Etfl Industry Hi Light Aug10 Us

FOR INSTITUTIONAL USE – NOT FOR PUBLIC DISTRIBUTION.
ETF Landscape
Industry Highlights
End August 2010
Deborah Fuhr, Managing Director

Global Head of ETF Research & Implementation Strategy
Phone: +44 20 7668 4276 Email: Deborah.Fuhr@blackrock.com
Table of contents
Current ETF and ETP Landscape Page 03
Summary Highlights for Global, US, Europe, Canada, Asia Pacific ex-Japan, Japan, Latin America…….… Page 03
United States ETFs/ETPs net new asset flows ..…………………………………………………………………………………………Page 16
Global ETF & ETP asset growth ……………………………………………………………………………………………………………………Page 28
Global ETF & ETP providers………………………………………………………………………………………………………………………...Page 30
European ETFs/ETPs net new asset flows ..….…………………………………………………………………………………………….Page 45
ETFs in Asia Pacific (ex-Japan) ……………………………………………………………………………………………………………………Page 49
ETFs in Japan ………………………………………………………………………………………………………………………………………………Page 52
ETFs in Latin America ………………………………………………………………………………………………………………………………….Page 54
ETFs in Canada …………………………………………………………………………………………………………………………………………….Page 56
Investment applications Page 58

Product overview ………………………………………………………………………………………………………………………………………..Page 58
ETF/ETP toolbox …………………………………………………………………………………………………………………………………………..Page 59
How and why ETFs are used ……………………………………………………………………………………………………………………….Page 62
Growth in institutional users of ETFs ………………………………………………………………………………………………………….Page 67
Core-Satellite ……………………………………………………………………………………………………………………………………………….Page 72
Fixed income index trading characteristics ………………………………………………………………………………………………..Page 74
Commodity index comparison …………………………………………………………………………………………………………………….Page 76
Appendix – Regulatory Update …………………………………………………………………………………………………………………..Page 81
ETF Landscape signup Page 88
2 ETF Landscape Industry Highlights August 2010

ETFs listed in the United States
At the end of August 2010 the US ETF industry had 871 ETFs, assets of US$715.7 Bn, from 30 providers on
two exchanges.
Assets
• YTD assets have increased by 1.5% from US$705.5 Bn to US$715.7 Bn, compared to the 5.9% decrease in the
MSCI US Index in US dollar terms.
• In August 2010, US domiciled ETFs/ETPs experienced net outflows totalling US$1.9 Bn. Equity ETFs/ETPs saw
US$6.9 Bn net outflows, of which US$11.6 Bn was from net redemptions of North American equity ETFs/ETPs while
US$4.5 Bn went into Emerging Markets equity ETFs/ETPs. Fixed Income ETFs/ETPs saw net inflows of US$3.0 Bn,
of which US$0.9 Bn went into High Yield ETFs/ETPs and US$0.8 Bn into Government bond ETFs/ETPs. Commodity
ETFs/ETPs experienced US$0.9 Bn net inflows, of which US$1.0 Bn went into Precious Metals ETFs/ETPs in
August 2010.
• YTD, US domiciled ETFs/ETPs experienced net inflows totalling US$48.0 Bn. Fixed Income ETFs/ETPs saw net
inflows of US$28.1 Bn, of which US$10.3 Bn went into Government bond ETFs/ETPs and US$5.6 Bn into
Aggregate/Broad fixed income ETFs/ETPs. Equity ETFs/ETPs saw US$12.0 Bn net inflows, of which US$13.9 Bn
went into Emerging Markets equity ETFs/ETPs while North American equity ETFs/ETPs saw net outflows of
US$6.4 Bn. Commodity ETFs/ETPs saw US$7.8 Bn net inflows, of which US$9.2 Bn went into Precious metals
ETFs/ETPs while Energy ETFs/ETPs saw net outflows of US$1.0 Bn YTD.
ETFs
• YTD the number of ETFs increased by 12.8% with 124 new ETFs launched, while 25 ETFs were delisted.
• The top 100 ETFs, out of 871, account for 82.9% of US ETF AUM, while 389 ETFs have less than US$50.0 Mn in
assets and 152 ETFs have less than US$10.0 Mn in assets.
• 29 January 2010 marked the 17th anniversary of ETFs in the US.
Data as at end August 2010.
Source: Global ETF Research & Implementation Strategy Team, BlackRock, Bloomberg.

ETFs listed in the United States (continued)
ETF providers
• iShares is the largest ETF provider in terms of both number of products, 210 ETFs, and assets of US$368.0 Bn,
reflecting 51.4% market share; State Street Global Advisors is second with 91 products and US$128.3 Bn, a
17.9% market share; followed by Vanguard with 46 products, assets of US$113.2 Bn and 15.8% market share at
the end of August 2010.
• In August 2010, US domiciled ETFs experienced net outflows totalling US$3.9 Bn. Vanguard gathered the largest
net inflows with US$3.7 Bn, followed by ProShares with US$1.2 Bn net inflows, while State Street Global Advisors
saw US$7.9 Bn net outflows in August 2010.
• YTD, US domiciled ETFs experienced net inflows totalling US$41.1 Bn. Vanguard gathered the largest net inflows
with US$23.7 Bn, followed by iShares with US$16.7 Bn net inflows, while State Street Global Advisors saw
US$13.1 Bn net outflows YTD.
• The top three ETF providers, out of 30, account for 85.1% of US ETF AUM.
Trading volume
• YTD the ETF average daily trading volume in US dollars has increased by 15.6% to US$52.9 Bn.
• In August 2010, US ETF turnover was 26.6% of all US equity turnover, greater than the 24.7% in
December 2009.
Mutual funds
• In the US, net sales of mutual funds (excluding ETFs) were minus US$331.0 Bn, while net sales of ETFs domiciled
in the US were positive US$38.8 Bn during the first six months of 2010 according to Strategic Insight.
ETPs
• Additionally, there were 160 other Exchange Traded Products (ETPs)1 with assets of US$98.2 Bn from 18
providers on one exchange.
ETFs & ETPs

• Combined, there were 1,031 products with assets of US$813.9 Bn from 44 providers on two exchanges in the US.
1 ETPs are products that have similarities to ETFs in the way they trade and settle but they do not use an open-end 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.

ETFs listed globally
At the end of August 2010 the global ETF industry had 2,308 ETFs with 4,922 listings, assets of US$1,064.4 Bn,
from 129 providers on 43 exchanges around the world.
Assets
• YTD assets have increased by 2.7% from US$1,036.0 Bn to US$1,064.4 Bn, compared to the 7.5% decrease in the
MSCI World Index in US dollar terms.
ETFs
• YTD the number of ETFs increased by 18.7% with 401 new ETFs launched, while 38 ETFs were delisted.
• The number of ETFs listed in Europe surpassed the US in April 2009, now with 985 ETFs listed in Europe, compared
to 871 in the US at the end of August 2010.
• There are currently plans to launch 944 new ETFs.
• The top 100 ETFs, out of 2,308, account for 63.3% of global ETF AUM, while 1,204 ETFs have less than
US$50.0 Mn in assets and 483 ETFs have less than US$10.0 Mn in assets.
Trading volume
• YTD the ETF average daily trading volume in US dollars increased by 13.4% to US$57.5 Bn.
ETF providers
• Globally, iShares is the largest ETF provider in terms of both number of products, 453 ETFs, and assets of
US$492.7 Bn, reflecting 46.3% market share; State Street Global Advisors is second with 110 products and
US$139.6 Bn, 13.1% market share; followed by Vanguard with 47 products and assets of US$113.3 Bn and 10.6%
market share at the end of August 2010.
• The top three ETF providers, out of 129, account for 70.1% of global ETF AUM.

ETFs listed globally (continued)
Exchanges
• YTD the number of exchanges with official listings has increased from 40 to 43.
Index providers
• MSCI ranks first in terms of AUM tied to its benchmarks with assets of US$258.7 Bn and 336 ETFs, while Standard
& Poor’s (S&P) ranks second with US$227.9 Bn and 278 ETFs, followed by Barclays Capital with US$111.9 Bn and
81 ETFs.
Mutual funds
• Globally, net sales of mutual funds (excluding ETFs) were minus US$283.3 Bn, while net sales of ETFs were
positive US$71.3 Bn during the first six months of 2010 according to Strategic Insight.
ETPs
• Additionally, there were 874 other Exchange Traded Products (ETPs)1 with 1,439 listings and assets of
US$135.0 Bn from 48 providers on 20 exchanges.
ETFs & ETPs

• Combined, there were 3,182 products with 6,361 listings, assets of US$1,199.3 Bn from 159 providers on
46 exchanges around the world.

ETFs listed in Europe
At the end of August 2010 the European ETF industry had 985 ETFs with 3,140 listings, assets of US$230.9 Bn,
from 37 providers on 19 exchanges.
Assets
• YTD assets have increased by 1.7% from US$226.9 Bn to US$230.9 Bn, compared to the 12.6% fall in the MSCI
Europe Index in US dollar terms.
• In August 2010, net new assets into European domiciled ETFs/ETPs totalled US$2.2 Bn. Equity ETFs/ETPs gathered
US$1.2 Bn net inflows, of which US$0.6 Bn went into Emerging Markets equity ETFs/ETPs and US$0.6 Bn into
European equity ETFs/ETPs. Fixed Income ETFs/ETPs saw net inflows of US$0.1 Bn, of which US$0.6 Bn went into
Corporate bond ETFs/ETPs while Government bond ETFs/ETPs saw net outflows of US$0.9 Bn. Commodity
ETFs/ETPs saw net inflows of US$0.9 Bn, of which US$1.0 Bn went into Precious Metals ETFs/ETPs while
Agriculture ETFs/ETPs saw net outflows of US$0.2 Bn.
• YTD, net new assets into European domiciled ETFs/ETPs totalled US$29.3 Bn. Equity based ETFs/ETPs gathered
US$14.8 Bn net inflows, of which US$5.8 Bn went into Emerging Markets equity ETFs/ETPs and US$2.9 Bn into
North American equity ETFs/ETPs. Fixed Income ETFs/ETPs saw US$7.0 Bn net inflows, of which US$5.2 Bn went
into Government bond ETFs/ETPs and US$2.2 Bn into Corporate bond ETFs/ETPs. Commodity ETFs/ETPs saw
US$6.8 Bn net inflows, of which US$5.4 Bn went into Precious Metals ETFs/ETPs and US$0.6 Bn into Broad
commodity exposure ETFs/ETPs YTD.
ETFs
• YTD the number of ETFs increased by 19.1% with 167 new ETFs launched, while nine ETFs were delisted.
• The top 100 ETFs, out of 985, account for 66.4% of European ETF AUM, while 520 ETFs have less than US$50.0
Mn in assets and 189 ETFs have less than US$10.0 Mn in assets.
• 11 April 2010 marked the 10th Anniversary of ETFs in Europe.
Exchanges
• YTD the number of exchanges with official listings has increased from 18 to 19.
Trading volume
• YTD the ETF average daily trading volume in US dollars increased by 0.7% to US$2.7 Bn. 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 August 2010, reported European ETF turnover was 9.5% of all European equity turnover, greater than the
8.4% in December 2009. Data as at end August 2010.

ETFs listed in Europe (continued)
ETF providers
• iShares is the largest ETF provider in terms of both number of products, 173 ETFs, and assets of US$83.8 Bn,
reflecting 36.3% market share; Lyxor Asset Management is second with 125 products and US$43.1 Bn, 18.7%
market share; followed by db x-trackers with 135 ETFs, assets of US$37.4 Bn and 16.2% market share at the end
of August 2010.
• In August 2010, net new assets into European domiciled ETFs totalled US$1.6 Bn. iShares has received the largest
net inflows with US$1.0 Bn, followed by db x-trackers with US$0.9 Bn net inflows, while Source Markets had the
largest net outflows with US$0.5 Bn.
• YTD, net new assets into European domiciled ETFs totalled US$26.0 Bn. iShares has received the largest net
inflows with US$6.6 Bn net new assets, followed by db x-trackers with US$3.1 Bn net inflows, and Lyxor Asset
Management with US$3.0 Bn net inflows YTD.
• The top three ETF providers, out of 37, account for 71.2% of European ETF AUM.
Mutual funds
• In Europe net sales of mutual funds (excluding ETFs) were US$55.2 Bn while net sales of ETFs domiciled in Europe
were US$21.2 Bn during the first six months of 2010 according to Lipper FMI.
ETPs
• Additionally, there were 387 other Exchange Traded Products (ETPs)1 with 885 listings and assets of US$19.7 Bn
from nine providers on six exchanges.
ETFs & ETPs

• Combined, there were 1,372 products with 4,025 listings and assets of US$250.5 Bn from 42 providers on
19 exchanges in Europe.

ETFs listed in Canada
At the end of August 2010 the Canadian ETF industry had 150 ETFs, assets of US$31.6 Bn, from four providers on
one exchange.
Assets
• YTD assets have risen by 10.7% from US$28.5 Bn to US$31.6 Bn, compared to the 0.9% decrease in the MSCI
Canada Index in US dollar terms.
ETFs
• YTD the number of ETFs increased by 36.4% with 41 new ETFs launched.
• 9 March 2010 marked the 20th Anniversary of the first ETF globally, which was listed in Canada in 1990.
Trading volume
• YTD the ETF average daily trading volume in US dollars has decreased by 23.0% to US$0.7 Bn.
ETF providers
• iShares is the largest ETF provider in terms of assets with US$24.5 Bn in 36 ETFs, reflecting 77.6% market share;
Claymore Securities is second with 28 products and US$3.9 Bn, a 12.3% market share; followed by BetaPro
Management with 56 products, assets of US$2.5 Bn and 7.9% market share at the end of August 2010.
ETPs
• Additionally, there was one other Exchange Traded Product (ETP)1, 20 cross listings and assets of US$0.4 Bn from
one provider on one exchange.

ETFs listed in Asia Pacific ex-Japan
At the end of August 2010 the Asia Pacific ex-Japan ETF industry had 180 ETFs with 284 listings, and assets of
US$48.2 Bn from 56 providers on 13 exchanges.
Assets
• YTD assets have increased by 23.9% from US$38.9 Bn to US$48.2 Bn, compared to the 3.8% decrease in the
MSCI AC Asia Pacific ex-Japan Index in US dollar terms.
ETFs
• YTD the number of ETFs increased by 40.6% with 54 new ETFs launched, while two ETFs were delisted.
ETF providers
• State Street Global Advisors is the largest ETF provider in terms of assets with US$10.3 Bn, in six ETFs, reflecting
21.4% market share; iShares is second with 15 products and US$9.1 Bn, a 19.0% market share; followed by
Hang Seng Investment Management with three products, assets of US$5.7 Bn and 11.8% market share at the end
of August 2010.
Mutual Funds
• In Asia Pacific ex-Japan, net sales of mutual funds (excluding ETFs) were minus US$29.0 Bn, while net sales of
ETFs domiciled in Asia Pacific ex Japan were positive US$8.4 Bn during the first six months of 2010 according to
Strategic Insight.
Trading volume
ETPs
• Additionally, there were 14 other Exchange Traded Products (ETPs)1 with 17 listings and assets of US$1.1 Bn from
ten providers on five exchanges.
Source: Global ETF Research & Implementation Strategy Team, BlackRock, Bloomberg

ETFs listed in Japan
At the end of August 2010 the Japanese ETF industry had 74 ETFs with 77 listings and assets of US$24.3 Bn from six
providers on two exchanges. There are 158 ETFs which have filed notifications in Japan.
Assets
• YTD assets have decreased by 1.5% from US$24.6 Bn to US$24.3 Bn, which is less than the 3.4% decrease in the
MSCI Japan Index in US dollar terms.
ETFs
• YTD the number of ETFs increased by 8.8% with six new ETFs launched.
Trading volume
Mutual Funds
• In Japan, net sales of mutual funds (excluding ETFs) were US$33.6 Bn, while net sales of ETFs domiciled in Japan
were US$2.1 Bn during the first six months of 2010 according to Strategic Insight.
ETF providers
• Nomura Asset Management is the largest ETF provider in terms of assets with US$12.7 Bn, in 32 ETFs, reflecting
52.5% market share; Nikko Asset Management is second with 14 products and US$5.4 Bn, a 22.4% market
share; followed by Daiwa Asset Management with 22 products, assets of US$4.7 Bn and 19.6% market share at
the end of August 2010.
ETPs
• Additionally, there were nine other Exchange Traded Products (ETPs)1 with 20 cross listings and assets of
US$0.3 Bn from four providers on two exchanges.
Source: Global ETF Research & Implementation Strategy Team, BlackRock, Bloomberg

ETFs listed in Latin America
At the end of August 2010 the Latin American ETF industry had 21 ETFs with 347 listings, and assets of US$11.9 Bn
from three providers on three exchanges. There were 276 ETFs cross listed in Mexico at the end of August 2010,
while there are 309 ETFs registered for sale in Chile and 290 ETFs registered for sale in Peru.
Assets
• YTD assets have increased by 20.7% from US$9.8 Bn to US$11.9 Bn, compared to the 3.6% decrease in the MSCI
EM Latin America Index in US dollar terms.
ETFs
• YTD the number of ETFs has increased by 23.5% with four new ETFs launched.
Trading volume
• YTD the ETF average daily trading volume in US dollars has increased by 34.1% to US$0.3 Bn.
ETF providers
• iShares is the largest ETF provider in terms of assets with US$7.3 Bn, in 18 ETFs, reflecting 61.2% market share;
BBVA Asset Management is second with US$3.4 Bn in two ETFs, a 28.6% market share at the end of August 2010.


US ETF and ETP asset growth
Assets (US$ Bn)
# Products
800 1000
900
700
800
600
700
500
600
400 500
400
300
300
200
200
100
100
0 0
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Aug-10
ETF Assets $0.5 $0.4 $1.1 $2.4 $6.7 $15.6 $33.9 $65.6 $84.6 $102.3 $150.7 $227.7 $299.4 $406.8 $580.7 $497.1 $705.5 $715.7
ETP Assets $2.0 $5.0 $3.8 $4.0 $6.1 $8.9 $14.4 $25.9 $40.5 $45.3 $88.1 $98.2
# ETFs 1 1 2 19 19 29 30 81 101 113 117 152 201 343 601 698 772 871
# ETPs 2 14 17 17 17 17 20 37 71 136 142 160


ETF providers in the United States
Ranked by AUM Aug-10 YTD Change
AUM AUG-10 NNA YTD NNA AUM % Market
PROVIDER # ETFs (US$ BN) % Total # Planned (US$ BN) (US$ BN) # ETFs % ETFs (US$ BN) % AUM Share
iShares 210 $368.0 51.4% 12 -$0.6 $16.7 24 12.9% $3.6 1.0% -0.2%
State Street Global Advisors 91 $128.3 17.9% 33 -$7.9 -$13.1 3 3.4% -$21.5 -14.4% -3.3%
Vanguard 46 $113.2 15.8% 21 $3.7 $23.7 0 0.0% $21.2 23.0% 2.8%
Powershares 117 $31.9 4.5% 38 -$1.5 -$0.1 11 10.4% -$1.8 -5.3% -0.3%
ProShares 99 $24.4 3.4% 98 $1.2 $4.4 21 26.9% $1.2 5.0% 0.1%
Van Eck Associates Corp 27 $14.9 2.1% 18 -$0.1 $1.6 4 17.4% $2.4 19.4% 0.3%
Bank of New York 1 $8.6 1.2% 0 -$0.1 $0.3 0 0.0% $0.0 -0.2% 0.0%
WisdomTree Investments 43 $7.0 1.0% 68 $0.4 $1.1 -9 -17.3% $0.6 8.9% 0.1%
Direxion Shares 38 $6.4 0.9% 147 $0.5 $2.4 12 46.2% $1.4 27.5% 0.2%
Rydex SGI 19 $2.9 0.4% 82 -$0.2 $0.2 -12 -38.7% -$0.1 -4.6% 0.0%
Claymore Securities 42 $2.9 0.4% 27 $0.1 $0.1 10 31.3% $0.0 -0.6% 0.0%
First Trust Advisors 43 $2.7 0.4% 7 $0.1 $0.9 3 7.5% $0.7 33.3% 0.1%
Charles Schwab Investment Management 11 $1.5 0.2% 0 $0.1 $1.2 5 83.3% $1.1 324.8% 0.2%
PIMCO 10 $1.4 0.2% 10 $0.2 $0.9 1 11.1% $0.9 197.3% 0.1%
Global X Funds 14 $0.4 0.1% 24 $0.1 $0.3 7 100.0% $0.4 407.6% 0.0%
RevenueShares 6 $0.4 0.1% 8 $0.0 $0.1 0 0.0% $0.1 31.8% 0.0%
IndexIQ Advisors 9 $0.2 0.0% 24 $0.0 $0.1 4 80.0% $0.1 84.6% 0.0%
DBX Strategic Advisors 5 $0.1 0.0% 34 $0.0 $0.0 0 0.0% $0.0 -15.2% 0.0%
Fidelity Management & Research 1 $0.1 0.0% 0 $0.0 $0.0 0 0.0% $0.0 -0.8% 0.0%
ALPS ETF Trust 3 $0.1 0.0% 6 $0.0 $0.0 1 50.0% $0.1 346.9% 0.0%
Emerging Global Advisors 8 $0.1 0.0% 15 $0.0 $0.1 4 100.0% $0.1 142.1% 0.0%
Old Mutual Global Shares 5 $0.1 0.0% 0 $0.0 $0.0 4 400.0% $0.0 40.5% 0.0%
Jefferies Asset Management 4 $0.1 0.0% 1 $0.0 $0.0 1 33.3% $0.0 -6.7% 0.0%
AdvisorShares 3 $0.1 0.0% 5 $0.0 $0.0 2 200.0% $0.0 209.0% 0.0%
Grail Advisors 5 $0.0 0.0% 3 $0.0 $0.0 0 0.0% $0.0 21.7% 0.0%
FaithShares 5 $0.0 0.0% 0 $0.0 $0.0 0 0.0% $0.0 -23.2% 0.0%
Geary Advisors 2 $0.0 0.0% 0 $0.0 $0.0 0 0.0% $0.0 -8.1% 0.0%
continued…
Source: Global ETF Research & Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).

