BlackRock Asset Management Canada Limited (iShares)
TSX : XHB

BlackRock Asset Management Canada Limited (iShares)

September 28, 2010 08:18 ET

BlackRock® Canada Launches the iShares® DEX HYBrid Bond Index Fund

The First ETF in Canada to Invest in both High-Yield and Investment-Grade Corporate Bonds

TORONTO, ONTARIO--(Marketwire - Sept. 28, 2010) - BlackRock Asset Management Canada Limited (BlackRock Canada), an indirect, wholly-owned subsidiary of BlackRock, Inc., today announced that the iShares Exchange-Traded Funds (ETFs) business, the world's largest provider of ETFs, launched the new iShares DEX HYBrid Bond Index Fund (TSX:XHB), the first ETF in Canada to invest in both high-yield and investment-grade corporate bonds.

XHB, which will begin trading on the Toronto Stock Exchange today, is a unique vehicle designed to provide investors with regular monthly income by investing in both BBB-rated corporate bonds and the high-yield bond market. XHB will invest exclusively in Canadian-dollar denominated securities.

"XHB is unique in Canada as the only ETF to give investors exposure to the expanding Canadian high-yield marketplace. Historically, we have had a relatively small high-yield market, with most high-yield issuers looking to raise capital in the US. However, over the last 18 months we have seen a number of new high-yield issues within Canada, and the number of issuers is expected to grow as the our marketplace becomes more established," said Oliver McMahon, Director of Product Management for iShares ETFs at BlackRock Canada.

"XHB meets investor demand for a diversified, high-yielding product, while it is designed to mitigate risk and deliver regular distributions."

Like the other trusted iShares ETFs, XHB offers the benefit of reasonable management fees (lower than many mutual funds) and the convenience of an exchange listing and intra-day trading. Unlike mutual funds, this means that investors can buy and sell throughout the trading day, and realize the current market value of their investments in real-time. They can also use value-added trading strategies, such as limit and stop orders.

Why XHB Will Appeal to Investors

A recent study found that most investors say the experience of the last two years has made them more cautious. In fact, preserving initial capital has become a considerably greater priority to them. Yet, not surprisingly, they also want to maximize their rates of return, and they view income generation as a cornerstone of any sound personal investment strategy.

On behalf of iShares ETFs, The Gandalf Group last month interviewed a representative sample of individual Canadian investors with more than $50,000 in the stock market, bonds, or mutual funds. It found that 95% said that preserving their initial investment and minimizing the risk of loss in their portfolio is a priority right now. (Fully 62% reported that it was a very important objective.) Still, at the same time, 89% of respondents said that it was also important to maximize the potential for increases in their holdings. And 73% stressed the importance of income generation to their overall investment plan.

"Our research shows that a majority of people today believe it is important to maximize the value of their investments and generate regular income," said Oliver McMahon. "We expect all investors to find XHB an attractive addition to an intelligently created, balanced portfolio."

XHB's Unique Methodology

XHB will invest in both high-yield and BBB-rated investment-grade corporate bonds and track a new and innovative index from PC-Bond, a business unit of TSX Inc., the DEX HYBrid Index (the "Index").

The Index will combine the full market capitalization of eligible Canadian high-yield bonds (which typically pay higher yields in order to compensate for greater credit risk) along with 30% of the market capitalization of the eligible BBB-rated corporate bond market. While the Canadian high-yield market is still nascent and relatively small, this innovative methodology allows the Index to maintain a significant yet investible weight in high yield-bonds. This diversification across ratings generates high income without sacrificing the stability that bonds provide. XHB will carry a management fee of only 0.45%.

As of August 31, 2010, there were 228 bonds included in the DEX HYBrid Bond Index. Of those, 16 were high yield-rated and 212 were BBB-rated bonds. High-yield rated bonds accounted for approximately 18% of the Index.

For more information about the new iShares funds, please visit www.iShares.ca. All other inquiries: 1-866-iShares (1-866-474-2737) or email iSharesCanada@blackrock.com.

About BlackRock

BlackRock is a leader in investment management, risk management and advisory services for institutional and retail clients worldwide. At June 30, 2010, BlackRock's AUM was $3.151 trillion. BlackRock offers products that span the risk spectrum to meet clients' needs, including active, enhanced and index strategies across markets and asset classes. Products are offered in a variety of structures including separate accounts, mutual funds, iShares® (exchange traded funds), and other pooled investment vehicles. BlackRock also offers risk management, advisory and enterprise investment system services to a broad base of institutional investors through BlackRock Solutions. Headquartered in New York City, as of June 30, 2010, the firm has approximately 8,500 employees in 24 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.

About iShares ETFs

The iShares business is a global product leader in ETFs with over 410 funds globally across equities, fixed income and commodities, which trade on 16 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 securities 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.

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