong Kong (TraHK) Hong Kong 2800 HK $63.6 20,636 $7,419.8 E Fund SZSE 100 China 159901 CH $59.6 489,427 $2,679.7 SHANGHAI SSE180 ETF China 510180 CH $45.6 440,853 $1,091.7 Polaris Taiwan Top 50 Tracker Taiwan 0050 TT $42.6 19,597 $1,958.6 Samsung Kodex200 ETF South Korea 069500 KS $36.9 1,356 $2,275.0 db x-trackers CSI300 Index ETF* Hong Kong 3049 HK $35.7 33,500 $553.9 Samsung KODEX Inverse ETF South Korea 114800 KS $33.1 4,991 $185.7 Hang Seng H-Share Index ETF Hong Kong 2828 HK $31.6 1,834 $2,726.3 GTJA Allianz SSE Commodity Equity Index China 510170 CH $28.0 58,235 $207.5 SPDR S&P/ASX 200 Fund Australia STW AU $18.1 360 $2,529.9 China SME ETF China 159902 CH $16.1 37,390 $632.3 Woori KOSEF 200 - KOSPI 200 South Korea 069660 KS $8.6 316 $357.2 Mirae Asset MAPS TIGER 200 ETF South Korea 102110 KS $7.8 289 $300.3 SPDR Straits Times Index ETF Singapore STTF SP $5.8 2,200 $182.6 Huatai-PineBridge Dividend ETF China 510880 CH $5.3 14,967 $354.2 Samsung KODEX Samsung Group ETF South Korea 102780 KS $5.2 879 $473.9 iShares MSCI India ETF Singapore INDIA SP $5.2 684 $1,219.5* This is a synthetic ETF. The relevant annotation that the fund is a synthetic ETF is a Hong Kong regulatory requirement. As such, for funds that are not authorised in Hong Kong, they may not carry the same annotation even though they may invest substantially in financial derivatives instruments.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 99: Top 20 ETFs in Asia Pacific (ex-Japan) with largest change in AUM, as at end April 2011 AUM AUM Country (US$ Mn) (US$ Mn) Change ETF listed Ticker Apr-11 Dec-10 (US$ Mn) Tracker Fund of Hong Kong (TraHK) Hong Kong 2800 HK $7,419.8 $6,855.8 $563.9 iShares FTSE A50 China Index ETF* Hong Kong 2823 HK $7,900.2 $7,351.4 $548.7 Samsung Kodex200 ETF South Korea 069500 KS $2,275.0 $1,856.7 $418.4 Dacheng SZSE Growth 40 Index ETF China 159906 CH $303.3 - $303.3 China AMC SSE 50 China 510050 CH $3,266.3 $2,965.4 $300.9 Hang Seng Index ETF Hong Kong 2833 HK $3,996.9 $3,737.1 $259.8 China Merchants SSE Consumer 80 Total Return China 510150 CH $248.8 - $248.8 ICBC Credit Suisse SSE Dividend Price Index ETF China 159905 CH $215.6 - $215.6 Fubon MSCI Taiwan Taiwan 0057 TT $88.4 $300.7 -$212.4 GTJA Allianz SSE Commodity Equity Index ETF China 510170 CH $207.5 - $207.5 SHANGHAI SSE180 ETF China 510180 CH $1,091.7 $888.2 $203.5 Polaris Taiwan Top 50 Tracker Taiwan 0050 TT $1,958.6 $1,757.7 $200.9 Woori KOSEF 200 - KOSPI 200 South Korea 069660 KS $357.2 $159.4 $197.8 Hua An Longtou Enterprise ETF China 510190 CH $182.5 - $182.5 Samsung KODEX Leverage ETF South Korea 122630 KS $337.3 $160.1 $177.1 E Fund SZSE 100 China 159901 CH $2,679.7 $2,835.1 -$155.4 SPDR S&P/ASX 200 Fund Australia STW AU $2,529.9 $2,659.0 -$129.0 Banking Index Benchmark Exchange Traded Scheme India BBEES IN $122.2 $9.5 $112.8 Mirae Asset TIGER KOSPI 200 ETF Hong Kong 2835 HK $112.2 - $112.2 db x-trackers CSI300 Index ETF Singapore XCSI SP $553.9 $450.3 $103.6* This is a synthetic ETF. The relevant annotation that the fund is a synthetic ETF is a Hong Kong regulatory requirement. As such, for funds that are not authorised in Hong Kong, they may not carry the same annotation even though they may invest substantially in financial derivatives instruments.