ETF providers in the United States (continued)
PROVIDER # ETFs (US$ BN) % Total # Planned (US$ BN) (US$ BN) # ETFs % ETFs (US$ BN) % AUM Share
US One Trust 1 $0.0 0.0% 2 $0.0 $0.0 1 100.0% $0.0 0.0% 0.0%
Javelin Investment Management 2 $0.0 0.0% 0 $0.0 $0.0 1 100.0% $0.0 -74.5% 0.0%
Pax World Management 1 $0.0 0.0% 2 $0.0 $0.0 1 100.0% $0.0 0.0% 0.0%
AllianceBernstein - - - 2 - - - - - - -
Capital West Securities - - - 1 - - - - - - -
Dreyfus Corp - - - 1 - - - - - - -
Eaton Vance - - - 5 - - - - - - -
Exchange Traded Spreads Trust - - - 5 - - - - - - -
Factor Advisors - - - 1 - - - - - - -
FactorShares - - - 22 - - - - - - -
Firsthand Capital - - - 5 - - - - - - -
Florentez Investment - - - 1 - - - - - - -
FocusShares - - - 6 - - - - - - -
Georgetown Investment Management - - - 5 - - - - - - -
Huntington Asset Advisors - - - 3 - - - - - - -
John Hancock - - - 2 - - - - - - -
JP Morgan Asset Management - - - 1 - - - - - - -
Legg Mason - - - 1 - - - - - - -
Macro Securities Depositor - - - 2 - - - - - - -
Next Investments - - - 1 - - - - - - -
Northern Trust - - - 2 - - - - - - -
RiverPark Advisors - - - 4 - - - - - - -
Russell Investments - - - 28 - - - - - - -
ShariahShares - - - 2 - - - - - - -
Spinnaker ETF Trust - - - 1 - - - - - - -
T Rowe Price - - - 1 - - - - - - -
Total 871 $715.7 100.0% 787 -$3.9 $41.1 99 12.8% $10.3 1.5%

Source: Global ETF Research & Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).

US ETF/ETP net new assets by type of exposure
AUGUST
# ETFs ADV ASSETS NNA
EXPOSURE /ETPs (US$ Mn) (US$ Mn) (US$ Mn) YTD-10 NNA (US$ Mn) 2009 NNA (US$ Mn)
Equity 739 51,369.3 574,620.8 (6,881.3) 11,972.8 36,476.3
North America - Equity 452 44,144.4 368,890.2 (11,647.9) (6,425.7) 1,987.0
Active 3 0.1 11.9 - 4.1 12.8
Broad 242 35,236.5 284,015.1 (9,646.1) (8,148.4) (11,180.1)
Consumer Goods/Services 26 1,133.3 8,189.9 (102.8) 1,334.1 287.2
Energy 31 1,594.6 15,565.8 (434.2) 1,326.7 1,145.3
Financials 29 2,789.4 14,913.1 (180.5) (871.4) 1,409.1
Healthcare 21 326.7 7,432.0 (534.5) (350.6) (400.8)
Industrials 14 531.8 4,150.7 (346.6) 387.2 914.1
Materials 11 573.4 4,145.4 (259.8) (188.1) 1,206.2
Other 5 8.7 1,832.1 (4.1) (91.0) (77.1)
Real Estate 18 1,015.2 13,078.6 0.9 7.5 4,377.4
Technology 36 676.0 9,131.2 (459.7) (544.8) 2,626.7
Telecommunications 6 14.1 1,066.3 57.9 102.6 139.4
Utilities 10 244.8 5,358.2 261.5 606.1 1,526.9
Asia Pacific - Equity 28 435.6 17,629.6 (91.0) 89.6 1,825.8
Europe - Equity 27 196.6 8,548.7 104.4 809.5 1,574.0
Global - Equity 58 103.1 11,497.7 296.0 511.5 3,353.7
Global (ex-US) - Equity 69 1,071.8 52,169.9 (6.5) 3,134.9 691.4
continued…
NNA – Net New Assets.

Source: National Stock Exchange (NSX), Global ETF Research & Implementation Strategy Team, BlackRock, Bloomberg.

(continued)
AUGUST
Emerging Markets - Equity 105 5,417.8 115,884.8 4,463.8 13,853.1 27,044.5
Broad - EM 35 2,921.7 76,488.9 4,210.5 14,638.0 16,691.3
Regional - EM 12 118.9 3,797.9 226.9 (343.3) 1,400.7
Country - EM 58 2,377.2 35,597.9 26.4 (441.6) 8,952.5
Brazil 8 990.4 9,912.2 9.5 (877.8) 2,545.7
Chile 1 17.3 671.3 82.4 283.0 50.1
China 20 759.1 9,694.7 (245.0) (1,647.2) 2,191.1
Colombia 1 2.6 59.3 23.4 46.0 5.3
Egypt 1 0.1 5.4 1.8 3.9
India 7 57.5 2,518.3 (14.6) 238.7 774.6
Indonesia 2 16.2 506.4 57.3 253.0 167.5
Israel 1 4.3 127.8 (40.3) (23.7) 22.5
Malaysia 1 29.2 790.7 69.6 129.3 61.0
Mexico 3 139.5 1,446.5 (22.0) 418.2 302.0
Peru 1 3.9 230.6 1.6 104.8 96.3
Poland 2 1.1 89.5 (0.6) 89.4 7.3
Russia 2 63.9 1,798.4 4.1 492.9 378.8
South Africa 1 17.5 498.5 - (15.9) 18.4
South Korea 2 108.4 3,269.3 - 263.2 770.6
Taiwan 2 128.3 2,732.3 (147.9) (642.1) 1,093.7
Thailand 1 16.6 512.6 144.3 205.5 174.8
Turkey 1 19.9 595.0 98.0 164.5 204.7
Vietnam 1 1.4 139.2 4.7 72.8 88.2
continued…


(continued)
AUGUST
Fixed Income 127 2,258.3 137,004.8 2,971.2 28,119.3 44,801.9
Active 2 6.1 527.1 183.4 472.3 48.8
Aggregate 12 205.4 30,572.6 593.5 5,630.1 8,216.7
Convertible 1 3.0 308.6 11.4 82.4 212.0
Corporate 17 197.1 25,834.6 555.5 4,313.5 10,560.6
Government 54 1,512.7 35,228.8 831.8 10,281.7 6,706.9
High Yield 3 178.6 11,956.9 916.3 3,786.9 4,429.4
Inflation 6 90.7 22,346.9 (365.3) 1,458.4 10,139.8
Mortgage 3 15.5 2,128.8 30.1 256.3 913.1
Municipal 29 49.3 8,100.3 214.5 1,837.7 3,574.6
Commodities 100 2,395.0 92,729.2 890.1 7,790.0 32,551.8
Agriculture 17 48.1 2,752.0 10.7 (401.7) 1,927.6
Broad 20 142.3 9,483.7 (277.2) 342.2 4,958.1
Energy 21 461.2 6,554.1 208.5 (1,039.1) 6,055.9
Industrial Metals 17 22.7 869.3 3.9 (319.7) 798.1
Livestock 1 1.5 67.8 (7.5) (33.0) 18.9
Precious Metals 24 1,719.2 73,002.3 951.6 9,241.5 18,793.2
Currency 35 379.9 5,968.5 288.4 (2,049.4) 4,154.9
Alternative 6 470.7 2,909.0 770.6 1,942.8 1,258.7
Mixed 24 5.1 686.7 32.7 272.5 225.5
Total 1,031 56,878.2 813,919.1 (1,928.3) 48,048.1 119,469.1


Sector ETF net new assets
ETF
INDEX TOTAL ETF AUM SHORT
RETURN (US$) (US$ MN) INTEREST
ETF INDEX YTD % (US$ MN) ETF ADV AUGUST 2010 NET FLOWS YTD 2010 NET FLOWS 2009 NET FLOWS
SECTOR TICKER TICKER AUG YTD 31-AUG CHANGE 13-AUG (US$ MN) (US$ MN) (US$ MN) (US$ MN)
DOW JONES U.S. SECTOR ETFs 5,141.2 -12.8% 252.6 167.7 -76.7 -408.4 -28.2
iShares Dow Jones U.S. Basic Materials IYM US DJUSBM -2.0% -1.4% 619.2 -24.1% 57.2 44.1 -26.2 -187.6 246.4
iShares Dow Jones U.S. Consumer Goods IYK US DJUSNC -2.1% 2.2% 272.5 -16.9% 17.0 2.6 11.6 -59.4 -105.4
iShares Dow Jones U.S. Consumer Services IYC US DJUSCY -4.0% -0.4% 170.6 6.0% 17.0 3.7 -31.0 17.8 -11.6
iShares Dow Jones U.S. Energy IYE US DJUSEN -4.2% -10.2% 584.9 -18.5% 9.5 4.5 -3.0 -57.5 9.6
iShares Dow Jones U.S. Financial IYF US DJUSFN -7.3% -4.7% 414.1 -13.0% 38.3 73.0 -22.1 -35.9 -105.5
iShares Dow Jones U.S. Healthcare IYH US DJUSHC -1.4% -8.4% 525.3 -15.2% 38.5 3.3 -3.0 -31.6 -356.3
iShares Dow Jones U.S. Industrial IYJ US DJUSIN -7.0% -1.2% 276.3 -4.4% 7.8 7.1 -26.5 -5.0 -11.7
iShares Dow Jones U.S. Technology IYW US DJUSTC -7.1% -10.2% 1,118.3 -17.8% 13.1 12.5 -52.3 -94.9 263.3
iShares Dow Jones U.S. Telecommunications IYZ US DJSTELT -1.4% 2.3% 649.9 2.1% 39.9 12.6 42.2 20.2 106.8
iShares Dow Jones U.S. Utilities IDU US DJUSUT 1.1% 1.0% 510.2 4.2% 14.2 4.4 33.6 25.5 -63.9
S&P EQUAL WEIGHT SECTOR ETFs 266.3 -2.5% 4.5 6.1 -38.3 10.1 100.3
Rydex S&P Equal Weight Consumer Discretionary RCD US S25 -6.1% -1.2% 23.5 28.6% 1.4 0.1 0.0 6.9 2.3
Rydex S&P Equal Weight Consumer Staples RHS US S30 -2.8% 3.1% 12.8 29.4% 0.1 0.1 0.0 2.5 -1.9
Rydex S&P Equal Weight Energy RYE US S10 -6.7% -8.9% 13.7 -21.8% 0.2 0.2 0.0 -3.0 9.3
Rydex S&P Equal Weight Financial RYF US S40 -6.7% 0.6% 15.0 8.9% 0.0 0.3 -3.4 1.8 1.0
Rydex S&P Equal Weight Health Care RYH US S35 -3.0% -8.1% 47.1 -31.1% 0.0 2.3 -13.7 -16.3 -1.4
Rydex S&P Equal Weight Industrial RGI US S20 -7.5% -1.3% 34.5 76.8% 0.1 0.2 0.0 16.5 8.4
Rydex S&P Equal Weight Materials RTM US S15 -3.7% -1.7% 31.0 -9.3% 0.5 0.5 2.6 -2.7 17.8
Rydex S&P Equal Weight Technology RYT US S45 -5.6% -6.7% 74.5 -6.8% 0.2 2.3 -26.2 2.1 58.5
Rydex S&P Equal Weight Utilities RYU US S55 1.0% -0.6% 14.3 21.9% 1.9 0.2 2.4 2.4 6.4
S&P SELECT SECTOR ETFs 30,412.5 -3.0% 7,044.4 3,953.2 -1,537.5 1,034.6 3,483.0
Consumer Discretionary Select Sector SPDR XLY US IXY -3.8% 2.0% 1,661.6 13.6% 782.5 238.9 -88.0 217.4 493.0
Consumer Staples Select Sector SPDR XLP US IXR -1.7% 1.5% 3,152.6 38.7% 369.2 209.7 -1.4 893.2 -117.0
Energy Select Sector SPDR XLE US IXE -5.0% -9.3% 5,779.2 2.9% 1,391.0 814.4 -212.8 768.0 195.0
Financial Select Sector SPDR XLF US IXM -7.8% -5.3% 5,216.5 -23.8% 1,737.1 1,059.6 -250.2 -1,255.6 -1,805.0
Health Care Select Sector SPDR XLV US IXV -1.5% -8.9% 2,492.4 -15.0% 521.3 238.5 -227.3 -187.1 599.0
Industrial Select Sector SPDR XLI US IXI -6.9% 2.4% 2,532.6 21.7% 558.2 517.6 -398.2 551.6 631.0
Materials Select Sector SPDR XLB US IXB -3.0% -5.4% 1,807.7 0.4% 691.6 340.6 -124.3 161.1 469.0
Technology Select Sector SPDR XLK US IXT -5.6% -8.8% 3,679.3 -21.3% 545.9 268.8 -412.4 -573.2 1,545.0
Utilities Select Sector SPDR XLU US IXU 1.5% 1.4% 4,090.8 11.6% 447.5 265.2 177.2 459.2 1,473.0
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.

Source: Global ETF Research & Implementation Strategy Team, BlackRock, National Stock Exchange (NSX), Bloomberg.

Sector ETF net new assets (continued)
ETF
INDEX TOTAL ETF AUM SHORT
RETURN (US$) (US$ MN) INTEREST
ETF INDEX YTD % (US$ MN) ETF ADV AUGUST 2010 NET FLOWS YTD 2010 NET FLOWS 2009 NET FLOWS
SECTOR TICKER TICKER AUG YTD 31-AUG CHANGE 13-AUG (US$ MN) (US$ MN) (US$ MN) (US$ MN)
MSCI US INVESTABLE MARKET SECTOR ETFs 5,506.8 2.5% 58.5 50.0 11.7 797.7 3,017.9
Vanguard Consumer Discretionary VCR US MZUSI0CD -4.9% 1.6% 234.3 19.3% 2.2 3.5 0.3 37.9 60.2
Vanguard Consumer Staples VDC US MZUSI0CS -1.6% -0.1% 547.2 -5.4% 2.2 4.9 -33.5 -40.1 -59.6
Vanguard Energy VDE US MSCIEN -4.7% -11.0% 1,041.0 0.5% 16.5 8.9 -39.3 118.5 302.2
Vanguard Financials VFH US MZUSI0FN -7.6% -4.3% 464.5 -7.7% 4.3 4.4 -2.8 -14.9 39.7
Vanguard Health Care VHT US MZUSI0HC -2.2% -9.2% 557.6 -6.4% 7.5 3.3 -15.2 12.8 -20.0
Vanguard Industrials VIS US MSCIIN -7.7% -0.8% 294.9 -12.1% 1.1 2.7 -5.3 -42.2 103.3
Vanguard Information Technology VGT US MZUSI0IT -7.0% -10.6% 1,137.0 16.3% 4.7 10.2 47.1 288.1 408.7
Vanguard Materials VAW US MZUSI0MT -2.8% -4.5% 414.8 -15.4% 9.6 5.3 -26.2 -56.5 203.1
Vanguard Telecommunication Services VOX US MSCITC 1.5% -2.0% 241.0 21.8% 1.1 2.1 11.6 39.4 15.2
Vanguard Utilities VPU US MZUSI0UT 0.5% -1.3% 574.6 25.2% 9.2 4.6 12.9 115.9 139.9
Vanguard REIT VNQ US RMZ -1.2% 14.5% 5,656.4 20.7% 130.6 118.2 62.2 338.9 1,825.2
S&P GLOBAL SECTOR ETFs 4,068.2 -8.4% 34.2 34.5 135.4 67.8 1,120.5
iShares S&P Global Consumer Discretionary RXI US SGD -3.6% -0.4% 93.0 8.7% 0.6 0.5 0.0 9.1 44.4
iShares S&P Global Consumers Staples KXI US SGCS -0.8% 1.1% 280.1 -10.8% 2.7 3.8 -17.1 -30.6 58.4
iShares S&P Global Energy IXC US SGES -4.3% -12.7% 1,035.3 -4.5% 1.5 8.2 75.3 112.7 337.7
iShares S&P Global Financials IXG US SGFS -6.7% -8.2% 262.5 -21.2% 19.7 3.4 15.9 -37.2 83.9
iShares S&P Global Healthcare IXJ US SGH 0.3% -7.9% 444.6 -16.3% 0.8 2.5 -21.7 -31.0 -110.0
iShares S&P Global Industrials EXI US SGN -5.8% -0.3% 161.2 3.9% 0.1 1.0 -2.2 10.1 66.5
iShares S&P Global Materials MXI US SGM -2.1% -7.1% 767.3 -15.8% 2.4 3.0 5.9 -59.8 473.3
iShares S&P Global Technology IXN US SGI -7.1% -10.0% 480.1 5.8% 1.2 4.6 27.2 88.9 61.7
iShares S&P Global Telecommunications IXP US SGT 0.6% 1.1% 325.0 0.6% 4.1 5.2 32.4 12.2 52.8
iShares S&P Global Utilities JXI US SGU -0.2% -6.3% 219.1 -13.0% 1.2 2.3 19.6 -6.5 51.7
MSCI ACWI ex US SECTOR ETFs 46.5 100.0% N/A 0.5 0.0 46.2 N/A
iShares MSCI ACWI ex US Consumer Discretionary AXDI US MSWDUCDN -2.5% -0.7% 5.3 100.0% N/A 0.0 0.0 5.3 N/A
iShares MSCI ACWI ex US Consumer Staples AXSL US MSWDUCSN 0.2% 1.7% 5.4 100.0% N/A 0.1 0.0 5.4 N/A
iShares MSCI ACWI ex US Energy AXEN US MSWDUENN -3.8% -14.2% 5.0 100.0% N/A 0.1 0.0 5.1 N/A
iShares MSCI ACWI ex US Health Care AXHE US MSWDUHCN 3.0% -6.6% 5.1 100.0% N/A 0.1 0.0 5.0 N/A
iShares MSCI ACWI ex US Industrials AXID US MSWDUINN -3.6% -1.5% 5.0 100.0% N/A 0.0 0.0 5.0 N/A
iShares MSCI ACWI ex US Information Technology AXIT US MSWDUITN -6.6% -8.1% 4.9 100.0% N/A 0.0 0.0 5.1 N/A
iShares MSCI ACWI ex US Materials AXMT US MSWDUMTN -1.7% -6.5% 5.3 100.0% N/A 0.0 0.0 5.1 N/A
iShares MSCI ACWI ex US Telecommunication Servic AXTE US MSWDUTCN 0.2% 0.1% 5.3 100.0% N/A 0.0 0.0 5.1 N/A
iShares MSCI ACWI ex US Utilities AXUT US MSWDUUTN -0.6% -8.1% 5.1 100.0% N/A 0.1 0.0 5.0 N/A

Source: Global ETF Research & Implementation Strategy Team, BlackRock, National Stock Exchange (NSX), Bloomberg.

