Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT
OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-09729
iShares Trust
(Exact name of registrant as specified in charter)
c/o: State Street Bank and Trust Company
1 Iron Street, Boston, MA 02210
(Address of principal executive offices) (Zip code)
The Corporation Trust Company
1209 Orange Street, Wilmington, DE 19801
(Name and address of agent for service)
Registrant’s telephone number, including area code: (415) 670-2000
Date of fiscal year end: April 30, 2018
Date of reporting period: October 31, 2017
Table of Contents
Item 1. | Reports to Stockholders. |
Table of Contents
OCTOBER 31, 2017
2017 SEMI-ANNUAL REPORT (UNAUDITED) |
iShares Trust
Ø | iShares Dow Jones U.S. ETF | IYY | NYSE Arca |
Ø | iShares Transportation Average ETF | IYT | Cboe BZX |
Ø | iShares U.S. Energy ETF | IYE | NYSE Arca |
Ø | iShares U.S. Healthcare ETF | IYH | NYSE Arca |
Ø | iShares U.S. Technology ETF | IYW | NYSE Arca |
Ø | iShares U.S. Utilities ETF | IDU | NYSE Arca |
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Table of Contents
iSHARES® DOW JONES U.S. ETF
Performance as of October 31, 2017
The iShares Dow Jones U.S. ETF (the “Fund”) seeks to track the investment results of a broad-based index composed of U.S. equities, as represented by the Dow Jones U.S. IndexTM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month reporting period ended October 31, 2017, the total return for the Fund was 8.79%, net of fees, while the total return for the Index was 8.91%.
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 23.48% | 23.46% | 23.74% | 23.48% | 23.46% | 23.74% | ||||||||||||||||||||||
5 Years | 14.84% | 14.84% | 15.05% | 99.72% | 99.74% | 101.60% | ||||||||||||||||||||||
10 Years | 7.47% | 7.46% | 7.67% | 105.53% | 105.37% | 109.29% |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 11 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,087.90 | $ | 1.05 | $ | 1,000.00 | $ | 1,024.20 | $ | 1.02 | 0.20% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 11 for more information. |
ALLOCATION BY SECTOR As of 10/31/17 |
Sector | Percentage of Total Investments* |
Information Technology | 23.89 | % | ||
Financials | 14.87 | |||
Health Care | 13.36 | |||
Consumer Discretionary | 12.20 | |||
Industrials | 10.38 | |||
Consumer Staples | 7.27 | |||
Energy | 5.64 | |||
Real Estate | 3.87 | |||
Materials | 3.45 | |||
Utilities | 3.26 | |||
Telecommunication Services | 1.81 | |||
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TOTAL | 100.00 | % | ||
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TEN LARGEST FUND HOLDINGS
As of 10/31/17
Security | Percentage of Total Investments* |
Apple Inc. | 3.44 | % | ||
Microsoft Corp. | 2.52 | |||
Amazon.com Inc. | 1.74 | |||
Facebook Inc. Class A | 1.68 | |||
Johnson & Johnson | 1.47 | |||
Berkshire Hathaway Inc. Class B | 1.42 | |||
JPMorgan Chase & Co. | 1.40 | |||
Exxon Mobil Corp. | 1.39 | |||
Alphabet Inc. Class A | 1.21 | |||
Alphabet Inc. Class C | 1.21 | |||
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TOTAL | 17.48 | % | ||
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* | Excludes money market funds. |
FUND PERFORMANCE OVERVIEWS | 5 |
Table of Contents
Fund Performance Overview
iSHARES® TRANSPORTATION AVERAGE ETF
Performance as of October 31, 2017
The iShares Transportation Average ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. equities in the transportation sector, as represented by the Dow Jones Transportation Average IndexTM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month reporting period ended October 31, 2017, the total return for the Fund was 7.81%, net of fees, while the total return for the Index was 8.05%.
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 22.55% | 22.68% | 22.85% | 22.55% | 22.68% | 22.85% | ||||||||||||||||||||||
5 Years | 15.49% | 15.51% | 15.53% | 105.47% | 105.66% | 105.81% | ||||||||||||||||||||||
10 Years | 8.49% | 8.51% | 8.83% | 125.82% | 126.25% | 133.01% |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 11 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,078.10 | $ | 2.30 | $ | 1,000.00 | $ | 1,023.00 | $ | 2.24 | 0.44% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 11 for more information. |
ALLOCATION BY SECTOR
As of 10/31/17
Sector | Percentage of Total Investments* |
Road & Rail | 43.46 | % | ||
Air Freight & Logistics | 31.08 | |||
Airlines | 19.01 | |||
Marine | 6.45 | |||
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TOTAL | 100.00 | % | ||
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TEN LARGEST FUND HOLDINGS
As of 10/31/17
Security | Percentage of Total Investments* |
FedEx Corp. | 14.37 | % | ||
Norfolk Southern Corp. | 8.45 | |||
United Parcel Service Inc. Class B | 7.77 | |||
Union Pacific Corp. | 7.50 | |||
JB Hunt Transport Services Inc. | 6.90 | |||
Landstar System Inc. | 4.79 | |||
CH Robinson Worldwide Inc. | 4.76 | |||
Kansas City Southern | 4.74 | |||
Ryder System Inc. | 4.71 | |||
Kirby Corp. | 4.61 | |||
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TOTAL | 68.60 | % | ||
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* | Excludes money market funds. |
6 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Fund Performance Overview
iSHARES® U.S. ENERGY ETF
Performance as of October 31, 2017
The iShares U.S. Energy ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. equities in the energy sector, as represented by the Dow Jones U.S. Oil & Gas IndexTM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month reporting period ended October 31, 2017, the total return for the Fund was 1.35%, net of fees, while the total return for the Index was 1.56%.
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 1.33% | 1.33% | 1.79% | 1.33% | 1.33% | 1.79% | ||||||||||||||||||||||
5 Years | 0.23% | 0.26% | 0.60% | 1.14% | 1.28% | 3.03% | ||||||||||||||||||||||
10 Years | 0.10% | 0.12% | 0.44% | 1.04% | 1.20% | 4.50% |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 11 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,013.50 | $ | 2.23 | $ | 1,000.00 | $ | 1,023.00 | $ | 2.24 | 0.44% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 11 for more information. |
ALLOCATION BY SECTOR
As of 10/31/17
Sector | Percentage of Total Investments* |
Oil, Gas & Consumable Fuels | 85.35 | % | ||
Energy Equipment & Services | 13.83 | |||
Other** | 0.82 | |||
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TOTAL | 100.00 | % | ||
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TEN LARGEST FUND HOLDINGS
As of 10/31/17
Security | Percentage of Total Investments* |
Exxon Mobil Corp. | 24.48 | % | ||
Chevron Corp. | 15.22 | |||
Schlumberger Ltd. | 6.16 | |||
ConocoPhillips | 4.31 | |||
EOG Resources Inc. | 4.00 | |||
Occidental Petroleum Corp. | 3.42 | |||
Phillips 66 | 2.71 | |||
Halliburton Co. | 2.57 | |||
Valero Energy Corp. | 2.42 | |||
Kinder Morgan Inc./DE | 2.41 | |||
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TOTAL | 67.70 | % | ||
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* | Excludes money market funds. |
** | Other includes sectors and/or investment types which individually represent less than 1% of total investments. |
FUND PERFORMANCE OVERVIEWS | 7 |
Table of Contents
Fund Performance Overview
iSHARES® U.S. HEALTHCARE ETF
Performance as of October 31, 2017
The iShares U.S. Healthcare ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. equities in the healthcare sector, as represented by the Dow Jones U.S. Health Care IndexTM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month reporting period ended October 31, 2017, the total return for the Fund was 8.24%, net of fees, while the total return for the Index was 8.48%.
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 23.05% | 23.03% | 23.59% | 23.05% | 23.03% | 23.59% | ||||||||||||||||||||||
5 Years | 17.00% | 16.99% | 17.51% | 119.23% | 119.19% | 124.08% | ||||||||||||||||||||||
10 Years | 10.66% | 10.69% | 11.13% | 175.43% | 176.15% | 187.17% |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 11 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,082.40 | $ | 2.31 | $ | 1,000.00 | $ | 1,023.00 | $ | 2.24 | 0.44% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 11 for more information. |
ALLOCATION BY SECTOR
As of 10/31/17
Sector | Percentage of Total Investments* |
Pharmaceuticals | 32.98 | % | ||
Biotechnology | 22.93 | |||
Health Care Equipment & Supplies | 21.20 | |||
Health Care Providers & Services | 17.69 | |||
Life Sciences Tools & Services | 5.08 | |||
Commercial Services & Supplies | 0.12 | |||
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TOTAL | 100.00 | % | ||
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TEN LARGEST FUND HOLDINGS
As of 10/31/17
Security | Percentage of Total Investments* |
Johnson & Johnson | 11.54 | % | ||
Pfizer Inc. | 6.45 | |||
UnitedHealth Group Inc. | 6.27 | |||
Merck & Co. Inc. | 4.65 | |||
AbbVie Inc. | 4.44 | |||
Amgen Inc. | 3.94 | |||
Medtronic PLC | 3.36 | |||
Bristol-Myers Squibb Co. | 3.12 | |||
Gilead Sciences Inc. | 3.02 | |||
Abbott Laboratories | 2.91 | |||
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TOTAL | 49.70 | % | ||
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* | Excludes money market funds. |
8 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Fund Performance Overview
iSHARES® U.S. TECHNOLOGY ETF
Performance as of October 31, 2017
The iShares U.S. Technology ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. equities in the technology sector, as represented by the Dow Jones U.S. Technology IndexTM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month reporting period ended October 31, 2017, the total return for the Fund was 17.45%, net of fees, while the total return for the Index was 17.77%.
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 37.58% | 37.56% | 38.26% | 37.58% | 37.56% | 38.26% | ||||||||||||||||||||||
5 Years | 19.49% | 19.49% | 20.00% | 143.59% | 143.59% | 148.88% | ||||||||||||||||||||||
10 Years | 10.11% | 10.11% | 10.55% | 161.98% | 162.05% | 172.58% |
Certain sectors and markets performed exceptionally well based on market conditions during the one-year period. Achieving such exceptional returns involves the risk of volatility and investors should not expect that such exceptional returns will be repeated.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 11 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | Annualized Expense Ratio | ||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | |||||||||||||||||||||
$ | 1,000.00 | $ | 1,174.50 | $ | 2.41 | $ | 1,000.00 | $ | 1,023.00 | $ | 2.24 | 0.44% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 11 for more information. |
ALLOCATION BY SECTOR
As of 10/31/17
Sector | Percentage of Total Investments* |
Software | 25.27 | % | ||
Internet Software & Services | 22.02 | |||
Semiconductors & Semiconductor Equipment | 19.63 | |||
Technology Hardware, Storage & Peripherals | 19.45 | |||
Communications Equipment | 5.70 | |||
IT Services | 5.40 | |||
Other** | 2.53 | |||
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TOTAL | 100.00 | % | ||
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TEN LARGEST FUND HOLDINGS
As of 10/31/17
Security | Percentage of Total Investments* |
Apple Inc. | 16.97 | % | ||
Microsoft Corp. | 12.41 | |||
Facebook Inc. Class A | 8.20 | |||
Alphabet Inc. Class A | 5.86 | |||
Alphabet Inc. Class C | 5.84 | |||
Intel Corp. | 4.21 | |||
Cisco Systems Inc. | 3.37 | |||
Oracle Corp. | 3.03 | |||
International Business Machines Corp. | 2.63 | |||
NVIDIA Corp. | 2.45 | |||
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TOTAL | 64.97 | % | ||
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* | Excludes money market funds. |
** | Other includes sectors and/or investment types which individually represent less than 1% of total investments. |
FUND PERFORMANCE OVERVIEWS | 9 |
Table of Contents
Fund Performance Overview
iSHARES® U.S. UTILITIES ETF
Performance as of October 31, 2017
The iShares U.S. Utilities ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. equities in the utilities sector, as represented by the Dow Jones U.S. Utilities IndexTM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month reporting period ended October 31, 2017, the total return for the Fund was 8.37%, net of fees, while the total return for the Index was 8.63%.
