ETF Landscape. Industry Highlights Q1 2011

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1 ETF Landscape Industry Highlights Q 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 9 ETFs/ETPs listed in Asia Pacific (exjapan) ETFs/ETPs listed in Japan ETFs/ETPs listed in Latin America 8 ETFs/ETPs listed in Canada 8 Middle East and Africa ETF and ETP asset growth 8 II. Investment applications 8 Product overview 8 ETF/ETP toolbox 89 How and why ETFs are used 9 Growth in institutional users of ETFs 98 Coresatellite Fixed income index trading characteristics Commodity index comparison Structures of ETFs and ETNs III. Appendix regulatory update IV. Subscribe to ETF Landscape reports

3 ETFs and ETPs listed globally At the end of Q, the global ETF industry had, ETFs with,9 listings and assets of $,99. Bn, from providers on 8 exchanges around the world. This compares to, ETFs with, listings and assets of $,8.9 Bn from providers on exchanges, at the end of Q. We expect global AUM in ETFs and ETPs to increase by % annually over the next three years, taking the global ETF/ETP industry to approximately $ trillion in AUM by early. Considering ETFs separately, AUM 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 AUM should reach $ trillion in, with European AUM reaching $ billion in. Anniversaries Assets 9 January marked the 8th anniversary of ETFs in the United States. 9 March marked the st anniversary of the first ETF globally, which listed in Canada in 99. April marks the th anniversary of ETFs in Europe. August will mark the th anniversary of ETFs in Australia. In Q, assets have increased by.% from $,. Bn to $,99. Bn, which is greater than the.% increase in the MSCI World Index in dollar terms. This compares to a.% increase in assets over the same period in. $. Bn of net new assets went into ETFs/ETPs in March. $9. Bn net inflows went into equity ETFs/ETPs, of which $. Bn went into ETFs/ETPs tracking developed market indices and $.9 Bn went into ETFs/ETPs tracking emerging market indices. Fixed income ETFs/ETPs saw net inflows of $. Bn, of which ETFs/ETPs providing inflation linked exposure saw $.9 Bn net inflows while credit spread ETFs/ETPs saw net outflows of $. Bn. $. Bn net inflows went into ETFs/ETPs with commodity exposure, of which ETFs/ETPs with exposure to precious metals saw $. Bn net inflows while ETFs/ETPs providing exposure to energy experienced net outflows 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 ETF/ETP flows are approximated by combining flows available for the, Europe, Canada and Latin America. Product level assets for ETPs listed in Israel are not currently available. An aggregate value has been included in the total assets. Latest data for Israel ETP assets sourced from Bank of Israel, February. Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).

4 ETFs and ETPs listed globally (continued) Assets (continued) ETFs $. Bn of net new assets went into ETFs/ETPs in Q. $.9 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 $.9 Bn, of which ETFs/ETPs providing high yield exposure saw $. Bn net inflows while Government bond ETFs/ETPs experienced net outflows of $. Bn. $. Bn net inflows went into ETFs/ETPs with commodity exposure, of which ETFs/ETPs with exposure to agricultural commodities saw $. Bn net inflows while ETFs/ETPs providing exposure to precious metals saw net outflows of $. Bn. After the recent disasters in Japan, the ishares MSCI Japan ETF (EWJ ) was the ETF used most to invest in Japan. For the month of March, there were net inflows of $. Bn, and $.8 Bn net inflows in Q. Trading volumes increased significantly and hit an all time high on March in terms of dollar volume traded ($.9 billion) as well as # of shares (9 million shares). In Q, the number of ETFs have increased by.9% with new ETFs launched, while 8 ETFs have merged. This compares to a 9.% increase in the number of ETFs over the same period in, when 9 new ETFs launched, while ETFs delisted. There are currently plans to launch, new ETFs compared to 8 at the end of Q. The top ETFs, out of,, account for.% of global ETF AUM, while, ETFs have less than $. Mn in assets,,8 ETFs have less than $. Mn in assets and ETFs have less than $. Mn in assets. Trading volume In Q, the ETF average daily trading volume in dollars increased by.% to $. Bn compared to December. This compares to average daily trading volume of $9.9 Bn in March.. Global ETF/ETP flows are approximated by combining flows available for the, Europe, Canada and Latin America. Product level assets for ETPs listed in Israel are not currently available. An aggregate value has been included in the total assets. Latest data for Israel ETP assets sourced from Bank of Israel, February. Note: Data as at end Q. 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.% market share; followed by Vanguard with ETFs, assets of $. Bn and.8% market share; at end of Q. The top three ETF providers, out of, account for 9.% of global ETF AUM. This compares to.% out of providers, at the end of Q. Seven new providers have entered the industry in, launching their first ETFs, while firms plan to launch their first ETF in the future. Exchanges In Q, the number of exchanges with official listings has increased from to 8. Index providers MSCI ranks first in terms of AUM and number of products tracking its benchmarks with assets of $. Bn and ETFs, while Standard & Poor s (S&P) ranks second with $. Bn and ETFs, followed by Barclays Capital with $. Bn and 8 ETFs. Mutual funds ETPs Globally, net sales of mutual funds (excluding ETFs) were minus $9. Bn, while net sales of ETFs were positive $.9 Bn during January according to Strategic Insight. Additionally, there were,9 other ETPs with,8 listings and assets of $8. Bn from 8 providers on exchanges. This compares to 8 ETPs with, listings and assets of $. Bn from providers on 8 exchanges, at the end of Q. ETFs and ETPs Combined, there were, products with, listings, assets of $,8. Bn from 8 providers on exchanges around the world. This compares to,89 products with,8 listings, assets of $,. Bn from providers on exchanges, at the end of Q. Note: Data as at end Q. 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 Q ETF total $.8 $. $. $. $8. $. $9. $. $.8 $. $. $9.8 $. $. $9. $. $,. $,. $,99. ETF equity $.8 $. $. $. $8. $. $9. $. $. $. $.9 $8. $89. $. $9.9 $9. $8. $,.8 $,. ETF fixed income $. $. $. $.8 $. $. $.8 $9.9 $. $. $. $8. ETF commodity $. $. $. $. $. $. $. $. $. $. $. ETP total $. $. $.9 $. $. $9. $.9 $. $. $. $9. $. $8. # ETFs 9 8 8,,9,9,, # ETPs 8,8,9 Note: Data as at end Q. 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 Q YTD change (%) Q YTD change (%) Q YTD change (%) Q YTD change (%) Q YTD change (%) Q YTD change (%) Q YTD change (%) Q YTD change (%) ETFs AUM,99..% 9..%. 8.% 9. 8.%.9.9%..%.8.%..9% # ETFs,.9% 99.9%,.% 8.%.%.% 8.9% 9.% # listings,9.% 99.9%,89.% 88.% 9.%.% 9.% 9.% # providers.% 9.%.% 8.%.8%.%.%.% # exchanges 8.%.%.%.%.%.%.%.%,9..%,..%,8..8%..% 9..%..%,..% 9.9.% ETPs Assets 8..% 9.8.%..%. 8.%..% 8..% # ETPs,9.%.%.% 9.% 8.%.% # listings,8.%.%,8.% 9.% 8.% 8.%.%.% # providers 8.%.% 9.%.%.%.% # exchanges.%.% 8.%.%.%.%.%.% Total Assets,8..8%,9.8.%.9 8.%..% 8..9%..%.8.%.8.% # ETFs/ETPs,.%,.%,.% 9.% 9.%.% 8.9%.% # listings,.%,.%,.%.% 9.%.% 8.%.% # providers 8.% 8.%.% 9.% 9.%.%.%.% # exchanges.%.%.%.%.%.%.%.% Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

8 Top ETF providers around the world: ranked by AUM Provider ishares # ETFs AUM $9. Q % total.% $9. # planned # ETFs % ETFs.% YTD change AUM $. % AUM.% % market share.% State Street Global Advisors 8 $..% $.8.% $9..%.% Vanguard $..8% $.8.% $..9%.% Lyxor Asset Management 8 $..9% $..% $..%.% db xtrackers 8 $.8.% $..% $.8.%.% PowerShares $..% $. 8.8% $. 9.8%.% ProShares $..% $.8 98.% $.8 8.%.% Van Eck Associates Corp $.9.% $.9.% $..%.% Credit Suisse Asset Management 8 $..% $..% $.9.9%.% Nomura Asset Management $..% $..% $..%.% Zurich Cantonal Bank $..9% $..% $.9.%.% Bank of New York $..8% $..% $..8%.% WisdomTree Investments $..8% $..% $..9%.% UBS Global Asset Management 8 $9.9.% $. 9.% $..%.% Commerzbank 9 $9..% $..% $..%.% Amundi ETF 9 $9..% $..% $..%.% HSBC/Hang Seng $8..% $. 9.9% $.8.%.% First Trust Advisors $..% $..% $.9.%.% Direxion Shares $..% $.9.% $..%.% Nikko Asset Management $..% $..% $..%.% Source Markets $..% $..8% $..%.% ETFlab Investment $..% $..% $..%.% EasyETF 9 $..% $..% $..%.% Claymore Investments $..% $..% $..8%.% Daiwa Asset Management $..% $..% $..%.% Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. 8

9 Global ETF assets by type of exposure Q YTD change Exposure # ETFs AUM % total # ETFs AUM % AUM Equity North America Emerging markets Europe Asia Pacific Global (ex) Global Fixed income Fixed income all (excash) Fixed income cash (money market) Commodities, $,. $. $. $. $8. $9. $8.9 $8. $9. $9. $. 8.%.9%.9% 9.%.8%.%.%.%.9%.%.% $. $. $8. $. $.8 $. $. $. $.9 $. $ $. $9.9 $. $. $. $. $. $. $9. $.8 $..% 9.%.%.%.% 9.%.8%.%.%.9%.8% North America equity.9% Emerging markets equity.9% Fixed income all (excash).9% Europe equity 9.% Asia Pacific equity.8% Global (ex) equity.% Commodities.% Global equity.% Fixed income cash (money market).% Alternative.% Currency.% Mixed.% Alternative $..% $. $. 8.8% Currency $.8.% $. $..8% Mixed $..% $. $. 8.% Total, $,99..% $. $88..% Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. 9

10 Global ETF/ETP net new assets by type of exposure # ETFs /ETPs # total listings Mar Assets Nov YTD NNA Exposure Equity,,8 8,89.,,. 8,99.,8.8,. 9,. Developed markets,,8,. 89,8.9,.,.,8.,8. North America 8,,.8 8,8.,. 8,.,.,. Broad., Canada 8 89.,9.8,.8,8.,8.,9. United States 8 98,9.,.8 (,8.),. 9,8.8 (,9.) United States sectors 8,.8,.,.,.,9.,.8 Consumer goods/services 9,., (98.), Energy 8,8. 9,9..8,.,.8,. Financials,9. 9,9.8. (.),.,. Healthcare. 8,9.8.. (8.) (.8) Industrials.,9...9,. 9. Materials 9.,. (.9) ,. Other.,.... (.) Real estate 9.,.. 8.,.,. Technology 8.,9..9,8.,.,. Telecommunications.,.. (9.9) 88.. Utilities., ,.9 NNA NNA 9 NNA continued Note: Global ETF/ETP flows are approximated by combining flows available for the United States, Europe, Canada and Latin America. Product level assets for ETPs listed in Israel are not currently available. An aggregate value has been included in the total assets. Latest data for Israel ETP assets sourced from Bank of Israel, February. NNA Net New Assets. Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).

11 Global ETF/ETP net new assets by type of exposure (continued) Exposure # ETFs /ETPs # total listings Mar Assets YTD NNA Europe,9,.,9.,9.9,. 8,8. 9,. Broad 8. 8,89. (,.8) (,8.),. 9,8.9 Country,89.8,8.,.,.,88.,. Sectors.8,8. (8.),..8,89. STOXX sectors ,9. (,.9). (9.9),. Automobiles and parts 8.. (9.) (.9).. Banks.,88. (.) Basic resources.,. (98.9) (.) (.). Chemicals.8. (.) (.8) 8.. Construction and materials (.) Financial services (.) Food and beverage 8.. (.) (.) (9.). Healthcare (.). Industrial goods and services.. (.) (.).9. Insurance.. (.). (.) 9. Media. 8. (.9) (.). (.) Oil and gas 9., Personal and household goods.9. (9.) (8.). (.) Real estate (.8). Retail 8.. (.8) (.) 8. (.) Technology. 9. (.). (.) (.) Telecommunications (.).9 Travel and leisure (.) (.).. Utilities.. (89.) (.) 9.8. Other sectors 9., Asia Pacific 9,89. 8,8.,8.9,9.,9.,88. Israel (9.) (8.). Global.8 9,.8.,.,99.,9. Global (ex) 9,9. 9,.8,.,.,. 9. NNA NNA 9 NNA continued Note: Global ETF/ETP flows are approximated by combining flows available for the United States, Europe, Canada and Latin America. Product level assets for ETPs listed in Israel are not currently available. An aggregate value has been included in the total assets. Latest data for Israel ETP assets sourced from Bank of Israel, February. NNA Net New Assets. Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).