Types of ETF exposure: United States
Aug-10 YTD Change

AUM AUM
Exposure # ETFs (US$ BN) % TOTAL # ETFs (US$ BN) % AUM
Fixed Income, 18.3%
Equity 531 $528.1 73.8% 47 -$30.1 -5.4%
Large-Cap - Equity 39 $120.6 16.8% -1 -$29.8 -19.8% Large-Cap - Equity, 16.8%
Emerging Markets - Equity 84 $113.6 15.9% 20 $9.8 9.4% Emerging Markets - Equity, 15.9%
International - Equity 161 $92.7 13.0% 13 -$4.3 -4.4% International - Equity, 13.0%
Sector - Equity 144 $69.5 9.7% 10 -$2.7 -3.8% Sector - Equity, 9.7%
Growth - Equity 27 $31.3 4.4% 0 -$4.0 -11.5%
Growth - Equity, 4.4%
Value - Equity 27 $28.7 4.0% 0 -$0.6 -2.2%
Broad Market - Equity 19 $25.9 3.6% 5 $1.7 7.1% Value - Equity, 4.0%
Mid-Cap - Equity 12 $23.6 3.3% 0 $0.8 3.5% Broad Market - Equity, 3.6%
Small-Cap - Equity 18 $22.2 3.1% 0 -$0.9 -4.0% Mid-Cap - Equity, 3.3%
Fixed Income 100 $131.0 18.3% 15 $29.1 28.6% Small-Cap - Equity, 3.1%
Leveraged Inverse 61 $16.6 2.3% 7 $2.0 13.5%
Leveraged Inverse, 2.3%
Custom 60 $14.7 2.1% 2 $5.7 62.2%
Leveraged 62 $9.3 1.3% 14 -$1.6 -14.4% Custom, 2.1%
Commodities 18 $9.1 1.3% 7 $2.2 31.4% Leveraged, 1.3%
Inverse 15 $5.0 0.7% 4 $2.1 74.7% Commodities, 1.3%
Currency 8 $1.2 0.2% 0 $0.3 37.0% Inverse, 0.7%
Active 16 $0.7 0.1% 3 $0.6 482.4%
Currency, 0.2%
Total 871 $715.7 100.0% 99 $10.3 1.5% Active, 0.1%


Index providers in the US
Ranked by AUM
Aug-10 YTD Change

AUM AUM
MSCI, 28.9%
Exposure # ETFs (US$ BN) % TOTAL # ETFs (US$ BN) % AUM
S&P, 27.3%
MSCI 109 $206.6 28.9% 22 $8.6 4.4%
S&P 161 $195.2 27.3% 11 -$22.7 -10.4% Barclays Capital, 14.6%
Barclays Capital 61 $104.8 14.6% 9 $23.5 29.0% Russell, 8.7%
Russell 53 $62.4 8.7% 2 -$3.3 -5.0% Dow Jones, 4.7%
Dow Jones 89 $33.3 4.7% 4 -$3.4 -9.3% Markit, 2.9%
Markit 2 $20.8 2.9% 0 $3.5 20.0% NASDAQ OMX, 2.8%
NASDAQ OMX 27 $20.0 2.8% 4 -$2.8 -12.2%
FTSE, 2.6%
FTSE 48 $18.3 2.6% 10 -$0.3 -1.5%
NYSE Euronext, 1.1%
NYSE Euronext 10 $7.6 1.1% 2 $1.4 22.7%
WisdomTree 35 $6.0 0.8% -10 $0.2 2.8% WisdomTree, 0.8%
Indxis 6 $4.0 0.6% 0 $1.4 53.3% Indxis, 0.6%
Deutsche Boerse 3 $3.7 0.5% 0 $0.1 3.4% Deutsche Boerse, 0.5%
Intellidex 37 $2.1 0.3% 0 -$0.4 -16.2% Intellidex, 0.3%
BNY Mellon 10 $2.0 0.3% 0 $0.0 -1.4% BNY Mellon, 0.3%
Morningstar 10 $1.5 0.2% 0 -$0.2 -11.2%
Morningstar, 0.2%
S-Network 12 $1.0 0.1% 2 -$0.1 -10.3%
S-Network, 0.1%
Zacks 13 $0.6 0.1% 0 $0.0 8.5%
Value Line 3 $0.2 0.0% -2 -$0.1 -25.5% Zacks, 0.1%
STOXX 3 $0.2 0.0% 0 -$0.1 -24.7% Value Line, 0%
CAC 0 $0.0 0.0% 0 $0.0 0.0% STOXX, 0%
Hang Seng 0 $0.0 0.0% 0 $0.0 0.0% CAC, 0%
Topix 0 $0.0 0.0% 0 $0.0 0.0%
Hang Seng, 0%
Other 179 $25.7 3.6% 45 $4.9 23.5%
Topix, 0%
Total 871 $715.7 100.0% 99 $10.3 1.5% Other, 3.6%


Top 10 ETFs in the US
Ranked by Assets Under Management (AUM)
Bloomberg AUM ADV ADV
ETF Ticker (US$ MN) ('000 Shares) (US$ MN)
SPDR S&P 500 SPY US $62,200.1 194,535 $21,142.5
iShares MSCI Emerging Markets Index Fund EEM US $39,403.9 54,830 $2,245.1
iShares MSCI EAFE Index Fund EFA US $31,875.6 17,998 $924.8
Vanguard Emerging Markets VWO US $30,207.6 11,585 $483.8
iShares S&P 500 Index Fund IVV US $20,898.9 2,695 $294.2
iShares Barclays TIPS Bond Fund TIP US $20,541.0 752 $80.7
PowerShares QQQ Trust QQQQ US $15,845.7 62,421 $2,815.0
iShares iBoxx $ Investment Grade Corporate Bond Fund LQD US $14,460.4 1,076 $119.9
Vanguard Total Stock Market ETF VTI US $13,634.0 1,663 $92.4
iShares Barclays Aggregate Bond Fund AGG US $12,518.9 698 $75.4
Ranked by US$ Average Daily Trading Volumes (ADV)

Bloomberg ADV ADV AUM
ETF Ticker (US$ MN) ('000 Shares) (US$ MN)
SPDR S&P 500 SPY US $21,142.5 194,535 $62,200.1
iShares Russell 2000 Index Fund IWM US $3,655.8 58,667 $12,168.5
PowerShares QQQ Trust QQQQ US $2,815.0 62,421 $15,845.7
iShares MSCI Emerging Markets Index Fund EEM US $2,245.1 54,830 $39,403.9
ProShares UltraShort S&P500 SDS US $985.0 29,391 $3,891.8
iShares MSCI Brazil Index Fund EWZ US $969.6 13,986 $9,081.7
iShares MSCI EAFE Index Fund EFA US $924.8 17,998 $31,875.6
Financial Select Sector SPDR Fund XLF US $911.0 64,467 $5,170.3
SPDR DJ Industrial Average ETF DIA US $757.1 7,331 $7,552.1
iShares Barclays 20+ Year Treasury Bond Fund TLT US $756.9 7,259 $3,167.3

Average expenses of ETFs vs open-end mutual
funds in the US
Average
Average TER(s) TER (bps)
Exchange Traded Funds*

Active 57
Broad Market - Equity 18
Commodities 57
Currency 48
Custom 44
Fixed Income 22
Growth - Equity 21
International - Equity 42
Inverse 95
Large-Cap - Equity 13
Leveraged 95
Leveraged Inverse 95
Mid-Cap - Equity 22
Sector - Equity 32
Small-Cap - Equity 21
Value - Equity 21
Total - Equity ETFs 34

Total - Fixed Income ETFs 25
Total - All 33
Open-end Mutual Funds**

Passive/Indexed Domestic Equity 93
Passive/Indexed International Equity 83
Passive/Indexed Fixed Income 40
Actively Managed Domestic Equity 146
Actively Managed International Equity 160
Actively Managed Fixed Income 105
*As at end February 2010.
**Captured from Morningstar on 15 March 2010.
Source: Morningstar, Global ETF Research and Implementation Strategy Team, BlackRock.

Short Interest
• Short Interest in US listed Exchange Traded Funds (ETFs) have reached
US listed ETF & HOLDRS Short Interest the highest ever during 2010.
Short Interest % of Shares S&P 500
Date (MN Shares) Outstanding Index Level Short Interest
– Based on data through August 2010 the average number of ETF
shares short during 2010 YTD reached an all time high of 1,725 Mn
2003 Avg 812 27.1% 983 812,125,142 shares, with an average of 1,653 Mn in 2009 and 1,693 Mn in 2008.
2004 Avg 952 26.3% 1,127 952,219,766 The August 2010 short interest level for US-listed ETFs was 10.9% of
2005 Avg 781 17.2% 1,206 781,047,462 shares outstanding or 1,721 Mn shares, down 0.8% from 1,735 Mn
in December 2009.
2006 Avg 837 13.5% 1,283 837,003,935
2007 Avg 1,242 16.1% 1,475 1,241,587,124
• Investors are using ETFs for long/short and hedging strategies.
2008 Avg 1,693 17.0% 1,209 1,693,145,303 – At the end of August 2010, there were 871 ETFs listed in the US and
2,308 ETFs worldwide, which provide exposure to equity sectors,
2009 Avg 1,653 12.4% 948 1,652,786,269
styles, countries and regional indices as well as fixed income,
commodity indices and currencies.
Jan-10 1,522 9.9% 1,138 1,522,472,484
• Security lending revenue on ETFs can be attractive.
Feb-10 1,746 11.3% 1,095 1,745,601,507
– For investors who own ETF shares, the lending revenue that can be
Mar-10 1,741 11.3% 1,151 1,740,821,957
earned on ETFs, may at times, and for some ETFs, more than cover
Apr-10 1,663 10.8% 1,212 1,663,051,052 the annual Total Expense Ratio (TER).
May-10 1,780 12.3% 1,136 1,780,161,990 • Short Interest is often considered an indication of the level of scepticism
Jun-10 1,868 11.9% 1,115 1,868,234,240 in the market.
Jul-10 1,759 11.4% 1,096 1,759,048,477 – Short interest data is captured for US listed securities on the 15th of
Aug-10 1,721 10.9% 1,049 1,720,741,108 each month or the next business day and reflects the number of
2010 Avg 1,725 11.2% 1,124 1,725,016,602 shares that have yet to be repurchased to give back to lenders.
The higher the short interest, the more investors are expecting a
The rules on shorting ETFs on financial indices and the use downturn. Short positions fall in value as stocks rise, and vice versa.
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.
On 26 February 2010 the SEC approved a new rule that places

restrictions on short selling a security when it has experienced
a price decline of at least 10% in a single day. If this level is
Source: Regulatory Notice 09-31, Financial Industry Regulatory Authority, SEC
reached, short selling is only allowed if the price of the security With short sales the investor risks paying more for a security than the investor received from its sale.
is above the current national best bid. Data as at mid August 2010.

ETP providers in the United States
Ranked by assets
Aug-10 YTD Change
Assets AUG-10 NNA YTD NNA Assets % Market
PROVIDER # ETPs (US$ BN) % Total # Planned (US$ BN) (US$ BN) # ETPs % ETPs (US$ BN) % Assets Share
State Street Global Advisors 1 $51.8 52.7% 0 $0.8 $6.7 0 0.0% $12.0 30.3% 7.6%
iShares 4 $11.1 11.3% 1 $0.1 $0.5 0 0.0% $1.4 14.1% 0.3%
Deutsche Bank 36 $10.2 10.3% 2 -$0.2 -$2.9 2 5.9% -$3.4 -25.2% -5.1%
Barclays (iPath) 38 $7.4 7.5% 25 $0.8 $1.7 8 26.7% $1.4 23.7% 0.7%
United States Commodity Funds 9 $4.6 4.7% 1 $0.3 -$1.1 2 28.6% -$2.9 -38.3% -3.8%
Merrill Lynch 17 $4.2 4.3% 0 -$0.2 -$0.3 0 0.0% -$1.0 -18.8% -1.6%
Rydex SGI 9 $2.5 2.6% 13 $0.1 -$0.1 0 0.0% -$0.2 -6.8% -0.5%
ETF Securities 4 $1.8 1.8% 20 $0.2 $1.2 2 100.0% $1.3 265.9% 1.3%
ProShares 12 $1.6 1.6% 38 $0.0 $0.5 0 0.0% $0.5 50.7% 0.4%
JPMorgan Chase 2 $1.5 1.5% 0 $0.0 $0.7 0 0.0% $0.8 111.7% 0.7%
Swedish Export Credit Corp 7 $0.8 0.8% 0 $0.0 $0.0 0 0.0% -$0.1 -7.1% -0.2%
GreenHaven Commodity Services 1 $0.3 0.3% 0 $0.0 $0.1 0 0.0% $0.1 28.4% 0.0%
Morgan Stanley 4 $0.1 0.1% 0 $0.0 $0.0 0 0.0% $0.0 45.8% 0.0%
Barclays Capital 9 $0.1 0.1% 1 $0.0 $0.0 1 12.5% $0.0 61.4% 0.0%
Credit Suisse 3 $0.1 0.1% 0 $0.0 $0.1 2 200.0% $0.1 2363.3% 0.1%
Goldman Sachs 2 $0.1 0.1% 0 $0.0 $0.0 0 0.0% $0.0 -8.1% 0.0%
HSBC USA 1 $0.1 0.1% 0 $0.0 $0.0 0 0.0% $0.0 -26.6% 0.0%
Teucrium Trading 1 $0.0 0.0% 0 $0.0 $0.0 1 100.0% $0.0 0.0% 0.0%
Claymore Securities - - - 2 - - - - - - -
Jefferies Asset Management - - - 2 - -
Sprott Asset Management - - - 1 - - - - - - -
WealthNotes Capital Management - - - 1 - - - - - - -
Total 160 $98.2 100.0% 107 $2.0 $7.0 18 12.7% $10.1 11.4%


Top 10 ETPs in the US
Ranked by Assets
Bloomberg Assets ADV ADV
ETP Ticker (US$ MN) ('000 Shares) (US$ MN)
SPDR Gold Trust GLD US $51,785.8 10,041 $1,214.0
iShares Silver Trust SLV US $5,677.5 6,844 $127.5
PowerShares DB Commodity Index Tracking Fund DBC US $4,144.5 1,802 $40.5
iShares COMEX Gold Trust IAU US $3,792.7 2,897 $35.1
United States Natural Gas Fund LP UNG US $2,441.6 19,070 $122.0
iPath Dow Jones-UBS Commodity Index Total Return ETN DJP US $2,090.7 340 $13.5
iPath S&P 500 VIX Short-Term Futures ETN VXX US $2,015.3 22,028 $488.6
PowerShares DB Agriculture Fund DBA US $1,983.7 1,311 $34.3
Oil Services HOLDRS OIH US $1,961.2 4,388 $433.4
United States Oil Fund LP USO US $1,911.9 9,173 $302.9
Bloomberg ADV ADV Assets
ETP Ticker (US$ MN) ('000 Shares) (US$ MN)
SPDR Gold Trust GLD US $1,214.0 10,041 $51,785.8
iPath S&P 500 VIX Short-Term Futures ETN VXX US $488.6 22,028 $2,015.3
Oil Services HOLDRS OIH US $433.4 4,388 $1,961.2
Semiconductor HOLDRS SMH US $336.4 13,660 $513.5
United States Oil Fund LP USO US $302.9 9,173 $1,911.9
Retail HOLDRS RTH US $237.1 2,716 $418.1
Euro Currency Trust FXE US $142.4 1,128 $479.6
iShares Silver Trust SLV US $127.5 6,844 $5,677.5
United States Natural Gas Fund LP UNG US $122.0 19,070 $2,441.6
PowerShares DB US Dollar Index Bullish Fund UUP US $77.5 3,210 $1,038.0
ETPs are products that have similarities to ETFs in the way they trade and settle but they do not use an open-end 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 and ETP asset growth
Assets US$ Bn
# Products
1,200 2,500
1,000
2,000
800
1,500
600
1,000
400
500
200
0 0
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Aug-10
ETF Assets Total $0.8 $1.1 $2.3 $5.3 $8.2 $17.6 $39.6 $74.3 $104.8 $141.6 $212.0 $309.8 $412.1 $565.6 $796.7 $711.1 $1,036.0 $1,064.4
ETF Commodity Assets $0.0 $0.1 $0.3 $0.5 $1.2 $3.4 $6.3 $10.0 $25.6 $32.4
ETF Fixed Income Assets $0.1 $0.1 $4.0 $5.8 $23.1 $21.3 $35.8 $59.9 $104.0 $167.0 $203.6
ETF Equity Assets $0.8 $1.1 $2.3 $5.3 $8.2 $17.6 $39.6 $74.3 $104.7 $137.5 $205.9 $286.3 $389.6 $526.5 $729.9 $596.4 $841.6 $824.3
ETP Assets Total $2.0 $5.1 $3.9 $4.1 $6.3 $9.3 $15.9 $32.5 $54.6 $61.2 $119.7 $135.0
# ETFs 3 3 4 21 21 31 33 92 202 280 282 336 461 714 1,173 1,596 1,945 2,308
# ETPs 2 14 17 17 18 22 64 170 347 517 625 874


ETFs/ETPs listed by region
Global US Europe Japan Asia ex-Japan Latin America Canada

YTD YTD YTD YTD YTD YTD YTD
Metric Aug-10 Change (%) Aug-10 Change (%) Aug-10 Change (%) Aug-10 Change (%) Aug-10 Change (%) Aug-10 Change (%) Aug-10 Change (%)
ETFs
AUM (US$Bn) 1,064.4 2.7% 715.7 1.5% 230.9 1.7% 24.3 -1.5% 48.2 23.9% 11.9 20.7% 31.6 10.7%
# ETFs 2,308 18.7% 871 12.8% 985 19.1% 74 8.8% 180 40.6% 21 23.5% 150 36.4%
# Listings 4,922 28.6% 871 12.8% 3,140 28.8% 77 8.5% 284 38.5% 347 86.6% 176 32.3%
# Providers 129 19.4% 30 3.4% 37 8.8% 6 0.0% 56 33.3% 3 0.0% 4 0.0%
# Exchanges 43 7.5% 2 0.0% 19 5.6% 2 0.0% 13 0.0% 3 0.0% 1 0.0%
ADV (US$Mn) 57,516.4 13.4% 52,914.3 15.6% 2,704.8 0.7% 121.8 -20.9% 731.9 -18.0% 298.7 34.1% 735.3 -23.0%
ETPs
Assets (US$Bn) 135.0 12.7% 98.2 11.4% 19.7 25.4% 0.3 11.1% 1.1 37.0% - - 0.4 100.0%
# ETPs 874 41.0% 160 12.7% 387 117.4% 9 80.0% 14 16.7% - - 1 100.0%
# Listings 1,439 55.7% 160 12.7% 885 98.0% 29 163.6% 17 13.3% 23 228.6% 21 61.5%
# Providers 48 29.7% 18 5.9% 9 200.0% 4 100.0% 10 42.9% - - 1 100.0%
# Exchanges 20 11.1% 1 0.0% 6 20.0% 2 0.0% 5 25.0% 1 0.0% 1 0.0%
Total
Assets (US$Bn) 1,199.3 3.8% 813.9 2.6% 250.5 3.3% 24.6 -1.2% 49.3 24.2% 11.9 20.7% 32.0 12.2%
# ETFs/ETPs 3,182 24.1% 1,031 12.8% 1,372 36.5% 83 13.7% 194 38.6% 21 23.5% 151 38.5%
# Listings 6,361 33.9% 1,031 12.8% 4,025 39.5% 106 29.3% 301 36.8% 370 91.7% 197 35.9%
# Providers 159 21.4% 44 4.8% 42 23.5% 8 33.3% 60 36.4% 3 0.0% 4 0.0%
# Exchanges 46 7.0% 2 0.0% 19 5.6% 2 0.0% 13 0.0% 3 0.0% 1 0.0%