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 15.43% | 15.41% | 15.95% | 15.43% | 15.41% | 15.95% | ||||||||||||||||||||||
5 Years | 12.52% | 12.52% | 13.02% | 80.36% | 80.39% | 84.44% | ||||||||||||||||||||||
10 Years | 6.58% | 6.59% | 7.02% | 89.10% | 89.23% | 97.06% |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 11 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,083.70 | $ | 2.31 | $ | 1,000.00 | $ | 1,023.00 | $ | 2.24 | 0.44% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 11 for more information. |
ALLOCATION BY SECTOR
As of 10/31/17
Sector | Percentage of Total Investments* |
Electric Utilities | 58.41 | % | ||
Multi-Utilities | 30.21 | |||
Gas Utilities | 5.56 | |||
Independent Power and Renewable Electricity Producers | 3.12 | |||
Water Utilities | 2.70 | |||
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TOTAL | 100.00 | % | ||
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TEN LARGEST FUND HOLDINGS
As of 10/31/17
Security | Percentage of Total Investments* |
NextEra Energy Inc. | 8.92 | % | ||
Duke Energy Corp. | 7.59 | |||
Southern Co. (The) | 6.41 | |||
Dominion Energy Inc. | 6.41 | |||
Exelon Corp. | 4.74 | |||
American Electric Power Co. Inc. | 4.50 | |||
PG&E Corp. | 3.64 | |||
Sempra Energy | 3.63 | |||
Consolidated Edison Inc. | 3.28 | |||
Edison International | 3.20 | |||
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TOTAL | 52.32 | % | ||
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* | Excludes money market funds. |
10 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.ishares.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are redeemed or sold in the market. Performance for certain funds may reflect a waiver of a portion of investment advisory fees. Without such a waiver, performance would have been lower.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Certain funds may have a NAV which is determined prior to the opening of regular trading on its listed exchange and their market returns are calculated using the midpoint of the bid/ask spread as of the opening of regular trading on the exchange. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower.
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of fund shares and (2) ongoing costs, including management fees and other fund expenses. The expense example, which is based on an investment of $1,000 invested on May 1, 2017 and held through October 31, 2017, is intended to help you understand your ongoing costs (in dollars and cents) of investing in a Fund and to compare these costs with the ongoing costs of investing in other funds.
Actual Expenses — The table provides information about actual account values and actual expenses. Annualized expense ratios reflect contractual and voluntary fee waivers, if any. To estimate the expenses that you paid on your account over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number corresponding to your Fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Example for Comparison Purposes — The table also provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of fund shares. Therefore, the hypothetical examples are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
ABOUT FUND PERFORMANCE / SHAREHOLDER EXPENSES | 11 |
Table of Contents
Schedule of Investments (Unaudited)
October 31, 2017
Security | Shares | Value | ||||||
COMMON STOCKS — 99.81% |
| |||||||
AEROSPACE & DEFENSE — 2.39% |
| |||||||
Arconic Inc. | 16,857 | $ | 423,448 | |||||
Boeing Co. (The) | 24,076 | 6,211,126 | ||||||
BWX Technologies Inc. | 4,236 | 253,821 | ||||||
Curtiss-Wright Corp. | 1,880 | 222,310 | ||||||
Esterline Technologies Corp.a | 1,144 | 108,508 | ||||||
General Dynamics Corp. | 12,048 | 2,445,503 | ||||||
HEICO Corp. | 1,100 | 99,748 | ||||||
HEICO Corp. Class A | 2,017 | 153,494 | ||||||
Hexcel Corp. | 3,820 | 231,836 | ||||||
Huntington Ingalls Industries Inc. | 1,969 | 458,442 | ||||||
KLX Inc.a | 2,269 | 124,477 | ||||||
L3 Technologies Inc. | 3,393 | 635,102 | ||||||
Lockheed Martin Corp. | 10,842 | 3,341,071 | ||||||
Moog Inc. Class Aa | 1,410 | 123,742 | ||||||
Northrop Grumman Corp. | 7,527 | 2,224,454 | ||||||
Orbital ATK Inc. | 2,476 | 329,135 | ||||||
Raytheon Co. | 12,553 | 2,262,051 | ||||||
Rockwell Collins Inc. | 7,030 | 953,268 | ||||||
Spirit AeroSystems Holdings Inc. Class A | 5,122 | 410,272 | ||||||
Teledyne Technologies Inc.a | 1,531 | 260,209 | ||||||
Textron Inc. | 11,501 | 606,563 | ||||||
TransDigm Group Inc. | 2,099 | 582,472 | ||||||
United Technologies Corp. | 32,136 | 3,848,607 | ||||||
|
| |||||||
26,309,659 | ||||||||
AIR FREIGHT & LOGISTICS — 0.65% |
| |||||||
CH Robinson Worldwide Inc. | 6,008 | 471,808 | ||||||
Expeditors International of Washington Inc. | 7,862 | 458,984 | ||||||
FedEx Corp. | 10,710 | 2,418,425 | ||||||
United Parcel Service Inc. Class B | 29,798 | 3,502,159 | ||||||
XPO Logistics Inc.a,b | 4,247 | 294,529 | ||||||
|
| |||||||
7,145,905 | ||||||||
AIRLINES — 0.46% |
| |||||||
Alaska Air Group Inc. | 5,396 | 356,298 | ||||||
Allegiant Travel Co. | 566 | 77,202 | ||||||
American Airlines Group Inc. | 18,829 | 881,574 | ||||||
Delta Air Lines Inc. | 28,924 | 1,447,068 | ||||||
JetBlue Airways Corp.a | 14,018 | 268,444 | ||||||
Southwest Airlines Co. | 23,921 | 1,288,385 | ||||||
Spirit Airlines Inc.a,b | 3,031 | 112,420 |
Security | Shares | Value | ||||||
United Continental Holdings Inc.a | 11,231 | $ | 656,789 | |||||
|
| |||||||
5,088,180 | ||||||||
AUTO COMPONENTS — 0.37% |
| |||||||
Adient PLC | 4,028 | 339,802 | ||||||
Autoliv Inc. | 3,776 | 471,471 | ||||||
BorgWarner Inc. | 8,612 | 454,025 | ||||||
Cooper Tire & Rubber Co. | 2,398 | 78,655 | ||||||
Dana Inc. | 6,095 | 185,837 | ||||||
Delphi Automotive PLC | 11,590 | 1,151,814 | ||||||
Gentex Corp. | 12,457 | 241,790 | ||||||
Goodyear Tire & Rubber Co. (The) | 10,888 | 333,064 | ||||||
Lear Corp. | 2,923 | 513,250 | ||||||
Tenneco Inc. | 2,319 | 134,757 | ||||||
Visteon Corp.a | 1,309 | 164,986 | ||||||
|
| |||||||
4,069,451 | ||||||||
AUTOMOBILES — 0.64% |
| |||||||
Ford Motor Co. | 169,001 | 2,073,642 | ||||||
General Motors Co. | 56,698 | 2,436,880 | ||||||
Harley-Davidson Inc. | 7,413 | 350,931 | ||||||
Tesla Inc.a,b | 5,699 | 1,889,390 | ||||||
Thor Industries Inc. | 2,076 | 282,793 | ||||||
|
| |||||||
7,033,636 | ||||||||
BANKS — 6.46% |
| |||||||
Associated Banc-Corp. | 6,619 | 167,461 | ||||||
BancorpSouth Inc. | 3,757 | 118,721 | ||||||
Bank of America Corp. | 425,074 | 11,642,777 | ||||||
Bank of Hawaii Corp. | 1,840 | 150,162 | ||||||
Bank of the Ozarks Inc. | 5,219 | 243,310 | ||||||
BankUnited Inc. | 4,666 | 162,610 | ||||||
BB&T Corp. | 35,096 | 1,728,127 | ||||||
BOK Financial Corp. | 1,080 | 93,388 | ||||||
Cathay General Bancorp. | 3,263 | 136,393 | ||||||
Chemical Financial Corp. | 3,091 | 162,865 | ||||||
CIT Group Inc. | 5,885 | 274,359 | ||||||
Citigroup Inc. | 118,033 | 8,675,425 | ||||||
Citizens Financial Group Inc. | 21,751 | 826,756 | ||||||
Comerica Inc. | 7,609 | 597,839 | ||||||
Commerce Bancshares Inc./MO | 3,876 | 225,428 | ||||||
Cullen/Frost Bankers Inc. | 2,555 | 251,668 | ||||||
East West Bancorp. Inc. | 6,271 | 375,257 | ||||||
F.N.B. Corp. | 13,812 | 186,324 | ||||||
Fifth Third Bancorp. | 32,005 | 924,944 | ||||||
First Citizens BancShares Inc./NC Class A | 379 | 153,495 |
12 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® DOW JONES U.S. ETF
October 31, 2017
Security | Shares | Value | ||||||
First Financial Bankshares Inc. | 2,774 | $ | 126,633 | |||||
First Horizon National Corp. | 9,870 | 185,260 | ||||||
First Republic Bank/CA | 6,624 | 645,178 | ||||||
Fulton Financial Corp. | 7,609 | 138,484 | ||||||
Glacier Bancorp. Inc. | 3,223 | 122,345 | ||||||
Hancock Holding Co. | 3,562 | 173,648 | ||||||
Home BancShares Inc./AR | 6,847 | 153,921 | ||||||
Huntington Bancshares Inc./OH | 47,443 | 654,713 | ||||||
IBERIABANK Corp. | 2,335 | 172,206 | ||||||
