BlackRock switches three iShares single-country ETFs to capped indices

Jul 5th, 2017 | By | Category: Equities

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BlackRock has announced that it is making changes to three iShares single-country ETFs by switching the funds to indices which utilise capping constraints. The three ETFs are listed on NYSE Arca and track MSCI indices providing broad market exposure to the Netherlands, South Africa and Canada.

BlackRock switches three iShares single-country ETFs to capped indices

The three iShares ETFs provide broad market exposure to equities listed in the Netherlands, South Africa and Canada.

The iShares MSCI Netherlands ETF (EWN) will change its index from the MSCI Netherlands Investable Market Index to the MSCI Netherlands IMI 25/50 Index.

The iShares MSCI South Africa ETF (EZA) will change its index from the MSCI South Africa Index to the MSCI South Africa 25/50 Index.

The two key requirements for MSCI’s 25/50 indices are that, as of the quarterly rebalance, no more than 25% of the value of the fund’s assets may be invested in a single issuer, and the sum of the weights of all issuers representing more than 5% of the fund should not exceed 50% of the fund’s total assets.

The iShares MSCI Canada ETF (EWC) will change its index from the MSCI Canada Index to the MSCI Canada Custom Capped Index.

According to BlackRock, “The changes to capped benchmarks are being implemented to seek to reduce tracking error in the funds and improve the investor experience.”

The changes will be implemented on or about 1 September 2017. Following the modifications, each funds’ name and ticker will remain unchanged. Current shareholders in the above mentioned funds are not required to take any actions as a result of these changes.

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