ETF Landscape: Celebrating 10 Years of ETFs in Europe - BlackRock

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockCelebrating 10 Years of ETFs in EuropeThis special edition of ETF Landscape is BlackRock’s comprehensive report on the history and outlook for the ETF industry inEurope. The report covers Exchange Traded Funds (ETFs) and Exchange Traded Products (ETPs). ETFs are open-end index fundsthat provide daily portfolio transparency, are listed and traded on exchanges like stocks on a secondary basis as well as utilising aunique creation and redemption process for primary transactions. ETPs are products that have similarities to ETFs in the way theytrade and settle but they do not use a mutual fund structure. The use of other structures including grantor trusts, partnerships,notes and commodity pools by ETPs can create different tax and regulatory implications for investors when compared to ETFs,which are funds. This commentary should not be regarded as a research report 1 .April 2010 marks the 10th anniversary ofthe launch of the first Exchange TradedFunds (ETFs) in EuropeWe take this opportunity to reflect on the history of ETFs as well asconsider the outlook for the future of ETFs in Europe.HighlightsThe rate of growth in terms of assets, number of products, listings,exchanges and providers has been greater in Europe than theexperience of ETFs in the early years in the US. Over the pastdecade through year end 2009 the compound annual growth ratefor ETF assets globally was 56.3%, it was 58.1% in the United States,53.1% in Canada and 90.5% in Europe, and there are no signs thatinvestor interest in ETFs is fading. Investors are finding that ETFs areproducts that work well in every market environment.Exchange Traded Funds have become popular and widely usedinvestment vehicles. In a world where investment products comeand go with the blink of an eye, ETFs might be considered one ofthe most innovative financial products in the last two decades. Theyhave fundamentally changed how both institutional and retailinvestors construct their investment portfolios.ETFs have opened a new panorama of investment opportunities.Essentially, ETFs are index funds that are listed and traded onexchanges like stocks, allow investors to gain broad exposure tospecific segments of equity, fixed income, and commodity marketswith relative ease, on a real-time basis, and at a lower cost thanmany other forms of investing. ETFs are based on sector, large-cap,mid-cap, small-cap, value, growth, domestic, international countryand regional equity indices, commodities and currencies as well ason corporate, credit, inflation and government fixed income indices.ETFs typically can be used to short indices, are lendable, and arepurchased on a commission basis just like other equities.ETFs offer many advantages. We believe that growth in the use ofETFs reflects their many advantages. They trade throughout the dayon major securities exchanges and can be bought and sold usingmarket, limit, or stop orders. ETFs are funds, not derivatives, whichallow investors to quickly react to short and long-term needs oropportunities. As such, they may serve as an alternative to futures,trading baskets of stocks and traditional mutual funds. ETFs do nothave any sales loads, although they do, like mutual funds, haveannual expense ratios, albeit less than traditional funds, rangingfrom zero to 1.81%. In fact, ETFs have some of the lowest expenseratios among registered investment products. Recent interest frominvestors has been partially fuelled by attempts to avoid accounting,earnings, and other stock-specific risks.ETFs are index-based 2 open-ended funds that can be bought andsold as quickly and easily as ordinary shares on a stock exchange –they have become popular and widely used investment vehicles toachieve many investment strategies: To gain diversified exposure to a market For core/satellite investing. For buy and hold investing. For active traders who wish to take advantage ofmarket movements. For investors wishing to hedge the market. As an alternative to futures and other institutionalinvestment tools.European ETF statistical update(end of January 2010) 3 At the end of January 2010 the European ETF industry had 896ETFs with 2,468 listings, assets of US$217.9 Bn, from 34providers on 18 exchanges. YTD assets have decreased by 4.0%, which is less than the 5.9%fall in the MSCI Europe Index in US dollar terms. The top 50 ETFs, out of 896, account for 52.6% of EuropeanETF AUM. The top 100 ETFs, out of 896, account for 69.5% of EuropeanETF AUM. There are 181 ETFs in Europe with less than US$10.0 Mnin assets. YTD the number of ETFs increased by 8.1% with 67 newETFs launched. YTD the number of exchanges with official listings remains at 18. YTD the average daily trading volume in US dollars increased by24.5% to US$2.8 Bn. Most ETF trades are not required to bereported in Europe as ETFs are not covered by the EuropeanUnion Directive on Markets in Financial Instruments (MiFID). The top three ETF providers, out of 34, have 74% market share. iShares is the largest provider of ETFs in Europe in terms of bothnumber of products, 172, and AUM of US$82.5 Bn, reflecting37.9% market share; Lyxor Asset Management is second with127 products and US$43.8 Bn, a 20.1% market share.db x-trackers is third with 118 products and assets ofUS$35.8 Bn and a 16.4% market share.1. Certain terms used in this publication may differ from those applied by other industry participants.2. Most are index-based, but some are active.3. Source: Various ETF providers, exchanges, Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg data as at 29 January 2010.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 2

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockThe importance of benchmark selectionPortfolio management, whether index or traditional active, hasalways involved a deep level of analysis, but while traditionalportfolio management is oriented towards stock selection based onfundamentals, modern portfolio theory provides the necessary toolsto construct portfolios in a more scientific way. Benchmarks havebeen at the centre of the transformation of the portfolioconstruction process from art to science. The importance ofbenchmarks can be illustrated through four key uses: Accurate gauge of ‘the market’ and investor sentiment.Since their inception, market indices have been widely used tomonitor overall market sentiment, giving investors the ability tofollow global market moves. Condensing the prices of diversesecurities in a market to a single statistic is useful because itreveals the net effect of all factors at work in a market. Theseinclude not only idiosyncratic factors specific to companies in theindex but also broader factors like war, peace, economicexpansion (or recession) that can potentially have an impact onshare values. Thus, a frequently updated stock market index givesan indication of a country’s economic outlook. Performance measurement. The performance of a security or afund cannot be judged unless it is first measured, andmeasurement is not possible without an objective frame ofreference. A benchmark serves as a reliable and consistent gaugeof the multiple dimensions of performance: return, risk andcorrelation. The benchmark not only needs to be theoreticallysound, it should also be a fair target for investment managers andrepresentative of the relevant opportunity set. Asset allocation. It is generally accepted that asset allocationpolicy is a key driver of investment performance. The weight thatdifferent asset classes have in the final policy mix is typicallybased on the expected return, risk and correlation of each assetclass. Benchmarks play a critical role in framing theseexpectations by providing the historical record for each assetclass on these dimensions, and they serve as guidelines forportfolio managers, helping to ensure that investors receive theirintended asset class returns. Investment vehicle. While benchmarks can be seen astheoretical portfolio constructs designed to represent a particularmarket, the fact that they can be mirrored by an ETF designed toreplicate its performance, further validates the concept ofthe benchmark.What makes a good benchmark?Selecting a specific benchmark is an individual decision, butthere are some minimum standards that any benchmark underconsideration should meet. An effective benchmark should meetmost, if not all, of the following criteria: Unambiguous and transparent: the names and weights ofsecurities comprising a benchmark should be clearly defined. Investable: the benchmark should contain securities that aninvestor can purchase in the market or easily replicate. Priced daily: the benchmark’s return should becalculated regularly. Availability of historical data: past returns of the benchmarkshould be available in order to measure historical returns. Low turnover: an index with high turnover can make it difficultfor a portfolio manager to effectively track when the underlyingsecurities are frequently changing. Published risk characteristics: the benchmark provider shouldregularly publish detailed risk metrics of the benchmark so thatinvestment managers can compare the actively managed portfoliorisks to the passive benchmark risks.Why are investors using ETFs?The motivations for using ETFs have expanded, including the everrelevantcost advantage and broad market access, as well asthemes that have emerged over the past year. Examples ofstrategies being implemented include managing asset allocation,taking tactical positions and increasing diversification. Investors arealso using ETFs to take negative positions in asset classes, either toremove existing unwanted exposure or to express a negative view.This expansion has been fuelled by the increase in the range ofasset classes accessible through ETFs. Moreover, the introductionof ETFs covering emerging markets, commodities and property hasallowed investors to access some of the best performing assetclasses of the past few years. On top of greater asset breadth, therange of instruments has also grown. This expansion in usage,breadth and product flexibility has driven steady growth in the useof ETFs over the past decade.The growth in beta investments in recent years has been driven by anumber of factors. While market conditions have had a noteworthyinfluence, some other key factors are driving a more permanentshift towards beta, including: Access: beta products are providing access to an expandingrange of market and asset classes, and through a much widerrange of instruments. Diversification: increasingly investors are widening the scope oftheir investments and looking for exposure to new asset classesand markets. The changing role of beta: as investors are altering the waythey view their investment objectives, alpha and beta decisionsare being combined in different ways.The range of beta tools available to investors has also grown withtraditional index funds, index futures, OTC derivatives and ETFs.ETFs share many characteristics with traditional index funds.Importantly, they also offer intra-day liquidity and enhancedflexibility, allowing investors to take both long and short positions.ETFs are bought on a commission basis, just like shares. They donot have any sales loads, although they do have annual expensesthat range from zero to 1.81%. ETFs have some of the lowestexpense ratios among registered investment products. The annualexpenses are usually deducted from dividend payments, which aretypically paid on a semi-annual basis.ETFs possess characteristics that make them an alternative tofutures and portfolios of shares for investors who are seeking togain or reduce country, regional, sector and style as well as fixedincome and commodity exposure. ETFs are index funds and notsynthetic derivatives. They trade and settle like single shares andare typically backed by baskets of securities designed to trackindices. On most exchanges ETFs can be used to go long and short.ETFs offer diversified exposure and lower expense ratios thantraditional active and index funds.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 8

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockA key benefit of the in-kind distribution of securities is that it doesnot create a tax event in the United States, which could occur if thefund sold securities and delivered cash. This is a special advantageof ETFs versus an open-end indexed mutual fund, which would haveto sell securities to meet cash redemptions.Major players in the ETF market have traditionally been largeinstitutional investors. Historically, institutions have used ETFs toindex core holdings or pursue more aggressive market timing andsector rotation strategies. However, since smaller institutions andretail investors can trade in small lots, they also can invest on thesame terms as larger investors. Investors now have a nearlycomplete toolkit given the array of over 2,000 ETFs that are nowavailable to track indices on a regional, country, sector, or industrybasis. ETFs can be used to follow overall movements in particularmarket segments rather than risk exposure to individual stocks.Institutional use of ETFs is growing.As the job of most portfolio managers has become broader anddeeper, covering developed, emerging markets and frontier marketsas well as looking at sectors and countries, we have found thatmany are admitting that they do not have the time nor resources totry to add value in all markets and are embracing the use of ETFs togain international market exposure. This allows them to pick stocksin the markets that they feel they can add value in. In other cases,these ETFs are used to equitise cash or to establish an over orunderweight position. ETFs make it easier for investors toparticipate in all domestic asset classes, global regions and industrysectors. Most importantly, ETFs give investors the opportunity toparticipate where markets have been showing promise.ETFs can be effective tools for both active and passive institutionalmanagers and for retail investors. They are a flexible tool that is nota derivative that enables investors to react quickly to short and longterm needs or opportunities. As such, they are an alternative tofutures, trading baskets of shares trades and the use of traditionalactive and passive funds.Understanding the definitions of an ‘ETF’Many market participants call different types of products ETFswhich raises the question of the definition of ETFs.ETFs are index funds that are bought and sold like common stockson stock exchanges. This flexibility enables investors to purchaseand sell shares through any brokerage firm, financial advisor, oronline broker, and hold the funds in any type of brokerage account.Similar to many index funds, ETFs have low portfolio turnover --which reduces transaction costs incurred by the fund and minimisescapital gains distributions to investors in the United States. Similarto common stocks, ETFs can be traded anytime during normalmarket hours and are priced intra-day, so investors know the valueof their investments.In many ways, ETFs are similar to mutual funds although they havemany significant differences. Mutual funds are priced once a dayafter the close of trading once the fund has priced its assets andhence created its NAV for that day. Once the fund has been priced,all fund unit buy and sell orders that have been accumulatedthroughout the day are transacted by the mutual fund company.The mutual fund company does all the redeeming and selling of thefund units. This pricing system does not allow you to knowbeforehand at what price you are going to transact when you placean order to buy or sell a mutual fund. Mutual funds will often chargefront load fees, pay rebates and often back end loads.ETFs, on the other hand, trade on an exchange at real time pricesthroughout the day like a stock. They are priced continuously basedon the value of their underlying portfolio and can be bought and soldany time the market is open. This means you know the price you willreceive when you place your order to trade. It also means you canuse all of the trading strategies which apply to trading stocks suchas limit orders, stop loss orders, short selling, margining, and insome cases even option strategies.ETFs may prove as liquid as the underlying basket of securities asthey have a unique daily creation and redemption process. Theability to continually create or redeem shares helps keep an ETF’smarket price in line with its underlying NAV. A key feature thatdistinguishes ETFs is that the shares are created by AuthorisedParticipants (APs) or creation/redemption brokers in block-size‘creation units’. ETFs tend to trade at, or close to, their underlyingNAVs. This is because there are arbitrageurs waiting to takeadvantage of a significant premium or discount relative to theunderlying index. An arbitrageur will buy/sell the ETF and place anoffsetting buy/sell transaction in the underlying basket ofcomponent securities.In the United States, most ETFs are structured as open-endmanagement investment companies (the same structure used bymutual funds), although a few ETFs are structured as unitinvestment trusts. ETFs have received exemptive orders from theSecurities and Exchange Commission (SEC), giving it relief fromprovisions of the Investment Company Act of 1940 that wouldotherwise not allow the ETF structure. ETFs in the United Statestypically hold securities using either a ‘fully replicated’ or an‘optimised’ basket of shares, which are designed to track the index.The SEC defines an ETF as investment companies that are legallyclassified as open-end companies or Unit Investment Trusts (UITs)that differ from traditional open-end companies and UITs in thefollowing respects 1 : ETFs do not sell individual shares directly to investors and onlyissue their shares in large blocks (blocks of 50,000 shares, forexample) that are known as ‘creation units.’ Investors generally do not purchase creation units with cash.Instead, they buy creation units with a basket of securities thatgenerally mirrors the ETF’s portfolio. Those who purchase creationunits are frequently institutions. After purchasing a creation unit, an investor often splits it up andsells the individual shares on a secondary market. This permitsother investors to purchase individual shares (instead ofcreation units). Investors who want to sell their ETF shares have two options:(1) they can sell individual shares to other investors on thesecondary market, or (2) they can sell the creation units back tothe ETF. In addition, ETFs generally redeem creation units bygiving investors the securities that comprise the portfolio insteadof cash. So, for example, an ETF invested in the stocks containedin the Dow Jones Industrial Average (DJIA) would give a redeemingshareholder the actual securities that constitute the DJIA insteadof cash. Because of the limited redeemability of ETF shares, ETFsare not considered to be – and may not call themselves –mutual funds.1. Source: U.S. Securities and Exchange Commission (SEC), www.sec.gov/answers/etf.htmThis document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 9

