What Is iShares? What Types of Funds It Holds and Examples

What Is iShares?

A global leader in exchange-traded funds (ETFs), iShares has over $2 trillion invested in more than 800 different product offerings across a wide range of asset classes and investment strategies. iShares is a subsidiary of BlackRock, the world's largest asset management company, and BlackRock is responsible for issuing and marketing iShares products.

Founded in the year 2000, the initial iShares listings were established on major exchanges such as the NYSE Euronext, Chicago Board Options Exchange, Nasdaq, and NYSE Arca.

The Basics of iShares

ETFs from iShares are a flexible, low-cost way for investors to gain exposure to various market segments, including fixed income, emerging markets and broad-based indexes. For example, the iShares Core S&P 500 ETF (IVV) tracks the S&P 500 Index, whereas the iShares MSCI Emerging Market ETF (EEM) follows more than 800 large and mid-cap companies in developing countries.

By combining low fees with tax efficiency in an asset that seeks to match an index, ETFs can build greater longer term savings compared with mutual funds. Beyond savings, most ETFs aim to match the performance of a benchmark index, which means turnover is less frequent and thus fees are lower. However, this doesn't come at the expense of performance. In fact, iShares Core ETFs outperformed more than 76% of their peers on average from 2015 to 2020.   

Almost all major global marketplaces list iShares funds, including the London Stock Exchange, the Hong Kong Stock Exchange, the Toronto Stock Exchange, among others. At any given time, iShares and Vanguard represent more than 50% of the total ETF market.

Examples of iShares ETFs

For U.S. investors, iShares offers 394 ETFs focused on commodities, equities, fixed income, multi assets, and real estate. In addition, investors can choose to focus on developing, emerging or frontier markets; specific regions and individual countries; industry sectors; megatrends such as climate change, demographic change and technological breakthroughs; thematic investing such as Environmental, Social and Governance (ESG) criteria; and other selection methodologies. Below are some popular products under the iShares brand: 

• iShares Core S&P 500 ETF (IVV): This ETF tracking the S&P 500 Index held approximately $286 billion in assets as of June 2021. It has an expense ratio of 0.03% and has returned 7.27% annually since its inception in May 2000, compared with 7.33% for its benchmark.
• iShares MSCI EAFE ETF (EFA): This ETF provides access to more than 900 stocks for companies in Europe, Australia Asia, and the Far East. The fund held about $56.8 billion in assets as of June 2021. It has an expense ratio of 0.32% and has returned 5.84% annually since its inception in August 2001.
• iShares Core US Aggregate Bond ETF (AGG): This ETF provides broad exposure to investment-grade bonds in the U.S. The fund held approximately $88.8 billion in assets as of June 2021. It has an expense ratio of 0.04% and has returned 4.02% annually since its inception in September 2003.