12 Global ETF/ETP net new assets by type of exposure (continued) # ETFs /ETPs # total listings Mar Assets Nov YTD NNA Exposure Emerging markets, 8,8.,9.,88. (,8.9),.,. Broad 8,8.8,. 89. (9,9.),9.,9.8 Global emerging markets 98,88.,. 8. (8,8.) 8,.,88. Frontier Sector Other 8.8 8,9. (.) (9.9),8.,.9 Regional. 9,. (8.8) (.),.,8. Asia emerging markets 8.8,. (9.9)..9. Eastern Europe., Middle East and Africa.. (.9) Latin America 9.,9.8 (.) (.).,. Country 8 8,.,8.,9.,9.9,.,9.8 Argentina Brazil ,.. 8.,.,. Chile (.) (.) 8.. China,9.,.. (9.) (,.),. Colombia.9.. (.) 8.. Egypt (.) (.) Hungary. 9. (.) (.) (.) India 8. 8,8. (.) (.),.,9.9 Indonesia. 9. (.) 8... Kuwait Malaysia.,. (.) (8.).8. Mexico ,. (.8).9 (,9.8),. Peru.8. (8.) Philippines..... Poland. 8. (.) Russia 8. 8,9.,.,.9,9..9 Saudi Arabia.. South Africa 8 9.9,99.9 (.9) (.). 8. South Korea 9., Taiwan.,98.8 (9.) 9. (9.),. Thailand 8.. (.) (.) Turkey.,.9. (9.). 8. UAE.. (.). Vietnam NNA continued Note: Global ETF/ETP flows are approximated by combining flows available for the United States, Europe, Canada and Latin America. Product level assets for ETPs listed in Israel are not currently available. An aggregate value has been included in the total assets. Latest data for Israel ETP assets sourced from Bank of Israel, February. NNA Net New Assets. Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX). NNA 9 NNA

13 Global ETF/ETP net new assets by type of exposure (continued) # ETFs /ETPs # total listings Mar Assets Nov YTD NNA Exposure Fixed income,,9.9 8,.,.,8.,.,. Active.,9...,9..8 Broad/aggregate 9 8.,9.. 8.,8.,9. Convertible Corporate 9 8.,88. 8.,.9,9.,9. Covered 8.,9.8 (.) Credit spreads (.8) (8.) (.) (9.) Emerging markets., ,.,88. Government 8,898.8,8.. (99.),88.,89. Govt/corp 8. 9,...,.,. High yield 9.,88..,.8,9.,9. Inflation 9.,8. 9.,.9 8.,9.8 Money market.9 9,. 9.9,.9 (,.9) (,8.) Mortgage 8.,...9.,. Commodities,,.,.,.9,.9,.,. Broad.,8. 9.,.9,.,9. Alternative..9. (.8) (.9). Agriculture 99 9.,9..,8.9 (9.),. Energy 8,9.,. (.). (,.),89. Industrial metals 9.,. 9.,8. 8.8,. Livestock.. (.). (.) 8. Precious metals 9 9,99.,99.9,. (,.) 9,9.,9.8 Currency 8.,... (,8.),. Alternative 88.,..8.,.,. Mixed 9., Total,, 9,.,8,.9,9.,. 9,9.,9. NNA NNA 9 NNA Note: Global ETF/ETP flows are approximated by combining flows available for the United States, Europe, Canada and Latin America. Product level assets for ETPs listed in Israel are not currently available. An aggregate value has been included in the total assets. Latest data for Israel ETP assets sourced from Bank of Israel, February. NNA Net New Assets. Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).

14 Global inverse leveraged and inverse ETF/ETP net new assets by type of exposure # ETFs /ETPs # total listings Mar Assets YTD NNA Exposure Leveraged 8,9.8,9. 8. (.) (,.) (,.) Equity,88.,. 8. (.) (,8.) (,.) North America,9.,.. (.) (,.) (,.) Europe.,..9 (.) 8.. Asia Pacific Middle East and Africa. Global.... Global (ex) (.9).9 Emerging markets 8.,8.8 (.) (.).. Fixed income Commodities 8.,. (.) (.) (9.) (.9) Currency (.). Alternative Mixed....8 Inverse ,..,.,.,8. Equity 8 9.,... 9.,. North America., ,. Europe., (.),. Asia Pacific.. (.) Middle East and Africa.9 Global (ex). 9.. (.) 9.. Emerging markets (.9) 9... Fixed income 8.9, ,.,. Commodities Currency (.) (.).. Alternative Leveraged inverse,8. 8,8. 8.,.,.,.9 Equity,.8 9,. (.),.,.,. North America,.,9..,.,.,899. Europe 9.,9. (9.) Asia Pacific (.) 8. Middle East and Africa 9 9. Global Global (ex).. (.) (.9).. Emerging markets..9 (.9) Fixed income 8.8, ,99.,. Commodities 8.,..... Currency Total 8, 8,99.,99.,8.,989.,9.,9. NNA Note: Global ETF/ETP flows are approximated by combining flows available for the United States, Europe, Canada and Latin America. Product level assets for ETPs listed in Israel are not currently available. An aggregate value has been included in the total assets. Latest data for Israel ETP assets sourced from Bank of Israel, February. NNA Net New Assets. Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX). NNA 9 NNA

15 Index providers worldwide: ranked by AUM Index provider MSCI S&P Barclays Capital Russell FTSE Dow Jones STOXX Markit Deutsche Boerse NASDAQ OMX NYSE Euronext Hang Seng Topix Nikkei EuroMTS WisdomTree SIX Swiss Exchange PCBond Grupo Bolsa SSE Indxis Structured Solutions CSI Intellidex BNY Mellon Morningstar SNetwork ISE Zacks Other Total # ETFs , AUM $. $. $. $8. $9. $. $. $. $9. $. $. $.8 $. $. $9.9 $9. $8.8 $8. $. $. $. $. $. $. $. $. $. $.8 $. $9. $,99. Q % total.%.% 8.%.%.%.8%.%.%.8%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.% $9. $. $. $8.8 $. $. $. $. $. $. $.8 $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $.8 $. # ETFs YTD change AUM Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. $.8 $. $. $. $.8 $. $. $. $. $. $. $. $. $. $. $.8 $. $. $. $.9 $. $. $. $. $. $. $. $. $. $. $88. % AUM.%.%.8%.% 8.%.8%.8%.%.%.%.8%.%.%.%.% 9.8%.%.%.9%.%.% 9.%.%.%.%.8% 8.8%.%.%.9%.% MSCI.% S&P.% Barclays Capital 8.% Russell.% FTSE.% Dow Jones.8% STOXX.% Markit.% Deutsche Boerse.8% NASDAQ OMX.% NYSE Euronext.% Hang Seng.% Topix.% Nikkei.% EuroMTS.% WisdomTree.% SIX Swiss Exchange.% PCBond.% Grupo Bolsa.% SSE.% Indxis.% Structured Solutions.% CSI.% Intellidex.% BNY Mellon.% Morningstar.% SNetwork.% ISE.% Zacks.% Other.%

16 Top ETFs worldwide Ranked by Assets Under Management (AUM) Ranked by $ Average Daily Trading Volumes () ETF Country listed Bloomberg ticker AUM ( shares) ETF Country listed Bloomberg ticker ( shares) AUM SPDR S&P SPY $89,9.9 9, $,. SPDR S&P SPY $,. 9, $89,9.9 Vanguard MSCI Emerging Markets ETF VWO $,.,8 $9. ishares Russell Index Fund IWM $,.8, $,. ishares MSCI EAFE Index Fund EFA $9,8. 8, $,98. PowerShares QQQ Trust QQQ $,898. 9,9 $,9. ishares MSCI Emerging Markets Index Fund EEM $8,8., $,9. ishares MSCI Emerging Markets EEM $,9., $8,8. ishares S&P Index Fund IVV $,., $. Energy Select Sector SPDR Fund XLE $,.8,9 $,8. PowerShares QQQ Trust QQQ $,9. 9,9 $,898. ishares MSCI EAFE Index Fund EFA $,98. 8, $9,8. ishares Barclays TIPS Bond Fund TIP $9,889. $8.8 Financial Select Sector SPDR Fund XLF $,9.,8 $8,9. Vanguard Total Stock Market ETF VTI $9,.,8 $9.8 Vanguard MSCI Emerging Markets ETF VWO $9.,8 $,. ishares Russell Index Fund IWM $,., $,.8 SPDR Dow Jones Industrial Average ETF DIA $9.,8 $9,9. ishares Russell Growth Index Fund IWF $,., $. ishares MSCI Brazil Index Fund EWZ $9., $,. ishares S&P/TSX Index Fund Canada XIU CN $,.,8 $.9 ishares Barclays + Year Treasury TLT $8. 8,8 $,.9 ishares MSCI Brazil Index Fund EWZ $,., $9. ishares MSCI Japan Index Fund EWJ $.,998 $,. ishares iboxx $ Investment Grade Corporate LQD $,8. 88 $9.8 ishares FTSE China Index Fund FXI $9., $8,.9 ishares Russell Value Index Fund IWD $,.,8 $. ProShares Ultra S&P SSO $.,8 $,.9 S&P MidCap SPDR MDY $,., $. Direxion Daily Financial Bull x Shares FAS $.,9 $,9. ishares S&P MidCap Index Fund IJH $,9. $. SPDR S&P Retail ETF XRT $., $,.8 Energy Select Sector SPDR Fund XLE $,8.,9 $,.8 Direxion Daily Small Cap Bull x Shares TNA $.9,8 $. ishares Barclays Aggregate Bond Fund AGG $,9. $8. Industrial Select Sector SPDR Fund XLI $., $,. Vanguard Total Bond Market ETF BND $9,. $. ProShares UltraShort S&P SDS $8.,88 $,. SPDR Dow Jones Industrial Average ETF DIA $9,9.,8 $9. S&P MidCap SPDR MDY $., $,. Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

17 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 9 99 # primary listings 9 # total listings 8 99 # total listings # AUM providers $ Bn $. $. $. 9 9 $.,9 $9. $. $. $. $.8 8 $. $.8 $. $. 8 8 # providers 9 8 AUM $ Bn $.8 $.8 $8. $9. $. $. $. $. $. $.8 $. $. $. $. Asia Pacific # primary # total # AUM # primary # total # AUM Country listings listings providers $ Bn Country listings listings providers $ Bn 9 Australia $.8 Malaysia $. China $. New Zealand $. Hong Kong $. Singapore 9 8 $. India 8 8 $. 8 South Korea $. Indonesia $. 8 Taiwan $. Japan $9. Thailand $. 9 Asia Pacific (continued) Note: Providers = primary ETF providers. AUM = Assets Under Management in primary listings only. Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

18 Top ETP providers around the world: ranked by assets Q YTD change Provider # ETPs Assets % total # planned # ETPs % ETPs Assets % assets % market share State Street Global Advisors $.8.% $..% $..% ETF Securities $..% $..% $..% ishares $..% $..% $. 8.% Deutsche Bank $. 8.% $..% $.9.9% Barclays (ipath) $9.9.% $. 8.% $..9% Merrill Lynch $..% $..% $.8.% United States Commodity Funds 9 $..% $.9.% $. 9.8% 9 UBS AG 98 $..% $..% $..% 98 Societe Generale $..% $..% $..% Rydex SGI 9 $.8.% $..% $..% 9 ProShares $.8.% $. 8.% $..9% JPMorgan Chase $..% $..% $..% Absa Capital $..% $..% $..% Swedish Export Credit Corp $.9.% $..% $. 9.9% db ETC $..9% $..% $. 9.9% Source Markets 8 $..% $..% $..% 8 GreenHaven Commodity Services $.8.% $..% $..% Benchmark Asset Management $..% $..% $..% Mitsubishi UFJ Trust and Banking Corporation $..% $..% $. 8.9% Credit Suisse $..% $..% $..% RBS $..% $..% $. 8.% Lyxor $..% $..% $..% Morgan Stanley $..% $..% $. 9.% Nomura Asset Management $..% $..% $..% VelocityShares $..% $..% $..% Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. 8

19 Top ETPs worldwide Ranked by assets Ranked by $ Average Daily Trading Volumes () ETP Country listed Bloomberg ticker Assets ( shares) ETP Country listed Bloomberg ticker ( shares) Assets SPDR Gold Trust GLD $,8.,8 $,.8 SPDR Gold Trust GLD $,.8,8 $,8. ishares Silver Trust SLV $,8.,9 $9. ishares Silver Trust SLV $9.,9 $,8. PowerShares DB Commodity Index DBC $,8., $9. ipath S&P VIX ShortTerm Futures ETN VXX $.8,8 $,8. ishares Gold Trust IAU $,9.,9 $.9 United States Oil Fund LP O $8., $,. ETFS Physical Gold UK PHAU LN $,. $. Oil Services HOLDRS OIH $., $,. GBS Bullion Securities UK GBS LN $,9. $.8 Semiconductor HOLDRS SMH $9.,9 $.9 PowerShares DB Agriculture Fund DBA $,9.,9 $. ProShares Ultra Silver AGQ $., $,. ipath Dow JonesUBS Commodity Index TR DJP $,88. 8 $9. Euro Currency Trust FXE $9.,8 $. Oil Services HOLDRS OIH $,., $. United States Natural Gas Fund LP UNG $., $,88. JPMorgan Alerian MLP Index ETN AMJ $,. 8 $. Retail HOLDRS RTH $9., $9. United States Natural Gas Fund LP UNG $,88., $. ProShares Ultra DJUBS Crude Oil UCO $.,9 $. NewGold ETF South Africa GLD SJ $,. 8 $.8 PowerShares DB Agriculture Fund DBA $.,9 $,9. United States Oil Fund LP O $,., $8. PowerShares DB Commodity Index DBC $9., $,8. ishares S&P GSCI CommodityIndexed Trust GSG $,.9 $9. PowerShares DB Dollar Index Bullish UUP $.,8 $8. ETFS Physical Swiss Gold Shares SGOL $,9. $.8 ishares Gold Trust IAU $.9,9 $,9. ipath S&P VIX ShortTerm Futures ETN VXX $,8.,8 $.8 ProShares UltraShort Silver ZSL $.,98 $9. ETFS Agriculture DJUBSCI UK AIGA LN $,.,9 $. CurrencyShares Japanese Yen Trust FXY $9. $. ProShares Ultra Silver AGQ $,., $. ProShares UltraShort DJUBS Crude Oil SCO $8.,9 $. Gold Source PETC UK SGLD LN $,. $9. ETFS Physical Gold UK PHAU LN $. $,. ETFS Physical Silver UK PHAG LN $98.8 $. ipath S&P GSCI Crude Oil Total Return OIL $.9, $9.9 Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. 9

20 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.8 India.8 South Korea. Note: Providers = primary ETP providers. Assets = Assets Under Management in primary listings only. Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