International Bancshares Corp. | 2,269 | 92,121 | ||||||
Investors Bancorp. Inc. | 11,119 | 152,886 | ||||||
JPMorgan Chase & Co. | 152,447 | 15,337,693 | ||||||
KeyCorp | 47,110 | 859,757 | ||||||
M&T Bank Corp. | 6,597 | 1,100,182 | ||||||
MB Financial Inc. | 3,644 | 167,405 | ||||||
PacWest Bancorp. | 5,220 | 252,230 | ||||||
People’s United Financial Inc. | 14,830 | 276,728 | ||||||
Pinnacle Financial Partners Inc. | 3,203 | 212,039 | ||||||
PNC Financial Services Group Inc. (The)c | 20,733 | 2,836,067 | ||||||
Popular Inc. | 4,371 | 160,328 | ||||||
Prosperity Bancshares Inc. | 2,992 | 196,814 | ||||||
Regions Financial Corp. | 51,429 | 796,121 | ||||||
Signature Bank/New York NYa | 2,397 | 311,634 | ||||||
Sterling Bancorp./DE | 9,730 | 243,737 | ||||||
SunTrust Banks Inc. | 20,848 | 1,255,258 | ||||||
SVB Financial Groupa | 2,271 | 497,985 | ||||||
Synovus Financial Corp. | 5,284 | 247,555 | ||||||
TCF Financial Corp. | 7,288 | 132,787 | ||||||
Texas Capital Bancshares Inc.a | 2,103 | 180,963 | ||||||
Trustmark Corp. | 3,083 | 101,554 | ||||||
U.S. Bancorp. | 68,746 | 3,738,407 | ||||||
UMB Financial Corp. | 1,906 | 140,148 | ||||||
Umpqua Holdings Corp. | 9,286 | 189,992 | ||||||
United Bankshares Inc./WV | 4,526 | 162,710 | ||||||
Valley National Bancorp. | 11,640 | 133,860 | ||||||
Webster Financial Corp. | 4,091 | 224,964 | ||||||
Wells Fargo & Co. | 193,542 | 10,865,448 | ||||||
Western Alliance Bancorp.a | 4,098 | 228,668 | ||||||
Wintrust Financial Corp. | 2,411 | 195,990 | ||||||
Zions BanCorp. | 8,806 | 409,127 | ||||||
|
| |||||||
71,170,855 | ||||||||
BEVERAGES — 1.73% |
| |||||||
Brown-Forman Corp. Class A | 2,560 | 146,765 | ||||||
Brown-Forman Corp. Class B | 8,505 | 484,955 |
Security | Shares | Value | ||||||
Coca-Cola Co. (The) | 166,306 | $ | 7,646,750 | |||||
Constellation Brands Inc. Class A | 7,419 | 1,625,429 | ||||||
Dr Pepper Snapple Group Inc. | 7,895 | 676,286 | ||||||
Molson Coors Brewing Co. Class B | 8,000 | 646,960 | ||||||
Monster Beverage Corp.a | 18,020 | 1,043,898 | ||||||
PepsiCo Inc. | 61,899 | 6,823,127 | ||||||
|
| |||||||
19,094,170 | ||||||||
BIOTECHNOLOGY — 2.92% |
| |||||||
AbbVie Inc. | 69,084 | 6,234,831 | ||||||
ACADIA Pharmaceuticals Inc.a | 4,189 | 145,903 | ||||||
Agios Pharmaceuticals Inc.a,b | 1,783 | 114,593 | ||||||
Alexion Pharmaceuticals Inc.a | 9,699 | 1,160,582 | ||||||
Alkermes PLCa | 6,596 | 321,621 | ||||||
Alnylam Pharmaceuticals Inc.a | 3,301 | 402,194 | ||||||
Amgen Inc. | 31,622 | 5,540,807 | ||||||
Biogen Inc.a | 9,149 | 2,851,377 | ||||||
BioMarin Pharmaceutical Inc.a | 7,599 | 623,802 | ||||||
Bioverativ Inc.a | 4,665 | 263,572 | ||||||
Bluebird Bio Inc.a | 1,947 | 270,828 | ||||||
Celgene Corp.a | 33,923 | 3,425,205 | ||||||
Clovis Oncology Inc.a | 2,118 | 159,634 | ||||||
Dyax Corp.a,d | 7,366 | 16,868 | ||||||
Exact Sciences Corp.a | 5,175 | 284,573 | ||||||
Exelixis Inc.a | 12,128 | 300,653 | ||||||
Gilead Sciences Inc. | 56,630 | 4,244,985 | ||||||
Incyte Corp.a | 7,401 | 838,163 | ||||||
Intercept Pharmaceuticals Inc.a | 814 | 50,167 | ||||||
Intrexon Corp.a,b | 2,650 | 43,328 | ||||||
Ionis Pharmaceuticals Inc.a,b | 5,348 | 305,424 | ||||||
Juno Therapeutics Inc.a | 3,758 | 168,772 | ||||||
Ligand Pharmaceuticals Inc.a,b | 876 | 127,327 | ||||||
Myriad Genetics Inc.a | 3,056 | 104,760 | ||||||
Neurocrine Biosciences Inc.a,b | 3,862 | 239,869 | ||||||
OPKO Health Inc.a,b | 15,885 | 106,906 | ||||||
Portola Pharmaceuticals Inc.a | 2,745 | 135,630 | ||||||
Radius Health Inc.a,b | 1,640 | 52,660 | ||||||
Regeneron Pharmaceuticals Inc.a | 3,322 | 1,337,504 | ||||||
Seattle Genetics Inc.a,b | 4,235 | 259,648 | ||||||
TESARO Inc.a | 1,645 | 190,442 | ||||||
Ultragenyx Pharmaceutical Inc.a | 1,625 | 74,896 | ||||||
United Therapeutics Corp.a | 1,846 | 218,917 | ||||||
Vertex Pharmaceuticals Inc.a | 10,914 | 1,595,954 | ||||||
|
| |||||||
32,212,395 |
SCHEDULESOF INVESTMENTS | 13 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® DOW JONES U.S. ETF
October 31, 2017
Security | Shares | Value | ||||||
BUILDING PRODUCTS — 0.39% |
| |||||||
Allegion PLC | 4,060 | $ | 338,563 | |||||
AO Smith Corp. | 6,371 | 377,163 | ||||||
Armstrong World Industries Inc.a | 2,190 | 111,909 | ||||||
Fortune Brands Home & Security Inc. | 6,696 | 442,338 | ||||||
Johnson Controls International PLC | 40,503 | 1,676,419 | ||||||
Lennox International Inc. | 1,641 | 313,644 | ||||||
Masco Corp. | 13,814 | 550,074 | ||||||
Owens Corning | 4,814 | 398,070 | ||||||
USG Corp.a,b | 4,001 | 137,354 | ||||||
|
| |||||||
4,345,534 | ||||||||
CAPITAL MARKETS — 2.92% |
| |||||||
Affiliated Managers Group Inc. | 2,399 | 447,413 | ||||||
Ameriprise Financial Inc. | 6,514 | 1,019,702 | ||||||
Bank of New York Mellon Corp. (The) | 44,678 | 2,298,683 | ||||||
BGC Partners Inc. Class A | 10,271 | 155,811 | ||||||
BlackRock Inc.c | 5,361 | 2,524,120 | ||||||
Cboe Global Markets Inc. | 4,897 | 553,655 | ||||||
Charles Schwab Corp. (The) | 51,523 | 2,310,291 | ||||||
CME Group Inc. | 14,685 | 2,014,341 | ||||||
E*TRADE Financial Corp.a | 11,905 | 518,939 | ||||||
Eaton Vance Corp. NVS | 4,978 | 251,240 | ||||||
Evercore Inc. Class A | 1,705 | 136,571 | ||||||
FactSet Research Systems Inc. | 1,678 | 318,602 | ||||||
Federated Investors Inc. Class B NVS | 3,986 | 123,845 | ||||||
Financial Engines Inc. | 2,650 | 95,665 | ||||||
Franklin Resources Inc. | 14,291 | 602,080 | ||||||
Goldman Sachs Group Inc. (The) | 15,565 | 3,774,201 | ||||||
Intercontinental Exchange Inc. | 25,561 | 1,689,582 | ||||||
Invesco Ltd. | 17,605 | 630,083 | ||||||
Janus Henderson Group PLC | 7,806 | 271,258 | ||||||
Lazard Ltd. Class A | 5,629 | 267,603 | ||||||
Legg Mason Inc. | 3,875 | 147,947 | ||||||
LPL Financial Holdings Inc. | 3,908 | 193,876 | ||||||
MarketAxess Holdings Inc. | 1,633 | 284,142 | ||||||
Moody’s Corp. | 7,192 | 1,024,213 | ||||||
Morgan Stanley | 61,175 | 3,058,750 | ||||||
MSCI Inc. | 3,900 | 457,704 | ||||||
Nasdaq Inc. | 5,119 | 371,895 | ||||||
Northern Trust Corp. | 9,300 | 869,736 | ||||||
Raymond James Financial Inc. | 5,563 | 471,631 |
Security | Shares | Value | ||||||
S&P Global Inc. | 11,095 | $ | 1,736,035 | |||||
SEI Investments Co. | 5,703 | 367,901 | ||||||
State Street Corp. | 16,245 | 1,494,540 | ||||||
Stifel Financial Corp. | 2,905 | 154,052 | ||||||
T Rowe Price Group Inc. | 10,358 | 962,258 | ||||||
TD Ameritrade Holding Corp. | 11,015 | 550,640 | ||||||
Waddell & Reed Financial Inc. Class A | 3,683 | 68,835 | ||||||
|
| |||||||
32,217,840 | ||||||||
CHEMICALS — 2.37% |
| |||||||
Air Products & Chemicals Inc. | 9,445 | 1,505,816 | ||||||
Albemarle Corp. | 4,785 | 674,159 | ||||||
Ashland Global Holdings Inc. | 2,718 | 184,770 | ||||||
Axalta Coating Systems Ltd.a | 9,487 | 315,443 | ||||||
Cabot Corp. | 2,753 | 167,823 | ||||||
Celanese Corp. Series A | 5,974 | 623,148 | ||||||
CF Industries Holdings Inc. | 10,118 | 384,282 | ||||||
Chemours Co. (The) | 7,927 | 448,747 | ||||||
DowDuPont Inc. | 101,091 | 7,309,890 | ||||||
Eastman Chemical Co. | 6,229 | 565,655 | ||||||
Ecolab Inc. | 11,289 | 1,475,021 | ||||||
FMC Corp. | 5,795 | 538,124 | ||||||
GCP Applied Technologies Inc.a | 3,212 | 93,951 | ||||||
HB Fuller Co. | 2,218 | 126,138 | ||||||
Huntsman Corp. | 9,173 | 293,719 | ||||||
Ingevity Corp.a | 1,803 | 128,428 | ||||||
International Flavors & Fragrances Inc. | 3,424 | 504,766 | ||||||
LyondellBasell Industries NV Class A | 14,098 | 1,459,566 | ||||||
Minerals Technologies Inc. | 1,564 | 112,452 | ||||||
Monsanto Co. | 18,996 | 2,300,416 | ||||||
Mosaic Co. (The) | 15,177 | 339,054 | ||||||
NewMarket Corp. | 396 | 158,554 | ||||||
Olin Corp. | 7,233 | 264,221 | ||||||
Platform Specialty Products Corp.a,b | 9,475 | 101,383 | ||||||
PolyOne Corp. | 3,459 | 159,356 | ||||||
PPG Industries Inc. | 11,130 | 1,293,751 | ||||||
Praxair Inc. | 12,378 | 1,808,673 | ||||||
RPM International Inc. | 5,736 | 305,901 | ||||||
Scotts Miracle-Gro Co. (The) Class A | 1,779 | 177,224 | ||||||
