BlackRock Asset Management Canada Limited (iShares)
NYSE : BLK

BlackRock Asset Management Canada Limited (iShares)

January 31, 2018 17:22 ET

BlackRock® Canada Announces Planned Reclassification of Advisor Class Units

TORONTO, ONTARIO--(Marketwired - Jan. 31, 2018) -

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BlackRock Asset Management Canada Limited ("BlackRock Canada"), an indirect, wholly-owned subsidiary of BlackRock, Inc. ("BlackRock") (NYSE:BLK) today announces that it plans to simplify its product lineup by reclassifying all advisor class units of its exchange traded funds ("iShares ETFs") into common units of the same iShares ETF. This change is consistent with overall industry trends towards transparent and simplified fee structures.

Advisor class units are a class of iShares ETF units on which the iShares ETF pays a service fee to registered dealers who have purchased them on behalf of their clients. The iShares ETFs do not pay a service fee in respect of common units.

Advisor class units are only available on certain iShares ETFs offered by BlackRock Canada and are denoted by ".A" or ".B" after their ticker symbol (see table below). As at December 31, 2017, the advisor class units made up less than 1% of BlackRock Canada's assets under management ("AUM"). While iShares ETFs have experienced rapid growth in Canada, demand for advisor class units has decreased significantly in recent years.

On or about March 31, 2018, for each iShares ETF, BlackRock Canada plans to reduce the annual management fee payable on the advisor class units by an amount equal to the applicable service fee component in respect of such units.

On or about April 6, 2018 (the "Reclassification Date"), advisor class units of the iShares ETFs will be reclassified into the corresponding common units of the same iShares ETF, subject to receipt of regulatory and third party approvals, if any. As at the Reclassification Date, the advisor class units and corresponding common units of each iShares ETF will share the same attributes and fee structure. Accordingly, the reclassification will not adversely impact the financial interests or rights of unitholders.

Each advisor class unit will be reclassified into the number of corresponding common unit(s) of the same iShares ETF equal to the net asset value ("NAV") per advisor class unit as of the Reclassification Date divided by the corresponding NAV per common unit as of the Reclassification Date. No fractional common units of any iShares ETF will be delivered upon reclassification. The reclassification of advisor class units into whole common units of the same iShares ETF is not expected to give rise to a disposition by unitholders of advisor class units for tax purposes on any whole units reclassified. In lieu of delivering fractional common units, payment in cash will be made for the remaining advisor class units, and such transaction will be considered a disposition of such advisor class units for tax purposes.

Unitholders do not have to take any action to participate in the elimination of the service fee or the reclassification. Certain amendments will be made to the applicable declaration of trust or trust agreement of the iShares ETFs to reflect the elimination of the service fee and facilitate the reclassification. A further press release will be issued confirming the details of the reclassification on or about the Reclassification Date.

In connection with this change, the distribution reinvestment plan ("DRIP"), pre-authorized cash contribution plan ("PACC") and systematic withdrawal plan ("SWP") with respect to the advisor class units of the iShares ETFs will be terminated on or about March 2, 2018. The last month to participate in the DRIP, PACC and SWP for the advisor class units will be February 2018. Following the reclassification, unitholders may elect to participate in these plans with respect to their common units by contacting the CDS participant through which they hold units as more fully described in each iShares ETF's prospectus.

The advisor class units of the iShares ETFs are expected to be voluntarily delisted from the Toronto Stock Exchange or Aequitas NEO Exchange, as the case may be, at the close of business on the Reclassification Date, as all outstanding advisor class units will be subject to the mandatory reclassification described above and BlackRock Canada does not intend to offer advisor class units of the iShares ETFs in the future.

As a result of the reclassification, the annual management fees and ticker symbols of the advisor class units of the iShares ETFs will change to the annual management fees and ticker symbols of the corresponding common units as shown in the table below. BlackRock Canada is not making any change to the annual management fees payable on the common units.