21 Top ETF/ETP providers around the world: ranked by assets Provider ishares State Street Global Advisors # ETFs/ ETPs 9 Assets $. $. Q % total 9.8%.% $. $. # planned # ETFs/ ETPs % ETFs/ ETPs.%.% YTD change Assets $.9 $. % assets.%.8% % market share.%.% Vanguard Lyxor Asset Management db xtrackers PowerShares ETF Securities ProShares Van Eck Associates Corp Credit Suisse Asset Management Nomura Asset Management Deutsche Bank Zurich Cantonal Bank Bank of New York WisdomTree Investments UBS Global Asset Management Barclays (ipath) Commerzbank Amundi ETF HSBC/Hang Seng Rydex SGI Source Markets First Trust Advisors Direxion Shares Nikko Asset Management $. $. $.8 $. $. $. $.9 $. $. $. $. $. $. $9.9 $9.9 $9. $9. $8. $8. $.8 $. $. $..%.%.%.%.%.%.%.%.%.%.8%.%.%.%.%.%.%.%.%.%.%.%.% $.8 $. $. $. $. $. $.9 $. $. $. $. $. $. $. $. $. $. $. $. $. $. $.9 $ %.%.%.8%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.% $. $. $.8 $. $. $. $. $.9 $. $.9 $.9 $. $. $. $. $. $. $.8 $. $. $.9 $. $..9%.%.% 9.8%.%.8%.%.9%.%.9%.%.8%.9%.%.9%.%.%.%.8%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.% Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

22 ETFs and ETPs listed in the United States At the end of Q, the ETF industry in the United States had 99 ETFs and assets of $9. Bn, from 9 providers on two exchanges. This compares to 8 ETFs and assets of $. Bn, from 9 providers on two exchanges at the end of Q. 9 January marked the 8th anniversary of ETFs in the United States. Assets In Q, assets have increased by.% from $89. Bn to $9. Bn, which is greater than the.% increase in the MSCI Index in dollar terms. This compares to a.% increase in assets over the same period in. $. Bn of net new assets went into United States listed ETFs/ETPs in March. $. Bn net inflows went into equity ETFs/ETPs, of which $. Bn went into ETFs/ETPs tracking emerging market equity indices, while ETFs/ETPs tracking equity indices saw net outflows of $.8 Bn. Fixed income ETFs/ETPs saw net inflows of $. Bn, of which $. Bn went into inflation linked bond ETFs/ETPs and $. Bn went into corporate bond ETFs/ETPs. Commodity ETFs/ETPs saw net inflows of $. Bn, of which ETFs/ETPs providing exposure to precious metals saw net inflows of $. Bn and $. Bn net inflows went into ETFs/ETPs providing agricultural commodity exposure in March. $9. Bn of net new assets went into United States listed ETFs/ETPs in Q. $. Bn net inflows went into equity ETFs/ETPs, of which $. Bn went into ETFs/ETPs tracking sector indices, while ETFs/ETPs tracking emerging market indices saw net outflows of $. Bn. Fixed income ETFs/ETPs saw net inflows of $. Bn, of which $.9 Bn went into high yield bond ETFs/ETPs and $. Bn into corporate bond ETFs/ETPs. Commodity ETFs/ETPs experienced net inflows of $. Bn, of which ETFs/ETPs providing exposure to agricultural commodities saw net inflows of $. Bn while ETFs/ETPs providing exposure to precious metals experienced $. Bn net outflows in Q. In Q, $9. Bn net new asset flows went into United States listed ETFs/ETPs compared to $8.9 Bn net inflows over the same period in. Net new asset flows into equity ETFs/ETPs were $. Bn in Q compared to $. Bn net outflows over the same period in and fixed income ETF/ETP net inflows were $. Bn in Q, less than the $. Bn net inflows over the same period in. Net inflows into commodity ETFs/ETPs were $. Bn in Q compared to $. Bn net outflows over the same period in.. 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 Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).

23 ETFs and ETPs listed in the United States (continued) ETFs In Q, the number of ETFs have increased by.9% 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.% of United States ETF AUM, while 8 ETFs have less than $. Mn in assets, 8 ETFs have less than $. Mn in assets and ETFs have less than $. Mn in assets. Trading volume In Q, 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 March. In March, United States ETF turnover was.% of all United States equity turnover, which is greater than the.% reported in December. 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; State Street Global Advisors is second with 9 ETFs, assets of $8. Bn and 9.% market share; followed by Vanguard with ETFs, assets of $. Bn and.% market share, at the end of Q. Of the $8.8 Bn of net new assets in United States listed ETFs in March, ishares gathered the largest net inflows with $. Bn, followed by Vanguard with $. Bn net inflows, while State Street Global Advisors saw $. Bn net outflows. In Q, of the $. Bn net new assets into United States listed ETFs, Vanguard gathered the largest net inflows with $. Bn, followed by ishares with $. Bn net inflows, while Bank of New York had the largest net outflows with $. Bn in Q. The top three ETF providers, out of 9, account for 8.% of United States ETF AUM. This compares to 8.% out of 9 providers, at the end of Q. firms in the United States plan to launch their first ETF in the future. Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX), NYSE Arca.

24 ETFs and ETPs listed in the United States (continued) Mutual funds ETPs 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 $.9 Bn in January according to Strategic Insight. Additionally, there were other ETPs with assets of $9.8 Bn from providers on one exchange. This compares to ETPs with assets of $8. Bn from providers on one exchange, at the end of Q. ETFs and ETPs Assets in United States listed ETFs and ETPs crossed the $ trillion milestone in December. Combined, there were, products with assets of $,9.8 Bn, from 8 providers on two exchanges in the United States. This compares to 99 products with assets of $8. Bn from providers on two exchanges, at the end of Q. Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).

25 United States ETF and ETP asset growth Assets, # products, Assets Q ETF assets $. $. $. $. $. $. $.9 $. $8. $. $. $. $99. $.8 $8. $9. $. $89. $9. ETP assets $. $. $.8 $. $. $8.9 $. $.9 $. $. $88. $.8 $9.8 # ETFs # ETPs 8 Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

26 ETF providers in the United States: ranked by AUM 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 Jefferies Asset Management Fidelity Management & Research DBX Strategic Advisors FocusShares Grail Advisors Javelin Investment Management Russell Investments FaithShares # ETFs AUM $. $8. $. $.9 $. Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX). $. $. $.9 $. $. $. $. $. $.8 $.8 $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. Q % total.% 9.%.%.8%.%.%.%.%.8%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.% $.8 $. $.8 $.9 $. $. $. $.9 $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. # planned Mar NNA $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. Q NNA $. $. $. $.9 $.9 $. $. $. $. $. $. $. $.9 $.8 $. $. $. $. $. $. $. $. $. $. $. $. $. $. # ETFs 9 % ETFs.9%.%.%.9%.%.%.%.%.%.%.%.% 8.%.%.9%.%.%.%.%.%.%.%.%.%.%.%.%.% YTD change AUM $8.8 $9. $. $. $.8 $. $. $. $.9 $. $. $. $. $.8 $. $. $. $. $. $. $. $. $. $. $. $. $. $. % AUM.%.%.9% 9.% 8.%.%.8%.9%.%.%.%.9% 9.8%.%.8% 8.%.%.%.%.% 9.% 8.%.8%.%.%.%.%.9% % market share.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.% continued

27 ETF providers in the United States: ranked by AUM (continued) Provider Pax World Management AllianceBernstein Dreyfus Corp Eaton Vance Exchange Traded Spreads Trust Factor Advisors Firsthand Capital Florentez Investment Georgetown Investment Management Hartford Huntington Asset Advisors Janus Capital Management John Hancock JP Morgan Asset Management Legg Mason Macro Securities Depositor Neuberger Berman Next Investments Northern Trust OppenheimerFunds RiverPark Advisors ShariahShares Spinnaker ETF Trust T Rowe Price Total # ETFs 99 AUM $. $9. Q % total.%.% $. $. # planned 89 Mar NNA $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $8.8 Q NNA $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. # ETFs % ETFs.%.9% YTD change AUM $. $9. % AUM 9.%.% % market share.% Note: Data as at end Q. 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 # ETFs /ETPs Mar Assets NNA YTD NNA Exposure Equity 8,.9 9,.,88.,.9,8.,. North America,. 9,. (9.),8.,.,89.8 Broad Canada., ,.,.,. United States,8.9 9,. (,.),.9,8. (,.) United States sectors,99.,.,.,.,.,98. Consumer goods/services,., (9.8), Energy,8.9 9,88..,8.8,9.,. Financials,9. 9,9..8 (8.),8.8,. Healthcare 9. 8,9.8.. (8.) (.8) Industrials.,...,. 9. Materials 9.,. (.9).8 8.,. Other.,.... (.) Real estate.,.. 9.,9.,.9 Technology 8.,8.9.,8.,89.,. Telecommunications.,.. (9.9) 88.. Utilities.,...8.,.9 Asia Pacific 8,.,8.,9.,8.,.,8. Europe.8,. 9.,89. 8.,. Israel.. (9.) (8.). Global 8.,..,.,8.,. Global (ex),. 8,.,9.,9.,9. 9. NNA 9 NNA continued Note: NNA Net New Assets. Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX). 8

29 United States ETF/ETP net new assets by type of exposure (continued) # ETFs /ETPs Mar Assets NNA YTD NNA Exposure Emerging markets 9,8. 8,.,88.8 (,.) 9,8.,. Broad,9. 9,.,9. (8,8.9),.,9. Global emerging markets,9.8 88,.,8. (,9.),.,9. Frontier. 8. (.) (.9) Sector Other.8,. (.) (8.),8.,8. Regional.,8. (.8) (9.) 8.,. Asia emerging markets. 9. (.8) (.) Eastern Europe Middle East and Africa.. (.)... Latin America 9.,99. (.) (8.).8 9. Country,.,99.,.9,9.,8. 8,99. Argentina Brazil 9 99.,. (.),. 9.,. Chile (.) (.) 8.. China 9.,. 9. (8.) (,.),9. Colombia.9.. (.) 8.. Egypt India 9 9.,. (.9) (8.),8.. Indonesia.. (.)... Malaysia. 99. (.) (.).8. Mexico., (9.) 88.. Peru.8. (8.) Philippines..... Poland. 89. (.)... Russia 88.,8.8 8., South Africa..8 (8.9). 8. South Korea 8., Taiwan.,9.9 (9.).9 (8.8),9. Thailand (.) (.) 8..8 Turkey..8. (.).. Vietnam NNA 9 NNA continued Note: NNA Net New Assets. Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX). 9

30 United States ETF/ETP net new assets by type of exposure (continued) # ETFs /ETPs Mar Assets NNA YTD NNA Exposure Fixed income,8.,.,8.,9. 9,.8,9. Active 8., Aggregate.,9...,.,8. Convertible Corporate 9.,..9,8.9,.,8. Emerging markets.8,...,.,8. Government 8,9. 8,... 9,9. 8,98. Govt/corp 8.9 9,8.9..,.8,. High yield 8 8.,..,9.9,9.,9. Inflation 9., ,. Money market (.) Mortgage., Commodities 8,99. 8,8.8,.9,.,9.,. Broad 9.,9..,8. 9.,98. Alternative... (.8). 8. Agriculture.,8..,..,8. Energy ,.8 (.). (9.),.9 Industrial metals 8.,9.., Livestock.. (.).8 (.) 8.9 Precious metals,. 9, (,.),. 8,9. Currency.8,8... (,9.),.9 Alternative 8.,...,.,. Mixed., Total,,.,9,8.,8. 9,. 9,89. 9,9. NNA 9 NNA Note: NNA Net New Assets. Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).

31 Sector ETF net new assets Sector ETF ticker Index ticker Index total return ($) ETF NAV performance ($) Mar YTD Mar YTD Mar ETF AUM YTD % change Dow Jones United States sector ETFs,..% ishares Dow Jones U.S. Basic Materials IYM DJBM.%.9%.9%.%,.8.% ishares Dow Jones U.S. Consumer Goods IYK DJNC.%.%.9%.% 8..% ishares Dow Jones U.S. Consumer Services IYC DJCY.%.%.%.%..% ishares Dow Jones U.S. Energy IYE DJEN.%.%.%.%,.8.% ishares Dow Jones U.S. Financial IYF DJFN.%.%.%.9%. 8.8% ishares Dow Jones U.S. Healthcare IYH DJHC.%.%.%.8%. 8.9% ishares Dow Jones U.S. Industrial IYJ DJIN.% 9.%.% 8.%..% ishares Dow Jones U.S. Technology IYW DJTC.%.%.%.%,..9% ishares Dow Jones U.S. Telecommunications IYZ DJSTELT.%.8%.%.% 8..9% ishares Dow Jones U.S. Utilities IDU DJUT.%.%.%.9%..% S&P equal weight sector ETFs. 8.% Rydex S&P Equal Weight Consumer Discretionary RCD S.%.%.%.%..% Rydex S&P Equal Weight Consumer Staples RHS S.8%.%.%.%.9.%..... Rydex S&P Equal Weight Energy RYE S.% 9.8%.% 9.8% 9. 9.% Rydex S&P Equal Weight Financial RYF S.8%.%.%.%..% Rydex S&P Equal Weight Health Care RYH S.% 8.%.% 8.%..8%..... Rydex S&P Equal Weight Industrial RGI S.%.%.%.% 9..% Rydex S&P Equal Weight Materials RTM S.%.%.%.% 9.9.9%..... Rydex S&P Equal Weight Technology RYT S.8%.%.9%.%. 8.% Rydex S&P Equal Weight Utilities RYU S.8%.%.%.9%..%..... S&P select sector ETFs,..% 9,88.8,88.,.8,8.,9. Consumer Discretionary Select Sector SPDR XLY IXY.%.%.8%.%,.8.% Consumer Staples Select Sector SPDR XLP IXR.%.8%.8%.%,.8.9% Energy Select Sector SPDR XLE IXE.%.%.%.%,8.9.%,.,..,.9,9. Financial Select Sector SPDR XLF IXM.%.%.8%.% 8,. 9.%,., Health Care Select Sector SPDR XLV IXV.9%.%.%.%, % Industrial Select Sector SPDR XLI IXI.% 8.%.8% 8.%,. 9.9% ,. Materials Select Sector SPDR XLB IXB.9%.%.%.%,8..8%, Technology Select Sector SPDR XLK IXT.%.8%.8%.%,9.8 9.% Utilities Select Sector SPDR XLU IXU.%.8%.%.%,9..% ETF short interest Mar ETF Mar 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 Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).