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.101 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 100: ETP providers in Asia Pacific (ex-Japan) ranked by assets, as at end April 2011 Apr-11 YTD change # # total Assets ADV # % Assets % % market Provider ETPs listings (US$ Bn) % total (US$ Mn) planned # ETPs ETPs (US$ Bn) assets share ETF Securities 5 5 $0.7 39.9% $3.2 0 0 0 0.0% $0.1 10.0% Benchmark Asset Management 1 1 $0.4 21.8% $3.1 1 0 0 0.0% $0.1 16.0% Reliance Capital Asset Management 1 1 $0.2 11.9% $0.2 0 0 0 0.0% $0.1 165.8% UTI Asset Management 1 1 $0.1 6.4% $0.3 0 0 0 0.0% $0.0 11.6% Sensible Asset Management 1 1 $0.1 5.0% $0.5 0 0 0 0.0% $0.0 64.2% Kotak Mahindra Asset Management 1 1 $0.1 4.3% $0.5 0 0 0 0.0% $0.0 56.4% HDFC Mutual Fund 1 1 $0.1 3.9% $0.2 0 0 0 0.0% $0.0 4.0% SBI Funds Management 1 1 $0.0 2.3% $0.3 0 0 0 0.0% $0.0 16.8% Prudential ICICI 1 1 $0.0 1.3% $0.0 0 0 0 0.0% $0.0 8.5% Samsung Investment Trust Management 3 3 $0.0 1.2% $0.6 0 2 2 200.0% $0.0 216.7% Axis Mutual Fund 1 1 $0.0 0.9% $0.0 0 0 0 0.0% $0.0 8.4% Religare India Asset Management 1 1 $0.0 0.4% $0.0 0 0 0 0.0% $0.0 -12.0% Hyundai Investments 1 1 $0.0 0.4% $0.0 0 0 0 0.0% $0.0 33.7% Quantum Asset Management 1 1 $0.0 0.3% $0.0 0 0 0 0.0% $0.0 8.3% Citigroup 5 5 $0.0 0.0% $0.0 0 0 0 0.0% $0.0 0.0% Barclays (iPath) - 1 - - $0.0 - - 0 - - - State Street Global Advisors - 2 - - $8.5 - - 0 - - - Birla Sun Life Mutual Fund - - - - - 1 - - - - - Bombay Bullion Association - - - - - 2 - - - - - Cydinar Sdn Bhd - - - - - 1 - - - - - ING OptiMix - - - - - 1 - - - - - RiddiSiddhi Bullions - - - - - 1 - - - - - RUSAL - - - - - 1 - - - - - Tata Mutual Fund - - - - - 1 - - - - - Other (planned ETP) - - - - - 1 - - - - - Total 25 28 $1.8 100.0% $17.4 10 2 2 8.7% $0.4Note: To avoid double counting, assets shown above refer only to primary listings.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 102
  • ETF Landscape End April 2011 Industry Review from BlackRockIn Asia Pacific (ex-Japan), open-end mutual funds (excluding ETFs) have seen US$32.5 Bn net outflows YTD to March 2011 accordingto data from Strategic Insight. Guaranteed funds were the most popular with US$1.5 Bn net inflows, while money market fundsexperienced US$12.2 Bn net outflows.Figure 101: Asia Pacific (ex-Japan) mutual fund flows (excluding ETFs) Net new flows US$ bn 250 200 150 100 50 0 -50 Exposure (US$ Bn) 2005 2006 2007 2008 2009 2010 YTD Mar-11 Equity 26.4 52.2 225.7 -1.2 19.9 -28.2 -4.8 Bond -0.4 8.5 15.5 6.4 20.5 -3.0 -11.5 Mixed 8.4 18.2 72.4 -21.4 -4.4 -5.6 -5.5 Money market 7.4 -12.3 3.4 39.9 -0.1 -32.8 -12.2 Real estate 1.7 7.0 9.1 -2.1 1.6 0.6 -0.3 Guaranteed 1.3 2.2 -0.3 0.8 1.7 0.7 1.5 Other 0.8 1.2 2.2 -2.5 -2.0 -0.2 0.2 Total 45.6 76.9 328.1 20.0 37.1 -68.5 -32.5Source: Strategic Insight Simfund Global.In Asia Pacific (ex-Japan), ETFs have seen US$2.1 Bn net inflows YTD to March 2011 according to data from Strategic Insight. Equity fundswere the most popular with US$2.0 Bn net inflows.Figure 102: Asia Pacific (ex-Japan) ETF fund flows Net new flows US$ bn 18 16 14 12 10 8 6 4 2 0 -2 Exposure (US$ Bn) 2005 2006 2007 2008 2009 2010 YTD Mar-11 Equity 0.3 1.7 0.2 15.5 2.4 8.1 2.0 Bond 1.8 0.3 0.1 0.0 0.9 0.6 0.0 Mixed 0.1 0.2 -0.2 0.0 0.0 0.0 0.0 Money market 0.0 0.0 0.0 0.1 0.0 0.0 0.1 Real estate -0.1 0.0 0.0 0.0 0.1 0.0 