Index investing and exchange traded funds

This iShares short paper draws a distinction between the role of index providers and the role of index fund managers and explores the responsibilities of both.

This short paper answers ten frequently asked questions about ETFs. Topics include various impacts of ETFs and index investing on markets, ETF market size, and the defining features of ETFs.

A BlackRock guest blog post on CFA Institute's Enterprising Investor, exploring the role that ETFs played amid the current coronavirus-driven market stresses.

A BlackRock guest blog post on CFA Institute's Enterprising Investor, using empirical evidence to dispel the ETF systemic risk narrative.

Long-form response to the CFA Institute Research Foundation's paper, using empirical evidence to dispel the ETF systemic risk narrative.

This paper grounds the academic debate around asset managers, index funds, and corporate control firmly in the practical context of the operation and regulation of asset managers.

In this post, the iShares team examines the SEC's new rule that will help modernize the regulatory framework for exchange traded funds.

This short paper examines the number of APs across different categorizations, including size of funds and asset classes. Overall, it presents data that the universe of APs is broad and diverse, and that the broad engagement by APs supports a healthy ETF ecosystem.

This short paper examines the central roles of authorized participants (APs) and market makers in ensuring the accuracy of ETF prices and smooth trading in all market conditions.

This short paper outlines the rationale for launching and closing ETFs and provides some ‘fast facts’ on how the number of ETFs and mutual funds in existence has changed over time.

In this Policy Spotlight, we show that the evidence does not support claims that index investing increases asset correlations or blunts stock price signals. Index investing and ETFs support price discovery and serve as 'shock absorbers' during market stress events.

Letter to the SEC in response to their request for comment on the proposed rule on exchange-traded funds (ETFs).

Index investing has profoundly changed the way investors seek returns, manage risk, and build portfolios. Although the benefits of index investing for the investor are widely recognized, recent commentary has focused on its role in capital markets. In this ViewPoint, we outline some of the key elements of the debate, focusing on index investing in relation to company stocks and the equity markets. We also examine the development of theories around common ownership, building on our March 2017 ViewPoint entitled “Index Investing and Common Ownership Theories."

Response to the Central Bank of Ireland’s Discussion Paper 6 on exchange-traded funds (ETFs).

In this ViewPoint, we explain how shares are created and redeemed in ETFs. This process, known as ETF primary trading, facilitates inflows and outflows from the underlying portfolios of these mutual funds. We discuss authorized participants (APs), market makers, and the distinct roles they play in ETF primary trading. We also consider the possibility of an AP stepping back from its role and explain the expected impact on ETFs and markets.

This ViewPoint provides an overview of the structural features of ETFs. Further, we discuss the benefits of bond ETFs, including transparency and price discovery, and some of the challenges, including the need for a classification system that better distinguishes among several types of exchange-traded products. We offer some suggestions for concrete regulatory actions that can extend the benefits of ETFs to a broader investor base and improve financial stability.

This publication examines the behavior of bond markets and fixed income ETFs during the recent period of significant asset flows following the news of Bill Gross’s departure from PIMCO on September 26, 2014. Our analysis demonstrates that ETFs helped defuse uncertainty and facilitated orderly and stable markets. We believe this experience is an illustrative case study of how fixed income ETFs provide liquidity, price transparency, and fair allocation of costs amidst periods of market stability, as well as during periods when markets are challenged with uncertainty or significant asset flows.

This ViewPoint provides a detailed overview of Exchange Traded Products with a focus on Exchange Traded Funds (ETFs). The paper explains some common misconceptions about the structure of ETFs and index investing. It also identifes several principles that we believe can help maximize the utility of ETFs and minimize the potential for any unintended consequences for investors and financial markets.

In this ViewPoint, we provide background on the history and structure of ETFs, summarize recent concerns that have been raised by regulators, and recommend five reforms that would improve the marketplace for ETFs. We explicitly support uniform standards on labeling, transparency, disclosure, and reporting that would reduce systemic risk, improve investor protection, and help ensure that investors understand precisely the risks and attributes of the products that they are purchasing.