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iShares Exchange Traded Funds

Maarja Vaikla

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Agenda

BlackRock & ETF Growth Story

Intro to ETFs – What is an ETF and Why ETFs?

Key areas of consideration for ETF selection

Growth and evolution of the ETF market

Products: iShares ETFs on the Nordnet platform

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BlackRock & ETF Growth Story

• iShares is the leading ETF provider in the world

• iShares has over $1 trillion in assets under management

• iShares has 780 ETFs listed globally, more than 200 ETFs registered in NorwaySource: BlackRock ETP Landscape, August 2016

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US Domiciled Funds: AUM Split by ETFs, Index and Active Funds

European Domiciled Funds: AUM Split by ETFs, Index and Active Funds

1. Industry overviewThe growth of index investing

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Source: Morningstar, as of 30 June 2016.Note: Fund categories include open-end mutual funds (excluding money market funds and fund of funds) and exchange traded funds (ETFs) domiciled globally, offered to both retail and institutional investors.

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Intro to ETFs – What is an ETF and Why ETFs?

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Structure of an ETF

ETFs seek to deliver the performance of a chosen index.They typically do this by holding the index constituent stocks at their index weights, or a representative sample (This is called physical replication)

References to the names and logos of each company mentioned is merely for explaining the investment strategy and should not be constructed as investment advice or investment recommendation of those companies.

INDEX

Fund manager

purchases securities

to represent the index

Exchange Traded Fund

(eg. FTSE 100, MSCI World, S&P 500, OBX25)

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What is an ETF? Two great investment ideas brought together

DiversifiedTradable during the

day

Diversified funds that trade like

stocks

ETFs

Stock Like a Mutual Fund

Like a stock Trading flexibility intraday on the exchange Options frequently available

Like an index fund Constructed to track benchmark indexes Low expense ratios

What sets ETFs apart? The creation/redemption process enables the

unique benefits of ETFs such as liquid access

Familiar ground…best of both worlds Two great investment ideas brought together

With short sales, an investor faces the potential for unlimited losses as the security's price rises. There can be no assurance that an active trading market for shares of an ETF will develop or be maintained. Transactions in shares of the iShares Funds will result in brokerage commissions and will generate tax consequences. iShares Funds are obliged to distribute portfolio gains to shareholders. Diversification may not protect against market risk or loss of principal.

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An ETF is an index tracker

Source: BlackRock – www.ishares.no, Net Total Return, 5 year period, September 2011 – September 2016Past performance is not a guide to current or future performance. The value of investments and the income from them can fall as well as rise and is not guaranteed. You may not get back the amount originally invested.

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Why ETFs?

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ETFs are index funds listed and traded like a stock on major stock exchanges globally.

Like an index fund

Like a stock

ETFs

What you see is what you get Full transparency on constituents, performance versus benchmark and costs on a daily basis. Everything

published on our website.

Total Expense Ratio (TER) start from 0.07% for plain vanilla broad equity exposures*

ETFs seek to offer a cost-effective route to diversified market exposure

ETFs offer immediate exposure to a basket or group of securities for diversification through a single trade

Broad range of asset classes, including equities, bonds, commodities, investment themes, etc.

ETFs are listed on exchanges and can be traded at any time the market is open

ETFs, bought on exchange, offer a way to access both diversified broad market and niche exposures in one trade

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**

Transparency

Cost-effective

Diversification

Flexibility

Additional liquidity

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*iShares S&P500 UCITS ETF** The mechanism used to ensure that the price of the ETF shares remains linked to the price of the underlying holdings is called the creation/redemption process.

The building blocks : Complete range of iShares ETFs

Corporate

Asset Backed Securities

BasketsProperty Short – termTreasuries

DevelopedMarkets

Global Global Government

Index Linked InfrastructureEmergingMarkets

Large, Mid, Small - Cap

Growth, Value,Dividend,Min Vol

Sectors / Industry Groups

DomesticGovernment

Equities Fixed Income Alternatives Commodities Cash

Equivalents

Maturity Buckets

Single

Regional, Country

Investors can expand their portfolios beyond traditional investments

Extensive range of index fund building blocks – across all asset classes, regions and markets

Private Equity

Emerging Markets

Constructing a Low Cost, Diversified Portfolio with Index Building Blocks

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Key areas of consideration for ETF selection

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Some key areas of consideration for ETF selectionOverview

1. Index

Selection

2. Domicile/ Registration/

Listing

3.Structure and Risk

Various dimensions in benchmark selection

Understand the ETF structure and structural risk

Being aware of different domiciles and product listings

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Several tracking instruments are available to investors via stock exchanges: Exchange Traded Funds (ETFs) are often traded side-by-side with Exchange Traded Notes (ETNs), Exchange Traded Commodities (ETCs) and Exchange Traded Instruments (ETIs)