0.0 Guaranteed 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Other 0.0 0.0 0.2 -0.1 0.2 0.3 0.1 Total 2.1 2.2 0.4 15.5 3.6 9.1 2.1Source: Strategic Insight Simfund Global.103 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockJapanAt the end of April 2011, the Japanese ETF industry had 84 ETFs Nomura Asset Management is the largest ETF provider in terms ofwith 88 listings and assets of US$29.4 Bn, from seven providers on assets, with US$15.2 Bn in 32 ETFs, reflecting 51.7% marketthree exchanges. This compares to 70 ETFs with 73 listings and share; Nikko Asset Management is second with 20 ETFs, assets ofassets of US$26.3 Bn from six providers on two exchanges at the US$6.6 Bn, and 22.6% market share; followed by Daiwa Assetend of April 2010. Management with 22 ETFs, assets of US$5.4 Bn and 18.3% market share, at the end of April 2011.In 2011 YTD, assets have decreased by 8.8% from US$32.2 Bn toUS$29.4 Bn, greater than the 5.3% decrease in the MSCI Japan Additionally, there were nine other ETPs1 with 20 cross listings andIndex in US dollar terms. This compares to a 6.9% increase in assets assets of US$0.6 Bn from four providers on two exchanges.over the same period in 2010. This compares to four ETPs with 20 cross listings and assets of US$0.2 Bn from three providers on two exchanges at the endIn 2011 YTD, the number of ETFs increased by 5.0% with four new of April 2010.ETFs launched. This compares to a 2.9% increase over the sameperiod in 2010, when two new ETFs launched.In the first four months of 2011, the ETF average daily tradingvolume in US dollars increased by 18.5% to US$0.2 Bn in April 2011.This compares to an average daily trading volume of US$0.2 Bn inApril 2010.Figure 103: ETF listings in Japan, as at end April 2011 1 1 Japan P listings: 84 T listings: 88 Providers: 7 AUM: US$29.4 BnNote: P listings = # primary listings. T listings = # total listings. Providers = # primary ETF providers. Assets = Assets Under Management in primary listings only.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 104
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 104: Japanese listed ETF and ETP asset growth Assets (US$ Bn) # products 40 90 35 80 70 30 60 25 50 20 40 15 30 10 20 5 10 0 0 Assets (US$ Bn) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Apr-11 ETF assets $6.6 $21.0 $27.6 $30.3 $31.8 $34.6 $34.2 $27.4 $24.6 $32.2 $29.4 ETP assets $0.0 $0.3 $0.3 $0.4 $0.6 ETF/ETP total $6.6 $21.0 $27.6 $30.3 $31.8 $34.6 $34.2 $27.8 $24.9 $32.6 $30.0 # ETFs 8 18 18 15 13 13 15 61 68 80 84 # ETPs 1 4 5 9 9 # ETFs/ETPs total 8 18 18 15 13 13 16 65 73 89 93Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 105: ETF providers in Japan ranked by AUM, as at end April 2011 Apr-11 YTD change # # total AUM % ADV # # % AUM % % market Provider ETFs listings (US$ Bn) total (US$ Mn) planned ETFs ETFs (US$ Bn) AUM share Nomura Asset Management 32 32 $15.2 51.7% $82.6 2 0 0.0% -$1.2 -7.6% 0.7% Nikko Asset Management 20 20 $6.6 22.6% $59.0 0 3 17.6% $0.1 1.2% 2.2% Daiwa Asset Management 22 22 $5.4 18.3% $21.0 0 0 0.0% -$1.5 -21.8% -3.0% Mitsubishi UFJ Asset Management 6 6 $2.1 7.0% $7.6 0 1 20.0% -$0.2 -8.4% 0.0% iShares 1 1 $0.1 0.2% $0.5 0 0 0.0% $0.0 41.7% 0.1% Simplex Asset Management 2 2 $0.0 0.1% $0.3 0 0 0.0% $0.0 0.1% 0.0% Kokusai Asset Management 1 1 $0.0 0.1% $0.7 0 0 0.0% $0.0 147.7% 0.0% EasyETF - 1 - - $0.0 - - - - - - Samsung Investment Trust Management - 1 - - $0.0 - - - - - - State Street Global Advisors - 2 - - $0.6 - - - - - - Total 84 88 $29.4 100.0% $172.3 2 4 5.0% -$2.8 -8.8%Note: To avoid double counting, assets shown above refer only to primary listings.