SOURCE: BlackRock, Inc.

BlackRock, Inc.

May 23, 2011 10:30 ET

Institutions' Growing ETF Use Underscores Funds' Versatility and Value

Annual Greenwich Associates Study Documents Higher Allocations for Liquidity Management, Transitions, Rebalancing and Cash Management

SAN FRANCISCO, CA--(Marketwire - May 23, 2011) - Institutional investors report they are increasingly turning to Exchange Traded Funds (ETFs) to facilitate essential fund management practices, including liquidity management, transition management and the equitization of transactional cash for asset-allocation purposes, a study released by Greenwich Associates today shows.

The trends in institutional investors' use of ETFs are documented in year-over-year changes in the behaviors of pension funds, foundations and endowments as reported by the independent research firm Greenwich Associates. The study, in its second year and sponsored this year by iShares, reports that the number of institutional investors reporting use of ETFs for transition management, cash equitization, rebalancing and liquidity management increased significantly from 2010 to 2011.

Among investors participating in the study, 63% said they use ETFs for transition management purposes. That level is up from the 38% who reported using ETFs for transitions in the 2010 Greenwich Associates study. Institutions reporting ETF usage for cash equitization rose to 51% in 2011 from 31% in 2010. The reported use of ETFs by institutions for rebalancing purposes rose to 44% in 2011 from 24% in 2010. The use of ETFs in overlay liquidity strategies or liquidity sleeves increased to 10% in 2011 from 3% in 2010.

"We are pleased by the Greenwich Associates study confirmation of these trends in ETF investing. Evidence indeed shows institutions are increasingly using ETFs for both tactical and strategic purposes, and we expect these trends to continue," said Liz Tennican, Head of US iShares Institutional at BlackRock, Inc. (NYSE: BLK).

The study was conducted between February and April 2011 through live, one-on-one interviews between Greenwich Associates and representatives of U.S. pension funds, endowments, foundations, and asset management companies. All participants were from organizations that include ETFs among their portfolio holdings.

"The marked increase in the use of ETFs for liquidity management is a significant development, reflecting sharper focus by institutions to assert control over their operational abilities during periods of irregular market conditions," said Ms. Tennican. "Liquidity has become a governance issue. The lessons of the global financial crisis of 2007-08 were hard ones. Institutional investors are applying their acquired knowledge from that period to their search for effective liquidity solutions. ETFs can be an effective tool for them."

The Greenwich Associate study identified iShares as the leading ETF provider of choice by institutional investors. Among participants, 85% of asset managers and 78% of institutional funds identified iShares ETFs as among their portfolio holdings.

Ms. Tennican noted that the trend toward expanded uses of ETFs by U.S. institutions reinforces iShares approach to serving the institutional investment community.

"Our efforts are largely educational in nature, helping institutional investors to identify and evaluate all of their investment options in order to achieve their specific objectives," said Ms. Tennican. "ETFs are often a potential solution. We have developed a wealth of information and expertise to help support the independent analysis of these choices by institutional investors."

About BlackRock

BlackRock is a leader in investment management, risk management and advisory services for institutional and retail clients worldwide. At March 31, 2011, BlackRock's AUM was $3.648 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 March 31, 2011, the firm has approximately 9,300 employees in 26 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

About iShares

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 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 iShares 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 Read the prospectus carefully before investing.

Investing involves risk, including possible loss of principal.Past performance does not guarantee future results. Asset allocation may not protect against market risk.

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. There can be no assurance that an active trading market for shares of an ETF will develop or be maintained.

"Cash equitization" relates to minimizing exposure to cash while gaining market exposure in a specific asset class.

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 Fund Distribution Company ("BFDC") assists in the marketing of the Funds. BFA and BFDC are affiliates of BlackRock, Inc., none of which is affiliated with SEI. Neither SEI, and its affiliates, nor BlackRock Institutional Trust Company, N.A., and its affiliates, are affiliated with Greenwich Associates, LLC, and its affiliates.

©2011 BlackRock Institutional Trust Company, N.A. All rights reserved. iShares® is a registered trademark of BlackRock Institutional Trust Company, N.A. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.