32 Sector ETF net new assets (continued) Sector ETF ticker Index ticker Index total return ($) ETF NAV performance ($) Mar YTD Mar YTD Mar ETF AUM YTD % change MSCI United States investable market sector ETFs 8,..%. 8..,88.8,88. Vanguard Consumer Discretionary VCR MZICD.%.%.%.% 8. 8.% Vanguard Consumer Staples VDC MZICS.%.%.8%.% 9.9.8% Vanguard Energy VDE MSCIEN.%.%.9%.%,..% Vanguard Financials VFH MZIFN.%.9%.%.%..% Vanguard Health Care VHT MZIHC.%.%.%.%. 9.% Vanguard Industrials VIS MSCIIN.% 8.%.% 8.8%. 9.% Vanguard Information Technology VGT MZIIT.%.%.%.%,8..9% Vanguard Materials VAW MZIMT.%.%.%.9%.9.9% 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.%.%.%.%..%..... ishares S&P Global Consumers Staples KXI SGCS.9%.%.9%.%..% ishares S&P Global Energy IXC SGES.%.%.9%.8%,..% ishares S&P Global Financials IXG SGFS.9%.9%.9%.% 9..%..... ishares S&P Global Healthcare IXJ SGH.9%.8%.8%.% 9..% ishares S&P Global Industrials EXI SGN.%.%.%.% 9..% ishares S&P Global Materials MXI SGM.%.%.%.9% 8.9.%..... ishares S&P Global Technology IXN SGI.8%.%.%.9% 9..% ishares S&P Global Telecommunications IXP SGT.%.%.%.% 8..% ishares S&P Global Utilities JXI SGU.%.9%.%.%..% MSCI ACWI ex. United States sector ETFs..%..... ishares MSCI ACWI ex Consumer Discretionary AXDI MSWDUCDN.%.%.%.%..%..... ishares MSCI ACWI ex Consumer Staples AXSL MSWDUCSN.%.%.%.%..%..... ishares MSCI ACWI ex Energy AXEN MSWDUENN.%.%.%.8%.8.8%..... ishares MSCI ACWI ex Health Care AXHE MSWDUHCN.%.%.%.%..%..... ishares MSCI ACWI ex Industrials AXID MSWDUINN.%.%.%.9%..9%..... ishares MSCI ACWI ex Information Technology AXIT MSWDUITN.%.%.%.9%.9.9%..... ishares MSCI ACWI ex Materials AXMT MSWDUMTN.%.9%.%.%.9.%..... ishares MSCI ACWI ex Telecommunication Services AXTE MSWDUTCN.8%.%.%.%..%..... ishares MSCI ACWI ex Utilities AXUT MSWDUUTN.%.%.%.%..%..... ETF short interest Mar ETF Mar 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 Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).

33 United States leveraged and inverse ETF/ETP net new assets by type of exposure # ETFs /ETPs Mar Assets NNA YTD NNA NNA Exposure Leveraged 9,.,8..8. (,.) (,9.) Equity,.,.. (.) (,88.) (,.) North America 9,.8,.. (9.9) (,98.) (,.) Europe Asia Pacific Global.... Global (ex) (.9).9 Emerging markets (.) (.).. Fixed income (8.9). Commodities 9 9.,9.8 (8.).8 (8.) (8.) Currency..9 (.) (.). Alternative Mixed....8 Inverse 8.,...,.,.8 Equity 9., ,. North America 8., ,9. Global (ex). 9.. (.) 9.. Emerging markets.. (.) 9... Fixed income 9., Commodities.8 9. (.9) 9. (.). Currency.. (.) (.) (8.). Alternative Leveraged inverse 8,.,..8,.,.8,. Equity,.,9.8.,9.,9.8,8.8 North America,.,98. 8.,.,.9,899. Europe.. (.) (.). 9. Asia Pacific (.) 8. Global Global (ex).. (.) (.9).. Emerging markets 9.. (.)...8 Fixed income 8.8, ,.,. Commodities Currency.. (.)... Total,9,8.8,89.,.9,9.,9. 9 NNA Note: NNA Net New Assets. Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).

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

35 Index providers in the United States: ranked by AUM Q YTD change Index provider # ETFs AUM % total # ETFs AUM % AUM S&P MSCI Barclays Capital Russell Dow Jones 8 8 $. $. $. $8. $. 9.% 9.%.% 9.%.% $. $8.8 $. $8.8 $. $. $. $. $. $..%.8%.%.% 8.9% S&P 9.% MSCI 9.% Barclays Capital.% Russell 9% Dow Jones.% NASDAQ OMX FTSE Markit WisdomTree NYSE Euronext $9. $.8 $. $9. $.9.%.%.%.%.8% $.8 $.9 $. $. $. $. $. $.9 $.8 $..%.%.% 9.8%.% NASDAQ OMX.% FTSE.% Markit.% WisdomTree.% NYSE Euronext.8% Deutsche Boerse.8% Deutsche Boerse Indxis Structured Solutions Intellidex $.9 $. $. $..8%.%.%.% $. $. $. $. $. $. $. $..%.% 8.%.8% Indxis.% Structured Solutions.% Intellidex.% Morningstar.% SNetwork.% Morningstar $..% $. $..8% BNY Mellon.% SNetwork BNY Mellon ISE Zacks $. $.8 $.8 $.8.%.%.%.% $. $. $. $. $. $. $. $..% 8.%.%.% ISE.% Zacks.% Value Line.% STOXX.% Other.% Value Line $..% $. $..% STOXX $..% $. $..% Other $..% $. $..% Total 99 $9..% $. $9..% Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

36 Top ETFs in the United States Ranked by Assets Under Management (AUM) Ranked by $ Average Daily Trading Volumes () ETF Bloomberg ticker AUM ( shares) ETF Bloomberg ticker ( shares) AUM SPDR S&P SPY $89,9.9 9, $,. SPDR S&P SPY $,. 9, $89,9.9 Vanguard MSCI Emerging Markets ETF VWO $,.,8 $9. ishares Russell Index Fund IWM $,.8, $,. ishares MSCI EAFE Index Fund EFA $9,8. 8, $,98. PowerShares QQQ Trust QQQ $,898. 9,9 $,9. ishares MSCI Emerging Markets Index Fund EEM $8,8., $,9. ishares MSCI Emerging Markets Index Fund EEM $,9., $8,8. ishares S&P Index Fund IVV $,., $. Energy Select Sector SPDR Fund XLE $,.8,9 $,8. PowerShares QQQ Trust QQQ $,9. 9,9 $,898. ishares MSCI EAFE Index Fund EFA $,98. 8, $9,8. ishares Barclays TIPS Bond Fund TIP $9,889. $8.8 Financial Select Sector SPDR Fund XLF $,9.,8 $8,9. Vanguard Total Stock Market ETF VTI $9,.,8 $9.8 Vanguard MSCI Emerging Markets ETF VWO $9.,8 $,. ishares Russell Index Fund IWM $,., $,.8 SPDR Dow Jones Industrial Average ETF DIA $9.,8 $9,9. ishares Russell Growth Index Fund IWF $,., $. ishares MSCI Brazil Index Fund EWZ $9., $,. ishares MSCI Brazil Index Fund EWZ $,., $9. ishares Barclays + Year Treasury TLT $8. 8,8 $,.9 ishares iboxx $ Investment Grade Corporate LQD $,8. 88 $9.8 ishares MSCI Japan Index Fund EWJ $.,998 $,. ishares Russell Value Index Fund IWD $,.,8 $. ishares FTSE China Index Fund FXI $9., $8,.9 S&P MidCap SPDR MDY $,., $. ProShares Ultra S&P SSO $.,8 $,.9 ishares S&P MidCap Index Fund IJH $,9. $. Direxion Daily Financial Bull x Shares FAS $.,9 $,9. Energy Select Sector SPDR Fund XLE $,8.,9 $,.8 SPDR S&P Retail ETF XRT $., $,.8 ishares Barclays Aggregate Bond Fund AGG $,9. $8. Direxion Daily Small Cap Bull x Shares TNA $.9,8 $. Vanguard Total Bond Market ETF BND $9,. $. Industrial Select Sector SPDR Fund XLI $., $,. SPDR Dow Jones Industrial Average ETF DIA $9,9.,8 $9. ProShares UltraShort S&P SDS $8.,88 $,. Vanguard REIT ETF VNQ $8,8.9,8 $. S&P MidCap SPDR MDY $., $,. Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

37 Top ETFs in the United States (continued) Ranked by largest change in AUM Ranked by largest YTD net inflows ETF Bloomberg ticker Q NNA AUM Q AUM Dec Change ETF Bloomberg ticker Q NNA AUM ishares MSCI Emerging Markets EEM $9,9. $8,8. $,. $8,. ishares MSCI Japan Index Fund EWJ $,9. $,. $. Energy Select Sector SPDR Fund XLE $,. $,8. $8,9. $,9.8 Vanguard MSCI Emerging Markets ETF VWO $,89. $,. $9. Vanguard MSCI Emerging Markets ETF VWO $,89. $,. $,9.8 $,.8 ishares MSCI Canada Index Fund EWC $,. $,8. $. ishares MSCI Japan Index Fund EWJ $,9. $,. $,88. $,.8 Energy Select Sector SPDR Fund XLE $,. $,8. $,.8 PowerShares QQQ Trust QQQ $,8.8 $,9. $,9.9 $,89. ishares MSCI Brazil Index Fund EWZ $,.8 $,. $9. ishares MSCI EAFE Index Fund EFA $,. $9,8. $,9. $,. PowerShares QQQ Trust QQQ $,8.8 $,9. $,898. ishares MSCI Canada Index Fund EWC $,. $,8. $,. $,8. ishares iboxx $ High Yield Corporate Bond HYG $,. $8,. $8. ishares S&P MidCap Index Fund IJH $988. $,9. $9,. $,8. ishares MSCI EAFE Index Fund EFA $,. $9,8. $,98. ishares Russell Value Index Fund IWD $8. $,. $,9. $,. Market Vectors Russia ETF RSX $99. $,9. $8. ishares MSCI Brazil Index Fund EWZ $,.8 $,. $,. $,99.9 ishares S&P MidCap Index Fund IJH $988. $,9. $. Market Vectors Russia ETF RSX $99. $,9. $,8. $,9. Market Vectors Agribusiness ETF MOO $9. $,. $. Vanguard Total Stock Market ETF VTI $. $9,. $8,. $,9. Vanguard Dividend Appreciation ETF VIG $9. $,8. $. Vanguard Dividend Appreciation ETF VIG $9. $,8. $,8.9 $,. Technology Select Sector SPDR Fund XLK $9. $,9.8 $8.9 ishares S&P Index Fund IVV $. $,. $,99. $,8. Vanguard S&P ETF VOO $8. $,. $.8 ishares iboxx $ High Yield Corporate Bond HYG $,. $8,. $,. $,8.8 ishares S&P Preferred Stock Index Fund PFF $8. $,8. $. Vanguard REIT ETF VNQ $. $8,8.9 $,. $,8. ishares MSCI Germany Index Fund EWG $8. $,8. $9. Technology Select Sector SPDR Fund XLK $9. $,9.8 $,89. $,. SPDR Barclays Capital High Yield Bond ETF JNK $8. $,8. $.9 Market Vectors Agribusiness ETF MOO $9. $,. $,. $,.8 Vanguard REIT ETF VNQ $. $8,8.9 $. Market Vectors Gold Miners GDX $8. $,9. $,8.8 $,. ishares Barclays Year Credit Bond Fund CSJ $. $,99. $.9 ishares Russell Growth Index Fund IWF $8. $,. $,8. $99. ishares Russell Value Index Fund IWD $8. $,. $. Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).

38 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 Mar ETF turnover ETF turnover as % of equity turnover Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, NYSE Arca. 8

39 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/index domestic equity Passive/index international equity Passive/index fixed income Active/nonindex domestic equity Active/nonindex international equity Active/nonindex fixed income 8 9 Source: Strategic Insight Simfund MF, Global ETF Research and Implementation Strategy Team, BlackRock, data as at end January. 9

40 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 March the average number of ETF shares short during was, Mn shares, with an average of, Mn in and, Mn in 9. The March short interest level for United Stateslisted ETFs was 9.% of shares outstanding or, Mn shares, up.% from, Mn in December. avg,.8%, Investors are using ETFs for long/short and hedging strategies. Jan Feb Mar avg,,8,, 8.9%.% 9.% 9.%,9,8,8, At the end of March, 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 March. Source: Regulatory Notice 9, Financial Industry Regulatory Authority, SEC, Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

41 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 8,8.8% ishares Russell Index Fund IWM 9, 9,.% Financial Select Sector SPDR Fund XLF, 9,8.% ishares MSCI Emerging Markets Index Fund EEM, 9,8 9.% SPDR S&P Retail ETF XRT, 9,8.9% ishares Dow Jones Real Estate Index Fund IYR 9,,.8% ishares FTSE China Index Fund FXI, 9,.% SPDR S&P Oil & Gas Exploration & Production ETF XOP,, 8.% SPDR KBW Regional Banking ETF KRE,, 9.% Energy Select Sector SPDR Fund XLE,9 9,.% ishares MSCI EAFE Index Fund EFA,,.% Health Care Select Sector SPDR Fund XLV, 88,9.% Materials Select Sector SPDR Trust XLB,9,.% Industrial Select Sector SPDR Fund XLI,9 9,.8% Consumer Discretionary Select Sector SPDR Fund XLY, 9, 9.% ishares Barclays + Year Treasury Bond Fund TLT,888, 9.% ishares MSCI Japan Index Fund EWJ,,.% Semiconductor HOLDRS SMH,99 8, 9.9% Technology Select Sector SPDR Fund XLK 9,998,.% Vanguard MSCI Emerging Markets ETF VWO 8,9 9,.9% Note: Data as at mid March. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

42 United States options on ETFs/ETPs At the end of Q, there were 9 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 Mar Cleared contracts Cleared transactions Note: Data as at end Q. Source: The Options Clearing Corporation (The OCC), Global ETF Research and Implementation Strategy Team, BlackRock.

