BlackRock has announced that its iShares exchange-traded funds (ETFs) business has launched two new global sector ETFs in the Canadian marketplace, providing exposure to industrials and consumer discretionary stocks.
The iShares S&P Global Industrials Index ETF (CAD-Hedged) (XGI) provides exposure to major global industrial companies such as General Electric (pictured).
The funds, the iShares S&P Global Industrials Index ETF (CAD-Hedged) (XGI) and iShares S&P Global Consumer Discretionary Index ETF (CAD-Hedged) (XCD), have been listed on the Toronto Stock Exchange (TSX) and are hedged back to Canadian dollars.
The iShares S&P Global Industrials Index ETF is linked to the S&P Global 1200 Industrials Canadian Dollar Hedged Index, a float-adjusted, market capitalisation-weighted CAD-hedged index. The index includes constituents of the S&P Global 1200 Index included in the industrials sector and sub-industries as defined by the Global Industry Classification Standard (GICS). Major holdings include General Electric, Siemens, United Technologies, 3M and Union Pacific.
Similarly, the iShares S&P Global Consumer Discretionary Index ETF tracks the S&P Global 1200 Consumer Discretionary Canadian Dollar Hedged Index. This index includes all constituents of the S&P Global 1200 classified as consumer discretionary. Major holdings include Toyota, Comcast, Home Depot, Walt Disney and McDonald’s.
The parent S&P Global 1200 captures approximately 70% of the world’s equity markets and is a composite of 31 local markets from seven headline indices including, among others, the S&P 500, S&P Europe 350 and S&P/TOPIX 150.
The funds each have a management fee of 0.63% per annum.
UK and European investors looking for a locally-listed equivalent could consider the Lyxor ETF MSCI World Industrials TR (INUG) and Lyxor ETF MSCI World Consumer Discretionary TR (DISG) from Lyxor, a subsidiary of Societe Generale. These world sector ETFs track companies included in the MSCI World Index classified as industrials and consumer discretionary, respectively, by GICS. The MSCI World Index covers 23 developed market countries. There is significant overlap with the iShares’ new S&P sector funds.
As well as being available to investors directly via the TSX, the new iShares funds will also be available to Sun Life Global Investments within several of their mutual funds that are sub-advised by BlackRock. In April 2011, BlackRock partnered with Sun Life Global Investments to bring to market two Canadian mutual funds, which have drawn on the complimentary approaches to risk management of both Sun Life Global Investments and BlackRock. The mutual funds comprise iShares ETFs.
Greg Walker, Managing Director, Head of iShares Institutional Business at BlackRock Canada, said: “In less than two years, the Sun Life BlackRock funds have secured more than C$800 million in assets. This success highlights that the industry is continuing to recognise the benefits ETFs can bring to investment portfolios and as proof more and more asset managers like Sun Life Global Investments are using ETFs as an important component of their own active asset allocation strategies.”
Rick Headrick, President, Sun Life Global Investments, added: “It’s great to see that our Sun Life Global Investments BlackRock funds are being embraced by our clients. With these two additional ETF products, our funds will be able to offer greater portfolio diversification. Our clients recognise the benefit that our funds deliver by combining a core allocation to Canadian holdings along with a complementary global sector exposure to provide diversification.”