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRock“This may be because advisers do not feel they are suitable for theirclients or because advisers feel ETFs are not a product with whichthey need to familiarise themselves. However, to the extent thatETFs can be a cheap and transparent way to invest in a particularmarket, even under our current whole of market requirement, theseproducts should be considered when deciding which products aresuitable for a retail client.”The FSA said: “The proposals bring to an end the current,commission-based system of adviser remuneration: we propose toban product providers from offering amounts of commission tosecure sales from adviser firms and, in turn, to ban adviser firmsfrom recommending products that automatically pay commission.”Comments on the consultation paper must be submitted prior to 30October 2009. The FSA will publish a Policy Statement (PS) givingfeedback in the first quarter of 2010. The final timetable forimplementation is likely to require firms to implement changes by31 December 2012.Source: CP09/18: Distribution of retail investments: Delivering the RDR, FinancialServices Authority.FINRA Regulatory Notice 09-31FINRA, the Financial Industry Regulatory Authority which regulatesall securities firms doing business in the United States, issued aregulatory notice in June 2009 to provide guidance on leveragedand inverse ETFs. The notice states that “...inverse and leveragedETFs that are reset daily typically are unsuitable for retail investorswho plan to hold them for longer than one trading session,particularly in volatile markets”.The following is taken from the Notice: Exchange-traded funds(ETFs) that offer leverage or that are designed to perform inverselyto the index or benchmark they track – or both – are growing innumber and popularity. While such products may be useful in somesophisticated trading strategies, they are highly complex financialinstruments that are typically designed to achieve their statedobjectives on a daily basis. Due to the effects of compounding, theirperformance over longer periods of time can differ significantly fromtheir stated daily objective. Therefore, inverse and leveraged ETFsthat are reset daily, typically, are unsuitable for retail investors whoplan to hold them for longer than one trading session, particularly involatile markets.This Notice reminds firms of their sales practice obligations inconnection with leveraged and inverse ETFs. In particular,recommendations to customers must be suitable and based on afull understanding of the terms and features of the productrecommended; sales materials related to leveraged and inverseETFs must be fair and accurate; and firms must have adequatesupervisory procedures in place to ensure that these obligationsare met.Most leveraged and inverse ETFs ‘reset’ daily, meaning that they aredesigned to achieve their stated objectives on a daily basis. Due tothe effect of compounding, their performance over longer periods oftime can differ significantly from the performance (or inverse of theperformance) of their underlying index or benchmark during thesame period of time. For example, between 1 December 2008 and30 April 2009: The Dow Jones U.S. Oil & Gas Index gained 2%, while an ETFseeking to deliver twice the index's daily return fell 6% and therelated ETF seeking to deliver twice the inverse of the index's dailyreturn fell 26%. An ETF seeking to deliver three times the daily return of theRussell 1000 Financial Services Index fell 53% while the indexactually gained around 8%. The related ETF seeking to deliverthree times the inverse of the index's daily return declined by 90%over the same period.This effect can be magnified in volatile markets. Using a two-dayexample, if the index goes from 100 to close at 101 on the first dayand back down to close at 100 on the next day, the two-day returnof an inverse ETF will be different than if the index had moved up toclose at 110 the first day but then back down to close at 100 on thenext day. In the first case with low volatility, the inverse ETF loses0.02%; but in the more volatile scenario the inverse ETF loses 1.82%.The effects of mathematical compounding can grow significantlyover time, leading to scenarios such as those noted above.Source: Regulatory Notice 09-31, Financial Industry Regulatory Authority.SEC-FINRA Investor Alert on Leveragedand Inverse ETFsThe Securities and Exchange Commission (SEC) and the FinancialIndustry Regulatory Authority (FINRA) issued an investor alert onTuesday 18 August 2009 entitled ‘Leveraged and Inverse ETFs:Specialized Products with Extra Risks for Buy-and-Hold Investors’:“The SEC staff and FINRA are issuing this Alert because we believeindividual investors may be confused about the performanceobjectives of leveraged and inverse exchange-traded funds (ETFs).Leveraged and inverse ETFs typically are designed to achieve theirstated performance objectives on a daily basis. Some investorsmight invest in these ETFs with the expectation that the ETFs maymeet their stated daily performance objectives over the long termas well. Investors should be aware that performance of these ETFsover a period longer than one day can differ significantly from theirstated daily performance objectives.”Source: Leveraged and Inverse ETFs: Specialized Products with Extra Risks for Buyand-HoldInvestors, Financial Industry Regulatory Authority.CFTC looking at speculative position limitsThe Commodity Futures Trading Commission (CFTC) is consideringwhether changes are needed in the regulatory regime that governsthe application of speculative position limits to the energy futuresmarkets. In mid-2009 the agency held several days of hearings togather public input on potential changes to the position limit regime.On January 14, 2010, the CFTC held a public meeting to discuss aproposed rule establishing a new position limit regime for energyfutures and options markets.“Written comments on the topic of this meeting will be acceptedfrom the public until April 30, 2010, and included in the record.Based upon what we learn, we will further review CFTC rules todetermine what, if any, course of action is most appropriate” saidCFTC Chairman Gary Gensler.Source: Futures Industry AssociationThis document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 11

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockSEC Evaluating the use of Derivativesby FundsThe SEC announced on March 25th, 2010 that it is conducting areview to evaluate the use of derivatives by mutual funds, exchangetradedfunds (ETFs) and other investment companies. The reviewwill examine whether and what additional protections are necessaryfor those funds under the Investment Company Act of 1940.Pending the review's completion, the SEC has determined to deferconsideration of exemptive requests under the InvestmentCompany Act to permit ETFs that would make significantinvestments in derivatives. The staff's decision will affect new andpending exemptive requests from certain actively-managed andleveraged ETFs that particularly rely on swaps and other derivativeinstruments to achieve their investment objectives. The deferraldoes not affect any existing ETFs or other types of fund applications.“It's appropriate to engage in a more thorough review of the use ofderivatives by ETFs and mutual funds given the questionssurrounding the risks associated with the derivative instrumentsunderlying many funds,” said SEC Chairman Mary Schapiro.Source: Press Release: SEC Staff Evaluating the Use of Derivatives by Funds, 2010-45, U.S. Securities and Exchange Commission.Changes to United States tax law mayaffect non-United States resident holdersof United States ETFsFunds registered under the Investment Company Act of 1940 andstructured for tax purposes as Regulated Investment Companies(RICs) under the U.S. Tax Code were previously allowed a packageof United States tax benefits to non- United States shareholders(generally called ‘flow-through’ benefits) as a result of the 2004American Jobs Creation Act. These flow-through benefits havegenerally expired as of 31 December 2009.The three effected flow-through benefits are: Exemption from U.S. withholding tax (30% or lower treaty rate) onfund distributions where such distributions represent QualifiedInterest Income (QII). QII is certain fund income derived frominterest income on debt of U.S. resident issuers (i.e., obligationsissued by Treasury and U.S. corporations). This applied to fixedincome ETFs. Exemption from U.S. withholding tax on any short-term capitalgains included in fund distributions. This applied to fixed incomeand equity ETFs. Relief from U.S. Estate Tax on fund holdings by non-U.S. residentpersons, where the underlying assets would have been exemptfrom Estate Tax if held directly by the non-U.S. resident person.The purpose of these three flow-through benefits was to allow anon-U.S. resident RIC shareholder the same treatment on a flowthroughbasis as if the investments were owned directly by the non-U.S. resident RIC shareholder.Source: BlackRock.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 12

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockETFs in EuropeIn Europe there were 896 ETFs, assets of US$217.9 Bn, with 2,468listings from 34 providers on 18 exchanges at the end of January2010. European ETF AUM has decreased by 4.0% while the MSCIEurope Index is down 5.9% YTD in US dollar terms. In Europe netsales of mutual funds (excluding ETFs) were US$220.6 Bn while netsales of ETFs domiciled in Europe were US$47.2 Bn during 2009according to Lipper FMI.ETFs providing exposure to fixed income are the most popular with22.9% of assets, followed by ETFs covering European countryindices with 15.2% of the assets in Europe. YTD 67 new ETFs werelaunched in Europe with a further 77 planned.iShares is the largest provider of ETFs in Europe in terms of bothnumber of products, 172, and AUM of US$82.5 Bn, reflecting 37.9%market share; Lyxor Asset Management is second with 127products and US$43.8 Bn, a 20.1% market share. db x-trackers isthird with 118 products and assets of US$35.8 Bn and a 16.4%market share.Additionally, there were 176 Exchange Traded Products (ETPs),assets of US$15.2 Bn, with 443 listings from three providers on fiveexchanges. YTD ETP assets in Europe decreased by 2.9% toUS$15.2 Bn at the end of January 2010.11 April 2010 will mark the tenth anniversary of ETFs in Europe.Since the launch of the first ETFs in Europe in April 2000 the rate ofgrowth in terms of assets, number of products and providers hasbeen greater than the experience of ETFs in the early years in theUnited States.Figure 3: ETF listings in Europe, as at end January 201031114817210541157129136161234Austria 5 Germany 9 Italy 13 Spain 17 United KingdomP listings: 1 P listings: 337 P listings: 14 P listings: 10 P listings: 156T listings: 21 T listings: 902 T listings: 346 T listings: 33 T listings: 356Providers: 1 Providers: 9 Providers: 4 Providers: 2 Providers: 7AUM: US$0.07 Bn AUM: US$89.74 Bn AUM: US$1.80 Bn AUM: US$2.38 Bn AUM: US$46.69BnBelgium 6 Greece 10 Netherlands 14 SwedenP listings: 1 P listings: 2 P listings: 10 P listings: 12T listings: 1 T listings: 2 T listings: 98 T listings: 12Providers: 1 Providers: 2 Providers: 4 Providers: 2AUM: US$0.06 Bn AUM: US$0.09 Bn AUM: US$0.24 Bn AUM: US$1.96 BnFinland 7 Hungary 11 Norway 15 SwitzerlandP listings: P listings: 1 P listings: 6 P listings: 80T listings: T listings: 1 T listings: 6 T listings: 252Providers: Providers: 1 Providers: 2 Providers: 6AUM: AUM: US$0.02 Bn AUM: US$0.80 Bn AUM: US$21.99 BnFrance 8 Ireland 12 Slovenia 16 TurkeyP listings: 241 P listings: 14 P listings: 1 P listings: 9T listings: 413 T listings: 14 T listings: 1 T listings: 9Providers: 8 Providers: 2 Providers: 1 Providers: 4AUM: US$51.33 Bn AUM: US$0.24 Bn AUM: US$0.01 Bn AUM: US$0.20 BnP listings = # primary listings. T listings = # total listings. Providers = # primary ETF providers. AUM = Assets Under Management in primary listings only.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 13

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockFigure 4: European listed ET F and ETP asset growthAssets US$ Bn240220200180160140120100806040200# products1,0009008007006005004003002001000Assets (US$ Bn) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Jan-10ETF total $0.7 $5.7 $10.7 $20.4 $34.0 $54.9 $89.7 $128.5 $142.7 $226.9 $217.9ETF equity $0.7 $5.7 $10.7 $19.4 $31.0 $49.3 $75.7 $103.5 $96.6 $159.8 $146.7ETF fixed income $1.0 $2.9 $5.2 $12.1 $21.0 $41.1 $51.6 $49.8ETF commodity $0.4 $2.0 $3.3 $4.9 $15.2 $15.1ETP total $1.1 $2.1 $4.9 $7.0 $15.7 $15.2ETF/ETP total $0.7 $5.7 $10.7 $20.4 $34.0 $56.0 $91.8 $133.3 $149.7 $242.6 $233.0# ETFs 6 71 118 104 114 165 273 423 635 829 896# ETPs 2 32 56 123 158 158# ETFs/ETPs total 6 71 118 104 114 167 305 479 758 987 1,054Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 5: European ETF asset growth: physical and synthetic replicationAssets US$ Bn240220200180160140120100806040200# ETFs9008007006005004003002001000Assets (US$ Bn) 2005 2006 2007 2008 2009Physical $41.3 $64.1 $80.6 $76.4 $125.0Synthetic $13.6 $25.6 $48.0 $66.4 $101.9ETF AUM total $54.9 $89.7 $128.5 $142.7 $226.9Physical 138 184 231 252 314Synthetic 27 89 192 383 515# ETFs total 165 273 423 635 829Note: Synthetic replication refers to the use of derivatives to replicate the index performance such as swaps, futures, forwards, options etc. Physical replication refers to the use ofphysical securities such as stocks, bonds and commodities to generate the index performance.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 14

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockFigure 6: ETF providers in Europe ranked by AUM, as at end January 2010Provider#ETFsAUM(US$ Bn)Jan-10%total#PlannedYTDflows(US$ Bn)#ETFs%ETFsYTD changeAUM(US$ Bn)%AUM%marketshareiShares 172 $82.50 37.9% 1 $1.8 4 2.4% -$3.24 -3.8% 0.09%Lyxor Asset Management 127 $43.83 20.1% 0 $1.1 4 3.3% -$1.75 -3.8% 0.03%db x-trackers 118 $35.77 16.4% 6 $0.6 2 1.7% -$1.44 -3.9% 0.02%Credit Suisse Asset Management 40 $9.74 4.5% 0 $0.5 13 48.1% $0.10 1.0% 0.22%Zurich Cantonal Bank 7 $6.65 3.1% 0 $0.1 3 75.0% -$0.04 -0.6% 0.10%Commerzbank 65 $6.21 2.8% 18 $0.2 3 4.8% -$0.02 -0.2% 0.11%EasyETF 64 $5.74 2.6% 2 $0.1 0 0.0% -$0.12 -2.0% 0.05%Amundi Investment Solutions 76 $4.70 2.2% 0 $0.2 13 20.6% -$0.08 -1.6% 0.05%ETFlab Investment 32 $4.41 2.0% 0 -$1.8 1 3.2% -$2.67 -37.7% -1.09%UBS Global Asset Management 16 $3.67 1.7% 0 $0.2 2 14.3% $0.14 4.1% 0.13%Source Markets 42 $3.13 1.4% 20 $0.4 10 31.3% $0.30 10.4% 0.19%XACT Fonder 12 $2.46 1.1% 0 -$0.1 0 0.0% -$0.17 -6.6% -0.03%BBVA Asset Management 8 $2.27 1.0% 0 $0.0 0 0.0% -$0.06 -2.5% 0.02%Julius Baer 16 $2.18 1.0% 21 $0.1 12 300.0% $0.08 3.8% 0.07%State Street Global Advisors 13 $1.35 0.6% 0 $0.0 0 0.0% -$0.09 -6.4% -0.02%PowerShares 19 $0.96 0.4% 5 $0.0 0 0.0% -$0.03 -3.4% 0.00%ABN Amro 10 $0.76 0.3% 0 $0.1 0 0.0% -$0.01 -1.1% 0.01%ETF Securities 21 $0.34 0.2% 0 $0.0 0 0.0% $0.02 7.6% 0.02%DnB NOR Asset Management 3 $0.30 0.1% 0 $0.0 0 0.0% -$0.02 -6.2% 0.00%Seligson & Co Fund Management 1 $0.25 0.1% 0 $0.0 0 0.0% $0.00 -1.4% 0.00%JPM Structured Fund Management 6 $0.18 0.1% 0 $0.0 0 0.0% -$0.01 -7.0% 0.00%Finans Portfoy Yonetimi 6 $0.11 0.0% 0 $0.0 0 0.0% -$0.05 -30.2% -0.02%HSBC 3 $0.10 0.0% 0 $0.0 0 0.0% $0.02 24.5% 0.01%Is Investment 1 $0.09 0.0% 0 $0.0 0 0.0% $0.08 1092.1% 0.04%Alpha Asset Management 1 $0.09 0.0% 0 $0.0 0 0.0% -$0.01 -10.6% 0.00%Beta1 ETFund 3 $0.04 0.0% 0 $0.0 0 0.0% $0.00 -3.3% 0.00%NCB Investment Services 1 $0.03 0.0% 0 $0.0 0 0.0% $0.00 -3.7% 0.00%OTP Fund Management 1 $0.02 0.0% 0 $0.0 0 0.0% $0.00 -6.1% 0.00%Medvesek Pusnik AM 1 $0.01 0.0% 0 $0.0 0 0.0% $0.00 5.7% 0.00%Bizim Menkul Degerler 1 $0.00 0.0% 0 $0.0 0 0.0% $0.00 3.4% 0.00%Ak Securities 1 $0.00 0.0% 0 $0.0 0 0.0% $0.00 4.8% 0.00%NBG Asset Management 1 $0.00 0.0% 1 $0.0 0 0.0% $0.00 0.0% 0.00%Think Capital 5 $0.00 0.0% 0 $0.0 0 0.0% $0.00 0.0% 0.00%HQ Fonder 3 $0.00 0.0% 0 $0.0 0 0.0% $0.00 0.0% 0.00%SPA ETF International 0 $0.00 0.0% 0 $0.0 0 0.0% $0.00 0.0% 0.00%Osmosis Investment Management - - - 1 - - - - - -Marshall Wace Asset Management - - - 1 - - - - - -Hinduja Bank (Switzerland) - - - 1 - - - - - -Total 896 $217.9 100.0% 77 $3.6 67 8.1% -$9.1 -4.0%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 15

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockFigure 7: Top five European ETF providers by average daily US dollar turnover, as at end January 2010ProviderDec-09Average daily turnover (US$ Mn)%marketshareJan-10%marketshareChange(US$ Mn)%changeiShares $778.9 34.2% $933.5 32.9% $154.6 19.8%Lyxor AM $584.0 25.6% $776.4 27.3% $192.4 32.9%db x-trackers $441.5 19.4% $612.2 21.6% $170.7 38.7%XACT Fonder $119.4 5.2% $126.9 4.5% $7.5 6.3%Credit Suisse AM $58.2 2.6% $59.6 2.1% $1.4 2.4%Others $298.7 13.1% $331.0 11.7% $32.3 10.8%Total $2,280.6 100.0% $2,839.5 100.0% $558.9 24.5%iShares 32.9%Lyxor AM 27.3%db x-trackers 21.6%XACT Fonder 4.5%Credit Suisse AM 2.1%Others 11.7%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 8: ETP providers in Europe ranked by assets, as at end January 2010Jan-10YTDYTD changeProvider#ETPsAssets(US$ Bn)%total#plannedflows(US$ bn)#ETPs%ETPsAssets(US$ Bn)%assets% marketshareETF Securities 147 $14.69 96.5% 15 -$0.33 0 0.0% -$0.48 -3.1% -0.2%Source Markets 28 $0.44 2.9% 0 $0.03 0 0.0% $0.02 4.2% 0.2%Lyxor 1 $0.10 0.7% 0 $0.00 0 0.0% $0.00 0.0% 0.0%GAM Holding 0 $0.00 0.0% 4 $0.00 0 0.0% $0.00 0.0% 0.0%Total 176 $15.23 100.0% 19 -$0.30 0 0.0% -$0.46 -2.9%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 16

