BlackRock Canada Moves Five iShares ETFs to RAFI Select Indices August 2026
BLK•BlackRock Canada will switch indices for five iShares ETFs (CRQ, CIE, CJP, CWO, CLU) to RAFI Fundamental Select on August 6, 2026, adding buybacks and intangibles to constituent selection. They may incur higher transaction costs and 2026 capital gains, and CLU hedged units’ risk rating drops to Medium.
1. Index Changes for iShares ETFs
Effective August 6, 2026, BlackRock Canada will replace the FTSE RAFI indices underlying five iShares fundamental ETFs—Canadian Fundamental (CRQ), International Fundamental (CIE), Japan Fundamental (CJP), Emerging Markets Fundamental (CWO) and US Fundamental (CLU/CLU.C)—with RAFI Fundamental Select indices. The new indices retain geographic coverage and issuer counts while incorporating adjusted sales, adjusted cash flow, dividends plus buybacks and book value plus intangibles in their fundamental rankings.
2. Transaction Costs and Capital Gains
The transition at the next scheduled rebalance may trigger higher-than-normal transaction costs for each ETF and is expected to generate net capital gains. Total net capital gains income for the 2026 tax year will be determined after December 15, 2026, with distributions following each ETF’s standard December process.
3. Risk Rating Update
BlackRock Canada re-applied the NI 81-102 investment risk classification and has lowered the risk rating of the CLU hedged unit class from Medium-High to Medium. This change reflects updated risk methodology and is independent of the announced index changes.
