ETF Landscape. Industry Highlights. February 2011

Transcription

1 ETF Landscape Industry Highlights February Deborah Fuhr, Managing Director Global Head of ETF Research and Implementation Strategy Phone: Deborah.Fuhr@blackrock.com

2 Table of contents I. Current ETF and ETP landscape ETFs/ETPs listed globally Global ETF and ETP asset growth Global ETF and ETP providers 8 ETFs/ETPs listed in the United States United States ETF and ETP asset growth ETFs/ETPs listed in Europe European ETF and ETP asset growth ETFs/ETPs listed in Asia Pacific (exjapan) ETFs/ETPs listed in Japan ETFs/ETPs listed in Latin America ETFs/ETPs listed in Canada 9 Middle East and Africa ETF and ETP asset growth 8 II. Investment applications 8 Product overview 8 ETF/ETP toolbox 8 How and why ETFs are used 9 Growth in institutional users of ETFs 9 Coresatellite Fixed income index trading characteristics Commodity index comparison 8 Structures of ETFs and ETNs III. Appendix regulatory update 8 IV. ETF Landscape reports

3 ETFs and ETPs listed globally At the end of February, the global ETF industry had, ETFs with,8 listings and assets of $,. Bn, from providers on 8 exchanges around the world. This compares to,9 ETFs with,998 listings and assets of $,.9 Bn from providers on exchanges, at the end of February. We expect global in ETFs and ETPs to increase by % annually over the next three years, taking the global ETF/ETP industry to approximately $ trillion in by early. Considering ETFs separately, should reach $ trillion globally by the end of, $ trillion in the United States in and $ billion in Europe in. Taking ETFs and ETPs together, United States should reach $ trillion in, with European reaching $ billion in. Anniversaries 9 January marked the 8th anniversary of ETFs in the United States. 9 March will mark the st anniversary of the first ETF globally, which listed in Canada in 99. April will mark the th anniversary of ETFs in Europe. August will mark the th anniversary of ETFs in Australia. Assets YTD, assets have increased by.% from $,. Bn to $,. Bn, which is less than the.% increase in the MSCI World Index in dollar terms. This compares to a.% decrease in assets over the same period in. $9. Bn of net new assets went into ETFs/ETPs in February. $. Bn net inflows went into equity ETFs/ETPs, of which $9. Bn went into ETFs/ETPs tracking developed market indices while ETFs/ETPs tracking emerging market indices saw net outflows of $. Bn. Fixed income ETFs/ETPs saw net inflows of $. Bn, of which ETFs/ETPs providing high yield exposure saw $. Bn net inflows while Government bond ETFs/ETPs saw net outflows of $. Bn. $. Bn net inflows went into ETFs/ETPs with commodity exposure, of which ETFs/ETPs with exposure to agricultural commodities saw $.8 Bn net inflows and ETFs/ETPs providing exposure to energy saw net inflows of $. Bn.. ETPs are products that have similarities to ETFs in the way they trade and settle but they do not use an openend investment company structure. The use of other structures including grantor trusts, partnerships, notes and commodity pools by ETPs can create different tax and regulatory implications for investors when compared to ETFs which are funds.. Global flows approximated by combining United States and European flows. Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).

4 ETFs and ETPs listed globally (continued) Assets (continued) $. Bn of net new assets went into ETFs/ETPs in YTD. $. Bn net inflows went into equity ETFs/ETPs, of which $. Bn went into ETFs/ETPs tracking developed market indices while ETFs/ETPs tracking emerging market indices saw net outflows of $9. Bn. Fixed income ETFs/ETPs saw net inflows of $. Bn, of which ETFs/ETPs providing high yield exposure saw $.9 Bn net inflows while Government bond ETFs/ETPs saw net outflows of $.9 Bn. $. Bn net inflows went into ETFs/ETPs with commodity exposure, of which ETFs/ETPs with exposure to agricultural commodities saw $.8 Bn net inflows while ETFs/ETPs providing exposure to precious metals saw net outflows of $. Bn. $. Bn of net new assets went into ETFs/ETPs YTD compared to $. Bn net outflows over the same period in. $. Bn net new asset inflows went into equity ETFs/ETPs YTD, compared to $9. Bn net outflows over the same period in. Net new asset flows into ETFs/ETPs tracking developed market equity indices were $. Bn YTD, compared to $8. Bn net outflows over the same period in and ETFs/ETPs tracking emerging market indices saw $9. Bn net outflows YTD, greater than the $. Bn net outflows in the same period in. Fixed income ETF/ETP net new asset inflows were $. Bn YTD, less than the $. Bn net inflows over the same period in and net inflows into ETFs/ETPs with commodity exposure were $. Bn YTD compared to net outflows of $. Bn in the same period in. ETFs YTD, the number of ETFs have increased by.9% with 9 new ETFs launched. This compares to a.% increase in the number of ETFs over the same period in, when new ETFs launched. There are currently plans to launch,9 new ETFs compared to 88 at the end of February. The top ETFs, out of,, account for.% of global ETF, while, ETFs have less than $. Mn in assets,, ETFs have less than $. Mn in assets and 9 ETFs have less than $. Mn in assets. Trading volume In February, the ETF average daily trading volume in dollars increased by.% to $9. Bn compared to December. This compares to average daily trading volume of $. Bn in February.. Global flows approximated by combining United States and European flows. Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).

5 ETFs and ETPs listed globally (continued) ETF providers Globally, ishares is the largest ETF provider in terms of both number of products and assets, ETFs and $9. Bn respectively, reflecting.% market share; State Street Global Advisors is second with 8 ETFs, assets of $. Bn, and.8% market share; followed by Vanguard with ETFs, assets of $. Bn and.% market share; as at end of February. The top three ETF providers, out of, account for 9.% of global ETF. This compares to.% out of providers, at the end of February. Four new providers have entered the industry in, launching their first ETFs, while firms plan to launch their first ETF in the future. Exchanges YTD, the number of exchanges with official listings has increased from to 8. Index providers MSCI ranks first in terms of and number of products tracking its benchmarks with assets of $9. Bn and ETFs, while Standard & Poor s (S&P) ranks second with $. Bn and ETFs, followed by Barclays Capital with $.8 Bn and 8 ETFs. Mutual funds Globally, net sales of mutual funds (excluding ETFs) were minus $. Bn, while net sales of ETFs were positive $. Bn during according to Strategic Insight. ETPs Additionally, there were,9 other ETPs with,8 listings and assets of $. Bn from providers on exchanges. This compares to ETPs with 9 listings and assets of $. Bn from providers on 8 exchanges, at the end of February. ETFs and ETPs Combined, there were,9 products with,8 listings, assets of $,. Bn from providers on exchanges around the world. This compares to, products with,99 listings, assets of $,. Bn from 9 providers on exchanges, at the end of February. Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).

6 Global ETF and ETP asset growth Assets $ Bn, products,,,,,, 8,, Assets Feb ETF total $.8 $. $. $. $8. $. $9. $. $.8 $. $. $9.8 $. $. $9. $. $,. $,. $,. ETF equity $.8 $. $. $. $8. $. $9. $. $. $. $.9 $8. $89. $. $9.9 $9. $8. $,.8 $,. ETF fixed income $. $. $. $.8 $. $. $.8 $9.9 $. $. $. $. ETF commodity $. $. $. $. $. $. $. $. $. $. $8.9 ETP total $. $. $.9 $. $. $9. $.9 $. $. $. $9. $. $. ETFs 9 8 8,,9,9,, ETPs 8 9,,9 Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

7 ETFs/ETPs listed by region Global United States Europe Japan Asia exjapan Latin America Canada Middle East & Africa Metric Feb YTD change (%) Feb YTD change (%) Feb YTD change (%) Feb YTD change (%) Feb YTD change (%) Feb YTD change (%) Feb YTD change (%) Feb YTD change (%) ETFs,..% 99..% 99..%..%..%..%..%..% ETFs,.9% 99.%,.% 8.% 8.%.% 9.% 9.% listings,8.% 99.%,88.% 8.%.%.8% 9.% 9.% providers.9% 8.%.%.%.%.%.%.% exchanges 8.%.%.%.%.%.%.%.% ADV 9,..%,9..%,9..% 9. 9.% 98..9% 9. 9.%,.8.%. 8.% ETPs Assets..%.9.%..8%..%..% 8..% ETPs,9.% 98.%.% 9.%.%.% listings,8.% 98.%,.% 9.%.% 8.%.% 8.% providers.8%.8% 9.%.%.%.% exchanges.%.% 8.%.%.%.%.%.% Total Assets,..%,..%..%.9.8%..%..%..%..% ETFs/ETPs,9.%,.%,.% 9.%.%.% 9.%.% listings,8.8%,.%,.%.9%.% 9.%.%.% providers.%.%.% 9.% 8.%.%.%.% exchanges.%.%.%.%.%.%.%.% Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

8 Top ETF providers around the world: ranked by Provider ishares ETFs $9. Feb % total.% ADV $. planned ETFs % ETFs.% YTD change $. %.% % market share.% State Street Global Advisors $99..9% $..% $8..%.% Vanguard $.9.% $..% $..%.% Lyxor Asset Management 8 $..% $..% $..%.% db xtrackers 8 $..% $.8.% $.9.8%.% PowerShares $..% $. 9.% $. 8.%.% ProShares $..% $. 99.% $..%.% Van Eck Associates Corp 9 $9..% $.9.% $.8.%.% Nomura Asset Management $.8.% $..% $..%.% Credit Suisse Asset Management $..% $..% $..%.% Bank of New York $.9.9% $..% $..9%.% Zurich Cantonal Bank $..8% $..% $..9%.% WisdomTree Investments $..8% $..% $..%.% Commerzbank 9 $8.9.% $..% $..%.% Amundi ETF 9 $.9.% $..% $.8.%.% HSBC/Hang Seng 9 $.8.% $. 9.8% $..%.% ETFlab Investment $..% $..% $..%.% Nikko Asset Management $.9.% $..% $..%.% UBS Global Asset Management $.9.% $..9% $..%.% Direxion Shares 9 $..% $..% $..%.% Daiwa Asset Management $..% $..% $.8.%.% First Trust Advisors $..% $..% $..%.% Source Markets $.9.% $..8% $. 9.%.% EasyETF 9 $.9.% $..% $..%.% Claymore Investments 9 $..% $..% $..%.% Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. 8

9 Global ETF assets by type of exposure Feb YTD change Exposure ETFs % total ADV ETFs % Equity,99 $,. 8.% $. $..% North America Emerging markets Europe Asia Pacific Global (ex) Global Fixed income Fixed income all (excash) Fixed income cash (money market) Commodities Alternative $. $.8 $. $8.8 $8.8 $8. $. $. $.9 $8. $..%.% 9.%.%.%.%.%.%.%.%.% $. $9. $.8 $. $. $. $. $. $. $. $. 9 $. $.8 $. $. $. $. $. $.8 $. $. $. 8.%.% 9.%.% 8.%.%.%.%.%.%.% North America equity.% Emerging markets equity.% Fixed income all (excash).% Europe equity 9.% Asia Pacific equity.% Global (ex) equity.% Commodities.% Global equity.% Fixed income cash (money market).% Alternative.% Currency.% Mixed.% Currency $..% $. $..% Mixed 9 $..% $. $..% Total, $,..% $9. 9 $..% Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. 9

10 Global ETF/ETP net new assets by type of exposure ETFs /ETPs ADV Feb Assets Nov YTD NNA Exposure Equity,9,.9 99,.,8.,.9,. 9,99. Developed markets,8,. 8,.9 9,8.,.,.,9. North America,9.,,9,,9,8 Asia Pacific 88.,.8..,9.,8.8 Europe,88.,9.,.,.9 8,. 9,. Global. 8,.,9.,9.,.,. Global (ex),.,.8,8.,.,9. 9. Emerging markets 8,.9,. (,999.9) (9,.),.,.9 Broad 9,8.,. (,9.) (,.),99.,. Regional 9.9 8,. (.) (.),.,9. Country 8,. 9,. (8.),.,88.,99. Brazil 9,.,9. (9.),.,8.,.8 Chile. 9.8 (.). 8.. China.,. (8.) (,.) (,8.),. Colombia.. (.) (.) 8.. Egypt (.) (.) Hungary... (.) (.) (.) India 9.9, (.8),99.,9.9 Indonesia.. (.).8.. Kuwait.... Malaysia 9.,.9 (.9) (.8).8. Mexico.,. (.) (9.).. Peru Philippines Poland Russia.,. 8.9,.,9..9 South Africa (.) (.). 8. South Korea 9., Taiwan 8.,. (.). (9.),. Thailand. 9. (.) (88.) Turkey.,. (.) (.8). 8. UAE.. (.). Vietnam Note: Global ETF/ETP data approximated by combining United States and European data. NNA Net New Assets. Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX). NNA NNA 9 NNA continued

11 Global ETF/ETP net new assets by type of exposure (continued) ETFs /ETPs ADV Feb Assets NNA YTD NNA NNA Exposure Fixed income,. 98,9. 88.,.,.,. Broad Active Aggregate. 9,..9.,9. 8,. Corporate 8. 8,..9 8.,.,. Convertible Covered 8., Credit spreads (.) (9.) Government 9,9.,. (,.) (9.),.,9. High yield 8.,8..,8.,8.,9. Inflation 9., ,. Money market.,... (999.) (,8.) Mortgage.,.. 9..,. Municipal., (9.),.,. Commodities,9. 8,.,.,9.,9.,9. Broad 98,8,,9.,.,9 Agriculture.8,9.,.,9. (8.9),.8 Energy 98.,.9,. 9. (.),89. Industrial metals 9 8.,89....,. Livestock (.) 8. Precious metals,9.,. 9. (,8.) 9,9.,9.8 Currency., (,8.),. Alternative 9.,...,.,. Mixed 8., Total,8,,8, 9,8.,9. 9,.,. 9 NNA Note: Global ETF/ETP data approximated by combining United States and European data. NNA Net New Assets. Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).

12 Global inverse and leveraged ETF assets by type of exposure Exposure Inverse Equity North America Europe Emerging markets Global (ex) Asia Pacific Fixed income Commodities Alternative Leveraged Equity North America Europe Emerging markets Global (ex) Asia Pacific Fixed income Commodities Currency Alternative Leveraged inverse Equity North America Europe Emerging markets Global (ex) Asia Pacific Fixed income Commodities Currency Total ETFs Feb total listings 9 $. $. 8 $. 8 $. $. $. $. 8 $. $. $. 99 $. 8 $. $.9 89 $. $.9 $. $. 9 $. 8 $. $. $. $. $9. 8 $. $. $. $. $. $. $. $. 9 $9. % total 9.%.%.%.%.%.%.%.%.%.% 9.%.%.%.%.%.%.%.%.%.%.%.%.%.%.9%.%.%.%.%.8%.%.% ETFs YTD change total % listings 8 $..% $..% $..% $..% $. 8.% $..% $..% $..8% $. 9.% $..% $..8% $..% $..% $..% $..% $..% $..% $..% $..% $..% $..% $.8.9% $..9% $..% $..% $. 9.% $..9% $. 8.% $..% $..9% $..% $.9.% % total.%.%.%.%.%.%.%.%.%.8%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.% Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

13 Index providers worldwide: ranked by Index provider MSCI S&P Barclays Capital Russell FTSE STOXX Dow Jones Markit NASDAQ OMX Deutsche Boerse Topix NYSE Euronext Nikkei Hang Seng EuroMTS SIX Swiss Exchange WisdomTree PCBond Grupo Bolsa SSE Indxis Structured Solutions CSI Intellidex BNY Mellon Morningstar SNetwork ISE Zacks Other Total ETFs , $9. $. $.8 $8.9 $. $. $. $.8 $.8 $. $. $.9 $. $. $9. $8.8 $8. $.8 $.8 $. $. $. $. $. $. $. $. $. $.9 $88. $,. Feb % total.8%.% 8.%.%.%.9%.8%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.% ADV $9. $.9 $. $. $. $. $. $. $.9 $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $9. ETFs Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. 9 YTD change $. $.9 $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $.9 $. $. $. $. $. $. $. $. $. $. %.%.9%.%.%.% 9.% 9.8%.%.9%.9%.%.%.%.%.%.%.%.%.9% 9.%.%.%.8%.8%.% 8.9%.9%.%.%.%.% MSCI.8% S&P.% Barclays Capital 8.% Russell.% FTSE.% STOXX.9% Dow Jones.8% Markit.% NASDAQ OMX.% Deutsche Boerse.% Topix.% NYSE Euronext.% Nikkei.% Hang Seng.% EuroMTS.% SIX Swiss Exchange.% WisdomTree.% PCBond.% Grupo Bolsa.% SSE.% Indxis.% Structured Solutions.% CSI.% Intellidex.% BNY Mellon.% Morningstar.% SNetwork.% ISE.% Zacks.% Other.%