Sensient Technologies Corp. | 1,953 | 148,526 | ||||||
Sherwin-Williams Co. (The) | 3,548 | 1,401,992 |
14 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® DOW JONES U.S. ETF
October 31, 2017
Security | Shares | Value | ||||||
Trinseo SA | 1,902 | $ | 135,042 | |||||
Valvoline Inc. | 8,805 | 211,496 | ||||||
Westlake Chemical Corp. | 1,509 | 128,129 | ||||||
WR Grace & Co. | 2,943 | 225,110 | ||||||
|
| |||||||
26,070,726 | ||||||||
COMMERCIAL SERVICES & SUPPLIES — 0.44% |
| |||||||
Brink’s Co. (The) | 2,192 | 166,811 | ||||||
Cintas Corp. | 3,702 | 551,746 | ||||||
Clean Harbors Inc.a | 2,311 | 123,662 | ||||||
Copart Inc.a | 8,704 | 315,868 | ||||||
Covanta Holding Corp. | 5,397 | 86,892 | ||||||
Deluxe Corp. | 2,074 | 144,454 | ||||||
Healthcare Services Group Inc. | 3,256 | 172,210 | ||||||
Herman Miller Inc. | 2,486 | 83,529 | ||||||
HNI Corp. | 1,903 | 65,121 | ||||||
KAR Auction Services Inc. | 5,899 | 279,200 | ||||||
MSA Safety Inc. | 1,405 | 111,697 | ||||||
Pitney Bowes Inc. | 8,333 | 114,495 | ||||||
Republic Services Inc. | 9,968 | 648,618 | ||||||
Rollins Inc. | 4,217 | 185,168 | ||||||
Stericycle Inc.a,b | 3,682 | 260,870 | ||||||
Tetra Tech Inc. | 2,424 | 119,382 | ||||||
Waste Management Inc. | 17,553 | 1,442,330 | ||||||
|
| |||||||
4,872,053 | ||||||||
COMMUNICATIONS EQUIPMENT — 1.11% |
| |||||||
Arista Networks Inc.a,b | 2,015 | 402,778 | ||||||
ARRIS International PLCa | 7,663 | 218,396 | ||||||
Brocade Communications Systems Inc. | 17,959 | 209,222 | ||||||
Ciena Corp.a | 6,239 | 132,704 | ||||||
Cisco Systems Inc. | 216,625 | 7,397,744 | ||||||
CommScope Holding Co. Inc.a | 8,267 | 265,701 | ||||||
EchoStar Corp. Class Aa | 2,046 | 114,474 | ||||||
F5 Networks Inc.a | 2,790 | 338,343 | ||||||
Finisar Corp.a,b | 4,873 | 114,711 | ||||||
Harris Corp. | 5,206 | 725,300 | ||||||
InterDigital Inc./PA | 1,526 | 111,932 | ||||||
Juniper Networks Inc. | 16,612 | 412,476 | ||||||
Lumentum Holdings Inc.a,b | 2,668 | 168,484 | ||||||
Motorola Solutions Inc. | 7,097 | 642,562 | ||||||
NetScout Systems Inc.a | 4,041 | 114,764 | ||||||
Palo Alto Networks Inc.a | 3,950 | 581,440 | ||||||
Plantronics Inc. | 1,512 | 68,584 | ||||||
ViaSat Inc.a,b | 2,354 | 153,246 |
Security | Shares | Value | ||||||
Viavi Solutions Inc.a | 9,753 | $ | 90,508 | |||||
|
| |||||||
12,263,369 | ||||||||
CONSTRUCTION & ENGINEERING — 0.17% |
| |||||||
AECOMa | 6,651 | 233,184 | ||||||
Chicago Bridge & Iron Co. NVb | 4,400 | 61,336 | ||||||
Dycom Industries Inc.a,b | 1,308 | 114,882 | ||||||
EMCOR Group Inc. | 2,580 | 207,716 | ||||||
Fluor Corp. | 6,045 | 260,479 | ||||||
Jacobs Engineering Group Inc. | 5,286 | 307,698 | ||||||
KBR Inc. | 6,101 | 119,763 | ||||||
MasTec Inc.a | 2,912 | 126,817 | ||||||
Quanta Services Inc.a | 6,566 | 247,735 | ||||||
Valmont Industries Inc. | 1,012 | 160,807 | ||||||
|
| |||||||
1,840,417 | ||||||||
CONSTRUCTION MATERIALS — 0.15% |
| |||||||
Eagle Materials Inc. | 2,144 | 226,342 | ||||||
Martin Marietta Materials Inc. | 2,717 | 589,181 | ||||||
Summit Materials Inc. Class Aa | 4,672 | 146,701 | ||||||
Vulcan Materials Co. | 5,720 | 696,410 | ||||||
|
| |||||||
1,658,634 | ||||||||
CONSUMER FINANCE — 0.75% |
| |||||||
Ally Financial Inc. | 19,444 | 508,072 | ||||||
American Express Co. | 31,737 | 3,031,518 | ||||||
Capital One Financial Corp. | 20,882 | 1,924,903 | ||||||
Credit Acceptance Corp.a,b | 555 | 159,135 | ||||||
Discover Financial Services | 16,172 | 1,075,923 | ||||||
LendingClub Corp.a | 16,596 | 94,431 | ||||||
Navient Corp. | 11,609 | 144,648 | ||||||
PRA Group Inc.a | 2,064 | 57,586 | ||||||
SLM Corp.a | 18,765 | 198,722 | ||||||
Synchrony Financial | 32,476 | 1,059,367 | ||||||
|
| |||||||
8,254,305 | ||||||||
CONTAINERS & PACKAGING — 0.49% |
| |||||||
AptarGroup Inc. | 2,759 | 240,226 | ||||||
Avery Dennison Corp. | 3,795 | 402,915 | ||||||
Ball Corp. | 15,279 | 655,928 | ||||||
Bemis Co. Inc. | 3,987 | 179,495 | ||||||
Berry Global Group Inc.a | 5,681 | 337,736 | ||||||
Crown Holdings Inc.a | 5,820 | 350,189 | ||||||
Graphic Packaging Holding Co. | 13,770 | 213,297 | ||||||
International Paper Co. | 17,859 | 1,022,785 | ||||||
Owens-Illinois Inc.a | 7,249 | 173,179 | ||||||
Packaging Corp. of America | 4,066 | 472,754 | ||||||
Sealed Air Corp. | 8,236 | 364,278 |
SCHEDULESOF INVESTMENTS | 15 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® DOW JONES U.S. ETF
October 31, 2017
Security | Shares | Value | ||||||
Silgan Holdings Inc. | 3,220 | $ | 94,185 | |||||
Sonoco Products Co. | 4,342 | 224,872 | ||||||
WestRock Co. | 11,022 | 675,979 | ||||||
|
| |||||||
5,407,818 | ||||||||
DISTRIBUTORS — 0.12% |
| |||||||
Genuine Parts Co. | 6,397 | 564,407 | ||||||
LKQ Corp.a | 13,494 | 508,589 | ||||||
Pool Corp. | 1,774 | 214,264 | ||||||
|
| |||||||
1,287,260 | ||||||||
DIVERSIFIED CONSUMER SERVICES —0.13% |
| |||||||
Adtalem Global Education Inc. | 2,695 | 99,580 | ||||||
Bright Horizons Family Solutions Inc.a | 2,159 | 186,322 | ||||||
Graham Holdings Co. Class B | 207 | 115,185 | ||||||
Grand Canyon Education Inc.a | 2,061 | 184,480 | ||||||
H&R Block Inc. | 8,972 | 221,967 | ||||||
Service Corp. International/U.S. | 8,142 | 288,716 | ||||||
ServiceMaster Global Holdings Inc.a | 5,716 | 269,281 | ||||||
Sotheby’sa | 1,622 | 84,052 | ||||||
|
| |||||||
1,449,583 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 1.47% |
| |||||||
Berkshire Hathaway Inc. Class Ba,b | 83,358 | 15,582,944 | ||||||
Leucadia National Corp. | 13,563 | 343,144 | ||||||
Voya Financial Inc. | 7,804 | 313,409 | ||||||
|
| |||||||
16,239,497 | ||||||||
DIVERSIFIED TELECOMMUNICATION SERVICES — 1.71% |
| |||||||
AT&T Inc. | 265,995 | 8,950,732 | ||||||
CenturyLink Inc. | 23,805 | 452,057 | ||||||
Level 3 Communications Inc.a | 12,867 | 690,057 | ||||||
Verizon Communications Inc. | 176,726 | 8,459,874 | ||||||
Zayo Group Holdings Inc.a | 8,005 | 288,660 | ||||||
|
| |||||||
18,841,380 | ||||||||
ELECTRIC UTILITIES — 1.90% |
| |||||||
ALLETE Inc. | 2,165 | 169,628 | ||||||
Alliant Energy Corp. | 10,114 | 437,532 | ||||||
American Electric Power Co. Inc. | 21,280 | 1,583,445 | ||||||
Duke Energy Corp. | 30,277 | 2,673,762 | ||||||
Edison International | 14,077 | 1,125,456 | ||||||
El Paso Electric Co. | 1,840 | 105,800 | ||||||
Entergy Corp. | 7,797 | 672,569 | ||||||
Eversource Energy | 13,763 | 862,114 | ||||||
Exelon Corp. | 41,706 | 1,676,998 |
Security | Shares | Value | ||||||
FirstEnergy Corp. | 19,145 | $ | 630,828 | |||||
Great Plains Energy Inc. | 9,274 | 304,465 | ||||||
Hawaiian Electric Industries Inc. | 4,674 | 170,414 | ||||||
IDACORP Inc. | 2,213 | 203,662 | ||||||
NextEra Energy Inc. | 20,256 | 3,141,098 | ||||||
OGE Energy Corp. | 8,565 | 315,535 | ||||||
PG&E Corp. | 22,221 | 1,283,707 | ||||||
Pinnacle West Capital Corp. | 4,834 | 423,990 | ||||||
PNM Resources Inc. | 3,534 | 153,376 | ||||||
Portland General Electric Co. | 3,912 | 186,759 | ||||||
PPL Corp. | 29,462 | 1,106,593 | ||||||
Southern Co. (The) | 43,236 | 2,256,919 | ||||||
Westar Energy Inc. | 6,129 | 327,779 | ||||||
Xcel Energy Inc. | 22,025 | 1,090,678 | ||||||
|
| |||||||
20,903,107 | ||||||||
ELECTRICAL EQUIPMENT — 0.59% |
| |||||||
Acuity Brands Inc. | 1,826 | 305,307 | ||||||
AMETEK Inc. | 10,005 | 675,237 | ||||||
Eaton Corp. PLC | 19,326 | 1,546,467 | ||||||
Emerson Electric Co. | 27,631 | 1,781,094 | ||||||
EnerSys | 1,823 | 126,461 | ||||||
Generac Holdings Inc.a,b | 2,746 | 143,039 | ||||||
Hubbell Inc. | 2,376 | 298,948 | ||||||
Regal Beloit Corp. | 1,984 | 161,002 | ||||||
Rockwell Automation Inc. | 5,557 | 1,115,957 | ||||||
Sensata Technologies Holding NVa,b | 7,460 | 364,869 | ||||||
|
| |||||||
6,518,381 | ||||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS — 0.83% |
| |||||||
Amphenol Corp. Class A | 13,246 | 1,152,402 | ||||||
Anixter International Inc.a | 1,259 | 86,493 | ||||||
Arrow Electronics Inc.a | 3,878 | 324,162 | ||||||
