EQUITY ETFs

Explore the benefits of equity ETFs, including portfolio diversification, passive and active strategies, and their role in Asia’s evolving markets.

Spices in sacks

WHAT ARE EQUITY ETFs

Equity ETFs are a type of exchange-traded fund that hold a portfolio of stocks and aims to replicate the performance of a specific equity index or strategy. These ETFs can be passive or active.

They are the largest, most established category of ETFs, with US$11.6 trillion in assets1. They offer investors targeted exposure to specific countries, regions, market capitalization levels, styles, themes, factors and beyond.

11.6

Equity ETF AUM, in USD1

750

Number of iShares equity ETFs1

4.1

iShares equity ETF AUM, in USD1

CASE STUDIES

Diversifying global equity exposure

An asset owner is looking to diversify its investments with 10% being allocated to Equities. The portfolio manager is wary of incurring high trading costs.

The institution allocates 10% of its portfolio to a strategy that tracks global developed markets.

ETFs provided access to the performance of a broad, diversified basket of around 1,500 stocks worldwide through a single, cost-effective trade.

Get more granular

An investment manager had a top-down country view on emerging markets. They were looking to express their convictions in a nimble and cost-efficient way.

The investment manager used ETFs to implement tactical single country views within emerging markets. They took an overweight position in Indian equities relative to the broader EM universe.

ETFs allowed them to efficiently access the Indian market and adjust their allocation swiftly in line with evolving convictions.

Outperforming the global equity benchmark by getting granular

A sovereign wealth fund in the region sought to implement active views through both tactical and strategic asset allocation decisions. While their benchmark covered a broad mix of global equities, they had specific top-down country views they wanted to express to achieve alpha. They were looking for a cost-efficient and targeted way to reflect those convictions within their portfolio.

ETFs can be used as building blocks to express regional & single country views to achieve alpha. The breadth of the iShares platform allows clients to utilize 40 ACT and UCITS products for exposure depending on their jurisdiction.

The platform provides portfolio optimization capabilities for clients to achieve their desired ex-ante TE to the global equities benchmark while using building blocks.