Morningstar Advisor - June/July 2010 - 78

Spotlight on the Evolution of Style Investing
with Robert Nestor, CFA, Head of iShares Product Services and Analytics Group
With the growth of the ETF landscape over the past ﬁve years and over 900 ETF products*, style-based ETF utilization has increased in tandem. Style indexes can act as portfolio benchmark building blocks that have exposure to speciﬁc U.S. market stock styles and can be implemented as another tool when constructing portfolios. And like other areas of the ETF landscape, the use of style-based ETFs has evolved from primarily tactical (short term) utilization to a combination of tactical and strategic (long-term) uses to more
Tactical Utilization Tax Management (“Harvesting”) Cash Equitization Tactical Style/ Cap Rotation Opportunistic Idea Implementation Tax Management (“Asset Location”) Core/Satellite Construction Active Risk Budgeting Strategic Deployment

strategic and core asset allocation use in portfolio construction. Style-based ETFs are increasingly utilized in active strategies where investors may have sentiments in certain market segments and they allow for a reﬁned portfolio construction approach incorporating both active and index elements to reach the risk level desired. iShares offers nine ETF products benchmarked to the Morningstar Style Indexes with exposure to the nine styles of the Morningstar Style BoxTM.
JKF Large Value JKI Mid Value JKF Small Value JKD Large Core JKG Mid Core JKD Small Core JKE Large Growth JKH Mid Growth JKE Small Growth JKD Large Core

JKD: iS Index F JKD Mid Co Large Mornin Core JKE: iS Growth Mornin JKK: iS Growth Mornin JKI: iSh Index F Small V

Core/Satellite Construction

Please visit www.iShares.com for more information on the investable products.
*Source: BlackRock as of 12/31/09

Trading shares of the iShares Funds will also generate tax consequences and transaction expenses. Call 1-800-iShares to request a prospectus, which includes investment objectives, risks, fees, Tactical Style/ expenses and other information that you should read and consider carefully before Cap Rotation investing. Investing involves risk, including possible loss of principal. Asset allocation may not protect against market risk.
The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or solicitation of an offer to buy any security. There is no guarantee that any strategies discussed will be effective. iShares Funds are obliged to distribute portfolio gains to shareholders. Tax consequences vary by investor. Consult a tax advisor regarding your situation. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results. The iShares Funds (“Funds”) are distributed by SEI Investments Distribution Co. (“SEI”) and advised by BlackRock Fund Advisors (“BFA”). BlackRock Fund Distribution Company (“BFDC”) assists in the marketing of the Funds. BFA and BFDC are afﬁliates of BlackRock, Inc., none of which is afﬁliated with SEI. The iShares Funds are not sponsored, endorsed, issued, sold or promoted by Morningstar ® Inc., nor does this company make any representation regarding the advisability of investing in the Funds. Neither SEI, nor BlackRock, Inc., nor any of their afﬁliates, are afﬁliated with the company listed above. ©2010 BlackRock Institutional Trust Company, N.A. All rights reserved. iShares® is a registered trademark of BlackRock Institutional Trust Company, N.A. All other trademarks, servicemarks or registered trademarks are the property of their respective owners. iS-2676-0510

http://www.iShares.com http://www.iShares.com

Morningstar Advisor - June/July 2010

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