43 ETP providers in the United States: ranked by assets Provider # ETPs Assets Q % total # planned Mar NNA Q NNA # ETPs % ETPs YTD change Assets % assets % market share State Street Global Advisors $.8.% $. $. $..% $..%.% ishares $..% $. $.8 $..% $. 8.%.% Deutsche Bank $..9% $. $. $.9.% $.9.9%.% Barclays (ipath) $9..% $. 8 $. $..% $..%.% Merrill Lynch $..% $. $. $..% $.8.%.% United States Commodity Funds 9 $..% $.9 $. $..% $. 9.8%.% ETF Securities $.9.% $. $. $..% $. 9.%.% Rydex SGI 9 $.8.% $. $. $..% $..%.% ProShares $.8.% $. 8 $. $..% $..9%.% JPMorgan Chase $..% $. $. $..% $..%.% Swedish Export Credit Corp $.9.% $. $. $..% $. 9.9%.% GreenHaven Commodity Services $.8.% $. $. $..% $..%.% UBS AG 8 $..% $. $. $..% $..%.% Credit Suisse $..% $. $. $..% $..%.% Morgan Stanley $..% $. $. $..% $. 9.%.% VelocityShares $..% $. $. $..% $..%.% Barclays Capital 9 $..% $. $. $..% $..%.% Goldman Sachs $..% $. $. $..% $..%.% Teucrium Trading $..% $. $. $..% $. 9.%.% HSBC/Hang Seng $..% $. $. $..% $..%.% RBS $..% $. $. $..% $. 9.%.% FactorShares $..% $. $. $..% $..%.% Citigroup $..% $. $. $..% $..%.% Jefferies Asset Management $. $. WealthNotes Capital Management $. $. Total $9.8.% $. $. $..% $9..% Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

44 Top ETF/ETP providers in the United States: ranked by assets Provider # ETFs/ ETPs Assets Q % total # planned Mar NNA Q NNA # ETFs/ ETPs % ETFs/ ETPs YTD change Assets % assets % market share ishares $..% $.9 $.9 $..9% $..9%.8% State Street Global Advisors 98 $..% $. 9 $. $.9.% $.9.%.8% Vanguard $..% $.8 $. $..% $..9%.% PowerShares $..% $. $. $.9.9% $. 9.%.% ProShares $..% $. $. $..% $..8%.% Van Eck Associates Corp $.9.% $.9 $. $..% $..%.% Deutsche Bank $..% $. $. $.9.% $.9.9%.% Bank of New York $..% $. $. $..% $..8%.% WisdomTree Investments $..% $. $. $..% $..9%.% Barclays (ipath) $9..9% $. 8 $. $..% $..%.% Rydex SGI $8..% $. 8 $. $..% $..8%.% First Trust Advisors $..% $. $. $..% $.9.%.% Direxion Shares $..% $.9 $. $..% $..%.% Merrill Lynch $..% $. $. $..% $.8.%.% United States Commodity Funds 9 $..% $.9 $. $..% $. 9.8%.% ETF Securities $.9.% $. $. $..% $. 9.%.% Guggenheim Funds $.8.% $. 9 $. $..% $..9%.% Charles Schwab Investment Management $.8.% $. $. $.9 8.% $. 9.8%.% PIMCO $..% $. 8 $. $.8.% $.8.%.% JPMorgan Chase $..% $. $. $..% $..%.% Swedish Export Credit Corp $.9.% $. $. $..% $. 9.9%.% Global X Funds $..% $. $. $. 9.9% $..8%.% ALPS ETF Trust $..% $. $. $..% $. 8.%.% GreenHaven Commodity Services $.8.% $. $. $..% $..%.% UBS AG 8 $..% $. $. $..% $..%.% Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).

45 Top brokers trading listed ETFs/ETPs: ranked by advertised volume Broker Credit Suisse Knight Securities UBS Merrill Lynch Citigroup Global Markets JPMorgan Chase Bank Barclays Capital Deutsche Bank Securities Morgan Stanley Citadel Securities Susquehanna Goldman Sachs Fidelity Capital Markets BNP Paribas Securities Instinet BTIG Jefferies & Co Royal Bank Of Canada GFI Group Inc. Bloomberg Tradebook ConvergEx State Street Bank & Trust HSBC Bank ITG JonesTrading Others Total # broker reported trades,,,,9,,99,9 8,99,9,9,9 8,9 9,,9,89,,,,9,,8,,9,9,,,8 $888,. Mar Broker advertised volume $,. $,. $9,.8 $,.8 $,8. $,89.9 $,88. $,.9 $,. $,. $9,89. $8,8. $,8. $8,. $8,. $,898. $,. $,9.9 $,. $,. $,8. $,88. $,. $,. $,. $,8. % broker advertised market share.%.%.% 8.%.9%.%.%.9%.%.%.%.%.%.%.%.9%.8%.8%.%.%.%.%.%.%.%.%.% % total exchange volume.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.%.% 9.% # broker reported trades (%) 8.%.%.8%.8%.9%.%.%.%.%.9%.%.% 9.%.% 8.%.8%.%.%.8%.%.%.%.%.8% 9.%.% 8.8% Monthly change Broker advertised volume (%).%.%.%.%.% 8.% 9.%.%.% 9.%.%.%.%.9%.8% 9.%.%.%.%.%.%.%.8% 9.%.%.%.% % broker advertised market share 8.%.% 8.%.%.%.%.9%.%.%.%.%.%.%.% 9.%.%.9%.%.%.%.% 9.%.%.%.%.% % total exchange volume.%.%.%.%.%.%.% 9.%.%.9%.%.% 8.%.%.%.%.9%.%.%.%.%.%.%.%.% 9.% 9.8% Credit Suisse.% Knight Securities.% UBS.% Merrill Lynch 8.% Citigroup Global Markets.9% JPMorgan Chase Bank.% Barclays Capital.% Deutsche Bank Securities.9% Morgan Stanley.% Citadel Securities.% Susquehanna.% Goldman Sachs.% Fidelity Capital Markets.% BNP Paribas Securities.% Instinet.% BTIG.9% Jefferies & Co.8% Royal Bank Of Canada.8% GFI Group Inc..% Bloomberg Tradebook.% ConvergEx.% State Street Bank & Trust Co..% HSBC Bank.% Investment Technology Group.% JonesTrading.% Others.% Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

46 ETFs and ETPs listed in Europe At the end of Q, the European ETF industry had, ETFs with,89 listings and assets of $. 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 Q. April marks the th anniversary of ETFs in Europe. Assets In Q, assets have increased by 8.% from $8. Bn to $. Bn, which is greater than the.% increase in the MSCI Europe Index in dollar terms. This compares to a.% increase in assets over the same period in. $. Bn of net new assets went into European listed ETFs/ETPs in March. $. Bn net inflows went into equity ETFs/ETPs, of which $.8 Bn went into ETFs/ETPs providing European single country exposure while ETFs/ETPs tracking STOXX Europe sectors saw net outflows of $. Bn. Fixed income ETFs/ETPs saw net inflows of $. Bn, of which money market ETFs/ETPs saw net inflows of $. Bn while credit spread ETFs/ETPs experienced $. Bn net outflows. $.8 Bn net inflows went into commodity ETFs/ETPs, of which $. Bn went into ETFs/ETPs providing exposure to precious metals while ETFs/ETPs providing exposure to energy experienced $. Bn net outflows. $. Bn of net new assets went into European listed ETFs/ETPs in Q. $. Bn net inflows went into equity ETFs/ETPs, of which $. Bn went into ETFs/ETPs providing European single country exposure while ETFs/ETPs providing broad European exposure experienced net outflows of $. Bn. Fixed income ETFs/ETPs saw net inflows of $. Bn, of which $. Bn went into money market ETFs/ETPs while government bond ETFs/ETPs saw net outflows of $. Bn. $. 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 exposure to energy. In Q, $. Bn net new asset flows went into European listed ETFs/ETPs, less than the $. Bn net inflows over the same period in. $. Bn net new asset flows went into equity ETFs/ETPs, less than the $8. Bn net inflows over the same period in and $. Bn net inflows went into fixed income ETF/ETPs, less than the $. Bn net inflows over the same period in. Net inflows into commodity ETFs/ETPs were $. Bn in Q, greater than the $. Bn net inflows over the same period in.. 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 Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

47 ETFs and ETPs listed in Europe (continued) ETFs In Q, the number of ETFs have increased by.% with 8 new ETFs launched while 8 ETFs have merged. This compares to an 8.% increase over the same period in when 8 new ETFs launched. The top ETFs, out of,, account for.% of European ETF AUM, 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 Q, the ETF average daily trading volume in dollars increased by.8% to $. Bn compared to December. This compares to average daily trading volume of $. Bn in March. 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 February, reported European ETF turnover was.% of all European equity turnover, which was less than the.% in December. Exchanges In Q, 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, ETFs and $9. Bn respectively, reflecting.% market share; Lyxor Asset Management is second with products, assets of $. Bn, and.% market share; followed by db xtrackers with ETFs, assets of $. Bn, and.% market share at the end of Q. Of the $. Bn of net new assets in European listed ETFs in March, UBS Global Asset Management gathered the largest net inflows with $. Bn, followed by ishares with $. Bn net inflows, while Lyxor Asset Management had the largest net outflows with $. Bn. In Q, of the $. Bn net new assets into European listed ETFs, ishares gathered the largest net inflows with $. Bn net new assets, followed by UBS Global Asset Management with $.8 Bn net inflows, while Lyxor Asset Management had the largest net outflows with $. Bn in Q. Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, Federation of European Stock Exchanges (FESE).

48 ETFs and ETPs listed in Europe (continued) ETF providers (continued) The top three ETF providers, out of, account for 9.% of European ETF AUM. This compares to.9% out of providers at the end of Q. In Q, two new providers have entered the industry, launching their first ETFs, 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 $. Bn during January according to Lipper FMI. Additionally, there were other ETPs with,8 listings, and assets of $. Bn, from nine providers on eight exchanges. This compares to 8 ETPs with listings and assets of $. Bn, from six providers, at the end of Q. ETFs and ETPs Combined, there were, products with, listings and assets of $.9 Bn, from providers on exchanges in Europe. This compares to,8 products with, listings and assets of $9. Bn from 9 providers on 8 exchanges, at the end of Q.. 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 Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. 8

49 European ETF and ETP asset growth Assets $ Bn # products,, 8 Assets 8 9 Q ETF total $. $. $. $. $. $.9 $89. $8. $. $.9 $8. $. ETF equity $. $. $. $9. $. $9. $. $. $9. $9.8 $98. $. ETF fixed income $. $.9 $. $. $. $. $. $. $. ETF commodity $. $. $. $.9 $. $. $9.9 ETP total $. $. $. $.9 $.9 $. $. $. # ETFs 8 8,, # ETPs Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. 9

50 ETF providers in Europe: ranked by AUM Provider ishares # ETFs # total listings AUM $9. Q % total.% $. # planned Mar NNA $. Q NNA $. # ETFs % ETFs.% YTD change AUM $.9 % assets.% % market share.% Lyxor Asset Management $..% $. $. $..% $..%.% db xtrackers $..% $. $. $..% $..%.% Credit Suisse Asset Management 8 98 $..% $. $. $..% $.9.9%.% Zurich Cantonal Bank $..% $. $. $..% $.9.%.% UBS Global Asset Management 8 $9.9.% $. $. $.8 9.% $..%.9% Commerzbank 9 $9..% $. $. $..% $..%.% Amundi ETF 9 8 $9..% $. $. $..% $..%.% Source Markets $..% $. $. $..8% $..%.% ETFlab Investment $..% $. $. $..% $..%.% EasyETF 9 $..% $. $. $..% $..%.% Swiss & Global Asset Management $..% $. $. $..% $..9%.% XACT Fonder $..% $. $. $..% $..%.% RBS 89 $..% $. $. $..% $. 9.9%.% PowerShares 9 $..% $. $. $..% $..%.% BBVA Asset Management $..% $. $. $..% $. 9.%.% State Street Global Advisors $..% $. $. $..% $. 9.%.% HSBC/Hang Seng $.9.% $. $. $. 9 9.% $. 9.%.% ETF Securities $.9.% $. $. $..% $..%.% Marshall Wace LLP $..% $. $. $..% $..%.% DnB NOR Asset Management 8 $..% $. $. $..% $..9%.% Seligson & Co Fund Management $..% $. $. $..% $..%.% Finans Portfoy Yonetimi $..% $. $. $..% $..%.% JP Morgan Mansart Investments $..% $. $. $..% $..%.% Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. continued

51 ETF providers in Europe: ranked by AUM (continued) Provider PIMCO Source # ETFs # total listings AUM $. Q % total.% $. # planned Mar NNA $. Q NNA $. # ETFs % ETFs.% YTD change AUM % assets $..% % market share.% SEB $..% $. $. $..% $..%.% Alpha Asset Management $..% $. $. $..% $..%.% ThinkCapital $..% $. $. $..% $. 8.%.% NCB Investment Services $..% $. $. $..% $..%.% Carnegie Fonder $..% $. $. $..% $..%.% OTP Fund Management $..% $. $. $..% $..8%.% Is Investment $..% $. $. $..% $..%.% NBG Asset Management $..% $. $. $..% $..%.% Osmosis Investment Management $..% $. $. $..% $..%.% Troika Dialog Asset Management $..% $. $. $..% $..%.% Garanti Bank $..% $. $. $..% $..%.% Medvesek Pusnik AM $..% $. $. $..% $..%.% Bizim Menkul Degerler $..% $. $. $..% $..8%.% 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,,89 $..% $. 8 $. $..% $. 8.% Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