14 Top ETFs worldwide Ranked by Assets Under Management () Ranked by $ Average Daily Trading Volumes (ADV) ETF Country listed Bloomberg ticker ADV ( shares) ADV ETF Country listed Bloomberg ticker ADV ADV ( shares) SPDR S&P SPY 9,9., 8,8. SPDR S&P SPY 8,8., 9,9. Vanguard MSCI Emerging Markets ETF VWO,8.,,9.8 ishares Russell Index Fund IWM,9.,99,. ishares MSCI EAFE Index Fund EFA 9,., 8. ishares MSCI Emerging Markets EEM,.,,. ishares MSCI Emerging Markets EEM,.,,. PowerShares QQQ Trust QQQQ,.,,. ishares S&P Index Fund IVV 8,.,9. Energy Select Sector SPDR Fund XLE,.,9,8. PowerShares QQQ Trust QQQQ,.,,. Vanguard MSCI Emerging Markets ETF VWO,9.8,,8. ishares Barclays TIPS Bond Fund TIP 9, ishares MSCI Brazil Index Fund EWZ 999.,,9. Vanguard Total Stock Market ETF VTI 9,.,9. ishares Barclays + Year Treasury TLT 89. 9,89,. ishares Russell Index Fund IWM,.,99,9. ishares MSCI EAFE Index Fund EFA 8., 9,. ishares Russell Growth IWF,., 9. Financial Select Sector SPDR Fund XLF 8. 8,8,9.9 ishares iboxx $ Investment Grade Corporate LQD,9.,. SPDR Dow Jones Industrial Average ETF DIA 8.9, 9,8.8 ishares MSCI Brazil Index Fund EWZ,9., 999. Direxion Daily Financial Bull x Shares FAS 8. 9,,.9 ishares S&P/TSX Index Fund Canada XIU CN,8.,9. ProShares UltraShort + Year Treasury TBT 9.,88,9. S&P MidCap SPDR MDY,8.,8. ishares FTSE China Index Fund FXI 8.,8,89. ishares Russell Value Index Fund IWD,.9,. ProShares Ultra S&P SSO.9,,. ishares Barclays Aggregate Bond Fund AGG,. 9. Direxion Daily Small Cap Bull x Shares TNA 8.,899. Energy Select Sector SPDR Fund XLE,8.,9,. S&P MidCap SPDR MDY.,8,8. ishares S&P MidCap Index Fund IJH, ProShares UltraShort S&P SDS 8.,8,9. SPDR Dow Jones Industrial Average ETF DIA 9,8.8, 8.9 SPDR S&P Retail ETF XRT. 9,8. ishares S&P UK IA LN 9,88.,9 8.9 Industrial Select Sector SPDR Fund XLI.,8,8.9 Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

15 Global ETF listings Americas Country EMEA Country Brazil Canada Chile Mexico United States Austria Belgium Finland France Germany Greece Hungary Ireland Italy Netherlands Norway Poland Portugal Russia Saudi Arabia Slovenia South Africa Spain Sweden Switzerland Turkey United Arab Emirates 8 United Kingdom primary listings primary listings 9 total listings total listings providers $ Bn , providers 8 8 $ Bn Asia Pacific primary total primary total Country listings listings providers $ Bn Country listings listings providers $ Bn 9 Australia. Malaysia. China. New Zealand. Hong Kong. Singapore 8. India. 8 South Korea. Indonesia. 8 Taiwan.8 Japan 8 8. Thailand. 9 Asia Pacific (continued) Note: Providers = primary ETF providers. = Assets Under Management in primary listings only. Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

16 Top ETP providers around the world: ranked by assets Provider State Street Global Advisors ETPs Assets $.8 Feb % total.% planned ETPs % ETPs.% YTD change Assets $. % assets.% % market share.% ETF Securities $.9.8%.% $..%.% ishares $8.9.8%.% $.8.%.% Deutsche Bank $. 8.%.% $..%.9% Barclays (ipath) $9..%.% $. 8.%.% Merrill Lynch $..%.% $.8.8%.% United States Commodity Funds 9 $..9%.% $..%.% Societe Generale $..%.% $..8%.% UBS AG 8 $..%.% $..%.% JPMorgan Chase $..%.% $..%.% ProShares $..% 8.% $..9%.% Rydex SGI 9 $..%.% $..%.% Absa Capital $..%.% $..%.% Swedish Export Credit Corp $.8.%.% $..%.% db ETC $..8%.% $..%.% Source Markets 8 $..%.% $..%.% GreenHaven Commodity Services $..%.% $. 9.%.% Benchmark Asset Management $..%.% $..8%.% Credit Suisse $..%.% $..%.% RBS $..%.% $..8%.% Lyxor $..%.% $..%.% Nomura Asset Management $..%.% $..%.% Morgan Stanley $..%.% $..%.% Mitsubishi UFJ Trust and Banking Corporation $..%.% $..9%.% UTI Asset Management $..%.% $..%.% Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

17 Top ETPs worldwide Ranked by assets Ranked by $ Average Daily Trading Volumes (ADV) ETP Country listed Bloomberg ticker Assets ADV ( shares) ADV ETP Country listed Bloomberg ticker ADV ADV ( shares) Assets SPDR Gold Trust GLD,8.,,8. SPDR Gold Trust GLD,8.,,8. ishares Silver Trust SLV,., 8. ishares Silver Trust SLV 8.,,. PowerShares DB Commodity Index DBC,8.,. Oil Services HOLDRS OIH 8.,998,. ETFS Physical Gold UK PHAU LN,.. United States Oil Fund LP O 98.,9,9. ishares Gold Trust IAU,9., ipath S&P VIX ShortTerm Futures ETN VXX. 9,8,. GBS Bullion Securities UK GBS LN,.. Semiconductor HOLDRS SMH.,. PowerShares DB Agriculture Fund DBA,9., 9. ProShares Ultra Silver AGQ.,. Oil Services HOLDRS OIH,., ProShares Ultra DJUBS Crude Oil UCO 9., 8. ipath Dow JonesUBS Commodity Index TR DJP,. 88. PowerShares DB Agriculture Fund DBA 9.,,9. JPMorgan Alerian MLP Index ETN AMJ,. 9. United States Natural Gas Fund LP UNG.,99,8. United States Natural Gas Fund LP UNG,8.,99. Euro Currency Trust FXE. 8. NewGold ETF South Africa GLD SJ,.8. ishares Gold Trust IAU 88.,98,9. ishares S&P GSCI CommodityIndexed Trust GSG, Retail HOLDRS RTH. 8. United States Oil Fund LP O,9.,9 98. PowerShares DB Commodity Index DBC.,,8. ETFS Agriculture DJUBSCI UK AIGA LN,.,. PowerShares DB Dollar Index Bullish UUP.,9 89. ipath S&P VIX ShortTerm Futures ETN VXX,. 9,8. ipath S&P GSCI Crude Oil Total TR OIL., 8. ETFS Physical Swiss Gold Shares SGOL,9. 8. ipath S&P VIX MidTerm Futures ETN VXZ. 8. Gold Source PETC UK SGLD LN 9.. Regional Bank HOLDRS RKH ETFS Physical Palladium Shares PALL ProShares UltraShort Silver ZSL.,8. PowerShares DB Dollar Index Bullish UUP 89.,9. JPMorgan Alerian MLP Index ETN AMJ. 9,. Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

18 Global ETP listings Americas Country Canada Chile primary listings total listings Assets providers $ Bn Mexico United States EMEA Country primary listings total listings Assets providers $ Bn Botswana France. Germany Israel Italy Netherlands South Africa 9.. Asia Pacific Country primary listings total listings Assets providers $ Bn Asia Pacific (continued) Country primary listings total listings Assets providers $ Bn Switzerland. Australia. 8 Japan 9 9. United Arab Emirates. Hong Kong. 9 Singapore United Kingdom. India.8 South Korea. Note: Providers = primary ETP providers. Assets = Assets Under Management in primary listings only. Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. 8

19 Top ETF/ETP providers around the world: ranked by assets Feb YTD change Provider ishares ETFs/ ETPs 8 Assets $. % total 9.% planned ETFs/ ETPs % ETFs/ ETPs.% Assets $.8 % assets.% % market share.% State Street Global Advisors 9 $..%.% $.9.%.% Vanguard $..%.% $9..%.% PowerShares/Deutsche Bank $..%.% $..%.% Lyxor Asset Management 8 $..%.% $..%.% db xtrackers/db ETC $..%.% $..%.% ETF Securities $.8.% 8.8% $..%.% ProShares $..%.% $..9%.% Van Eck Associates Corp 9 $..%.% $..%.% Nomura Asset Management $..%.% $..%.% Credit Suisse Asset Management 8 $..%.% $..%.% Zurich Cantonal Bank $..8%.% $..%.% Bank of New York $.8.8%.% $..%.% WisdomTree Investments $..%.% $..%.% Barclays (ipath) $9..%.% $. 8.%.% Commerzbank 9 $9..%.% $..%.% Amundi ETF 9 $8..%.% $..8%.% UBS Global Asset Management $8..%.% $..%.% HSBC/Hang Seng $.9.%.% $..%.% Rydex SGI $..% 8.% $..8%.% Source Markets 8 $..%.% $..%.% Nikko Asset Management $..%.% $..%.% ETFlab Investment 9 $..%.% $..%.% First Trust Advisors $..%.% $..%.% Direxion Shares 9 $..%.% $..8%.% Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. 9

20 ETFs and ETPs listed in the United States At the end of February, the ETF industry in the United States had 99 ETFs and assets of $99. Bn, from 8 providers on two exchanges. This compares to 8 ETFs and assets of $8. Bn, from 8 providers on two exchanges at the end of February. 9 January marked the 8th anniversary of ETFs in the United States. Assets YTD, assets have increased by.% from $89. Bn to $99. Bn, which is less than the.% increase in the MSCI Index in dollar terms. This compares to a.8% decrease in assets over the same period in. $. Bn of net new assets went into United States listed ETFs/ETPs in February. $. Bn net inflows went into equity ETFs/ETPs, of which $. Bn went into ETFs/ETPs tracking North American indices, while ETFs/ETPs tracking emerging market indices saw net outflows of $. Bn. Fixed income ETFs/ETPs saw net inflows of $. Bn, of which $. Bn went into high yield bond ETFs/ETPs while government bond ETFs/ETPs saw net outflows of $. Bn. Commodity ETFs/ETPs experienced net inflows of $. Bn, of which ETFs/ETPs providing exposure to agricultural commodities saw net inflows of $. Bn and $.8 Bn net inflows went into broad commodity exposure ETFs/ETPs in February. $.8 Bn of net new assets went into United States listed ETFs/ETPs in YTD. $. Bn net inflows went into equity ETFs/ETPs, of which $.8 Bn went into ETFs/ETPs tracking North American indices, while ETFs/ETPs tracking emerging market indices saw net outflows of $9. Bn. Fixed income ETFs/ETPs saw net inflows of $.8 Bn, of which $. Bn went into high yield bond ETFs/ETPs while municipal bond ETFs/ETPs saw net outflows of $. Bn. Commodity ETFs/ETPs experienced net inflows of $.9 Bn, of which ETFs/ETPs providing exposure to agricultural commodities saw net inflows of $. Bn and $. Bn net inflows went into broad commodity exposure ETFs/ETPs in YTD. YTD, $.8 Bn net new asset flows went into United States listed ETFs/ETPs compared to $.8 Bn net outflows over the same period in. Net new asset flows into ETFs/ETPs tracking North American indices were $.8 Bn YTD compared to $. Bn net outflows over the same period in and net outflows from emerging market indices were $9. Bn YTD, greater than the $. Bn net outflows over the same period in. Fixed income ETF/ETP net inflows were $.8 Bn YTD, less than the $. Bn net inflows over the same period in, and net inflows into commodity ETFs/ETPs were $.9 Bn YTD compared to $. Bn net outflows over the same period in. Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).

21 ETFs and ETPs listed in the United States (continued) ETFs YTD, the number of ETFs have increased by.% with new ETFs launched. This compares to a.% increase in the number of ETFs over the same period in, when new ETFs launched. The top ETFs, out of 99, account for 8.8% of United States ETF, while ETFs have less than $. Mn in assets, ETFs have less than $. Mn in assets and ETFs have less than $. Mn in assets. Trading volume In February, the ETF average daily trading volume in dollars increased by.% to $.9 Bn, compared to December. This compares to average daily trading volume of $9. Bn in February. In February, United States ETF turnover was.% of all United States equity turnover, which is less than the.% reported in December. ETF providers ishares is the largest ETF provider in terms of both number of products and assets, ETFs and $8.9 Bn respectively, reflecting.% market share; State Street Global Advisors is second with 9 ETFs, assets of $88.8 Bn and.% market share; followed by Vanguard with ETFs, assets of $. Bn and.9% market share, at the end of February. Of the $. Bn of net new assets in United States listed ETFs in February, Vanguard gathered the largest net inflows with $. Bn, followed by ishares with $. Bn net inflows, while State Street Global Advisors saw $. Bn net outflows. YTD, of the $. Bn net new assets into United States listed ETFs, Vanguard gathered the largest net inflows with $. Bn, followed by State Street Global Advisors with $. Bn net inflows, while Bank of New York had the largest net outflows with $. Bn YTD. The top three ETF providers, out of 8, account for 8.% of United States ETF. This compares to 8.% out of 8 providers, at the end of February. firms in the United States plan to launch their first ETF in the future. Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).

22 ETFs and ETPs listed in the United States (continued) Mutual funds ETPs During, according to Strategic Insight, net sales of mutual funds (excluding ETFs) were minus $. Bn in the United States, while net sales of ETFs domiciled in the United States were positive $. Bn. Additionally, there were 98 other ETPs with assets of $.9 Bn from providers on one exchange. This compares to ETPs with assets of $8. Bn from providers on one exchange, at the end of February. ETFs and ETPs Assets in United States listed ETFs and ETPs crossed the $ trillion milestone in December. Combined, there were, products with assets of $,. Bn, from providers on two exchanges in the United States. This compares to 9 products with assets of $. Bn from providers on two exchanges, at the end of February.. ETPs are products that have similarities to ETFs in the way they trade and settle but they do not use an openend investment company structure. The use of other structures including grantor trusts, partnerships, notes and commodity pools by ETPs can create different tax and regulatory implications for investors when compared to ETFs which are funds. Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).

23 United States ETF and ETP asset growth Assets, products, Assets Feb ETF assets $. $. $. $. $. $. $.9 $. $8. $. $. $. $99. $.8 $8. $9. $. $89. $99. ETP assets $. $. $.8 $. $. $8.9 $. $.9 $. $. $88. $. $.9 ETFs ETPs 8 98 Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

24 ETF providers in the United States: ranked by Provider ishares State Street Global Advisors Vanguard PowerShares ProShares Van Eck Associates Corp Bank of New York WisdomTree Investments First Trust Advisors Direxion Shares Rydex SGI Guggenheim Funds Charles Schwab Investment Management PIMCO Global X Funds ALPS ETF Trust RevenueShares Emerging Global Advisors IndexIQ Advisors AdvisorShares Fidelity Management & Research Jefferies Asset Management DBX Strategic Advisors Grail Advisors Javelin Investment Management One Trust FaithShares Pax World Management ETFs $8.9 $88.8 $. ADV $. $. Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX). $.9 $. $. $.8 $. $. $. $. $. $. $. $. $.9 $. $. $. $. $. $. $. $. $. $. $. $. Feb % total.%.%.9%.9%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.% $. $. $. $.9 $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. planned Feb NNA $. $. $. $. $.8 $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. YTD NNA $. $. $. $. $. $. $. $. $.9 $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. ETFs % ETFs.%.%.%.%.%.%.%.%.%.%.%.% 8.%.% 9.%.%.%.%.%.%.%.%.%.%.%.%.%.% YTD change $. $. $9. $. $. $. $. $. $. $. $. $. $.8 $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. %.%.8%.%.%.%.%.%.%.%.8%.%.% 8.%.%.% 9.%.% 8.%.% 8.8% 8.%.%.%.9%.%.%.9% 98.% % market share.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.% continued

25 ETF providers in the United States: ranked by (continued) Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX). $.9 ADV AllianceBernstein Dreyfus Corp.% $8..% $. $. 8. % $ Total Feb NNA YTD NNA YTD change Feb Factor Advisors T Rowe Price Spinnaker ETF Trust ShariahShares Russell Investments RiverPark Advisors OppenheimerFunds Northern Trust Next Investments Neuberger Berman Macro Securities Depositor Legg Mason JP Morgan Asset Management John Hancock Janus Capital Management Huntington Asset Advisors Hartford Georgetown Investment Management FocusShares Florentez Investment Firsthand Capital FactorShares Exchange Traded Spreads Trust Eaton Vance % market share % % ETFs ETFs planned % total ETFs Provider

26 United States ETF/ETP net new assets by type of exposure ETFs /ETPs ADV Feb Assets NNA YTD NNA NNA Exposure Equity 8 9,.9 8,99.,.,.,8.,. North America 8,.,8.,.,8.,.,98. Active Broad,.,.,8.,.,.8 (,8.) Consumer goods/services 9. 9,8. (.) (,.),8. 8. Energy,9.8 8,9.,.,9.9,.8,. Financials,.9 9,8.9 (,9.) (8.),8.8,9. Healthcare. 8,. (.) (.) (8.) (.8) Industrials.,. (99.9) (9.),. 9. Materials., ,. Other.,.... (.) Real estate.,. 89..,.,. Technology.9,..,88.,9.,. Telecommunications.,9. (8.8) (.) Utilities.,8. (9.) (.).,.9 Asia Pacific 8., ,.,8.8 Europe 8 9.8,.,.,. 8.,. Global.9,9. 8.9,.,8.,. Global (ex),.,.8,8.,., NNA continued Note: NNA Net New Assets. Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).

