iShares S&P 500 becomes the largest ETF in Europe

iShares, the Exchange Traded Funds (ETF) platform of BlackRock, Inc. announced that total assets under management (AUM) for the iShares S&P 500 have reached $9.2 billion, making it the largest ETF and index fund in Europe. Since the start of 2011 more than $1 billion of net new money has come into the fund, highlighting renewed investor appetite for equities and developed markets in particular.

The fund provides access to one of the leading benchmarks for US equities, the S&P 500. Since iShares launched the ETF in Europe in 2002, the S&P 500 index has returned 26.98 per cent. Physically backed and fully replicating the index, the fund offers exposure to the 500 largest companies in the US by market capitalisation.

With an AUM of $9.2 billion, the scale of the iShares S&P 500 means that investors can achieve highly liquid and cost efficient exposure to the world’s largest equity market in a single trade. On average, $69 million of the fund was traded every day during 2010, with an average spread consistently below 10 basis points.

David Gardner, Head of iShares EMEA Sales, said: “Many investors are expecting positive returns from developed market equities in 2011 after several years in the doldrums. With the S&P 500 hitting levels not seen since June 2008, the US has been a particular beneficiary of positive sentiment.

“European investors are choosing to access US equities through the iShares S&P 500 for two key reasons. Firstly, ETFs provide instant exposure, enabling investors to establish a position or increase their allocation to an asset class immediately. Secondly, the scale of the ETF is also an important factor, because highly liquid products enable investors to buy and sell with minimal market impact and achieve tighter spreads when they trade. We have 16 official exchange liquidity providers making markets in the fund on different exchanges across Europe, which also ensures liquidity.”