52 European ETF/ETP net new assets by type of exposure # ETFs /ETPs # Total listings Mar Assets YTD NNA Exposure Equity 8,9,9.,.,8.,.,.8,9. Europe,9,98.,.,.,.,8. 8,.8 Broad 8.,. (,.) (,8.),9. 8,9. Country,9.,.8,8.,99.,8.,8. Sectors.,. (89.),..9,8. STOXX sectors ,9. (,.9). (9.9),. Automobiles and parts 8.. (9.) (.9).. Banks.,88. (.) Basic resources.,. (98.9) (.) (.). Chemicals.8. (.) (.8) 8.. Construction and materials (.) Financial services (.) Food and beverage 8.. (.) (.) (9.). Healthcare (.). Industrial goods and services.. (.) (.).9. Insurance.. (.). (.) 9. Media. 8. (.9) (.). (.) Oil and gas 9., Personal and household goods.9. (9.) (8.). (.) Real estate (.8). Retail 8.. (.8) (.) 8. (.) Technology. 9. (.). (.) (.) Telecommunications (.).9 Travel and leisure (.) (.).. Utilities.. (89.) (.) 9.8. Other sectors 8.8, North America 8 8.,9..,.,9.8,. Broad 8., Canada United States 9.,9. 9.,88.,9.,. Asia Pacific 8.,8. (.).,9.,. Global 9.,8.8..,.,. Global (ex) NNA NNA 9 NNA continued Note: NNA Net New Assets. Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

53 European ETF/ETP net new assets by type of exposure (continued) # ETFs /ETPs # Total listings Mar Assets YTD NNA Exposure Emerging markets 8.8 9,. (.) (8.),.9,. Broad 9.,9. (.) (,.),.,8. Global emerging markets.8,. (.) (,8.9),9.,99. Frontier Sector Other 9.,88.. (.). 9. Regional.9,8. (9.).,. 8. Asia Pacific 9.,. (.) Eastern Europe 9 8., Middle East and Africa.9. (.). 8.. Latin America 8.8,. (9.) (9.)..8 Country 8.9,. 9.,.,89.8,. Brazil.,9..8 (.) Chile. 9.9 (9.8) 9..8 China 8.,. (8.8) (88.). 8.9 Egypt (9.) (.) Hungary. 9. (.) (.) (.) India 8.8,8. (9.) (.) 9.. Indonesia.... Kuwait Malaysia 8.. (.) (.8) 99.. Mexico Poland Russia 9 9.,99.., South Africa.. (.9) (.) 8.. South Korea 8., Taiwan. 8. (.9)... Thailand. (.) Turkey. 8.. (8.).. UAE (.). Vietnam NNA NNA 9 NNA continued Note: NNA Net New Assets. Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

54 European ETF/ETP net new assets by type of exposure (continued) # ETFs /ETPs # Total listings Mar Assets YTD NNA Exposure Fixed income 9 8.,.,.. 8,.9 9,. Active Broad/aggregate.. (.8) Corporate 8 8.,...,.8,.8 Covered 8.,9.8 (.) Credit spreads (.8) (8.) (.) (9.) Emerging.,. (.) (8.),.. Government 9. 8,8.8. (,.),9.,98. High yield Inflation., (.),.8 Money market 9. 8,99. 9.,. (99.8) (,8.) Mortgage.,. (.) (.) (.) 9. Commodities,.,8..,9. 9,9.,. Broad 8 8.,..,.,.,98.9 Alternative.. (.9).8 Agriculture.,9. (.8). (.),. Energy.,8. (8.)..,8. Industrial metals 8.,. (8.) 9... Livestock. 9. (.9).. 9. Precious metals. 9,..9 9.,.,. Currency (.) (.). 9. Alternative 9.9, , Mixed Total,,,.,9.,.,.,.,88. NNA NNA 9 NNA Note: NNA Net New Assets. Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

55 STOXX Sector ETF net flows: week ending April The week ending April saw $. Mn net outflows from STOXX Europe sector ETFs. The largest sector ETF net outflows last week were in insurance with $. Mn followed by banks with $. Mn net outflows while basic resources experienced net inflows of $. Mn. YTD, STOXX Europe sector ETFs have seen $8. Mn net inflows. Banks has seen the largest net inflows with $8. Mn, followed by oil and gas with $. Mn net inflows while industrial goods and services experienced the largest net outflows with $.8 Mn. ETF day Sector Ticker Futures Index $ total return performance open ETF AUM # stocks % weight Weekly Rank YTD Rank interest Apr YTD % change Weekly ETF net flows MTD ETF net flows YTD ETF net flows Automobiles and parts SXAR.%.%.%...%.... Banks SXR.%.% 9.%.,88..% Basic resources SXPR.%.%.%.,..% Chemicals SXR.%.% 8.%...%.... Construction and materials SXOR.8%.9% 8.%.9 8..% Financial services SXFR.%.% 9.%.. 9.%.... Food and beverage SXR 8.9%.%.% 9...%..9.. Healthcare SXDR 9.%.%.% % Industrial goods and services SXNR 9.%.%.% %....8 Insurance SXIR.8%.8% 9 9.%. 8..% Media SXMR.%.% 8.9%.. 8.9%.... Oil and gas SXER 9.%.%.% 8.,9..%.... Personal and household goods SXQR 8.%.%.%...9% Real estate SX8R.%.9%.%. 88..% Retail SXRR.%.% 8.% % Technology SX8R.%.%.% %.... Telecommunications SXKR.%.%.%. 9..% Travel and leisure SXTR.%.%.% %.... Utilities SXR.%.% 9.% 9...% Total.%.% 9.%,8.,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 April. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

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

57 European leveraged and inverse ETF/ETP net new assets by type of exposure # ETFs /ETPs # total listings Mar Assets YTD NNA Exposure Leveraged 88.,8. 8. (9.) 8.,.8 Equity.,88.. (.). 9. North America.8. (.).8.. Europe.,..9 (.).8. Emerging markets Fixed income... Commodities 8 8.,. (.9)... Currency Inverse.9, ,.8 Equity 9 9.,....,. North America Europe., (.),. Asia Pacific.. (.) Emerging markets.... Fixed income 9 8., Commodities Currency (.). 9.. Alternative 8. (8.8).9 Leveraged inverse 8.,9. (.) Equity.,. (.8).. 9. North America Europe.,98. (9.).. 9. Emerging markets Fixed income Commodities.8. Currency Total 8 8.,8...,.,99.9 NNA NNA 9 NNA Note: NNA Net New Assets. Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

58 Types of ETF exposure in Europe: ranked by AUM ETFs should be viewed as a tool for both active and passive managers. Type of exposure Equity total # ETFs $9. Q AUM % total 8.% $. # ETFs 9 YTD change AUM $. % AUM 8.% Country exposure Europe Emerging markets Regional Exposure Eurozone Country exposure United States International Regional exposure Europe Global exposure European sector exposure Style Eurozone sector exposure sector exposure Fixed income Commodities Inverse Alternative $. $9. $. $. $8. $. $. $. $. $.8 $. $9. $9.8 $.9 $..%.8%.%.9%.%.%.%.8%.%.9%.% 9.% 9.%.9%.% $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. 8 $. $. $. $. $. $. $.9 $. $. $. $. $. $. $. $..9%.8%.8%.%.%.%.8%.%.%.%.9%.%.%.%.% Fixed income 9.% Country exposure Europe equity.% Emerging markets equity.8% Regional Exposure Eurozone equity.% Commodities 9.% Country exposure United States equity.9% International equity.% Regional exposure Europe equity.% Global exposure equity.% European sector exposure equity.8% Style equity.% Inverse.9% Eurozone sector exposure equity.9% Alternative.% Leveraged.% Leveraged inverse.% Currency.% sector exposure equity.% Mixed (equity & fixed income).% Leveraged $..% $. $. 8.% Leveraged inverse $..% $. $..% Currency $..% $. $..% Mixed (equity and fixed income) $..% $. $..% Total, $..% $. $. 8.% Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. 8

59 Index providers in Europe: ranked by AUM Q YTD change Index provider # ETFs AUM % total # ETFs AUM % AUM MSCI $..% $.9 $..% STOXX Deutsche Boerse FTSE Markit S&P EuroMTS Barclays Capital SIX Swiss Exchange NYSE Euronext Dow Jones NASDAQ OMX Hang Seng Topix Russell Nikkei Structured Solutions $9.8 $. $.9 $.8 $.8 $9.9 $8.9 $8.8 $8. $.8 $. $.8 $.9 $. $. $..%.%.%.%.%.%.9%.9%.8%.9%.%.%.%.%.%.% $. $.8 $. $. $. $. $. $. $. $. $. $. $. $. $. $. $. $.8 $. $. $. $. $.9 $. $. $. $. $. $. $. $. $..8% 8.%.%.8% 9.%.%.%.%.%.9%.%.%.% 88.%.9% 8.8% MSCI.% STOXX.% Deutsche Boerse.% FTSE.% Markit.% S&P.% EuroMTS.% Barclays Capital.9% SIX Swiss Exchange.9% NYSE Euronext.8% Dow Jones.9% NASDAQ OMX.% Hang Seng.% Topix.% Russell.% Nikkei.% Structured Solutions.% SNetwork % Intellidex % Other.8% SNetwork $..% $. $..8% Intellidex $..% $. $..% Other $..8% $. 8 $..% Total, $..% $. $. 8.% Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. 9

60 Top ETFs in Europe Ranked by Assets Under Management (AUM) Ranked by $ Average Daily Trading Volumes () ETF Country listed Bloomberg ticker AUM ( shares) ETF Country listed Bloomberg ticker ( shares) AUM ishares S&P UK IA LN $9,., $. ishares DAX (DE) Germany DAXEX GY $8.,98 $8,. ishares DAX (DE) Germany DAXEX GY $8,.,98 $8. ishares FTSE UK ISF LN $.8,98 $,9. ZKB Gold ETF (CHF) Switzerland ZGLD SW $,88. $9.9 db xtrackers DAX ETF Germany XDAX GY $.,8 $,. Lyxor ETF Euro STOXX France MSE FP $,9., $.8 Lyxor ETF Euro STOXX France MSE FP $.8, $,9. ishares MSCI Emerging Markets UK IEEM LN $,.,8 $. ishares S&P UK IA LN $., $9,. ishares FTSE UK ISF LN $,9.,98 $.8 Lyxor ETF CAC France CAC FP $.,99 $,9. ishares EURO STOXX (DE) Germany SXEEX GY $,.,9 $8. Lyxor ETF Leverage CAC France LVC FP $9., $8. db xtrackers DAX ETF Germany XDAX GY $,.,8 $. Lyxor ETF XBEAR CAC France BX FP $9.,9 $. db xtrackers MSCI Emerging Market TRN Germany XMEM GY $,8.8,8 $8. db xtrackers Euro Stoxx ETF Germany XESX GY $8.,999 $,88. ishares Markit iboxx Euro Corporate Bond Germany IBCS GY $,.9 $. db xtrackers ShortDAX Daily ETF Germany XSDX GY $8., $. Lyxor ETF CAC France CAC FP $,9.,99 $. db xtrackers II EONIA TR Index ETF Germany XEON GY $8. 9 $,. ishares EURO STOXX Germany EUN GY $,9.9,988 $8. ishares EURO STOXX Germany EUN GY $8.,988 $,9.9 ishares MSCI World UK IWRD LN $,., $.8 ishares EURO STOXX (DE) Germany SXEEX GY $8.,9 $,. CS ETF (CH) on SMI Switzerland CSSMI SW $,. 9 $. db xtrackers MSCI Emerging Market TRN Germany XMEM GY $8.,8 $,8.8 db xtrackers Euro Stoxx ETF Germany XESX GY $,88.,999 $8. Lyxor ETF Euro Cash (EONIA) France CSH FP $. 8 $,8.9 ZKB Silver ETF (CHF) Switzerland ZSIL SW $,88. $.8 ishares Barclays Capital Gov Bond UK IBGL LN $. $. db xtrackers II EONIA TR Index ETF Germany XEON GY $,. 9 $8. ishares MSCI Emerging Markets UK IEEM LN $.,8 $,. db xtrackers MSCI World TRN ETF Germany XMWO GY $,99. 9 $. ishares MSCI Japan UK IJPN LN $., $,8. db xtrackers MSCI A TRN ETF Germany XM GY $,. $.9 Lyxor ETF DAX Germany LYXDAX GY $. 8 $,8. Lyxor ETF MSCI India France INR FP $,.8,9 $.9 Lyxor ETF Xbear FTSE MIB Italy XBRMIB IM $., $8. Note: AUM reflects total fund AUM. reflects total of all exchange listings, share classes and OTC volumes. NNA reflects the total fund NNA. Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

61 Top ETFs in Europe (continued) Ranked by largest change in AUM Ranked by largest YTD net inflows ETF Bloomberg ticker Q NNA AUM Q AUM Dec Change ETF Bloomberg ticker Q NNA AUM ishares DAX (DE) DAXEX GY $,. $8,. $,9. $,. ishares DAX (DE) DAXEX GY $,. $8,. $8. db xtrackers DAX ETF XDAX GY $,. $,. $,9. $,8. db xtrackers DAX ETF XDAX GY $,. $,. $. ishares S&P IA LN $,. $9,. $,9.8 $,.9 ishares S&P IA LN $,. $9,. $. db xtrackers MSCI Emerging Market TRN XMEM GY $,. $,8.8 $,. $,9. UBS ETF FTSE SF FGBAS SW $8. $88. $. Lyxor ETF Euro STOXX MSE FP $,9. $,9. $8,8. $,98.9 Lyxor ETF Russia (DJ RusIndex Titans ) R FP $. $,99. $. UBS ETF FTSE SF FGBAS SW $8. $88. $. $8.9 RDX Source ETF RDXS LN $. $9. $. db xtrackers DJ STOXX XSX GY $8. $. $,. $. db xtrackers II EONIA Total Return Index ETF XEON GY $. $,. $8. Lyxor ETF Russia (DJ RusIndex Titans ) R FP $. $,99. $,.9 $. MAN GLG Europe Plus Source ETF MPFE GY $8. $9.9 $. ETFlab EURO STOXX ETFSXE GY $88. $,9. $,. $. AMUNDI ETF Dow Jones EURO STOXX C FP $. $,. $. db xtrackers II EONIA Total Return XEON GY $. $,. $,9. $8. STOXX Source ETF SDJ GY $. $.9 $8.9 RDX Source ETF RDXS LN $. $9. $. $9.9 ishares Markit iboxx Euro High Yield Bond IHYG LN $. $8.9 $. ZKB Silver ETF (CHF) ZSIL SW $. $,88. $,8.8 $9. CS ETF (IE) on MSCI EMU CSEMU SW $. $,. $.9 UBSETF MSCI A ACHA SW $.9 $,. $,. $. UBSETF MSCI Japan A JPNCHA SW $. $,. $. AMUNDI Dow Jones EURO STOXX C FP $. $,. $. $9. Lyxor ETF Euro Cash (EONIA) CSH FP $.8 $,8.9 $. Lyxor ETF Euro Cash (EONIA) CS ETF (IE) on MSCI EMU Lyxor ETF Commodities CRB MAN GLG Europe Plus Source ETF ishares STOXX Europe (DE) Lyxor ETF MSCI Emerging Markets CSH FP CSEMU SW CRB FP MPFE GY SXXPIEX GY LEM FP $.8 $. $9. $8. $. $. $,8.9 $,. $,. $9.9 $,88. $,9. $,9. $8. $,. $,9.9 $,8. $9. $. $.9 $9.9 $9. $8. UBSETF MSCI A ishares STOXX Europe (DE) UBSETF MSCI Pacific (ex Japan) A Lyxor ETF Commodities CRB ishares FTSE UK Dividend Plus Lyxor ETF DAX ACHA SW SXXPIEX GY PACA SW CRB FP IUKD LN LYXDAX GY $.9 $. $99. $9. $8. $8. $,. $,88. $. $,. $9. $,8. $9. $8. $.8 $. $8. $. Note: AUM reflects total fund AUM. reflects total of all exchange listings, share classes and OTC volumes. NNA reflects the total fund NNA. Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

62 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 Mar 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 Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, Federation of European Stock Exchanges (FESE).