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockFigure 9: Top 10 ETFs in Europe by AUM, as at end January 2010ETFTickerAUM(US$ Mn)ADV(‘000 shares)ADV(US$ Mn)Lyxor DJ Euro STOXX 50 MSE FP $6,684 2,038 $82iShares S&P 500 IUSA LN $6,581 5,744 $63iShares DJ EURO STOXX 50 (DE) SX5EEX GY $5,646 1,910 $78iShares DJ Euro STOXX 50 EUN2 GY $5,574 1,803 $73iShares FTSE 100 ISF LN $5,391 9,394 $81ZKB Gold ETF (CHF) ZGLD SW $5,061 7 $14iShares € Corporate Bond IBCS GY $4,513 150 $25Lyxor CAC 40 CAC FP $4,093 844 $46iShares DAX® (DE) DAXEX GY $3,683 1,898 $143Xmtch (CH) on SMI XMSMI SW $3,606 380 $23Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 10: Top 10 ETFs in Europe by average daily US dollar trading volume, as at end January 2010ETFTickerADV(US$ Mn)ADV(‘000 shares)AUM(US$ Mn)iShares DAX® (DE) DAXEX GY $143 1,898 $3,683Lyxor DJ Euro STOXX 50 MSE FP $82 2,038 $6,684db x-trackers ShortDAX ETF XSDX GY $81 877 $962iShares FTSE 100 ISF LN $81 9,394 $5,391iShares DJ EURO STOXX 50 (DE) SX5EEX GY $78 1,910 $5,646iShares DJ Euro STOXX 50 EUN2 GY $73 1,803 $5,574iShares S&P 500 IUSA LN $63 5,744 $6,581db x-trackers DAX ETF XDAX GY $62 769 $2,028db x-trackers Euro Stoxx 50 ETF XESX GY $55 1,311 $3,555Lyxor ETF DAX LYXDAX GY $49 612 $511Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 11: Top 10 ETFs in Europe with largest change in AUM, as at end January 2010ETFTickerAUM (US$ Mn)Jan-10AUM (US$ Mn)Dec-09Change(US$ Mn)ETFlab DAX ETFDAX GY $478 $2,569 -$2,091Lyxor DJ Euro STOXX 50 MSE FP $6,684 $7,767 -$1,083iShares DJ EURO STOXX 50 (DE) SX5EEX GY $5,646 $6,425 -$779db x-trackers II EONIA Total Return Index ETF XEON GY $2,349 $2,929 -$580Lyxor CAC 40 CAC FP $4,093 $4,584 -$491Lyxor ETF FTSE 100 L100 LN $716 $294 $422iShares FTSE 100 ISF LN $5,391 $5,782 -$390iShares DJ Euro STOXX 50 EUN2 GY $5,574 $5,933 -$359ETFlab DJ EURO STOXX 50 ETFSX5E GY $2,552 $2,847 -$296Lyxor EuroMTS Global MTX FP $1,181 $1,430 -$250Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 17

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockFigure 12: European ETF assets by type of exposure, as at end January 2010Exposure#ETFsJan-10AUM(US$ Bn)%total#ETFs%ETFsYTD changeAUM(US$ Bn)%AUM% marketshareEquity – total 614 $146.70 67.3% 34 5.9% -$7.66 -5.0% -0.7%Country exposure europe 93 $33.14 15.2% 2 2.2% -$3.67 -10.0% -1.0%Regional exposure eurozone 37 $32.13 14.7% 3 8.8% -$2.95 -8.4% -0.7%Emerging markets 87 $22.40 10.3% 3 3.6% -$0.05 -0.2% 0.4%Country exposure United States 38 $11.77 5.4% 1 2.7% -$0.25 -2.1% 0.1%Regional exposure Europe 50 $11.31 5.2% 3 6.4% -$0.66 -5.5% -0.1%International 62 $11.27 5.2% 7 12.7% $0.26 2.4% 0.3%European sector exposure 127 $9.54 4.4% 1 0.8% -$0.65 -6.4% -0.1%Global exposure 49 $8.34 3.8% 3 6.5% $0.21 2.5% 0.2%Style 41 $4.95 2.3% 0 0.0% $0.25 5.3% 0.2%Eurozone sector exposure 18 $1.80 0.8% 0 0.0% -$0.18 -9.1% 0.0%United states sector exposure 12 $0.06 0.0% 11 1100.0% $0.03 102.7% 0.0%Fixed income 154 $49.84 22.9% 6 4.1% -$1.54 -3.0% 0.2%Commodities 56 $15.12 6.9% 21 60.0% -$0.05 -0.3% 0.3%Inverse 36 $2.92 1.3% 6 20.0% $0.15 5.4% 0.1%Leveraged 14 $1.56 0.7% 0 0.0% -$0.01 -0.6% 0.0%Leveraged inverse 9 $1.14 0.5% 0 0.0% $0.03 2.3% 0.0%Currency 6 $0.39 0.2% 0 0.0% $0.04 10.0% 0.0%Alternative 3 $0.12 0.1% 0 0.0% -$0.01 -4.1% 0.0%Mixed (equity and fixed income) 4 $0.07 0.0% 0 0.0% $0.00 1.6% 0.0%Total 896 $217.87 100.0% 67 8.1% -$9.06 -4.0%Fixed income 22.9%Country exposure Europe – equity 15.2%Regional exposure Eurozone – equity 14.7%Emerging markets – equity 10.3%Commodities 6.9%Country exposure United States – equity 5.4%Regional exposure Europe – equity 5.2%International – equity 5.2%European sector exposure – equity 4.4%Global exposure – equity 3.8%Style – equity 2.3%Inverse 1.3%Eurozone sector exposure – equity 0.8%Leveraged 0.7%Leveraged inverse 0.5%Currency 0.2%Alternative 0.1%Mixed (equity and fixed income) 0.0%United States sector exposure – equity 0.0%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 18

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockFigure 13: European ETF assets by index provider, as at end January 2010Index provider#ETFsJan-10AUM(US$ Bn)%total#ETFs# totallistingsYTD changeAUM(US$ Bn)STOXX 201 $46.92 21.5% 1 0.5% -$3.74 -7.4% -0.8%MSCI 182 $43.59 20.0% 17 10.3% -$0.10 -0.2% 0.8%Deutsche Boerse 27 $17.12 7.9% 0 0.0% -$2.77 -13.9% -0.9%Markit 71 $18.50 8.5% 6 9.2% $0.01 0.0% 0.3%EuroMTS 28 $10.52 4.8% 6 27.3% -$0.48 -4.3% 0.0%FTSE 65 $15.56 7.1% 2 3.2% -$0.30 -1.9% 0.2%S&P 46 $10.42 4.8% 13 39.4% -$0.31 -2.9% 0.1%CAC 18 $6.99 3.2% 0 0.0% -$0.53 -7.1% -0.1%Barclays Capital 18 $6.18 2.8% 0 0.0% -$0.06 -1.0% 0.1%Dow Jones 35 $3.44 1.6% 2 6.1% $0.27 8.5% 0.2%Hang Seng 4 $1.43 0.7% 0 0.0% $0.00 -0.1% 0.0%NASDAQ OMX 19 $3.48 1.6% 1 5.6% -$0.22 -6.0% 0.0%Topix 4 $0.68 0.3% 0 0.0% $0.05 7.6% 0.0%Nikkei 3 $0.52 0.2% 1 50.0% $0.03 6.5% 0.0%Intellidex 5 $0.04 0.0% 0 0.0% $0.00 7.5% 0.0%S-Network 3 $0.07 0.0% 0 0.0% $0.01 8.9% 0.0%Russell 8 $0.22 0.1% 0 0.0% $0.00 1.3% 0.0%NYSE 2 $0.00 0.0% 0 0.0% $0.00 0.0% 0.0%Other 157 $32.19 14.8% 18 12.9% -$0.92 -2.8% 0.2%Total 896 $217.87 100.0% 67 8.1% -$9.06 -4.0%STOXX 21.5%MSCI 20%Deutsche Boerse 7.9%Markit 8.5%EuroMTS 4.8%FTSE 7.1%S&P 4.8%CAC 3.2%BarCap 2.8%Dow Jones 1.6%Hang Seng 0.7%NASDAQ OMX 1.6%Topix 0.3%Nikkei 0.2%Intellidex 0%S-Network 0%Russell 0.1%Other 14.8%%AUM%totalSource: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 19

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockFigure 14: European ETF and ETP net new assets by type of exposure, as at end January 2010ExposureADV(US$ Mn)Assets(US$ Mn)Jan-2010NNA(US$ Mn)YTD 2010 NNA(US$ Mn)Equity 2,370.8 152,191.9 3,039.5 3,039.5 33,622.6Europe 1,720.2 97,470.8 (58.6) (58.6) 19,025.9Broad 1,569.0 85,451.4 (57.5) (57.5) 15,638.9Consumer goods/services 12.6 1,223.4 (150.9) (150.9) 335.4Energy 15.2 1,196.1 120.1 120.1 322.1Financials 42.9 2,768.4 (62.2) (62.2) 825.5Healthcare 17.0 1,029.1 (49.0) (49.0) 145.9Industrials 4.7 420.2 (15.6) (15.6) 136.6Information technology 4.8 411.9 23.1 23.1 12.4Materials 28.2 1,591.8 (47.5) (47.5) 522.5Private equity 0.4 67.3 16.6 16.6 34.2Real estate 7.5 1,450.6 46.3 46.3 333.6Telecommunications 6.2 851.5 (54.5) (54.5) 425.0Utilities 11.1 953.6 176.4 176.4 361.3Other 0.6 55.7 (3.8) (3.8) (67.4)North America 135.9 14,162.1 525.1 525.1 1,558.6Asia Pacific 80.7 8,888.0 698.0 698.0 2,662.0Global 68.6 9,235.7 596.9 596.9 2,799.7Emerging markets 365.3 22,435.2 1,278.2 1,278.2 7,576.4Broad 96.6 9,259.4 469.2 469.2 3,665.0Regional 33.2 3,102.6 146.5 146.5 778.8Country 235.6 10,073.2 662.5 662.5 3,132.7Brazil 53.9 2,218.7 96.2 96.2 811.2China 52.4 2,742.9 155.4 155.4 862.9Egypt 0.1 6.5 - - (5.2)Hungary 0.7 17.5 - - (0.3)India 27.6 1,990.8 93.3 93.3 616.3Kuwait 0.0 26.8 - - 14.5Malaysia 0.1 22.0 - - 10.1Russia 29.3 1,090.5 134.7 134.7 174.2South Africa 3.1 198.8 28.0 28.0 64.3South Korea 15.0 550.5 114.7 114.7 152.3Taiwan 10.4 446.9 41.4 41.4 137.7Thailand - - - - 30.5Turkey 40.8 579.3 (16.7) (16.7) 193.3UAE 0.1 11.3 - - 7.2Vietnam 2.0 170.7 15.5 15.5 63.6Fixed income 379.4 50,139.3 93.9 93.9 9,009.9Broad – fixed income 1.1 110.6 4.3 4.3 102.3Corporate 53.1 8,882.1 190.0 190.0 4,770.8Covered 2.1 744.9 32.8 32.8 438.4Credit spreads 9.7 841.3 (56.1) (56.1) (291.1)Government 183.9 26,389.2 188.6 188.6 6,193.2Inflation 29.3 4,443.2 119.5 119.5 2,375.6Money market 95.7 6,938.0 (435.1) (435.1) (4,971.6)Mortgage 4.5 1,790.0 49.9 49.9 392.1Commodities 294.5 30,300.1 129.8 129.8 13,659.7Broad 37.2 5,196.2 231.2 231.2 2,985.9Agriculture 39.6 1 ,880.7 (71.8) (71.8) 1,294.3Alternative 0.1 3.1 1.4 1.4 1.8Energy 60.0 2,536.5 (32.2) (32.2) 1,834.2Industrial metals 13.1 623.8 93.7 93.7 343.5Livestock 0.8 73.8 3.8 3.8 29.4Precious metals 143.6 19,986.0 (96.3) (96.3) 7,170.7Currency 4.0 326.1 61.6 61.6 190.7Alternative 0.0 48.8 - - 47.8Mixed (equity and fixed income) 0.6 72.3 3.8 3.8 14.8Total 3,049.2 233,078.4 3,328.7 3,328.7 56,545.52009 NNA(US$ MN)Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 20

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockEuropean institutions reported using any ETFsFigure 15: European institutions reported assets by firm size, as at end December 2008Firm reported assetsAll European reporting firms Reported ETF users % of ETF usersNumber ofInstitutionsReported assets(US$ Mn)Number ofInstitutionsReported assets(US$ Mn)Number ofInstitutionsReported assets(US$ Mn)Greater than US$50 Bn 7 661,190 5 1,191 71.4% 0.2%US$20-50 Bn 33 955,727 21 3,303 63.6% 0.3%US$10-20 Bn 42 590,382 19 2,850 45.2% 0.5%US$5-10 Bn 76 523,710 31 2,033 40.8% 0.4%US$1-5 Bn 386 873,731 86 3,960 22.3% 0.5%US$500-1,000 Mn 241 167,551 41 873 17.0% 0.5%US$250-500 Mn 269 94,595 40 531 14.9% 0.6%US$100-250 Mn 440 71,129 49 430 11.1% 0.6%Less than US$100 Mn 7,966 68,084 147 483 1.8% 0.7%Total 9,460 4,006,099 439 15,654 4.6% 0.4%Source: Thomson Reuters, Global ETF Research and Implementation Strategy Team, BlackRock.Figure 16: European institutions reported assets by firm type, as at end December 2008All European reporting firms Reported ETF users % of ETF usersType of firmNumber ofInstitutionsReported assets(US$ Mn)Number ofInstitutionsReported assets(US$ Mn)Number ofInstitutionsReported assets(US$ Mn)Investment managers 2,088 2,303,598 431 14,325 20.6% 0.6%Bank and trust 238 208,456 40 1,386 16.8% 0.7%Endowment fund 3 756 - - 0.0% 0.0%Foundation 33 5,530 - - 0.0% 0.0%Hedge fund 107 12,932 15 111 14.0% 0.9%Insurance company 58 21,093 1 0 1.7% 0.0%Investment advisor 1,279 1,947,807 369 12,684 28.9% 0.7%Pension fund 117 76,566 6 143 5.1% 0.2%Private equity 142 18,127 - - 0.0% 0.0%Sovereign wealth fund 1 7,588 - - 0.0% 0.0%Venture capital 110 4,743 - - 0.0% 0.0%Brokerage firms 42 14,566 6 843 14.3% 5.8%Strategic entities 7,330 1,687,935 2 485 0.0% 0.0%Holding company 195 159,512 1 322 0.5% 0.2%Government agency 72 482,071 - - 0.0% 0.0%Corporation 7,063 1,046,352 1 163 0.0% 0.0%Total 9,460 4,006,099 439 15,654 4.6% 0.4%Source: Thomson Reuters, Global ETF Research and Implementation Strategy Team, BlackRock.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 21

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockAccording to European Fund and Asset Management Association (EFAMA), UCITS posted net inflows of €70 Bn in the third quarter of 2009.Net inflows have now been positive for three quarters in a row, following 18 months of net withdrawals from UCITS. This developmentreflected net inflows of €55 Bn into equity, bond and balanced funds in the second quarter, compared to net outflows of €30 Bn in the firstquarter. The stock market rally and less stressed financial market conditions have ignited greater investor confidence since mid March 2009,leading to gradual portfolio asset allocation shifts towards more stocks and fixed income securities-oriented investments. Confirming thisevolution in investor sentiment, net inflows into money market funds turned significantly negative in the second quarter of 2009.Figure 17: Net assets of European investment fundsAssets US$ Bn7,0006,0005,0004,0003,0002,0001,0000Assets (€ Bn) 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Q3-09Total assets 4,156 4,561 4,619 4,296 4,835 5,373 6,569 7,574 7,924 6,123 6,840UCITS assets 3,195 3,550 3,619 3,346 3,785 4,212 5,172 5,974 6,201 4,575 5,157Non-UCITS assets 961 1,011 1,000 950 1,050 1,161 1,397 1,600 1,723 1,548 1,682Total # funds 43,212 44,342 47,341 51,166 53,806 52,715# UCITS funds 30,167 30,837 33,600 36,079 37,643 36,588# Non-UCITS funds 9,345 13,505 13,741 15,087 16,163 16,127# funds40,00035,00030,00025,00020,00015,00010,0005,0000Country2008 Q3-09 YTD change#funds € Mn US$ Mn%share#funds € Mn US$ MnAustria 2,307 127,729 177,761 2.1% 2,230 137,342 201,111 2.0% -77 9,613 -0.1%Belgium 1,924 92,822 129,181 1.5% 1,993 92,670 135,696 1.4% 69 -152 -0.2%Bulgaria 82 164 229 0.0% 87 172 252 0.0% 5 8 0.0%Czech Republic 107 4,495 6,255 0.1% 112 4,506 6,599 0.1% 5 11 0.0%Denmark 789 97,788 136,092 1.6% 810 103,895 152,133 1.5% 21 6,107 -0.1%Finland 522 41,338 57,530 0.7% 506 51,729 75,747 0.8% -16 10,391 0.1%France 12,232 1,293,265 1,799,837 21.1% 11,783 1,430,238 2,094,298 20.9% -449 136,973 -0.2%Germany 6,052 911,330 1,268,298 14.9% 6,081 995,217 1,457,297 14.5% 29 83,887 -0.3%Greece 279 10,324 14,368 0.2% 247 10,923 15,995 0.2% -32 599 0.0%Hungary 412 9,473 13,184 0.2% 419 10,304 15,088 0.2% 7 831 0.0%Ireland 5,025 647,054 900,505 10.6% 5,032 702,552 1,028,747 10.3% 7 55,498 -0.3%Italy 1,132 246,981 343,723 4.0% 1,070 249,850 365,855 3.7% -62 2,869 -0.4%Liechtenstein 508 15,246 21,218 0.2% 532 23,066 33,776 0.3% 24 7,820 0.1%Luxembourg 12,325 1,559,653 2,170,569 25.5% 12,207 1,773,834 2,597,425 25.9% -118 214,181 0.5%Netherlands 522 67,504 93,945 1.1% 522 76,500 112,019 1.1% 0 8,996 0.0%Norway 530 29,573 41,157 0.5% 536 43,865 64,231 0.6% 6 14,292 0.2%Poland 436 17,446 24,279 0.3% 466 20,552 30,094 0.3% 30 3,106 0.0%Portugal 523 25,054 34,868 0.4% 532 27,448 40,192 0.4% 9 2,394 0.0%Romania 68 1,701 2,367 0.0% 67 2,248 3,292 0.0% -1 547 0.0%Slovakia 124 3,278 4,562 0.1% 116 3,263 4,778 0.0% -8 -15 0.0%Slovenia 132 1,872 2,605 0.0% 131 2,186 3,201 0.0% -1 314 0.0%Spain 3,014 203,498 283,209 3.3% 2,656 195,686 286,542 2.9% -358 -7,812 -0.5%Sweden 565 86,624 120,555 1.4% 569 113,417 166,077 1.7% 4 26,793 0.2%Switzerland 777 157,040 218,553 2.6% 715 156,457 231,224 2.3% -62 -583 -0.3%Turkey 357 13,293 18,500 0.2% 335 16,029 23,472 0.2% -22 2,736 0.0%United Kingdom 3,062 458,116 637,560 7.5% 2,961 596,163 872,961 8.7% -101 138,047 1.2%All funds 5,353,806 6,122,663 8,520,910 100.0% 52,715 6,840,113 10,018,100 100.0% -1,091 717,450 0.0%UCITS 37,643 4,574,799 6,366,747 74.7% 36,588 5,157,294 7,553,949 75.4% -1,055 582,495 0.7%Non-UCITS 16,163 1,547,864 2,154,163 25.3% 16,127 1,682,819 2,464,151 24.6% -36 134,955 -0.7%Source: European Fund and Asset Management Association (EFAMA, formerly FEFSI).%share#funds€ Mn%shareThis document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 22