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.105 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 106: Top five Japanese ETF providers by average daily US dollar turnover, as at end April 2011 Average daily turnover (US$ Mn) % market % market Change % Provider Dec-10 share Apr-11 share (US$ Mn) change Nomura Asset Management 47.9% Nomura AM $89.0 61.2% $82.6 47.9% -$6.4 -7.2% Nikko Asset Management 34.2% Nikko AM $34.3 23.6% $59.0 34.2% $24.6 71.8% Daiwa Asset Management 12.2% Daiwa AM $17.8 12.2% $21.0 12.2% $3.2 17.9% Mitsubishi UFJ Asset Management 4.4% Mitsubishi UFJ AM $4.0 2.8% $7.6 4.4% $3.6 88.5% Kokusai Asset Management 0.4% Kokusai AM $0.0 0.0% $0.7 0.4% $0.7 100.0% Others 0.9% Others $0.3 0.2% $1.5 0.9% $1.2 426.0% Total $145.5 100.0% $172.3 100.0% $26.9 18.5%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 107: ETP providers in Japan ranked by assets, end April 2011 Apr-11 YTD change # # total Assets % ADV # # % Assets % % market Provider ETPs listings (US$ Bn) total (US$ Mn) planned ETPs ETPs (US$ Bn) assets share Mitsubishi UFJ Trust and Banking Corp 4 4 $0.3 56.0% $11.3 0 0 0.0% $0.2 144.8% 22.3% Nomura Asset Management 3 3 $0.2 32.9% $2.0 0 0 0.0% $0.0 -5.2% -18.3% Simplex Asset Management 1 1 $0.1 10.3% $2.4 0 0 0.0% $0.0 15.8% -2.8% Mizuho Asset Management 1 1 $0.0 0.8% $0.1 0 0 0.0% $0.0 -41.9% -1.2% ETF Securities - 19 - - $0.7 0 - - - - - State Street Global Advisors - 1 - - $4.7 0 - - - - - Other (planned ETP) - - - - - 1 - - - - - Total 9 29 $0.6 100.0% $21.1 1 0 0.0% $0.2 47.4%Note: To avoid double counting, assets shown above refer only to primary listings.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 108: Japanese ETF assets by type of exposure, as at end April 2011 Apr-11 YTD change # AUM % ADV # % AUM % % market Exposure ETFs (US$ Bn) total (US$ Mn) ETFs ETFs (US$ Bn) AUM share Nikkei 225 5 $13.3 45.3% $119.5 0 0.0% -$0.6 -4.6% 2.0% TOPIX 8 $13.0 44.3% $39.0 0 0.0% -$1.5 -10.5% -0.8% Japanese Sectors 43 $1.1 3.7% $3.4 0 0.0% -$0.3 -19.2% -0.5% International 18 $0.9 3.2% $6.0 3 20.0% $0.0 5.2% 0.4% Nikkei 300 1 $0.1 0.3% $0.0 0 0.0% $0.0 -3.4% 0.0% Small Cap 1 $0.0 0.1% $0.0 0 0.0% $0.0 -2.8% 0.0% Growth 1 $0.0 0.0% $0.0 0 0.0% $0.0 4.5% 0.0% Other 7 $0.9 3.1% $4.4 1 16.7% -$0.4 -33.3% -1.1% Total 84 $29.4 100.0% $172.3 4 5.0% -$2.8 -8.8% Nikkei 225 45.3% TOPIX 44.3% Japanese Sectors 3.7% International 3.2% Nikkei 300 0.3% Small Cap 0.1% Growth 0% Other 3.1%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 106