Top 25 ETF providers around the world
Ranked by AUM
Aug-10 YTD CHANGE
AUM AUM MARKET
PROVIDER # ETFs (US$ BN) % TOTAL # PLANNED # ETFs % ETFs (US$ BN) % AUM SHARE
iShares 453 $492.7 46.3% 18 40 9.7% $3.8 0.8% -0.9%
State Street Global Advisors 110 $139.6 13.1% 34 3 2.8% -$21.4 -13.3% -2.4%
Vanguard 47 $113.3 10.6% 23 0 0.0% $21.3 23.1% 1.8%
Lyxor Asset Management 127 $44.1 4.1% 1 2 1.6% -$2.3 -4.9% -0.3%
db x-trackers 161 $38.2 3.6% 7 40 33.1% $0.8 2.2% 0.0%
PowerShares 136 $32.8 3.1% 39 11 8.8% -$1.8 -5.3% -0.3%
ProShares 99 $24.4 2.3% 98 21 26.9% $1.2 5.0% 0.0%
Van Eck Associates Corp 27 $14.9 1.4% 18 4 17.4% $2.4 19.4% 0.2%
Nomura Asset Management 32 $12.7 1.2% 0 2 6.7% -$0.6 -4.8% -0.1%
Credit Suisse Asset Management 54 $11.8 1.1% 0 27 100.0% $2.1 21.9% 0.2%
Zurich Cantonal Bank 7 $9.4 0.9% 0 3 75.0% $2.7 40.0% 0.2%
Bank of New York 1 $8.6 0.8% 0 0 0.0% $0.0 -0.2% 0.0%
WisdomTree Investments 43 $7.0 0.7% 68 -9 -17.3% $0.6 8.9% 0.0%
Claymore Securities 70 $6.8 0.6% 34 13 22.8% $0.6 9.5% 0.0%
Commerzbank 79 $6.7 0.6% 2 17 27.4% $0.4 6.9% 0.0%
Direxion Shares 38 $6.4 0.6% 147 12 46.2% $1.4 27.5% 0.1%
Amundi ETF 87 $6.0 0.6% 0 24 38.1% $1.3 26.6% 0.1%
Hang Seng Investment Management 3 $5.7 0.5% 0 0 0.0% $0.4 7.4% 0.0%
Nikko Asset Management 14 $5.4 0.5% 0 4 40.0% -$0.3 -5.1% 0.0%
ETFlab Investment 35 $5.3 0.5% 0 4 12.9% -$1.8 -25.7% -0.2%
Source Markets 51 $5.2 0.5% 19 19 59.4% $2.4 85.3% 0.2%
EasyETF 64 $5.2 0.5% 0 0 0.0% -$0.7 -11.7% -0.1%
UBS Global Asset Management 20 $5.0 0.5% 9 6 42.9% $1.5 42.2% 0.1%
Daiwa Asset Management 23 $4.8 0.4% 1 0 0.0% -$0.2 -3.6% 0.0%
BBVA Asset Management 10 $4.6 0.4% 0 1 11.1% $2.3 98.0% 0.2%


Global ETF assets by type of exposure
Aug-10 YTD Change

AUM AUM
Region of Exposure # ETFs (US$ BN) % TOTAL # ETFs (US$ BN) % AUM
Equity 1,787 $824.3 77.4% 246 -$17.3 -2.1% North America - Equity, 37.4%
North America - Equity 561 $398.4 37.4% 66 -$24.9 -5.9% Fixed Income - All (ex-Cash), 18.5%
Emerging Markets - Equity 401 $187.7 17.6% 102 $24.5 15.0%
Emerging Markets - Equity, 17.6%
Europe - Equity 462 $100.0 9.4% 40 -$14.7 -12.8%
Europe - Equity, 9.4%
Asia Pacific - Equity 172 $63.3 5.9% 24 $0.7 1.2%
Asia Pacific - Equity, 5.9%
Global (ex-US) - Equity 71 $53.2 5.0% 7 -$2.5 -4.4%
Global (ex-US) - Equity, 5%
Global - Equity 120 $21.8 2.0% 7 -$0.3 -1.6%
Fixed Income 353 $203.6 19.1% 72 $36.6 21.9% Commodities, 3%
Fixed Income - All (ex-Cash) 330 $196.5 18.5% 67 $37.4 23.5% Global - Equity, 2%
Fixed Income - Cash (Money Market) 23 $7.1 0.7% 5 -$0.9 -10.9% Fixed Income - Cash (Money Market), 0.7%
Commodities 108 $32.4 3.0% 38 $6.8 26.4% Alternative, 0.2%
Alternative 9 $1.7 0.2% 7 $1.7 100.0% Currency, 0.1%
Currency 15 $1.6 0.1% 1 $0.4 36.4% Mixed, 0.1%
Mixed 36 $0.8 0.1% -1 $0.2 24.0%
Total 2,308 $1,064.4 100.0% 363 $28.3 2.7%


Index providers worldwide
Ranked by AUM
Aug-10 YTD Change
MSCI, 24.3%
AUM AUM
S&P, 21.4%
Index Provider # ETFs (US$ BN) % TOTAL # ETFs (US$ BN) % AUM
MSCI 336 $258.7 24.3% 71 $14.9 6.1%
Barclays Capital, 10.5%
S&P 278 $227.9 21.4% 45 -$21.3 -8.5% Russell, 5.9%
Barclays Capital 81 $111.9 10.5% 11 $24.4 27.9% FTSE, 4.3%
Russell 60 $62.7 5.9% -1 -$3.3 -5.0% Markit, 4%
FTSE 163 $46.1 4.3% 37 $3.4 7.9% STOXX, 3.9%
Markit 92 $43.0 4.0% 22 $4.8 12.6% Dow Jones, 3.9%
STOXX 214 $41.8 3.9% 10 -$9.2 -18.1%
NASDAQ OMX, 2.2%
Dow Jones 150 $41.1 3.9% 14 $0.2 0.5%
Deutsche Boerse, 2.2%
NASDAQ OMX 55 $23.7 2.2% 12 -$2.8 -10.5%
Deutsche Boerse 40 $23.4 2.2% 10 $0.0 -0.1%
Topix, 1.2%
Topix 53 $12.8 1.2% 0 $0.3 2.7% Hang Seng, 1.2%
Hang Seng 12 $12.6 1.2% 3 $0.8 6.5% Nikkei, 1.1%
Nikkei 9 $11.2 1.1% 1 -$1.3 -10.1% EuroMTS, 1%
EuroMTS 29 $10.5 1.0% 7 -$0.5 -4.7% SIX Swiss Exchange, 0.7%
SIX Swiss Exchange 15 $7.6 0.7% 2 $0.3 3.9% NYSE Euronext, 0.7%
NYSE Euronext 16 $7.6 0.7% 6 $1.5 23.8%
CAC, 0.6%
CAC 15 $6.3 0.6% -3 -$1.2 -15.9%
WisdomTree, 0.6%
WisdomTree 35 $6.0 0.6% -10 $0.2 2.8%
Indxis 6 $4.0 0.4% -1 $1.2 44.3%
Indxis, 0.4%
CSI 27 $2.7 0.3% 16 $0.3 12.4% CSI, 0.3%
BNY Mellon 11 $2.3 0.2% 0 -$0.1 -2.3% BNY Mellon, 0.2%
Intellidex 38 $2.2 0.2% -4 -$0.4 -16.5% Intellidex, 0.2%
Morningstar 10 $1.5 0.1% 0 -$0.2 -11.2% Morningstar, 0.1%
S-Network 15 $1.1 0.1% 2 -$0.1 -8.7% S-Network, 0.1%
Zacks 14 $0.7 0.1% 0 $0.1 10.6%
Zacks, 0.1%
Value Line 3 $0.2 0.0% -2 -$0.1 -25.5%
Value Line, 0%
Other 531 $94.8 8.9% 115 $16.4 20.9%
Other, 8.9%
Total 2,308 $1,064.4 100.0% 363 $28.3 2.7%

Top 10 ETFs worldwide
Ranked by Assets Under Management (AUM)
Bloomberg AUM ADV ADV
ETF Country Listed Ticker (US$ MN) ('000 Shares) (US$ MN)
SPDR S&P 500 US SPY US $62,200.1 194,535 $21,142.5
iShares MSCI Emerging Markets Index Fund US EEM US $39,403.9 54,830 $2,245.1
iShares MSCI EAFE Index Fund US EFA US $31,875.6 17,998 $924.8
Vanguard Emerging Markets US VWO US $30,207.6 11,585 $483.8
iShares S&P 500 Index Fund US IVV US $20,898.9 2,695 $294.2
iShares Barclays TIPS Bond Fund US TIP US $20,541.0 752 $80.7
PowerShares QQQ Trust US QQQQ US $15,845.7 62,421 $2,815.0
iShares iBoxx $ Investment Grade Corporate Bond Fund US LQD US $14,460.4 1,076 $119.9
Vanguard Total Stock Market ETF US VTI US $13,634.0 1,663 $92.4
iShares Barclays Aggregate Bond Fund US AGG US $12,518.9 698 $75.4

Bloomberg ADV ADV AUM
ETF Country Listed Ticker (US$ MN) ('000 Shares) (US$ MN)
SPDR S&P 500 US SPY US $21,142.5 194,535 $62,200.1
iShares Russell 2000 Index Fund US IWM US $3,655.8 58,667 $12,168.5
PowerShares QQQ Trust US QQQQ US $2,815.0 62,421 $15,845.7
iShares MSCI Emerging Markets Index Fund US EEM US $2,245.1 54,830 $39,403.9
ProShares UltraShort S&P500 US SDS US $985.0 29,391 $3,891.8
iShares MSCI Brazil Index Fund US EWZ US $969.6 13,986 $9,081.7
iShares MSCI EAFE Index Fund US EFA US $924.8 17,998 $31,875.6
Financial Select Sector SPDR Fund US XLF US $911.0 64,467 $5,170.3
SPDR DJ Industrial Average ETF US DIA US $757.1 7,331 $7,552.1
iShares Barclays 20+ Year Treasury Bond Fund US TLT US $756.9 7,259 $3,167.3


Global ETF listings
1 2 3 4 5
BZ CN CL MX US
P listings 7 150 - 14 871
T listings 7 176 50 290 871
Providers 2 4 - 2 30
AUM US$Bn 1.6 31.6 - 10.3 715.7
BZ (Brazil), CN (Canada), CL (Chile), MX (Mexico),

US (United States)
6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
A B F FR G GR H I IT N NO R SAR SL SA SP S SW T UAE UK
P listings 1 1 1 250 369 2 1 14 13 11 6 1 2 1 24 10 16 98 11 1 179
T listings 21 1 1 426 1,057 2 1 14 447 106 6 1 2 1 24 44 48 474 11 1 479
Providers 1 1 1 9 9 2 1 2 4 4 2 1 1 1 7 2 2 6 5 1 9
AUM US$Bn 0.0 0.0 0.2 51.0 90.2 0.1 0.0 0.2 1.7 0.2 0.6 0.0 0.0 0.0 1.8 1.3 2.0 29.5 0.1 0.0 53.5
A (Austria), B (Belgium), F (Finland), FR (France), G (Germany), GR (Greece), H (Hungary), I (Ireland), IT (Italy), N (Netherlands), NO (Norway), R (Russia) SAR (Saudi Arabia), SL (Slovenia), SA (South Africa),
SP (Spain), S (Sweden), SW (Switzerland), T (Turkey), UAE (United Arab Emirates), UK (United Kingdom)
27 28 29 30 31 32 33 34 35 36 37 38
AU CH HK IN IND J MY NZ SG SK TW TH
P listings 11 12 37 15 1 74 4 6 20 59 12 3
T listings 32 12 66 15 1 77 5 6 71 59 14 3 P listings = Primary listings

Providers 4 10 10 7 1 6 3 2 8 12 2 2
T listings = Total listings
Providers = Primary ETF providers
AUM US$Bn 2.8 11.5 23.1 0.3 0.0 24.3 0.4 0.3 2.8 4.3 2.6 0.1 AUM = Assets Under Management in primary listings only
AU (Australia), CH (China), HK (Hong Kong), IN (India), IND (Indonesia), J (Japan), MY (Malaysia), NZ (New Zealand),
SG (Singapore), SK (South Korea), TW (Taiwan), TH (Thailand)

Top 25 ETP providers around the world
Ranked by assets
Aug-10 YTD Change
Assets Assets % Market
PROVIDER # ETPs (US$ BN) % Total # Planned # ETPs % ETPs (US$ BN) % Assets Share
State Street Global Advisors 1 $51.8 38.4% 0 0 0.0% $12.0 30.3% 5.2%
ETF Securities 196 $20.2 15.0% 34 42 27.3% $4.0 24.9% 1.5%
iShares 4 $11.1 8.2% 1 0 0.0% $1.4 14.1% 0.1%
Deutsche Bank 63 $10.7 7.9% 2 29 85.3% -$2.9 -21.4% -3.4%
Barclays (iPath) 50 $7.4 5.5% 25 20 66.7% $1.5 25.0% 0.5%
United States Commodity Funds 9 $4.6 3.4% 1 2 28.6% -$2.9 -38.3% -2.8%
Merrill Lynch 17 $4.2 3.1% 0 0 0.0% -$1.0 -18.8% -1.2%
Rydex SGI 9 $2.5 1.9% 13 0 0.0% -$0.2 -6.8% -0.4%
Absa Capital 1 $2.0 1.5% 3 0 0.0% $0.1 5.2% -0.1%
ProShares 12 $1.6 1.2% 38 0 0.0% $0.5 50.7% 0.3%
JPMorgan Chase 2 $1.5 1.1% 0 0 0.0% $0.8 111.7% 0.5%
Swedish Export Credit Corp 7 $0.8 0.6% 0 0 0.0% -$0.1 -7.1% -0.1%
Source Markets 28 $0.7 0.5% 0 0 0.0% $0.3 75.0% 0.2%
GreenHaven Commodity Services 1 $0.3 0.2% 0 0 0.0% $0.1 28.4% 0.0%
Nomura Asset Management 3 $0.2 0.2% 0 -1 -25.0% $0.0 -5.3% 0.0%
Benchmark Asset Management 1 $0.2 0.2% 0 0 0.0% $0.1 100.0% 0.1%
UBS Global Asset Management 69 $0.2 0.1% 0 69 100.0% $0.2 100.0% 0.1%
RBS 18 $0.2 0.1% 0 18 100.0% $0.2 100.0% 0.1%
Societe Generale 42 $0.1 0.1% 0 42 100.0% $0.1 100.0% 0.1%
Morgan Stanley 4 $0.1 0.1% 0 0 0.0% $0.0 45.8% 0.0%
Barclays Capital 9 $0.1 0.1% 1 1 12.5% $0.0 61.4% 0.0%
UTI Asset Management 1 $0.1 0.1% 0 0 0.0% $0.0 44.7% 0.0%
Credit Suisse 3 $0.1 0.1% 0 2 200.0% $0.1 2363.3% 0.1%
Goldman Sachs 2 $0.1 0.0% 0 0 0.0% $0.0 -8.1% 0.0%


Global ETP listings
1 2 3
Canada Mexico US
P listings 1 - 160
T listings 21 23 160
Providers 1 - 18
Assets US$ Bn 0.4 - 98.2
4 5 6 7 8 9 10 11 12
Botswana France Germany Israel Italy Nether- South UAE UK
lands Africa
P listings - 3 89 300 - - 2 1 295
T listings 1 46 403 300 47 33 2 1 356
Providers - 1 6 7 - - 2 1 5
Assets US$ Bn 0.0 0.0 0.8 13.3 - - 2.0 0.0 18.9
13 14 15 16 17 18
Australia Hong India Japan Singapore South
Kong Korea
P listings 5 - 8 9 - 1
P listings = Primary listings
T listings = Total listings
T listings 5 1 8 29 2 1 Providers = Primary ETF providers
Assets in primary listings only
Providers 1 - 8 4 - 1
Assets US$ Bn 0.6 - 0.5 0.3 - 0.0

European ETF and ETP growth
Assets US$ Bn # Products
260 1,100
240 1,000
220
900
200
800
180
160 700
140 600
120 500
100 400
80
300
60
200
40
20 100
0 0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Aug-10
ETF Assets Total $0.7 $5.7 $10.7 $20.4 $34.0 $54.9 $89.7 $128.5 $142.7 $226.9 $230.9
ETF Commodity Assets $0.4 $2.0 $3.3 $4.9 $15.2 $20.0
ETF Fixed Income Assets $1.0 $2.9 $5.2 $12.1 $21.0 $41.1 $51.6 $54.6
ETF Equity Assets $0.7 $5.7 $10.7 $19.4 $31.0 $49.3 $75.7 $103.5 $96.6 $159.8 $154.1
ETP Assets $1.1 $2.1 $4.9 $7.0 $15.7 $19.7
# ETFs 6 71 118 104 114 165 273 423 636 827 985
# ETPs 2 32 56 123 178 387


ETF providers in Europe
Ranked by AUM
Aug-10 YTD Change
PROVIDER # ETFs # Listings (US$ BN) % Total # Planned (US$ BN) (US$ BN) # ETFs % ETFs (US$ BN) % AUM Share
iShares 173 745 $83.8 36.3% 3 $1.0 $6.6 5 3.0% -$1.9 -2.3% -1.5%
Lyxor Asset Management 125 471 $43.1 18.7% 0 -$0.4 $3.0 2 1.6% -$2.5 -5.4% -1.4%
db x-trackers 135 531 $37.4 16.2% 5 $0.9 $3.1 19 16.4% $0.2 0.6% -0.2%
Credit Suisse Asset Management 54 118 $11.8 5.1% 0 $0.2 $2.5 27 100.0% $2.1 21.9% 0.8%
Zurich Cantonal Bank 7 12 $9.4 4.1% 0 $0.2 $1.7 3 75.0% $2.7 40.0% 1.1%
Commerzbank 79 316 $6.7 2.9% 2 $0.0 $1.2 17 27.4% $0.4 6.9% 0.1%
Amundi ETF 87 216 $6.0 2.6% 0 $0.0 $2.0 24 38.1% $1.3 26.6% 0.5%
ETFlab Investment 35 54 $5.3 2.3% 0 $0.1 -$0.3 4 12.9% -$1.8 -25.7% -0.8%
Source Markets 51 51 $5.2 2.3% 19 -$0.5 $2.7 19 59.4% $2.4 85.3% 1.0%
EasyETF 64 121 $5.2 2.2% 0 -$0.1 -$0.1 0 0.0% -$0.7 -11.7% -0.3%
UBS Global Asset Management 20 99 $5.0 2.2% 9 $0.2 $2.1 6 42.9% $1.5 42.2% 0.6%
Swiss & Global Asset Management 16 32 $3.5 1.5% 0 $0.0 $1.1 12 300.0% $1.4 68.2% 0.6%
XACT Fonder 12 16 $2.5 1.1% 0 -$0.1 $0.0 0 0.0% -$0.2 -6.7% -0.1%
BBVA Asset Management 8 8 $1.2 0.5% 0 $0.0 $0.0 0 0.0% -$1.1 -48.1% -0.5%
State Street Global Advisors 13 36 $1.0 0.4% 0 $0.0 -$0.3 0 0.0% -$0.5 -31.9% -0.2%
PowerShares 19 66 $1.0 0.4% 1 $0.0 $0.0 0 0.0% $0.0 -3.8% 0.0%
RBS 10 55 $0.9 0.4% 21 $0.0 $0.1 0 0.0% $0.2 20.2% 0.1%
ETF Securities 25 107 $0.5 0.2% 0 $0.0 $0.2 4 19.0% $0.2 50.8% 0.1%
Marshall Wace Asset Management 3 4 $0.4 0.2% 0 $0.0 $0.4 3 100.0% $0.4 100.0% 0.2%
HSBC 9 13 $0.3 0.1% 11 $0.0 $0.2 6 200.0% $0.2 297.5% 0.1%
Seligson & Co Fund Management 1 1 $0.2 0.1% 0 $0.0 $0.0 0 0.0% -$0.1 -23.2% 0.0%
DnB NOR Asset Management 3 3 $0.2 0.1% 0 $0.0 $0.0 0 0.0% -$0.1 -44.5% -0.1%
JPM Structured Fund Management 6 12 $0.1 0.0% 0 $0.0 -$0.1 0 0.0% -$0.1 -40.7% 0.0%
continued…