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockIn Europe, open-end mutual funds (excluding ETFs) saw US$220.6 Bn net new inflows during 2009 according to data from Lipper FMI.Equity funds were the most popular with US$131.2 Bn net inflows, followed by bond funds with US$111.3 Bn net inflows, while moneymarket funds experienced net outflows of US$65.9 Bn.Figure 18: European mutual fund flows (excluding ETFs)Net new flows US$ Bn5004003002001000-100-200-300-400-500-600-700Exposure (US$ Bn) 2002 2003 2004 2005 2006 2007 2008 2009Equity 31.8 65.9 72.8 120.4 124.4 -32.3 -229.2 131.2Bond 9.8 87.5 60.8 158.7 -17.0 -109.3 -260.7 111.3Mixed -26.0 -10.0 7.9 44.0 54.7 40.4 -60.6 43.4Money market 104.8 73.4 29.4 46.0 122.9 178.1 138.0 -65.9Money market-enhanced 1.7 14.5 15.6 36.4 46.0 -35.9 -59.5 -12.6Other 29.0 58.7 46.8 40.5 67.5 63.6 -23.1 13.3Total 151.2 290.1 233.2 445.9 398.5 104.7 -495.1 220.6Source: Lipper FMI.In Europe, ETFs saw US$47.2 Bn net new inflows during 2009 according to data from Lipper FMI. Equity funds were the most popularwith US$29.5 Bn net inflows, followed by bond funds with US$13.1 Bn net inflows, while money market funds experienced net outflowsof US$5.1 Bn.Figure 19: European ETF fund flowsNet new flows US$ Bn80706050403020100-10Exposure (US$ Bn) 2002 2003 2004 2005 2006 2007 2008 2009Equity 7.1 4.0 8.8 10.1 13.1 14.5 54.3 29.5Bond 1.7 0.1 3.0 2.3 4.7 2.4 8.2 13.1Mixed 0.1 -0.0 0.0 -0.0 0.3Money market 3.4 11.0 -5.1Other 0.6 1.6 0.8 3.1 9.5Total 8.8 4.1 11.8 13.1 19.4 21.0 76.5 47.2Source: Lipper FMI.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 23

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockFigure 20: Average expenses of ETFs versus open-end mutual funds in EuropeExposureExchange Traded Funds 1Average TER(bps)Alternative 25Commodities 44Country exposure Europe - equity 30Country exposure United States - equity 38Currency 30Emerging markets - equity 69European sector exposure - equity 35Eurozone sector exposure - equity 42Fixed income 17Global exposure - equity 49International - equity 56Inverse 41Leveraged 59Leveraged inverse 61Mixed 72Regional exposure Europe - equity 38Regional exposure Eurozone - equity 23Style - equity 37United States sector exposure - equity 52Total – equity ETFS 40Total – fixed income ETFS 17Total – all 35Open-end mutual funds 2Passive/indexed european equity 91Passive/indexed international equity 78Passive/indexed fixed income 49Actively managed european equity 180Actively managed international equity 176Actively managed fixed income 1001. As at end February 2010.2. Captured from Morningstar on 15 March 2010.Source: Morningstar, Global ETF Research and Implementation Strategy Team, BlackRock.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 24

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockFigure 21: European exchange ETF statistics, as at end January 2010Turnover in € MnExchange Jan-10 Dec-09 % changeAverage daily turnover in € Mn% marketshare Jan-10 Dec-09 % change% marketshareDeutsche Boerse 13,805.7 10,331.8 33.6% 33.7% 690.3 516.6 33.6% 33.7%NYSE Euronext 6,923.9 5,900.1 17.4% 16.9% 346.2 268.2 29.1% 16.9%NYSE Euronext Paris 5,926.0 4,835.5 22.6% 14.5% 296.3 219.8 34.8% 14.5%NYSE Euronext Amsterdam 994.2 1,061.8 -6.4% 2.4% 49.7 48.3 3.0% 2.4%NYSE Euronext Brussels 3.8 2.8 33.9% 0.0% 0.2 0.1 47.3% 0.0%Borsa Italiana 4,921.2 3,708.5 32.7% 12.0% 246.1 185.4 32.7% 12.0%London Stock Exchange 5,576.6 5,065.5 10.1% 13.6% 278.8 241.2 15.6% 13.6%SIX Swiss Exchange 2,740.6 2,813.6 -2.6% 6.7% 137.0 127.9 7.1% 6.7%NASDAQ OMX Nordic 817.1 930.2 -12.2% 2.0% 43.0 46.5 -7.5% 2.1%Oslo Stock Exchange 1,111.6 833.7 33.3% 2.7% 55.6 41.7 33.3% 2.7%Istanbul Stock Exchange 682.8 553.0 23.5% 1.7% 34.1 24.0 42.0% 1.7%Bolsa De Madrid 363.6 298.9 21.6% 0.9% 18.2 14.9 21.6% 0.9%Helsinki Stock Exchange 5.9 49.3 -88.1% 0.0% 0.3 2.5 -87.4% 0.0%Boerse Stuttgart 225.2 172.4 30.7% 0.6% 11.3 8.6 30.7% 0.5%Budapest Stock Exchange 10.4 0.1 9324.3% 0.0% 0.5 0.0 10266.7% 0.0%Athens Exchange 5.9 8.6 100.0% 0.0% 0.3 0.4 100.0% 0.0%Wiener Borse 5.8 2.7 113.9% 0.0% 0.3 0.1 125.1% 0.0%Irish Stock Exchange 1.1 1.6 -28.9% 0.0% 0.1 0.1 -25.3% 0.0%Ljubljana Stock Exchange 0.0 0.1 -87.0% 0.0% 0.0 0.0 -85.7% 0.0%Chi-X (not an official exchange) 437.7 366.7 19.4% 1.1% 21.9 15.9 37.3% 1.1%European reported OTC 3,289.4 2,120.9 55.1% 8.0% 164.5 96.4 70.6% 8.0%European ETF market 40,924.6 33,157.8 23.4% 100.0% 2,048.4 1,590.6 28.8% 100.0%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 25

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockFigure 22: European exchange accumulated turnover market share, 2010# total ETFsExchange Listings Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10Deutsche Boerse 578 33.7%NYSE Euronext 512 16.9%NYSE Euronext Paris 413 14.5%NYSE Euronext Amsterdam 98 2.4%NYSE Euronext Brussels 1 0.0%Borsa Italiana 346 12.0%London Stock Exchange 356 13.6%SIX Swiss Exchange 252 6.7%Oslo Stock Exchange 6 2.7%NASDAQ OMX Nordic 12 2.0%Istanbul Stock Exchange 9 1.7%Bolsa De Madrid 33 0.9%Helsinki Stock Exchange 1 0.0%Boerse Stuttgart 324 0.6%Budapest Stock Exchange 1 0.0%Athens Exchange 2 0.0%Wiener Borse 21 0.0%Irish Stock Exchange 14 0.0%Ljubljana Stock Exchange 1 0.0%Chi-X (not an official exchange) 1.1%European reported OTC 8.0%Total 2,468 100.0%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 23: European exchange accumulated turnover market share, 2009# total ETFsExchange Listings Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09Deutsche Boerse 572 30.3% 26.7% 31.4% 31.0% 31.2% 32.0% 34.2% 37.3% 37.2% 31.2% 35.9% 31.2%NYSE Euronext 495 20.3% 18.1% 19.0% 18.4% 19.5% 20.2% 20.3% 17.3% 16.2% 17.8% 18.2% 17.8%NYSE Euronext Paris 396 18.3% 16.0% 16.8% 16.1% 16.6% 17.4% 17.6% 14.6% 13.8% 14.6% 15.4% 14.6%NYSE Euronext Amsterdam 98 2.0% 2.1% 2.1% 2.2% 2.8% 2.8% 2.6% 2.7% 2.3% 3.2% 2.7% 3.2%NYSE Euronext Brussels 1 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Borsa Italiana 336 10.5% 10.7% 12.7% 11.7% 12.6% 11.5% 10.9% 11.0% 11.5% 11.2% 12.5% 11.2%London Stock Exchange 338 13.5% 20.8% 12.8% 11.3% 11.4% 11.2% 11.8% 11.0% 10.8% 15.3% 11.0% 15.3%SIX Swiss Exchange 206 4.7% 5.6% 5.2% 5.3% 5.0% 5.1% 5.1% 5.4% 5.1% 8.5% 6.0% 8.5%Oslo Stock Exchange 6 4.9% 3.1% 3.0% 3.5% 4.7% 3.8% 2.7% 4.0% 3.4% 2.5% 3.7% 2.5%NASDAQ OMX Nordic 12 5.5% 7.1% 5.9% 6.8% 5.0% 4.5% 2.7% 3.6% 2.9% 2.8% 3.2% 2.8%Istanbul Stock Exchange 9 1.2% 1.0% 1.0% 2.3% 2.2% 1.9% 1.4% 2.0% 1.2% 1.7% 1.3% 1.7%Bolsa De Madrid 33 0.7% 0.7% 0.4% 0.7% 0.4% 1.3% 0.9% 0.6% 0.6% 0.9% 1.3% 0.9%Helsinki Stock Exchange 1 0.1% 0.1% 0.1% 0.2% 0.1% 0.1% 0.0% 0.1% 0.2% 0.1% 0.0% 0.1%Boerse Stuttgart 324 0.0% 0.0% 0.5% 0.7% 0.1% 0.1% 0.1% 0.1% 0.1% 0.5% 0.6% 0.5%Budapest Stock Exchange 1 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Athens Exchange 2 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Wiener Borse 21 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Irish Stock Exchange 14 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Ljubljana Stock Exchange 1 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Iceland Stock Exchange 0 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% - - - - - -Chi-X (not an official exchange) 1.5% 1.4% 0.8% 0.9% 1.0% 1.4% 1.3% 1.4% 1.7% 1.1% 1.0% 1.1%European reported OTC 6.7% 4.5% 7.1% 7.2% 6.9% 7.0% 8.5% 6.0% 9.1% 6.4% 5.4% 6.4%Total 2,371 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 26

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockImplementing asset allocation with ETFsInvestment applicationsETFs have many investment applications. ETFs on broad-basedindices can serve as diversified core holdings, while style and sectorETFs can be used to complete parts of a portfolio or fortactical strategies.Due to their targeted exposure to specific market segments, ETFsgenerally work well within the macro asset allocation and sectoremphasis models developed by equity strategists. They also helpprovide efficient ways to gain international diversification. Anotherbenefit of ETFs is that they are complimentary to many otherinvestment products. They can be used together with commonstocks, private asset managers, and other fund products.Investors may buy ETFs to diversify their assets. Most ETFs arepassively managed portfolios designed to provide relatively low-costinvestments in broad-based or proprietary indices. Some ETFs offerrelatively low-risk, broadly diversified portfolios, which manyinvestors may find attractive as the core equity components of theirportfolios. Others offer diversified investments in particular styles,sectors, industries, regions, or countries.ETFs work well with strategic asset-allocation models. In our view,asset-allocation models have two primary applications for investors: As the framework for an entire portfolio.Investors desiring a complete asset allocation strategy may findthis appealing, as they merely have to purchase appropriateinvestments for each market segment in their proper weightingsand occasionally rebalance their portfolios. As the core portion of a portfolio.Those seeking an approach with more active trading may find acore/satellite investment strategy appropriate. In this case, themodel can serve as a core. In an effort to increase returns,shorter-term tactical strategies, such as stock, sector, style orcountry overweights may then be employed as satelliteinvestments. Core holdings can help ensure that a portfolio’sperformance does not deviate widely from establishedbenchmarks, while satellite investments constitute active plays inan effort to increase returns.ETFs based on broad-market indices serve as core holdings, whichis essential, especially in today’s environment of increased marketvolatility. Since no single sector, style, or stock consistentlyoutperforms its peers, having core holdings invested in broadmarketindices not only helps reduce volatility but also can achievecompetitive returns for the overall portfolio.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 27

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockETFs can be used for targeted sector exposure. Sector ETFs can be used for the tactical portion of a portfolio or to gain exposure tounderrepresented sectors in a portfolio. They can also serve as the building blocks for a sector model.Figure 24: Sector weights and YTD performanceWorld, emerging marketsSector#stocksMSCI World%weight% YTDreturn#stocksMSCI Emerging Markets%weightConsumer discretionary 240 9.47% -2.81% 70 5.57% -8.65%Consumer staples 127 10.38% -1.63% 58 5.53% -4.70%Energy 116 10.87% -5.47% 48 14.67% -6.60%Financials 339 20.46% -4.64% 174 23.68% -6.62%Healthcare 120 10.30% -0.80% 12 2.27% -0.29%Industrials 262 10.57% -1.76% 112 6.92% -3.83%Information technology 147 11.88% -6.30% 84 13.78% -5.69%Materials 159 7.38% -8.70% 110 15.25% -6.94%Telecommunications 48 4.23% -6.94% 54 8.66% -2.18%Utilities 93 4.47% -5.03% 45 3.68% -1.36%Total 1,651 100.00% -4.19% 767 100.00% -5.65%United States% YTDreturnSector#stocksS&P 500%weight% YTDreturnConsumer discretionary 39 11.16% -4.51%Consumer staples 31 3.39% -8.66%Energy 59 10.02% -1.21%Financials 80 9.83% -2.95%Healthcare 42 12.41% -1.25%Industrials 52 12.54% 0.42%Information technology 79 15.13% -1.48%Materials 74 19.24% -8.45%Telecommunications 9 2.82% -9.32%Utilities 35 3.46% -5.10%Total 500 100.00% -3.70%Sector#stocksDJ US Total Market%weight% YTDreturnBasic materials 69 3.34% -8.22%Consumer goods 125 9.86% -1.69%Consumer services 198 11.44% -2.39%Financials 257 16.37% -1.59%Healthcare 133 12.38% 0.44%Industrials 256 12.80% -2.72%Oil and gas 93 10.84% -4.39%Technology 173 16.37% -8.58%Telecommunications 18 2.68% -9.72%Utilities 74 3.91% -4.53%Total 1,396 100.00% -3.66%Consumer discretionary 11.2%Consumer staples 3.4%Energy 10%Financials 9.8%Healthcare 12.4%Industrials 12.5%Information technology 15.1%Materials 19.2%Telecommunications 2.8%Utilities 3.5%Basic materials 3.3%Consumer goods 9.9%Consumer services 11.4%Financials 16.4%Health care 12.4%Industrials 12.8%Oil and gas 10.8%Technology 16.4%Telecommunications 2.7%Utilities 3.9%continued…Note: Index returns are for illustrative purposes only and do not represent actual fund performance. Index performance returns do not reflect any management fees, transactioncosts or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results. YTD returns reflect US dollar priceperformance only from 31 December 2009 to 29 January 2010. Index weights captured from Bloomberg on 18 February 2010.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 28

