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BlackRock Canada launches six news iShares ETFs

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BlackRock Asset Management Canada Limited (BlackRock Canada), an indirect, wholly-owned subsidiary of BlackRock, has launched six new iShares Exchange-Traded Funds (ETFs). Several of these funds have been constructed to meet investor demand for income while others offer access to local and global sectors—in some cases, for the first time in Canada.

 

The six new ETFs have closed the initial offering of their units and began trading on the Toronto Stock Exchange on Monday 18 April).

"Investor appetite for sector-specific exposure remains strong as many seek to diversify portfolios by industry," says Mary Anne Wiley, Managing Director, Head of iShares Distribution at BlackRock Canada. "These new funds will offer investors even greater opportunity to target their portfolios by sector both within and beyond our market."

The six new ETFs offer sector concentration, income generation or both.

The iShares S&P Global Healthcare Index Fund (CAD-Hedged) (XHC) seeks to provide long-term capital growth by replicating, to the extent possible, the performance of the S&P Global 1200 Health Care Canadian Dollar Hedged Index, net of expenses. XHC delivers access to a sector that is virtually unrepresented in the Canadian equity market, yet is considered a good defensive sector. XHC’s expected income distribution frequency is semi-annually.

The iShares S&P/TSX Global Base Metals Index Fund (XBM), with a management fee of 0.55%, seeks to provide long-term capital growth by replicating, to the extent possible, the performance of the S&P/TSX Global Base Metals Index, net of expenses and invests in companies that are involved in the extraction/production of industrial metals (copper, iron, zinc, nickel, etc.). XBM’s expected income distribution frequency is quarterly.

The iShares S&P/TSX Capped Utilities Index Fund (XUT), with a management fee of 0.55%, seeks to provide long-term capital growth by replicating, to the extent possible, the performance of the S&P/TSX Capped Utilities Index. XUT will allow investors to implement their outlook on infrastructure spending and energy prices, and is also considered a defensive sector. XUT’s expected income distribution frequency is monthly.

The iShares S&P/TSX Capped Consumer Staples Index Fund (XST), with a management fee of 0.55%, seeks to provide long-term capital growth by replicating, to the extent possible, the performance of the S&P/TSX Capped Consumer Staples Index and is the first ETF in Canada to offer exposure to the consumer staples sector, including grocery stores, pharmacies and food companies. It allows investors to implement their outlook on economic conditions and employment. XST’s expected income distribution frequency is quarterly.

The iShares S&P/TSX Equity Income Index Fund (XEI) with a management fee of 0.55%, seeks to provide long-term capital growth by replicating, to the extent possible, the performance of the S&P/TSX Equity Income Index, net of expenses. XEI is the first ETF in Canada to offer clients exposure to the S&P/TSX Equity Income Index, consisting of 50 to 75 stocks selected from the S&P/TSX Composite Index that focus on dividend yield. XEI offers investors access to companies with higher dividend yields. XEI’s expected income distribution frequency is monthly.

The iShares JP Morgan USD Emerging Markets Bond Index Fund (CAD-Hedged) (XEB) with a management fee of 0.72%, seeks to provide income and long-term capital growth by replicating, to the extent possible, the performance of the JP Morgan EMBI Global Core Hedged in CAD Index, net of expenses. XEB allows investors to get exposure to USD-denominated government bonds issued by emerging markets, which can offer greater yield potential and allow investors to further diversify the fixed-income components of their portfolios. XEB’s expected income distribution frequency is monthly.

"These new ETFs offer investors sector exposure and greater yield potential, allowing clients to further diversify asset classes and the fixed income components of their portfolios," said Oliver McMahon (pictured), Director of iShares Product Management at BlackRock Canada. "We saw a need for sectors not available to Canadian investors and delivered a global opportunity to complete our comprehensive suite of products."

The funds also enable sector rotation strategies, inviting investors to move in and out of sectors based on their own assumptions about ongoing performance. Sector rotation strategies are especially effective in adapting to changing economic cycles, which favour companies in various sectors as each phase of the cycle expands and contracts.

"As our economy moves into an early growth phase, sectors like consumer discretionary, materials and energy tend to outperform other sectors. Therefore, investors may want to consider the iShares S&P/TSX Global Base Metals Index Fund (XBM) for their portfolio as the material sector tends to outperform as large infrastructure projects get underway," says Wiley.

For investors seeking steady income, the iShares S&P/TSX Equity Income Index Fund (XEI) and the iShares JP Morgan USD Emerging Markets Bond Index Fund (CAD-Hedged) (XEB) are expected to satisfy that need while offering exposure to broader markets. These ETFs are especially attractive for those who place high priority on preserving initial capital and view income generation as a cornerstone to any sound personal investment strategy.

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