ETF providers in Europe (continued)
Ranked by AUM
Aug-10 YTD Change

PROVIDER # ETFs # Listings (US$ BN) % Total # Planned (US$ BN) (US$ BN) # ETFs % ETFs (US$ BN) % AUM Share
Finans Portfoy Yonetimi 6 6 $0.1 0.0% 0 $0.0 -$0.1 0 0.0% $0.0 -26.1% 0.0%
Alpha Asset Management 1 1 $0.1 0.0% 0 $0.0 $0.0 0 0.0% $0.0 -38.7% 0.0%
HQ Fonder 7 7 $0.0 0.0% 0 $0.0 $0.0 4 133.3% $0.0 0.0% 0.0%
NCB Investment Services 1 1 $0.0 0.0% 0 $0.0 $0.0 0 0.0% $0.0 -29.3% 0.0%
Is Investment 2 2 $0.0 0.0% 0 $0.0 -$0.1 0 0.0% $0.0 119.7% 0.0%
OTP Fund Management 1 1 $0.0 0.0% 0 $0.0 $0.0 0 0.0% $0.0 -15.5% 0.0%
Osmosis Investment Management 1 2 $0.0 0.0% 0 $0.0 $0.0 1 100.0% $0.0 0.0% 0.0%
Medvesek Pusnik AM 1 1 $0.0 0.0% 0 $0.0 $0.0 0 0.0% $0.0 -6.4% 0.0%
NBG Asset Management 1 1 $0.0 0.0% 1 $0.0 $0.0 0 0.0% $0.0 0.0% 0.0%
Bizim Menkul Degerler 1 1 $0.0 0.0% 0 $0.0 $0.0 0 0.0% $0.0 -8.2% 0.0%
Think Capital 5 5 $0.0 0.0% 0 $0.0 $0.0 0 0.0% $0.0 0.0% 0.0%
Troika Dialog Asset Management 1 1 $0.0 0.0% 0 $0.0 $0.0 1 100.0% $0.0 0.0% 0.0%
Garanti Bank 1 1 $0.0 0.0% 0 $0.0 $0.0 1 100.0% $0.0 0.0% 0.0%
Kuveyt Turk Katilim Bankasi 1 1 $0.0 0.0% 0 $0.0 $0.0 1 100.0% $0.0 0.0% 0.0%
Ak Securities 0 0 $0.0 0.0% 0 $0.0 $0.0 -1 -100.0% $0.0 0.0% 0.0%
Direxion Shares - 12 - - 0 - - - - - - -
ProShares - 8 - - 0 - - - - - - -
Van Eck Associates Corp - 1 - - 0 - - - - - - -
Vanguard - 1 - - 0 - - - - - - -
Hinduja Bank (Switzerland) - - - - 1 - - - - - - -
Qbasis Invest - - - - 1 - - - - - - -
Total 985 3,140 $230.9 100.0% 74 $1.6 $26.0 158 19.1% $4.0 1.7%


Types of ETF exposure in Europe
Ranked by AUM
ETFs should be viewed as a tool for both active and passive managers
Aug-10 YTD Change

Fixed Income, 23.4%
AUM AUM
Type of Exposure # ETFs (US$ BN) % TOTAL # ETFs (US$ BN) % AUM Country Exposure Europe - Equity, 15%
Equity - Total 668 $148.7 64.4% 91 -$5.6 -3.6% Regional Exposure Eurozone - Equity, 11.8%
Country Exposure Europe - Equity 103 $34.5 15.0% 13 -$2.3 -6.2% Emerging Markets - Equity, 11.8%
Regional Exposure Eurozone - Equity 37 $27.3 11.8% 4 -$7.7 -22.0% Commodities, 8.7%
Emerging Markets - Equity 107 $27.1 11.8% 23 $4.7 20.8%
International - Equity, 5.7%
International - Equity 68 $13.1 5.7% 13 $2.1 19.1%
Country Exposure United States - Equity 49 $13.0 5.6% 12 $1.0 8.0% Country Exposure United States - Equity, 5.6%
Regional Exposure Europe - Equity 50 $9.9 4.3% 3 -$2.1 -17.2% Regional Exposure Europe - Equity, 4.3%
European Sector Exposure - Equity 134 $8.6 3.7% 8 -$1.6 -15.7% European Sector Exposure - Equity, 3.7%
Global Exposure - Equity 46 $8.5 3.7% 0 $0.3 4.0%
Global Exposure - Equity, 3.7%
Style - Equity 43 $4.9 2.1% 3 $0.2 3.4%
Style - Equity, 2.1%
Eurozone Sector Exposure - Equity 19 $1.7 0.7% 1 -$0.3 -14.9%
US Sector Exposure - Equity 12 $0.2 0.1% 11 $0.1 451.8% Inverse, 1.4%
Fixed Income 169 $54.0 23.4% 20 $2.6 5.1% Eurozone Sector Exposure - Equity, 0.7%
Commodities 62 $20.0 8.7% 27 $4.9 32.0% Alternative, 0.7%
Inverse 40 $3.1 1.4% 10 $0.4 13.4%
Leveraged, 0.6%
Alternative 8 $1.7 0.7% 5 $1.5 1245.9%
Leveraged 16 $1.5 0.6% 2 -$0.1 -7.1% Leveraged Inverse, 0.6%
Leveraged Inverse 14 $1.4 0.6% 5 $0.3 25.1% Currency, 0.1%
Currency 4 $0.3 0.1% -2 $0.0 -2.8% US Sector Exposure - Equity, 0.1%
Mixed (Equity & Fixed Income) 4 $0.1 0.0% 0 $0.0 19.6%
Mixed (Equity & Fixed Income), 0%
Total 985 $230.9 100.0% 158 $4.0 1.7%


Index providers in Europe
Ranked by AUM
Aug-10 YTD Change

AUM AUM
Type of Exposure # ETFs (US$ BN) % TOTAL # ETFs (US$ BN) % AUM MSCI, 21.4%
MSCI 202 $49.5 21.4% 40 $5.8 13.4% STOXX, 18%
STOXX 210 $41.5 18.0% 10 -$9.1 -18.0%
Deutsche Boerse, 8.6%
Deutsche Boerse 37 $19.7 8.6% 10 -$0.1 -0.7%
Markit, 8.3%
Markit 83 $19.3 8.3% 18 $0.8 4.2%
FTSE, 7.2%
FTSE 81 $16.7 7.2% 18 $0.8 5.3%
EuroMTS, 4.5%
EuroMTS 29 $10.5 4.5% 7 -$0.5 -4.7%
S&P, 4.3%
S&P 52 $10.0 4.3% 19 -$0.8 -7.0%
SIX Swiss Exchange 15 $7.6 3.3% 2 $0.3 3.9% SIX Swiss Exchange, 3.3%
Barclays Capital 18 $7.0 3.1% 0 $0.8 12.8% Barclays Capital, 3.1%
CAC 15 $6.3 2.7% -3 -$1.2 -15.9% CAC, 2.7%
NASDAQ OMX 24 $3.6 1.6% 6 -$0.1 -1.9% NASDAQ OMX, 1.6%
Dow Jones 35 $3.6 1.5% 2 $0.4 12.5% Dow Jones, 1.5%
Hang Seng 6 $1.5 0.6% 2 $0.1 3.6% Hang Seng, 0.6%
Topix 4 $0.8 0.3% 0 $0.1 20.6% Topix, 0.3%
Nikkei 3 $0.5 0.2% 1 $0.0 -4.5% Nikkei, 0.2%
Russell 4 $0.2 0.1% -4 $0.0 -17.8% Russell, 0.1%
S-Network 3 $0.1 0.0% 0 $0.0 16.9% S-Network, 0%
NYSE Euronext 6 $0.1 0.0% 4 $0.1 100.0% NYSE Euronext, 0%
Intellidex 1 $0.0 0.0% -4 $0.0 -35.7%
Intellidex, 0%
Other 157 $32.4 14.0% 30 $6.6 25.8%
Other, 14%
Total 985 $230.9 100.0% 158 $4.0 1.7%


Average expenses of ETFs vs open-end mutual
funds in Europe
Average
EXPOSURE TER (bps)
Exchange Traded Funds*

Alternative 25
Commodities 44
Country Exposure Europe - Equity 30
Country Exposure United States - Equity 38
Currency 30
Emerging Markets - Equity 69
European Sector Exposure - Equity 35
Eurozone Sector Exposure - Equity 42
Fixed Income 17
Global Exposure - Equity 49
International - Equity 56
Inverse 41
Leveraged 59
Leveraged Inverse 61
Mixed 72
Regional Exposure Europe - Equity 38
Regional Exposure Eurozone - Equity 23
Style - Equity 37
US Sector Exposure - Equity 52
Total - Equity ETFs 40

Total - Fixed Income ETFs 17
Total - All 35
Open-end Mutual Funds**

Passive/Indexed Domestic Equity 91
Passive/Indexed International Equity 78
Passive/Indexed Fixed Income 49
Actively Managed Domestic Equity 180
Actively Managed International Equity 176
Actively Managed Fixed Income 100
*As at end February 2010.
**Captured from Morningstar on 15 March 2010.
Source: Morningstar, Global ETF Research and Implementation Strategy Team, BlackRock.

European fund industry
Net sales data through June 2010 – Lipper FMI
Net Flows (US$ Mn)
600,000
400,000
200,000
-200,000
-400,000
-600,000
2002 2003 2004 2005 2006 2007 2008 2009 YTD JUN-10
All ETF 8,782.5 4,105.8 11,755.1 13,109.9 19,354.3 20,961.0 76,545.5 47,193.7 21,169.7
All Index-tracking 17,607.6 14,292.8 23,662.7 26,880.9 30,234.9 26,598.2 78,260.0 74,257.0 27,994.9
All Europe (Ex-ETFs) 149,202.0 288,513.5 234,604.6 450,509.1 413,256.6 115,780.6 -495,109.2 220,587.2 55,166.4
Source: Lipper FMI.

ETP providers in Europe
Ranked by assets
Aug-10 YTD Change

Assets AUG-10 NNA YTD NNA Assets Market
PROVIDER # ETPs (US$ BN) % Total # Planned (US$ BN) (US$ BN) # ETPs % ETPs (US$ BN) % Assets Share
ETF Securities 187 $17.8 90.6% 14 $0.3 $2.0 40 27.2% $2.7 17.5% -6.1%
Source Markets 28 $0.7 3.7% 0 -$0.1 $0.3 0 0.0% $0.3 75.0% 1.1%
Deutsche Bank 27 $0.5 2.6% 0 $0.3 $0.5 27 100.0% $0.5 100.0% 2.6%
UBS Global Asset Management 69 $0.2 0.9% 0 $0.0 $0.2 69 100.0% $0.2 100.0% 0.9%
RBS 18 $0.2 0.8% 0 $0.0 $0.2 18 100.0% $0.2 100.0% 0.8%
Societe Generale 42 $0.1 0.7% 0 $0.0 $0.0 42 100.0% $0.1 0.0% 0.7%
Barclays (iPath) 12 $0.1 0.4% 0 $0.0 $0.1 12 100.0% $0.1 100.0% 0.4%
Standard Commodities 1 $0.0 0.2% 0 $0.0 $0.0 1 100.0% $0.0 0.0% 0.2%
Lyxor 3 $0.0 0.0% 0 $0.0 $0.0 0 0.0% -$0.1 -100.0% -0.6%
GAM Holding - - - 4 - - - - - - -
Total 387 $19.7 100.0% 18 $0.6 $3.3 209 117.4% $4.0 25.4%


European ETF/ETP net new assets by type of
exposure
AUGUST
Equity 742 2,241.7 154,604.0 1,162.2 14,801.4 32,725.0
Europe - Equity 439 1,639.6 91,321.4 585.4 2,597.3 18,205.5
Broad 271 1,358.7 80,258.1 474.6 (178.9) 14,818.5
Consumer Goods/Services 39 48.7 1,439.2 (208.0) 71.9 335.4
Energy 10 12.0 838.5 22.0 (36.4) 322.1
Financials 26 76.2 2,610.7 174.2 39.1 825.5
Healthcare 11 7.2 961.4 55.5 (58.7) 145.9
Industrials 11 40.6 493.1 (54.6) 95.0 136.6
Information Technology 12 2.5 330.6 14.5 (1.8) 12.4
Materials 19 58.4 1,342.9 (33.6) (177.6) 522.5
Private Equity 1 0.7 85.9 4.0 44.8 34.2
Real Estate 12 5.6 1,493.4 91.1 272.1 333.6
Telecommunications 11 13.0 761.8 (8.2) (165.7) 425.0
Utilities 11 15.3 608.1 53.9 (65.1) 361.3
Other 5 0.6 97.9 - 50.9 (67.4)
North America - Equity 79 149.3 15,984.9 (37.1) 2,857.9 1,561.5
Asia Pacific - Equity 53 112.9 9,913.6 122.0 1,823.6 2,662.0
Global - Equity 56 84.0 10,164.8 (130.7) 1,756.2 2,799.6
continued…


exposure (continued)
AUGUST
Emerging Markets - Equity 115 255.9 27,219.4 622.6 5,766.4 7,496.4
Broad - EM 24 93.3 13,140.6 427.2 3,964.6 3,665.0
Regional - EM 20 22.3 2,796.0 20.8 256.9 778.8
Country - EM 71 140.3 11,282.8 - 1,544.9 3,052.7
Brazil 9 21.9 2,271.2 15.2 104.9 811.2
Chile 1 0.0 3.1 3.0 3.0 -
China 11 29.3 2,704.8 62.3 28.6 862.9
Egypt 1 0.2 14.6 2.8 6.4 (5.2)
Hungary 1 0.2 15.7 - (0.5) (0.3)
India 6 16.7 2,399.0 (7.5) 304.9 616.3
Indonesia 0 0.5 - - - -
Kuwait 2 0.4 50.7 - 15.6 14.5
Malaysia 1 2.1 84.8 4.9 51.8 10.1
Mexico 2 0.1 7.2 3.0 7.9 -
Russia 8 14.6 1,411.4 19.9 495.1 174.2
South Africa 6 2.1 238.9 5.6 60.4 64.3
South Korea 5 10.6 805.7 (1.9) 351.8 152.3
Taiwan 5 9.6 473.7 30.8 84.2 137.7
Thailand 0 - - - - 30.5
Turkey 11 30.3 617.3 35.8 (12.3) 113.3
UAE 1 0.0 12.5 - 1.2 7.2
Vietnam 1 1.7 172.2 0.6 41.8 63.6
continued…


exposure (continued)
AUGUST
Fixed Income 182 372.5 54,571.0 139.3 7,045.0 9,453.3
Broad 1 5.3 291.5 49.8 206.9 102.3
Corporate 13 52.4 10,558.0 588.4 2,233.1 4,770.8
Covered 8 2.1 929.9 42.2 298.7 438.4
Credit Spreads 13 7.1 716.0 (43.2) (115.1) (291.1)
Government 117 212.3 29,733.8 (947.1) 5,220.4 6,193.2
Inflation 15 20.9 3,968.5 (80.8) (222.2) 2,365.8
Money Market 14 65.6 6,624.5 488.1 (715.2) (4,518.2)
Mortgage 1 6.8 1,748.7 42.0 138.2 392.1
Commodities 376 290.2 39,466.3 912.0 6,758.4 13,657.9
Broad 57 27.3 5,193.8 (19.6) 621.8 2,985.9
Agriculture 83 51.6 2,156.2 (218.3) (37.7) 1,294.3
Energy 74 37.6 2,575.9 166.3 568.1 1,834.2
Industrial Metals 55 9.3 727.5 (49.4) 184.1 343.5
Livestock 17 1.0 78.2 1.7 2.3 29.4
Precious Metals 90 163.4 28,734.8 1,031.3 5,419.8 7,170.7
Currency 62 3.3 448.0 (59.0) 211.9 190.7
Alternative 9 7.9 1,355.7 (2.4) 466.5 898.6
Mixed (Equity & Fixed Income) 1 0.5 85.1 (0.1) 18.5 14.8
Total 1,372 2,916.1 250,530.1 2,152.0 29,301.6 56,940.3


STOXX 600 Sector ETF net flows
For the week ending 27 August 2010
• The week ending 27 August saw US$3.6 Mn net • Year-to-date, STOXX Europe 600 sector ETFs
outflows from STOXX Europe 600 sector ETFs. have seen US$227.4 Mn net outflows.
• The largest sector ETF net outflows in the week • Year-to-date, Food & Beverage sector ETFs
ending 27 August were in Industrial Goods & have seen the largest net outflows with
Services with US$66.5 Mn and US$163.4 Mn, followed by Basic Resources with
Telecommunications with US$58.4 Mn while Banks US$158.5 Mn while Media has experienced the
experienced net inflows of US$176.6 Mn. largest net inflows with US$205.8 Mn YTD.
FUTURES ETF
US$ TOTAL RETURN PERFORMANCE OPEN ETF AUM (US$ Mn) 5-DAY
INTEREST YTD % ADV WEEKLY ETF NET FLOWS MTD ETF NET FLOWS YTD ETF NET FLOWS
SECTOR TICKER WEEKLY RANK YTD RANK (US$ Mn) 27-Aug CHANGE (US$ Mn) (US$ Mn) (US$ Mn) (US$ Mn)
Automobiles & Parts SXAR -0.4% 12 -5.1% 8 85.8 186.1 -16.5% 1.6 -15.7 -66.3 -34.0
Banks SX7R -0.5% 13 -13.9% 16 659.5 1,370.8 -9.8% 10.5 176.6 158.1 92.9
Basic Resources SXPR -1.4% 17 -13.6% 15 320.0 990.8 -27.1% 6.7 -16.2 -13.8 -158.5
Chemicals SX4R -0.8% 15 -11.3% 13 99.9 185.7 -17.4% 2.4 -14.0 -9.6 -11.9
Construction & Materials SXOR -2.0% 18 -24.0% 19 34.1 140.9 -25.9% 1.5 14.8 14.8 -2.3
Financial Services SXFR 0.5% 7 -9.6% 11 9.7 68.3 -14.0% 0.7 0.0 -0.2 -2.7
Food & Beverage SX3R 1.0% 5 -0.9% 4 169.7 348.3 -33.3% 1.8 -11.4 -142.8 -163.4
Health Care SXDR 0.4% 8 -6.6% 10 535.7 848.8 -11.9% 3.8 -6.4 50.5 -50.1
Industrial Goods & Services SXNR -0.7% 14 -0.7% 3 349.5 440.2 12.0% 4.0 -66.5 -105.4 41.9
Insurance SXIR 0.1% 11 -12.1% 14 154.5 524.8 -19.9% 5.2 -11.9 -23.5 -47.9
Media SXMR 0.3% 10 -3.9% 6 122.9 312.6 176.6% 1.5 -7.0 -34.3 205.8
Oil & Gas SXER -1.1% 16 -20.4% 18 194.3 776.3 -25.7% 7.3 -7.4 2.5 -29.0
Personal & Household Goods SXQR 1.0% 6 1.8% 1 154.7 227.5 37.8% 0.8 2.8 0.1 60.7
Real Estate SX86R 1.8% 2 -6.4% 9 15.9 59.5 -26.8% 0.8 0.0 0.0 -14.7
Retail SXRR 1.1% 4 -1.2% 5 78.3 140.4 -21.5% 0.4 0.1 13.7 -35.3
Technology SX8R -2.3% 19 -10.3% 12 86.4 197.6 1.8% 1.2 1.5 13.9 28.9
Telecommunications SXKR 2.2% 1 -5.1% 7 379.3 703.6 -19.8% 4.2 -58.4 -0.2 -114.2
Travel & Leisure SXTR 1.5% 3 -0.6% 2 66.9 82.5 -6.6% 0.4 7.0 14.6 -3.0
Utilities SX6R 0.3% 9 -18.3% 17 226.8 573.4 -19.9% 3.1 8.5 50.8 9.4
Total 0.0% -9.2% 3,743.9 8,178.0 -14.7% 57.7 -3.6 -77.2 -227.4
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.
Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

Asia Pacific (ex-Japan) ETF and ETP asset growth
Assets (US$ Bn) # Products
50 200
45 180
40 160
35 140
30 120
25 100
20 80
15 60
10 40
5 20
0 0
2001 2002 2003 2004 2005 2006 2007 2008 2009 Aug-10
ETF Assets $3.7 $3.8 $6.6 $8.6 $10.5 $18.1 $27.0 $23.8 $38.5 $48.2
ETP Assets $0.1 $0.5 $0.8 $1.1
# ETFs 4 11 20 27 32 49 68 96 132 180
# ETPs 4 6 12 14