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockFigure 24: Sector weights and YTD performance (continued)EuropeSector#stocksSTOXX 600%weight% YTDreturn#stocksEURO STOXX%weightAutomobiles and parts 13 1.54% -8.94% 12 3.09% -9.11%Banks 55 15.53% -9.26% 38 16.35% -12.03%Basic resources 29 5.24% -9.55% 12 2.29% -9.39%Chemicals 19 3.85% -9.06% 13 6.41% -9.79%Construction and materials 28 2.74% -7.39% 21 4.20% -7.55%Financial services 33 1.40% -8.38% 12 1.17% -10.62%Food & beverage 26 7.52% -2.72% 13 5.22% -4.09%Healthcare 36 9.89% -2.22% 15 4.27% -3.89%Industrial goods and services 91 8.12% -3.81% 40 8.48% -5.07%Insurance 35 5.70% -6.57% 16 7.23% -7.79%Media 25 2.04% -4.92% 15 2.47% -6.43%Oil and gas 39 10.14% -5.81% 17 7.70% -8.26%Personal and household goods 29 4.97% -0.45% 12 4.00% -1.86%Real estate 20 1.14% -5.71% 11 1.24% -4.14%Retail 24 3.44% -1.21% 11 2.91% -0.53%Technology 24 3.09% 2.23% 16 4.64% 1.06%Telecommunications 20 6.40% -8.17% 11 7.62% -9.92%Travel and leisure 23 1.22% -0.56% 8 1.01% -2.06%Utilities 31 6.06% -7.90% 20 9.67% -9.21%Total 600 100.00% -5.73% 313 100.00% -7.62%Sector#stocksMSCI Europe%weight% YTDreturnConsumer discretionary 61 7.20% -4.31%Consumer staples 38 12.25% -2.02%Energy 24 11.29% -5.95%Financials 106 23.37% -8.64%Healthcare 32 10.71% -3.38%Industrials 84 9.67% -4.17%Information technology 16 2.87% 2.43%Materials 49 9.46% -9.22%Telecommunications 22 6.93% -7.96%Utilities 30 6.24% -7.73%Total 462 100.00% -5.92%Note: Index returns are for illustrative purposes only and do not represent actual fund performance. Index performance returns do not reflect any management fees, transactioncosts or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results. YTD returns reflect US dollar priceperformance only from 31 December 2009 to 29 January 2010. Index weights captured from Bloomberg on 18 February 2010.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.% YTDreturnThis document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 29

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockFigure 25: Macro asset allocation strategiesETFs can be used to implement the country and regional allocations suggested by strategists and analysts.MSCI World#stocks%weight% YTDreturnAustralia 73 3.93% -6.86%Austria 8 0.15% -4.77%Belgium 13 0.46% -2.61%Canada 99 4.95% -7.84%Denmark 13 0.43% 3.12%Finland 17 0.54% 2.26%France 76 4.86% -7.35%Germany 50 3.53% -8.89%Greece 12 0.19% -10.39%Hong Kong 41 1.09% -6.58%Ireland 4 0.12% -4.39%Italy 33 1.52% -8.48%Japan 345 10.29% 1.31%Netherlands 20 1.22% -3.51%New Zealand 5 0.05% -5.82%Norway 8 0.34% -7.30%Portugal 9 0.13% -10.19%Singapore 29 0.69% -6.08%Spain 29 1.85% -11.83%Sweden 30 1.22% -2.56%Switzerland 37 3.59% -3.67%United Kingdom 103 9.87% -4.94%United States 597 48.97% -3.60%Total 1,651 100.00% -4.19%MSCI Europe#stocks%weight% YTDreturnAustria 8 0.50% -4.77%Belgium 13 1.52% -2.61%Denmark 13 1.44% 3.12%Finland 17 1.79% 2.26%France 76 16.19% -7.35%Germany 50 11.76% -8.89%Greece 12 0.64% -10.39%Ireland 4 0.41% -4.39%Italy 33 5.06% -8.48%Netherlands 20 4.06% -3.51%Norway 8 1.14% -7.30%Portugal 9 0.43% -10.19%Spain 29 6.17% -11.83%Sweden 30 4.05% -2.56%Switzerland 37 11.97% -3.67%United Kingdom 103 32.87% -4.94%Total 462 100.00% -5.92%MSCI GCC Countries#stocks%weight% YTDreturnBahrain 7 8.41% -2.61%Kuwait 21 17.12% -5.44%Oman 11 2.67% 3.62%Qatar 14 7.07% -4.18%Saudi Arabia 37 53.89% 2.51%UAE 16 10.84% -9.78%Total 106 100.00% -0.81%MSCI Emerging Markets#stocks%weight% YTDreturnBrazil 75 16.50% -10.98%Chile 16 1.50% 3.07%China 118 17.33% -8.62%Colombia 8 0.65% 2.22%Czech Republic 3 0.43% 2.07%Egypt 12 0.51% 7.32%Hungary 4 0.59% 0.66%India 60 7.59% -5.34%Indonesia 22 1.94% 2.38%Israel 17 2.81% 0.29%Malaysia 42 2.71% -0.53%Mexico 23 4.31% -6.23%Morocco 4 0.20% 4.26%Peru 3 0.57% -10.09%Philippines 12 0.41% -5.79%Poland 19 1.30% -1.32%Russia 28 6.75% 2.39%South Africa 45 6.68% -5.44%South Korea 96 12.99% -4.66%Taiwan 117 11.34% -6.48%Thailand 23 1.35% -5.17%Turkey 20 1.52% 1.68%Total 767 100.00% -5.65%MSCI Frontier Markets#stocks%weight% YTDreturnArgentina 6 3.05% -3.19%Bahrain 7 11.26% -2.61%Bulgaria 2 0.19% 0.33%Croatia 7 2.62% 5.43%Estonia 2 0.40% 54.06%Jordan 8 2.36% -1.12%Kazakhstan 3 3.70% 1.15%Kenya 6 1.93% 8.89%Kuwait 21 22.92% -5.44%Lebanon 6 2.60% -3.96%Lithuania 2 0.24% 18.99%Mauritius 3 0.95% 3.26%Nigeria 12 6.91% 8.03%Oman 11 3.58% 3.62%Pakistan 14 3.53% 1.83%Qatar 14 9.47% -4.18%Romania 5 0.98% 8.48%Serbia 2 0.22% 0.30%Slovenia 6 3.20% -0.64%Sri Lanka 3 0.58% 0.24%Trinidad 2 1.01% 0.16%Tunisia 4 0.53% 4.58%UAE 16 14.52% -9.78%Ukraine 7 0.34% 8.38%Vietnam 14 2.92% -1.53%Total 183 100.00% -2.15%Note: Index returns are for illustrative purposes only and do not represent actual fund performance. Index performance returns do not reflect any management fees, transactioncosts or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results. YTD returns reflect US dollar priceperformance only from 31 December 2009 to 29 January 2010. Index weights captured from Bloomberg on 18 February 2010.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 30

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockFigure 26: Index performance (annual US dollar price performance)IndexTicker#members 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009MSCI World MXWO 1,651 14.2% 22.8% 23.6% -14.1% -17.8% -21.1% 30.8% 12.8% 7.6% 18.0% 7.1% -42.1% 27.0% -4.2%MSCI Emerging Markets MXEF 767 -13.4% -27.5% 63.7% -31.8% -4.9% -8.0% 51.6% 22.4% 30.3% 29.2% 36.5% -54.5% 74.5% -5.6%MSCI Europe MXEU 462 19.6% 27.8% 15.3% -9.9% -21.3% -20.0% 34.1% 18.0% 7.2% 29.8% 10.6% -47.9% 30.6% -5.9%MSCI Pacific ex Japan MXPCJ 148 -32.7% -9.6% 39.3% -17.5% -12.2% -9.0% 41.3% 24.6% 10.2% 28.0% 27.2% -52.2% 65.9% -6.8%MSCI Japan MXJP 345 -24.6% 4.0% 61.9% -28.9% -29.9% -10.7% 34.3% 15.0% 24.2% 5.1% -6.4% -29.6% 4.9% 1.3%S&P 500 SPX 500 31.0% 26.7% 19.5% -10.1% -13.0% -23.4% 26.4% 9.0% 3.0% 13.6% 3.5% -38.5% 23.5% -3.7%MSCI EAFE MXEA 955 0.2% 18.2% 25.3% -15.2% -22.6% -17.5% 35.3% 17.6% 10.9% 23.5% 8.6% -45.1% 27.7% -4.4%S&P GSCI SPGCCI -18.4% -24.3% 46.2% 26.9% -31.5% 39.0% 10.8% 19.2% 39.1% 0.4% 40.7% -42.8% 50.3% -7.3%DJ-UBS Commodity DJUBS -8.2% -30.5% 18.6% 24.2% -22.3% 23.9% 22.7% 7.6% 17.5% -2.7% 11.1% -36.6% 18.7% -7.3%Barclays Capital GlobalAggregate Bond IndexLEGATRUU 12,989 3.8% 13.7% -5.1% 3.1% 1.6% 16.5% 12.5% 9.1% -4.4% 6.6% 9.5% 4.8% 6.9% 0.4%YTDJan-10% accumulated US$ price return % accumulated US$ price return400%400%350%300%250%200%150%100%50%0%-50%-100%350%300%250%200%150%100%50%0%-50%-100%Jan-95Oct-95Jul-96Apr-97Jan-98Oct-98Jul-99Apr-00Jan-01Oct-01Jul-02Apr-03Jan-04Oct-04Jul-05Apr-06Jan-07Oct-07Jul-08Apr-09Jan-10MSCI WorldMSCI Emerging MarketsMSCI EuropeMSCI Pacific ex JapanMSCI JapanS&P 500S&P GSCIMSCI EAFEBarclays Capital Global Aggregate Bond IndexDJ-UBS CommodityNote: Index returns are for illustrative purposes only and do not represent actual fund performance. Index performance returns do not reflect any management fees, transactioncosts or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results. Number of constituents captured fromBloomberg on 18 February 2010.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 31

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockFigure 27: Core/satellite applicationsETFs in the coreETFs in the satelliteActivestrategy3ETFsActivestrategy1ETFsatellitePortfolioETFsatelliteActivestrategy2ETFsatellite A broad market index. Concentrated, focused ETFs. Exposure to diversified baskets of securities. Optimised core: sector, style or country indices. Sector and style. Individual countries and regions. Alternative asset class.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.ETFs also offer a way to gain exposure to international and emergingmarket equities. They provide access to baskets of stocks inspecific countries or regions in the form of an individual listedsecurity. Most ETFs are well diversified and thus typically provide aless volatile way to obtain exposure to given countries than thepurchase of individual stocks or GDRs. They also provide convenientinvestments in markets and securities that otherwise mightbe inaccessible.Investors can use ETFs as a cash management tool. They canpurchase ETFs to ‘equitise’ cash inflows that could eventually beinvested in stocks. Equitising cash simply refers to investing cash ina way that provides exposure to the performance of an equitysecurity or index. This can be done in relatively small increments –ETFs typically trade in round lots with the price of a share rangingfrom approximately US$6 to US$150.ETFs can be sold short to hedge a portfolio of stocks, bonds,commodities, closed-end funds or open-end mutual funds. Thisallows an investor to preserve a portfolio while protecting it fromoverall market losses. In a market decline, profits on an ETF shortposition could offset some of the losses incurred by the portfolio.Listed options are available on certain ETFs and can be used forincome-producing, risk-reducing, and speculative strategies. Listedoptions also exist for many of the same indices on which ETFs arebased, allowing for additional hedging and arbitrage strategies.ETFs provide low-cost, liquid trading vehicles. They can be used bymarket timers wishing to gain or reduce exposure to entire marketsegments or sectors throughout the trading day. They also can beused for targeted asset allocation or sector rotation strategies. ETFscan be shorted throughout the trading day subject to the availabilityof applicable stock borrows.As an alternative to futures, ETFs can be bought in smaller sizes,do not require any special documentation or accounts, and do nothave roll costs or margin requirements. In addition, the currentarray of ETFs covers many benchmarks for which there is nofutures contract.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 32

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockFigure 28: ETF portfoliosConservative Balanced Growth DynamicFixed incomeBarCap € Government Bond 1–3BarCap € Government Bond 3–5BarCap € Government Bond 7–10iBoxx € Liquid Corporate BondEquitiesMSCI Europe ex-UKFTSE 100S&P 500MSCI North AmericaNikkei 225MSCI Emerging MarketsPropertyFTSE EPRA/NAREIT Global Property YieldAlternativesFTSE/Macquarie Global Infrastructure 100S&P Listed Private EquityDow-Jones-UBS CommodityLowerExpected riskHigherLowerExpected returnHigherNote: Sample portfolios are for illustrative purposes only and should not be construed as a recommendation to purchase or sell, or an offer to sell, or a solicitation of an offer to buyany security.Source: BlackRock.Figure 29: Why use ETFs?Transparency Investors can generally see the ETF composition at any given time.LiquidityDiversification ETFs offer two sources of liquidity: Traditional liquidity measured by secondary market trading volume. The liquidity of the underlying assets via the creation and redemption process. ETFs offer immediate exposure to a basket or group of securities for instant diversification. Broad range of asset classes including equities, bonds, commodities, investment themes etc.Flexibility ETFs are listed on exchanges and can be traded at any time the market is open. Pricing is continuous throughout the day.Cost effectiveness ETFs offer a cost effective route to diversified market exposure. The average Total Expense Ratio (TER) for equity ETFs in Europe is 40 bps versus 91 bps per annum for the average equityindex tracking fund and 180 bps per annum for the average active equity fund 1 .Securities lending ETF units and underlying assets can be lent out to potentially offset holding costs.1. Source: Morningstar, March 2010.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 33

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockFigure 30: How can ETFs be used?Strategic Market exposure:Implement a wide variety of investment strategies using a broad range of market exposures. Directional views:Establish broad directional market position, use long and short trades to implement market view(s). Core satellite:Achieve strategic focus. Rebalancing:Adjust drift in a portfolio’s asset allocation or style. Completion:Add uncorrelated instruments and/or asset classes to strategy.Tactical Interim beta:Maintain exposure to given market while searching for specific market opportunity. Cash management:Invest cash rapidly and cost effectively to gain desired market exposures. Derivatives alternative:Broad opportunity set of Delta 1 exposures with single line cash-based settlement. Exposure management:Shift portfolio emphasis by adjusting exposures (e.g. duration, credit). Thematic:Implement thematic exposures (e.g. dividends, alternatives).Figure 31: ETFs can offer solutions for a range of portfolio strategies 1Portfolio constructionPortfolio management Fill allocations required by investment strategy. Improve diversification. Gain exposure to size, style, yield, sector, geography. Implement short-/long-term and/or neutral market views: Hard to access asset classes, themes, sector, country. Tactical asset allocations.Strategic assetallocations Establish core holdings. Establish single country or sector satellites.Risk management Active risk budgeting. Combine ETFs in managing total portfolio volatility or duration adjustments in fixed income portfolios.Cash equitisation Manage inflows, outflows, transitions. Obtain a wider exposure than offered by other Delta 1 products.Exposure Exposures to markets or asset classes where one has no expertise or operational capabilities.1. 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 asolicitation of an offer to buy any security. There is no guarantee that any strategies discussed will be effective.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 34

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockETFs may afford investors two forms of liquidity. The first is throughtrading the shares on a secondary basis on the exchange. Thesecond is on a primary basis via the unique ‘creation’ process,whereby an AP purchases the underlying basket of securities in thelocal market and deposits the basket ‘in kind’ into the ETF, creatingmore shares in that ETF. The unique daily creation/redemptionprocess means that the liquidity in the ETF is driven by the liquidityin the underlying securities.Divergence in the performance of an ETF, relative to the index ittracks, is possible. Differences tend to be caused by fund fees andexpenses, tracking error when optimisation strategies are used totrack the index or other market forces, rebalancing due to corporateactions and index changes and the dividend reinvestment policy ofthe fund.ETFs tend to trade at, or close to, their underlying NAVs. This isbecause there are arbitrageurs waiting to take advantage of asignificant premium or discount relative to the underlying index. Anarbitrageur will buy/sell the ETF and place an offsetting buy/selltransaction in the underlying basket of component securities.Figure 32: Typical ETF trading processPrimary marketSecondary marketETF managerSecuritiesETFETF marketmakers/brokerCash (OTC)ETFInvestorCashETF¹Exchange1. ETF or Creation Basket.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 35