iShares ETF Name Advisor Class Unit Ticker Current
Advisor Class Management Fee (including Service Fee)
Common Unit Ticker Common Unit Management Fee
iShares International Fundamental Index ETF CIE.A 1.40 % CIE 0.65 %
iShares Japan Fundamental Index ETF (CAD-Hedged) CJP.A 1.40 % CJP 0.65 %
iShares US Fundamental Index ETF CLU.A 1.40 % CLU 0.65 %
iShares US Fundamental Index ETF - Non-Hedged CLU.B 1.40 % CLU.C 0.65 %
iShares Emerging Markets Fundamental Index ETF CWO.A 1.40 % CWO 0.65 %
iShares Canadian Fundamental Index ETF CRQ.A 1.40 % CRQ 0.65 %
iShares S&P/TSX Canadian Dividend Aristocrats Index ETF CDZ.A 1.35 % CDZ 0.60 %
iShares S&P/TSX Canadian Preferred Share Index ETF CPD.A 0.95 % CPD 0.45 %
iShares US Dividend Growers Index ETF (CAD-Hedged) CUD.A 1.35 % CUD 0.60 %
iShares Global Monthly Dividend Index ETF (CAD-Hedged) CYH.A 1.35 % CYH 0.60 %
iShares Global Real Estate Index ETF CGR.A 1.40 % CGR 0.65 %
iShares Global Infrastructure Index ETF CIF.A 1.40 % CIF 0.65 %
iShares Global Water Index ETF CWW.A 1.35 % CWW 0.60 %
iShares Global Agriculture Index ETF COW.A 1.40 % COW 0.65 %
iShares Balanced Income CorePortfolio™ Index ETF CBD.A 1.25 % CBD 0.25 %
iShares Balanced Growth CorePortfolio™ Index ETF CBN.A 1.25 % CBN 0.25 %
iShares High Quality Canadian Bond Index ETF XQB.A 0.62 % XQB 0.12 %
iShares 1-5 Year Laddered Corporate Bond Index ETF CBO.A 0.75 % CBO 0.25 %
iShares 1-10 Year Laddered Corporate Bond Index ETF CBH.A 0.75 % CBH 0.25 %
iShares U.S. High Yield Fixed Income Index ETF (CAD-Hedged) CHB.A 1.00 % CHB 0.50 %
iShares 1-5 Year Laddered Government Bond Index ETF CLF.A 0.65 % CLF 0.15 %
iShares 1-10 Year Laddered Government Bond Index ETF CLG.A 0.65 % CLG 0.15 %
iShares Convertible Bond Index ETF CVD.A 0.95 % CVD 0.45 %
iShares Premium Money Market ETF CMR.A 0.50 % CMR 0.25 %
iShares Canadian Financial Monthly Income ETF FIE.A 1.40 % FIE 0.65 %
iShares Equal Weight Banc & Lifeco ETF CEW.A 1.30 % CEW 0.55 %
iShares Short Duration High Income ETF (CAD-Hedged) CSD.A 1.05 % CSD 0.55 %

Update to Risk Ratings

In connection with updating the disclosure documents for the iShares ETFs to reflect this announcement, BlackRock Canada applied the new investment risk classification methodology set out in National Instrument 81-102 - Investment Funds, which came into force on September 1, 2017, to determine the risk rating of each iShares ETF. As a result of the application of the new investment risk classification methodology, BlackRock Canada today also announces an update to the risk rating of one of the iShares ETFs (as described below). This change will be reflected in the prospectus amendment for the iShares ETF that will be filed on or about February 2, 2018. There have been no changes to the investment objectives, investment strategies or management of the iShares ETFs.

iShares ETF Name Previous Risk Rating Updated Risk Rating
iShares U.S. High Yield Fixed Income Index ETF (CAD-Hedged) Low to Medium Medium

A copy of the standardized risk classification methodology used by BlackRock Canada to identify the risk ratings of the iShares ETFs is available on request, at no cost, by calling us at 1-855-255-5951 or by writing to BlackRock Canada at 161 Bay Street, Suite 2500, Toronto, Ontario M5J 2S1.

About BlackRock

BlackRock helps investors build better financial futures. As a fiduciary to our clients, we provide the investment and technology solutions they need when planning for their most important goals. As of December 31, 2017, the firm managed approximately US$6.288 trillion in assets on behalf of investors worldwide. For additional information on BlackRock, please visit 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 800 funds globally across multiple asset classes and strategies and more than US$1.5 trillion in assets under management as of December 31, 2017, 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.1

1 Based on US$6.288 trillion in AUM as of 12/31/17.

iShares® ETFs are managed by BlackRock Asset Management Canada Limited. Commissions, trailing commissions, management fees and expenses all may be associated with investing in iShares® ETFs. 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.

©2018 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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