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 109: Top 20 ETFs in Japan by AUM, as at end April 2011 AUM ADV ADV ETF Ticker (US$ Mn) (‘000 shares) (US$ Mn) NIKKEI 225 ETF 1321 JP $6,923.5 402 $49.7 TOPIX ETF 1306 JP $6,814.5 2,422 $26.0 Listed Index Fund 225 1330 JP $3,113.7 416 $51.6 Listed Index Fund TOPIX 1308 JP $3,036.8 501 $5.3 Daiwa ETF TOPIX 1305 JP $2,655.6 624 $6.7 Daiwa ETF NIKKEI 225 1320 JP $2,436.2 115 $14.2 MAXIS NIKKEI225 ETF 1346 JP $785.2 28 $3.4 MAXIS S&P Mitsubishi Group ETF 1670 JP $740.8 2,381 $3.0 SSE 50 Index Linked ETF 1309 JP $347.6 6 $1.8 TOPIX Banks Exchange Traded Fund 1615 JP $315.1 936 $1.3 MAXIS TOPIX ETF 1348 JP $288.5 86 $0.9 MAXIS TOPIX Core30 ETF 1344 JP $187.6 12 $0.1 TOPIX Core 30 Exchange Traded Fund 1311 JP $177.1 23 $0.1 NEXT FUNDS Ibovespa Linked ETF 1325 JP $146.0 272 $1.0 NEXT FUNDS Tokyo Stock Exchange REIT Index ETF 1343 JP $95.9 30 $0.4 Listed Index Fund China A Share (Panda) CSI 300 1322 JP $89.7 5 $0.2 Nikkei 300 Stock Index Listed Fund 1319 JP $84.3 20 $0.0 Daiwa ETF TOPIX Core 30 1310 JP $82.2 1 $0.0 Listed Index Fund International Emerging Countries Equity 1681 JP $72.7 29 $0.4 Listed Index Fund J-REIT Bi-Monthly Dividend Payment 1345 JP $67.0 22 $0.3Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 110: Top 20 ETFs in Japan by average daily US dollar trading volume, as at end April 2011¹ ADV ADV AUM ETF Ticker (US$ Mn) (‘000 shares) (US$ Mn) Listed Index Fund 225 1330 JP $51.6 416 $3,113.7 NIKKEI 225 ETF 1321 JP $49.7 402 $6,923.5 TOPIX ETF 1306 JP $26.0 2,422 $6,814.5 Daiwa ETF NIKKEI 225 1320 JP $14.2 115 $2,436.2 Daiwa ETF TOPIX 1305 JP $6.7 624 $2,655.6 Listed Index Fund TOPIX 1308 JP $5.3 501 $3,036.8 MAXIS NIKKEI225 ETF 1346 JP $3.4 28 $785.2 MAXIS S&P Mitsubishi Group ETF 1670 JP $3.0 2,381 $740.8 SSE 50 Index Linked ETF 1309 JP $1.8 6 $347.6 TOPIX Banks Exchange Traded Fund 1615 JP $1.3 936 $315.1 NEXT FUNDS Ibovespa Linked ETF 1325 JP $1.0 272 $146.0 MAXIS TOPIX ETF 1348 JP $0.9 86 $288.5 Kokusai S&P500 VIX Short-Term Futures Index ETF 1552 JP $0.7 7 $19.1 SPDR S&P 500 1557 JP $0.6 4 $95,287.1 iShares Nikkei 225 1329 JP $0.5 4 $65.4 Listed Index Fund International Emerging Countries Equity 1681 JP $0.4 29 $72.7 NEXT FUNDS Tokyo Stock Exchange REIT Index ETF 1343 JP $0.4 30 $95.9 NEXT FUNDS India S&P CNX Nifty Linked ETF 1678 JP $0.4 310 $45.2 Listed Index Fund International Bond Monthly Dividend 1677 JP $0.4 1 $49.3 Listed Index Fund J-REIT Bi-Monthly Dividend Payment Type 1345 JP $0.3 22 $67.01. For ETFs cross listed into Japan from the US, AUM reflects total fund AUM (which is not counted in previous totals). ADV reflects US dollar volume of the specific exchange listing shown.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.107 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockIn Japan, open-end mutual funds (excluding ETFs) saw US$14.2 Bn net new inflows YTD to March 2011, according to data from StrategicInsight. Real estate funds were the most popular with US$8.2 Bn net inflows, followed by bond funds with US$6.9 Bn, while mixed assetclass funds experienced net outflows of US$1.5 Bn.Figure 111: Mutual fund flows in Japan (excluding ETFs) Net new flows US$ bn 70 60 50 40 30 20 10 0 -10 -20 Exposure (US$ Bn) 2005 2006 2007 2008 2009 2010 YTD Mar-11 Equity 10.5 41.4 40.0 -4.7 7.0 -6.8 -0.3 Bond 40.0 14.8 21.4 27.3 26.6 61.2 6.9 Mixed 15.3 42.8 49.5 -9.3 -11.1 -5.7 -1.5 Money market 0.3 0.0 2.4 2.6 0.1 -0.2 -0.2 Real estate 6.2 9.7 7.7 -2.1 15.2 17.4 8.2 Guaranteed 0.2 3.8 7.4 4.3 0.6 -1.1 0.3 Other 1.4 0.7 -1.3 -0.4 0.4 0.3 0.7 Total 73.9 113.2 127.1 17.7 38.8 65.1 14.2Source: Strategic Insight Simfund Global.YTD to March 2011, ETFs in Japan saw US$0.2 Bn net outflows according to data from Strategic Insight. Equity ETFs experienced US$0.4Bn net outflows.Figure 112: ETF flows in Japan Net new flows US$ bn 5 4 3 2 1 0 -1 -2 -3 -4 -5 -6 Exposure (US$ Bn) 2005 2006 2007 2008 2009 2010 YTD Mar-11 Equity -4.9 2.3 2.9 2.9 -5.1 3.9 -0.4 Bond 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Mixed 0.0 0.0 0.0 0.2 -0.2 0.0 0.0 Real estate 0.0 0.0 0.0 0.1 0.0 0.0 0.0 Other 0.0 0.0 0.2 0.2 -0.1 0.1 0.1 Total -4.9 2.3 3.1 3.3 -5.3 4.0 -0.2Source: Strategic Insight Simfund Global.