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F O R B E S B R A N D V O I C E W I T H i S H A R E S | P A I D P R O G R A M
A fund’s environmental, social and governance basket of securities) and stocks (they trade on
(“ESG”) investment strategy limits the types and exchanges intraday at market price, which may be
number of investment opportunities available greater or less than net asset value). However, there
to the fund and, as a result, the fund may are several key differences between active mutual
underperform other funds that do not have an funds and exchange traded funds. First, shares of
ESG focus. A fund’s ESG investment strategy may ETFs are not individually redeemed from the fund,
74
result in the fund investing in securities or industry which insulates investors from other shareholder
sectors that underperform the market as a whole activities. Mutual funds are accessed directly from
E or underperform other funds screened for ESG the fund company or through a select broker that
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O standards. has an arrangement with the fund company to sell
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R their funds. Pricing generally occurs once a day and
U International investing involves risks, including investors buy or redeem shares of the mutual fund at
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A risks related to foreign currency, limited liquidity, the end-of-day net asset value, less any applicable
H less government regulation and the possibility fees. In addition, most ETFs seek to track a market
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I of substantial volatility due to adverse political, index, before fees and expenses. The structure of
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economic or other developments. These risks active and index mutual funds is the same, but the
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E often are heightened for investments in emerging/ management strategy differs in that active mutual
V developing markets and in concentrations of single funds seek to outperform their benchmark while
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countries. the goal of index mutual funds is to track their
index. Finally, transactions in shares of ETFs will
Fixed income risks include interest-rate and credit result in brokerage commissions and will generate
risk. Typically, when interest rates rise, there is a tax consequences. Some mutual funds may charge
corresponding decline in bond values. Credit risk sales loads or redemption fees. Both mutual funds
refers to the possibility that the bond issuer will not and ETFs are obliged to distribute portfolio gains to
be able to make principal and interest payments. shareholders. Certain traditional mutual funds can
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against market risk or loss of principal. Buying This information should not be relied upon as
and selling shares of ETFs will result in brokerage research, investment advice or a recommendation
commissions. regarding any products, strategies or any security
in particular. This material is strictly for illustrative,
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industries, sectors, markets or asset classes may to change.
underperform or be more volatile than other
industries, sectors, markets or asset classes than the The iShares Funds are distributed by BlackRock
general securities market. ÛiÃÌ
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“BlackRock”). The iShares Funds are not sponsored,
When comparing stocks or bonds and iShares endorsed, issued, sold or promoted by MSCI Inc.,
Funds, it should be remembered that management nor does this company make any representation
fees associated with fund investments, like iShares regarding the advisability of investing in the Funds.
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stocks or bonds.
iSHARES and BLACKROCK are registered
Investment comparisons are for illustrative purposes trademarks of BlackRock. All other marks are the
only. To better understand the similarities and property of their respective owners.
differences between investments, including
investment objectives, risks, fees and expenses, it is ICRMH1019U-963544
important to read the products’ prospectuses. ETFs
combine features of both mutual funds (they hold a
N O V E M B E R 3 0 , 2 0 1 9 F O R B E S . C O M
