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iShares expands into US

iShares, part of Barclays Global Investors, has established an exchange traded fund that tracks the S&P 500 index, which consists of the largest companies in the US.

This exchange traded fund is the 13th fund in the iShares stable and is the first of these to provide investors with exposure to the US. It aims to produce capital growth by investing in the companies that make up the index, which include Apple Computers, Coca-Cola, Disney and Nike.

Investors&#39 money is pooled to buy shares in the listed companies, as do unit trusts, Oeics and investment trusts with a US bias. However, exchange traded funds are more flexible in that they can be traded on stock exchanges like conventional shares in a single company. This allows investors to get in and out of the market quickly, while diversifying across a range of industrial sectors.

iShares S&P 500 may appeal to experienced investors who already have actively managed funds in their portfolio and who want to add a country-specific tracker fund with a twist.

The US stockmarket suffered towards the end of last year and although the outlook is more positive now, the future is still uncertain. The passive management style of exchange traded funds could be a disadvantage in the current climate because there is no scope to deviate from the index to improve returns. But investors stand to reap the rewards if the index is on the cusp of an upward cycle.

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iShares – iShares S&P 500

Friday, March 22, 2002 Type: Exchange traded fund Aim: Growth by tracking the S&P 500 index Minimum investment: Subject to negotiation with stockbroker Maximum investment: No maximum Investment split: 100% tracking the S&P 500 index Place of registration: Dublin Isa link: Yes Pep transfers: Yes Charges: Annual 0.35% Commission: None Tel: 020 7668 8007

Keith Carby

Lives: Near Swindon, WiltshireBorn: September 14, 1946Age: 55Education: Swanwick Hall Grammar School, Derbyshire, first in chemistry from Hull University, postgraduate courses at three other universities.Career: Research Assistant, London University, 1973-75, executive at Institute of Personnel Management, 1975-77, assistant director Ashridge College, 1977-81, Hambro Life/Allied Dunbar 1981-90, J Rothschild 1991-98Career ambition: To make Inter-Alliance what it […]

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