First ETF in Europe to invest solely in emerging markets consumer growth. Second ETF to be issued and settle in an international central securities depository….…
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BlackRock launches two exchange-traded funds on the London Stock Exchange to provide investors with precise and cost-efficient access to popular equity sectors.
The iShares MSCI Emerging Markets Consumer Growth UCITS ETF aims to capture opportunities arising from evolving spending patterns by emerging market consumers. The fund invests in companies that derive a high or growing proportion of their revenue from this consumer spending. The fund includes developed and emerging market companies in the consumer staples, consumer discretionary healthcare, industrial, information technology and Telecoms sectors. The fund complements the new iShares Core MSCI Emerging Markets IMI UCITS ETF launched last week.
The iShares MSCI USA Dividend IQ UCITS ETF invests in US companies that target higher-than-average dividend yields. Securities are screened according to their earnings quality and to ensure that the dividends they pay are both sustainable and persistent over time. The fund aims to provide European investors with access to high quality income streams.
Tom Fekete, Head of Product Development for iShares in EMEA commented: “Investors are increasingly complementing their broad equity allocations with targeted funds that track specific sectors and themes. ETFs are an ideal way to achieve this investment mix as they provide quick and easy access to niche, as well as broad, exposures in a cost efficient manner.
“We’re starting to see a shift in sentiment towards emerging markets and the growing consumption of the middle classes is creating a compelling investment opportunity. Equally UK and European investors continue to need income-generating assets, and the high-quality dividends being issued by many US companies can offer a solid source of diversified income.”
A new settlement structure
The iShares MSCI USA Dividend IQ UCITS ETF will be the second iShares fund to be issued and settle in an international central securities depository provided by Euroclear Bank. This pioneering partnership between iShares and Euroclear Bank seeks to facilitate growth in the European ETF market by simplifying the issuance structure, and post-trade environment, of European ETFs. By using a single European settlement location, it is expected this new international ETF structure will improve trading liquidity, ease cross-border ETF processing and significantly lower transaction costs for investors. The iShares MSCI USA Dividend IQ UCITS ETF will be cross-listed on BATS Chi-X today.
Leland Clemons, Head of iShares EMEA Capital Markets commented: “Market infrastructure improvements are imperative to support the rapid growth of the ETF industry and we hope to see this structure adopted by providers across Europe to continue to drive the ETF market evolution.”
Both exchange-traded funds (ETFs) are physically replicating funds that purchase and hold the underlying securities. The iShares MSCI Emerging Markets Consumer Growth UCITS ETF has a total expense ratio (TER) of 0.60% and the iShares MSCI USA Dividend IQ UCITS ETF has a TER of 0.35%.