27 United States ETF/ETP net new assets by type of exposure (continued) ETFs /ETPs ADV Feb Assets NNA YTD NNA NNA Exposure Emerging markets equity,.,.9 (,.) (9,.) 9,8.,. Broad emerging markets,. 88,. (,.) (9,.),.,9. Regional emerging markets.,. (.9) (.) 9.,. Country emerging markets,.9,8. (9.) 8., ,9. Brazil 9,.9,8. (.),8. 9.,. Chile. 8. (.) (.) 8.. China. 9,8. (.) (,.8) (,.),9. Colombia.. (.) (.) 8.. Egypt India 8.,99. (8.) (.8),8.. Indonesia.8. (.).8.. Malaysia. 9. (.) (.).8. Mexico.9,. (9.) (.9) 88.. Peru Philippines Poland Russia., South Africa.. (8.8) (8.9). 8. South Korea., Taiwan.,. (.). (8.8),9. Thailand. 9. (.) (88.) 8..8 Turkey. 8. (9.8) (9.8).. Vietnam NNA continued Note: NNA Net New Assets. Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).

28 United States ETF/ETP net new assets by type of exposure (continued) ETFs /ETPs ADV Feb Assets NNA YTD NNA NNA Exposure Fixed income 8,.,. 99.,8. 9,.8,8.9 Active Aggregate. 9,..9.,9. 8,. Convertible Corporate.,.. 89.,.,. Government,8.9,8. (89.) 8. 9,8.,.9 High yield 8.,..,.9,.,9. Inflation 9 8., ,9.8 Mortgage., Municipal., (9.),.,. Commodities,.,.8,.,88.,9.,.8 Agriculture 8. 9,.,.,9..,9. Broad.,9. 8.,. 9.,98. Energy 8., (9.),.9 Industrial metals.8, Livestock (.) 8.9 Precious metals,. 88,.9. (,.),. 8,9. Currency.,.8.9. (,9.),.9 Alternative.9,8...,.,8. Mixed.8, Total,,.,,.,9.,8. 9,89. 9,9. 9 NNA Note: NNA Net New Assets. Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX). 8

29 Sector ETF net new assets Sector ETF ticker Index ticker Index total return ($) Feb YTD Feb ETF YTD % change Dow Jones United States sector ETFs,..% ishares Dow Jones U.S. Basic Materials IYM DJBM.8%.%,8. 8.% ishares Dow Jones U.S. Consumer Goods IYK DJNC.%.% 98..% ishares Dow Jones U.S. Consumer Services IYC DJCY.%.8%..% ishares Dow Jones U.S. Energy IYE DJEN.%.%,..% ishares Dow Jones U.S. Financial IYF DJFN.9%.% 9.9.% ishares Dow Jones U.S. Healthcare IYH DJHC.%.% 8..%..... ishares Dow Jones U.S. Industrial IYJ DJIN.%.%..% ishares Dow Jones U.S. Technology IYW DJTC.%.%,..% ishares Dow Jones U.S. Telecommunications IYZ DJSTELT.%.%..% ishares Dow Jones U.S. Utilities IDU DJUT.%.%..8% S&P equal weight sector ETFs.9 8.% Rydex S&P Equal Weight Consumer Discretionary RCD S.%.%..% Rydex S&P Equal Weight Consumer Staples RHS S.%.%..%..... Rydex S&P Equal Weight Energy RYE S.8%.%. 8.% Rydex S&P Equal Weight Financial RYF S.%.%..% Rydex S&P Equal Weight Health Care RYH S.%.9% 9.9.% Rydex S&P Equal Weight Industrial RGI S.%.%.8.% Rydex S&P Equal Weight Materials RTM S.%.9%.9.%..... Rydex S&P Equal Weight Technology RYT S.% 8.%. 8.% Rydex S&P Equal Weight Utilities RYU S.%.%..%..... S&P select sector ETFs,99. 9.% 8,.,9..,8.8,9. Consumer Discretionary Select Sector SPDR XLY IXY.%.%,..% Consumer Staples Select Sector SPDR XLP IXR.8%.%,8..% Energy Select Sector SPDR XLE IXE.%.%,9..%,8.,.,8.,8.9,9. Financial Select Sector SPDR XLF IXM.9%.8%,9.9.%, Health Care Select Sector SPDR XLV IXV.%.%,..% Industrial Select Sector SPDR XLI IXI.%.%,8..% ,. Materials Select Sector SPDR XLB IXB.%.%,.9.% Technology Select Sector SPDR XLK IXT.%.%,. 9.9% Utilities Select Sector SPDR XLU IXU.%.%,9.9.% ETF short interest Feb ETF ADV Feb net flows YTD net flows net flows continued Note: Index returns are for illustrative purposes only and do not represent actual fund performance. Index performance returns do not reflect any management fees, transaction costs or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results. NNA Net New Assets. Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX). 9

30 Sector ETF net new assets (continued) Sector ETF ticker Index ticker Index total return ($) Feb YTD Feb ETF YTD % change MSCI United States investable market sector ETFs 8,9. 8.% ,.,88. Vanguard Consumer Discretionary VCR MZICD.%.% 8. 8.% Vanguard Consumer Staples VDC MZICS.%.9%..% Vanguard Energy VDE MSCIEN.%.%,8..% Vanguard Financials VFH MZIFN.8%.% 8. 8.% Vanguard Health Care VHT MZIHC.%.9%. 9.% Vanguard Industrials VIS MSCIIN.%.% 8..8% Vanguard Information Technology VGT MZIIT.%.%,8..9% Vanguard Materials VAW MZIMT.8%.% 8.9.% Vanguard Telecommunication Services VOX MSCITC.%.%..%..... Vanguard Utilities VPU MZIUT.%.% 8..% Vanguard REIT VNQ RMZ.% 8.% 8,8..8% ,8. S&P global sector ETFs,. 9.% ishares S&P Global Consumer Discretionary RXI SGD.%.8% 9..9% ishares S&P Global Consumers Staples KXI SGCS.%.%..% ishares S&P Global Energy IXC SGES.%.%,9. 8.8% ishares S&P Global Financials IXG SGFS.9% 8.%..8%..... ishares S&P Global Healthcare IXJ SGH.%.% 8..% ishares S&P Global Industrials EXI SGN.%.%. 8.8% ishares S&P Global Materials MXI SGM.8%.8% 8..% ishares S&P Global Technology IXN SGI.%.%..% ishares S&P Global Telecommunications IXP SGT.%.% 8..% ishares S&P Global Utilities JXI SGU.%.%..8% MSCI ACWI ex. United States sector ETFs..%..... ishares MSCI ACWI ex Consumer Discretionary AXDI MSWDUCDN.8%.%..%..... ishares MSCI ACWI ex Consumer Staples AXSL MSWDUCSN.%.8%..%..... ishares MSCI ACWI ex Energy AXEN MSWDUENN.8% 9.%. 9.%..... ishares MSCI ACWI ex Health Care AXHE MSWDUHCN.%.9%.8.%..... ishares MSCI ACWI ex Industrials AXID MSWDUINN.%.%..%..... ishares MSCI ACWI ex Information Technology AXIT MSWDUITN.%.%..%..... ishares MSCI ACWI ex Materials AXMT MSWDUMTN.%.%.9.%..... ishares MSCI ACWI ex Telecommunication Services AXTE MSWDUTCN.9%.%..%..... ishares MSCI ACWI ex Utilities AXUT MSWDUUTN.8%.%..8%..... ETF short interest Feb ETF ADV Feb net flows YTD net flows net flows Note: Index returns are for illustrative purposes only and do not represent actual fund performance. Index performance returns do not reflect any management fees, transaction costs or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results. NNA Net New Assets. Data as at end February. Source: National Stock Exchange (NSX), Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

31 United States leveraged and inverse ETF/ETP net new assets by type of exposure ETFs /ETPs ADV Feb Assets NNA YTD NNA NNA Exposure Leveraged 88,., (8.) (,.) (,9.) Equity,.9,. (.9) (9.) (,88.) (,.) Asia Pacific Emerging markets Europe equity Global (exunited States) (.9).9 North America 8,9.,9. (.) (9.) (,98.) (,.) Alternative Commodities 9 98., (8.) (8.) Currency.. (.) (.) (.). Fixed income (8.9). Mixed..8.. Inverse 89.,...9,.,8. Equity 8.9,. (.) ,. Emerging markets Global (exunited States). 8. (.) (.) 9.. North America.,. (.8) 9. 8.,9. Alternative Commodities.. (9.). (.).9 Currency.8.9 (9.8) (.) (8.). Fixed income.9, Leveraged inverse 8,8.,. 98.9,.,.8,9.9 Equity,.,9..,9.,9.8,. Asia Pacific... (.) 8. Emerging markets Europe equity.. (.8) (.). 9. Global equity Global (exunited States) (.).. North America,.,9..8,8.,.9,98.9 Commodities Currency Fixed income 8.8,.8..9,.,. Total,99.,9.,.8,8.8,9.,98. 9 NNA Note: NNA Net New Assets. Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).

32 Types of ETF exposure in the United States Feb YTD change Type of exposure ETFs % total ADV ETFs % Equity $. 8.8% $. $.9.% Largecap Emerging markets 9 $9.8 $.8 9.%.% $. $. $. $. 8.%.9% Largecap equity 9.% Emerging markets equity.% International $..% $. $.8.% Fixed income.% Sector Growth Value Broad market Midcap Smallcap Fixed income Custom 9 $.9 $.9 $9. $8. $.9 $. $. $..%.9%.%.%.%.%.%.% $.8 $. $. $. $. $.9 $. $. $. $.9 $. $. $. $. $.8 $..% 9.% 8.%.8%.%.%.9%.% International equity.% Sector equity.% Growth equity.9% Value equity.% Broad market equity.% Midcap equity.% Smallcap equity.% Custom.% Leveraged inverse.% Leveraged inverse $..% $. $..9% Commodities.% Commodities Leveraged Inverse Currency 9 $. $. $. $..%.%.%.% $. $. $. $. $. $. $. $..%.8%.%.% Leveraged.% Inverse.% Currency.% Active.% Active $..% $. $..8% Total 99 $99..% $.9 $8..% Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

33 Index providers in the United States: ranked by Index provider S&P MSCI Barclays Capital Russell Dow Jones NASDAQ OMX FTSE Markit WisdomTree NYSE Euronext Deutsche Boerse Indxis Structured Solutions Intellidex Morningstar BNY Mellon SNetwork ISE Zacks Value Line STOXX Other Total ETFs $8. $.9 $.9 $8. $.8 $. $. $. $8. $.9 $. $. $.8 $. $. $.8 $.8 $. $.8 $. $. $. $99. Feb % total 9.9% 8.%.% 9.%.%.%.%.%.9%.9%.8%.%.%.%.%.%.%.%.%.%.%.%.% ADV $.9 $.9 Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. $8. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. ETFs YTD change $.8 $. $.9 $. $.8 $. $. $. $. $. $.8 $.9 $. $. $. $. $. $. $. $. $. $. $8. %.8%.%.9%.% 9.%.%.%.%.%.%.%.%.%.8% 8.9% 8.%.%.%.% 9.%.9% 8.%.% S&P 9.9% MSCI 8.% Barclays Capital.% Russell 9.% Dow Jones.% NASDAQ OMX.% FTSE.% Markit.% WisdomTree.9% NYSE Euronext.9% Deutsche Boerse.8% Indxis.% Structured Solutions.% Intellidex.% Morningstar.% BNY Mellon.% SNetwork.% ISE.% Zacks.% Value Line.% STOXX.% Other.%

34 Top ETFs in the United States Ranked by Assets Under Management () Ranked by $ Average Daily Trading Volumes (ADV) ETF Bloomberg ticker ADV ( shares) ADV ETF Bloomberg ticker ADV ADV ( shares) SPDR S&P SPY 9,9., 8,8. SPDR S&P SPY 8,8., 9,9. Vanguard MSCI Emerging Markets ETF VWO,8.,,9.8 ishares Russell Index Fund IWM,9.,99,. ishares MSCI EAFE Index Fund EFA 9,., 8. ishares MSCI Emerging Markets Index Fund EEM,.,,. ishares MSCI Emerging Markets Index Fund EEM,.,,. PowerShares QQQ Trust QQQQ,.,,. ishares S&P Index Fund IVV 8,.,9. Energy Select Sector SPDR Fund XLE,.,9,8. PowerShares QQQ Trust QQQQ,.,,. Vanguard MSCI Emerging Markets ETF VWO,9.8,,8. ishares Barclays TIPS Bond Fund TIP 9, ishares MSCI Brazil Index Fund EWZ 999.,,9. Vanguard Total Stock Market ETF VTI 9,.,9. ishares Barclays + Year Treasury TLT 89. 9,89,. ishares Russell Index Fund IWM,.,99,9. ishares MSCI EAFE Index Fund EFA 8., 9,. ishares Russell Growth Index Fund IWF,., 9. Financial Select Sector SPDR Fund XLF 8. 8,8,9.9 ishares iboxx $ Investment Grade Corporate LQD,9.,. SPDR Dow Jones Industrial Average ETF DIA 8.9, 9,8.8 ishares MSCI Brazil Index Fund EWZ,9., 999. Direxion Daily Financial Bull x Shares FAS 8. 9,,.9 S&P MidCap SPDR MDY,8.,8. ProShares UltraShort + Year Treasury TBT 9.,88,9. ishares Russell Value Index Fund IWD,.9,. ishares FTSE China Index Fund FXI 8.,8,89. ishares Barclays Aggregate Bond Fund AGG,. 9. ProShares Ultra S&P SSO.9,,. Energy Select Sector SPDR Fund XLE,8.,9,. Direxion Daily Small Cap Bull x Shares TNA 8.,899. ishares S&P MidCap Index Fund IJH, S&P MidCap SPDR MDY.,8,8. SPDR Dow Jones Industrial Average ETF DIA 9,8.8, 8.9 ProShares UltraShort S&P SDS 8.,8,9. Vanguard Total Bond Market ETF BND 9, SPDR S&P Retail ETF XRT. 9,8. Vanguard REIT ETF VNQ 8,9.,9 8. Industrial Select Sector SPDR Fund XLI.,8,8.9 Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

35 Top ETFs in the United States (continued) Ranked by largest change in Ranked by largest YTD net inflows ETF Bloomberg ticker YTD NNA Feb Dec Change ETF Bloomberg ticker YTD NNA Feb ADV Feb ishares MSCI Emerging Markets EEM 9,.8,.,.,.9 PowerShares QQQ Trust QQQQ,99.,.,. SPDR S&P SPY. 9,9. 89,9.,8. Energy Select Sector SPDR Fund XLE,.,8.,. PowerShares QQQ Trust QQQQ,99.,.,9.9,. ishares MSCI Brazil Index Fund EWZ,.8, Energy Select Sector SPDR Fund XLE,.,8. 8,9.,. ishares MSCI Japan Index Fund EWJ,.9,.. ishares S&P Index Fund IVV 9.9 8,.,99.,. Market Vectors Agribusiness ETF MOO,.,.. ishares MSCI EAFE Index Fund EFA 8. 9,.,9.,. ishares S&P Index Fund IVV 9.9 8,.. Vanguard MSCI Emerging Markets ETF VWO.,8.,9.8,. Technology Select Sector SPDR Fund XLK 8.,99.. ishares S&P MidCap Index Fund IJH.8,. 9,.,. ishares iboxx $ High Yield Corporate HYG. 8,8.. ishares FTSE China Index Fund FXI,.9,89. 8,.,. ishares MSCI Canada Index Fund EWC.,. 8. ishares MSCI Japan Index Fund EWJ,.9,.,88.,.9 SPDR Barclays Capital High Yield Bond ETF JNK.8,9.8. ishares Russell Index Fund IWM,98.,.,98.,98. ishares S&P MidCap Index Fund IJH.8,. 8. Market Vectors Agribusiness ETF MOO,.,.,.,.8 SPDR Dow Jones Industrial Average ETF DIA. 9, Technology Select Sector SPDR Fund XLK 8.,99.,89.,.9 Vanguard Dividend Appreciation ETF VIG.,. 9. SPDR Dow Jones Industrial Average ETF DIA. 9,8.8 8,9.,. Vanguard S&P ETF VOO ishares MSCI Canada Index Fund EWC.,.,.,. ishares MSCI Germany Index Fund EWG 9.,. 89. ishares Russell Growth Index Fund IWF.,.,8.,9. ishares S&P Index Fund OEF 8.,. 9. ishares Russell Value Index Fund IWD.,.9, Vanguard REIT ETF VNQ. 8,9. 8. Vanguard REIT ETF VNQ. 8,9.,. 9. SPDR S&P Oil & Gas Exploration & Production XOP 9.,. 9. Market Vectors Gold Miners GDX 88.,., Market Vectors Indonesia ETF IDX ishares iboxx $ High Yield Corporate HYG. 8,8.,. 9.9 Vanguard FTSE AllWorld Ex Index Fund VEU 8.,. 9. Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).

