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Eyes on Europe, and the US consumer
What needs to happen to prevent a crisis in Europe? And what are the biggest risks to the US consumer? Russ answers these questions in his new fortnightly market update.
While the situation appears to have temporarily stabilized, the politically charged nature of the European crisis will keep investors on edge," he writes. "Closer to home, there is another risk to the global economy. While the US consumer continues to defy expectations, this is unlikely to continue in the absence of a significant acceleration in income growth."
ETF trading ideas
We have included ETF trading idea for advisers looking for international investment opportunities outside of the US and Europe. And did you know the S&P/ASX Dividend Opportunities Index (accessed via IHD) has outperformed both the Australian All Ordinaries Index, and a portfolio of the Big 4 Australian banks since 2002.*
Expressing an Asian regional view via ETFs
iShares S&P Asia 50. IRESS code: IAA.AXW
The iShares S&P Asia 50 seeks investment results that correspond to the price and yield performance, before fees and expenses, of 50 stocks across four countries, as represented by the Standard & Poor's Asia 50 Index. The Index represents four major economic sectors of Asian equity markets and generally includes highly liquid securities from Hong Kong, Korea, Taiwan and Singapore.
Key points about IAA:
- designed to deliver the performance of 50 leading Asian stocks: Hong Kong, South Korea, Singapore and Taiwan
- serves to cover the large-cap constituents of each country
- largest holdings - Samsung Electronics, Taiwan Semiconductor, China Mobile and Hyundai Motors
(as at 17 Nov 2011)
- management cost 0.50%
- seeks to provide unhedged Asian equity exposure
- currently has over $186 million in assets
- holds physical securities, not derivatives or synthetic instruments
Expressing a view on diversifying your equity income via ETFs
iShares S&P/ASX High Dividend. IRESS code: IHD.AXW
The iShares S&P/ASX High Dividend aims to provide investors with the performance of the market, before fees and expenses, as represented by the S&P/ASX Dividend Opportunities Index. The Index seeks to provide exposure to high dividend paying common stocks from the S&P/ASX 300 universe, while meeting diversification, stability and tradability requirements.
Key points about IHD:
- designed to deliver the performance of the S&P/ASX Dividend Opportunities Index (Index)
- the Index has been designed to serve as a benchmark for Australian income seeking investors investing in the Australian equity market
- sector limits of 20% underweights financials seeking to provide high yield and to ensure diversification
- largest holdings - Navitas, Monadelphous, Westpac, United Group, IRESS Market Tech and Coca-Cola Amatil (as at 17 Nov 2011)
- quarterly distributions
- Index average annual return: 10.32%**
- management cost 0.30%
- holds physical securities, not derivatives or synthetic instruments
If you have any questions please don't hesitate to contact the iShares team on 1300 474 2737.
Regards,
Tim Sparks
National Broking Strategy & ETF Research
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Russ Koesterich,
CFA, iShares Global
Chief Investment
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*Source: Bloomberg. July 2002 to October 2011.
**Source: Bloomberg. 9.32 year investment period.
Before investing in an iShares exchange traded fund, you should carefully consider whether such products are appropriate for you, read the applicable prospectus or product disclosure statement ("PDS") available at iShares.com.au and consult an investment adviser.
Issued by BlackRock Asset Management Australia Limited ABN 33 001 804 566, AFSL 225 398 ("BAMAL") and BlackRock Investment Management (Australia) Limited ABN 13 006 165 975 AFSL 230523 ("BIMAL"). BIMAL and BAMAL are wholly-owned subsidiaries of BlackRock, Inc. (collectively "BlackRock").
This information is intended strictly for use by wholesale clients / professional investors in Australia, as defined in the Corporations Act 2001, and is not for retail distribution in Australia.
BlackRock believes the information in this document is correct at the time of issue, but no warranty of accuracy or reliability is given and no responsibility arising in any way for errors or omissions (including responsibility to any person by reason of negligence) is accepted by BlackRock.
This information is general in nature, and has been prepared without taking into account any individual’s objectives, financial situation, or needs.
Transaction costs are incurred when buying or selling shares or units (as the case may be) of an iShares fund on the Australian Securities Exchange ("ASX") and brokerage commissions if such trades are done through a broker.
Neither the performance nor the repayment of capital or any income of an iShares fund is guaranteed by any BlackRock entity. Past performance is not a reliable indicator of future performance.
Shares or units of an iShares fund trade on ASX at market price (not, net asset value ("NAV")). Shares or units may only be redeemed directly from an iShares fund by persons called "Authorised Participants".
An iShares fund is not sponsored, endorsed, issued, sold or promoted by the provider of the index which a particular iShares fund seeks to track. No index provider makes any representation regarding the advisability of investing in the iShares funds.
Standard & Poor's® and S&P® are registered trademarks of Standard & Poor's ("S&P"), a division of The McGraw-Hill Companies, Inc. ("McGraw-Hill"). ASX® is a registered trademark of ASX Operations Pty Limited ("ASX Operations") and has been licensed for use to S&P. The iShares funds are not sponsored, endorsed, issued, sold or promoted by S&P, McGraw-Hill or ASX Operations (including its affiliates). Each of these companies has licensed the use of their respective trademarks and servicemarks to BlackRock Institutional Trust Company, N.A. None of these companies make any representation, warranty or condition regarding the advisability of buying, selling or holding shares or units in the iShares funds.
Australian iShares funds: BIMAL is the Responsible Entity for the managed investment scheme Australian iShares funds quoted on ASX, and is the issuer of units in those iShares funds. Each fund constitution provides that the liability of each unit holder is limited to its investment in the fund. In addition to the normal risks associated with investing, there may be risks associated with investments in smaller companies and those narrowly focused.
International iShares funds: BAMAL is the local agent and intermediary for international iShares funds issued by iShares (iShares, Inc. ARBN 125632 279 formed in Maryland, USA; iShares Trust ARBN 125 632 411 organised in Delaware, USA. The liability of shareholders is limited). BlackRock Fund Advisors ("BFA") serves as an advisor to the iShares funds that are registered with the United States Securities and Exchange Commission under the Investment Company Act of 1940. BFA is a subsidiary of BlackRock Institutional Trust Company, N.A ("BTC"). BTC is a wholly-owned subsidiary of BlackRock, Trades on ASX in the shares of an international iShares fund are settled using CHESS Depositary Interests (or "CDIs"). An investment in an international iShares fund has different risk, performance and return factors compared to investments in other listed securities that do not have international exposure.
© 2011 BlackRock. 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.
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