iShares and Euroclear Bank improve access to fast-growing exchange-traded funds market
24 April 2013, Amsterdam / Brussels / London – Investor access to exchange-traded funds (‘ETFs’) has improved following the inclusion of 50 products from iShares on the FundSettle fund processing platform. iShares is the ETF business of BlackRock (BLK:NYSE) while FundSettle is part of Euroclear Bank, the leading international central securities depository.
iShares products are the first ETFs on the platform, which hosts over 65,000 mutual funds, linking fund managers with third-party distributors such as private banks and wealth managers. BlackRock and Euroclear will initially make the service available in the Netherlands, but are exploring ways of offering ETFs in this way to other European markets.
ETFs typically trade like stocks on a stock market with intra-day pricing and offer investors broad exposure to financial markets, often holding securities included in popular indices such as the MSCI Europe and S&P 500. FundSettle will now enable end investors to buy and sell shares in ETFs like mutual funds, at the end-of-day ‘net asset value’ (‘NAV’), thus offering an additional means of accessing the products.
BlackRock and Euroclear expect ETF use to grow in the Netherlands as financial advisors move to build portfolios that use ETFs and mutual funds together. In Europe, assets held in ETFs have grown substantially in the last five years to $373 billion at the end of March compared with $133 billion at the end of 2007 (Source: BlackRock).
Leen Meijaard, Head of iShares Sales in Europe, the Middle East and Africa, said, “There is great interest in ETFs at the moment as the market moves towards a model without retrocessions and many investors want to be able to buy ETFs like mutual funds through their bank or wealth manager. Adding these iShares to FundSettle’s platform will help Dutch investors to build and manage a portfolio in a straightforward way.”
Jo Van de Velde, Head of Product Management, Euroclear commented, “By meeting clients’ demand to execute their ETF orders via FundSettle, we are effectively allowing investors to purchase ETFs in the same way as their mutual fund investments. Euroclear is delighted to continue a long-standing partnership with BlackRock and deliver a quality spectrum of ETF services to institutional and retail clients alike.”
The 50 iShares ETFs have been selected in response to Dutch client demand and offer access to stocks and bonds in both developed and emerging markets. Products include the iShares MSCI Europe ETF, the iShares S&P 500 ETF and the iShares MSCI World ETF.
Notes to Editors
iShares is the global product leader in exchange traded funds with over 600 funds globally across equities, fixed income and commodities, which trade on 20 exchanges worldwide. The iShares Funds are bought and sold like common stocks on securities exchanges. The iShares Funds are attractive to many individual and institutional investors and financial intermediaries because of their relative low cost, tax efficiency and trading flexibility. Investors can purchase and sell shares through any brokerage firm, financial advisor, or online broker, and hold the funds in any type of brokerage account. The iShares customer base consists of the institutional segment of pension plans and fund managers, as well as the retail segment of financial advisors and high net worth individuals.
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Euroclear is the world’s largest provider of domestic and cross-border settlement and related services for bond, equity, derivatives and fund transactions. The Euroclear group comprises the international central securities depository Euroclear Bank, based in Brussels, as well as the national central securities depositories Euroclear Belgium, Euroclear Finland, Euroclear France, Euroclear Nederland, Euroclear Sweden and Euroclear UK & Ireland.
In 2012, the Euroclear group settled more than EUR 542 trillion in securities transactions, representing 159 million domestic and cross-border transactions, and held over EUR 23 trillion in assets for clients. Euroclear Bank is rated AA+ by Fitch Ratings and AA by Standard & Poor’s.
Launched in 2000, Euroclear Bank-operated FundSettle automates and standardises the straight-through processing of offshore and domestic fund transactions. FundSettle provides a single access point for fund buyers to process subscriptions, redemptions, transfers and switches, covering more than 65,000 investment funds worldwide and over 500 transfer agents.