36 United States ETF turnover as % of United States equity turnover ETF turnover,, ETF turnover as % of equity turnover %,, % %,, %,, %,, %,, % %, % Jan8 Feb8 Mar8 Apr8 May8 Jun8 Jul8 Aug8 Sep8 Oct8 Nov8 Dec8 Jan9 Feb9 Mar9 Apr9 May9 Jun9 Jul9 Aug9 Sep9 Oct9 Nov9 Dec9 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb % ETF turnover ETF turnover as % of equity turnover Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, NYSE Arca.

37 Average expenses of ETFs versus openend mutual funds in the United States Average TER(s) Average TER (bps) ETFs Active Broad market equity Commodities Currency Custom Emerging markets equity Fixed income Growth equity International equity Inverse Largecap equity Leveraged Leveraged inverse Midcap equity Sector equity Smallcap equity Value equity Total equity ETFs Total fixed income ETFs Total all Openend mutual funds Passive/indexed domestic equity Passive/indexed international equity Passive/indexed fixed income Actively managed domestic equity Actively managed international equity Actively managed fixed income. As at end February.. Captured from Morningstar on March. Source: Morningstar, Global ETF Research and Implementation Strategy Team, BlackRock. 9 8

38 Short interest: United States listed ETF and HOLDRS short interest The rules on shorting ETFs on financial indices and the use of inverse and leveraged inverse ETFs on financial indices in the various markets are continually being updated as regulators react to market conditions and the actions of other regulators so the position is quite fluid. Date avg avg avg Short interest (Mn shares) % of shares outstanding.%.%.% S&P Index Level 98,, On February, the SEC approved a new rule that places restrictions on short selling a security when it has experienced a price decline of at least % in a single day. If this level is reached, short selling is only allowed if the price of the security is above the current national best bid. Short interest in United States listed ETFs reached the highest ever during. avg avg 8 avg 9 avg 8,,9,.%.%.%.%,8,,9 98 Based on data through to February the average number of ETF shares short during was, Mn shares, with an average of, Mn in and, Mn in 9. The February short interest level for United Stateslisted ETFs was.% of shares outstanding or,8 Mn shares, up 8.% from, Mn in December. avg,.8%, Investors are using ETFs for long/short and hedging strategies. Jan Feb avg,,8, 8.9%.% 9.%,9,8, At end of February, there were 99 ETFs listed in the United States and, ETFs worldwide, which provide exposure to equity sectors, styles, countries and regional indices as well as fixed income, commodity indices and currencies. Security lending revenue on ETFs can be attractive. For investors who own ETF shares, the lending revenue that can be earned on ETFs, may at times, and for some ETFs, more than cover the annual Total Expense Ratio (TER). Short interest is often considered an indication of the level of scepticism in the market. Short interest data is captured for United States listed securities on the th of each month or the next business day and reflects the number of shares that have yet to be repurchased to give back to lenders. The higher the short interest, the more investors are expecting a downturn. Short positions fall in value as stocks rise, and vice versa. Note: With short sales, the investor faces the potential for unlimited losses as the security's price rises. Data as at mid February. Source: Regulatory Notice 9, Financial Industry Regulatory Authority, SEC, Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. 8

39 Short interest: top United States listed ETFs and HOLDRS based on short interest Name Bloomberg ticker Short interest ( shares) Shares outstanding ( shares) Short interest ratio (%) SPDR S&P SPY,9,.% ishares Russell Index Fund IWM,9 98,.% ishares MSCI Emerging Markets Index Fund EEM, 8,.% PowerShares QQQ Trust QQQQ 9,8,.% Financial Select Sector SPDR Fund XLF 88,,9 8.% SPDR S&P Retail ETF XRT,8, 8.% ishares Dow Jones U.S. Real Estate Index Fund IYR,8, 9.% ishares FTSE/Xinhua China Index Fund FXI,,.% SPDR S&P Oil & Gas Exploration & Production ETF XOP,88, 9.% SPDR KBW Regional Banking ETF KRE 8,98,.% ishares MSCI Japan Index Fund EWJ, 9,.% Energy Select Sector SPDR Fund XLE, 9,.% ishares MSCI EAFE Index Fund EFA 8,,.% Industrial Select Sector SPDR Fund XLI,8,.% Technology Select Sector SPDR Fund XLK,, 8.% Vanguard Emerging Markets VWO,89 9,.% Consumer Staples Select Sector SPDR Fund XLP,,.% ishares Barclays + Year Treasury Bond Fund TLT, 9,.% Health Care Select Sector SPDR Fund XLV 9,9 8,.8% Consumer Discretionary Select Sector SPDR Fund XLY 8,89,9.% Note: Data as at mid February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. 9

40 United States options on ETFs/ETPs In February, there were 8 options on ETFs/ETPs in the United States, which means that % of United States listed ETFs/ETPs had options. Options on ETFs offer strategies for managing the risk or expanding the opportunities for profit. Because ETFs are traded like stocks, ETF options are very similar to stock options. Just as stock options settle in shares of stock, ETF options settle in ETFs. cleared contracts 8,, cleared transactions,,,,,,,,,,,,,, 8,,,,,,,,,,,,,, Oct9 Nov9 Dec9 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Cleared contracts Cleared transactions Note: Data as at end February. Source: The Options Clearing Corporation (The OCC), Global ETF Research and Implementation Strategy Team, BlackRock.

41 ETP providers in the United States: ranked by assets Provider ETPs Feb Assets % total planned Feb NNA YTD NNA ETPs % ETPs YTD change Assets % assets % market share State Street Global Advisors $.8.% $. $..% $..%.% ishares $8.9.% $. $..% $.8.%.% Deutsche Bank $..8% $.9 $..% $..%.% Barclays (ipath) $9..% $. $..% $. 8.%.% Merrill Lynch $..% $. $..% $.8.8%.% United States Commodity Funds 9 $..% $. $..% $..%.% ETF Securities $.8.% $. $..% $..%.% JPMorgan Chase $..% $. $..% $..%.% ProShares $..% 8 $. $..% $..9%.% Rydex SGI 9 $..% $. $..% $..%.% Swedish Export Credit Corp $.8.% $. $..% $..%.% GreenHaven Commodity Services $..% $. $..% $. 9.%.% Credit Suisse $..% $. $..% $..%.% Morgan Stanley $..% $. $..% $..%.% Barclays Capital 9 $..% $. $..% $..%.% Teucrium Trading $..% $. $..% $..9%.% VelocityShares $..% $. $..% $. 9.%.% Goldman Sachs $..% $. $..% $. 8.%.% HSBC/Hang Seng $..% $. $..% $..%.% FactorShares $..% $. $..% $..%.% RBS $..% $. $..% $..%.% Citigroup $..% $. $..% $. 8.%.% Jefferies Asset Management Sprott Asset Management WealthNotes Capital Management Total 98 $.9.% $. $..% $..% Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

42 Top ETF/ETP providers in the United States: ranked by assets Provider ishares ETFs/ ETPs Assets $.8 Feb % total.% planned Feb NNA $.9 YTD NNA $. ETFs/ ETPs % ETFs/ ETPs.% YTD change Assets $8. % assets.8% % market share.9% State Street Global Advisors 98 $..% 9 $. $..% $8..%.% Vanguard $..% $. $..% $9..%.% PowerShares/Deutsche Bank $..% $. $.8.% $..%.% ProShares $..% $. $..% $..9%.% Van Eck Associates Corp 9 $..% $. $..% $..%.% Bank of New York $.8.% $. $..% $..%.% WisdomTree Investments $..% $. $..% $..%.% Barclays (ipath) $9..9% $. $..% $. 8.%.% Rydex SGI $..% 8 $. $..% $..8%.% First Trust Advisors $..% $. $.9.% $..%.% Direxion Shares 9 $..% $. $..% $..8%.% Merrill Lynch $..% $. $..% $.8.8%.% United States Commodity Funds 9 $..% $. $..% $..%.% ETF Securities $.8.% $. $..% $..%.% Guggenheim Funds $..% 9 $. $..% $..%.% Charles Schwab Investment Management $..% $. $. 8.% $.8 8.%.% JPMorgan Chase $..% $. $..% $..%.% PIMCO $..% 8 $. $..% $..%.% Swedish Export Credit Corp $.8.% $. $..% $..%.% Global X Funds $..% 9 $. $. 9.% $..%.% ALPS ETF Trust $.9.% $. $..% $. 9.%.% GreenHaven Commodity Services $..% $. $..% $. 9.%.% RevenueShares $..% 8 $. $..% $..%.% Emerging Global Advisors 9 $..% $. $..% $. 8.%.% Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).

43 Top brokers trading listed ETFs/ETPs: ranked by advertised volume Broker Knight Securities Credit Suisse UBS Merrill Lynch Citigroup Global Markets Barclays Capital Citadel Securities JPMorgan Chase Bank Morgan Stanley Deutsche Bank Securities Goldman Sachs Susquehanna Capital Group Fidelity Capital Markets BNP Paribas Securities BTIG Royal Bank Of Canada GFI Group Instinet Jefferies & Co Bloomberg Tradebook ConvergEx State Street Bank & Trust Co HSBC Bank JonesTrading Newedge Group Others Total broker reported trades,, 8,9 8,9,, 9,89,9,8,8,,8,,,8,9,9 9,,,9,,98,9, Feb Broker advertised volume $8,. $9,. $,. $,8. $,9. $,98. $,8. $,. $,9. $,9. $,. $,. $9,.8 $,. $,9. $,. $,8. $,.9 $,. $,9. $,9. $,9. $,. $,9.8 $,8. $,.8 $,. % broker advertised market share.%.%.% 9.8%.%.%.%.%.%.%.8%.%.9%.%.9%.9%.9%.9%.%.%.%.%.%.%.%.%.% % total exchange volume.9%.%.%.%.9%.%.%.%.%.%.%.9%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.% broker reported trades (%).8%.%.%.%.%.%.%.%.%.%.%.% 8.% 9.%.%.%.%.%.% 8.%.%.%.%.9%.%.8%.9% Monthly change Broker advertised volume (%).%.%.%.%.%.% 8.%.8%.% 9.%.%.% 9.9%.%.%.9%.%.%.%.%.%.%.%.9%.% 8.%.% % broker advertised market share 9.9%.%.%.%.%.%.%.%.% 8.%.9%.% 9.%.8%.%.%.%.%.%.%.%.%.%.%.8%.% % total exchange volume.%.%.%.%.%.% 8.8%.8% 9.%.%.%.%.%.% 9.%.%.%.% 8.% 9.% 8.%.%.%.9%.%.%.9% Knight Securities.% Credit Suisse % UBS.% Merrill Lynch 9.8% Citigroup Global Markets.% Barclays Capital.% Citadel Securities.% JPMorgan Chase Bank.% Morgan Stanley % Deutsche Bank Securities % Goldman Sachs.8% Susquehanna Capital Group.% Fidelity Capital Markets.9% BNP Paribas Securities % BTIG.9% Royal Bank Of Canada.9% GFI Group.9% Instinet.9% Jefferies & Co.% Bloomberg Tradebook.% ConvergEx.% State Street Bank & Trust Co.% HSBC Bank.% JonesTrading.% Newedge Group.% Others.% Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

44 ETFs and ETPs listed in Europe At the end of February, the European ETF industry had, ETFs with,88 listings and assets of $99. Bn, from providers on exchanges. This compares to 9 ETFs with,9 listings and assets of $. Bn from providers on 8 exchanges, at the end of February. April will mark the th anniversary of ETFs in Europe. Assets YTD, assets have increased by.% from $8. Bn to $99. Bn, which is less than the.% increase in the MSCI Europe Index in dollar terms. This compares to a.% decrease in assets over the same period in. $. Bn of net new assets went into European listed ETFs/ETPs in February. $. Bn net inflows went into equity ETFs/ETPs, of which $.9 Bn went into ETFs/ETPs tracking North American indices while ETFs/ETPs tracking emerging market indices saw net outflows of $. Bn. Fixed income ETFs/ETPs saw net outflows of $. Bn, of which government bond ETFs/ETPs saw net outflows of $. Bn while $. Bn went into money market ETFs/ETPs. $. Bn net inflows went into commodity ETFs/ETPs, of which $. Bn went into ETFs/ETPs providing broad commodity exposure and $. Bn went into ETFs/ETPs providing energy exposure. $. Bn of net new assets went into European listed ETFs/ETPs in YTD. $. Bn net inflows went into equity ETFs/ETPs, of which $. Bn went into ETFs/ETPs tracking North American indices and $. Bn into ETFs/ETPs tracking European indices. Fixed income ETFs/ETPs saw net outflows of $. Bn, of which government bond ETFs/ETPs saw net outflows of $. Bn while $. Bn went into money market ETFs/ETPs. $. Bn net inflows went into commodity ETFs/ETPs, of which $.9 Bn went into ETFs/ETPs providing broad commodity exposure while ETFs/ETPs providing exposure to precious metals saw $. Bn net outflows. YTD, $. Bn net new asset flows went into equity ETFs/ETPs, less than the $. Bn net inflows over the same period in. Net new asset flows into ETFs/ETPs tracking North American indices were $. Bn YTD, greater than the net inflows of $.9 Bn over the same period in. Net inflows into ETFs/ETPs tracking European indices were smaller at $. Bn YTD versus $. Bn net inflows over the same period in. Fixed income ETF/ETP net outflows were $. Bn YTD compared to $. Bn net inflows over the same period in, and the net new asset inflows into commodity ETFs/ETPs were $. Bn YTD, greater than the net inflows of $.8 Bn over the same period in. Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, Federation of European Stock Exchanges (FESE).

45 ETFs and ETPs listed in Europe (continued) ETFs YTD, the number of ETFs have increased by.% with new ETFs launched. This compares to an 8.% increase over the same period in when new ETFs launched. The top ETFs, out of,8, account for.% of European ETF, while ETFs have less than $. Mn in assets, ETFs have less than $. Mn in assets and ETFs have less than $. Mn in assets. Trading volume In February, the ETF average daily trading volume in dollars increased by.% to $. Bn compared to December. This compares to average daily trading volume of $. Bn in February. Most ETF trades are not required to be reported in Europe as ETFs are not covered by the European Union directive on markets in financial instruments (MiFID). In January, reported European ETF turnover was.% of all European equity turnover, which was less than the.% in December. Exchanges YTD, the number of exchanges with official listings has increased from to. ETF providers ishares is the largest ETF provider in terms of both number of products and assets, 8 ETFs and $. Bn respectively, reflecting.% market share; Lyxor Asset Management is second with products, assets of $. Bn, and.9% market share; followed by db xtrackers with ETFs, assets of $8. Bn, and.% market share at the end of February. Of the $. Bn of net new assets in European listed ETFs in February, ishares gathered the largest net inflows with $. Bn, followed by UBS Global Asset Management with $. Bn net inflows, while Lyxor Asset Management had the largest net outflows with $. Bn. YTD, of the $.9 Bn net new assets into European listed ETFs, ishares gathered the largest net inflows with $.9 Bn net new assets, followed by Source Markets with $. Bn net inflows, while Lyxor Asset Management had the largest net outflows with $. Bn YTD. Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, Federation of European Stock Exchanges (FESE).

