Why iShares ETFs in 401k Plans?

Access to Over 200 Funds that Track Indexes

Index investments like iShares ETFs seek to deliver performance that tracks a market or asset class benchmark. While good active managers exist, the challenge is identifying them in advance, and not simply chasing returns. Only the very skilled (or very lucky) active managers can be right most of the time.

iShares ETFs are managed to track more than 200 different indexes. Each modular component represents a specific asset class, style, sector, country, or region. These diverse instruments allow you to help achieve the necessary asset allocation goals with flexibility.

View in-depth information and a complete list of iShares ETFs.

While both iShares ETFs and mutual funds each hold baskets of securities, some key differences do exist. iShares ETFs trade on exchanges intraday at market price, which may be greater or less than net asset value, and shares of iShares ETFs are not individually redeemed from the fund. In addition, iShares index ETFs are passively managed; they seek to track a market index, before fees and expenses, and do not attempt to outperform during rising or declining markets. iShares ETF performance may diverge from the ETF's underlying index.

In comparison, mutual funds are accessed directly from the fund company or through a select broker, pricing generally occurs once a day, and investors buy or redeem shares at the end-of-day net asset value, less any applicable fees. Some mutual funds may charge redemption fees. Mutual funds may be either actively managed or track an index. The structure of both active and index mutual funds is similar, but the management strategy differs. Active mutual funds seek to outperform their benchmark while the goal of index mutual funds is to track their index. Consequently, active funds typically charge more than index-linked products such as an exchange traded fund, or an index mutual fund, for the increased trading and research expenses that may be incurred.