page 1
page 2
page 3
page 4
page 5
page 6
page 7
page 8
page 9
page 10
page 11
page 12
page 13
page 14
page 15
page 16

- 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)

8David Krein is midway through a conversation about risk-based indexing when he stops and marvels about the way in which investors-retail and institutional alike-have thought of indexes when making investment decisions. He pauses."Historically, investors turn to indexes because they want to measure the performance of a certain market," says the Senior Director, Product Development and Analytics for Dow Jones Indexes, sitting in his Princeton, New Jersey, office. "The Dow Jones Industrial Average has measured the performance of U.S. blue-chip stocks for more than 115 years. But it has never been able to tell me how risky they are, or if I'm getting in at a good or a bad time. Those are important pieces of information that are missing-and we are trying to make this information available in our risk-based indexes."Dow Jones Indexes is in the midst of creating new indexes and index families to cover various facets of risk that investors face in the markets. These indexes go a step beyond the traditional-or as David puts it, their "historical"-role of following price performance. "They're not here to predict the future," insists David, making an emphatic point. "The Dow Jones Golden Crossover Indexes, for instance, instead might show that the market has reached a certain point that historically has meant that a currently rising market might start heading lower or a falling market might start heading higher. It has 'crossed over' from one market direction to another."There are no guarantees, of course, and markets have a way of making just about everyone's predictions look bad," he observes. "But risk-based indexes like these are designed to provide extra levels of information well beyond traditional benchmarking."Working with thought leadersDavid had a conference call the previous day about two new risk-based index families that Dow Jones Indexes is building in collaboration with third parties. He is excited to talk about these firms and their ideas."Ralph Vince. He's an extraordinary guy. He's an analyst focused on investment and portfolio risk. He's got enormous expertise in draw-down risk management and position sizing. He's collaborating with us to create a new series of indexes that will use these dynamics as their basis."Martin Pring. He's also brilliant, but in a completely unique field. He's got three decades of experience in analyzing U.S. business cycles, and he's the author of several books. He's working with us to create a multi-asset class index that drives portfolio allocation using proprietary, quantitative metrics to assess where the United States is in its business cycle."David takes a moment to mention that both of these professionals are well regarded in the investment community and among the most highly regarded in their respective fields. Their articles and books are must-reads among business as well as academic circles, he says, and each has a philosophy that is not "ethereal, but usable in real-life situations." He goes on:"Here's what's amazing about them and what they do. They're thought leaders. They've each created thoughtful, risk-based theories that could be put into practice in active investment portfolios. "But by incorporating their strategies into indexes, we're helping them introduce their concepts to a new world of investors. We're making them accessible to a really broad group of people who know our name and trust our indexes." In DevelopmentRisk-Based IndexesDavid KreinSenior Director, Product Development and Analytics