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 108
  • ETF Landscape End April 2011 Industry Review from BlackRockMiddle East and AfricaFigure 113: ETF listings in the Middle East and Africa, as at end April 2011 3 1 2 1 Saudi Arabia 2 South Africa 3 UAE P listings: 2 P listings: 26 P listings: 1 T listings: 2 T listings: 26 T listings: 1 Providers: 1 Providers: 8 Providers: 1 AUM: US$0.0 Bn AUM: US$2.8 Bn AUM: US$0.0 BnNote: P listings = # primary listings. T listings = # total listings. Providers = # primary ETF providers. Assets = Assets Under Management in primary listings only.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 114: Middle East and Africa listed ETF and ETP asset growth Assets (US$ Bn) # products 20 350 18 300 16 14 250 12 200 10 8 150 6 100 4 50 2 0 0 Assets (US$ Bn) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Apr-11 ETF assets - $0.3 $0.6 $0.8 $1.2 $1.6 $1.2 $2.2 $1.2 $1.8 $2.3 $2.8 ETP assets $0.0 $0.1 $0.1 $0.2 $0.5 $0.4 $4.5 $9.1 $8.1 $14.8 $17.3 $19.7 # ETFs - 1 3 4 5 7 8 11 17 23 29 29 # ETPs 1 1 1 3 18 41 94 211 246 297 327 325Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, Bank of Israel.109 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 115: ETF providers in the Middle East and Africa ranked by AUM, as at end April 2011 Apr-11 YTD change # AUM % ADV # # % AUM % % market Provider ETFs (US$ Bn) total (US$ Mn) planned ETFs ETFs (US$ Bn) AUM share Satrix Managers 7 $1.7 59.2% $7.7 1 0 0.0% $0.0 2.9% -10.4% STANLIB 2 $0.5 16.7% $0.1 3 0 0.0% $0.4 1030.4% 14.9% db x-trackers 5 $0.2 8.8% $1.5 0 0 0.0% $0.1 28.2% 0.5% Bips Investment Managers 2 $0.2 7.3% $1.8 0 0 0.0% $0.0 20.7% 0.0% Absa Capital 7 $0.1 3.7% $4.9 0 0 0.0% -$0.1 -44.9% -4.5% Fortress Asset Managers 1 $0.0 1.7% $0.1 1 0 0.0% $0.0 -3.5% -0.4% Investec Fund Management 1 $0.0 1.2% $0.4 0 0 0.0% $0.0 -2.1% -0.3% Falcom Financial Services 2 $0.0 1.0% $0.1 0 0 0.0% $0.0 63.5% 0.3% Nedbank Capital 1 $0.0 0.2% $0.0 1 0 0.0% $0.0 3.4% 0.0% National Bank of Abu Dhabi 1 $0.0 0.2% $0.0 2 0 0.0% $0.0 2.5% 0.0% Al Mal Capital - - - - 1 - - - - - Gaon Investment House - - - - 2 - - - - - HSBC/Hang Seng - - - - 1 - - - - - Other (planned) - - - - 12 - - - - - Total 29 $2.8 100.0% $16.6 24 0 0.0% $0.5 21.1%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 116: ETP providers in the Middle East and Africa ranked by assets, as at end April 2011 Apr-11 YTD change # Assets % ADV # # % Assets % % market Provider ETPs (US$ Bn) total (US$ Mn) planned ETPs ETPs (US$ Bn) Assets share Israeli ETP Providers¹ 317 $17.2 87.3% $121.6 0 -2 -0.6% $2.2 14.4% 0.7% Harel 21 NA NA $5.1 0 0 0.0% NA NA NA Index 20 NA NA $7.2 0 0 0.0% NA NA NA KSM 101 NA NA $37.8 0 0 0.0% NA NA NA Mabat 59 NA NA $15.9 0 -1 -1.7% NA NA NA Meitav 14 NA NA $4.0 0 0 0.0% NA NA NA Psagot 52 NA NA $16.9 0 0 0.0% NA NA NA Tachlit 50 NA NA $34.8 0 -1 -2.0% NA NA NA Absa Capital 1 $2.5 12.6% $7.3 3 0 0.0% $0.2 7.2% -0.7% Dubai Commodities Asset Management 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 8.3% 0.0% FirstRand Bank 1 $0.0 0.0% $0.2 0 0 0.0% $0.0 0.0% 0.0% Clade Investment Management 1 $0.0 0.0% $0.0 0 0 0.0% $0.0 0.0% 0.0% STANLIB 4 $0.0 0.0% $0.2 0 0 0.0% $0.0 0.0% 0.0% Other (planned ETP) - - - - 1 - - - - - Total 325 $19.7 100.0% $129.3 4 -2 -0.6% $2.3 13.4%1. Individual assets of Israeli providers are temporarily unavailable. An aggregate value for Israeli ETPs has been included in the total assets. Latest data for Israel ETP assets from Bank of Israel is March 2011.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, Bank of Israel.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 110
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 117: Top 10 ETFs in the Middle East and Africa by AUM, as at end April 2011 Country AUM ADV ADV ETF listed Ticker (US$ Mn) (‘000 shares) (US$ Mn) SATRIX40 South Africa STX40 SJ $1,014.8 1,338 $6.0 STANLIB SWIX 40 Fund South Africa STANSX SJ $369.0 84 $0.1 Satrix Dividend Plus South Africa STXDIV SJ $160.0 959 $0.2 SATRIX Financials South Africa STXFIN SJ $126.8 68 $0.1 Bips Government Inflation Linked Bond Fund South Africa BIPINF SJ $126.5 29 $0.1 STANLIB Top 40 Fund South Africa STAN40 SJ $100.6 0 $0.0 SATRIX Industrials South Africa STXIND SJ $99.0 16 $0.1 SATRIX RAFI 40 Total Return South Africa STXRAF SJ $92.6 339 $0.4 SATRIX SWIX TOP 40 South Africa STXSWX SJ $85.0 424 $0.4 SATRIX RESI South Africa STXRES SJ $83.0 55 $0.5Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 118: Top 10 ETFs in the Middle East and Africa by average daily US dollar trading volume, as at end April 2011 Country ADV ADV AUM ETF listed Ticker (US$ Mn) (‘000 shares) (US$ Mn) SATRIX40 South Africa STX40 SJ $6.0 1,338 $1,014.8 NewRand ETF South Africa NRD SJ $4.5 1,241 $43.8 Bips Top 40 South Africa BIPS40 SJ $1.7 378 $77.9 db x-trackers MSCI USA South Africa DBXUS SJ $0.9 695 $27.8 SATRIX RESI South Africa STXRES SJ $0.5 55 $83.0 Zshares GOVI South Africa ZGOVI SJ $0.4 273 $33.8 SATRIX SWIX TOP 40 South Africa STXSWX SJ $0.4 424 $85.0 SATRIX RAFI 40 Total Return South Africa STXRAF SJ $0.4 339 $92.6 eRAFI Overall SA Index ETF South Africa RAFISA SJ $0.3 68 $24.1 db x-trackers MSCI Japan South Africa DBXJP SJ $0.3 396 $30.8Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 119: Top 10 ETFs in the Middle East and Africa by change in AUM, as at end April 2011 AUM AUM Country (US$ Mn) (US$ Mn) Change ETF listed Ticker Apr-11 Dec-10 (US$ Mn) STANLIB SWIX 40 Fund South Africa STANSX SJ $369.0 $5.1 $363.9 NewRand ETF South Africa NRD SJ $43.8 $130.6 -$86.8 STANLIB Top 40 Fund South Africa STAN40 SJ $100.6 $36.4 $64.2 Bips Government Inflation Linked Bond South Africa BIPINF SJ $126.5 $94.1 $32.3 db x-trackers MSCI World South Africa DBXWD SJ $80.6 $50.3 $30.3 SATRIX SWIX TOP 40 South Africa STXSWX SJ $85.0 $108.4 -$23.4 Satrix Dividend Plus South Africa STXDIV SJ $160.0 $138.4 $21.6 SATRIX RESI South Africa STXRES SJ $83.0 $63.5 $19.4 SATRIX40 South Africa STX40 SJ $1,014.8 $999.9 $14.9 SATRIX RAFI 40 Total Return South Africa STXRAF SJ $92.6 $82.3 $10.3Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.111 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.