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockToday the ETF toolbox is well stocked with a wide array of products:Figure 33: The ETF toolboxEquity Fixed income Cash Currency Global Government EONIA, SONIA Developed currencies Capitalisation (large, mid,small…) Sectors Broad markets Emerging markets Countries Inverse/leveraged Styles Active Dividend Fundamental Infrastructure Real estate Shariah Thematic Private equity Corporate Credit Inflation High yield Mortgage backed Emerging markets Fed fundsAlternatives Hedge funds Carbon Volatility2,055 ETFs with 3,941 ETF listings620 ETPs 1 with 911 listingsTotal: 2,675 productswith 4,852 listings Emerging market currencies Inverse/leveraged Strategy (carry, momentum...)Commodities Broad (S&P GSCI, DJ-UBS,RICI, CRB…) Sub-indices (energy, livestock,precious metals, industrialmetals, agriculture...) Individual commodities Based on physically held assets(gold, silver, platinum,palladium…) Based on futures Based on forwards Inverse/leveraged1. ETPs include HOLDRs, Exchange Traded Commodities (ETCs), Exchange Traded Currency Products, and ETNs, as at end January 2010.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.ETFs cover many well known blue-chip indices such as S&P 500,CAC, DAX, FTSE 100, Hang Seng, Nikkei etc. Recently there hasbeen a proliferation of new indices from index providers which theyhope will form the basis of new ETFs. Many of the new indices usediverse weighting methodologies, including market capitalisation,equal weight, price, dividend and other fundamental factors. As anexample the new FTSE RAFI Index Series is weighted using fourfundamental factors; total cash dividends, free cash flow, total salesand book equity value rather than traditional market capitalisation.WisdomTree has created dividend-weighted indices where thestock’s weight is based on either the amount of cash dividend or thedividend yield of the companies in each index.Infrastructure ETFs: the first infrastructure ETF was launched inJanuary 2007. Infrastructure indices provide diversified exposure tothree infrastructure clusters: energy (oil and gas storage andtransportation), transportation (airport services, highways andrailroads, marine ports and services) and utilities (electric, gas,water, multi-utilities).Fixed income ETFs: the first fixed income ETF was launched inCanada in November 2000. A broad array of government, corporate,credit, high yield, emerging market, inflation protected and moneymarket fixed income products are available to investors within theflexibility of an ETF wrapper, allowing investors to implement incomegenerating strategies, fund future liabilities, hedge inflation andenhance portfolio risk-adjusted returns. There are global, regionaland single country fixed income ETFs with TERs ranging from 0.05%to 0.70%.Commodity ETFs: the first commodity ETF was launched inCanada in March 2001. Commodities as an asset class typicallyexhibit low correlation to equity indices, and the advent ofcommodity ETFs allows investors to satisfy asset allocation anddiversification requirements, hedge inflation or speculate oncommodity indices such as the S&P GSCI. Trading commodityindices as a single exchange traded product avoids the need tomanage futures rolls, provides investors with deep underlyingliquidity pools, and allows investors who are restricted from usingderivatives or other commodity vehicles to gain exposure in anequity vehicle.Shari’ah ETFs: the first Shari’ah compliant ETF was launched inJanuary 2007. Shari’ah compliance means compliance with certainShari’ah principles that are derived from the Quaran and othersources of Islamic law, as determined by Shari’ah scholars.Methodologies exclude representation in the index by shares issuedby producers of alcohol and pork-related products, providers ofconventional financial services and providers of entertainmentservices (e.g. hotels, casinos/gambling, cinema etc.). Tobaccomanufacturers, defence and weapons companies, although notstrictly forbidden under Shari’ah law, are also excluded. In additionto excluding companies from certain sectors, Shari’ah compliantindices also exclude companies that employ excessive leverage orgenerate excessive interest income.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 36

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockPrivate equity ETFs: the first private equity ETF was launched inOctober 2006. Private equity firms raise capital primarily frominstitutional investors such as pension funds, banks, insurancecompanies, endowments, family offices, funds of funds andfoundations to invest in venture capital, buy-outs and specialsituations (distressed companies). Typically, private equitycompanies invest in high growth, start-up companies or acquirebusinesses where superior efficiencies could be achieved.Real estate ETFs: the first real estate ETF was launched in theUnited States in June 2000. The existing range of real estate ETFsinclude listed real estate companies and Real Estate InvestmentTrusts (REITs) which own and usually actively manage incomeproducingcommercial real estate. REITs are typically required topay out at least 90% of all taxable income, providing dividendincome to investors, along with the potential for long term shareprice appreciation. There are several ETFs available allowinginvestors to gain global, regional or single country REIT exposure.Dividend ETFs: the first dividend weighted ETF was launched inNovember 2003. Several ETF providers have structured ETFs byselecting and weighting the constituents based on dividend yield orabsolute dividend payments. Some research suggests that dividendweighted indices generate higher cumulative returns with lowervolatility than comparable standard market cap weighted indicesover the long term. There are many ETFs providing dividendweighted global, regional, single country and emerging marketsexposure with Total Expense Ratios (TERs) ranging from 0.25%to 0.75%.Fundamental ETFs: the first fundamental factor weighted ETF waslaunched in May 2000. Fundamental factors such as sales, cashflow, book value, dividends, earnings, and employees, areincreasingly being used to create new indices. It has been arguedthat traditional market cap weighted indices are systematicallyinefficient by overweighting overvalued stocks and underweightingundervalued stocks.Sector ETFs: the first sector ETFs were launched in December1998 covering nine United States economic sectors allowinginvestors to gain United States sector exposure or implementsector rotation strategies. Certain sectors outperform in particularstages of the economic cycle. Sector rotation strategies aredesigned to beat the market by rotating the investment into thesector which is expected to outperform in the given stage of theeconomic cycle. There are many ETFs providing global, regional, andsingle country sector exposure with TERs ranging from 0.12%to 1.50%.Inverse/leveraged ETFs: the first inverse or leveraged ETF waslaunched in February 2005. Leveraged ETFs are designed to provideup to 300% daily upside performance, while the inverse range ofETFs provide one and two times daily reverse (short) indexperformance. These ETFs can be used to magnify returns, hedgeportfolios and manage risk without the need for a margin account ormargin calls. TERs for these ETFs range from 0.40% to 1.60%.Global ETFs: the first global ETF was launched in August 1997 inNew Zealand. Global ETFs allow investors to gain diversifiedexposure to broad developed markets such as MSCI World whichtracks the performance of 23 developed countries. Internationaldiversification can minimise the impact of economic downturnswithin individual countries or regions and reduce overall risk. Thereare global ETFs with TERs ranging from 0.25% to 0.94%.Emerging Market ETFs: the first emerging market ETF waslaunched in March 1996. Emerging market countries are typicallycharacterised by rapid economic growth, volatility, immatureinstitutions and political instability. ETFs that track global emergingmarket indices such as the MSCI Emerging Markets Index provideinvestors with diversified exposure to 25 EM countries. There aremany ETFs providing global, regional, and single country emergingmarket exposure with TERs ranging from 0.19% to 1.50%.Source: Various ETF Providers, Exchanges, Global ETF Research and Implementation Strategy Team, BlackRock.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 37

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockFigure 34: Comparison of fixed income index trading characteristicsBarclaysCapitalCitigroupeb.rexxEuroMTSFTSEJPMorganMarkitiBoxxGovernmentGovernmentGovernmentGovernmentGiltEmergingmarketGovernmentAggregate Corporate Inflation-linked CorporateCorporate Asset backed Asset backedInflation-linkedIndex familyExposureIndexcalculationPrice sourcePricecontributionPrice typeBarclays Capital Aggregate Barclays Capital About 80% comes from Barclays Capital traders Daily Bid prices (usually)Government –termGovernment –short treasuryBarclays Capital Barclays Capital traders Daily Mid pricesBarclays CapitalAbout 80% comes from Barclays Capital traders Therest comes from third party vendorsDailyBid pricesCorporate Barclays Capital About 80% comes from Barclays Capital traders Daily Bid pricesInflation-linked Barclays Capital Barclays Capital traders DailyMid marketreal pricesInflation-linkedworldBarclays CapitalEuro government, US TIPS, UK linkers and Japaneselinkers come from Barclays Capital. Prices forAustralian linkers are taken from ABN Amro. Canadianlinker prices are taken from RBC Dominion andSwedish linker prices are taken from PMI ExchangeDailyMid pricesCitigroup Citigroup Individual Citigroup trader pricing DailyBid prices(Japan mid prices)eb.rexx Deutsche Börse Eurex BondsIntraday 9:00 am- 5:00 pm CETTraded price dataEuroMTS EuroMTS MTS MarketsIntraday 9:00 am- 5:30 pm CETBid pricesFTSE FTSE Gilt-Edged Market Makers Association (GEMMA) Daily Dirty pricesJP Morgan JP Morgan JP Morgan traders Daily Bid pricesMarkit iBoxx Covered Markit iBoxx ConsortiumIntraday 8:00 am- 4:30 pm GMTBid/ask quotesGovernment –liquid cappedand corporateMarkitiBoxx ConsortiumIntraday 9:00 am- 5:15 pm CETBid/ask quotesCorporate Markit iBoxx Consortium Intraday Bid/ask quotes1. A fund may price a security using a different pricing source than used by the Index Provider itself.Source: Fixed Income Index Guide, BlackRock.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 38

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockAdvantages of fixed income products Government, corporate, credit, inflation, interest rate indices. Security: government issued fixed income products are usuallyconsidered risk free. Corporate debt is also considered to belower risk than the company’s equity. In the event of liquidation,bondholders are ranked above shareholders in the claim oncompany assets. Return of capital: the redemption value of bonds is predeterminedat the time of purchase. Income: the coupon rate of bonds is known before investing andprovides the investor with a reliable income stream. Diversification: a diversified portfolio contains multiple assetclasses and eliminates the concentration risk embedded in asingle asset class portfolio. Benefit from falling interest rates: interest rates can belocked in for a defined period. The inverse relationship betweenbond prices and interest rates allows investors to benefit fromrising bond prices during falling interest rate environments. Speculation: fixed income products provide investors withadditional tolls to speculate on future prices of interest rates.Figure 35: Fixed income exhibits low historical correlation with almost all asset classes potentially providing diversificationbenefits to a portfolioAsset classes Global property 1 Global equities 2 Global bonds 3 Cash 4 Emerging markets 5Global property 1 1.00 0.66 0.07 -0.06 0.60Global equities 2 0.66 1.00 -0.09 -0.04 0.57Global bonds 3 0.07 -0.09 1.00 0.03 -0.03Cash 4 -0.06 0.04 0.03 1.00 -0.06Emerging markets 5 0.60 0.57 -0.03 -0.06 1.001. FTSE EPRA/NAREIT Global Index.2. MSCI World Index.3. Barclays Capital Global Aggregate Bond Index.4. LIBOR 3M Index.5. MSCI Emerging Markets Index.Note: Past performance is no guarantee of future results.Source: Bloomberg, Datastream, May 2001 to May 2008.Shorting and hedging with ETFs 6ETFs can be sold short to hedge a portfolio of stocks, bonds,commodities or funds. This allows an investor to potentiallypreserve a portfolio while protecting it from overall market losses. Ina market decline, profits on an ETF short position could offset someof the losses incurred by the portfolio. Options are available onmost ETFs in the United States which can be used for a numberof strategies.Securities lending revenue on ETFs can be attractive for investorswho own ETF shares. The lending revenue that can be earned onETFs, may at times and for some ETFs, more than cover the annualTER. Investors can also use inverse (short) and leverage inverseETFs to implement hedges and short economic exposure. There arecurrently 67 inverse/inverse leveraged ETFs in the United Statesand 81 inverse/inverse leveraged ETFs listed on exchanges outsidethe US. Short interest is often considered an indication of the levelof scepticism in the market.Short interest data is captured for United States listed securities onthe 15th of each month, or the next business day, and reflects thenumber of shares that have yet to be repurchased to give back tolenders. The higher the short interest, the more investors areexpecting a downturn. Short positions fall in value as stocks rise,and vice versa.The rules on shorting ETFs on financial indices and the use ofinverse and leveraged inverse ETFs on financial indices in thevarious markets are continually being updated as regulators react tomarket conditions and the actions of other regulators – so theposition is quite fluid.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 39

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockCommodities in your portfolioPortfolio diversificationCommodity returns have historically displayed low correlation withequities or other asset classes. As equities and other traditionalassets perform well, commodities have tended to underperformthese asset classes. However, as other asset classes decreased invalue, commodities have sometimes provided positive returns forinvestors. Commodities are often used to reduce portfolio risk byadding diversification.Portfolio protectionHistorically, commodities are one of the few asset classes to havebenefited from rising inflation. As demand for goods and servicesincreases, prices of those goods and services usually also rise, asdo the prices of the commodities used in their production. Becausecommodity prices tend to rise in periods of inflation, investing incommodities can potentially provide some portfolio protectionagainst accelerating inflation. In addition, commodities have oftenproved more resilient than other asset classes to geopolitical andmacro-economic shocks. For example, political crises in emergingmarkets have sometimes tripped up stock markets but left thecommodity market relatively unaffected.Figure 36: S&P GSCI USD TR Index versus MSCI World USD TR% accumulated US$ total return400%350%300%250%200%150%100%50%0%-50%-100%Dec-95Dec-96Dec-97Dec-98Dec-99Dec-00Dec-01Dec-02Dec-03Dec-04Dec-05Dec-06Dec-07Dec-08Dec-09MSCI WorldS&P GSCIData as at end December 2009.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Indices are a convenient way to access a group of commodities. Indices can represent the asset class as a whole or a particular sub-sector,such as energy, agriculture or precious metals. Commodity indices differ in the rules used to gain exposure to the asset class. Does theindex track futures prices or spot prices? How often is the index rebalanced? Are there minimum and maximum weightings for differentsectors or individual commodities? Investors should be aware of these rules before investing in structured products linked to indices. Thissection describes the components and methodologies of some of the main commodity indices. Some of the key features are outlined below.Why include commodities in your portfolio?Strategic A long-only passive investment in commodities provides investors with significant portfolio benefits. Counter cyclical with stocks and bonds. Diversification when you need it most. Best Macro Economic Hedge against rising growth. High equity-like returns.Tactical Outlook for commodity investment returns is both cyclically and secularly bullish. Severe capacity constraints due to lack of infrastructure investment. Significant benefits are expected to come from backwardation in the energy markets.This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material. 40