ETF providers in Asia Pacific (ex-Japan)
AUM AUM % Market
PROVIDER # ETFs # Listings (US$ BN) % Total # Planned # ETFs % ETFs (US$ BN) % AUM Share
State Street Global Advisors 6 8 $10.3 21.4% 1 0 0.0% $0.6 6.0% -3.9%
iShares 15 39 $9.1 19.0% 0 2 15.4% $1.3 16.6% -1.4%
Hang Seng Investment Management 3 5 $5.7 11.8% 0 0 0.0% $0.4 7.4% -1.9%
E Fund Management 2 2 $3.9 8.1% 1 1 100.0% $2.6 196.8% 4.7%
China Asset Management 2 2 $3.9 8.1% 2 0 0.0% $0.1 3.6% -1.7%
Polaris 8 9 $2.2 4.6% 3 0 0.0% $0.1 4.2% -0.9%
Samsung Investment Trust Management 16 16 $2.1 4.3% 0 0 0.0% $0.5 31.0% 0.2%
Lyxor Asset Management 2 32 $1.0 2.0% 1 0 0.0% $0.2 22.5% 0.0%
Hua An Fund Management 1 1 $0.9 2.0% 2 0 0.0% $0.8 402.2% 1.5%
Woori Asset Management 10 10 $0.9 1.8% 7 2 25.0% $0.5 116.6% 0.8%
BOCI-Prudential Asset Management 3 3 $0.9 1.8% 0 0 0.0% -$0.1 -9.0% -0.7%
China Southern Fund Management 1 1 $0.8 1.6% 0 1 100.0% $0.8 100.0% 1.6%
Bank Of Communications 1 1 $0.7 1.4% 0 0 0.0% $0.7 100.0% 1.4%
db x-trackers 21 63 $0.6 1.2% 2 21 100.0% $0.6 100.0% 1.2%
AIG-Huatai Fund Management 1 1 $0.5 1.1% 0 0 0.0% -$0.1 -11.0% -0.4%
Mirae Asset MAPS Global Investments 15 15 $0.5 1.0% 0 4 36.4% $0.1 16.8% -0.1%
Fubon Asset Management 4 4 $0.4 0.8% 0 0 0.0% -$0.2 -29.8% -0.7%
KB Asset Management 4 4 $0.3 0.7% 0 1 33.3% $0.1 22.8% 0.0%
Bosera Asset Management 1 1 $0.3 0.6% 1 1 100.0% $0.3 100.0% 0.6%
HSBC 1 1 $0.3 0.6% 0 0 0.0% $0.0 -1.6% -0.2%
DBS Asset Management 2 2 $0.3 0.6% 0 0 0.0% $0.0 6.4% -0.1%
Korea Investment Trust Management 5 5 $0.3 0.5% 0 0 0.0% -$0.1 -23.1% -0.3%
Benchmark Asset Management 7 7 $0.2 0.5% 7 1 16.7% $0.0 15.2% 0.0%
Fortune SGAM Fund Management 1 1 $0.2 0.5% 0 1 100.0% $0.2 100.0% -99.5%
i-VCAP Management 1 1 $0.2 0.4% 0 0 0.0% $0.0 13.9% 0.0%
Smartshares Limited 5 5 $0.2 0.4% 0 0 0.0% $0.0 -5.8% -0.1%
ICBC Credit Suisse Asset Management 1 1 $0.2 0.4% 0 0 0.0% -$0.2 -54.3% -0.6%
AmInvestment Management 2 2 $0.2 0.3% 0 0 0.0% $0.0 8.7% -0.1%
CIMB-Principal Asset Management 2 3 $0.2 0.3% 1 1 100.0% $0.0 0.5% -0.1%
Vanguard 1 3 $0.1 0.3% 2 0 0.0% $0.1 178.9% 0.2%
AMP 1 1 $0.1 0.3% 0 0 0.0% -$0.1 -51.6% -0.4%
Yurie Asset Management 2 2 $0.1 0.2% 0 0 0.0% $0.0 -5.6% -0.1%
continued…

ETF providers in Asia Pacific (ex-Japan) (continued)
AUM AUM % Market
Hanwha Investment Trust Management 1 1 $0.1 0.2% 0 1 100.0% $0.1 100.0% 0.2%
One Asset Management 2 2 $0.1 0.2% 0 0 0.0% $0.0 -5.1% -0.1%
CCB Principal Asset Management 1 1 $0.1 0.1% 0 1 100.0% $0.1 100.0% 0.1%
Motilal Oswal Asset Management 1 1 $0.1 0.1% 0 1 100.0% $0.1 100.0% 0.1%
Sensible Asset Management 1 1 $0.0 0.1% 0 0 0.0% $0.0 16.4% 0.0%
UOB Asset Management 1 1 $0.0 0.1% 0 0 0.0% -$0.2 -79.5% -0.5%
Prudential Asset Management 2 2 $0.0 0.1% 0 1 100.0% $0.0 45.4% 0.0%
KTB Asset Management 1 1 $0.0 0.1% 0 0 0.0% $0.0 142.5% 0.0%
Ping An 1 1 $0.0 0.1% 0 1 100.0% $0.0 0.0% 0.1%
Da Cheng International Asset Management 1 1 $0.0 0.0% 0 1 100.0% $0.0 0.0% 0.0%
China International Capital Corp 1 1 $0.0 0.0% 0 1 100.0% $0.0 0.0% 0.0%
Tong Yang Investment Trust Management 1 1 $0.0 0.0% 0 0 0.0% $0.0 -22.1% 0.0%
Kotak Mahindra Asset Management 3 3 $0.0 0.0% 0 1 50.0% $0.0 101.9% 0.0%
Daishin Investment Trust Management 1 1 $0.0 0.0% 0 0 0.0% $0.0 -9.4% 0.0%
Daiwa Asset Management 1 1 $0.0 0.0% 1 0 0.0% $0.0 0.0% 0.0%
Russell Investments 1 1 $0.0 0.0% 0 1 100.0% $0.0 0.0% 0.0%
Australian Index Investments 6 6 $0.0 0.0% 0 6 100.0% $0.0 0.0% 0.0%
Hyundai Investments 1 1 $0.0 0.0% 0 1 100.0% $0.0 0.0% 0.0%
TMB Asset Management 1 1 $0.0 0.0% 0 0 0.0% $0.0 2.7% 0.0%
Indo Premier Securities 1 1 $0.0 0.0% 0 0 0.0% $0.0 -11.9% 0.0%
Reliance Capital Asset Management 1 1 $0.0 0.0% 4 0 0.0% $0.0 -11.0% 0.0%
Quantum Asset Management 1 1 $0.0 0.0% 0 0 0.0% $0.0 11.9% 0.0%
PRUDENTIAL ICICI 1 1 $0.0 0.0% 0 0 0.0% $0.0 13.6% 0.0%
UTI Asset Management 1 1 $0.0 0.0% 1 0 0.0% $0.0 -89.3% 0.0%
Allianz SE - - - - 1 - - - - -
Birla Sun Life Mutual Fund - - - - 1 - - - - -
Government Service Insurance Systems - - - - 1 - - - - -
Guotai Asset Management - - - - 1 - - - - -
Penghua Fund Management - - - - 4 - - - - -
Religare India Asset Management - - - - 1 - - - - -
Tata Mutual Fund - - - - 1 - - - - -
Other (Planned) - - - - 5 - - - - -
Total 180 284 $48.2 100.0% 51 52 40.6% $9.3 23.9%


Japan ETF and ETP asset growth
40 80
35 70
30 60
25 50
20 40
15 30
10 20
5 10
0 0
2001 2002 2003 2004 2005 2006 2007 2008 2009 Aug-10
ETF Assets $6.6 $21.0 $27.6 $30.3 $31.8 $34.6 $34.2 $27.4 $24.6 $24.3
ETP Assets $0.0 $0.3 $0.3 $0.3
# ETFs 8 18 18 15 13 13 15 61 68 74
# ETPs 1 4 5 9


ETF providers in Japan
Ranked by AUM
Aug-10 YTD Change

AUM AUM % Market
Nomura Asset Management 32 32 $12.7 52.5% 0 2 6.7% -$0.6 -4.8% -1.8%
Nikko Asset Management 14 14 $5.4 22.4% 0 4 40.0% -$0.3 -5.1% -0.9%
Daiwa Asset Management 22 22 $4.7 19.6% 0 0 0.0% -$0.2 -3.6% -0.4%
Mitsubishi UFJ Asset Management 4 4 $1.3 5.3% 0 0 0.0% $0.8 143.8% 3.2%
iShares 1 1 $0.0 0.1% 0 0 0.0% $0.0 -30.8% -0.1%
Simplex Asset Management 1 1 $0.0 0.0% 0 0 0.0% $0.0 -3.4% 0.0%
EasyETF 0 1 $0.0 0.0% 0 0 0.0% $0.0 0.0% 0.0%
Samsung Investment Trust Management 0 1 $0.0 0.0% 0 0 0.0% $0.0 0.0% 0.0%
State Street Global Advisors 0 1 $0.0 0.0% 0 0 0.0% $0.0 0.0% 0.0%
Total 74 77 $24.3 100.0% 0 6 8.8% -$0.4 -1.5%


Latin America ETF asset growth
# Products
Assets (US$ Bn)
14 24
22
12
20
18
10
16
8 14
12
6 10
8
4
6
4
2
2
0 0
2002 2003 2004 2005 2006 2007 2008 2009 Aug-10
ETF Assets $0.1 $0.4 $0.4 $1.3 $2.6 $6.0 $5.1 $9.8 $11.9
# ETFs 1 1 2 2 2 6 10 17 21


ETF providers in Latin America
Ranked by AUM
Aug-10 YTD Change

AUM AUM % Market
iShares 18 214 $7.3 61.2% 1 3 20.0% -$1.1 -13.2% -23.9%
BBVA Asset Management 2 7 $3.4 28.6% 0 1 100.0% $3.4 100.0% 28.6%
Banco Itau 1 1 $1.2 10.2% 0 0 0.0% -$0.3 -17.5% -4.7%
Direxion Shares - 4 - - - - - - - -
EasyETF - 10 - - - - - - - -
Lyxor Asset Management - 4 - - - - - - - -
PowerShares - 1 - - - - - - - -
ProShares - 18 - - - - - - - -
State Street Global Advisors - 27 - - - - - - - -
Van Eck Associates Corp - 13 - - - - - - - -
Vanguard - 39 - - - - - - - -
WisdomTree Investments - 9 - - - - - - - -
Total 21 347 $11.9 100.0% 1 4 23.5% $2.0 20.7%


Canada ETF asset growth
35 160
30 140
120
25
100
20
80
15
60
10
40
5 20
0 0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Aug-10
ETF Assets $0.4 $4.0 $3.1 $3.4 $5.5 $7.4 $10.6 $13.0 $18.0 $15.7 $28.5 $31.6
ETP Assets $0.4
# ETFs 1 3 14 15 16 16 20 26 46 77 110 150
#ETPs 1


ETF providers in Canada
Ranked by AUM
Aug-10 YTD Change

AUM AUM % Market
PROVIDER # ETFs (US$ BN) % Total # Planned # ETFs % ETFs (US$ BN) % AUM Share
iShares 36 $24.5 77.6% 2 6 20.0% $2.0 8.8% -1.38%
BetaPro Management 56 $2.5 7.9% 1 14 33.3% -$0.1 -2.3% -1.06%
BMO Asset Management 30 $0.7 2.2% 0 17 100.0% $0.5 100.0% 1.64%
Total 150 $31.6 100.0% 10 40 36.4% $3.1 10.7%
Data as at August 2010.


Exchange Traded Funds (ETFs)
Product overview
• ETFs are open-ended index tracking funds1. • ETFs are generally liquid:
• ETFs are managed by asset managers. – Liquidity reflects liquidity of underlying basket
• ETFs are bought and sold through brokers. of shares not the trading volume of the ETF –
as long as trading with a broker which is an
• Trade on the exchange like any other stock. authorised participant.
• Settle like any other share on the exchange. – Creation/redemption process makes ETFs as
• Can be purchased, cleared and held in brokerage or liquid as their underlying shares.
custodial account. – Unique structure for brokers who enter into
• Can go long or short. legal agreements with the ETF asset managers
• Are lendable and marginable. to be authorised participants, creation/
redemption agents or liquidity providers:
• Transparent underlying portfolios generally
available daily. o Portfolio of securities can be exchanged
for ‘Creation Units’.
• Real Time indicative NAV.
o ‘Creation Units’ can be redeemed for
• ETFs will generally price around their NAV due to underlying portfolio.
the creation/redemption process.
o Creation/redemption (‘in kind’) feature
• Benefits: allows for arbitrage and results in the
– ETFs are not a derivative. fund trading near Net Asset Value.
– Flexible.
– Transparent.
– Liquid.
– Small minimum investment.
– Ability to trade with multiple counterparties.
1 Note a few active funds which disclose their portfolios daily have been approved and listed.

ETF/ETP tool box
EQUITY FIXED INCOME CASH CURRENCY
• Global • Government • EONIA, SONIA • Developed currencies

• Capitalisation • Corporate • Fed funds • Emerging market
(large, mid, small…) • Credit currencies
• Sectors • Inflation • Inverse/leveraged
ALTERNATIVES
• Broad markets • High yield • Strategy (carry,
• Emerging markets • Hedge funds momentum…)
• Mortgage backed
• Countries • Emerging markets • Carbon
• Inverse/leveraged • Volatility
COMMODITIES
• Styles
– Active • Broad (S&P, GSCI,
DJUBS, RICI, CRB…)
– Dividend
• Sub-indices (energy,
– Fundamental livestock, precious metals,
– Infrastructure industrial metals,
agriculture…)
– Real estate • Individual commodities
– Shariah • Based on physically held
– Thematic assets (gold, silver,
platinum, palladium…)
– Private equity • Based on futures
– Value • Based on forwards
• Inverse/leveraged
– Growth
2,308 ETFs with 4,922 ETF listings 874 other ETPs* with 1,439 ETP listings
Total: 3,182 products with 6,361 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 August 2010.
Source: Global ETF Research & Implementation Strategy Team, BlackRock.

New asset classes will continue to squeeze the
traditional core of actively managed funds
Source: BCG Global Asset Management 2009, ‘Conquering the Crisis’, July 2009, Projections 2008–2012

How should I decide which product to use?
Considerations: Products:
Transparency
• What is my Benchmark? Portfolio Trading
Client Service
• What are my Regulatory guidelines?
• What are my Mandate Constraints?
Product Choice
• What are my counterparty risk guidelines? ETFs
• What are my Tracking Risk guidelines?
Liquidity • How can I gain Long and/or Short exposure?
• How can Securities Lending add value? ETNs
• What is my Time Horizon?
Portfolio • What are the Tax implications?
Management • What are my Liquidity Requirements?
• What Costs are involved? ETCs*
Swaps
Futures & Options
Securitised Products
Certificates, Warrants, Equity Linked Notes, Local
Access Products
* Exchange Traded Commodities (ETCs)

How can ETFs be used?
• 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 & short trades to implement market view(s)
• Core satellite:
Strategic Achieve strategic focus
• Rebalancing:
Adjust drift in a portfolio’s asset allocation or style
• Completion:
Add uncorrelated instruments and/or asset classes to strategy
• 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:
Tactical Broad opportunity set of Delta 1 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)

Why use ETFs?
Transparency  Investors can generally see the ETF composition at any given time
• ETFs offer two sources of liquidity

Liquidity – Traditional liquidity measured by secondary market trading volume
– The liquidity of the underlying assets via the creation and redemption process
• ETFs provide immediate exposure to a basket or group of securities for

instant diversification
Diversification
• Broad range of asset classes including equities, bonds, commodities,
investment themes etc
• ETFs are listed on exchanges and can be traded at any time the market is open
Flexibility
• Pricing is continuous throughout the day
• ETFs offer a cost-effective route to diversified market exposure
Cost effectiveness • The average total expense ratio (TER) for equity ETFs in the us is 34 bps versus
93 bps (per annum) for the average equity index tracking fund and 146 bps
(per annum) for the average active equity fund1
Securities lending • ETF units and underlying assets can be lent out to potentially offset holding costs
1 Source: Morningstar. March 2010

ETFs can offer solutions for a range of
portfolio strategies
 Fill allocations required by investment strategy.
Portfolio
 Improve diversification.
construction
 Gain exposure to size, style, yield, sector, geography .
• Implement short-, long- term and/or neutral market views:

Portfolio
– Hard to access asset classes, themes, sector, country.
management
– Tactical asset allocation.
Strategic asset • Establish core holdings.

allocations • Establish single country or sector satellites.
• Active risk budgeting.

Risk management • Combine ETFs in managing total portfolio volatility or duration adjustments in fixed
income portfolios.
• Manage inflows, outflows, transitions.

Cash equitisation
• Obtain wider exposures than offered by other Delta 1 products.
• Exposures to markets or asset classes where one has no expertise or

Exposure operational capabilities.
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.

ETFs gain foothold in Institutional market
• In the United States, where ETFs are most How ETFs are used by US Institutions
commonly thought of as a retail product, Ta ctica l a djustments 45 % 56%
institutional investors are finding that ETFs can be Transitions 38% 31 %

helpful tools for cash equitisation, transition
management, rebalancing, and obtaining hard to Cash equitis ation 31% 63 %
achieve exposures. Core /satellite 28 % 19%
• According to a recent survey by Greenwich 2 4% 31 %

Re balancing
Associates1, ETF use among US pension funds,
endowments and foundations has grown to about Portfolio completion 2 4% 25%
14%, according to the results of Greenwich 3%

ETF overlay 25%
Associates’ most recent annual study of the US 3%
investment management market. Despite that Other 6%
relatively modest share, institutions actually 0% 20% 40% 60% 80% 100% 120%
represent roughly half the assets invested in Plan sponsors
ETFs in the United States according to recent Money ma na gers
industry estimates. Note: Based on responses from 70 U.S. plan sponsors and money managers using ETFs.
Source 2010 Greenwich Market Pulse - ETFs
• Almost half the institutional users in the Greenwich
Associates annual study say they employ ETFs for Greenwich Associates asked the institutions participating
what they consider ‘tactical’ tasks related to the in the survey to name the providers they use for ETFs.
management of their portfolios. Approximately The results reveal two things:
20% of institutional ETF users say they employ the 1) iShares/BlackRock is by far the most widely used
funds to implement ‘strategic or long-term’ provider of ETFs among US institutions; and
investment decisions, and an equal share report 2) Most institutions that employ ETFs use more than one
that they use ETFs for both tactical and provider: 89% of institutional ETF users obtain ETFs
strategic purposes. from iShares/BlackRock, whereas 60% use
1
Greenwich Associates surveyed U.S. pension funds, endowments,
SPDRs/State Street and 51% use Vanguard.
foundations, and money managers that identified themselves
as ETF users. Seventy institutions participated in the survey,
including 43 plan sponsors and 27 money managers. The survey
was conducted from 8 March to 16 March 2010. Source: Greenwich Associates: ETFs Gain Foothold in Institutional Market, April 2010.

ETFs gain foothold in Institutional market (continued)
• Institutions cite a range of criteria used in selecting Expected change in asset allocation to ETFs
an ETF provider. In addition to the obvious Incre ase >10% 10%
consideration of fees, institutions rank four factors
as particularly important in selecting an ETF Increa se 5-10% 18%
provider: liquidity, benchmark, the track record of

Increase 1-4% 25%
the fund, and reputation of the company behind
the fund. No change 33%
• Almost 55% of institutions currently employing

De crease -1-4% -8%
ETFs expect their usage of the product to increase
in the next three years, including nearly 20% that Decrease -5-10% -5%
expect the amount of assets dedicated to ETFs to
grow by 5–10% in that period. Money managers Decrease > -10% -3%
are slightly more apt to predict an increase in use: -20% 0% 20% 40%
Approximately 65% expect to be devoting more
Note: Based on responses from 70 US plan sponsors and money managers using ETFs.
assets to ETFs in the next 12 months, compared Source 2010 Greenwich Market Pulse – ETFs
with half of plan sponsors. About 20% of plan
sponsors expect to reduce their use of ETFs. Nearly 30% of institutions that do not use ETFs say
they lack familiarity with the product. One way to
address this lack of information would be for providers
to win over investment consultants, who would then
be in a position to explain the product to their
institutional clients as both a tool for tactical
adjustments and a means of obtaining desired
exposures. 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.
Source: Greenwich Associates: ETFs Gain Foothold in Institutional Market, April 2010.

Growth in institutional users of ETFs
Numbe r of Inst it ut ions Numbe r of Inst it ut ions
3,000 3,000
2,500 2,500
2,000 2,000
1,500 1,500
1,000 1,000
500 500
0 0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Other 0 0 1 2 5 11 10 10 10 30 15 15
Latin America 0 0 0 4 5 8 7 19 40 36 57 68
Asia Pacific 1 1 4 11 23 19 23 35 38 51 60 79
Canada 3 7 24 32 55 68 62 58 73 77 95 101
Europe 16 29 60 152 233 302 315 351 430 461 608 618
United States 145 241 342 561 782 889 1,010 1,154 1,333 1,559 1,781 2,045
Total 165 278 431 762 1,103 1,297 1,427 1,627 1,924 2,214 2,616 2,926
Source: Global ETF Research & Implementation Strategy Team, BlackRock, Thomson Reuters.