  • ETF Landscape End April 2011 Industry Review from BlackRockLatin AmericaAt end of April 2011, the Latin American ETF industry had 27 ETFs, iShares is the largest ETF provider in terms of assets with US$7.5 Bn,with 407 listings and assets of US$10.4 Bn, from four providers on in 18 ETFs, reflecting 71.9% market share; BBVA Asset Managementthree exchanges. This compares to 21 ETFs, with 243 listings and is second with US$1.7 Bn in five ETFs and 15.8% market share at theassets of US$9.1 Bn from three providers on three exchanges at the end of April 2011.end of April 2010. There were 330 ETFs cross listed in Mexico, 305 ETFs registeredIn 2011 YTD, assets have increased by 3.1% from US$10.1 Bn to for sale in Chile and 294 ETFs registered for sale in Peru at theUS$10.4 Bn, greater than the 0.4% increase in the MSCI EM Latin end of April 2011.America Index in US dollar terms. This compares to a 7.5% decreasein assets over the same period in 2010. The first ETF to launch in Latin America was the NAFTRAC, designed to track the Mexican Bolsa Index. Since its launch in Mexico byIn the first four months of 2011, the ETF average daily trading Nacional Financiera during 2002, it became the largest ETF in thevolume in US dollars increased by 107.4% to US$0.3 Bn in April region with US$5.9 Bn in AUM at end of April 2011. It was acquired2011. This compares to an average daily trading volume of by iShares on 14 May 2009 and has since been renamedUS$0.3 Bn in April 2010. iShares NAFTRAC.Figure 120: ETF listings in Latin America, as at end April 2011 3 4 1 2 1 Brazil 2 Chile 3 Mexico 4 Peru P listings: 8 # registrations1: 305 P listings: 19 # registrations1: 294 T listings: 8 P listings: – T listings: 349 Providers: 2 T listings: 50 Providers: 3 AUM: US$1.9 Bn Providers: – AUM: US$8.6 Bn AUM: –1. ETFs registered for sale in Peru and Chile are only available as admissible investments for pension funds.Note: P listings = # primary listings. T listings = # total listings. Providers = # primary ETF providers. Assets = Assets Under Management in primary listings only.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 112
  • ETF Landscape End April 2011 Industry Review from BlackRockFigure 121: Latin America ETF asset growth Assets (US$ Bn) # products 12 30 10 25 8 20 6 15 4 10 2 5 0 0 Assets (US$ Bn) 2002 2003 2004 2005 2006 2007 2008 2009 2010 Apr-11 ETF assets $0.1 $0.4 $0.4 $1.3 $2.7 $6.3 $5.5 $9.8 $10.1 $10.4 # ETFs 1 1 2 2 2 6 10 17 26 27Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 122: ETF providers in Latin America ranked by AUM, as at end April 2011 # cross # cross # registered # registered # listings listings for sale for sale AUM % ADV # planned Provider ETFs in Mexico in Chile in Chile1 in Peru1 (US$ Bn) total (US$ Mn) new ETFs iShares 18 154 50 169 196 $7.5 71.9% $250.6 1 BBVA Asset Management 5 5 - - - $1.7 15.8% $8.2 - Itau Unibanco 2 - - - - $1.3 12.1% $2.7 1 Protego 2 - - - - $0.0 0.1% $0.1 - Direxion Shares - 4 - - - - - $13.1 - EasyETF - 9 - 5 5 - - $0.0 - Global X Funds - 2 - - - - - $0.0 - Lyxor Asset Management - 4 - 42 - - - $0.0 - PowerShares - 39 - - 1 - - $6.5 - ProShares - 18 - - - - - $3.5 - State Street Global Advisors - 28 - 24 24 - - $5.7 - Van Eck Associates Corp - 19 - 12 16 - - $1.4 - Vanguard - 39 - 30 39 - - $0.8 - WisdomTree Investments - 9 - 9 - - $0.1 - Amundi ETF - - - 1 2 - - - - db x-trackers - - - 13 2 - - - - Bank of New York - - - - 1 - - - - Credit Suisse Asset Management - - - - 2 - - -