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockFigure 37: Commodity index performance comparisonIndex # of commodities Weighting method Recomposition frequencyS&P GSCI 24 World Production MonthlyRogers International Commodity Index 36 Discretion of Committee AnnualReuters/Jefferies CRB Index 19 Equal Weighted IrregularDow Jones UBS Commodity Index 19 Liquidity and Production Annual% accumulated US$ total return % accumulated US$ total return600%600%500%500%400%400%300%300%200%200%100%100%0%0%-100%-100%Sep-98Feb-99Jul-99Dec-99May-00Oct-00Mar-01Aug-01Jan-02Jun-02Nov-02Apr-03Sep-03Feb-04Jul-04Dec-04May-05Oct-05Mar-06Aug-06Jan-07Jun-07Nov-07Apr-08Sep-08Feb-09Jul-09Dec-09S&P GSCI TRRogers International Commodity Index TRReuters/Jefferies CRB Index TRDJ-UBS Commodity TRData as at end December 2009.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.Figure 38: Types of commodity exposureETFs providing exposure to ‘Commodities’ can be based on different types of underlying investments/vehicles which can lead to significantdifference in performance:Shares Price is based on the exchange traded share price of listed companies. eg. Gold miners, steel product producers, Coal miners, companies engaged in agriculture/farming activities. Price is based on the traded price of the physical underlying commodity.Physical commodities The commodity is typically stored in a vault. eg. Gold, Silver, Platinum, Palladium. Price is based on an index level which is derived from underlying futures contracts.Futures Typically used for exposures which cannot be physically stored or represent a basket of commodities. eg. Agriculture, Energy, Industrial Metals, Livestock.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.41 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockFigure 39: Commodity index comparisonS&P Goldman SachsCommodity IndexDow Jones UBSCommodity IndexThomson Reuters JefferiesCRB IndexRogers International CommodityIndex (RICI)Energy 65%Energy 33%Energy 39%Energy 44%Livestock 6%Livestock 7%Livestock 7%Livestock, 3%Precious metals 4%Precious metals 11%Precious metals 7%Precious metals 7%Industrial metals 7%Industrial metals 20%Industrial metals 13%Industrial metals 14%Agriculture 18%Agriculture 29%Agriculture 34%Agriculture 32%DJ UBSCommodityIndex(%)ThomsonReutersJefferiesCRB(%)RogersCommodityIndex (RICI)Internat’l(%)Commodity MeasureS&P GSCI(%)Energy 65.29% 33.00% 39.00% 44.00%WTI crude oil $/barrel 34.77% 13.75% 23.00% 21.0%Brent crude oil $/barrel 12.11% - - 14.00%RBOB gasoline $cents/ gallon 4.69% 3.71% 5.00% 3.00%Heating oil $cents/ gallon 3.88% 3.65% 5.00% 1.80%Gasoil $/metric ton 4.31% - - 1.20%Natural gas $/mmBtu 5.53% 11.89% 6.00% 3.00%Livestock 6.37% 6.68% 7.00% 3.00%Live cattle $cents/ pound 3.45% 4.29% 6.00% 2.00%Feeder cattle $cents/ pound 0.66% - - -Lean hogs $cents/ pound 2.26% 2.40% 1.00% 1.00%Precious metals 4.00% 10.75% 7.00% 7.10%Gold $/troy oz 3.61% 7.86% 6.00% 3.00%Silver $/troy oz 0.39% 2.89% 1.00% 2.00%Palladium $/troy oz - - - 0.30%Platinum $/troy oz - - - 1.80%Industrial metals 6.67% 20.33% 13.00% 14.00%Aluminium $/metric ton 2.32% 7.00% 6.00% 4.00%Copper $/metric ton 2.78% 7.31% 6.00% 4.00%Lead $/metric ton 0.42% - - 2.00%Nickel $/metric ton 0.57% 2.88% 1.00% 1.00%Tin $/metric ton - - - 1.00%Zinc $/metric ton 0.58% 3.14% - 2.00%DJ UBSCommodityIndex(%)ThomsonReutersJefferiesCRB(%)RogersCommodityIndex (RICI)Internat’l(%)Commodity MeasureS&P GSCI(%)Agriculture 17.65% 29.23% 34.00% 31.90%Wheat $cents/ bushels 4.54% 4.80% 1.00% 6.00%Kansas wheat $cents/ bushels 1.00% - - 1.00%Corn $cents/ bushels 4.85% 5.72% 6.00% 4.75%Soybeans $cents/ bushels 3.00% 7.60% 6.00% 3.35%Soybean oil $cents/ pound - 2.88% - 2.00%Soybean meal $/short ton - - - 0.75%Cotton $cents/ pound 0.96% 2.27% 5.00% 4.20%Sugar $cents/ pound 2.02% 2.99% 5.00% 2.00%Coffee $cents/ pound 0.87% 3.97% 5.00% 2.00%Cocoa $/metric ton 0.41% - 5.00% 1.00%Orange juice $cents/ pound - - 1.00% 0.66%Rubber JPY/ kilogram - - - 1.00%Lumber- - - 1.00%$/1k boardfleetCanola CAD/metric ton - - - 0.67%Rice $/cwt - - - 0.50%Oats $cents/ bushels - - - 0.50%Rapeseed EUR/metric ton - - - 0.15%Azuki beans JPY/bag - - - 0.10%Greasy wool AUD/ kilogram - - - 0.10%Total 100.00% 100.00% 100.00% 100.00%Data as at: Mar-09 Jan-09 Jan-09 Feb-09Source: Global ETF Research and Implementation Strategy Team, BlackRock, S&P, Dow Jones, Lyxor, RICI Handbook 2009.42 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockFigure 40: Deciding on which product to use depends on many factorsConsiderations Questions Products Transparency Client service Product choice Liquidity Portfolio management What is my benchmark? What are my regulatory guidelines? What are my mandate constraints? What are my counterparty riskguidelines? What are my tracking riskguidelines? How can I gain long and/orshort exposure? How can securities lendingadd value? What is my time horizon? What are the tax implications? What are my liquidityrequirements? What costs are involved? Portfolio trading ETFs ETNs ETPs Swaps Futures Options Securitised products:certificates, warrants,equity linked notes,local access productsSource: Global ETF Research and Implementation Strategy Team, BlackRock.Factors to consider when selectingan ETFObjectives: assess your financial goals.Strategy: look for the right ETF to complement your portfolio.Ensure you read the prospectus and other documentationpublished by the ETF provider prior to investing.Risks: the value of your investment may go up or down. Checkthe specific risks (i.e. political, economic and currency riskswhen investing in an ETF providing exposure to an emergingmarket, country or region) and tax implications.The index: even ETFs with very similar sounding names can bebased on very different constituents. Index providers havedifferent index methodologies which will determine the holdings,weights and rebalance frequency, which will result in differentrisk and reward characteristics. Understanding the index is animportant step in the process.The structure: regulatory changes and innovations in structureshave seen ETPs move beyond the conventional open-ended fundstructure of an ETF. Additionally, open-ended funds can, in manyjurisdictions, embrace the use of swaps and other derivatives,which may change the risk characteristics and may limit theproduct’s transparency compared to traditional physical ETFs,particularly in relation to the fund’s list of holdings. The size ofthe ETF in terms of AUM will often dictate how much certaininvestors can invest in an ETF.Total costs: the fund’s Total Expense Ratio (TER), not just theManagement Expense Ratio (MER), is a major considerationwhen comparing costs between ETFs. Trading costs, tracking risk,registrations, trading currency, dividend withholding rates andsecurities lending within the fund and lending of the ETF shouldall be considered.Liquidity: ETFs afford investors two forms of liquidity. The first isthrough trading the shares on a secondary basis on-exchange.The second is on a primary basis via the unique ‘creation’process, whereby an AP purchases the underlying basket ofsecurities in the local market and deposits the basket ‘in kind’into the ETF, creating more shares in that ETF. The uniquecreation/redemption process means that the liquidity in the ETFis driven by the liquidity in the underlying securities. Similarindices can have different liquidity profiles based on theirindex methodology.ETF provider: the type and amount of information provided ontheir ETFs, index construction and methodology, tax and indexmanagement knowledge, as well as the level and type of supportprovided to investors, intermediaries and brokers varies based onthe size, scale and expertise of the provider.43 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockInvestment concernsETFs possess risks related to the securities in their underlyingindices. ETFs are subject to risks applicable to any investment inportfolios of common stocks or bonds, including that of generallylower prices and the chance that they may underperform moreconcentrated or actively managed portfolios. By targetingperformance in line with indices, investors are also foregoingopportunities to outperform.ETFs are subject to ‘tracking error’ risks. Factors such asexpenses, imperfect correlation between an ETF’s stocks andthose in its underlying index and regulatory policies may causean ETF’s return to deviate from its underlying index. Six majorsources of tracking error are summarised below: Fees and expenses: expenses of all fund products reducetotal return. Although ETFs have the low expense ratios, feeswill cause an ETF to underperform its index over time. Premiums/discounts: on any date, the closing price of anETF may be at a premium or discount to its Net Asset Value(NAV) due to supply and demand factors. This will affectreported performance of the ETF versus its index. Dividend reinvestment: some ETFs hold dividends in cashand only pay them out to investors on a periodic basis. Incontrast, some ETFs can reinvest dividends daily. A lag individend reinvestment can cause small underperformance inrising markets. Optimised replication: many ETFs use computeroptimisation techniques to design portfolios to closely trackthe index while minimising transaction costs. Under thistechnique, the ETF omits or underweights some stocks (usuallythe less liquid or smaller-cap stocks). This technique, ifproperly used, should have only a minor effect on tracking. Rebalancing: ETFs are required to make changes in thecomposition of their portfolios when stocks are added to ordropped from the index. The timing, market impact, andtransaction costs of the changes can affect performance. Nonconcurrent trading hours: some ETFs trade in theUnited States when their underlying markets are closed. Forexample, the Japanese market is closed while an ETF trackingthe Japanese market is trading on NYSE Arca. Given increasedcorrelation between markets, ETFs based on the Japanesemarket may appear to be at a premium prior to the start of thetrading day in Japan when the United States’ market is up inanticipation that the Japanese market will rally. Similarly, on adown day in the United States, the ETFs on the Japanesemarket may appear to trade at a discount.Many European investors prefer ETFs that are UCITS funds froma regulatory and dividend withholding point of view. SomeEuropean investors are only allowed to invest in UCITS funds. ForEuropean and Asian investors, dividend withholding may behigher when investing in US listed ETFs as they may sufferdividend withholding within the ETFs as well as on dividends paidout of the ETF.Basic ETF structuresETFs have distinctive features. Each ETF is designed to track aspecific index. They provide access to investment styles, assetclasses, markets, and different sectors. They are structured asopen-end funds which are domiciled and registered in manycountries around the world. The assets of ETFs are held bycustodians in a ring fenced structure.Most ETFs purchase the underlying securities in the index withthe majority fully replicating their underlying index, many havethe capacity to employ optimisation and sampling techniques.These ETFs may exclude certain securities and deviate from theirbenchmark constituent weights, which could lead totracking error.The open-end structure typically allows funds to lend stock,which may generate extra income. In addition, these funds canhold other securities and financial instruments, including cashand equivalents and futures. Dividends are typically paid outquarterly, semi-annually or annually, although some ETFs doreinvest dividends in the fund.In Europe, a new approach is being used to create funds andETFs which utilise a total return swap plus a basket of securitiesto comply with the diversification rules under Undertakings forCollective Investments in Transferable Securities (UCITS III) todeliver index performance rather than purchasing the underlyingsecurities in the index.Investors who are expressing concerns over counterparty risk,transparency and liquidity when using structured products,swaps, certificates, and notes are showing a preference for ETFswhere the structure is a fund, and often, more specifically forETFs which purchase the underlying securities in the index.ETFs tend to trade at or close to the NAV of the underlyingbasket of shares. Arbitrageurs would take advantage ofsignificant premium or discount relative to the underlying index.An arbitrageur would typically buy or sell the ETF and place anoffsetting buy or sell transaction in the underlying basket ofcomponent stocks or futures.ETF providers have continued to expand their product ranges inmore specialised areas to cater for the growing number ofprofessional and retail investors using ETFs as advanced portfolioconstruction tools.The increasing availability of these highly-specialised ETFs acrossthe full spectrum of equities, fixed-income and alternativeinvestments now ensures that investors can use ETFs to instantlyreallocate capital to take advantage of new investmentopportunities as market conditions stabilise.44 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockFigure 41: Key tax considerationsExample: iShares MSCI Emerging Markets: European versus United States listed fundsLocal shares(3.01%gross divdends)2.71% Net dividendsEuropean listed ETF(Irish domiciled)2.71%Gross dividends(9.91% withholding(no withholding[blended rate])out of the ETF)Non-United Statesbased investorLocal shares(3.01%gross divdends)2.77% Net dividendsUnited Stateslisted ETF(United states1.94% 1Net dividends(8.06% withholdingdomiciled)(up to 30% 2[blended rate])withholding)Non-United Statesbased investorLocal shares(3.01%Gross divdends)2.77% United Stateslisted ETF2.77%Net dividends(United StatesGross dividends(8.06% withholdingdomiciled)(no withholding[blended rate])out of the ETF)United Statesbased investor1. Maximum rate, lower rate may apply based on local tax treaties with United States.2. Assumes impact of maximum rate.Note: The information given does not constitute tax or legal advice and prospective investors should consult their own professional advisers as to the implications of theirsubscribing for, purchasing, holding, switching or disposing of shares under the laws of the jurisdiction in which they may be subject to tax. Tax legislation may change.Source: BlackRock, July 2009.Figure 42: New asset classes will continue to squeeze the traditional core of actively managed fundsCAGR, 2008-2012 (%)ETFsPassive products/ETFsPassive fixedLiability-drivenincomeinvestmentsPassiveequityFixed incomeStructuredcore andproductsspecialitiesEquitycore andMoneyspecialitiesmarketInnovative productsInfrastructure fundsCommoditiesAbsolute returnReal estateShort-extension funds(including REITs)Quantitative productsHedge fundsPrivate equityActive productsNet revenue margin (basis points)Estimated size, 2008 ($trillions). Scale = $1 trillionActive Passive InnovativeSource: BCG Global Asset Management 2009, ‘Conquering the Crisis’, July 2009, Projections 2008–2012.45 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockFigure 43: ETF launches in 2010ETF nameMarch 2010Ticker(BB)Region/countryLaunchdateETFX AEX Fund NTH NA Europe 26-Mar-10HSBC MSCI Japan ETF HMJP LN Europe 24-Mar-10ETFX DJ-UBS All Commodities Forward COMF LN Europe 18-Mar-103 Mthdb x-trackers SMI SHORT DAILY ETF XSVS GY Europe 16-Mar-10ETFlab iBoxx € Liquid CorporatesETFLCD GY Europe 04-Mar-10Diversifieddb x-trackers II IBOXX € LIQUIDXBLC GY Europe 01-Mar-10CORPORATE 100 TOTAL RETURNINDEX ETFMW TOPS Global Alpha USD MWTU LN Europe 01-Mar-10MW TOPS Global Alpha EUR MWTE LN Europe 01-Mar-10MW TOPS Global Alpha GBP MWTS LN Europe 01-Mar-10February 2010DAX Source ETF DAX30S GY Europe 18-Feb-10Osmosis Climate Solutions ETF OCS LN Europe 08-Feb-10ComStage ETF CAC40 Z40 FP Europe 04-Feb-10ComStage ETF CAC40 Short Z4S FP Europe 04-Feb-10ComStage ETF CAC40 Leverage Z4L FP Europe 04-Feb-10January 2010UBS Index Solutions - Gold hedgedAUEUAH SW Europe 29-Jan-10EUR ETFRDX Source ETF RDXS LN Europe 28-Jan-10Xmtch (IE) on FTSE MIB XMMIB SW Europe 27-Jan-10Xmtch (IE) on Nikkei 225 XMNIK SW Europe 27-Jan-10Xmtch (IE) on FTSE 100 XMUKX SW Europe 27-Jan-10Xmtch (IE) on Nasdaq 100 XMNAS SW Europe 27-Jan-10Xmtch (IE) on Dow JonesXMDJIA SW Europe 27-Jan-10Industrial AverageXmtch (IE) on Dow Jones EURO STOXX 50 XMES50 SW Europe 27-Jan-10ComStage ETF iBoxx € Sovereigns CBOXEINF GY Europe 25-Jan-10Inflation-Linked Euro-Inflation TRiShares DJ Euro STOXX 50 (Acc) SEUA LN Europe 25-Jan-10iShares MSCI Canada SCAN LN Europe 25-Jan-10iShares MSCI Australia SAUS LN Europe 25-Jan-10iShares MSCI South Africa SRSA LN Europe 25-Jan-10db x-trackers II iBOXX Euro Germany Total XBTR GY Europe 19-Jan-10Return Index ETFdb x-trackers II - iBOXX Euro Germany 1-3 XB13 GY Europe 19-Jan-10Total Return Index ETFComStage ETF iBoxx € Sovereigns CBOXGS3M GY Europe 18-Jan-10Germany Capped 3m-2 TRComStage ETF iBoxx € Liquid Sovereigns CBOXES3M GY Europe 18-Jan-10Diversified 3m-1 TRLyxor ETF MSCI World Real Estate MWO FP Europe 18-Jan-10Lyxor ETF MSCI USA Real Estate MUA FP Europe 18-Jan-10Lyxor ETF MSCI AC Asia Pacific ex JapanAHJ FP Europe 18-Jan-10Real EstateLyxor ETF MSCI Europe Real Estate MEH FP Europe 18-Jan-10CASAM ETF MSCI Europe EX Switzerland CS9 FP Europe 15-Jan-10CASAM ETF MSCI EuropeE EX EMU CU9 FP Europe 15-Jan-10CASAM ETF MSCI Brazil BRZ FP Europe 15-Jan-10CASAM ETF Commodities S&PCME FP Europe 15-Jan-10GSCI MetalsCASAM ETF Commodities S&P GSCINEG FP Europe 15-Jan-10Non EnergyCASAM ETF Commodities S&PCA8 FP Europe 15-Jan-10GSCI AgricultureCASAM ETF Commodities S&P GSCI (LE) CL7 FP Europe 15-Jan-10ETF nameTicker(BB)Region/countryLaunchdateCASAM ETF Short Govt BondSB0 FP Europe 15-Jan-10EuroMTS BroadJanuary 2010 (continued)CASAM ETF Short Govt Bond EuroMTSS13 FP Europe 15-Jan-10Broad 1-3CASAM ETF Short Govt Bond EuroMTSS35 FP Europe 15-Jan-10Broad 3-5CASAM ETF Short Govt Bond EuroMTSS5B FP Europe 15-Jan-10Broad 5-7CASAM ETF Short Govt Bond EuroMTSS71 FP Europe 15-Jan-10Broad 7-10CASAM ETF Short Govt Bond EuroMTSS10 FP Europe 15-Jan-10Broad 10-15Xmtch (IE) on MSCI Pacific ex Japan XMPXJ SW Europe 13-Jan-10Xmtch (IE) on MSCI UK XMUK SW Europe 13-Jan-10Xmtch (IE) on MSCI Canada XMCA SW Europe 13-Jan-10Xmtch (IE) on MSCI Japan XMJAP SW Europe 13-Jan-10Xmtch (IE) on MSCI Europe XMEUR SW Europe 13-Jan-10Xmtch (IE) on MSCI EMU XMEMU SW Europe 13-Jan-10Xmtch (IE) on MSCI USA XMUSA SW Europe 13-Jan-10ETFlab iBoxx € Liquid Germany Covered ETFIBOXG GY Europe 12-Jan-10DiversifiedUBS Index Solutions - Gold (USD) ETF A AUUSA SW Europe 12-Jan-10ZKB Gold ETF (CHF) H ZGLDHC SW Europe 08-Jan-10ZKB Gold ETF (EUR) H ZGLDHE SW Europe 08-Jan-10ZKB Gold ETF (GBP) H ZGLDHG SW Europe 08-Jan-10JB Physical Platinum Fund CHF A JBPLCA SW Europe 08-Jan-10JB Physical Platinum Fund EUR A JBPLEA SW Europe 08-Jan-10JB Physical Platinum Fund GBP A JBPLGA SW Europe 08-Jan-10JB Physical Platinum Fund USD A JBPLUA SW Europe 08-Jan-10JB Physical Palladium Fund CHF A JBPACA SW Europe 08-Jan-10JB Physical Palladium Fund EUR A JBPAEA SW Europe 08-Jan-10JB Physical Palladium Fund GBP A JBPAGA SW Europe 08-Jan-10JB Physical Palladium Fund USD A JBPAUA SW Europe 08-Jan-10JB Physical Silver Fund CHF A JBSICA SW Europe 08-Jan-10JB Physical Silver Fund EUR A JBSIEA SW Europe 08-Jan-10JB Physical Silver Fund GBP A JBSIGA SW Europe 08-Jan-10JB Physical Silver Fund USD A JBSIUA SW Europe 08-Jan-10Consumer Discretionary S&P US Select XLYS LN Europe 05-Jan-10Sector Source ETFEnergy S&P US Select Sector Source ETF XLES LN Europe 05-Jan-10Materials S&P US Select SectorXLBS LN Europe 05-Jan-10Source ETFIndustrials S&P US Select SectorXLIS LN Europe 05-Jan-10Source ETFTechnology S&P US Select SectorXLKS LN Europe 05-Jan-10Source ETFUtilities S&P US Select Sector Source ETF XLUS LN Europe 05-Jan-10Health Care S&P US Select SectorXLVS LN Europe 05-Jan-10Source ETFConsumer Staples S&P US SelectSector Source ETF XLPS LN Europe 05-Jan-10Financials S&P US Select SectorSource ETFXLFS LN Europe 05-Jan-10Source: Various ETF providers, exchanges, Global ETF Research and ImplementationStrategy Team, BlackRock, Bloomberg.46 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockFigure 44: ETP launches in 2010ETP nameMarch 2010Ticker(BB)Region/countryLaunchdateETFS Long CHF Short EUR XBJA GY Europe 10-Mar-10ETFS Long GBP Short EUR XBJB GY Europe 10-Mar-10ETFS Long JPY Short EUR SJPS GY Europe 10-Mar-10ETFS Long NOK Short EUR LNOE GY Europe 10-Mar-10ETFS Long SEK Short EUR XBJD GY Europe 10-Mar-10ETFS Short CHF Long EUR SCHE GY Europe 10-Mar-10ETFS Short GBP Long EUR XBJC GY Europe 10-Mar-10ETFS Short JPY Long EUR SJPL GY Europe 10-Mar-10ETFS Short NOK Long EUR SEN0 GY Europe 10-Mar-10ETFS Short SEK Long EUR SSEE GY Europe 10-Mar-10UBS Bloomberg DJ-UBS Constant Maturity CMDE LN Europe 10-Mar-10Composite ETC EURUBS Bloomberg DJ-UBS Constant Maturity CMDG LN Europe 10-Mar-10Composite ETC GBPUBS Bloomberg DJ-UBS Constant Maturity CMDJ LN Europe 10-Mar-10Composite ETC USDUBS CMCI Platinum ETC EUR PLTE LN Europe 10-Mar-10UBS CMCI Platinum ETC USD PLTI LN Europe 10-Mar-10UBS CMCI Platinum ETC GBP PLTG LN Europe 10-Mar-10UBS ETC Precious Metals USD PREC LN Europe 10-Mar-10UBS ETC Precious Metals GBP PREG LN Europe 10-Mar-10UBS ETC Precious Metals EUR PREE LN Europe 10-Mar-10UBS CMCI Active ETC GBP ACTG LN Europe 10-Mar-10UBS CMCI Active ETC EUR ACTE LN Europe 10-Mar-10UBS CMCI Active ETC USD ACTI LN Europe 10-Mar-10UBS ETC Energy GBP ENRG LN Europe 10-Mar-10UBS ETC Energy USD ENER LN Europe 10-Mar-10UBS ETC Energy EUR ENRE LN Europe 10-Mar-10UBS ETC Essence USD ESSU LN Europe 10-Mar-10UBS ETC Essence EUR ESSE LN Europe 10-Mar-10UBS ETC Essence GBP ESSG LN Europe 10-Mar-10UBS ETC Corn GBP CRNG LN Europe 10-Mar-10UBS ETC Corn USD CRNU LN Europe 10-Mar-10UBS ETC Corn EUR CRNE LN Europe 10-Mar-10UBS ETC WTI Crude Oil USD OILD LN Europe 10-Mar-10UBS ETC WTI Crude Oil GBP OILL LN Europe 10-Mar-10UBS ETC WTI Crude Oil EUR OILE LN Europe 10-Mar-10UBS ETC Livestock GBP LVSG LN Europe 10-Mar-10UBS ETC Livestock USD LIVD LN Europe 10-Mar-10UBS ETC Livestock EUR LIVE LN Europe 10-Mar-10UBS ETC Composite EUR CMCE LN Europe 10-Mar-10UBS ETC Composite GBP CMCG LN Europe 10-Mar-10UBS ETC Composite USD CMCI LN Europe 10-Mar-10UBS ETC Natural Gas USD NATU LN Europe 10-Mar-10UBS ETC Natural Gas GBP NATG LN Europe 10-Mar-10UBS ETC Natural Gas EUR NATE LN Europe 10-Mar-10UBS ETC Sugar USD SUGU LN Europe 10-Mar-10UBS ETC Sugar EUR SUGE LN Europe 10-Mar-10UBS ETC Sugar GBP SUGG LN Europe 10-Mar-10UBS ETC CMSP USD FLEU LN Europe 10-Mar-10UBS ETC CMSP EUR FLEE LN Europe 10-Mar-10UBS ETC CMSP GBP FLEG LN Europe 10-Mar-10UBS ETC Gold EUR GLDE LN Europe 10-Mar-10UBS ETC Gold USD GLDD LN Europe 10-Mar-10UBS ETC Gold GBP GLDG LN Europe 10-Mar-10UBS ETC Industrial Metals USD INDU LN Europe 10-Mar-10UBS ETC Industrial Metals GBP INDG LN Europe 10-Mar-10UBS ETC Industrial Metals EUR INDE LN Europe 10-Mar-10UBS ETC Aluminium EUR ALUE LN Europe 10-Mar-10ETP nameTicker(BB)Region/countryLaunchdateMarch 2010 (continued)UBS ETC Aluminium USD ALUU LN Europe 10-Mar-10UBS ETC Aluminium GBP ALUG LN Europe 10-Mar-10UBS ETC Cocoa EUR COCE LN Europe 10-Mar-10UBS ETC Cocoa USD COCU LN Europe 10-Mar-10UBS ETC Cocoa GBP COCG LN Europe 10-Mar-10UBS ETC Brent GBP LCOG LN Europe 10-Mar-10UBS ETC Brent EUR LCOE LN Europe 10-Mar-10UBS ETC Brent USD LCOU LN Europe 10-Mar-10UBS ETC Agriculture USD AGRY LN Europe 10-Mar-10UBS ETC Agriculture EUR AGRE LN Europe 10-Mar-10UBS ETC Agriculture GBP AGRG LN Europe 10-Mar-10UBS ETC Copper EUR MSUE LN Europe 10-Mar-10UBS ETC Copper GBP MSUG LN Europe 10-Mar-10UBS ETC Copper USD MSUU LN Europe 10-Mar-10UBS ETC Food GBP FOOG LN Europe 10-Mar-10UBS ETC Food EUR FOOE LN Europe 10-Mar-10UBS ETC Food USD FOOD LN Europe 10-Mar-10UBS ETC Wheat USD WHTU LN Europe 10-Mar-10UBS ETC Wheat EUR WHTE LN Europe 10-Mar-10UBS ETC Wheat GBP WHTG LN Europe 10-Mar-10UBS ETC Silver USD SILU LN Europe 10-Mar-10UBS ETC Silver EUR SILE LN Europe 10-Mar-10UBS ETC Silver GBP SILG LN Europe 10-Mar-10db ETC Monthly Short Gold Euro Hedged XETB GY Europe 08-Mar-10db ETC Monthly Short Brent Crude OilXETA GY Europe 08-Mar-10Euro Hedgeddb ETC Industrial Metals Euro Hedged XETD GY Europe 08-Mar-10db ETC Brent Crude Oil Euro Hedged XETC GY Europe 08-Mar-10February 2010iPath S&P GSCI Agriculture Index TR ETN AGGS GY Europe 25-Feb-10iPath S&P GSCI Energy Index TR ETN NRGY GY Europe 25-Feb-10iPath S&P GSCI Grains Index TR ETN SEED GY Europe 25-Feb-10iPath S&P GSCI Index TR ETN SPGS GY Europe 25-Feb-10iPath S&P GSCI Livestock Index TR ETN MOOO GY Europe 25-Feb-10iPath S&P GSCI Precious Metals IndexPMET GY Europe 25-Feb-10TR ETNiPath S&P GSCI Softs Index TR ETN SOFT GY Europe 25-Feb-10iPath S&P GSCI Industrial Metals IndexTR ETNIMET GY Europe 25-Feb-10Source: Various ETP providers, exchanges, Global Global ETF Research andImplementation Strategy Team, BlackRock, Bloomberg.47 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockFigure 45: Planned new ETFsETF nameEuropeCommerzbankTicker(BB)ComStage ETF iBoxx € Liquid Sovereigns Diversified Overall TRComStage ETF iBoxx € Liquid Sovereigns Diversified 1-3 TRComStage ETF iBoxx € Liquid Sovereigns Diversified 3-5 TRComStage ETF iBoxx € Liquid Sovereigns Diversified 5-7 TRComStage ETF iBoxx € Liquid Sovereigns Diversified 7-10 TRComStage ETF iBoxx € Liquid Sovereigns Diversified 10-15 TRComStage ETF iBoxx € Liquid Sovereigns Diversified 15+ TRComStage ETF iBoxx € Liquid Sovereigns Diversified 25+ TRComStage ETF iBoxx € Sovereigns Germany Capped 1-5 TRComStage ETF iBoxx € Sovereigns Germany Capped 5-10 TRComStage ETF iBoxx € Sovereigns Germany Capped 10+ TRComStage ETF PSI 20®ComStage ETF PSI 20® LeverageEasyETFEasyETF FTSE EPRA UKEasyETF iBoxx Euro InflationiSharesiShares Barclays Global Aggregate BondNBG Asset ManagementNBGAM ETF Stoxx Greece - Turkey 30 Equities FundPowerSharesPowerShares Nasdaq OMX IrelandPowerShares FTSE RAFI Emerging Markets FundPowerShares FTSE RAFI Asia Pacific Ex Japan FundPowerShares FTSE RAFI Hong Kong/China FundPowerShares FTSE RAFI All-World 3000 FundSource MarketsCAC Source ETFCECE Source ETFDJ EURO STOXX Mid Cap Source ETFDJ EURO STOXX Small Cap Source ETFDow Jones Industrial Average Source ETFEONIA Source ETFEPRA Eurozone Source ETFMDAX Source ETFMSCI Brazil Source ETFMSCI BRIC Source ETFMSCI China Source ETFMSCI Emerging Markets Source ETFMSCI India Source ETFMSCI Mexico Source ETFMSCI North America Source ETFMSCI Pacific ex Japan Source ETFMSCI Turkey Source ETFRDX Source ETFS&P/MIB Source ETFSMI Source ETFLaunchdateFigure 46: Planned new ETPsETP nameEuropeETF SecuritiesETFS Forward AluminiumETFS Forward CoffeeETFS Forward CopperETFS Forward CornETFS Forward CottonETFS Forward Crude OilETFS Forward GasolineETFS Forward GoldETFS Forward NickelETFS Forward SilverETFS Forward Soybean OilETFS Forward SoybeansETFS Forward SugarETFS Forward WheatETFS Forward ZincGAM HoldingsGAM Holding CopperGAM Holding ZincGAM Holding AluminiumGAM Holding NickelTicker(BB)LaunchdateSource: Various ETP providers, exchanges, Global ETF Research and ImplementationStrategy Team, BlackRock, Bloomberg.Source: various ETF providers, exchanges, Global ETF Research and ImplementationStrategy Team, BlackRock, Bloomberg.48 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockSubscribe to ETF Landscape reportsWe publish a number of regular reports which you and your colleagues can receive via email by sending your business contact details to:ETFresearch@blackrock.com. You can also access and sign-up to our reports via our Bloomberg page at: ETFP .Monthly Global Industry HighlightsMonthly snapshot of the latest key global and regional ETF and ETPindustry trends produced in the second week of the month showingdata as at end of previous month.Monthly Global Industry ReviewComprehensive monthly review of the latest key global and regionalETF and ETP industry trends. Includes global assets, flows, numberof products, trading volumes, comparison to the mutual fundindustry, index performance comparison and correlations, andapplications. Produced at the end of the month showing data as atend of previous month.Quarterly Global HandbookQuarterly comprehensive guidebook to all ETFs and ETPs from allproviders listed around the world. Includes the price tickers, indextickers, annual Total Expense Ratio (TER), dividend policy, fundstructure, (AUM) as well as ETF provider websites, exchanges, andindex providers to assist in comparing the various products available.Weekly STOXX 600 European Sector ETF Net FlowsWeekly report covering the seven families of European Sector ETFNet Flows, analysing all ETFs listed in Europe tracking the STOXX600 sectors. Data reported in this analysis includes index weights,tickers, performance, futures open interest, ETF AUM, tradingvolumes and net inflows/outflows. The report is produced everyWednesday showing data as at end of previous week.Exposure industry reviewsReview of all ETFs listed around the world including exposurebreakdowns, assets, products, flows, index performance andcorrelation comparison and key tax considerations: China Commodity Emerging Market ETFs Fixed Income ETFs Real EstateRegional industry reviewsReview of all ETFs listed providing exposure and/or listed in theregion covered. Includes a comparison to the local mutual fundflows and index performance: Asia Pacific Canada Latin America Spain United KingdomAnnual Review of Institutional Users of ETFsReview of the use of ETFs listed globally by institutional investorsglobally who have reported holding one or more ETFs in their mutualfund holding disclosures, or in different filing sources including 13F,13D and 13G, proxy and other declarable stakes during any of thefour quarters of the year based on data compiled byThomson Reuters.If you or your colleagues wish to subscribe to any ETF Landscape reports please email ETFresearch@blackrock.com withthe following details: Title, Name, Company, Address, Phone, and Email.49 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.