63 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 Openend mutual funds Passive/index European equity Passive/index international equity Passive/index fixed income Active/nonindex European equity Active/nonindex international equity Active/nonindex fixed income Average TER (bps) Source: Strategic Insight Simfund Global, Global ETF Research and Implementation Strategy Team, BlackRock, data as at end January.

64 ETP providers in Europe: ranked by assets Provider # ETPs # total listings Assets Q % total # planned Mar NNA Q NNA # ETPs % ETPs YTD change Assets % assets % market share ETF Securities 8 $.9.% $. $. $..8% $..%.% Societe Generale $..% $. $. $..% $..%.% UBS AG 8 8 $.8.% $. $. $..% $..%.9% db ETC 9 $..% $. $. $..% $. 9.9%.% Source Markets 8 $..8% $. $. $..% $..%.% RBS 8 $..% $. $. $..% $..%.% Lyxor 8 $..% $. $. $..% $..%.% Barclays (ipath) $..% $. $. $..% $..%.% Standard Commodities $..% $. $. $..% $..%.% ishares $. $. $. State Street Global Advisors $. $. $. Merrill Lynch $. $. $. Credit Suisse GAM Holding Total,8 $..% $. $. $..% $..% Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

65 Top ETF/ETP providers in Europe: ranked by assets Provider # ETFs/ ETPs # total listings Q Assets % total # planned Mar NNA Q NNA # ETFs/ ETPs % ETFs/ ETPs YTD change Assets % assets % market share ishares $9..% $. $. $..% $.9.%.% Lyxor Asset Management $..% $. $. $..% $..%.9% db xtrackers/db ETC 88 9 $..% $. $. $.8.% $..%.% ETF Securities 8 8 $.8.% $. $. $..9% $.8.8%.% Credit Suisse Asset Management 8 98 $..9% $. $. $..% $.9.9%.% Zurich Cantonal Bank $..% $. $. $..% $.9.%.% UBS Global Asset Management 8 $9.9.9% $. $. $.8 9.% $..%.8% Commerzbank 9 $9..% $. $. $..% $..%.% Amundi ETF 9 8 $9..% $. $. $..% $..%.% Source Markets 8 $.8.% $. $. $..% $..%.% ETFlab Investment $..9% $. $. $..% $..%.% EasyETF 9 $..8% $. $. $..% $..%.% Swiss & Global Asset Management $..% $. $. $..% $..9%.% Societe Generale $..% $. $. $..% $..%.% UBS AG 8 8 $.8.% $. $. $..% $..%.% XACT Fonder $..9% $. $. $..% $..%.% RBS $.9.% $. $. $..9% $. 8.%.% PowerShares 9 $..% $. $. $..% $..%.% BBVA Asset Management $..% $. $. $..% $. 9.%.% State Street Global Advisors $..% $. $. $..% $. 9.%.% HSBC/Hang Seng $.9.% $. $. $. 9 9.% $. 9.%.% Marshall Wace LLP $..% $. $. $..% $..%.% DnB NOR Asset Management 8 $..% $. $. $..% $..9%.% Seligson & Co Fund Management $..% $. $. $..% $..%.% Lyxor 8 $..% $. $. $..% $..%.% Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

66 Top brokers trading European listed ETFs/ETPs: ranked by traded volume Broker Deutsche Bank Securities Susquehanna Goldman Sachs Morgan Stanley Societe Generale CA Cheuvreux Labranche Structured Products Credit Suisse UniCredit Merrill Lynch JPMorgan Chase Bank Citigroup Global Markets Winterflood Securities Peel Hunt Knight Securities UBS Nomura International RBS Macquarie Group HSBC Bank Enskilda Securities Exane Barclays Capital Carnegie Newedge Group Others Total # broker reported trades,,,9,,9,9, 9,8,8 9,898,89,,8 9,,99, 9 89,,8 Mar Broker advertised volume $8, $,9 $,99 $, $,9 $,8 $, $,9 $,8 $,8 $, $, $,98 $, $9 $8 $9 $ $ $ $ $ $9 $ $ $,88 $,8 % broker advertised market share.8%.% 8.8%.%.%.%.%.%.%.9%.%.%.9%.%.%.%.%.%.%.9%.9%.%.%.%.%.%.% Monthly change # broker reported trades (%) Broker advertised volume (%) % broker advertised market share.% 9.8%.9% N/A N/A N/A.% 8.%.%.9%.9%.% 98.%.%.%.%.%.%.%.%.% 9.%.%.%.%.%.%.9%.%.% 9.% 8.%.9% 9.% 9.8%.%.%.%.%.%.%.%.%.%.% 98.%.%.%.% 9.9%.%.% 9.%.%.%.%.% 9.8%.%.%.% 8.8%.%.%.%.%.% 8.%.%.9% 8.%.% 98.% 8.%.% 8.%.%.%.% 8.% Deutsche Bank Securities.8% Susquehanna.% Goldman Sachs 8.8% Morgan Stanley.% Societe Generale.% CA Cheuvreux.% Labranche Structured Products.% Credit Suisse.% UniCredit.% Merrill Lynch.9% JPMorgan Chase Bank.% Citigroup Global Markets.% Winterflood Securities.9% Peel Hunt.% Knight Securities.% UBS.% Nomura International.% RBS.% Macquarie Group.% HSBC Bank.9% Enskilda Securities.9% Exane.% Barclays Capital.% Carnegie.% Newedge Group.% Others.% Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

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

68 ETFs and ETPs listed in Asia Pacific (exjapan) (continued) Mutual funds ETPs During January, according to Strategic Insight, net sales of mutual funds (excluding ETFs) were positive $. Bn in Asia Pacific (exjapan), while net sales of ETFs domiciled in Asia Pacific (exjapan) were positive $. Bn. Additionally, there were other ETPs with 8 listings and assets of $. Bn from providers on five exchanges. This compares to ETPs with listings and assets of $.9 Bn from nine providers on five exchanges at the end of Q.. 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 Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg 8

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

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

71 ETF providers in Asia Pacific (exjapan): ranked by AUM (continued) Provider # ETFs # total listings AUM Q % total # planned # ETFs % ETFs YTD change AUM % AUM % market share Smartshares Limited $..% $..% $..%.% Vanguard $..% $..% $..%.% GTJA Allianz $..% $..% $..%.% ivcap Management $..% $..% $..%.% AmInvestment Management $..% $..% $..%.% Fortune SGAM Fund Management $..% $..% $..%.% CIMBPrincipal Asset Management $..% $..% $..%.% Russell Investments $..% $..% $..%.% AMP $..% $..% $..%.% BetaShares Capital $..% $..% $..%.% Fubon Asset Management $..% $..% $..%.% Hanwha Investment Trust Management $..% $..% $. 9.8%.% Yurie Asset Management $..% $..% $..%.% HFT Investment Management $..% $..% $..%.% Ping An $..% $..% $..9%.% One Asset Management $..% $..% $..%.% Motilal Oswal Asset Management $..% $..% $..%.% Penghua Fund Management $..% $..% $..%.% CCB Principal Asset Management $..% $..% $..%.% UOB Asset Management $..% $..% $..%.% Fullgoal Fund Management $..% $..% $..%.% Sensible Asset Management $..% $..% $..%.% Daishin Investment Trust Management $..% $..% $..%.% Prudential Asset Management $..% $..% $. 8.8%.% continued Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

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

73 Top ETFs in Asia Pacific (exjapan) Ranked by Assets Under Management (AUM) Ranked by $ Average Daily Trading Volumes () ETF Country listed Bloomberg ticker AUM ( shares) ETF Country listed Bloomberg ticker ( shares) AUM ishares FTSE A China Index ETF* Hong Kong 8 HK $,.8 88, $. ishares FTSE A China Index ETF* Hong Kong 8 HK $. 88, $,.8 Tracker Fund of Hong Kong (TraHK) Hong Kong 8 HK $,. 9,9 $. China AMC SSE China CH $.9 9, $,8. Hang Seng Index ETF Hong Kong 8 HK $,99. $. Samsung KODEX Leverage ETF South Korea KS $9.,9 $.8 China AMC SSE China CH $,8. 9, $.9 E Fund SZSE China 99 CH $8.,8 $,8. Hang Seng HShare Index ETF Hong Kong 88 HK $,899., $. Tracker Fund of Hong Kong (TraHK) Hong Kong 8 HK $. 9,9 $,. E Fund SZSE China 99 CH $,8.,8 $8. Samsung Kodex ETF South Korea 9 KS $9.,9 $,8. SPDR S&P/ASX Fund Australia STW AU $,. $. GTJA Allianz SSE Commodity Equity Index China CH $. 9, $8. ABF Pan Asia Bond Index Fund Hong Kong 8 HK $,8. $. SHANGHAI SSE8 ETF China 8 CH $.8, $9. Samsung Kodex ETF South Korea 9 KS $,8.,9 $9. db xtrackers CSI Index ETF* Hong Kong 9 HK $., $. Polaris Taiwan Top Tracker Taiwan TT $,., $. Hang Seng HShare Index ETF Hong Kong 88 HK $., $,899. ishares MSCI India ETF Singapore INDIA SP $,., $9. Samsung KODEX Inverse ETF South Korea 8 KS $.9,88 $.9 World Index Shares CSI China Tracker* Hong Kong 8 HK $,8.8, $. Polaris Taiwan Top Tracker Taiwan TT $., $,. SHANGHAI SSE8 ETF China 8 CH $9., $.8 ishares MSCI India ETF Singapore INDIA SP $9., $,. Bank Of Communications Schroder SSE8 China CH $., $. China SME ETF China 99 CH $., $9. China SME ETF China 99 CH $9., $. SPDR S&P/ASX Fund Australia STW AU $. $,. db xtrackers CSI Index ETF Singapore XCSI SP $. $. SSE Component Stock Index ETF China 99 CH $.,9 $. SSE Component Stock Index ETF China 99 CH $.,9 $. Mirae Asset MAPS TIGER ETF South Korea KS $. $. W.I.S.E. Polaris CSI Investment Trust Taiwan TT $9.8 8,9 $. W.I.S.E. Polaris CSI Investment Trust Taiwan TT $. 8,9 $9.8 Samsung KODEX Samsung Group ETF South Korea 8 KS $89. $. HuataiPineBridge Dividend ETF China 88 CH $.,9 $. Samsung KODEX Leverage ETF South Korea KS $.8,9 $9. World Index Shares CSI China Tracker* Hong Kong 8 HK $., $,8.8 * 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 Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

74 ETFs and ETPs listed in Japan At the end of Q, the Japanese ETF industry had 8 ETFs with 88 listings and assets of $9. Bn, from eight providers on three exchanges. This compares to ETFs with listings and assets of $. Bn from six providers on two exchanges, at the end of Q. There are 8 ETFs which have filed notifications in Japan. Assets In Q, assets have decreased by 8.% from $. Bn to $9. Bn, greater than the.% decrease in the MSCI Japan Index in dollar terms. This compares to a.9% increase in assets over the same period in. ETFs In Q, the number of ETFs increased by.% with four new ETFs launched. This compares to a.9% increase over the same period in, when two new ETFs launched. Trading volume In Q, 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 March. 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 8.% market share, at the end of Q. Mutual funds In Japan, net sales of mutual funds (excluding ETFs) were positive $.9 Bn, while net sales of ETFs domiciled in Japan were negative $. Bn during January 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 cross listings and assets of $. Bn from three providers on two exchanges, at the end of Q.. 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 Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

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

76 ETF providers in Japan: ranked by AUM Q YTD change Provider Nomura Asset Management # ETFs # total listings AUM $. % total.% $. # planned # ETFs % ETFs.% AUM $. % AUM.% % market share.% Nikko Asset Management $..% $..% $..%.% Daiwa Asset Management $. 8.% $..% $..%.8% Mitsubishi UFJ Asset Management $..% $..% $..%.% ishares $..% $..% $. 8.%.% Simplex Asset Management $..% $..% $..%.% Kokusai Asset Management $..% $..% $..%.% EasyETF Samsung Investment Trust Management State Street Global Advisors Total 8 88 $9..% $..% $. 8.% Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