46 ETFs and ETPs listed in Europe (continued) ETF providers (continued) The top three ETF providers, out of, account for.% of European ETF. This compares to.% out of providers, at the end of February. YTD, one new provider has entered the industry, launching their first ETF, while three firms plan to launch their first ETFs in Europe in the future. Mutual funds ETPs In Europe, net sales of mutual funds (excluding ETFs) were $8. Bn, while net sales of ETFs domiciled in Europe were $.8 Bn during according to Lipper FMI. Additionally, there were other ETPs¹ with, listings, and assets of $. Bn, from nine providers on eight exchanges. This compares to 8 ETPs with listings and assets of $. Bn, from four providers, at the end of February. ETFs and ETPs Combined, there were, products with, listings and assets of $. Bn, from providers on exchanges in Europe. This compares to,8 products with,9 listings and assets of $. Bn from providers on 8 exchanges, at the end of February.. ETPs are products that have similarities to ETFs in the way they trade and settle but they do not use an openend investment company structure. The use of other structures including grantor trusts, partnerships, notes and commodity pools by ETPs can create different tax and regulatory implications for investors when compared to ETFs which are funds. Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

47 European ETF and ETP asset growth Assets $ Bn products,, 8 Assets 8 9 Feb ETF total $. $. $. $. $. $.9 $89. $8. $. $.9 $8. $99. ETF equity $. $. $. $9. $. $9. $. $. $9. $9.8 $98. $.9 ETF fixed income $. $.9 $. $. $. $. $. $. $. ETF commodity $. $. $. $.9 $. $. $8. ETP total $. $. $.9 $. $. $. $. ETFs 8 8,, ETPs Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

48 ETF providers in Europe: ranked by Provider ishares ETFs 8 total listings 8 $. Feb % total.% ADV $. planned Feb NNA $. YTD NNA $.9 ETFs % ETFs.% YTD change $.8 % assets.% % market share.% Lyxor Asset Management 8 $..9% $. $. $..% $..%.% db xtrackers $8..% $. $. $..% $..%.% Credit Suisse Asset Management 8 9 $..% $. $. $..% $..%.% Zurich Cantonal Bank $..% $. $. $..% $..%.% Commerzbank 9 $9..% $. $. $..% $..%.% Amundi ETF 9 $8..8% $. $. $.9.% $..8%.% UBS Global Asset Management $8..% $. $. $..% $..%.% ETFlab Investment 9 $..% $. $.8 $..% $..%.% Source Markets $..% $. $. $..8% $. 8.%.% EasyETF 9 $..% $. $. $..% $. 8.8%.% Swiss & Global Asset Management $..% $. $. $..% $..%.% XACT Fonder $..% $. $. $..% $..%.% RBS $..% $. $. $..% $..%.% PowerShares 9 $..% $. $. $..% $..%.% State Street Global Advisors $..% $. $. $..% $..%.% BBVA Asset Management $..% $. $. $..% $..%.% ETF Securities 9 $.9.% $. $. $..8% $. 8.9%.% HSBC/Hang Seng $.9.% $. $. $..8% $..%.% Marshall Wace LLP $..% $. $. $..% $..%.% Seligson & Co Fund Management $..% $. $. $..% $..8%.% DnB NOR Asset Management 8 $..% $. $. $..% $..9%.% Finans Portfoy Yonetimi $..% $. $. $..% $..%.% JP Morgan Mansart Investments $..% $. $. $..% $..%.% Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. continued 8

49 ETF providers in Europe: ranked by (continued) Provider PIMCO Source ETFs total listings $. Feb % total.% ADV $. planned Feb NNA $. YTD NNA $. ETFs % ETFs.% YTD change % assets $..% % market share.% Alpha Asset Management $..% $. $. $..% $..8%.% ThinkCapital $..% $. $. $..% $..%.% Carnegie Fonder $..% $. $. $..% $..%.% NCB Investment Services $..% $. $. $..% $..%.% OTP Fund Management $..% $. $. $..% $..%.% Is Investment $..% $. $. $..% $..9%.% NBG Asset Management $..% $. $. $..% $..%.% Osmosis Investment Management $..% $. $. $..% $..%.% Troika Dialog Asset Management $..% $. $. $..% $..%.% Garanti Bank $..% $. $. $..% $..%.% Medvesek Pusnik AM $..% $. $. $..% $..%.% Bizim Menkul Degerler $..% $. $. $..% $. 9.%.% ESAF $..% $. $. $..% $..%.% Goldman Sachs Asset Management $..% $. $. $..% $..%.% Kuveyt Turk Katilim Bankasi $..% $. $. $..% $..%.% Direxion Shares $. ProShares 8 $. Van Eck Associates Corp $. Vanguard $. Hinduja Bank (Switzerland) Ossiam Qbasis Invest Total,,88 $99..% $. $. $.9.% $..% Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. 9

50 European ETF/ETP net new assets by type of exposure ETFs /ETPs ADV Feb Assets NNA YTD NNA NNA Exposure Equity 8,89.,8..,.,99.,.8 Europe 9,.8,. 9.,98.8,8. 8,. Broad,8.,8.9 (.) (9.),8.9,. Consumer Goods/Services.8,. (.) (9.).. Energy., Financials 8.,..,. (9.) 8. Healthcare. 98. (9.) (.) (9.).9 Industrials Information Technology (.). Materials.,9. (.) (.) (9.). Private Equity Real Estate., Telecommunications (9.). Utilities Other. 9.. (.) (.) North America 8., ,.,9.8,. Asia Pacific.,.9 (8.).8,9.,. Global 8 9.,8.. 8.,8.9,98. 9 NNA continued Note: NNA Net New Assets. Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

51 European ETF/ETP net new assets by type of exposure (continued) Exposure ETFs /ETPs ADV Feb Assets NNA YTD NNA NNA Emerging Markets.,. (.).8,.9,. Broad EM 8 8.8,. (9.9) (88.),.,. Regional EM.9, Country EM.8,.. 9.,89.8,. Brazil 9.,.9 (.) (.) Chile China.,89. (8.) (.). 8.9 Egypt (9.) (.) Hungary... (.) (.) (.) India 8.9, Indonesia.8 Kuwait.... Malaysia.. (.) (.) 99.. Mexico Poland Russia 9 9.8, South Africa.. (9.) South Korea.9, Taiwan. 8.8 (.9) 8... Thailand. (.) Turkey..8 (.) (8.).. UAE (.). Vietnam NNA continued Note: NNA Net New Assets. Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

52 European ETF/ETP net new assets by type of exposure (continued) ETFs /ETPs ADV Feb Assets NNA YTD NNA NNA Exposure Fixed Income.9,.9 (.) (9.) 8,.9 9,. Broad Corporate.,99.. (.),.8,.8 Covered 8., Credit Spreads (.) (9.) Government ,99. (,.) (,9.),.8,9. High Yield Inflation.,9... (.),.8 Money Market.,... (999.) (,8.) Mortgage.,8.8 (8.) (8.) (.) 9. Commodities. 9,99.,.,. 9,.,.9 Broad 8. 9,.. 9.,.,98.9 Agriculture., (9.),9. Energy.9, ,8. Industrial Metals.8, Livestock Precious Metals.,.. (.),.,. Currency (.). 9. Alternative., Mixed Total,,8.,9.,.,.,.,88. 9 NNA Note: NNA Net New Assets. Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

53 STOXX Sector ETF net flows: week ending February The week ending February saw $. Mn net outflows from STOXX Europe sector ETFs. The largest sector ETF net outflows last week were in basic resources with $9. Mn followed by financial services with $. Mn net outflows while oil and gas experienced net inflows of $. Mn. YTD, STOXX Europe sector ETFs have seen $,. Mn net inflows. Banks has seen the largest net inflows with $8. Mn, followed by oil and gas with $8. Mn net inflows while chemicals experienced the largest net outflows with $. Mn. STOXX $ total return performance Futures open ETF ETF day ADV Sector Ticker stocks % interest weight Weekly Rank YTD Rank Feb YTD % change Weekly ETF net flows MTD ETF net flows YTD ETF net flows Automobiles and parts SXAR.%.%.% % Banks SXR.%.9%.% 9.,8..% Basic resources SXPR.%.8%.% 8 8.8,..% Chemicals SXR.%.%.% %.8... Construction and materials SXOR.%.8% 9.%.9.9.% Financial services SXFR.%.9%.% 9...%.... Food and beverage SXR 8.9%.%.% % Healthcare SXDR 9.%.9%.%. 8..% Industrial goods and services SXNR 9 9.%.%.8%...9% Insurance SXIR.%.% 8.% % Media SXMR 8.%.%.%. 8..9% Oil and gas SXER 8.%.%.% 88.,..% Personal and household goods SXQR 8.%.%.%...% Real estate SX8R.%.%.% 8...%.... Retail SXRR.%.8% 8.% % Technology SX8R.9%.%.9%.. 9.%....8 Telecommunications SXKR.%.%.9%.8 8..% Travel and leisure SXTR.%.% 9.8% %...8. Utilities SXR.%.9% 8.%.9 9..% Total.%.%.8%,.,88..% 9...9,. Note: Index returns are for illustrative purposes only and do not represent actual fund performance. Index performance returns do not reflect any management fees, transaction costs or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results. Index YTD returns reflect dollar total return performance from December to February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

54 STOXX Europe sector ETF net flows, history Net flows,,8,,,, 8 8, Net flows,,8,,,, 8 8, Jan 9Jan Feb Mar Apr May 8Jun Jul Aug Sep 8Oct Nov Dec Dec 8Jan Feb Note: Data as at February Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. Weekly net flows YTD net flows YTD net flows

55 European leveraged and inverse ETF/ETP net new assets by type of exposure Feb Exposure ETFs /ETPs ADV Assets NNA YTD NNA NNA 9 NNA Leveraged 8 9.,.. (8.) 8.,9.8 Equity.,. (9.) (.).. Europe.9,9. (9.) (.).8. North America Commodities Currency Fixed Income... Inverse 8., ,. Equity 98.,. (.) (.9) (8.),. Asia Pacific.. (.) Europe 89.8,99. (.) (.) (9.),. Emerging markets North America. 8. (8.) (.8). Commodities Currency Fixed Income 9 8.,8.. (.). 8. Alternative 8. (8.8).9 Leveraged Inverse 8., Equity., Europe 9., North America..... Fixed Income Currency Commodities.8 Total. 9,.9. (.),.8,9. Note: NNA Net New Assets. Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

56 Types of ETF exposure in Europe: ranked by ETFs should be viewed as a tool for both active and passive managers. Type of exposure Equity Total ETFs $. Feb % total 8.9% ADV $. ETFs 9 YTD change $. %.% Country exposure Europe Emerging markets Regional Exposure Eurozone Country exposure United States International Regional exposure Europe European sector exposure Global exposure Style Eurozone sector exposure sector exposure Fixed income Commodities Inverse Alternative Leveraged Leveraged inverse $. $. $.8 $. $8.9 $. $. $. $. $. $. $.9 $.8 $. $. $. $..%.%.%.9%.%.%.%.%.%.9%.% 9.% 9.%.9%.%.%.% $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $.9 $. $. $. $. $. $. $. $. $..%.%.% 8.%.% 8.9%.9% 8.%.%.%.%.9%.%.%.%.9%.% Fixed income 9.% Country exposure Europe equity.% Emerging markets equity.% Regional Exposure Eurozone equity.% Commodities 9.% Country exposure United States equity.9% International equity.% Regional exposure Europe equity.% European sector exposure equity.% Global exposure equity.% Style equity.% Inverse.9% Eurozone sector exposure equity.9% Alternative.% Leveraged inverse.% Leveraged.% Currency.% sector exposure equity.% Mixed (equity & fixed income).% Currency $..% $. $..% Mixed (equity and fixed income) $..% $. $..% Total, $99..% $. $..% Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

57 Index providers in Europe: ranked by Feb YTD change Index provider ETFs % total ADV ETFs % MSCI $..% $.9 $.9.8% STOXX Deutsche Boerse FTSE Markit S&P EuroMTS SIX Swiss Exchange Barclays Capital NYSE Euronext NASDAQ OMX Dow Jones Hang Seng Topix Nikkei Russell Structured Solutions SNetwork $.8 $8. $. $. $. $9. $8.8 $8. $8. $. $. $.8 $.9 $.8 $. $. $..% 9.%.%.%.%.%.9%.9%.%.8%.8%.%.%.%.%.%.% $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. 9.%.%.%.%.%.%.%.8%.%.8%.%.8%.8%.%.8% 8.%.% MSCI.% STOXX.% Deutsche Boerse 9.% FTSE.% Markit.% S&P.% EuroMTS.% SIX Swiss Exchange.9% Barclays Capital.9% NYSE Euronext.% NASDAQ OMX.8% Dow Jones.8% Hang Seng.% Topix.% Nikkei.% Russell.% Structured Solutions.% SNetwork.% Intellidex.% Other.% Intellidex $..% $. $..8% Other $9..% $. 8 $..% Total, $99..% $. $..% Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

58 Top ETFs in Europe Ranked by Assets Under Management () Ranked by $ Average Daily Trading Volumes (ADV) ETF Country listed Bloomberg ticker ADV ( shares) ADV ETF Country listed Bloomberg ADV ticker ADV ( shares) ishares S&P UK IA LN 9,88.,9 8.9 ishares S&P UK IA LN 8.9,9 9,88. Lyxor ETF Euro STOXX France MSE FP 8,., 9. Lyxor ETF Euro STOXX France MSE FP 9., 8,. ZKB Gold ETF Switzerland ZGLD SW, ishares DAX (DE) Germany DAXEX GY 9.,8,9. ishares MSCI Emerging Markets UK IEEM LN,88.8,8. STOXX Optimised Industrial Goods & Services Germany XNPS GY 9.9. ishares DAX (DE) Germany DAXEX GY,9.,8 9. ishares FTSE UK ISF LN 8. 8,,9. ishares FTSE UK ISF LN,9. 8, 8. db xtrackers DAX ETF Germany XDAX GY 8.9 8,8. ishares EURO STOXX (DE) Germany SXEEX GY,9.,.9 ishares MSCI North America UK INAA LN 8.,9. db xtrackers MSCI Emerging Market TRN Germany XMEM GY,.,. ishares FTSE Developed Markets Property UK IWDP LN 8.,. ishares Markit iboxx Euro Corporate Germany IBCS GY,. 8.9 STOXX Optimised Basic Resources Source Germany XPPS GY.. ishares EURO STOXX Germany EUN GY,88.9,8. ishares EURO STOXX Germany EUN GY.,8,88.9 db xtrackers DAX ETF Germany XDAX GY, ishares EURO STOXX (DE) Germany SXEEX GY.9,,9. Lyxor ETF CAC France CAC FP, db xtrackers Euro Stoxx ETF Germany XESX GY.,,. ishares MSCI World UK IWRD LN,., 9. db xtrackers II EONIA Total Return Index Germany XEON GY. 9,8.8 CS ETF (CH) on SMI Switzerland CSSMI SW,9. 8. Lyxor ETF Leverage CAC France LVC FP 9.,. db xtrackers Euro Stoxx ETF Germany XESX GY,.,. ishares MSCI Emerging Markets UK IEEM LN.,8,88.8 db xtrackers MSCI World TRN ETF Germany XMWO GY,. 8. Lyxor ETF XBEAR CAC France BX FP., 9. ZKB Silver ETF (CHF) Switzerland ZSIL SW, db xtrackers MSCI Emerging Market TRN Germany XMEM GY.,,. db xtrackers MSCI A TRN ETF Germany XM GY,.. Lyxor ETF DAX Germany LYXDAX GY.,8. ishares MSCI Japan UK IJPN LN,.,9.9 Lyxor ETF CAC France CAC FP. 99,9. Lyxor ETF MSCI India France INR FP,.,99 8. ishares MSCI Eastern Europe / UK IEER LN.8 8. Note: reflects total fund. ADV reflects total of all exchange listings, share classes and OTC volumes. NNA reflects the total fund NNA. Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. 8

