BlackRock iShares
BlackRock and iShares, what’s in it for me?
In other pages on this website you will find more information about the history of iShares and the 2009 takeover of Barclays Global Investors that included the shiny gem of iShares.
The question we want to put here is whether this power package of BlackRock and iShares is good for you as an individual investor. What does BlackRock add to the ETF market and what are the pros and cons of iShares ETF’s compared to other options?
The backup of BlackRock for iShares and the ETF market
One thing we can be sure of is that the power of BlackRock really made an impact on the results of iShares. Since buying iShares from Barclays its annual growth rate is about 10 to 15%.
Of course that is great news for iShares but it is also great news for the development of the ETF market. The ETF market has grown with comparable figures and the power backing of BlackRock sure did help the ETF market to grow exponentially.
The ETF market growth has cut costs
Due to the growth of the ETF markets competition has grown too. As with other markets costs tend to get down while different companies want to have a slice of the pie. The same occurs with the ETF market. The net expense ratio for ETF’s has gone down sometimes to 0,04% depending on the ETF you are trading.
A larger market also enabled cutting costs as efficiency ratio’s go up. The same has occurred with iShares who has cut costs too wanting to remain number 1 in this rapidly growing ETF market (and they still are number 1 by far).
Spreads have come down, especially with iShares ETF’s
The daily volumes in iShares ETF’s is significant and rising. This has a direct effect on spreads between ask and bid prices. Of course this is a very important factor for individual traders as they profit directly from the lower spreads. Here the impact of BlackRock’s growth path for iShares translates directly in better market conditions for ETF traders.
A large variety of ETF’s offered by iShares
If we compare the number and scope of ETF’s run by iShares under the banner of Barclays with that of current BlackRock’s iShares we are seeing an eruption of many new ETF’s covering many market sectors and regions.
Today an individual investor in let’s say Berlin can invest in a myriad of ETF’s covering all sorts of indices, market sectors and commodities. This sure has helped the individual investor to grab things in his or her own hands and compete with even institutional investors that previously had the sole access to all these foreign markets and market sectors.
This really is the biggest win from the growth of the ETF market and we may thank BlackRock for pushing iShares on a path of immense growth.
Sometimes there are better alternatives
iShares offers many great ETF’s in many markets but they do not offer the best ETF on all specific markets. That is why I have made a list of preferred ETF’s I trade for specific markets and purposes. In my list of 137 ETF’s you will find many iShares ETF’s but you will also find many more ETF’s from other ETF providers.
I have a reason for picking these specific ETF’s. I also prefer some diversity among ETF providers and to be honest some just offer a better ETF than iShares that suits my needs as an investor.
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