Global institutions reported assets
as at end December 2008 All Reporting Firms Reported ETF Users % Of ETF Users
Reported Reported Reported
Number of Assets Number of ETF Assets Number of ETF Assets
Firm Reported Assets Institutions (US$ Mn) Institutions (US$ Mn) Institutions (US$ Mn)
>50 Billion 39 5,404,681 28 68,250 71.8% 1.3%
20-50 Billion 113 3,505,831 84 69,810 74.3% 2.0%
10-20 Billion 125 1,763,371 71 35,571 56.8% 2.0%
5-10 Billion 205 1,481,979 98 15,356 47.8% 1.0%
1-5 Billion 1,216 2,638,240 428 41,249 35.2% 1.6%
500-1000 Million 864 610,428 246 14,123 28.5% 2.3%
250-500 Million 1,196 421,369 323 13,359 27.0% 3.2%
100-250 Million 2,141 345,296 535 11,739 25.0% 3.4%
<100 Million 31,542 303,393 686 4,710 2.2% 1.6%
Total 37,441 16,474,589 2,499 274,167 6.7% 1.7%
All Reporting Firms Reported ETF Users % Of ETF Users

Reported Reported Reported
Number of Assets Number of ETF Assets Number of ETF Assets
Firm Type Institutions (US$ Mn) Institutions (US$ Mn) Institutions (US$ Mn)
Investment Managers 7,061 11,817,584 2,443 176,880 34.6% 1.5%
Bank and Trust 493 419,345 158 15,959 32.0% 3.8%
Endowment Fund 17 11,477 8 1,811 47.1% 15.8%
Finance Company 2 6 - - 0.0% 0.0%
Foundation 44 11,043 2 4 4.5% 0.0%
Hedge Fund 1,030 349,620 356 14,194 34.6% 4.1%
Insurance Company 136 160,902 16 1,670 11.8% 1.0%
Investment Advisor 4,462 10,209,252 1,857 134,501 41.6% 1.3%
Pension Fund 226 553,665 38 8,692 16.8% 1.6%
Private Equity 331 41,858 7 21 2.1% 0.0%
Sovereign Wealth Fund 15 45,210 1 28 6.7% 0.1%
Venture Capital 305 15,206 - - 0.0% 0.0%
Brokerage Firms 143 338,226 45 86,869 31.5% 25.7%
Strategic Entities 30,237 4,318,779 11 10,418 0.0% 0.2%
Holding Company 501 254,762 5 3,210 1.0% 1.3%
Government Agency 97 640,813 - - 0.0% 0.0%
Corporation 29,639 3,423,204 6 7,207 0.0% 0.2%
Total 37,441 16,474,589 2,499 274,167 6.7% 1.7%


Types of institutional users of ETFs
Type of Institution 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Investment Advisor 109 200 319 549 802 923 1,023 1,167 1,380 1,564 1,946 2,152
Hedge Fund 9 20 30 73 114 144 152 180 209 285 340 438
Bank and Trust 14 19 30 67 92 109 120 139 161 174 189 193
Pension Fund 5 8 9 15 22 28 28 33 45 36 45 48
Brokerage Firm 14 11 15 15 16 25 28 31 37 40 45 48
Insurance Company 13 19 27 39 50 60 65 66 74 80 23 17
Endowment Fund 1 1 1 3 3 3 5 5 7 8 9 9
Private Equity 0 0 0 0 0 0 0 0 1 4 7 9
Holding Company 0 0 0 0 0 1 2 3 3 4 3 5
Corporation 0 0 0 0 1 1 1 1 4 16 5 4
Foundation 0 0 0 0 1 0 2 1 2 3 3 2
Sovereign Wealth Fund 0 0 0 0 0 0 0 0 0 0 0 1
Venture Capital 0 0 0 1 2 3 1 1 1 0 1 0
Grand Total 165 278 431 762 1,103 1,297 1,427 1,627 1,924 2,214 2,616 2,926

Growth in institutional users of ETFs
Country 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
United States 145 241 342 561 782 889 1,010 1,154 1,333 1,559 1,781 2,045
United Kingdom 9 12 15 25 37 55 61 55 79 87 112 120
Canada 3 7 24 32 55 68 62 58 73 77 95 101
Switzerland 0 3 7 19 26 35 31 48 62 62 92 94
Spain 1 2 8 32 47 60 62 61 70 76 76 76
Germany 1 1 1 6 14 19 21 29 35 43 60 70
France 0 2 10 24 29 32 30 36 47 42 56 59
Luxembourg 0 1 4 10 10 13 14 16 20 19 32 33
Italy 4 6 7 14 20 26 26 25 24 23 41 30
Mexico 0 0 0 0 0 0 0 0 7 11 19 24
Sweden 0 0 2 7 12 15 17 16 17 19 20 22
Austria 0 0 0 3 9 11 11 7 8 12 22 21
Argentina 0 0 0 0 0 0 0 6 18 7 20 21
Hong Kong 0 0 1 4 11 10 10 7 12 12 19 19
Taiwan 0 0 0 0 0 0 5 14 12 12 10 19
Chile 0 0 0 4 5 6 6 12 15 18 18 18
Liechtenstein 0 0 0 0 0 1 0 2 3 10 14 16
Singapore 0 0 2 4 6 5 5 9 7 10 13 16
Portugal 0 0 0 2 3 3 5 7 13 16 16 14
Belgium 1 1 4 6 9 9 11 12 13 13 16 12
Greece 0 0 0 0 2 5 5 9 9 9 7 11
Netherlands 0 0 0 0 0 1 4 8 13 10 11 9
Australia 0 0 0 0 0 0 0 1 2 8 7 8
Japan 1 1 1 3 6 4 3 4 5 8 9 7
Norway 0 0 0 0 2 3 3 3 3 4 7 7
Malaysia 0 0 0 0 0 0 0 0 0 1 2 7
South Africa 0 0 0 0 3 7 7 5 4 20 7 6
Finland 0 0 0 1 3 4 3 3 3 3 7 6
Denmark 0 0 0 1 1 2 3 2 1 4 5 5
Ireland 0 1 2 2 6 6 7 8 5 3 5 5
Bermuda 0 0 0 1 2 3 3 3 3 6 4 5
Brazil 0 0 0 0 0 0 0 0 0 0 0 4
Iceland 0 0 0 0 1 1 1 1 2 2 2 3
India 0 0 0 0 0 0 0 0 0 0 0 2
Czech Republic 0 0 0 0 1 1 0 3 3 2 3 2
Poland 0 0 0 0 1 0 0 0 0 0 2 2
Virgin Islands (US) 0 0 0 0 0 1 0 0 1 2 1 2
Cayman Islands 0 0 0 0 0 0 0 1 1 1 2 1
Hungary 0 0 0 0 0 0 0 0 0 1 1 1
Bahamas 0 0 0 0 0 0 0 0 0 0 1 1
Peru 0 0 0 0 0 2 1 1 0 0 0 1
Thailand 0 0 0 0 0 0 0 0 0 0 0 1
Colombia 0 0 0 0 0 0 0 0 0 0 0 0
Slovenia 0 0 0 0 0 0 0 0 0 1 1 0
Barbados 0 0 1 1 0 0 0 1 1 1 0 0

ETF portfolios
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.

Core-Satellite: ETFs can be used in the core
portfolio, as well as in the satellite
• ETFs in the core:
– A broad market index.
– Exposure to diversified baskets
of securities.
– Optimised core: sector, style or
country indices.
• ETFs in the satellite:

– Concentrated, focused ETFs.
– Sector and style.
– Individual countries and
regions.
– Alternative asset class.

MSCI World & MSCI EM Index Weights & Performance
MSCI World # Stocks % Weight % YTD Return MSCI Emerging Markets # Stocks % Weight % YTD Return
Australia 72 3.8% -10.6% Brazil 76 16.1% -8.4%
Austria 8 0.1% -15.7% Chile 16 1.7% 21.9%
Belgium 13 0.4% -9.8% China 125 18.7% -6.3%
Canada 99 5.1% -0.8% Colombia 8 0.9% 39.6%
Denmark 11 0.5% 8.2% Czech Republic 4 0.4% -9.8%
Finland 17 0.5% -14.0% Egypt 10 0.5% 1.6%
France 77 4.6% -19.6% Hungary 4 0.4% -15.4%
Germany 50 3.6% -14.6% India 60 7.9% 0.7%
Greece 9 0.1% -40.1% Indonesia 22 2.4% 16.7%
Hong Kong 40 1.2% 1.0% Malaysia 40 3.1% 21.2%
Ireland 5 0.1% -28.9% Mexico 21 4.2% -2.2%
Israel 16 0.4% -10.2% Morocco 3 0.2% -1.1%
Italy 30 1.4% -23.9% Peru 3 0.7% 15.3%
Japan 342 10.1% -3.4% Philippines 12 0.5% 13.5%
Netherlands 21 1.2% -13.7% Poland 22 1.5% -7.4%
New Zealand 5 0.0% -13.4% Russia 28 6.2% -5.0%
Norway 9 0.4% -16.4% South Africa 45 7.3% 2.0%
Portugal 9 0.1% -22.2% South Korea 99 13.4% -0.6%
Singapore 30 0.8% 3.4% Taiwan 118 10.6% -9.0%
Spain 28 1.7% -25.0% Thailand 20 1.6% 26.0%
Sweden 33 1.4% 3.3% Turkey 20 1.7% 10.7%
Switzerland 37 3.6% -3.1%
United Kingdom 106 10.1% -8.5% Total 756 100.0% -2.0%
United States 591 48.9% -5.9%
Total 1,658 100.0% -7.5%

YTD returns reflect US dollar price performance only from 31/12/2009 to 31/08/2010. Index weights captured from Bloomberg 08/09/2010.

Fixed Income Index Guide
• Understanding index methodology is the key to selecting and using ETFs.
• Investors must understand the differences in pricing sources*, frequency of pricing updates and
what prices are being captured:
– Where (one bank or consortium..)
– When (intraday, daily, weekly..)
– What (bid, mid, dirty…)
*A fund may price a security using a different pricing source than used by the Index Provider itself.
Source: Fixed Income Index Guide, BlackRock.

Comparison of Fixed Income index trading characteristics
INDEX EXPOSURE INDEX PRICE SOURCE PRICE PRICE TYPE
FAMILY CALCULATION CONTRIBUTION
Daily Bid prices (non-
Barclays government bonds)
Aggregate Barclays Capital About 80% comes from Barclays Capital traders
Capital Mid prices (government
bonds)
Government – term Barclays Capital Barclays Capital traders Daily Mid prices
Government – short About 80% comes from Barclays Capital traders Daily Mid prices
Barclays Capital
treasury The rest comes from third party vendors
Corporate Barclays Capital About 80% comes from Barclays Capital traders Daily Bid prices
Inflation-linked Barclays Capital Barclays Capital traders Daily Mid prices
Daily Mid prices

Euro government, US TIPS, UK linkers and Japanese
linkers come from Barclays Capital. Prices for
Inflation-linked world Barclays Capital Australian linkers are taken from ABN Amro. Canadian
linker prices are taken from RBC Dominion and
Swedish linker prices are taken from PMI Exchange
Bid prices
Citigroup Citigroup Individual Citigroup trader pricing Daily
(Japan mid prices)
Intraday 9:00 am
eb.rexx Deutsche Börse Eurex Bonds Traded price data
- 5:00 pm CET
Intraday 9:00 am
EuroMTS EuroMTS MTS Markets Bid prices
- 5:30 pm CET
Gilt-Edged Market Makers Association (GEMMA) via

FTSE FTSE Daily Mid prices
Reuters
JP Morgan JP Morgan JP Morgan traders Daily Bid prices
Markit International Index Intraday 8:00 am

Covered iBoxx Consortium Bid prices
iBoxx Company (IIC) - 4:30 pm GMT
Government – liquid capped International Index Intraday 9:00 am

iBoxx Consortium Bid prices
and corporate Company (IIC) - 5:15 pm CET
International Index
$ Corporate iBoxx Consortium Intraday Bid prices
Company (IIC)
Source: Fixed Income Index Guide, BlackRock.

Commodity Indices
Indices are a convenient way to access a group of commodities. Indices can represent the asset class
as a whole or a particular sub-sector, such as energy, agriculture or precious metals.
Commodity indices differ in the rules used to gain exposure to the asset class. Does the index track futures prices
or spot prices? How often is the index rebalanced? Are there minimum and maximum weightings for different
sectors or individual commodities? Investors should be aware of these rules before investing in structured products
linked to indices. This section describes the components and methodologies of some of the main commodity
indices. Some of the key features are outlined below.
% accumulated
Commodity index comparison US$ total return
600%
# of Recomposition 500%
Index Commodities Weighting Method Frequency
400%
S&P GSCI 24 World Production Monthly
300%
Rogers International Discretion of
36 Annual 200%
Commodity Index Committee
Thomson Equal Weighted 100%
Reuters/Jefferies 19 within broad Irregular
0%
CRB Index sectors
Dow Jones UBS Liquidity and -100%
19 Annual
Aug-98
Apr-99
Dec-99
Aug-00
Apr-01
Dec-01
Aug-02
Apr-03
Dec-03
Aug-04
Apr-05
Dec-05
Aug-06
Apr-07
Dec-07
Aug-08
Apr-09
Dec-09
Commodity Index Production
S&P GSCI TR
Thomson Reuters/Jefferies CRB Index TR
Rogers International Commodity Index TR
DJ-UBS Commodity TR
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. Data as at end December 2009.

Commodity index comparison
S&P Dow Jones UBS Thomson Reuters Jefferies Rogers International
GSCI Commodity Index CRB Index Commodity Index (RICI)
Energy Energy Energy Energy
Livestock Livestock Livesto ck Livesto ck

Precious Metals Precious Metals P recio us M etals P recio us M etals
Industrial Metals Industrial Metals Industrial M etals Industrial M etals
Agriculture Agriculture
A griculture A griculture
Rogers Rogers
DJ UBS Thomson International DJ UBS Thomson International
Commodity Reuters Commodity Commodity Reuters Commodity
Commodity Measure S&P GSCI Index Jefferies CRB Index (RICI) Commodity Measure S&P GSCI Index Jefferies CRB Index (RICI)
Energy 70.38% 31.09% 39.00% 44.00% Agriculture 12.91% 31.09% 34.00% 31.90%
WTI Crude Oil $/barrel 35.95% 13.92% 23.00% 21.00% Wheat $cents/bushels 2.88% 5.71% 1.00% 6.00%
Brent Crude Oil $/barrel 14.92% - - 14.00% Kansas Wheat $cents/bushels 0.59% - - 1.00%
RBOB Gasoline $cents/gallon 4.67% 3.56% 5.00% 3.00% Corn $cents/bushels 3.17% 6.83% 6.00% 4.75%
Heating Oil $cents/gallon 4.63% 3.49% 5.00% 1.80% Soybeans $cents/bushels 2.33% 7.93% 6.00% 3.35%
GasOil $/metric ton 5.95% - - 1.20% Soybean Oil $cents/pound - 3.08% - 2.00%
Natural Gas $/mmBtu 4.27% 10.11% 6.00% 3.00% Soybean Meal $/short ton - - - 0.75%
Livestock 5.08% 6.54% 7.00% 3.00% Cotton $cents/pound 1.31% 2.21% 5.00% 4.20%
Live Cattle $cents/pound 2.77% 4.00% 6.00% 2.00% Sugar $cents/pound 1.55% 2.07% 5.00% 2.00%
Feeder Cattle $cents/pound 0.50% - - - Coffee $cents/pound 0.73% 3.26% 5.00% 2.00%
Lean Hogs $cents/pound 1.82% 2.53% 1.00% 1.00% Cocoa $/metric ton 0.36% - 5.00% 1.00%
Precious Metals 3.68% 13.04% 7.00% 7.10% Orange Juice $cents/pound - - 1.00% 0.60%
Gold $/troy oz 3.28% 9.74% 6.00% 3.00% Rubber JPY/kilogram - - - 1.00%
Silver $/troy oz 0.40% 3.30% 1.00% 2.00% Lumber $/1k board fleet - - - 1.00%
Palladium $/troy oz - - - 0.30% Canola CAD/metric ton - - - 0.75%
Platinum $/troy oz - - - 1.80% Rice $/cwt - - - 0.50%
Industrial Metals 7.95% 18.25% 13.00% 14.00% Oats $cents/bushels - - - 0.50%
Aluminium $/metric ton 2.51% 5.53% 6.00% 4.00% Rapeseed EUR/metric ton - - - 0.25%
Copper $/metric ton 3.48% 7.56% 6.00% 4.00% Azuki Beans JPY/bag - - - 0.15%
Lead $/metric ton 0.44% - - 2.00% Greasy Wool AUD/kilogram - - - 0.10%
Nickel $/metric ton 0.88% 2.77% 1.00% 1.00%
Tin $/metric ton - - - 1.00% TOTAL 100.00% 100.01% 100.00% 100.00%
Zinc $/metric ton 0.65% 2.39% - 2.00% Data as of: May-10 Jul-10 Jan-10 Jan-10
Source: Global ETF Research & Implementation Strategy Team, BlackRock, S&P, Dow Jones, Lyxor, RICI Handbook 2010.

Leverage/inverse ETFs
At the end of August 2010 there were 280 leveraged and inverse ETFs with US$41.1 Bn assets under
management from 18 providers globally. There are currently 76 inverse/inverse leveraged ETFs in the US and
97 inverse/inverse leveraged ETFs listed on exchanges outside the US.
These types of products are designed to rebalance daily which means that investors cannot expect the ETF to
achieve its stated performance objective (-1x,-2x,+2x,+3x etc) over any period greater than one trading
day. Investors can also use inverse (short) and leverage inverse ETFs to implement hedges and short
economic exposure.
A significant effect on longer term returns is index volatility and its effect on compounding. In periods of high
volatility the relationship breaks down as the effects of compounding become more pronounced, while in
periods of low index volatility the effects are less apparent.
Example return series
Leveraged
Index Leveraged x2 Inverse x1 Inverse (x2)
Period Index % Return ETF % Return ETF % Return ETF % Return
Start 100.00 100.00 100.00 100.00
Day 1 102.50 2.5% 105.00 5.0% 97.50 -2.5% 95.00 -5.0%
Day 2 101.00 -1.5% 101.93 -2.9% 98.93 1.5% 97.78 2.9%
Day 3 98.00 -3.0% 95.87 -5.9% 101.87 3.0% 103.59 5.9%
Day 4 99.00 1.0% 97.83 2.0% 100.83 -1.0% 101.48 -2.0%
Day 5 102.00 3.0% 103.76 6.1% 97.77 -3.0% 95.33 -6.1%
Day 6 105.00 2.9% 109.86 5.9% 94.89 -2.9% 89.72 -5.9%
Day 7 110.00 4.8% 120.32 9.5% 90.38 -4.8% 81.17 -9.5%
Day 8 102.00 -7.3% 102.82 -14.5% 96.95 7.3% 92.98 14.5%
Day 9 108.00 5.9% 114.92 11.8% 91.25 -5.9% 82.04 -11.8%
Day 10 100.00 -7.4% 97.89 -14.8% 98.00 7.4% 94.20 14.8%
For illustrative purposes only
Total 0.0% -2.1% -2.0% -5.8% Source: BlackRock

Delta 1 products comparison
ETFs Futures Swaps
Round trip execution costs Commission, bid/ask spread Commission, bid/ask spread Usually commission
Holding cost Total Expense Ratio (TER) Roll, basis risk, margin Financing
Tracking error Yes No No
Minimum trade size 1 share 1 contract Variable on exposure
Expiry No Monthly, quarterly Fixed
Available to lend Yes No No
Legal structure Fund Listed derivative OTC derivative
Liquidity provided Exchange dealers Exchange dealers Single dealer