59 Top ETFs in Europe (continued) Ranked by largest change in Ranked by largest YTD net inflows ETF Bloomberg ticker YTD NNA Feb Dec Change ETF Bloomberg ticker YTD NNA ADV ishares S&P IA LN,9. 9,88.,9.8,8. ishares S&P IA LN,9. 9, db xtrackers MSCI Emerging Market TRN XMEM GY 89.,.,.,9. db xtrackers DAX ETF XDAX GY., db xtrackers DAX ETF XDAX GY.,8.,9. 9. ishares STOXX Europe (DE) SXXPIEX GY.,8.. ishares EURO STOXX (DE) SXEEX GY 9.,9.,.. MAN GLG Europe Plus Source ETF MPFE GY ETFlab EURO STOXX ETFSXE GY 8.,98.,.. ishares Markit iboxx Euro High Yield Bond IHYG LN Lyxor ETF Russia (DJ RusIndex Titans ) R FP.,.,.9. UBSETF MSCI A ACHA SW.,.. UBSETF MSCI A ACHA SW.,.,.. CS ETF (IE) on MSCI EMU CSEMU SW ishares STOXX Europe (DE) SXXPIEX GY.,8., Lyxor ETF Commodities CRB CRB FP.,88.. Lyxor ETF Commodities CRB CRB FP.,88.,. 8. ishares EURO STOXX (DE) SXEEX GY 9.,9..9 ishares DAX (DE) DAXEX GY.,9.,9. 9. Lyxor ETF Russia (DJ RusIndex Titans ) R FP.,.. db xtrackers DJ STOXX XSX GY. 8.,.. ishares FTSE UK Dividend Plus IUKD LN. 9.. CS ETF (IE) on MSCI EMU CSEMU SW Lyxor ETF Euro Cash (EONIA) CSH FP.,.. ishares MSCI Emerging Markets IEEM LN.,88.8,8..9 STOXX Optimised Banks Source ETF XPS GY Lyxor ETF Leverage CAC LVC FP ishares eb.rexx Money Market (DE) EBMMEX GY.,9.. Lyxor ETF MSCI India INR FP.,.,.. RDX Source ETF RDXS LN 9... ishares Markit iboxx Euro High Yield Bond IHYG LN STOXX Optimised Oil & Gas Source ETF XEPS GY... MAN GLG Europe Plus Source ETF MPFE GY ishares STOXX Europe Banks (DE) SXPEX GY.. 9. ishares MSCI AC Far East exjapan IFFF LN 9.,9.,. 9. ishares EURO STOXX (Acc) IEUA LN Lyxor ETF EuroMTS Y MTA FP 9.8,., Lyxor ETF Stoxx Europe Banks BNK FP ishares EURO STOXX EUN GY.9,88.9,9. 9. ishares BarCap Euro Government Bond IBGM LN Note: reflects total fund. ADV reflects total of all exchange listings, share classes and OTC volumes. NNA reflects the total fund NNA. Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. 9

60 European ETF turnover as % of European equity turnover ETF turnover, ETF turnover as % of European equity turnover %, % 8, % %, %, %, % % Sep8 Oct8 Nov8 Dec8 Jan9 Feb9 Mar9 Apr9 May9 Jun9 Jul9 Aug9 Sep9 Oct9 Nov9 Dec9 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb ETF turnover ETF turnover as % of European equity turnover Note: European equity turnover from main market and multilateral trading facilities includes electronic order book equity trading, offelectronic order book equity trading, reporting transactions and dark pool equity trading. Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, Federation of European Stock Exchanges (FESE).

61 Average expenses of ETFs versus openend mutual funds in Europe Average TER(s) ETFs Alternative Commodities Country exposure Europe equity Country exposure United States equity Currency Emerging markets equity European sector exposure equity Eurozone sector exposure equity Fixed income Global exposure equity International equity Inverse Leveraged Leveraged inverse Mixed Regional exposure Europe equity Regional exposure Eurozone equity Style equity United States sector exposure equity Total equity ETFs Total fixed income ETFS Total all Average TER (bps) Openend mutual funds Passive/indexed domestic equity Passive/indexed international equity Passive/indexed fixed income Actively managed domestic equity Actively managed international equity Actively managed fixed income. As at end February.. Captured from Morningstar on March. Source: Morningstar, Global ETF Research and Implementation Strategy Team, BlackRock

62 ETP providers in Europe: ranked by assets Provider ETPs total listings Feb Assets % total planned Feb NNA YTD NNA ETPs % ETPs YTD change Assets % assets % market share ETF Securities 8 $..% $. $..8% $..%.% Societe Generale $..% $. $..% $..8%.% UBS AG 8 8 $..% $. $..% $..%.% db ETC 9 $..% $. $..% $..%.% Source Markets 8 $..% $. $..% $..%.% RBS 8 $..% $. $..% $..%.% Lyxor 8 $..% $. $..% $..%.% Barclays (ipath) $..% $. $..% $. 8.%.% Standard Commodities $..% $. $..% $..9%.% ishares State Street Global Advisors Merrill Lynch Credit Suisse GAM Holding Total, $..% $.8 $..% $..8% Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

63 Top ETF/ETP providers in Europe: ranked by assets Provider ishares ETFs/ ETPs 8 total listings 8 Feb Assets $. % total.% planned Feb NNA $. YTD NNA $.9 ETFs/ ETPs % ETFs/ ETPs.% YTD change Assets $.8 % assets.% % market share.% Lyxor Asset Management 8 $..% $. $..% $..%.% db xtrackers/db ETC 8 $..% $. $..% $.9.9%.% ETF Securities 8 $..% $. $..% $..8%.% Credit Suisse Asset Management 8 9 $..9% $. $..% $..%.% Zurich Cantonal Bank $..% $. $..% $..%.% Commerzbank 9 $9..% $. $..% $..%.% Amundi ETF 9 $8..% $. $.9.% $..8%.% UBS Global Asset Management $8..% $. $..% $..%.% Source Markets 8 $..% $. $..% $..%.% ETFlab Investment 9 $..% $.8 $..% $..%.% EasyETF 9 $..8% $. $..% $. 8.8%.% Swiss & Global Asset Management $..% $. $..% $..%.% Societe Generale $..% $. $..% $..8%.% UBS AG 8 8 $..% $. $..% $..%.% XACT Fonder $..% $. $..% $..%.% RBS $.9.% $. $..9% $..%.% PowerShares 9 $..% $. $..% $..%.% State Street Global Advisors $..% $. $..% $..%.% BBVA Asset Management $..% $. $..% $..%.% HSBC/Hang Seng $.9.% $. $..8% $..%.% Marshall Wace LLP $..% $. $..% $..%.% Seligson & Co Fund Management $..% $. $..% $..8%.% DnB NOR Asset Management 8 $..% $. $..% $..9%.% Lyxor 8 $..% $. $..% $..%.% Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

64 Top brokers trading European listed ETFs/ETPs: ranked by traded volume Broker Deutsche Bank Securities Goldman Sachs International Morgan Stanley Societe Generale CA Cheuvreux Credit Suisse Merrill Lynch UniCredit JPMorgan Chase Bank Citigroup Global Markets Labranche Structured Products Winterflood Securities Nomura International Knight Securities Peel Hunt UBS HSBC Bank Barclays Capital Macquarie Group RBS Exane Carnegie Newedge Group Enskilda Securities Svenska Handelsbanken London Others Total broker reported trades,,8,8,8, 9,9, 9,,,9,9,9, 9 9,99,,98 Feb Broker advertised volume $,9 $, $, $,8 $,8 $, $, $,88 $,8 $,8 $,8 $, $8 $8 $ $ $ $8 $9 $ $ $ $8 $ $ $,8 $, % broker advertised market share.%.% 9.% 8.%.9%.8%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.% Monthly change broker reported trades (%) Broker advertised volume (%) % broker advertised market share.%.%.8%.%.%.%.%.% 9.%.%.8%.%.%.%.%.% 9.%.%.%.%.9%.8%.% 8.8% 9.%.%.8%.%.%.%.%.%.%.%.9%.9%.%.9%.%.%.9%.%.% 8.%.%.%.%.%.%.% 9.8%.%.%.%.9%.%.% 9.9%.% 9.% 9.8%.%.%.% 9.%.9%.8%.% 8.% 9.%.% 8.%.8%.% 9.% 9.%.%.%.%.% Deutsche Bank Securities.% Goldman Sachs International.% Morgan Stanley 9.% Societe Generale 8.% CA Cheuvreux.9% Credit Suisse.8% Merrill Lynch.% UniCredit.% JPMorgan Chase Bank.% Citigroup Global Markets.% Labranche Structured Products.% Winterflood Securities.% Nomura International.% Knight Securities.% Peel Hunt.% UBS.% HSBC Bank.% Barclays Capital.% Macquarie Group.% RBS.% Exane.% Carnegie.% Newedge Group.% Enskilda Securities.% Svenska Handelsbanken London.% Others.% Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

65 ETFs and ETPs listed in Asia Pacific (exjapan) At the end of February, the Asia Pacific (exjapan) ETF industry had ETFs with listings and assets of $. Bn, from providers on exchanges. This compares to 8 ETFs with listings and assets of $8. Bn, from 9 providers on exchanges, at the end of February. August will mark the th anniversary of ETFs in Australia. Assets ETFs YTD, assets have increased by.% from $. Bn to $. Bn, compared to the.% fall in the MSCI AC Asia Pacific exjapan Index in dollar terms. This compares to a decrease in assets of.% over the same period in. YTD, the number of ETFs increased by 8.% with new ETFs launched. This compares to a.% increase over the same period in, when eight new ETFs launched. Trading volume In January, the ETF average daily trading volume in dollars increased by.9% to $.9 Bn, compared to December. This compares to average daily trading volume of $. Bn in February. ETF providers State Street Global Advisors is the largest ETF provider in terms of assets with $. Bn, in eight ETFs, reflecting.% market share; ishares is second with 9 ETFs, assets of $9.9 Bn, and 8.% market share; followed by HSBC/Hang Seng with four ETFs, assets of $.9 Bn and.8% market share, at the end of February. YTD, three new providers have entered the industry launching their first ETF, while eight firms plan to launch their first ETFs in the future. Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg

66 ETFs and ETPs listed in Asia Pacific (exjapan) (continued) Mutual funds ETPs During, according to Strategic Insight, net sales of mutual funds (excluding ETFs) were minus $. Bn in Asia Pacific (exjapan), while net sales of ETFs domiciled in Asia Pacific (exjapan) were positive $8. Bn. Additionally, there were other ETPs with listings and assets of $. Bn from providers on five exchanges. This compares to ETPs with listings and assets of $.9 Bn from eight providers on five exchanges at the end of February.. ETPs are products that have similarities to ETFs in the way they trade and settle but they do not use an openend investment company structure. The use of other structures including grantor trusts, partnerships, notes and commodity pools by ETPs can create different tax and regulatory implications for investors when compared to ETFs which are funds. Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg

67 Asia Pacific (exjapan) ETF and ETP asset growth Assets products Assets 8 9 Feb ETF assets $. $.8 $. $8. $. $8. $. $.8 $8. $. $. ETP assets $. $. $.8 $. $. ETFs ETPs Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

68 ETF providers in Asia Pacific (exjapan): ranked by Provider State Street Global Advisors ishares HSBC/Hang Seng China Asset Management E Fund Management Samsung Investment Trust Management Polaris Hua An Fund Management BOCIPrudential Asset Management db xtrackers Woori Asset Management Lyxor Asset Management China Southern Fund Management Mirae Asset MAPS Global Investments Bank Of Communications HuataiPineBridge Fund Management KB Asset Management Da Cheng International Asset Management Korea Investment Trust Management Benchmark Asset Management DBS Asset Management Bosera Asset Management GTJA Allianz Smartshares Limited ETFs Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg total listings 9 8 $. $9.9 $.9 $. $. $. $. $. $. $. $.9 $. $. $. $. $. $. $. $. $. $. $. $. $. Feb % total.% 8.%.8%.8%.%.%.8%.%.%.9%.%.%.%.%.%.%.%.%.%.%.%.%.%.% ADV $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. planned ETFs % ETFs.%.%.%.%.%.%.%.%.%.%.%.%.% 8.8%.%.%.%.%.%.%.%.%.%.% YTD change $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. %.9%.8%.%.%.8%.%.%.% 9.%.% 8.%.%.9%.%.% 8.%.%.%.%.%.%.%.%.9% % market Share.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.% continued 8

69 ETF providers in Asia Pacific (exjapan): ranked by (continued) Provider ETFs total listings Feb % total ADV planned ETFs % ETFs YTD change % % market share ICBC Credit Suisse Asset Management $..% $..% $..%.% Vanguard $..% $..% $..%.% Fubon Asset Management $..% $..% $..%.% ivcap Management $..% $..% $..%.% AmInvestment Management $..% $..% $..%.% CIMBPrincipal Asset Management $..% $..% $..%.% Fortune SGAM Fund Management $..% $..% $..9%.% Russell Investments $..% $..% $..%.% AMP $..% $..% $..%.% HFT Investment Management $..% $..% $..8%.% Yurie Asset Management $..% $..% $..%.% BetaShares Capital $..% $..% $..%.% Ping An $..% $..% $..%.% Penghua Fund Management $..% $..% $..%.% One Asset Management $..% $..% $..%.% Motilal Oswal Asset Management $..% $..% $. 8.%.% CCB Principal Asset Management $..% $..% $..%.% Hanwha Investment Trust Management $..% $..% $..%.% UOB Asset Management $..% $..% $..%.% Sensible Asset Management $..% $..% $. 9.%.% China Merchants Fund Management $..% $..% $..%.% Daishin Investment Trust Management $..% $..% $..%.% KTB Asset Management $..% $..% $. 9.%.% Prudential Asset Management $..% $..% $..%.% continued Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. 9

70 ETF providers in Asia Pacific (exjapan): ranked by (continued) Provider ETFs total listings Feb % total ADV planned ETFs % ETFs YTD change % % market share Kotak Mahindra Asset Management $..% $..% $..%.% Midas Asset Management $..% $..% $..%.% Tong Yang Investment Trust Management $..% $..% $..%.% Australian Index Investments $..% $..% $..%.% Daiwa Asset Management $..% $..% $..%.% Krung Thai Asset Management $..% $..% $..%.% TMB Asset Management $..% $..% $..%.% Indo Premier Securities $..% $..% $..9%.% Reliance Capital Asset Management $..% $..% $..9%.% China International Capital Corp $..% $..% $. 9.%.% Hyundai Investments $..% $..% $..%.% PRUDENTIAL ICICI $..% $..% $. 8.%.% Quantum Asset Management $..% $..% $..9%.% UTI Asset Management $..% $..% $..8%.% Allianz SE EasyETF Fullgoal Fund Management Birla Sun Life Mutual Fund Government Service Insurance Systems Guotai Asset Management Religare India Asset Management Tata Mutual Fund Other (Planned) Total $..% $.9 8.% $..% Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

71 Top ETFs in Asia Pacific (exjapan) Ranked by Assets Under Management () Ranked by $ Average Daily Trading Volumes (ADV) ETF Country listed Bloomberg ticker ADV ( shares) ADV ETF Country listed Bloomberg ticker ADV ADV ( shares) ishares FTSE A China Index ETF* Hong Kong 8 HK,. 9, 9. ishares FTSE A China Index ETF Hong Kong 8 HK 9. 9,,. Tracker Fund of Hong Kong (TraHK) Hong Kong 8 HK,.,9. China AMC SSE China CH 9.,,9.8 Hang Seng Index ETF Hong Kong 8 HK,88.8. E Fund SZSE China 99 CH 9.,,99. China AMC SSE China CH,9.8, 9. Samsung KODEX Leverage ETF South Korea KS.,8 9. E Fund SZSE China 99 CH,99., 9. Tracker Fund of Hong Kong (TraHK) Hong Kong 8 HK.,9,. Hang Seng HShare Index ETF Hong Kong 88 HK,.,. SHANGHAI SSE8 ETF China 8 CH. 9, 8.9 ABF Pan Asia Bond Index Fund Hong Kong 8 HK,9.. Samsung Kodex ETF South Korea 9 KS 8.,8,. SPDR S&P/ASX Fund Australia STW AU,9.. Polaris Taiwan Top Tracker Taiwan TT 8. 9,,9. Polaris Taiwan Top Tracker Taiwan TT,9. 9, 8. GTJA Allianz SSE Commodity Equity Index China CH.8,9 8.8 Samsung Kodex ETF South Korea 9 KS,.,8 8. db xtrackers CSI Index ETF Hong Kong 9 HK 8.8,. World Index Shares ETFs CSI * Hong Kong 8 HK,.,8.9 Samsung KODEX Inverse ETF South Korea 8 KS 8.,. SHANGHAI SSE8 ETF China 8 CH 8.9 9,. China SME ETF China 99 CH.,9. ishares MSCI India ETF Singapore INDIA SP Hang Seng HShare Index ETF Hong Kong 88 HK.,,. China SME ETF China 99 CH.,9. SPDR S&P/ASX Fund Australia STW AU.,9. Bank Of Communications Schroder SSE8 China CH 98.,9. db xtrackers CSI Banks Index ETF Hong Kong HK., 9. SSE Component Stock Index ETF China 99 CH. 9,9.8 W.I.S.E. Polaris CSI Investment Trust Taiwan TT 8.8,8 8. db xtrackers CSI Index ETF Singapore XCSI SP.. E Fund SSE Midcap ETF China CH 8.,.8 W.I.S.E. Polaris CSI Investment Trust Taiwan TT 8.,8 8.8 World Index Shares ETFs CSI China Hong Kong 8 HK.9,8,. Samsung KODEX Samsung Group ETF South Korea 8 KS. 8. Mirae Asset MAPS TIGER ETF South Korea KS.9. HuataiPineBridge Dividend ETF China 88 CH 9.,. SSE Component Stock Index ETF China 99 CH.8 9,9. * This is a synthetic ETF. The relevant annotation that the fund is a synthetic ETF is a Hong Kong regulatory requirement. As such, for funds that are not authorized in Hong Kong, they may not carry the same annotation even though they may invest substantially in financial derivatives instruments. Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