Each of these products implies different levels of complexity and carries different structural risks

Structure and riskThe alphabet soup

UCITS-compliant Possible counterparty risk among

others Possible additional risks dependent on

an individual’s circumstances

Not UCITS-compliant Non-fund debt structures Effectively unregulated Possible counterparty risk among

others Possible additional risks

dependent on an individual’s circumstances

Neither notesnor funds

Non UCITS-compliant Possible additional

risks dependent on an individual’s circumstances

Exchange Traded Products (ETPs)

Exchange Traded Funds (ETFs) Physically replicating ETFs:

– Fully replicating– Optimised/partially replicating

Derivative replicating ETFs

Exchange Traded Notes (ETNs)/Exchange Traded Commodities (ETCs)

Exchange Traded Instruments (ETIs)

Source: BlackRock. For illustrative purposes only.

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3

45

6

7

8

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Growth and evolution of the ETF market

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Growth and evolution of the ETF Market - 2016 a record year for global and European ETFs

Global ETPs

European ETPs

Distribution of Most Recent Assets, US$ bn

Distribution of Most Recent Assets, US$ bn

Source: BlackRock Global ETP Landscape, July 2016.

-

1,000

2,000

3,000

4,000

5,000

-

500

1,000

1,500

2,000

2,500

3,000

3,500# of ProductsAssets, US$ bn

ETF Assets Other ETP Assets

# ETFs # Other ETPs

Equity2,520.4

Fixed Income630.2

Commodity138.9

Alternative18.2 Currency

4.4

-

200 400 600 800 1,000 1,200 1,400 1,600

-

100

200

300

400

500

600# of ProductsAssets, US$ bn

ETF Assets Other ETP Assets

# ETFs # Other ETPs

Equity351.5

Fixed Income151.3

Commodity50.0

Alternative1.5 Currency

0.4

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iShares EMEA product range

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iShares EMEA product rangeOverview

Core & Precision

Broad Markets

Strategies

Equity Fixed Income

CreditGov.t

Sovereign

Inflation

Commodity

Emerging Markets

High Yield

IG Corp

Covered

USD

Local

Broad Market

Developed Markets

Emerging Markets

Sectors

Source: BlackRock, as at September 2016

Income

Global, Regional, Country

Size, Style, Thematic

Currency Hedged

Global, Regional, Country

Broad

Aggregate

EUR, USD,

Currency Hedged

Corp

Interest Rate Hedged

Short Duration

203 EMEA iShares registered in Norway All UCITS2 Domiciles: Irish (IE),

German (DE)138 Equity, 64 Fixed

Income, 1 Commodity

Distributing, Accumulating

Maturity Buckets

202 Physical Replication & 1 Synthetic Replication

Factors

Sustainability

Crossover

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Regulatory Information

BlackRock Advisors (UK) Limited, which is authorised and regulated by the Financial Conduct Authority ('FCA'), registered office at 12 Throgmorton Avenue, London, EC2N 2DL, England, Tel +44 (0)20 7743 3000. For your protection, calls are usually recorded.

 Restricted Investors

This document is not, and under no circumstances is to be construed as an advertisement or any other step in furtherance of a public offering of shares in the United States or Canada. This document is not aimed at persons who are resident in the United States, Canada or any province or territory thereof, where the companies/securities are not authorised or registered for distribution and where no prospectus has been filed with any securities commission or regulatory authority. The companies/securities may not be acquired or owned by, or acquired with the assets of, an ERISA Plan.

 Risk Warnings

Investment in the products mentioned in this document may not be suitable for all investors. Past performance is not a guide to future performance and should not be the sole factor of consideration when selecting a product. The price of the investments may go up or down and the investor may not get back the amount invested. Your income is not fixed and may fluctuate. The value of investments involving exposure to foreign currencies can be affected by exchange rate movements. We remind you that the levels and bases of, and reliefs from, taxation can change.

 BlackRock has not considered the suitability of this investment against your individual needs and risk tolerance. The data displayed provides summary information, investment should be made on the basis of the relevant Prospectus which is available from your Broker, Financial Adviser or BlackRock Advisors (UK) Limited. We recommend you seek independent professional advice prior to investing.

In respect of the products mentioned this document is intended for information purposes only and does not constitute investment advice or an offer to sell or a solicitation of an offer to buy the securities described within. This document may not be distributed without authorisation from the manager.

© 2016 BlackRock, Inc. All Rights reserved. BLACKROCK, BLACKROCK SOLUTIONS, iSHARES, BUILD ON BLACKROCK, SO WHAT DO I DO WITH MY MONEY and the stylized i logo are registered and unregistered trademarks of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners.

Disclaimer

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