Liquidity: the ETF transaction process

Appendix – Regulatory Update
FINRA Regulatory Notice 09-31
FINRA, the Financial Industry Regulatory Authority which regulates all securities firms doing business in the US, issued a
regulatory notice in June 2009 to provide guidance on leveraged and inverse ETFs. The notice states that "...inverse and
leveraged ETFs that are reset daily typically are unsuitable for retail investors who plan to hold them for longer than one trading
session, particularly in volatile markets...”.
The following is taken from the notice: Exchange-traded funds (ETFs) that offer leverage or that are designed to perform
inversely to the index or benchmark they track - or both - are growing in number and popularity. While such products may be
useful in some sophisticated trading strategies, they are highly complex financial instruments that are typically designed to
achieve their stated objectives on a daily basis. Due to the effects of compounding, their performance over longer periods of
time can differ significantly from their stated daily objective. Therefore, inverse and leveraged ETFs that are reset daily typically
are unsuitable for retail investors who plan to hold them for longer than one trading session, particularly in volatile markets.
This Notice reminds firms of their sales practice obligations in connection with leveraged and inverse ETFs. In particular,
recommendations to customers must be suitable and based on a full understanding of the terms and features of the product
recommended; sales materials related to leveraged and inverse ETFs must be fair and accurate; and firms must have adequate
supervisory procedures in place to ensure that these obligations are met.
Most leveraged and inverse ETFs “reset” daily, meaning that they are designed to achieve their stated objectives on a daily basis.
Due to the effect of compounding, their performance over longer periods of time can differ significantly from the performance
(or inverse of the performance) of their underlying index or benchmark during the same period of time. For example, between
December 1, 2008, and April 30, 2009:
• The Dow Jones U.S. Oil & Gas Index gained 2 percent, while an ETF seeking to deliver twice the index's daily return fell 6
percent and the related ETF seeking to deliver twice the inverse of the index's daily return fell 26 percent.
• An ETF seeking to deliver three times the daily return of the Russell 1000 Financial Services Index fell 53 percent while the
index actually gained around 8 percent. The related ETF seeking to deliver three times the inverse of the index's daily
return declined by 90 percent over the same period.
This effect can be magnified in volatile markets. Using a two-day example, if the index goes from 100 to close at 101 on the first
day and back down to close at 100 on the next day, the two-day return of an inverse ETF will be different than if the index had
moved up to close at 110 the first day but then back down to close at 100 on the next day. In the first case with low volatility,
the inverse ETF loses 0.02 percent; but in the more volatile scenario the inverse ETF loses 1.82 percent. The effects of
mathematical compounding can grow significantly over time, leading to scenarios such as those noted above.
Source: Regulatory Notice 09-31, Financial Industry Regulatory Authority

Appendix – Regulatory Update (continued)
UK Retail Distribution Review (RDR) Update
On 26 March, FSA published its feedback statement (Policy Statement 10/6) to its Consultation Paper of June 2009 (CP09/18)
relating to proposals to improve the clarity with which adviser firms describe their services to consumers, and introduce a system
of ‘adviser-charging’ to remove the potential commission-bias through the influence of product providers.
The Policy Statement contains final rules in relation to ‘adviser-charging’ and ‘service-labelling’ and FSA will proceed with the
proposals set out in the consultation. Therefore, with effect from 1 January 2013, advisers will be prevented from receiving
commissions paid by product providers. FSA notes that it wants adviser firms to have charging structures that are product
neutral in that the charges reflect the services provided to the client, not the particular product provider or type of product.
Product providers are no longer required to monitor ‘appropriate adviser-charging’ (with reference to so-called ‘decency limits’)
though there remains a requirement to obtain and validate instructions from the client if the charge is deducted (by the provider)
from the client’s investment. This creates a significant challenge for providers as due to a result of increasing disintermediation,
in part due to the growth of platforms, the end-consumer will not be a direct client of the firm. FSA accepts that bespoke share
classes to provide for a full range of possible adviser charges (when taken from funds) is impractical and recognises the value of
cash accounts provided by platforms or other third-parties to collect adviser charges. This is a particularly important
development for factory-gate priced products such as most ETFs, however, it is uncertain whether the current practice of
rebating a proportion of the annual management charge, if this is used to fund the consumer cash account, will be acceptable
and FSA states that it intends to consult further on whether any rebates should be prohibited.
In addition, FSA will proceed with proposals for advisers to describe the advice provided as either independent or ‘restricted’. As
noted in previous editions, firms offering independent advice will need to demonstrate that their recommendations are based on
a comprehensive and unbiased analysis of the market and that any products selected are made in the interests of clients. If a
firm elects to limit its product range to certain investments or strategies, it will need to describe the services it offers as
‘restricted’ and this fact must be clearly disclosed to the consumer. FSA notes that it may be possible for certain advisers
servicing specialist client groups to retain the independence ‘label’ even where certain products are excluded from the scope of
their advice, although the firm would have to demonstrate that the product or strategy was not appropriate for their clients. FSA
observes that this exception is unlikely to be of benefit to most firms since most retail investment products are likely to be
appropriate for the vast majority of retail investors. Separately, FSA notes it was clear from responses received that it was not
widely understood that ETFs already fall within the current definition of packaged products and for the avoidance of doubt, it is
made clear that any products which might achieve similar outcomes as more traditional retail investment products are potentially
caught by the new rules.
Source: Policy Statement 10/6, Distribution of retail investments: Delivering the RDR – feedback to CP09/18 and final rules, Financial Services Authority, BlackRock.

UK Retail Distribution Review (RDR) Update (continued)
In addition to the feedback statement, FSA has also published the long-awaited Discussion Paper on the role of platforms in
facilitating the delivery of the RDR objectives. In particular, the paper discusses how platforms should be remunerated in a post-
RDR world and FSA has made clear that its ultimate objective is to separate or ‘unbundle’ product and platform charges to
provide greater transparency to consumers. FSA expresses a clear preference for the ‘wrap’ model where either the consumer
pays a wrap fee or product charges are rebated, although clearly the latter scenario will be subject to further consideration. FSA
goes on to say that it would be prepared to prevent all payments to platforms by product providers as it observes that payments
are often to secure ‘shelf-space’, have little relationship to the utility service provided by the platform and typically are used for
purposes which do not directly benefit the consumer, a view which draws strong parallels with the position under the MiFID
Inducements regime. This is not FSA’s final view on this topic but it does clearly call into question the economics of how
platforms will be paid post-RDR.
There is no requirement for platforms to extend their service model to be able to trade listed instruments such as ETFs, but with
the increasing adoption of ETFs by advisers, many platforms are already reviewing and building the functionality to provide wider
securities access. Also, in response to calls from the industry, the FSA intends to make compulsory the transferability of
investments from one platform to another.
The FSA intends to formally consult on proposals to regulate platforms in the summer and expects to publish final rules by the
end of this year, which does not give platforms a significant amount of time to implement the necessary changes to their
business models, which will inevitably require significant input from product providers and the adviser community. Comments on
the Discussion Paper are invited up to and including 26 May and BlackRock, like many of our competitors, continue to work with
the Investment Management Association and other industry practitioners to ensure that our views are fully represented in
ongoing discussions with the FSA.
Source: Policy Statement 10/6, Distribution of retail investments: Delivering the RDR – feedback to CP09/18 and final rules, Financial Services Authority, BlackRock.

SEC-FINRA Investor Alert on Leveraged and Inverse ETFs
The Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) issued an investor
alert on Tuesday 18 August 2009 entitled ‘Leveraged and Inverse ETFs: Specialized Products with Extra Risks for Buy-and-
Hold Investors’:
“The SEC staff and FINRA are issuing this Alert because we believe individual investors may be confused about the
performance objectives of leveraged and inverse exchange-traded funds (ETFs). Leveraged and inverse ETFs typically are
designed to achieve their stated performance objectives on a daily basis. Some investors might invest in these ETFs with the
expectation that the ETFs may meet their stated daily performance objectives over the long term as well. Investors should be
aware that performance of these ETFs over a period longer than one day can differ significantly from their stated daily
performance objectives.”
Source: Leveraged and Inverse ETFs: Specialized Products with Extra Risks for Buy-and-Hold Investors, Financial Industry Regulatory Authority.
CFTC Hearings on Energy Position Limits and Hedge Exemptions
U.S. Commodity Futures Trading Commission (CFTC) held hearings on Energy Position Limits and Hedge Exemptions on
July 28, July 29 and August 5, on whether federal position limits should be set on the energy markets.
The hearings provided critical input from a wide range of industry participants and academics to the Commission’s efforts to
examine different approaches to regulate energy markets. The Commodity Exchange Act states that the Commission shall
impose limits on trading and positions as necessary to eliminate, diminish or prevent the undue burdens on interstate
commerce that may result from excessive speculation. The CFTC’s hearings examined the role of position limits in energy
markets in fulfilling the CFTC’s mission to ensure the fair, open and efficient functioning of futures markets.
Goldman Sachs, JPMorgan Chase and other leading banks are exempt from most commodity-trading limits in order to
manage risks as they serve as market makers. The Commodity Futures Trading Commission is looking into whether those
exemptions should stand, as it considers blanket limits on a variety of commodity markets.
A number of ETPs/ ETFs providing exposure to commodities have recently issued notices that they have suspended their
creation process.
Source: Hearings on Energy Position Limits and Hedge Exemptions, U.S. Commodity Futures Trading Commission.

SEC Evaluating the use of Derivatives by Funds
The following is taken from the SEC’s press release announced on 25 March 2010: The SEC staff is conducting a review to
evaluate the use of derivatives by mutual funds, exchange-traded funds (ETFs) and other investment companies. The review will
examine whether and what additional protections are necessary for those funds under the Investment Company Act of 1940.
Pending the review's completion, the SEC has determined to defer consideration of exemptive requests under the Investment
Company Act to permit ETFs that would make significant investments in derivatives. The staff's decision will affect new and
pending exemptive requests from certain actively-managed and leveraged ETFs that particularly rely on swaps and other
derivative instruments to achieve their investment objectives. The deferral does not affect any existing ETFs or other types of
fund applications.
“It's appropriate to engage in a more thorough review of the use of derivatives by ETFs and mutual funds given the questions
surrounding the risks associated with the derivative instruments underlying many funds,” said SEC Chairman Mary Schapiro.
Source: Press Release: SEC Staff Evaluating the Use of Derivatives by Funds, 2010-45, U.S. Securities and Exchange Commission.
Changes to US tax law may affect non-US resident holders of US ETFs
Funds registered under the Investment Company Act of 1940 and structured for tax purposes as Regulated Investment
Companies (RICs) under the U.S. Tax Code were previously allowed a package of U.S. tax benefits to non-U.S. shareholders
(generally called ‘flow-through’ benefits) as a result of the 2004 American Jobs Creation Act. These flow-through benefits
have generally expired as of 31-Dec-09.
The three effected flow-through benefits are:
• Exemption from U.S. withholding tax (30% or lower treaty rate) on fund distributions where such distributions represent
Qualified Interest Income (QII). QII is certain fund income derived from interest income on debt of U.S. resident issuers
(i.e., obligations issued by Treasury and U.S. corporations). This applied to fixed income ETFs.
• Exemption from U.S. withholding tax on any short-term capital gains included in fund distributions. This applied to fixed
income and equity ETFs.
• Relief from U.S. Estate Tax on fund holdings by non-U.S. resident persons, where the underlying assets would have been
exempt from Estate Tax if held directly by the non-U.S. resident person.
The purpose of these three flow-through benefits was to allow a non-U.S. resident RIC shareholder the same treatment on a
flow-through basis as if the investments were owned directly by the non-U.S. resident RIC shareholder.
Source: BlackRock, April 2010.

Changes to US tax law may affect non-US resident holders of US ETFs (continued)
FATCA (foreign account withholding provisions in the HIRE Act)
The US Congress recently passed the HIRE Act, which contains provisions still commonly known as FATCA (the legislation
previously being the Foreign Account Tax Compliance Act).
FATCA is a system designed at getting financial institutions (of all descriptions) around the world to identify US investors -
even where they hold indirectly via non-US entities - and report details of these to the IRS. This responds to high levels
of political concern in the US over tax evasion, especially by wealthy individuals.
In order to encourage compliance with this legislation, the US will from 1 January 2013 impose a 30% US withholding tax
on the gross sales proceeds (as well as income) derived by any part of that financial institution from holdings of US financial
assets – unless that institution agrees to enter the reporting regime. Funds and fund managers are included in the definition
of 'Foreign Financial Institutions' (FFIs) and so FATCA goes greatly wider in reach than the existing 'Qualified Intermediary'
system, with which it will coexist.
The impacts on the financial world are undoubtedly complex and potentially far reaching. The basic wording of the HIRE Act
leaves many questions of detail unanswered, so financial institutions are waiting keenly for draft regulations to be issued by
the US Treasury later this year.
It does however currently appear that holdings of US ETFs by non-US investors would be subject to the 30% withholding from
gross sales proceeds, where held through a non-US financial intermediary who does not become FATCA compliant when the
regime goes live in 2013.
Source: BlackRock, April 2010.

2010 ETF ecosystem
ETFs
Regulations
ETPs Tax Fund Ratings ETNs
Manager/Provider
Index Exchange ETF

Provider Research:
INVESTOR
Consultants Banks,
Brokers,
Market
Liquidity Managers
Maker
Provider
Fund ETF Portals,

Supermarkets Websites,
Centres ETCs
ETVs
Source: Global ETF Research and Implementation Strategy Team, BlackRock.

ETF Landscape reports
• ETF Landscape Quarterly Global Handbook includes the price tickers, index tickers, annual total expense ratio
(TER), dividend policy, fund structure, assets under management (AUM), average daily volume, index replication
method as well as the websites for the providers, exchanges, and index providers to assist in comparing the
various products that are currently available.
• ETF Landscape Monthly Industry Review provides an up-to-date snapshot of the latest key industry trends with a
view to helping professional investors make more informed decisions
• Sign up at no cost by sending your business card details to: ETFresearch@blackrock.com

Call 1-800-iShares to request a prospectus, which includes investment objectives, risks, fees,
expenses and other information that you should read and consider carefully before investing.
Investing involves risk, including possible loss of principal.
Diversification may not protect against market risk. With short sales, you risk paying more for a security than you received from its sale. There are special risks associated with margin
investing. As with stocks, you may be called upon to deposit additional cash or securities if your account equity, including that which is attributable to ETFs, declines. There is no
guarantee that there will be borrower demand for shares of the iShares Funds, or that securities lending will generate any level of income. Distributions paid out of the Fund's net
investment income, including income from securities lending, if any, are taxable to investors as ordinary income. Buying and selling shares of iShares Funds will result in brokerage
commissions.
In addition to the normal risks associated with investing, international investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in
generally accepted accounting principles or from economic or political instability in other nations. Emerging markets involve heightened risks related to the same factors as well as
increased volatility and lower trading volume. Securities focusing on a single country and narrowly focused investments may be subject to higher volatility.Bonds and bond funds will
decrease in value as interest rates rise. An investment in the Fund(s) is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
Although market makers will generally take advantage of differences between the NAV and the trading price of iShares Fund shares through arbitrage opportunities, there is no
guarantee that they will do so. Shares of the iShares Funds may be sold throughout the day on the exchange through any brokerage account. However, shares may only be redeemed
directly from a Fund by Authorized Participants, in very large creation/redemption units. There can be no assurance that an active trading market will develop or be maintained.
The iShares Funds ("Funds") that are registered with the US Securities and Exchange Commission under the Investment Company Act of 1940 are distributed in the US by SEI
Investments Distribution Co. (SEI). BlackRock Fund Advisors (BFA) serves as the investment advisor to the Funds. BFA is a subsidiary of BlackRock Institutional Trust Company, N.A., a
subsidiary of BlackRock Inc., none of which is affiliated with SEI. This material does not constitute an offer or solicitation to sell or a solicitation of an offer to buy any shares of any Fund
(nor shall any such shares be offered or sold to any person) in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities law of that
jurisdiction.
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by Cohen & Steers Capital Management, Inc., Dow Jones & Company, Inc., European Public Real Estate
Association ("EPRA®"), FTSE International Limited ("FTSE"), FTSE/Xinhua Index Limited ("FXI"), iBoxx®, JPMorgan Chase & Co., MSCI Inc., Morningstar Inc., The NASDAQ OMX Group,
Inc., National Association of Real Estate Investment Trusts ("NAREIT"), New York Stock Exchange, Inc., Russell Investment Group or Standard & Poor's, nor are they sponsored,
endorsed or issued by Barclays Capital. None of these companies make any representation regarding the advisability of investing in the Funds. Neither SEI, nor BlackRock or any of their
affiliates, are affiliated with the companies listed above. FXI does not make any warranty regarding the FTSE/Xinhua Index. "FTSE" is a trade- and servicemark of London Stock Exchange
and The Financial Times Limited; "Xinhua" is a trade- and servicemark of Xinhua Financial Network Limited.
Information on funds and securities is provided strictly for illustrative purposes and should not be deemed an offer to sell or a solicitation of an offer to buy shares of any funds or
securities, that are described in this report.
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. The information provided is not intended to be a complete analysis of every material
fact respecting any strategy. The examples presented do not take into consideration commissions, tax implications or other transactions costs, which may significantly affect the
economic consequences of a given strategy. The information provided is not intended to be tax advice. Investors should be urged to consult their tax professionals or financial advisors
for more information regarding their specific tax situations. Neither BlackRock nor SEI provide investment or tax advice.
This document is an independent market commentary document based on publicly available information and is produced by the ETF Research & Implementation Strategy team.
This document does not provide investment advice and the information contained within should not be relied upon in assessing whether or not to invest in the products mentioned. It has
been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The securities discussed in this commentary may not be suitable for all
investors.
The trademarks and service marks contained herein are the property of their respective owners. Third-party data providers make no warranties or representations of any kind relating to
the accuracy, completeness, or timeliness of the data they provide and shall not have liability for any damages of any kind relating to such data.
© 2010 BlackRock Advisors (UK) Limited. All rights reserved. iShares® is a registered trademark of BlackRock Institutional Trust Company, N.A. All other trademarks, servicemarks or
registered trademarks are the property of their respective owners. iS-3225-0810.
* Not FDIC Insured * No Bank Guarantee * May Lose Value
FOR INSTITUTIONAL USE ONLY - NOT FOR PUBLIC DISTRIBUTION

Etfl Industry Hi Light Aug10 Us

Загружено:

Сведения о документе

Исходное описание:

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

Etfl Industry Hi Light Aug10 Us

Загружено:

Авторское право:

Доступные форматы

FOR INSTITUTIONAL USE – NOT FOR PUBLIC DISTRIBUTION.

Deborah Fuhr, Managing Director

Investment applications Page 58

ETF Landscape signup Page 88

2 ETF Landscape Industry Highlights August 2010

3 ETF Landscape Industry Highlights August 2010

ETFs & ETPs

4 ETF Landscape Industry Highlights August 2010

5 ETF Landscape Industry Highlights August 2010

ETFs & ETPs

6 ETF Landscape Industry Highlights August 2010

7 ETF Landscape Industry Highlights August 2010

ETFs & ETPs

8 ETF Landscape Industry Highlights August 2010

9 ETF Landscape Industry Highlights August 2010

10 ETF Landscape Industry Highlights August 2010

11 ETF Landscape Industry Highlights August 2010

Data as at end August 2010.

12 ETF Landscape Industry Highlights August 2010

Data as at end August 2010.

13 ETF Landscape Industry Highlights August 2010

14 ETF Landscape Industry Highlights August 2010

Data as at end August 2010.

15 ETF Landscape Industry Highlights August 2010

NNA – Net New Assets.

16 ETF Landscape Industry Highlights August 2010

NNA – Net New Assets.

17 ETF Landscape Industry Highlights August 2010

Total 1,031 56,878.2 813,919.1 (1,928.3) 48,048.1 119,469.1

NNA – Net New Assets.

18 ETF Landscape Industry Highlights August 2010

NNA – Net New Assets.

19 ETF Landscape Industry Highlights August 2010

NNA – Net New Assets.

20 ETF Landscape Industry Highlights August 2010

Aug-10 YTD Change

Total 871 $715.7 100.0% 99 $10.3 1.5% Active, 0.1%

Data as at end August 2010.

21 ETF Landscape Industry Highlights August 2010

Aug-10 YTD Change

Total 871 $715.7 100.0% 99 $10.3 1.5% Other, 3.6%

Data as at end August 2010.

22 ETF Landscape Industry Highlights August 2010

Ranked by US$ Average Daily Trading Volumes (ADV)

23 ETF Landscape Industry Highlights August 2010

Exchange Traded Funds*

Total - Equity ETFs 34

Open-end Mutual Funds**

24 ETF Landscape Industry Highlights August 2010

On 26 February 2010 the SEC approved a new rule that places

25 ETF Landscape Industry Highlights August 2010

Data as at end August 2010.

26 ETF Landscape Industry Highlights August 2010

27 ETF Landscape Industry Highlights August 2010

Data as at end August 2010.

28 ETF Landscape Industry Highlights August 2010

Global US Europe Japan Asia ex-Japan Latin America Canada

Data as at end August 2010.

29 ETF Landscape Industry Highlights August 2010

Data as at end August 2010.

30 ETF Landscape Industry Highlights August 2010

Aug-10 YTD Change

Total 2,308 $1,064.4 100.0% 363 $28.3 2.7%