72 ETFs and ETPs listed in Japan At the end of February, the Japanese ETF industry had 8 ETFs with 8 listings and assets of $. Bn, from seven providers on three exchanges. This compares to ETFs with listings and assets of $. Bn from six providers on two exchanges, at the end of February. There are 8 ETFs which have filed notifications in Japan. Assets YTD, assets have increased by.% from $. Bn to $. Bn, compared to the.% increase in the MSCI Japan Index in dollar terms. This compares to a.% decrease in assets over the same period in. ETFs YTD, the number of ETFs increased by.% with one new ETF launched. This compares to a.9% increase over the same period in, when two new ETFs launched. Trading volume In February, the ETF average daily trading volume in dollars increased by 9.% to $. Bn compared to December. This compares to average daily trading volume of $. Bn in February. ETF providers Nomura Asset Management is the largest ETF provider in terms of assets, with $. Bn in ETFs, reflecting.% market share; Nikko Asset Management is second with ETFs, assets of $. Bn, and.% market share; followed by Daiwa Asset Management with ETFs, assets of $. Bn and 9.% market share, at the end of February. Mutual funds In Japan, net sales of mutual funds (excluding ETFs) were $. Bn, while net sales of ETFs domiciled in Japan were $.9 Bn during according to Strategic Insight. ETPs Additionally, there were nine other ETPs with cross listings and assets of $. Bn from four providers on two exchanges. This compares to four ETPs with ten cross listings and assets of $. Bn from three providers on two exchanges, at the end of February.. ETPs are products that have similarities to ETFs in the way they trade and settle but they do not use an openend investment company structure. The use of other structures including grantor trusts, partnerships, notes and commodity pools by ETPs can create different tax and regulatory implications for investors when compared to ETFs which are funds. Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

73 Japan ETF and ETP asset growth Assets products 9 8 Assets 8 9 Feb ETF assets $. $. $. $. $.8 $. $. $. $. $. $. ETP assets $. $. $. $. $. ETFs ETPs 9 9 Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

74 ETF providers in Japan: ranked by Feb YTD change Provider Nomura Asset Management ETFs total listings $. % total.% ADV $. planned ETFs % ETFs.% $. %.% % market share.% Nikko Asset Management $..% $..% $..%.9% Daiwa Asset Management $. 9.% $..% $. 8.8%.% Mitsubishi UFJ Asset Management $..% $..% $..8%.% ishares $..% $..% $..%.% Simplex Asset Management $..% $..% $..%.% Kokusai Asset Management $..% $..% $..%.% EasyETF $. Samsung Investment Trust Management $. State Street Global Advisors $. Total 8 8 $..% $..% $..% Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

75 Top ETFs in Japan Ranked by Assets Under Management () Ranked by $ Average Daily Trading Volumes (ADV) ETF Bloomberg ticker ADV ( shares) ADV ETF Bloomberg ticker ADV ADV ( shares) TOPIX ETF JP,88.9,9.9 NIKKEI ETF JP. 8,88.9 NIKKEI ETF JP, Listed Index Fund JP 9.,8. Listed Index Fund JP,8. 9. TOPIX ETF JP.9,9,88.9 Listed Index Fund TOPIX 8 JP,9.. Daiwa ETF NIKKEI JP.,. Daiwa ETF NIKKEI JP,.. Listed Index Fund TOPIX 8 JP.,9. Daiwa ETF TOPIX JP,9..8 MAXIS S&P Mitsubishi Group ETF JP.,,.9 MAXIS S&P Mitsubishi Group ETF JP,.9,. Daiwa ETF TOPIX JP.8,9. MAXIS NIKKEI ETF JP 9.. MAXIS NIKKEI ETF JP. 9. TOPIX Banks Exchange Traded Fund JP 8.,8. TOPIX Banks Exchange Traded Fund JP.,8 8. SSE Index Linked ETF 9 JP.8. SSE Index Linked ETF 9 JP..8 MAXIS TOPIX ETF 8 JP. 8.8 Kokusai S&P VIX ShortTerm Futures Index ETF JP MAXIS TOPIX Core ETF JP.. NEXT FUNDS Tokyo Stock Exchange REIT JP. 8. TOPIX Core Exchange Traded Fund JP.. MAXIS TOPIX ETF 8 JP.8 8. NEXT FUNDS Ibovespa Linked ETF JP.9. NEXT FUNDS Ibovespa Linked ETF JP..9 NEXT FUNDS Tokyo Stock Exchange REIT Index ETF JP. 8. Listed Index Fund JREIT JP.. Daiwa ETF TOPIX Core JP 9.. Simplex JASDAQ TOP Exchange Traded Fund JP..9 Listed Index Fund China A Share (Panda) CSI JP 88.. NEXT FUNDS India S&P CNX Nifty Linked ETF 8 JP.. Nikkei Stock Index Listed Fund 9 JP ishares Nikkei 9 JP.. Listed Index Fund JREIT JP.. Listed Index Fund International Emerging Countries 8 JP.. Listed Index Fund International Emerging Countries Equity 8 JP.. Listed Index Fund China A Share (Panda) CSI JP. 88. Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

76 ETFs and ETPs listed in Latin America At the end of February, the Latin American ETF industry had ETFs, with listings and assets of $. Bn, from four providers on three exchanges. This compares to ETFs, with listings and assets of $9. Bn from three providers on three exchanges, at the end of February. There were 89 ETFs cross listed in Mexico, ETFs registered for sale in Chile and 99 ETFs registered for sale in Peru, at the end of February. Assets ETFs YTD, assets have increased by.% from $. Bn to $. Bn, compared to the.8% decrease in the MSCI EM Latin America Index in dollar terms. This compares to a.% decrease in assets over the same period in. YTD, the number of listings have increased by.8%, with ten new ETFs cross listed in Latin America. This compares to a 9.9% increase over the same period in, with new primary listings and new cross listings. Trading volume In February, the ETF average daily trading volume in dollars increased by 9.% to $. Bn, compared to December. This compares to average daily trading volume of $. Bn in February. ETF providers ETPs ishares is the largest ETF provider in terms of assets with $. Bn, in 8 ETFs, reflecting.% market share; BBVA Asset Management is second with $. Bn in five ETFs and.% market share, at the end of February. Additionally, there were other ETPs cross listed on two exchanges in Latin America at the end of February. This compares to seven other ETPs cross listed on one exchange, at the end of February.. ETPs are products that have similarities to ETFs in the way they trade and settle but they do not use an openend investment company structure. The use of other structures including grantor trusts, partnerships, notes and commodity pools by ETPs can create different tax and regulatory implications for investors when compared to ETFs which are funds. Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

77 Latin America ETF asset growth Assets products 8 Assets 8 9 Feb ETF assets $. $. $. $. $. $. $. $9.8 $.. ETFs Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

78 ETF providers in Latin America: ranked by Provider ishares BBVA Asset Management Itau Unibanco Protego Direxion Shares EasyETF Global X Funds Lyxor Asset Management PowerShares ProShares State Street Global Advisors Van Eck Associates Corp Vanguard WisdomTree Investments Total ETFs 8 total listings Feb % total $..% $..% $..% $..% $..% ADV $8. $8. $. $. $. $. $. $. $. $. $8. $. $. $. $9. planned ETFs % ETFs.%.%.%.%.% YTD change % $..% $..% $..% $..% $..% % market share.%.8%.8%.% Top ETFs in Latin America Ranked by Assets Under Management () Ranked by $ Average Daily Trading Volumes (ADV) ETF ishares NAFTRAC PIBB FUNDO INDICE BRASIL BRTRAC ishares IPC Large Cap Total Return ishares Ibovespa Fundo de Índice MEXTRAC ishares Mexico Corporate Bond ishares LATixx Mexico UDITRAC ishares IPC Mid Cap Total Return ishares LATixx Mexico CETETRAC Country listed Mexico Brazil Mexico Mexico Brazil Mexico Mexico Mexico Mexico Mexico Bloomberg ticker NAFTRAC MM,. PIBB BZ,.8 BRTRAC MM ILCTRAC MM 9. BOVA BZ 89. MEXTRAC MM. CORPTRC MM. UDITRAC MM IMCTRAC MM CETETRC MM... ADV ( shares),9, ADV ishares NAFTRAC PowerShares QQQ Trust ishares MSCI Brazil Index Fund ishares Ibovespa Fundo de Índice ishares MSCI Japan Index Fund BRTRAC Direxion Daily Financial Bull x Shares ishares MSCI Canada Index Fund SPDR S&P SPDR Dow Jones Industrial Average ETF Country listed Mexico Mexico Mexico Brazil Mexico Mexico Mexico Mexico Mexico Mexico Bloomberg ticker NAFTRAC MM QQQQ* MM EWZ* MM BOVA BZ EWJ* MM BRTRAC MM FAS* MM EWC* MM SPY* MM DIA* MM ADV. For ETFs cross listed into Latin America from the, reflects total fund (which is not counted in previous totals). ADV reflects dollar volume of the specific exchange listing shown. Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. ETF ADV ( shares),9 9,8,8 8,.,.,9. 89., ,.9,. 9,9.. 8

79 ETFs and ETPs listed in Canada At the end of February, the Canadian ETF industry had 9 ETFs and assets of $. Bn, from four providers on one exchange. This compares to ETFs and assets of $9. Bn from four providers on one exchange, at the end of February. 9 March will mark the st anniversary of the first ETF globally, which listed in Canada in 99. Assets ETFs YTD, assets have increased by.%, from $8. Bn to $. Bn, which is less than the.% increase in the MSCI Canada Index in dollar terms. This compares to a.% increase in assets over the same period in. In February, net inflows into Canadian domiciled ETFs totalled $. Bn. ETFs with exposure to North American indices saw $. Bn net inflows, of which exposure to local Canadian equity indices saw $. Bn net inflows, while ETFs/ETPs with fixed income exposure saw $. Bn net inflows. YTD, the number of ETFs have increased by.% with new ETFs launched. This compares to a.% increase over the same period in, when new ETFs launched. Trading volume In February, the ETF average daily trading volume in dollars increased by.% to $. Bn, compared to December. This compares to average daily trading volume of $.9 Bn in February. Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. 9

80 ETFs and ETPs listed in Canada (continued) ETF providers ETPs ishares is the largest ETF provider in terms of assets with $9. Bn in 8 ETFs, reflecting.% market share; Claymore Investments is second with 9 ETFs and $.9 Bn, a.% market share; followed by BetaPro Management with ETFs, assets of $. Bn and.% market share, at the end of February. Of the $. Bn net inflows into Canadian listed ETFs in February, BMO Asset Management saw net inflows of $. Bn and Claymore Investments saw net inflows of $. Bn. Additionally, there were other ETPs cross listed on one exchange in Canada at the end of February. This compares to eight other ETPs cross listed on one exchange, at the end of February.. ETPs are products that have similarities to ETFs in the way they trade and settle but they do not use an openend investment company structure. The use of other structures including grantor trusts, partnerships, notes and commodity pools by ETPs can create different tax and regulatory implications for investors when compared to ETFs which are funds. Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. 8

81 Canada ETF asset growth Assets products 8 8 Assets Feb ETF assets $. $. $. $. $. $. $. $. $8. $. $8. $8. $. ETFs 9 Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. 8

82 ETF providers in Canada: ranked by Provider ishares ETFs 8 $9. Feb % total.% ADV $. planned Feb NNA $. YTD NNA $. ETFs % ETFs.% YTD change $. % assets.% % market share.% Claymore Investments 9 $.9.% $. $. $..% $..%.% BetaPro Management $..% $. $. $..% $..%.% BMO Asset Management $.9.% $. $. $..% $..%.% Total 9 $..% $. 9 $. $..% $.9.% Top ETFs in Canada Ranked by Assets Under Management () Ranked by $ Average Daily Trading Volumes (ADV) ETF Bloomberg ticker ADV ( shares) ADV ETF Bloomberg ticker ADV ADV ( shares) ishares S&P/TSX Index Fund XIU CN,8.,9. ishares S&P/TSX Index Fund XIU CN.,9,8. ishares DEX Short Term Bond Index Fund XSB CN,. 9. Horizons BetaPro NYMEX Crude Oil Bull Plus HOU CN.,.9 ishares S&P Index Fund (CADHedged) XSP CN, Horizons BetaPro NYMEX Natural Gas Bull Plus HNU CN.,988. ishares DEX Universe Bond Index Fund XBB CN, Horizons BetaPro NYMEX Natural Gas Bear Plus HND CN 99. 9,9 8.9 ishares S&P/TSX Capped Composite Index XIC CN,.. Horizons BetaPro NYMEX Crude Oil Bear Plus HOD CN.9 8,9. ishares DEX All Corporate Bond Index Fund XCB CN,.. Horizons BetaPro S&P/TSX Global Gold Bull Plus HGU CN 8., 8. ishares S&P/TSX Global Gold Index Fund XGD CN,88.,. ishares S&P/TSX Capped Energy Index Fund XEG CN.,8,8. ishares S&P/TSX Capped REIT Index Fund XRE CN,. 98. Horizons BetaPro S&P/TSX Bull Plus Fund HXU CN.,8. ishares S&P/TSX Capped Energy Index Fund XEG CN,8.,8. ishares S&P/TSX Global Gold Index Fund XGD CN.,,88. ishares MSCI EAFE Index Fund (CADHedged) XIN CN,8. 9. Horizons BetaPro S&P/TSX Global Gold Bear Plus HGD CN 8.,. Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. 8

83 Middle East and Africa ETF and ETP asset growth Assets products 8 8 Assets ETF assets $. $. $.8 $. $. $. $. 8 $. 9 $.8 $. Feb $. ETP assets $. $. $. $. $. $. $. $9. $8. $.8 $. $8. ETFs ETPs Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, Bank of Israel. 8

84 ETF providers in Middle East and Africa: ranked by Provider Satrix Managers db xtrackers Bips Investment Managers Absa Capital STANLIB Fortress Asset Managers Investec Fund Management Falcom Financial Services Nedbank Capital National Bank of Abu Dhabi Al Mal Capital Gaon Investment House HSBC/Hang Seng Other (Planned) Total ETFs 9 $. $. $. $. $. $. $. $. $. $. $. Feb % total.%.%.%.%.%.9%.%.9%.%.%.% ADV $. $. $. $. $. $. $. $. $. $. $. planned ETFs % ETFs.%.%.%.%.%.%.%.%.%.%.% YTD change $. $. $. $. $. $. $. $. $. $. $. %.8% 9.%.%.9%.8%.%.%.%.% 9.%.% % market share.%.8%.%.%.%.%.%.%.%.% Top ETFs in Middle East and Africa Ranked by Assets Under Management () Ranked by $ Average Daily Trading Volumes (ADV) ETF Country listed Bloomberg ticker ADV ( shares) ADV ETF Country listed Bloomberg ticker ADV ADV ( shares) SATRIX Satrix Dividend Plus SATRIX Financials STANLIB Top Fund NewRand ETF Bips Government Inflation Linked Bond Fund SATRIX Industrials SATRIX RAFI Total Return db xtrackers MSCI World SATRIX SWIX TOP South Africa South Africa South Africa South Africa South Africa South Africa South Africa South Africa South Africa South Africa STX SJ STXDIV SJ STXFIN SJ STAN SJ NRD SJ BIPINF SJ STXIND SJ STXRAF SJ DBXWD SJ STXSWX SJ ,, SATRIX STANLIB Top Fund SATRIX RESI Bips Top Zshares GOVI SATRIX Industrials STANLIB SWIX Fund Satrix Dividend Plus SATRIX RAFI Total Return SATRIX Financials South Africa South Africa South Africa South Africa South Africa South Africa South Africa South Africa South Africa South Africa STX SJ STAN SJ STXRES SJ BIPS SJ ZGOVI SJ STXIND SJ STANSX SJ STXDIV SJ STXRAF SJ STXFIN SJ , 9 8, Note: Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. 8

