Blackrock iShares

Blackrock iShares is the largest manager of exchange traded funds in both the United States and across the globe. Blackrock iShares are available in the United States and Canada; the United Kingdom; continental Europe; Mexico and Latin America; and in Asia and Australia. At year end 2013, Blackrock iShares was managing $661.589 billion in U.S. assets.

In the United States, Blackrock iShares track indexes provided by Barclays Capital; Cohen & Steers; Dow Jones; FTSE; FTSE Xinhua; iBoxx; JP Morgan; Morningstar; MSCI; NASDAQ: the NYSE; Russell; and Standard & Poors.

History
A timeline of the history of what is now Blackrock iShares:


 * 1996: Barclays Global Investors (BGI) created when Barclays bought Wells Fargo Nikko Advisors (a joint venture between San Francisco-based Wells Fargo & Co. and Tokyo-based Nikko Cordial Securities Inc.) and merged it with its BZW Investment Management unit. The year saw the introduction of World Equity Benchmark (WEBs) exchange traded funds. WEBs were single country stock funds based on MSCI single country indexes.


 * 2000: Launch of iShares ETFs in the United States, United Kingdom, and Canada.


 * 2001: Launch of iShares ETFs in Hong Kong and Japan.


 * 2002: iShares fixed income ETFs launched in the United States.


 * 2006: Barclays buys the German exchange-traded funds provider Indexchange from HypoVereinsbank for 240 million euros. The purchase enables iShares to expand its presence in the European markets.


 * 2007: Launch of iShares in Mexico; launch of high yield bond and municipal bond ETFs in the United States.


 * 2008: First all ETF 529 savings plan created for fee-only advisors.


 * 2009: BGI sells iShares to Blackrock for $13.5 billion;  launched ETF (401k) for financial advisors.


 * 2013: Blackrock iShares purchases Credit Suisse's ETFs.

In the U.S. the annual growth of iShares assets under management (AUM) is documented in the following table.

Boglehead portfolios using iShares
The extensive line-up of iShares ETFs allows investors to implement a wide variety of low cost indexed portfolios. In October 2012, iShares introduced a package of ten low expense ETFs (six existing funds plus four new issues) designed and marketed for investors to implement strategic asset allocations

The Core funds include the following ETFs:

Examples of how iShares ETFs can be used in structuring portfolios consistent with allocations frequently discussed among Boglehead forum members are highlighted below.

Three fund portfolio
The three fund portfolio is an often recommended portfolio for investors seeking a simple, indexed portfolio employing total market funds covering the US stock market, the US investment grade bond market, and international stock markets. The following table provides a low cost implementation of the three fund portfolio, using iShare Core ETFs. The sample portfolio shows an equal division of assets among the three asset classes, which corresponds to a 67%/33% split between stocks and bonds. The three fund portfolio can be adjusted for any desired stock/bond split.

Core Four portfolio
As proposed by Rick Ferri on the Bogleheads&reg; forum, the Core Four are four funds which form the "cornerstone" of a portfolio.

Rick proposes that investors first determine their bond allocation. With the remaining funds, allocate 60% to US stock, 30% to international and 10% to REIT.

 Rick stresses that the exact numbers aren't important. For the 60/40 portfolio listed below, you could increase  iShares US Real Estate ETF  to 10%, drop iShares Core S&P Total Market ETF  to 35% and the iShares Core MSCI Total International ETF to 15% if you like round numbers.

The core-four is just a low cost foundation for your portfolio. You could add a slice of value stocks (US and/or International). You could split the bond portion between Treasury Inflation Protected Securities and nominal bonds, which would result in a slightly more conservative version of David Swensen's model portfolio (less international stock and less REIT, but otherwise the same four base funds plus TIPS.

Coffeehouse portfolio
This simple 7-fund portfolio was made popular by Bill Shultheis' book The Coffeehouse Investor. He advocates 40% in an intermediate term bond fund and 10% each in various stock funds, resulting in a 60%/40% equity/bond split. This allocation can be adjusted according to risk tolerance. The Coffeehouse Portfolio contains only 10% international stocks (17% of total equities). It slices up the domestic portion, but uses a total international fund. Further information can be found at The Coffeehouse Investor.

David Swenson's lazy portfolio
David Swensen is CIO of Yale University and author of Unconventional Success. His lazy portfolio uses low-cost, tax-efficient index funds, a healthy dose of real estate, and  inflation-protected securities (TIPS). The overall equity/bond allocation can be adjusted (higher or lower) according to risk tolerance and investor needs.

Permanent Portfolio
The Permanent Portfolio is a buy-and-hold portfolio that contains a healthy allocation to gold. The portfolio is designed to hold an equal allocation of domestic stocks, gold, short-term treasury bonds, and long term treasury bonds. The portfolio can be implemented with the iShare ETFs listed in the following table.