Avnet Inc. | 5,239 | 208,512 | ||||||
Belden Inc. | 1,838 | 146,875 | ||||||
CDW Corp./DE | 6,730 | 471,100 | ||||||
Cognex Corp. | 3,736 | 460,088 | ||||||
Coherent Inc.a | 1,072 | 281,625 | ||||||
Corning Inc. | 39,238 | 1,228,542 | ||||||
Dolby Laboratories Inc. Class A | 2,479 | 143,633 | ||||||
FLIR Systems Inc. | 5,841 | 273,476 | ||||||
IPG Photonics Corp.a | 1,631 | 347,256 | ||||||
Itron Inc.a | 1,424 | 111,286 | ||||||
Jabil Inc. | 7,839 | 221,687 | ||||||
Keysight Technologies Inc.a | 8,149 | 364,016 |
16 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® DOW JONES U.S. ETF
October 31, 2017
Security | Shares | Value | ||||||
Littelfuse Inc. | 980 | $ | 204,820 | |||||
National Instruments Corp. | 4,687 | 210,915 | ||||||
SYNNEX Corp. | 1,292 | 174,265 | ||||||
TE Connectivity Ltd. | 15,350 | 1,396,389 | ||||||
Tech Data Corp.a | 1,550 | 143,793 | ||||||
Trimble Inc.a | 10,854 | 443,712 | ||||||
Universal Display Corp.b | 1,816 | 266,044 | ||||||
VeriFone Systems Inc.a | 4,785 | 91,298 | ||||||
Vishay Intertechnology Inc. | 6,020 | 133,945 | ||||||
Zebra Technologies Corp. Class Aa | 2,334 | 270,721 | ||||||
|
| |||||||
9,157,055 | ||||||||
ENERGY EQUIPMENT & SERVICES — 0.78% |
| |||||||
Baker Hughes a GE Co. | 18,480 | 580,826 | ||||||
Core Laboratories NVb | 1,856 | 185,414 | ||||||
Dril-Quip Inc.a | 1,690 | 71,149 | ||||||
Ensco PLC Class Ab | 18,747 | 101,046 | ||||||
Halliburton Co. | 37,459 | 1,600,998 | ||||||
Helmerich & Payne Inc. | 4,647 | 252,379 | ||||||
Nabors Industries Ltd. | 12,386 | 69,733 | ||||||
National Oilwell Varco Inc. | 16,390 | 560,374 | ||||||
Oceaneering International Inc. | 4,216 | 85,248 | ||||||
Patterson-UTI Energy Inc. | 9,269 | 183,341 | ||||||
Rowan Companies PLC Class Aa | 4,666 | 66,864 | ||||||
Schlumberger Ltd. | 60,106 | 3,846,784 | ||||||
Superior Energy Services Inc.a | 6,714 | 59,217 | ||||||
TechnipFMC PLCa | 19,075 | 522,464 | ||||||
Transocean Ltd.a | 16,468 | 172,914 | ||||||
U.S. Silica Holdings Inc. | 3,525 | 107,548 | ||||||
Weatherford International PLCa | 42,028 | 145,837 | ||||||
|
| |||||||
8,612,136 | ||||||||
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) — 3.76% |
| |||||||
Acadia Realty Trust | 3,934 | 110,742 | ||||||
Alexander & Baldwin Inc. | 1,931 | 87,358 | ||||||
Alexandria Real Estate Equities Inc. | 4,066 | 504,021 | ||||||
American Campus Communities Inc. | 5,901 | 245,364 | ||||||
American Homes 4 Rent Class A | 10,061 | 214,098 | ||||||
American Tower Corp. | 18,563 | 2,666,946 | ||||||
Apartment Investment & Management Co. Class A | 6,680 | 293,786 | ||||||
Apple Hospitality REIT Inc.b | 9,110 | 172,543 | ||||||
AvalonBay Communities Inc. | 5,956 | 1,080,002 |
Security | Shares | Value | ||||||
Boston Properties Inc. | 6,665 | $ | 807,665 | |||||
Brandywine Realty Trust | 7,366 | 128,831 | ||||||
Brixmor Property Group Inc. | 13,248 | 231,443 | ||||||
Camden Property Trust | 4,004 | 365,325 | ||||||
CBL & Associates Properties Inc.b | 7,746 | 60,729 | ||||||
Colony NorthStar Inc. Class Ab | 24,021 | 294,978 | ||||||
Columbia Property Trust Inc. | 5,117 | 112,983 | ||||||
CoreCivic Inc. | 5,197 | 128,158 | ||||||
CoreSite Realty Corp. | 1,516 | 167,897 | ||||||
Corporate Office Properties Trust | 4,334 | 138,385 | ||||||
Cousins Properties Inc. | 18,038 | 162,703 | ||||||
Crown Castle International Corp. | 17,572 | 1,881,610 | ||||||
CubeSmart | 7,651 | 208,260 | ||||||
CyrusOne Inc. | 3,967 | 243,534 | ||||||
DCT Industrial Trust Inc. | 4,070 | 236,141 | ||||||
DDR Corp. | 13,442 | 103,100 | ||||||
DiamondRock Hospitality Co. | 8,613 | 93,537 | ||||||
Digital Realty Trust Inc.b | 8,862 | 1,049,615 | ||||||
Douglas Emmett Inc. | 6,756 | 268,821 | ||||||
Duke Realty Corp. | 15,332 | 436,655 | ||||||
EastGroup Properties Inc. | 1,530 | 138,603 | ||||||
Education Realty Trust Inc.b | 3,052 | 106,515 | ||||||
EPR Properties | 2,781 | 192,390 | ||||||
Equinix Inc. | 3,377 | 1,565,240 | ||||||
Equity Commonwealtha | 5,516 | 165,756 | ||||||
Equity LifeStyle Properties Inc. | 3,780 | 334,454 | ||||||
Equity Residential | 15,910 | 1,070,107 | ||||||
Essex Property Trust Inc. | 2,863 | 751,337 | ||||||
Extra Space Storage Inc.b | 5,407 | 441,157 | ||||||
Federal Realty Investment Trust | 3,089 | 372,286 | ||||||
First Industrial Realty Trust Inc. | 5,239 | 161,780 | ||||||
Forest City Realty Trust Inc. Class A | 11,586 | 285,363 | ||||||
Four Corners Property Trust Inc. | 2,621 | 64,686 | ||||||
Gaming and Leisure Properties Inc. | 8,766 | 320,310 | ||||||
GEO Group Inc. (The) | 5,307 | 137,717 | ||||||
GGP Inc. | 27,204 | 529,390 | ||||||
Gramercy Property Trust | 6,513 | 193,436 | ||||||
HCP Inc. | 20,431 | 527,937 | ||||||
Healthcare Realty Trust Inc. | 5,448 | 175,644 | ||||||
Healthcare Trust of America Inc. Class A | 8,716 | 261,916 | ||||||
Highwoods Properties Inc. | 4,531 | 231,308 |
SCHEDULESOF INVESTMENTS | 17 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® DOW JONES U.S. ETF
October 31, 2017
Security | Shares | Value | ||||||
Hospitality Properties Trust | 7,338 | $ | 209,720 | |||||
Host Hotels & Resorts Inc. | 31,981 | 625,548 | ||||||
Hudson Pacific Properties Inc. | 6,673 | 225,681 | ||||||
Iron Mountain Inc. | 11,486 | 459,440 | ||||||
JBG SMITH Propertiesa | 4,054 | 126,525 | ||||||
Kilroy Realty Corp. | 4,332 | 308,568 | ||||||
Kimco Realty Corp. | 18,481 | 335,615 | ||||||
Kite Realty Group Trust | 3,849 | 71,938 | ||||||
Lamar Advertising Co. Class A | 3,582 | 252,316 | ||||||
LaSalle Hotel Properties | 4,932 | 139,132 | ||||||
Lexington Realty Trust | 9,378 | 94,905 | ||||||
Liberty Property Trust | 6,412 | 274,947 | ||||||
Life Storage Inc.b | 2,037 | 164,630 | ||||||
Macerich Co. (The) | 4,728 | 258,149 | ||||||
Mack-Cali Realty Corp. | 3,991 | 90,875 | ||||||
Medical Properties Trust Inc. | 15,474 | 204,721 | ||||||
Mid-America Apartment Communities Inc. | 4,929 | 504,483 | ||||||
National Health Investors Inc. | 1,777 | 135,390 | ||||||
National Retail Properties Inc. | 6,553 | 263,300 | ||||||
Omega Healthcare Investors Inc.b | 8,515 | 245,743 | ||||||
Outfront Media Inc. | 6,057 | 142,037 | ||||||
Paramount Group Inc.b | 8,824 | 140,478 | ||||||
Park Hotels & Resorts Inc. | 6,260 | 180,225 | ||||||
Pebblebrook Hotel Trustb | 3,053 | 108,870 | ||||||
Physicians Realty Trust | 7,729 | 134,330 | ||||||
Piedmont Office Realty Trust Inc. Class A | 6,214 | 120,179 | ||||||
Potlatch Corp. | 1,844 | 95,519 | ||||||
Prologis Inc. | 23,004 | 1,485,598 | ||||||
Public Storage | 6,497 | 1,346,503 | ||||||
Quality Care Properties Inc.a | 4,018 | 63,605 | ||||||
Rayonier Inc. | 5,477 | 164,200 | ||||||
Realty Income Corp. | 11,914 | 639,424 | ||||||
Regency Centers Corp. | 6,384 | 392,935 | ||||||
Retail Properties of America Inc. Class A | 10,032 | 122,591 | ||||||
RLJ Lodging Trust | 7,634 | 165,352 | ||||||
Ryman Hospitality Properties Inc. | 2,245 | 148,462 | ||||||
Sabra Health Care REIT Inc. | 7,618 | 151,751 | ||||||
SBA Communications Corp.a | 5,217 | 820,008 | ||||||
Senior Housing Properties Trustb | 10,573 | 194,543 | ||||||
Simon Property Group Inc. | 13,433 | 2,086,548 | ||||||
SL Green Realty Corp. | 4,300 | 411,424 |
Security | Shares | Value | ||||||
Spirit Realty Capital Inc. | 19,619 | $ | 163,034 | |||||
Starwood Waypoint Homesb | 5,570 | 202,247 | ||||||
STORE Capital Corp. | 7,345 | 181,348 | ||||||
Sun Communities Inc. | 3,432 | 309,772 | ||||||
Sunstone Hotel Investors Inc. | 9,826 | 160,360 | ||||||
Tanger Factory Outlet Centers Inc. | 4,228 | 96,187 | ||||||
Taubman Centers Inc. | 2,579 | 121,780 | ||||||
UDR Inc. | 11,649 | 451,865 | ||||||
Uniti Group Inc.a | 7,440 | 130,200 | ||||||
Urban Edge Propertiesb | 4,700 | 110,262 | ||||||
Ventas Inc. | 15,457 | 969,927 | ||||||
VEREIT Inc. | 42,241 | 333,282 | ||||||
Vornado Realty Trust | 7,438 | 556,809 | ||||||
Washington Prime Group Inc. | 7,570 | 59,273 | ||||||
Washington REITb | 3,178 | 102,300 | ||||||
