BlackRock Asset Management Canada Limited (iShares)

BlackRock Asset Management Canada Limited (iShares)

June 01, 2015 09:22 ET

BlackRock Asset Management Canada Limited: Enhancements to the Benchmark Index Methodology for the iShares 1-5 Year Laddered Corporate Bond Index ETF

TORONTO, ONTARIO--(Marketwired - June 1, 2015) - BlackRock Asset Management Canada Limited ("BlackRock Canada") (TSX:CBO), an indirect, wholly-owned subsidiary of BlackRock, Inc. ("BlackRock"), today announced that FTSE TMX Global Debt Capital Markets Inc. ("FTSE"), the provider of the FTSE TMX Canada 1-5 Year Laddered Corporate Bond Index (the "Index") which the iShares 1-5 Year Laddered Corporate Bond Index ETF ("CBO") seeks to replicate, will be making certain enhancements to the Index methodology which are designed to improve the diversification and liquidity of the Index. These enhancements are scheduled to be phased in over a three-month period beginning on July 15 and continuing through to October 15, 2015.

The Index will continue to be comprised of five distinct annual groupings of bond maturities (or "rungs") with the result that the Index debt securities mature in a sequential or "laddered" manner. The enhancements to the Index methodology include adding to the eligible universe investment grade debt securities rated "BBB", a common component of the investment grade corporate bond market, rather than only those rated 'A' or higher, and removing the requirement that each "rung" of the Index "ladder" be limited to 20 constituents. The enhanced Index methodology will also require rebalancing of all "rung" weightings annually (July 15), and of all index constituents semi-annually (January 15 and July 15), where previously, the Index was rebalanced annually and only in the "rung" comprised of the longest-dated debt securities on June 30 of each year. These enhancements are expected to result in greater diversification through an increased number of securities and a broader range of sectors within the Index.

As a result of these changes, BlackRock Canada expects that CBO's overall yield to maturity, and correspondingly, the total return earned by investors, should increase on both a pre-tax and after-tax basis. The inclusion of BBB-rated debt securities should provide the opportunity for higher yields within the Index portfolio. BlackRock Canada expects the after-tax returns of CBO for investors to improve as the weighted average premium to par of the bonds held within the Index is expected to be lower going forward as a result of greater diversification and more frequent rebalancing. The expected reduction in the weighted average premium to par of the bonds held within the Index will generally also correspond to a lower average coupon rate.

Further information on the iShares Funds can be found at www.blackrock.com/ca.

Forward-looking information

This press release contains forward-looking statements with respect to CBO's tax efficiency, overall yield to maturity and other portfolio characteristics. By their nature, these forward-looking statements involve risks and uncertainties that could cause CBO's actual portfolio characteristics and results to differ materially from the expectations described in this press release.

About BlackRock

BlackRock is a leader in investment management, risk management and advisory services for institutional and retail clients worldwide. At March 31, 2015, BlackRock's AUM was $4.774 trillion. BlackRock helps clients meet their goals and overcome challenges with a range of products that include 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 March 31, 2015, the firm had approximately 12,300 employees in more than 30 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/ca / Twitter: @BlackRockCA / Blog: www.blackrockblog.com/can

About iShares

iShares is a global leader in exchange-traded funds (ETFs), with more than a decade of expertise and commitment to individual and institutional investors of all sizes. With over 700 funds globally across multiple asset classes and strategies and more than $1 trillion in assets under management as of March 31, 2015, iShares helps clients around the world build the core of their portfolios, meet specific investment goals and implement market views. iShares funds are powered by the expert portfolio and risk management of BlackRock, trusted to manage more money than any other investment firm.

iShares Funds are managed by BlackRock Asset Management Canada Limited. Commissions, trailing commissions, management fees and expenses all may be associated with investing in iShares Funds. Please read the relevant prospectus before investing. The funds are not guaranteed, their values change frequently and past performance may not be repeated. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional.

© 2015 BlackRock Asset Management Canada Limited. All rights reserved. iSHARES® and BLACKROCK® are registered trademarks of BlackRock, Inc., or its subsidiaries in the United States and elsewhere. Used with permission.

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