BlackRock Australia confirmed on Wednesday that it has implemented stock splits on three of the most popular ETFs under its iShares brand.
According to the asset manager, the splits will make it easier for Australian investors to access the three US equity ETFs at a low cost and in a single trade.
Shares in the iShares S&P 500 ETF (IVV), which were previously trading at around $596, have been split at a ratio of 15 to one. IVV ranks as Australia’s third largest ETF with a market cap of $5.18 billion, according to the latest BetaShares Australian ETF Review.
Meanwhile, shares in the currency-hedged version of the same fund — the iShares S&P 500 (AUD Hedged) ETF (IHVV) — have been split at a ratio of 10 to one. IHVV was trading near $380 prior to the split.
Additionally, shares in the iShares S&P Mid-Cap ETF (IJH), which were previously trading at around $373, have also been split at a ratio of 10 to one.
According to BlackRock, the changes mean that investors will own more units in the ETFs at a lower unit price, with no effect on the overall market value of their investments. The changes will also not have any tax implications and will not impact fund performance.
“ETFs are essential building blocks in model portfolios so our decision to lower the unit price will help advisers to be more precise in portfolio construction without over or underweighting the core US equity exposure,” said Jason Collins, head of iShares and index investments at BlackRock Australasia.
“Similarly, smaller investors will have the choice to stay invested without leaving meaningful cash amounts on the sidelines.”
Following the stock splits, trading in all three ETFs commenced on a deferred settlement basis on 7 December under different ticker codes: IVVDB, IHVDA and IJHDB.
BlackRock previously set the implementation date for the stock splits for 9 December and, from 13 December, said that trading in the funds will commence on a normal settlement basis, with the ticker codes of the ETFs reverting back to their originally allocated codes.
“Ultimately, our iShares products all share one common goal — to help millions of Australian investors get the most out of their money in order to help them experience financial wellbeing,” Mr Collins concluded.