Weingarten Realty Investors | 5,277 | 160,685 | ||||||
Welltower Inc. | 15,941 | 1,067,409 | ||||||
Weyerhaeuser Co. | 32,712 | 1,174,688 | ||||||
WP Carey Inc. | 4,637 | 316,012 | ||||||
Xenia Hotels & Resorts Inc. | 4,625 | 100,640 | ||||||
|
| |||||||
41,396,850 | ||||||||
FOOD & STAPLES RETAILING — 1.53% |
| |||||||
Casey’s General Stores Inc. | 1,671 | 191,447 | ||||||
Costco Wholesale Corp. | 18,973 | 3,056,171 | ||||||
CVS Health Corp. | 43,978 | 3,013,812 | ||||||
Kroger Co. (The) | 38,981 | 806,907 | ||||||
Rite Aid Corp.a,b | 45,369 | 74,859 | ||||||
Sprouts Farmers Market Inc.a | 5,415 | 100,123 | ||||||
Sysco Corp. | 21,099 | 1,173,526 | ||||||
U.S. Foods Holding Corp.a | 6,225 | 169,818 | ||||||
United Natural Foods Inc.a | 2,225 | 86,263 | ||||||
Wal-Mart Stores Inc. | 63,461 | 5,540,780 | ||||||
Walgreens Boots Alliance Inc. | 39,810 | 2,638,209 | ||||||
|
| |||||||
16,851,915 | ||||||||
FOOD PRODUCTS — 1.30% |
| |||||||
Archer-Daniels-Midland Co. | 24,437 | 998,740 | ||||||
B&G Foods Inc. | 2,933 | 93,269 | ||||||
Bunge Ltd. | 6,153 | 423,203 | ||||||
Campbell Soup Co. | 8,445 | 400,040 | ||||||
Conagra Brands Inc. | 18,053 | 616,690 | ||||||
Darling Ingredients Inc.a | 6,870 | 125,378 | ||||||
Dean Foods Co. | 3,795 | 37,001 | ||||||
Flowers Foods Inc. | 7,886 | 150,071 | ||||||
General Mills Inc. | 24,907 | 1,293,171 |
18 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® DOW JONES U.S. ETF
October 31, 2017
Security | Shares | Value | ||||||
Hain Celestial Group Inc. (The)a | 4,614 | $ | 166,196 | |||||
Hershey Co. (The) | 6,070 | 644,513 | ||||||
Hormel Foods Corp. | 11,629 | 362,360 | ||||||
Ingredion Inc. | 3,116 | 390,591 | ||||||
JM Smucker Co. (The) | 4,933 | 523,145 | ||||||
Kellogg Co. | 10,796 | 675,074 | ||||||
Kraft Heinz Co. (The) | 25,792 | 1,994,495 | ||||||
Lamb Weston Holdings Inc. | 6,398 | 326,234 | ||||||
Lancaster Colony Corp. | 807 | 101,053 | ||||||
McCormick & Co. Inc./MD NVS | 5,167 | 514,272 | ||||||
Mondelez International Inc. Class A | 65,224 | 2,702,230 | ||||||
Pinnacle Foods Inc. | 5,165 | 281,079 | ||||||
Post Holdings Inc.a | 2,895 | 240,082 | ||||||
Snyder’s-Lance Inc.b | 3,829 | 144,085 | ||||||
TreeHouse Foods Inc.a | 2,427 | 161,104 | ||||||
Tyson Foods Inc. Class A | 12,527 | 913,344 | ||||||
|
| |||||||
14,277,420 | ||||||||
GAS UTILITIES — 0.18% |
| |||||||
Atmos Energy Corp. | 4,596 | 400,955 | ||||||
National Fuel Gas Co. | 3,715 | 215,656 | ||||||
New Jersey Resources Corp. | 3,814 | 169,532 | ||||||
ONE Gas Inc. | 2,323 | 178,824 | ||||||
South Jersey Industries Inc. | 3,505 | 119,065 | ||||||
Southwest Gas Holdings Inc. | 2,099 | 172,937 | ||||||
Spire Inc. | 2,092 | 165,163 | ||||||
UGI Corp. | 7,460 | 357,036 | ||||||
WGL Holdings Inc. | 2,233 | 191,368 | ||||||
|
| |||||||
1,970,536 | ||||||||
HEALTH CARE EQUIPMENT & SUPPLIES — 2.70% |
| |||||||
Abbott Laboratories | 75,159 | 4,075,873 | ||||||
ABIOMED Inc.a | 1,797 | 346,677 | ||||||
Align Technology Inc.a | 3,136 | 749,441 | ||||||
Baxter International Inc. | 21,783 | 1,404,350 | ||||||
Becton Dickinson and Co. | 9,832 | 2,051,643 | ||||||
Boston Scientific Corp.a | 59,238 | 1,666,957 | ||||||
C.R. Bard Inc. | 3,157 | 1,032,560 | ||||||
Cooper Companies Inc. (The) | 2,096 | 503,585 | ||||||
Danaher Corp. | 26,429 | 2,438,604 | ||||||
DENTSPLY SIRONA Inc. | 9,973 | 609,051 | ||||||
DexCom Inc.a | 3,710 | 166,839 | ||||||
Edwards Lifesciences Corp.a | 9,173 | 937,756 | ||||||
Haemonetics Corp.a | 2,324 | 110,529 | ||||||
Halyard Health Inc.a | 2,137 | 90,075 | ||||||
Hill-Rom Holdings Inc. | 2,860 | 230,831 |
Security | Shares | Value | ||||||
Hologic Inc.a,b | 12,253 | $ | 463,776 | |||||
IDEXX Laboratories Inc.a | 3,792 | 630,117 | ||||||
Integra LifeSciences Holdings Corp.a | 2,748 | 128,551 | ||||||
Intuitive Surgical Inc.a | 4,853 | 1,821,622 | ||||||
Masimo Corp.a | 2,077 | 182,278 | ||||||
Medtronic PLC | 58,736 | 4,729,423 | ||||||
NuVasive Inc.a | 2,236 | 126,848 | ||||||
ResMed Inc. | 6,225 | 524,021 | ||||||
STERIS PLC | 3,678 | 343,268 | ||||||
Stryker Corp. | 13,901 | 2,152,848 | ||||||
Teleflex Inc. | 1,929 | 457,134 | ||||||
Varian Medical Systems Inc.a | 4,018 | 418,635 | ||||||
West Pharmaceutical Services Inc. | 3,176 | 322,046 | ||||||
Zimmer Biomet Holdings Inc. | 8,743 | 1,063,324 | ||||||
|
| |||||||
29,778,662 | ||||||||
HEALTH CARE PROVIDERS & SERVICES — 2.51% |
| |||||||
Acadia Healthcare Co. Inc.a,b | 3,636 | 114,025 | ||||||
Aetna Inc. | 14,349 | 2,439,760 | ||||||
AmerisourceBergen Corp. | 7,045 | 542,113 | ||||||
Anthem Inc. | 11,351 | 2,374,743 | ||||||
Brookdale Senior Living Inc.a | 8,351 | 83,761 | ||||||
Cardinal Health Inc. | 13,636 | 844,068 | ||||||
Centene Corp.a | 7,504 | 702,900 | ||||||
Chemed Corp. | 668 | 149,251 | ||||||
Cigna Corp. | 10,876 | 2,144,965 | ||||||
DaVita Inc.a | 6,614 | 401,734 | ||||||
Envision Healthcare Corp.a | 5,110 | 217,686 | ||||||
Express Scripts Holding Co.a | 25,090 | 1,537,766 | ||||||
HCA Healthcare Inc.a | 12,548 | 949,256 | ||||||
HealthSouth Corp. | 4,312 | 198,956 | ||||||
Henry Schein Inc.a | 6,902 | 542,497 | ||||||
Humana Inc. | 6,236 | 1,592,363 | ||||||
Laboratory Corp. of America Holdingsa | 4,415 | 678,630 | ||||||
LifePoint Health Inc.a | 1,730 | 83,299 | ||||||
Magellan Health Inc.a | 1,000 | 85,300 | ||||||
McKesson Corp. | 9,137 | 1,259,810 | ||||||
MEDNAX Inc.a | 4,057 | 177,656 | ||||||
Molina Healthcare Inc.a,b | 1,941 | 131,658 | ||||||
Owens & Minor Inc. | 2,613 | 64,201 | ||||||
Patterson Companies Inc. | 3,458 | 127,946 | ||||||
Quest Diagnostics Inc. | 5,869 | 550,395 | ||||||
Tenet Healthcare Corp.a,b | 3,403 | 48,595 |
SCHEDULESOF INVESTMENTS | 19 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® DOW JONES U.S. ETF
October 31, 2017
Security | Shares | Value | ||||||
UnitedHealth Group Inc. | 41,886 | $ | 8,805,275 | |||||
Universal Health Services Inc. Class B | 3,795 | 389,746 | ||||||
WellCare Health Plans Inc.a | 1,922 | 380,056 | ||||||
|
| |||||||
27,618,411 | ||||||||
HEALTH CARE TECHNOLOGY — 0.16% |
| |||||||
Allscripts Healthcare Solutions Inc.a,b | 7,454 | 100,480 | ||||||
athenahealth Inc.a,b | 1,738 | 222,255 | ||||||
Cerner Corp.a | 13,684 | 923,944 | ||||||
Medidata Solutions Inc.a | 2,470 | 185,818 | ||||||
Veeva Systems Inc. Class Aa,b | 4,961 | 302,323 | ||||||
|
| |||||||
1,734,820 | ||||||||
HOTELS, RESTAURANTS & LEISURE — 1.98% |
| |||||||
Aramark | 10,621 | 464,032 | ||||||
Bloomin’ Brands Inc. | 3,930 | 69,875 | ||||||
Brinker International Inc. | 2,136 | 65,618 | ||||||
Buffalo Wild Wings Inc.a,b | 721 | 85,222 | ||||||
Carnival Corp. | 17,713 | 1,175,966 | ||||||
Cheesecake Factory Inc. (The) | 1,853 | 82,903 | ||||||
Chipotle Mexican Grill Inc.a,b | 1,093 | 297,187 | ||||||
Choice Hotels International Inc. | 1,630 | 113,693 | ||||||
Cracker Barrel Old Country Store Inc.b | 1,048 | 163,624 | ||||||
Darden Restaurants Inc. | 5,490 | 451,662 | ||||||
Domino’s Pizza Inc. | 2,104 | 385,032 | ||||||
Dunkin’ Brands Group Inc. | 3,858 | 227,892 | ||||||
Extended Stay America Inc. | 8,355 | 165,596 | ||||||
Hilton Grand Vacations Inc.a | 2,800 | 114,688 | ||||||
Hilton Worldwide Holdings Inc. | 8,764 | 633,462 | ||||||
Hyatt Hotels Corp. Class Aa | 2,080 | 130,333 | ||||||
Jack in the Box Inc. | 1,284 | 132,907 | ||||||
Las Vegas Sands Corp. | 15,680 | 993,798 | ||||||
Marriott International Inc./MD Class A | 13,583 | 1,622,897 | ||||||
Marriott Vacations Worldwide Corp. | 1,010 | 132,936 | ||||||
McDonald’s Corp. | 35,109 | 5,860,043 | ||||||
MGM Resorts International | 22,485 | 704,905 | ||||||
Norwegian Cruise Line Holdings Ltd.a | 7,761 | 432,676 | ||||||
Royal Caribbean Cruises Ltd. | 7,472 | 924,809 | ||||||
Six Flags Entertainment Corp. | 3,444 | 216,249 | ||||||
Starbucks Corp. | 62,465 | 3,425,581 | ||||||
Texas Roadhouse Inc. | 2,883 | 144,179 |
Security | Shares | Value | ||||||
Vail Resorts Inc. | 1,753 | $ | 401,472 | |||||
Wendy’s Co. (The) | 8,208 | 124,844 | ||||||