85 Exchange Traded Funds (ETFs): product overview Most ETFs in Europe are UCITS funds which are the same as traditional mutual funds in Europe. In the United States, most ETFs are registered investment companies regulated under the Investment Company Act of 9 (the 9 Act ), the same as traditional mutual funds. ETFs in the United States require special exemptions from the Securities and Exchange Commission since they buy and sell shares at Net Asset Value ( NAV ) at the end of each day to a limited group of institutional investors. As a result, other shareholders in the United States who wish to buy or sell shares must trade in the secondary market, rather than directly with the fund unlike mutual funds. ETFs are openended index tracking funds. ETFs are managed by asset managers. ETFs are bought and sold through brokers. Trade on the exchange like any other stock. Settle like any other share on the exchange. Can be purchased, cleared and held in brokerage or custodial account. Can go long or short. Are lendable and marginable. Transparent underlying portfolios generally available daily. Real time indicative NAV. ETFs will generally price around their NAV due to the creation/ redemption process. Benefits: ETFs are not a derivative. Flexible. Transparent. Liquid. Small minimum investment. Ability to trade with multiple counterparties. ETFs are generally liquid: Liquidity reflects liquidity of underlying basket of shares not the trading volume of the ETF as long as trading with a broker which is an authorised participant. Creation/redemption process makes ETFs as liquid as their underlying shares. Unique structure for brokers who enter into legal agreements with the ETF asset managers to be authorised participants, creation/ redemption agents or liquidity providers: Portfolio of securities can be exchanged for Creation Units. Creation Units can be redeemed for underlying portfolio. Creation/redemption ( in kind ) feature allows for arbitrage and results in the fund trading near NAV.. Note a few active funds which disclose their portfolios daily have been approved and listed. 8

86 Exchange Traded Products (ETPs): product overview ETPs are products that have similarities to ETFs in the way they trade and settle but they do not use a mutual fund structure. The use of other structures by ETPs can create different tax and regulatory implications for investors when compared to ETFs which are funds. Structures often used by ETPs: Grantor Trusts. Delaware Statutory Trust. New York Grantor Trust. Special Purpose Company. Partnerships. Secured Note. Unsecured Note. Commodity Pool. ETPs may not provide transparency on the underlying portfolio. ETPs may not have a real time indicative NAV. ETPs may expose the investor with up to % counterparty risk. ETPs typically do not have an inkind creation/redemption process. ETPs are openended. ETPs are bought and sold through brokers. Trade on the exchange like any other stock. Settle like any other share on the exchange. Can be purchased, cleared and held in brokerage or custodial account. Can go long or short. Are lendable and marginable. 8

87 ETF/ETP tool box Equity Fixed income Cash Currency Global Government EONIA, SONIA Developed currencies Capitalisation Corporate Fed funds Emerging market currencies e.g. large, mid, small Sectors Credit Inflation Alternatives Inverse/leveraged Strategy Broad markets High yield Hedge funds e.g. carry, momentum Emerging markets Countries Mortgage backed Emerging markets Carbon Volatility Commodities Inverse/leveraged Broad Styles Active Dividend Fundamental Infrastructure e.g. S&P, GSCI, DJUBS, RICI, CRB Subindices e.g. energy, livestock, precious metals, industrial metals, agriculture Real estate Individual commodities Shariah Based on physically held assets Thematic Private equity Value Growth e.g. gold, silver, platinum, palladium Based on futures Based on forwards Inverse/leveraged, ETFs with,8 ETF listings,9 other ETPs with,8 ETP listings Total:,9 products with,8 listings. Other Exchange Traded Products (ETPs) include Holding Company Depository Receipts (HOLDRs), Exchange Traded Commodities (ETCs), Exchange Traded Currency products, and Exchange Traded Notes (ETNs). Data as at end February. Source: Global ETF Research and Implementation Strategy Team, BlackRock. 8

88 New asset classes New asset classes will continue to squeeze the traditional core of actively managed funds CAGR, 8 (%) ETFs Passive products/etfs Passive equity Passive fixed income Liabilitydriven investments Innovative products Infrastructure funds Money market Fixed income core and specialities Structured products Equity core and specialities Commodities Real estate (including REITs) Quantitative products Absolute return Shortextension funds Hedge funds Private equity Active products Net revenue margin (basis points) Estimated size, 8 ($trillions). Scale = $ trillion Active Passive Innovative Source: BCG Global Asset Management 9, Conquering the Crisis, July 9, Projections 8. 88

89 How should I decide which product to use? Considerations Product structure Domicile Country registrations Portfolio holdings Assets Under Management Average daily trading volume ETF provider / manager Transparency Client service Product choice Liquidity What is my benchmark? What are my regulatory guidelines? What are my mandate constraints? What are my counterparty risk guidelines? What are my tracking risk guidelines? How can I gain long and/or short exposure? How can securities lending add value? What is my time horizon? What are the tax implications? What are my liquidity requirements? What costs are involved? Products Portfolio trading ETFs ETNs ETPs Swaps Futures Options Securitised products: certificates, warrants, equity linked notes, local access products 89

90 Why use ETFs? Transparency Investors can generally see the ETF composition at any given time Liquidity ETFs offer two sources of liquidity: Traditional liquidity measured by secondary market trading volume The liquidity of the underlying assets via the creation and redemption process Diversification ETFs provide immediate exposure to a basket or group of securities for instant diversification Broad range of asset classes including equities, bonds, commodities, investment themes etc Flexibility ETFs are listed on exchanges and can be traded at any time the market is open Pricing is continuous throughout the day Cost effectiveness ETFs offer a costeffective route to diversified market exposure The average total expense ratio (TER) for equity ETFs in Europe is bps versus 9 bps (per annum) for the average equity index tracking fund and 8 bps (per annum) for the average active equity fund Securities lending ETF units and underlying assets can be lent out to potentially offset holding costs. Source: Morningstar. March. 9

91 How can ETFs be used? Strategic Market exposure: Implement a wide variety of investment strategies using a broad range of market exposures Directional views: Establish a broad directional market position, use long and short trades to implement market view(s) Core satellite: Achieve strategic focus Rebalancing: Adjust drift in a portfolio s asset allocation or style Completion: Add uncorrelated instruments and/or asset classes to strategy Tactical Interim beta: Maintain exposure to a given market while searching for a specific market opportunity Cash management: Invest cash rapidly and cost effectively to gain desired market exposures Derivatives alternative: Broad opportunity set of Delta exposures with single line cash based settlement Exposure management: Shift portfolio emphasis by adjusting exposures (e.g. duration, credit) Thematic: Implement thematic exposures (e.g. dividends, alternatives) 9

92 ETFs can offer solutions for a range of portfolio strategies Portfolio construction Fill allocations required by investment strategy Improve diversification Gain exposure to size, style, yield, sector, geography Portfolio management Implement short, long term and/or neutral market views: Hard to access asset classes, themes, sector, country Tactical asset allocation Strategic asset allocations Establish core holdings Establish single country or sector satellites Risk management Active risk budgeting Combine ETFs in managing total portfolio volatility or duration adjustments in fixed income portfolios Cash equitisation Manage inflows, outflows, transitions Obtain wider exposures than offered by other Delta products Exposure Exposures to markets or asset classes where one has no expertise or operational capabilities Note: The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. There is no guarantee that any strategies discussed will be effective. 9

93 Asian institutions build out investment capabilities Asian institutions appetite for using external asset managers is growing slowly with the recovery in global markets. Although a recent flurry of RFPs marked a resumption in manager hiring after a near deadstop during the market crisis, institutional investors in Asia continue to build out their own investment management capabilities with an eye towards internalising assets for specific investment strategies. In addition, Asian institutions are not planning to limit their internal management to passive strategies; many are looking to go toe to toe with external managers in active strategies with the goal of generating alpha. These conclusions are drawn from the results of Greenwich Associates Asian Investment Management Study, in which 8 of the largest institutional investors in Hong Kong, Macau, China, Taiwan, South Korea, Singapore and other Asian countries were interviewed. These institutions together manage some $ trillion in assets, a sum that was roughly unchanged from 9 to. About one third of Asian institutions use ETFs as part of their investment strategies. ETFs are most widely employed due to their relatively high levels of liquidity and flexibility, and for their ability to provide institutions with a means of accessing specific investment strategies or exposures.. Greenwich Associates conducted interviews with 8 of the largest institutions in Brunei, China, Hong Kong/Macau, India, Indonesia, Malaysia, the Philippines, Singapore, South Korea, Taiwan and Thailand. Interview topics included asset allocation, product fees paid and compensation. Source: Greenwich Associates: Asian Institutions Build Out Internal Investment Capabilities, Asian Investment Management June. 9

94 ETFs gain foothold in institutional market In the United States, where ETFs are most commonly thought of as a retail product, institutional investors are finding that ETFs can be helpful tools for cash equitisation, transition management, rebalancing, and obtaining hard to achieve exposures. According to a recent survey by Greenwich Associates, ETF use among United States pension funds, endowments and foundations has grown to about %, according to the results of Greenwich Associates most recent annual study of the United States investment management market. Despite that relatively modest share, institutions actually represent roughly half the assets invested in ETFs in the United States according to recent industry estimates. Almost half the institutional users in the Greenwich Associates annual study say they employ ETFs for what they consider tactical tasks related to the management of their portfolios. Approximately % of institutional ETF users say they employ the funds to implement strategic or longterm investment decisions, and an equal share report that they use ETFs for both tactical and strategic purposes. Greenwich Associates asked the institutions participating in the survey to name the providers they use for ETFs. The results revealed the following: ishares/blackrock is by far the most widely used provider of ETFs among United States institutions; and Most institutions that employ ETFs use more than one provider: 89% of institutional ETF users obtain ETFs from ishares/blackrock, whereas % use SPDRs/State Street and % use Vanguard. How ETFs are used by United States Institutions Tactical adjustments % % Transitions 8% % Cash equitisation % % Core/satellite Rebalancing Portfolio completion 8% % % 9% % % % ETF overlay % % Other % % % % % % % 9% % Plan sponsors Money managers. Greenwich Associates surveyed United States pension funds, endowments, foundations, and money managers that identified themselves as ETF users. Seventy institutions participated in the survey, including plan sponsors and money managers. The survey was conducted from 8 March to March.. Based on responses from United States plan sponsors and money managers using ETFs. Source Greenwich Market Pulse ETFs. Source: Greenwich Associates: ETFs Gain Foothold in Institutional Market, April. Greenwich Market Pulse ETFs. 9

95 ETFs gain foothold in institutional market (continued) Institutions cite a range of criteria used in selecting an ETF provider. In addition to the obvious consideration of fees, institutions rank four factors as particularly important in selecting an ETF provider: liquidity, benchmark, the track record of the fund, and reputation of the company behind the fund. Expected change in asset allocation to ETFs Increase >% % Almost % of institutions currently employing ETFs expect their usage of the product to increase in the next three years, including nearly % that expect the amount of assets dedicated to ETFs to grow by % in that period. Money managers are slightly more apt to predict an increase in use: approximately % expect to be devoting more assets to ETFs in the next months, compared with half of plan sponsors. Increase % % Increase % % No change 8% % % About % of plan sponsors expect to reduce their use of ETFs. Nearly % of institutions that do not use ETFs say they lack familiarity with the product. One way to address this lack of information would be for providers to win over investment consultants, who would then be in a position to explain the product to their institutional clients as both a tool for tactical adjustments and a means of obtaining desired exposures. Decrease % % Decrease % % (8%) (%) The results of this recent Greenwich Market Pulse suggest that many investment consultants are not currently recommending ETFs or even initiating discussions with their clients about the product. Decrease >% (%) (%) (%) % % % % %. Based on responses from United States plan sponsors and money managers using ETFs. Source: Greenwich Associates: ETFs Gain Foothold in Institutional Market, April. Greenwich Market Pulse ETFs. 9

96 Growth in institutional users of ETFs Number of institutions, Number of institutions,,,,,,,,, Number of institutions United States 8 889,,,,9,8, Europe Canada Asia Pacific Latin America Other Total 8,,9,,,9,,,9 Source: Global ETF Research and Implementation Strategy Team, BlackRock, Thomson Reuters. 9

97 Global institutions reported assets: as at end December 8 Firm reported assets > Bn Bn Bn Bn Bn Mn Mn Mn < Mn Total institutions 9, 8,9,,, All reporting firms Reported assets,,8,,8,,,8,99,8,,8,9,9,9,,89 Reported ETF users institutions ,99 Reported ETF assets 8, 9,8,,,9,,9,9,, institutions.8%.%.8%.8%.% 8.%.%.%.%.% % of ETF users Reported ETF assets.%.%.%.%.%.%.%.%.%.% Firm type Investment managers Bank and trust Endowment fund Finance company Foundation Hedge fund Insurance company Investment advisor Pension fund Private equity Sovereign wealth fund Venture capital Brokerage firms Strategic entities Holding company Government agency Corporation Total All reporting firms institutions, 9,,, 9 9,9, Reported assets,8,8 9,,, 9,,9,9,,,88,, 8,,8,9,,8,,,,89 Reported ETF users institutions, 8 8,8 8,99 Reported ETF assets,88,99,8,9,, 8,9 8 8,89,8,,, % of ETF users Reported ETF institutions assets.%.%.%.8%.%.8%.%.%.%.%.%.%.8%.%.%.%.8%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.% Source: Global ETF Research and Implementation Strategy Team, BlackRock, Thomson Reuters. 9

98 Types of institutional users of ETFs Type of institution Investment advisor ,,,8,,9, Hedge fund Bank and trust Pension fund Brokerage firm 8 8 Insurance company Endowment fund Private equity 9 Holding company Corporation Foundation Sovereign wealth fund Venture capital Total 8,,9,,,9,,,9 Source: Global ETF Research and Implementation Strategy Team, BlackRock, Thomson Reuters. 98

99 99 Source: Global ETF Research and Implementation Strategy Team, BlackRock, Thomson Reuters. Growth in institutional users of ETFs 9 Taiwan Chile Liechtenstein 9 Singapore Portugal 9 9 Belgium Greece 9 8 Netherlands 8 8 Australia 9 9 Hong Kong 8 Argentina 8 9 Austria 9 Sweden 9 Mexico Italy 9 Luxembourg 9 9 France 9 9 Germany 8 Spain Switzerland Canada United Kingdom,,8,9,,, United States Country 9 8 Japan Barbados Slovenia Colombia Thailand Denmark 8 Ireland Bermuda Brazil Iceland India Czech Republic Poland Virgin Islands () Cayman Islands Hungary Bahamas Peru Norway Malaysia South Africa Finland,9,,,9,,,9, 8 Total Country

100 ETF portfolios Conservative Balanced Growth Dynamic Fixed income BarCap Government Bond BarCap Government Bond BarCap Government Bond iboxx Liquid Corporate Bond Equities MSCI Europe exuk FTSE S&P MSCI North America Nikkei MSCI Emerging Markets Property FTSE EPRA/NAREIT Global Property Yield Alternatives FTSE/Macquarie Global Infrastructure S&P Listed Private Equity DowJonesUBS Commodity Lower Expected risk Higher Lower Expected return Higher Note: Sample portfolios are for illustrative purposes only and should not be construed as a recommendation to purchase or sell, or an offer to sell, or a solicitation of an offer to buy any security. Source: BlackRock.

101 Coresatellite: ETFs can be used in the core portfolio, as well as in the satellite ETFs in the core ETFs in the satellite Active strategy ETFs Active strategy ETF satellite Portfolio ETF satellite Active strategy ETF satellite A broad market index. Exposure to diversified baskets of securities. Optimised core: sector, style or country indices. Concentrated, focused ETFs. Sector and style. Individual countries and regions. Alternative asset class.