iShares Core FTSE 100 ETF: April 2026 update

• BlackRock has been managing index portfolios since 1971

• This ETF provides exposure to the largest 100 companies in the UK

• The ETF’s low charges should help it track the FTSE 100 Index closely

How it fits in a portfolio

An ETF is a basket of investments that often includes shares or bonds. They tend to track the performance of an index such as the FTSE 100 and trade on stock exchanges, like shares. This means their price fluctuates throughout the day.

The iShares Core FTSE 100 ETF invests in the 100 largest companies in the UK. While the FTSE 100 is a UK index, many of the companies also earn money overseas. Investors will therefore be indirectly investing into foreign economies as well as the UK.

An ETF is one of the simplest ways to invest and can be a low-cost starting point for an investment portfolio aiming to deliver long-term growth. This ETF could be used to diversify a global portfolio, or one focused on smaller companies or other investments such as bonds.

Manager

Dharma Laloobhai is Co-Head of International Index Equity Investments at BlackRock. She oversees the fund managers responsible for iShares equity index funds and exchange-traded funds (ETFs) across Europe, the Middle East, Africa and the Asia-Pacific region. Laloobhai has 25 years of industry experience, with 19 at BlackRock.

While Laloobhai leads the team, each ETF at BlackRock has a primary and secondary manager, though in practice a broader team helps to manage each ETF. The wider team is well-resourced and experienced in index investing.

Process

This ETF aims to track the performance of the UK’s largest 100 companies, as measured by the FTSE 100 Index. It does this by investing in every company, and in proportion with each company’s weight in the index. This is known as full replication and should help the ETF track the index closely.

Financials is the largest sector within the index, making up just under 25% of the ETF at the end of March. Healthcare, consumer staples and industrials are the next biggest sectors. The top 10 companies currently account for half of the ETF’s assets, so they can have a big impact on overall performance. This is determined by the underlying index the ETF is tracking.

In any ETF, taxes, dealing commissions and the cost of running the ETF all drag on performance. BlackRock use a system to help them determine the most efficient way to trade. They also cross trade internally across all their index funds and ETFs when there is an index rebalance. This helps to reduce costs.

The ETF can lend some of its investments to others in exchange for a fee in a process known as stock lending. This offsets some of the costs involved with running the ETF. Since BlackRock’s lending program started in 1981, only three borrowers with active loans have defaulted. In each case, BlackRock was able to repurchase every security out on loan with collateral on hand and without any losses to their clients. Even so, stock lending adds risk.

As this ETF is listed offshore investors are not usually entitled to compensation from the UK Financial Services Compensation Scheme.

Culture

BlackRock is currently the largest asset manager in the world, running around $14trn of assets globally. The company was founded by eight partners including current CEO Larry Fink and is known for both active and passive strategies. Employees at BlackRock are encouraged to hold shares in the company so that they are engaged with helping the company perform well and grow. The iShares brand represents BlackRock's family of index tracking and exchange-traded funds.

As the world's largest asset manager, and with lots of resource and knowledge under its belt, BlackRock benefits from unique access to the marketplace, which can help reduce trading costs. BlackRock is also a pioneer in the passive investment space and has a track record of innovation in this part of the investment market.

The team running this ETF also works closely with various equity and risk departments across the business. We believe this adds good support and challenge on how to run the ETF effectively.

ESG Integration

BlackRock was an early signatory to the PRI and has offered ESG-focused funds for several years, including through its iShares range of passive products. However, it only made a company-wide commitment to ESG in January 2020. Following that announcement, the company has expanded its range of ESG-focused ETFs, screened some thermal coal companies out from its actively managed funds and requires all fund managers to consider ESG risks.

BlackRock’s Investment Stewardship Team aims to vote at 100% of meetings where it has the authority to do so. The Investment Stewardship team engages with companies, in conjunction with fund managers, and the results of proxy votes can be found on the BlackRock website’s ‘proxy voting search’ function.

BlackRock has courted controversy in recent years for failing to put its significant weight behind shareholder resolutions aimed at tackling climate change. It responded by committing to be more transparent on its voting activity and providing rationales for key votes.

BlackRock raised further concerns in 2022 when it indicated it might support fewer shareholder proposals based on environmental and social issues in the future. However, its support for shareholder resolutions has fallen dramatically, from 40% in 2021 to just 4% in 2024. BlackRock argues that many of the resolutions were overreaching, lacked economic merit or didn’t promote long-term shareholder value, but this reasoning has been met with some scepticism.

In 2024, BlackRock announced that its US arm would step back from the Climate Action 100+ collective engagement initiative, citing legal considerations, although it suggested its international arm would remain a member.

The iShares Core FTSE 100 ETF tracks an index that does not specifically integrate ESG considerations into its process. The ETF can therefore invest in shares issued by companies in any sector, in line with the index.

Cost

The ETF currently has an ongoing annual fund charge of 0.07%. Ensuring an ETF has a low charge is an important part of tracking the underlying index closely.

We recently made some changes to the amount clients pay to invest with us. Find out more about these changes

The annual charge to hold ETFs in the HL ISA, SIPP or Fund & Share Account is 0.35% (capped at £150 p.a. in each account) and 0.25% in the HL Lifetime ISA (capped at £45 p.a.). There are no charges from HL to hold ETFs within the HL Junior ISA. As ETFs trade like shares, both a buy and sell instruction will be subject to the HL share dealing charges.

Performance

The ETF has tracked the FTSE 100 Index closely over the long term. In the last 10 years, the ETF has returned 138.28%* compared to the benchmark’s return of 140.18%. As expected of ETFs, it’s fallen behind the index over the long term because of the costs involved. However, the tools used by the team have helped to keep performance tight to the index.

Over the past 12 months, the ETF has gained 22.46% versus 22.59% for the benchmark. Remember, past performance isn’t a guide to future returns.

The financials sector contributed significantly to the ETF’s overall returns as UK banks performed well. Higher interest rates have benefited banks as they increase the cost of borrowing, which boosts profits.

The basic materials and energy sectors were also positive contributors. Mining companies benefitted from strong demand and higher prices for key commodities like copper and gold. Energy companies have performed well more recently driven by a sharp rise in oil prices.

The FTSE 100 recorded its highest annual gain in 16 years during 2025, and this momentum has continued into 2026 with the index reaching new highs. However, the UK stock market, like many other global markets, experienced a sharp selloff in March 2026 following heightened tensions in the Middle East.

Given BlackRock's size, experience and expertise running ETFs, we expect this ETF to continue to track the FTSE 100 Index well in future, though there are no guarantees.