Definition
iShares refers to a family of exchange-traded funds (ETFs) managed by BlackRock, a global investment management company. Each iShare is a publically-traded investment fund that tracks a specific index, sector, commodity, or asset class. They allow individual investors access to a wide variety of markets and investment strategies typically only available to large institutional investors.
Phonetic
The phonetic spelling of “iShares” is : “ai-ˈsherz”.
Key Takeaways
- iShares is a family of exchange-traded funds (ETFs) managed by BlackRock, one of the largest asset management firms in the world.
- Investment Variety: They offer over 800 different products across a broad range of asset classes and investment styles. This provides investors with a wide variety of options to diversify their portfolio.
- Liquidity and Accessibility: iShares ETFs are bought and sold on global exchanges just like individual stocks, which offers high liquidity and easy accessibility for investors of all sizes.
Importance
iShares is an important term in business/finance as it signifies a family of exchange-traded funds (ETFs) managed by BlackRock, one of the world’s largest asset managers. The fundamental value of iShares lies in its ability to provide investors with exposure to a wide array of asset classes, from stocks and bonds to commodities, through a single security that trades just like a normal stock. iShares have gained immense popularity due to their flexibility, liquidity, lower costs, and transparency, making them a vital tool for individual and institutional investors globally for portfolio diversification and risk management. Furthermore, iShares offer tax efficiency and allow for intra-day buying or selling, capabilities that mutual funds typically do not offer.
Explanation
iShares are exchange-traded funds (ETFs) managed by BlackRock, one of the world’s leading asset managers. Essentially, iShares serve the purpose of providing investors with a means to easily invest in a diversified range of assets by tracking the performance of a specific index or sector. This enables both retail and institutional investors to gain exposure to multiple securities with a single investment, thereby helping them to achieve a level of diversification that might be difficult or expensive to replicate individually.iShares are used for various investment strategies, including portfolio diversification, risk management, and income generation, among others. They are often included in investment portfolios as they can cover a wide array of asset classes, including stocks, bonds, commodities, real estate, and more, across different regions and sectors. In essence, they aim to offer efficiency and flexibility, combined with the liquidity of being traded like a regular stock on an exchange. This means investors can buy or sell iShares at any time during the trading day at market price.
Examples
iShares is a company that manages exchange-traded funds (ETFs). Here are three real-world examples:1. iShares Core S&P 500 ETF (IVV): This is one of the most popular iShares ETFs. It is designed to track the S&P 500 index, which includes 500 of the largest US companies. This ETF is often used by investors who look for an investment that closely follows the US large-cap equities market performance.2. iShares MSCI Emerging Markets ETF (EEM): This ETF gives investors exposure to emerging market economies, like China, South Korea, Taiwan, and India. Its portfolio includes companies from these and other emerging markets, making it useful for investors seeking global diversification.3. iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD): This iShares ETF is designed to track an index of high quality, US corporate bonds. It’s a popular choice among investors looking for steady income and lower risk than stocks. This ETF includes bonds from companies in various sectors, providing a good level of diversification within the corporate bond market.
Frequently Asked Questions(FAQ)
What are iShares?
iShares are a family of exchange-traded funds (ETFs) managed by BlackRock. They are one of the leading ETF providers globally.
How do iShares work?
iShares work similar to mutual funds, however, they are traded on exchanges like individual stocks. They pool resources from multiple investors to purchase a diversified set of assets.
What types of iShares are there?
There are a wide variety of iShares that invest in different asset classes, sectors, and markets such as stocks, bonds, commodities, technology, healthcare, etc. They also cover numerous geographical locations worldwide.
How can I purchase iShares?
You can purchase iShares on the stock exchange during market hours, through a broker or online trading platform.
Why should I consider investing in an iShares ETF?
iShares ETFs are known for their liquidity, diversification and low costs compared to mutual funds. They allow investors to gain exposure to a wide range of assets without the need to buy each individual security.
What are the risks of investing in iShares?
As with all investments, there’s a risk that you could lose money. The risks would depend on the specific iShares investment – for instance, stock ETFs carry a different set of risks compared to bond ETFs.
Can any investor buy iShares?
Yes, iShares are available to all types of investors, whether retail or institutional. The only requirement is access to a trading platform that connects to the markets where the iShares are traded.
Do iShares pay dividends?
Yes, most iShares ETFs do pay dividends. The dividends are based on the income earned by the underlying assets.
Are iShares transparent?
Yes, iShares are very transparent as they reveal their holdings on a daily basis. This allows investors to know what assets they own through their iTares ETF.
: How can I find more information about a specific iShares fund?
: You can find more information about a specific iShares fund on the BlackRock official website or financial news and information websites.
Related Finance Terms
- Exchange-Traded Funds (ETFs)
- BlackRock, Inc.
- Asset Allocation
- Portfolio Management
- Index Funds
Sources for More Information