Wyndham Worldwide Corp. | 4,421 | 472,384 | ||||||
Wynn Resorts Ltd. | 3,472 | 512,085 | ||||||
Yum! Brands Inc. | 14,974 | 1,114,814 | ||||||
|
| |||||||
21,843,364 | ||||||||
HOUSEHOLD DURABLES — 0.50% |
| |||||||
CalAtlantic Group Inc. | 3,391 | 167,312 | ||||||
DR Horton Inc. | 14,881 | 657,889 | ||||||
Garmin Ltd. | 4,822 | 272,973 | ||||||
Helen of Troy Ltd.a | 1,158 | 107,578 | ||||||
Leggett & Platt Inc. | 5,729 | 270,753 | ||||||
Lennar Corp. Class A | 8,802 | 490,007 | ||||||
Lennar Corp. Class B | 309 | 14,817 | ||||||
Mohawk Industries Inc.a | 2,754 | 720,887 | ||||||
Newell Brands Inc. | 21,137 | 861,967 | ||||||
NVR Inc.a | 149 | 488,924 | ||||||
PulteGroup Inc. | 11,977 | 362,065 | ||||||
Tempur Sealy International Inc.a | 1,952 | 127,602 | ||||||
Toll Brothers Inc. | 6,543 | 301,240 | ||||||
Tupperware Brands Corp. | 2,260 | 132,775 | ||||||
Whirlpool Corp. | 3,167 | 519,166 | ||||||
|
| |||||||
5,495,955 | ||||||||
HOUSEHOLD PRODUCTS — 1.39% |
| |||||||
Church & Dwight Co. Inc. | 10,785 | 487,158 | ||||||
Clorox Co. (The) | 5,552 | 702,495 | ||||||
Colgate-Palmolive Co. | 38,104 | 2,684,427 | ||||||
Energizer Holdings Inc. | 2,746 | 118,050 | ||||||
Kimberly-Clark Corp. | 15,258 | 1,716,678 | ||||||
Procter & Gamble Co. (The) | 110,471 | 9,538,066 | ||||||
Spectrum Brands Holdings Inc. | 1,042 | 114,537 | ||||||
|
| |||||||
15,361,411 | ||||||||
INDEPENDENT POWER AND RENEWABLE ELECTRICITY PRODUCERS — 0.10% |
| |||||||
AES Corp./VA | 28,346 | 301,318 | ||||||
Calpine Corp.a | 15,921 | 237,860 | ||||||
NRG Energy Inc. | 13,062 | 326,550 | ||||||
Vistra Energy Corp. | 12,257 | 238,276 | ||||||
|
| |||||||
1,104,004 | ||||||||
INDUSTRIAL CONGLOMERATES — 1.79% |
| |||||||
3M Co. | 25,867 | 5,954,325 | ||||||
Carlisle Companies Inc. | 2,699 | 296,431 | ||||||
General Electric Co. | 375,077 | 7,561,552 | ||||||
Honeywell International Inc. | 33,055 | 4,765,209 |
20 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® DOW JONES U.S. ETF
October 31, 2017
Security | Shares | Value | ||||||
Roper Technologies Inc. | 4,408 | $ | 1,138,013 | |||||
|
| |||||||
19,715,530 | ||||||||
INSURANCE — 2.95% |
| |||||||
Aflac Inc. | 17,173 | 1,440,643 | ||||||
Alleghany Corp.a | 684 | 387,295 | ||||||
Allstate Corp. (The) | 15,697 | 1,473,320 | ||||||
American Financial Group Inc./OH | 2,986 | 314,993 | ||||||
American International Group Inc. | 39,071 | 2,524,377 | ||||||
AmTrust Financial Services Inc. | 3,682 | 46,246 | ||||||
Aon PLC | 10,976 | 1,574,288 | ||||||
Arch Capital Group Ltd.a,b | 5,646 | 562,567 | ||||||
Arthur J Gallagher & Co. | 7,872 | 498,534 | ||||||
Aspen Insurance Holdings Ltd. | 2,538 | 108,880 | ||||||
Assurant Inc. | 2,349 | 236,427 | ||||||
Assured Guaranty Ltd. | 5,045 | 187,170 | ||||||
Athene Holding Ltd. Class Aa,b | 3,210 | 167,337 | ||||||
Axis Capital Holdings Ltd. | 3,647 | 198,360 | ||||||
Brighthouse Financial Inc.a | 4,094 | 254,565 | ||||||
Brown & Brown Inc. | 5,071 | 252,739 | ||||||
Chubb Ltd. | 20,132 | 3,036,308 | ||||||
Cincinnati Financial Corp. | 6,392 | 448,527 | ||||||
CNO Financial Group Inc. | 7,798 | 186,918 | ||||||
Erie Indemnity Co. Class A | 788 | 95,190 | ||||||
Everest Re Group Ltd. | 1,789 | 424,798 | ||||||
First American Financial Corp. | 4,893 | 266,277 | ||||||
FNF Group | 12,296 | 460,116 | ||||||
Genworth Financial Inc. Class Aa | 21,037 | 69,633 | ||||||
Hanover Insurance Group Inc. (The) | 1,862 | 183,184 | ||||||
Hartford Financial Services Group Inc. (The) | 15,792 | 869,350 | ||||||
Kemper Corp. | 2,024 | 129,738 | ||||||
Lincoln National Corp. | 9,626 | 729,458 | ||||||
Loews Corp. | 11,960 | 592,140 | ||||||
Markel Corp.a | 602 | 652,749 | ||||||
Marsh & McLennan Companies Inc. | 22,138 | 1,791,628 | ||||||
Mercury General Corp. | 1,567 | 87,705 | ||||||
MetLife Inc. | 45,958 | 2,462,430 | ||||||
Old Republic International Corp. | 10,688 | 216,860 | ||||||
Primerica Inc. | 1,994 | 176,469 | ||||||
Principal Financial Group Inc. | 11,624 | 765,440 | ||||||
ProAssurance Corp. | 2,407 | 134,912 | ||||||
Progressive Corp. (The) | 25,082 | 1,220,239 |
Security | Shares | Value | ||||||
Prudential Financial Inc. | 18,446 | $ | 2,037,545 | |||||
Reinsurance Group of America Inc. | 2,806 | 419,160 | ||||||
RenaissanceRe Holdings Ltd. | 1,825 | 252,507 | ||||||
RLI Corp. | 1,683 | 99,449 | ||||||
Torchmark Corp. | 4,702 | 395,579 | ||||||
Travelers Companies Inc. (The) | 11,984 | 1,587,281 | ||||||
Unum Group | 9,806 | 510,304 | ||||||
Validus Holdings Ltd. | 3,418 | 178,009 | ||||||
White Mountains Insurance Group Ltd. | 153 | 136,040 | ||||||
Willis Towers Watson PLC | 5,834 | 939,741 | ||||||
WR Berkley Corp. | 4,065 | 278,778 | ||||||
XL Group Ltd. | 11,202 | 453,345 | ||||||
|
| |||||||
32,515,548 | ||||||||
INTERNET & DIRECT MARKETING RETAIL — 2.60% |
| |||||||
Amazon.com Inc.a | 17,273 | 19,091,502 | ||||||
Expedia Inc. | 5,291 | 659,576 | ||||||
Groupon Inc.a | 18,159 | 86,618 | ||||||
Liberty Expedia Holdings Inc. Class Aa | 2,374 | 109,441 | ||||||
Liberty Interactive Corp. QVC Group Series Aa | 18,331 | 416,480 | ||||||
Liberty Ventures Series Aa | 3,562 | 202,892 | ||||||
Netflix Inc.a | 18,679 | 3,669,116 | ||||||
Priceline Group Inc. (The)a | 2,125 | 4,062,915 | ||||||
Shutterfly Inc.a | 1,372 | 58,584 | ||||||
TripAdvisor Inc.a | 4,594 | 172,275 | ||||||
Wayfair Inc. Class Aa | 1,763 | 123,234 | ||||||
|
| |||||||
28,652,633 | ||||||||
INTERNET SOFTWARE & SERVICES — 4.56% |
| |||||||
Akamai Technologies Inc.a | 7,491 | 391,405 | ||||||
Alphabet Inc. Class Aa | 12,911 | 13,337,579 | ||||||
Alphabet Inc. Class Ca | 13,078 | 13,295,618 | ||||||
Cars.com Inc.a | 3,147 | 74,962 | ||||||
CoStar Group Inc.a | 1,436 | 424,697 | ||||||
eBay Inc.a | 42,962 | 1,617,090 | ||||||
Facebook Inc. Class Aa | 102,686 | 18,489,641 | ||||||
GrubHub Inc.a | 3,806 | 232,242 | ||||||
IAC/InterActiveCorpa | 3,181 | 410,508 | ||||||
j2 Global Inc. | 2,099 | 155,620 | ||||||
LogMeIn Inc. | 2,291 | 277,326 | ||||||
Pandora Media Inc.a,b | 10,856 | 79,357 | ||||||
Twitter Inc.a | 27,888 | 575,051 | ||||||
VeriSign Inc.a,b | 3,732 | 401,265 |
SCHEDULESOF INVESTMENTS | 21 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® DOW JONES U.S. ETF
October 31, 2017
Security | Shares | Value | ||||||
Yelp Inc.a | 3,270 | $ | 152,774 | |||||
Zillow Group Inc. Class Aa,b | 2,040 | 84,272 | ||||||
Zillow Group Inc. Class Ca,b | 4,616 | 190,548 | ||||||
|
| |||||||
50,189,955 | ||||||||
IT SERVICES — 4.12% |
| |||||||
Accenture PLC Class A | 26,737 | 3,806,279 | ||||||
Acxiom Corp.a | 3,410 | 85,796 | ||||||
Alliance Data Systems Corp. | 2,099 | 469,609 | ||||||
Amdocs Ltd. | 6,263 | 407,721 | ||||||
Automatic Data Processing Inc. | 19,207 | 2,233,006 | ||||||
Booz Allen Hamilton Holding Corp. | 6,377 | 240,987 | ||||||
Broadridge Financial Solutions Inc. | 5,055 | 434,326 | ||||||
CACI International Inc. Class Aa | 1,099 | 157,981 | ||||||
Cognizant Technology Solutions Corp. Class A | 25,636 | 1,939,876 | ||||||
Conduent Inc.a,b | 8,609 | 133,267 | ||||||
Convergys Corp. | 4,017 | 103,358 | ||||||
CoreLogic Inc./U.S.a | 3,749 | 175,828 | ||||||
CSRA Inc. | 7,098 | 227,065 | ||||||
DST Systems Inc. | 2,576 | 151,005 | ||||||
DXC Technology Co. | 12,337 | 1,129,082 | ||||||
EPAM Systems Inc.a | 2,162 | 197,066 | ||||||
Euronet Worldwide Inc.a | 2,305 | 222,755 | ||||||
Fidelity National Information Services Inc. | 14,391 | 1,334,909 | ||||||
First Data Corp. Class Aa | 18,536 | 330,126 | ||||||
Fiserv Inc.a | 9,146 | 1,183,767 | ||||||
FleetCor Technologies Inc.a | 3,999 | 660,915 | ||||||
Gartner Inc.a | 3,946 | 494,473 | ||||||
Genpact Ltd. | 5,366 | 163,395 | ||||||
Global Payments Inc.b | 6,626 | 688,773 | ||||||
International Business Machines Corp. | 37,570 | 5,788,034 | ||||||
Jack Henry & Associates Inc. | 3,304 | 363,870 | ||||||
Leidos Holdings Inc. | 6,082 | 380,247 | ||||||
Mastercard Inc. Class A | 40,473 | 6,021,168 | ||||||
