The fund underwent a 15 to 1 stock split in December 2022. On the date of the stock split, units on issue in the fund increased by 15 times and the unit price decreased by 15 times. Investors holding units in the fund prior to the stock split received 15 units for every pre-split unit held with no impact to the value of the investment https://www.blackrock.com/au/individual/products/275304/ishares-s-p-500-etf
IVV will become more accessible to first time and returning investors with a lower entry price. https://hellostake.com/au/blog/stake-updates/ivv-stock-split
Are stock splits common?
- Stock splits are not a regular event as they generally occur if a significant change in share price has been sustained over time. This is IVV’s first stock split and its price has shown a steady upward trend over the past 5 years from $344.43.
- At the same time the currency hedged version of this ETF ($IHVV) will undergo a 10:1 stock split. In this case one unit worth $383.27 at 24/11/2022 would convert into ten units each worth $38.32.
- iShares’ parent company BlackRock, Inc.($BLK) has made efforts to review its product line during the past few years periodically. They have made similar decisions regarding stock splits for their U.S. products in 2020 and 2021. The business has also been proactive in closing less popular offerings.
- Although no specific reason has been published for this decision, the lower entry price will benefit investors with small trading amounts. There are no fractional shares available in this situation. It could also encourage regular investments and improve the ETF’s liquidity by enabling trading at higher price levels.