Fixed Income ETFs Hit Record Levels

Published on Wednesday, 08 February 2012 09:28 Written by TradersHuddle Staff

NEW YORK & SAN FRANCISCO-( Business Wire )-

Global asset flows for exchange traded products (ETPs), and fixed income exchange traded funds (ETFs) specifically, hit record levels during the month of January, illustrating a continuing market “revolution” globally as investors increasingly turn to fixed income ETFs in an effort to help restore investment yield to their portfolios.

According to the BlackRock Investment Institute’s latest “ETP Landscape” report released today, the global exchanged traded product (ETP) industry had its best month of January ever with $34.1 billion of net inflows, representing a 144% increase in inflows over the previous record set in January 2011 and up 116% from December 2011. Also, according to the ETP Landscape, fixed income ETPs set a new global monthly record, attracting $9.0 billion in January 2012 up from the previous monthly record set of $6.7 billion set in January 2009.

“In this challenging environment with sustained levels of low yield, now more than ever investors are looking for new ways to generate income,” said Peter Fisher, Senior Managing Director and head of BlackRock’s Fixed Income Portfolio Management. “We see a quiet revolution building in the asset class as more and more investors learn how to use fixed income ETFs to build portfolios that combine low risk with the potential for yield.”

Over the last decade, fixed income ETFs have helped democratize access to fixed income markets by creating new centers of transparent liquidity and offering investors a cost efficient way to express a view on specific fixed income sectors.

“At iShares, we created the first fixed income ETF nearly ten years ago to offer efficient access to a wide range of fixed income markets and we’re thrilled to see institutional and retail investors embracing the benefits of these products,” said Matt Tucker, Head of iShares Fixed Income Investment Strategy. “Passive fixed income ETFs are essential building blocks of a portfolio and make particular sense during this period of historically low yield.”

iShares plans to continue to expand its fixed income product offerings later this month when it is scheduled to launch six new fixed income ETFs in the U.S., including the iShares Barclays U.S. Treasury Bond Fund (ticker: GOVT), the iShares Barclays CMBS Bond Fund (ticker: CMBS), the iShares Aaa – A Rated Corporate Bond Fund (ticker: QLTA), and three corporate sector bond funds (financials, ticker: MONY; industrials, ticker: ENGN; and utilities, ticker: AMPS).

About BlackRock

BlackRock (NYSE:BLK) is a leader in investment management, risk management and advisory services for institutional and retail clients worldwide. At December 31, 2011, BlackRock’s AUM was $3.513 trillion. BlackRock offers products that span the risk spectrum to meet clients’ needs, including active, enhanced and index strategies across markets and asset classes. Products are offered in a variety of structures including separate accounts, mutual funds, iShares^® (exchange-traded funds), and other pooled investment vehicles. BlackRock also offers risk management, advisory and enterprise investment system services to a broad base of institutional investors through BlackRock Solutions^®. Headquartered in New York City, as of December 31, 2011, the firm has approximately 10,100 employees in 27 countries and a major presence in key global markets, including North and South America, Europe, Asia, Australia and the Middle East and Africa. For additional information, please visit the Company's website at www.blackrock.com.

iShares is the global product leader in exchange traded funds with over 460 funds globally across equities, fixed income and commodities, which trade on 19 exchanges worldwide. The iShares Funds are bought and sold like common stocks on securities exchanges. The iShares Funds are attractive to many individual and institutional investors and financial intermediaries because of their relative low cost, tax efficiency and trading flexibility. Investors can purchase and sell shares through any brokerage firm, financial advisor, or online broker, and hold the funds in any type of brokerage account. The iShares customer base consists of the institutional segment of pension plans and fund managers, as well as the retail segment of financial advisors and high net worth individuals.

Carefully consider the funds' investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the funds' prospectuses, which may be obtained by calling 1-800-iShares (1-800-474-2737) or by visiting www.iShares.com. Read the prospectus carefully before investing.

Investing involves risk, including possible loss of principal.

Bonds and bond funds may decrease in value as interest rates rise. An investment in the Fund(s) is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. There can be no assurance that an active trading market for shares of an ETF will develop or be maintained.

This material represents an assessment of the market environment at a specific time and is not intended to be a forecast of future events or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding the funds or any security in particular.

Transactions in shares of the iShares Funds will result in brokerage commissions and will generate tax consequences. iShares Funds are obliged to distribute portfolio gains to shareholders. Shares of the iShares Funds may be sold throughout the day on the exchange through any brokerage account. However, shares may only be redeemed directly from a Fund by Authorized Participants, in very large creation/redemption units.

The iShares Funds ("Funds") are distributed by SEI Investments Distribution Co. ("SEI"). BlackRock Fund Advisors ("BFA") serves as the investment advisor to the Funds. BlackRock Investments, LLC (“BRIL”), assists in the marketing of the Funds. BFA and BRIL are affiliates of BlackRock, Inc., none of which is affiliated with SEI.

The iShares Funds are not sponsored, endorsed or issued by Barclays Capital, nor does this company make any representation regarding the advisability of investing in the Funds. Neither SEI, nor BlackRock Institutional Trust Company, N.A., nor any of their affiliates, are affiliated with the company listed above.

* Not FDIC Insured * No Bank Guarantee * May Lose Value

BlackRockChristine Hudacko, 415-670-2687christine.hudacko@blackrock.comDiane Henry, This e-mail address is being protected from spambots. You need JavaScript enabled to view it.