77 Top ETFs in Japan Ranked by Assets Under Management (AUM) Ranked by $ Average Daily Trading Volumes () ETF Bloomberg AUM ticker ( shares) ETF Bloomberg ticker ( shares) AUM TOPIX ETF JP $,.,9 $8.8 NIKKEI ETF JP $. 89 $,99. NIKKEI ETF JP $, $. Listed Index Fund JP $. $,8. Listed Index Fund TOPIX 8 JP $,.9 98 $. TOPIX ETF JP $8.8,9 $,. Listed Index Fund JP $,8. $. Daiwa ETF NIKKEI JP $.8 $,. Daiwa ETF NIKKEI JP $,. $.8 Daiwa ETF TOPIX JP $. $,. Daiwa ETF TOPIX JP $,. $. Listed Index Fund TOPIX 8 JP $. 98 $,.9 MAXIS S&P Mitsubishi Group ETF JP $8.9 8 $.8 MAXIS NIKKEI ETF JP $. $.9 MAXIS NIKKEI ETF JP $.9 $. TOPIX Banks Exchange Traded Fund JP $.,8 $. SSE Index Linked ETF 9 JP $. 9 $. SSE Index Linked ETF 9 JP $. 9 $. TOPIX Banks Exchange Traded Fund JP $.,8 $. MAXIS TOPIX ETF 8 JP $.9 8 $88. MAXIS TOPIX ETF 8 JP $88. 8 $.9 NEXT FUNDS Tokyo Stock Exchange REIT Index JP $. $9.9 MAXIS TOPIX Core ETF JP $8. $. ishares Nikkei 9 JP $. 8 $.8 TOPIX Core Exchange Traded Fund JP $. $. NEXT FUNDS Ibovespa Linked ETF JP $.9 $. NEXT FUNDS Ibovespa Linked ETF JP $. $.9 MAXIS S&P Mitsubishi Group ETF JP $.8 8 $8.9 NEXT FUNDS Tokyo Stock Exchange REIT Index ETF JP $9.9 $. Kokusai S&P VIX ShortTerm Futures Index ETF JP $.8 $. Listed Index Fund China A Share (Panda) CSI JP $8. $. Listed Index Fund JREIT JP $.8 $. Daiwa ETF TOPIX Core JP $8. $. NEXT FUNDS TOPIX Construction & Materials 9 JP $. $. Nikkei Stock Index Listed Fund 9 JP $. $. Listed Index Fund China A Share (Panda) CSI JP $. $8. Listed Index Fund International Emerging Countries Equity 8 JP $9. $. Simplex JASDAQ TOP Exchange Traded Fund JP $. $. Listed Index Fund JREIT BiMonthly Dividend Payment Type JP $. $.8 NEXT FUNDS India S&P CNX Nifty Linked ETF 8 JP $. 8 $. Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

78 ETFs and ETPs listed in Latin America At the end of Q, 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 Q. There were 9 ETFs cross listed in Mexico, ETFs registered for sale in Chile and 9 ETFs registered for sale in Peru, at the end of Q. Assets ETFs In Q, assets have increased by.% from $. Bn to $. Bn, greater than the.% increase in the MSCI EM Latin America Index in dollar terms. This compares to a.% decrease in assets over the same period in. In Q, the number of listings have increased by.%, with new ETFs cross listed in Latin America. This compares to a.% increase over the same period in, with three new primary listings and new cross listings. Trading volume In Q, 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 March. ETF providers ETPs ishares is the largest ETF provider in terms of assets with $. Bn, in 8 ETFs, reflecting.8% market share; BBVA Asset Management is second with $. Bn in five ETFs and.% market share, at the end of Q. Additionally, there were other ETPs cross listed on two exchanges in Latin America at the end of Q. This compares to nine other ETPs cross listed on one exchange, at the end of Q.. 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 Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. 8

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

80 ETF providers in Latin America: ranked by AUM 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 Q AUM % total $..8% $..% $..% $..% $..% $9. $. $.8 $. $. $. $. $. $.8 $. $8. $. $. $.8 $. # planned # ETFs % ETFs.%.%.%.%.% YTD change AUM % AUM $..% $..% $..9% $..% $..% % market share.8%.%.%.% Top ETFs in Latin America Ranked by Assets Under Management (AUM) Ranked by $ Average Daily Trading Volumes () 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 AUM ticker NAFTRAC MM $,8. PIBB BZ $,9. BRTRAC MM $,. ILCTRAC MM $. BOVA BZ $8. MEXTRAC MM $. CORPTRC MM $. UDITRAC MM IMCTRAC MM CETETRC MM $.8 $. $. ( shares),999, 8 8 $.9 $.8 $. $. $. $. $. $. $. $. ishares NAFTRAC ishares Ibovespa Fundo de Índice ishares MSCI Japan Index Fund BRTRAC PowerShares QQQ Trust ishares MSCI Brazil Index Fund ishares Barclays Short Treasury ishares MSCI Canada Index Fund SPDR Dow Jones Industrial Average ETF ishares Barclays Year Treasury Country listed Mexico Brazil Mexico Mexico Mexico Mexico Mexico Mexico Mexico Mexico Bloomberg ticker NAFTRAC MM BOVA BZ EWJ* MM BRTRAC MM QQQ* MM EWZ* MM SHV* MM EWC* MM DIA* MM SHY* MM. For ETFs cross listed into Latin America from the, AUM reflects total fund AUM (which is not counted in previous totals). reflects dollar volume of the specific exchange listing shown. Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. ETF $.9 $. $.9 $. $.8 $8. $.8 $. $.8 $. ( shares),999,, AUM $,8. $8. $,. $,. $,9. $,. $,88. $,8. $9,9. $,8. 8

81 ETFs and ETPs listed in Canada At the end of Q, the Canadian ETF industry had ETFs and assets of $.8 Bn, from four providers on one exchange. This compares to ETFs and assets of $.8 Bn from four providers on one exchange, at the end of Q. 9 March marked the st anniversary of the first ETF globally, which listed in Canada in 99. Assets ETFs In Q, assets have increased by.%, from $8. Bn to $.8 Bn, greater than the.% increase in the MSCI Canada Index in dollar terms. This compares to a.9% increase in assets over the same period in. In March, net inflows into Canadian domiciled ETFs totalled $. Bn. Equity ETFs saw $.9 Bn net inflows, of which $.9 Bn went into ETFs providing exposure to Canadian equities, while fixed income ETFs saw $. Bn net inflows. In Q, the number of ETFs have increased by 8.9% with new ETFs launched. This compares to a.% increase over the same period in, when new ETFs launched. Trading volume In Q, 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 March. Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. 8

82 ETFs and ETPs listed in Canada (continued) ETF providers ETPs ishares is the largest ETF provider in terms of assets with $. Bn in 8 ETFs, reflecting.% market share; Claymore Investments is second with ETFs, assets of $. Bn, and.% market share; followed by BetaPro Management with ETFs, assets of $.9 Bn and.9% market share, at the end of Q. Of the $. Bn net inflows into Canadian listed ETFs in March, ishares saw net inflows of $.8 Bn while BetaPro Management experienced net outflows of $. Bn. Additionally, there were other ETPs cross listed on one exchange in Canada at the end of Q. This compares to nine other ETPs cross listed on one exchange, at the end of Q.. 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 Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. 8

83 Canada ETF asset growth Assets # products 8 8 Assets Q ETF assets $. $. $. $. $. $. $. $. $8. $. $8. $8. $.8 # ETFs Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. 8

84 ETF providers in Canada: ranked by AUM Provider ishares # ETFs 8 AUM $. Q % total.% $. # planned 8 Mar NNA $.8 Q NNA $. # ETFs % ETFs.% YTD change AUM $. % assets.% % market share.% Claymore Investments $..% $. $. $..% $..8%.% BetaPro Management $.9.9% $. $. $..% $..%.% BMO Asset Management $..% $. $. $..% $..%.% First Asset Management Total $.8.% $. $. $. 8.9% $..% Top ETFs in Canada Ranked by Assets Under Management (AUM) Ranked by $ Average Daily Trading Volumes () ETF Bloomberg ticker AUM ( shares) ETF Bloomberg ticker ( shares) AUM 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 $,. 8 $. Horizons BetaPro NYMEX Natural Gas Bull Plus HNU CN $.9, $88. ishares S&P Index Fund (CADHedged) XSP CN $,. $. Horizons BetaPro NYMEX Natural Gas Bear Plus HND CN $.,9 $. ishares DEX Universe Bond Index Fund XBB CN $,.9 $8. Horizons BetaPro NYMEX Crude Oil Bull Plus HOU CN $.,8 $9. ishares S&P/TSX Capped Composite Index Fund XIC CN $,8. $. Horizons BetaPro NYMEX Crude Oil Bear Plus HOD CN $.9,9 $. ishares DEX All Corporate Bond Index Fund XCB CN $,. 8 $.8 Horizons BetaPro S&P/TSX Bull Plus Fund HXU CN $.,8 $89. ishares S&P/TSX Capped REIT Index Fund XRE CN $, $. ishares S&P/TSX Capped Energy Index Fund XEG CN $., $,88. ishares S&P/TSX Global Gold Index Fund XGD CN $,8.9 $9.8 Horizons BetaPro S&P/TSX Global Gold Bull Plus HGU CN $.,8 $8.9 ishares S&P/TSX Capped Energy Index Fund XEG CN $,88., $. ishares S&P/TSX Global Gold Index Fund XGD CN $9.8 $,8.9 ishares MSCI EAFE Index Fund (CADHedged) XIN CN $,. 8 $. Horizons BetaPro S&P/TSX Bear Plus Fund HXD CN $8.9, $.8 Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. 8

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

86 ETF providers in Middle East and Africa: ranked by AUM Q YTD change 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 AUM $. $. $. $. $. $. $. $. $. $. $. % total 8.% 9.%.%.%.%.9%.%.%.%.%.% $.8 $. $.9 $. $. $. $. $. $. $. $9.9 # planned # ETFs % ETFs.%.%.%.%.%.%.%.%.%.%.% AUM $. $. $. $. $. $. $. $. $. $. $. % AUM.% 8.%.% 9.%.%.%.8%.%.%.%.9% % market share.%.%.%.8%.%.%.%.%.%.% Top ETFs in Middle East and Africa Ranked by Assets Under Management (AUM) Ranked by $ Average Daily Trading Volumes () ETF Country listed Bloomberg ticker AUM ( shares) ETF Country listed Bloomberg ticker ( shares) AUM SATRIX Satrix Dividend Plus South Africa South Africa STX SJ STXDIV SJ $,. $.,, $.8 $. SATRIX Bips Top South Africa South Africa STX SJ BIPS SJ $.8 $., $,. $. SATRIX Financials South Africa STXFIN SJ $. $. SATRIX RESI South Africa STXRES SJ $.8 9 $8. SATRIX Industrials NewRand ETF South Africa South Africa STXIND SJ NRD SJ $9. $9. $. $. SATRIX RAFI Total Return Satrix Dividend Plus South Africa South Africa STXRAF SJ STXDIV SJ $. $. 8, $88. $. STANLIB Top Fund South Africa STAN SJ $9. $. SATRIX Financials South Africa STXFIN SJ $. $. Bips Government Inflation Linked Bond Fund South Africa BIPINF SJ $9. 9 $. db xtrackers MSCI Japan South Africa DBXJP SJ $. $.9 SATRIX RAFI Total Return SATRIX SWIX TOP South Africa South Africa STXRAF SJ STXSWX SJ $88. $8. 8 $. $. Bips Government Inflation Linked Bond Fund SATRIX SWIX TOP South Africa South Africa BIPINF SJ STXSWX SJ $. $. 9 $9. $8. SATRIX RESI South Africa STXRES SJ $8. 9 $.8 Falcom Saudi Equity ETF Saudi Arabia FALCOM AB $. $8. Note: Data as at end Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg. 8

87 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

88 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. 88

89 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,9 ETF listings,9 other ETPs with,8 ETP listings Total:, products with, 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 Q. Source: Global ETF Research and Implementation Strategy Team, BlackRock. 89

90 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. 9

91 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 9

92 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: Strategic Insight Simfund Global, Global ETF Research and Implementation Strategy Team, BlackRock, data as at end January. 9

93 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

94 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

95 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

96 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 study of the United States investment management market by Greenwich Associates during, ETF use among United States pension funds, endowments and foundations grew to approximately %. How ETFs are used by United States Institutions Tactical adjustments % % Transitions 8% % Despite that relatively modest share, institutions actually represented roughly half the assets invested in ETFs in the United States according to industry estimates. Cash equitisation % % Almost half the institutional users in the Greenwich Associates annual study stated that they employed ETFs for what they considered tactical tasks related to the management of their portfolios. Core/satellite 8% 9% Approximately % of institutional ETF users surveyed stated that they employed the funds to implement strategic or longterm investment decisions, and an equal share reported that they used ETFs for both tactical and strategic purposes. Rebalancing Portfolio completion % % % % Greenwich Associates asked the institutions participating in the survey to name the providers they used for ETFs. The results revealed the following: ETF overlay % % ishares/blackrock was by far the most widely used provider of ETFs amongst United States institutions; and Other % % Most institutions that employed ETFs used more than one provider: 89% of institutional ETF users obtained ETFs from ishares/blackrock, whereas % used SPDRs/State Street and % used Vanguard. % % % % % % 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

97 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 ranked 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 employing ETFs that were questioned during the Greenwich Associates survey, stated that they expected their usage of the product to increase over the following three years, including nearly % that expected the amount of assets dedicated to ETFs to grow by % in that period. Money managers were slightly more apt to predict an increase in use: approximately % expected to be devoting more assets to ETFs, compared with half of plan sponsors. About % of plan sponsors expected to reduce their use of ETFs. Increase % % Increase % % No change 8% % % Nearly % of institutions that did not use ETFs said they lacked 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. 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 % % Decrease % % Decrease >% (8%) (%) (%) (%) (%) % % % % %. 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

98 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. 98

99 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. 99

100 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.

101 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

102 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.

103 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.