Investment strategy changes at BlackRock

Toronto-based BlackRock Asset Management Canada Ltd. is implementing changes to the investment strategy of iShares U.S. High Yield Bond Index Fund (hedged in Canadian dollars [C$]). The new strategy is to invest primarily in a regularly rebalanced portfolio of U.S. dollar-denominated (US$) high-yield corporate bonds selected by BlackRock Canada that, in aggregate, closely match the characteristics of the Markit iBoxx US$ liquid high-yield total return index (hedged in C$), and hedge any resulting US$ currency exposure back to the C$. This is a change from the previous investment strategy, which involved investing in the iShares iBoxx US$ high-yield corporate bond exchange-trade fund (ETF), a U.S.-based iShares ETF that invests in a portfolio of US$-denominated high-yield corporate bonds included in the iShares U.S. high yield bond index fund (C$-hedged) index. The investment objective of iShares U.S. High Yield Bond Index Fund will remain unchanged. BlackRock Canada expects that the new investment strategy will be implemented during a three-month period from July 22 to October 22. As a result, the potential expiration of U.S. tax rules exempting qualified interest income from U.S. withholding taxes will no longer affect the fund, as interest income arising from direct investments in U.S. fixed-income securities generally is not subject to U.S. withholding taxes.

(cohara@investmentexecutive.com).