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6Customer SpotlightAxel Lomholt, Head of iShares ETF Product Development, EMEA Insights: Could you tell us a little about your role at iShares?Lomholt: I'm the Head of Product Development for iShares' EMEA (Europe Middle East Africa) region. We're responsible for the creation of investment products across multiple asset classes, such as physical and swap-based ETFs and physical notes.Insights: You recently launched European ETFs based on the Dow Jones Sustainability IndexesSM. Why did you decide that now is the right time to launch sustainability-themed products?Lomholt: When considering expanding our existing ESG (environmental, social, governance) offerings, we consulted with the various iShares sales teams to gauge whether there was sufficient demand at this time for additional products of this nature. The feedback that we received was very positive, indicating that there's great investor demand for ESG products.Insights: How did iShares decide to enter this market?Lomholt: We recognize that ESG investment is becoming increasingly important for certain client segments. We had discussions with our in-house BlackRock ESG specialists and we got to understand our clients' demands via the iShares sales teams. So we decided that we would launch two new products that meet the majority of our clients' needs.Insights: Do you see regional differences in investor interest in sustainability?Lomholt: In Europe, sustainable investing has been growing in importance during the past decade, most notably in the Nordic countries, as well as the Netherlands and the U.K. Germany's interest in this area also appears to be growing. These two new products are currently listed in three locations: the U.K., Netherlands and Germany. We're also registered in eight other European countries.Insights: The indexes you chose screen for "sin" industries such as alcohol, tobacco, gambling, armaments and firearms. What drove your decision to choose these versions?Lomholt: The index construction and screening was selected based on client feedback. These exclusions meet the majority of our clients' needs.Insights: What has the market reaction been to your sustainability products?Lomholt: Our sales teams have received positive client feedback, while we have seen modest asset flows. This is not surprising given the current market volatility. There's also a time lag in cross-registrations and listings in Europe.Insights: Why did you choose Dow Jones Indexes as your index provider for your sustainability products?Lomholt: Dow Jones Indexes is the leading index provider in this space and the most established in Europe. SAM is an investment boutique focused exclusively on sustainability investing since 1995 and has partnered with Dow Jones Indexes in providing sustainability indices since 1999. Their screening methodology was preferred to other providers because it has:- Annual reviews together with daily monitoring, which allows companies to be excluded from the index prior to a rebalance if there is a market event or extraordinary circumstances, such as the BP oil spill.- Quarterly rebalancing, which is great, since many alternative indexes are only rebalanced annually.Axel LomholtHead of iShares ETF Product Development, EMEA

- Positive screening, which focuses on best-in-class companies. This includes companies that lead in achieving long-term shareholder value by embracing sustainability opportunities while seeking to reduce and avoid sustainability costs and risk.- Client support. This is very important. Dow Jones Indexes and SAM showed willingness to support iShares in educating our clients in their sustainable investment decisions.Insights: Do you expect sustainability to be a growing focus for iShares?Lomholt: By 2015, predictions are that responsible investments will make up between 15% and 20% of total global AUM (or around US$26.5 trillion).1 We believe that the three products that we offer position iShares well to meet our clients' investment needs in Europe. We'll continue to monitor the needs of our clients to see whether it is suitable to expand the product range.Insights: Which other market trends do you see that will impact your product development plans going forward?Lomholt: We still remain committed to emerging markets, especially fixed income and commodities, as long-term investment themes. We recognize that the majority of the iShares client base is looking for building blocks to execute their investment strategies in these segments. We'll continue to expand the exposures that we offer to meet our clients' needs as their investment strategies change.For more information on iShares, visit: >> www.iShares.com1Source: Responsible Investing: A Paradigm Shift by Robeco and Booz & Co.7Index Family Snapshot: Dow Jones Sustainability IndexesSMFirst Index Launched: 1999Key Indexes: - Dow Jones Sustainability World IndexSM- Dow Jones Sustainability World ex All IndexSM- Dow Jones Sustainability World Enlarged IndexSM- Dow Jones Sustainability World Enlarged ex All IndexSM- Dow Jones Sustainability North America IndexSM- Dow Jones Sustainability North America ex All IndexSM - Dow Jones Sustainability Europe IndexSM- Dow Jones Sustainability Europe ex All IndexSMMethodology: of Corporate Sustainability Assessment: Sustainability Indexing 101 (Recorded October 2010)