ETF Landscape April 2010Celebrating 10 Years of ETFs in Europe from BlackRockAMERICAS EMEA ASIA/PACIFICATLANTABlackRock Investment Management LLCSuite 750, 3455 Peachtree Road N.E., Atlanta,30326, GA+1.404.237.1941BLOOMFIELD HILLSBlackRock Investment Management LLCSuite 100, 39533 Woodward Avenue,Bloomfield Hills, 48304, MI+1.248.988.8700BOSTONBlackRock Capital Management IncOne Financial Center, Boston, 02111, MA+1.617.357.1200CHARLOTTEBlackRock Investment Management LLCSuite 1045, 401 North Tryon Street,Charlotte, 28202, NC+1.704.350.8400CHICAGOBlackRock Financial Management IncSuite 2900, 227 West Monroe Street,Chicago, 60606, IL+1.312.395.9300CINCINNATIBlackRock Investment Management LLCSuite 2315, 425 Walnut Street, Cincinnati, 45202, OH+1.513.579.3600DALLASBlackRock Investment Management LLCSuite 750, Premier Place, 5910 North CentralExpressway, Dallas, 75206, TX+1.214.346.7340DURHAMBlackRock Investment Management LLC2200 West Main Street, Durham, 27705, NC+1.919.416.6860FLORHAM 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Perth, WA 6005, Australia+61.8.9229.280050 This document is not an offer to buy or sell any security or to participate in any trading strategy. Please refer to important information and qualifications at the end of this material.

Regulatory InformationBlackRock Advisors (UK) Limited (‘BlackRock’), which is authorised and regulated by the Financial Services Authority in the United Kingdom, has issued this document for access byprofessional clients and for information purposes only. This document or any portion hereof may not be reprinted, sold or redistributed without authorisation from BlackRock.This communication is being made available to persons who are investment professionals as that term is defined in Article 19 of the Financial Services and Markets Act 2000 (FinancialPromotion Order) 2005 or its equivalent under any other applicable law or regulation in the relevant jurisdiction. It is directed at persons who have professional experience in mattersrelating to investments.This document is an independent market commentary document based on publicly available information and is produced by the ETF Research and Implementation Strategy team.Specifically, this is not marketing nor is it an offer to buy or sell any security or to participate in any trading strategy. Affiliated companies of BlackRock may make markets in the securitiesof ETFs and provide ETFs in the form of iShares. Further, BlackRock and/or its affiliated companies and/or their employees may from time to time hold shares or holdings in theunderlying shares of, or options on, any security of ETFs and may as principal or agent buy securities in ETFs.This document does not provide investment advice and the information contained within should not be relied upon in assessing whether or not to invest in the products mentioned. It hasbeen prepared without regard to the individual financial circumstances and objectives of persons who receive it. The securities discussed in this commentary may not be suitable for allinvestors. BlackRock recommends that investors independently evaluate each issuer, security or instrument discussed in this publication and encourages investors to seek the advice of afinancial adviser. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.The value of and income from any investment may go up or down and an investor may not get back the amount invested. The value of the investment involving exposure to foreigncurrencies can be affected by exchange rate movements. We also remind you that the levels and bases of, and reliefs from, taxation can change and is dependent uponindividual circumstances.Although BlackRock endeavours to update and ensure the accuracy of the content of this document BlackRock does not warrant or guarantee its accuracy or correctness. Despite theexercise of all due care, some information in this document may have changed since publication. Investors should obtain and read the ETF prospectuses from the ETF Providers andconfirm any relevant information with ETF Providers before investing. Neither BlackRock, nor any affiliate, nor any of their respective, officers, directors, partners, or employees acceptsany liability whatsoever for any direct or consequential loss arising from any use of this publication or its contents.The trademarks and service marks contained herein are the property of their respective owners. Third-party data providers make no warranties or representations of any kind relating tothe accuracy, completeness, or timeliness of the data they provide and shall not have liability for any damages of any kind relating to such data.© 2010 BlackRock Advisors (UK) Limited. Registered Company No 00796793. All rights reserved. Calls may be monitored or recorded.This publication was produced by the Global ETF Research and Implementation Strategy Team at BlackRock.If you would like to sign up to receive future copies of BlackRock’s ETF Landscape series including our Monthly Industry Review, Quarterly Global Handbook and Annual Review ofInstitutional Users, please send your name, company, title, mailing address and phone number to: ETFresearch@blackrock.com.We also welcome any comments or suggestions.www.blackrock.comRB-ETFLC10YEE-I-APR10-EN