MAXIMUS Inc. | 2,800 | 186,004 | ||||||
Paychex Inc. | 13,765 | 878,069 | ||||||
PayPal Holdings Inc.a | 48,894 | 3,547,749 | ||||||
Sabre Corp. | 8,991 | 175,864 | ||||||
Science Applications International Corp. | 1,876 | 137,586 | ||||||
Square Inc. Class Aa,b | 10,942 | 406,933 |
Security | Shares | Value | ||||||
Teradata Corp.a,b | 5,474 | $ | 183,105 | |||||
Total System Services Inc. | 7,292 | 525,389 | ||||||
Vantiv Inc. Class Aa,b | 6,988 | 489,160 | ||||||
Visa Inc. Class A | 79,252 | 8,716,135 | ||||||
Western Union Co. (The) | 19,869 | 394,598 | ||||||
WEX Inc.a | 1,725 | 213,193 | ||||||
|
| |||||||
45,378,469 | ||||||||
LEISURE PRODUCTS — 0.10% |
| |||||||
Brunswick Corp./DE | 3,879 | 196,471 | ||||||
Hasbro Inc. | 4,875 | 451,376 | ||||||
Mattel Inc.b | 14,742 | 208,157 | ||||||
Polaris Industries Inc. | 2,481 | 293,825 | ||||||
|
| |||||||
1,149,829 | ||||||||
LIFE SCIENCES TOOLS & SERVICES — 0.84% |
| |||||||
Agilent Technologies Inc. | 13,915 | 946,637 | ||||||
Bio-Rad Laboratories Inc. Class Aa | 864 | 189,899 | ||||||
Bio-Techne Corp. | 1,647 | 215,790 | ||||||
Bruker Corp. | 4,406 | 138,348 | ||||||
Charles River Laboratories International Inc.a | 2,100 | 244,209 | ||||||
Illumina Inc.a | 6,343 | 1,301,520 | ||||||
INC Research Holdings Inc. Class Aa | 2,444 | 139,675 | ||||||
Mettler-Toledo International Inc.a | 1,109 | 757,037 | ||||||
PerkinElmer Inc. | 4,815 | 348,221 | ||||||
PRA Health Sciences Inc.a | 2,147 | 174,830 | ||||||
Quintiles IMS Holdings Inc.a | 6,582 | 711,514 | ||||||
Thermo Fisher Scientific Inc. | 17,315 | 3,356,166 | ||||||
Waters Corp.a | 3,452 | 676,765 | ||||||
|
| |||||||
9,200,611 | ||||||||
MACHINERY — 1.95% |
| |||||||
Actuant Corp. Class A | 2,572 | 65,586 | ||||||
AGCO Corp. | 2,819 | 193,299 | ||||||
Allison Transmission Holdings Inc. | 6,141 | 260,931 | ||||||
Barnes Group Inc. | 2,149 | 139,878 | ||||||
Caterpillar Inc. | 25,560 | 3,471,048 | ||||||
Colfax Corp.a | 4,282 | 178,602 | ||||||
Crane Co. | 2,233 | 185,607 | ||||||
Cummins Inc. | 6,845 | 1,210,744 | ||||||
Deere & Co. | 13,893 | 1,846,102 | ||||||
Donaldson Co. Inc. | 5,603 | 264,518 | ||||||
Dover Corp. | 6,755 | 645,035 | ||||||
Flowserve Corp. | 5,600 | 246,792 |
22 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® DOW JONES U.S. ETF
October 31, 2017
Security | Shares | Value | ||||||
Fortive Corp. | 13,264 | $ | 958,457 | |||||
Graco Inc. | 2,417 | 318,536 | ||||||
Hillenbrand Inc. | 2,804 | 110,898 | ||||||
IDEX Corp. | 3,290 | 421,811 | ||||||
Illinois Tool Works Inc. | 13,384 | 2,094,864 | ||||||
Ingersoll-Rand PLC | 11,023 | 976,638 | ||||||
ITT Inc. | 3,834 | 178,818 | ||||||
Kennametal Inc. | 3,539 | 154,477 | ||||||
Lincoln Electric Holdings Inc. | 2,723 | 249,617 | ||||||
Middleby Corp. (The)a,b | 2,481 | 287,548 | ||||||
Mueller Industries Inc. | 2,554 | 88,752 | ||||||
Nordson Corp. | 2,205 | 279,351 | ||||||
Oshkosh Corp. | 3,188 | 291,893 | ||||||
PACCAR Inc. | 15,217 | 1,091,515 | ||||||
Parker-Hannifin Corp. | 5,734 | 1,047,086 | ||||||
Pentair PLC | 7,119 | 501,605 | ||||||
Snap-on Inc. | 2,509 | 395,870 | ||||||
Stanley Black & Decker Inc. | 6,602 | 1,066,553 | ||||||
Terex Corp. | 3,686 | 173,647 | ||||||
Timken Co. (The) | 2,930 | 138,150 | ||||||
Toro Co. (The) | 4,738 | 297,783 | ||||||
Trinity Industries Inc. | 6,488 | 210,990 | ||||||
WABCO Holdings Inc.a | 2,194 | 323,769 | ||||||
Wabtec Corp./DEb | 3,729 | 285,268 | ||||||
Welbilt Inc.a | 6,082 | 134,169 | ||||||
Woodward Inc. | 2,325 | 179,792 | ||||||
Xylem Inc./NY | 7,847 | 522,061 | ||||||
|
| |||||||
21,488,060 | ||||||||
MARINE — 0.02% |
| |||||||
Kirby Corp.a,b | 2,326 | 164,797 | ||||||
|
| |||||||
164,797 | ||||||||
MEDIA — 2.77% |
| |||||||
AMC Networks Inc. Class Aa,b | 2,251 | 114,531 | ||||||
Cable One Inc. | 204 | 144,801 | ||||||
CBS Corp. Class A | 311 | 17,674 | ||||||
CBS Corp. Class B NVS | 15,817 | 887,650 | ||||||
Charter Communications Inc. Class Aa | 8,701 | 2,907,613 | ||||||
Cinemark Holdings Inc. | 4,587 | 166,692 | ||||||
Comcast Corp. Class A | 203,782 | 7,342,266 | ||||||
Discovery Communications Inc. Class Aa,b | 6,872 | 129,743 | ||||||
Discovery Communications Inc. Class C NVSa | 9,039 | 160,985 | ||||||
DISH Network Corp. Class Aa | 9,904 | 480,740 |
Security | Shares | Value | ||||||
Interpublic Group of Companies Inc. (The) | 17,213 | $ | 331,350 | |||||
John Wiley & Sons Inc. Class A | 1,913 | 104,545 | ||||||
Liberty Broadband Corp. Class Aa | 1,150 | 99,142 | ||||||
Liberty Broadband Corp. Class Ca | 6,645 | 580,042 | ||||||
Liberty Global PLC Series Aa | 9,797 | 302,237 | ||||||
Liberty Global PLC Series C NVSa,b | 25,873 | 773,344 | ||||||
Liberty Global PLC LiLAC Class Aa | 2,377 | 51,628 | ||||||
Liberty Global PLC LiLAC Class Ca,b | 4,982 | 109,604 | ||||||
Liberty Media Corp.-Liberty Formula One Class Aa,b | 1,027 | 37,383 | ||||||
Liberty Media Corp.-Liberty Formula One Class Ca | 8,723 | 332,695 | ||||||
Liberty Media Corp.-Liberty SiriusXM Class Aa | 3,717 | 155,036 | ||||||
Liberty Media Corp.-Liberty SiriusXM Class Ca | 7,373 | 307,086 | ||||||
Lions Gate Entertainment Corp. Class Aa | 2,914 | 84,564 | ||||||
Lions Gate Entertainment Corp. Class Ba | 4,828 | 133,543 | ||||||
Live Nation Entertainment Inc.a | 5,688 | 249,021 | ||||||
Madison Square Garden Co. (The)a | 720 | 160,337 | ||||||
Meredith Corp. | 1,586 | 84,058 | ||||||
New York Times Co. (The) Class A | 5,204 | 99,396 | ||||||
News Corp. Class A | 16,618 | 227,002 | ||||||
News Corp. Class B | 5,296 | 73,614 | ||||||
Nexstar Media Group Inc. Class A | 2,006 | 127,983 | ||||||
Omnicom Group Inc. | 9,977 | 670,355 | ||||||
Regal Entertainment Group Class A | 5,156 | 84,301 | ||||||
Scripps Networks Interactive Inc. Class A | 4,170 | 347,278 | ||||||
Sinclair Broadcast Group Inc. Class A | 3,158 | 100,109 | ||||||
Sirius XM Holdings Inc.b | 64,125 | 348,840 | ||||||
TEGNA Inc. | 9,431 | 115,341 |
SCHEDULESOF INVESTMENTS | 23 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® DOW JONES U.S. ETF
October 31, 2017
Security | Shares | Value | ||||||
Time Inc. | 4,019 | $ | 46,620 | |||||
Time Warner Inc. | 33,646 | 3,307,065 | ||||||
Tribune Media Co. Class A | 3,069 | 125,614 | ||||||
Twenty-First Century Fox Inc. Class A | 45,454 | 1,188,622 | ||||||
Twenty-First Century Fox Inc. Class B | 19,075 | 485,459 | ||||||
Viacom Inc. Class Ab | 300 | 9,015 | ||||||
Viacom Inc. Class B NVS | 15,335 | 368,500 | ||||||
Walt Disney Co. (The) | 66,883 | 6,541,826 | ||||||
|
| |||||||
30,515,250 | ||||||||
METALS & MINING — 0.40% |
| |||||||
Alcoa Corp.a | 7,444 | 355,674 | ||||||
Allegheny Technologies Inc.a | 4,938 | 124,339 | ||||||
Carpenter Technology Corp. | 2,055 | 102,318 | ||||||
Commercial Metals Co. | 5,131 | 99,952 | ||||||
Compass Minerals International Inc. | 1,407 | 92,299 | ||||||
Freeport-McMoRan Inc.a | 58,395 | 816,362 | ||||||
Newmont Mining Corp. | 23,062 | 833,922 | ||||||
Nucor Corp. | 13,909 | 804,358 | ||||||
Reliance Steel & Aluminum Co. | 3,163 | 243,045 | ||||||
Royal Gold Inc. | 2,841 | 238,957 | ||||||
Steel Dynamics Inc. | 10,221 | 380,323 | ||||||
U.S. Steel Corp. | 7,572 | 191,723 | ||||||
Worthington Industries Inc. | 1,996 | 90,818 | ||||||
|
| |||||||
4,374,090 | ||||||||
MORTGAGE REAL ESTATE INVESTMENT — 0.18% |
| |||||||
AGNC Investment Corp. | 16,793 | 338,043 | ||||||
Annaly Capital Management Inc. | 47,096 | 539,720 | ||||||
Blackstone Mortgage Trust Inc. Class Ab | 3,964 | 126,174 | ||||||
Chimera Investment Corp. | 8,200 | 150,060 | ||||||
Invesco Mortgage Capital Inc. | 4,992 | 85,962 | ||||||
MFA Financial Inc.b | 17,656 | 145,486 | ||||||
New Residential Investment Corp. | 13,491 | 237,847 | ||||||
Starwood Property Trust Inc. | 11,512 | 247,623 | ||||||
Two Harbors Investment Corp. | 15,180 | 148,764 | ||||||
|
| |||||||
2,019,679 | ||||||||
MULTI-UTILITIES — 0.99% |
| |||||||
Ameren Corp. | 10,453 | 647,982 | ||||||
Avista Corp. | 2,744 | 143,347 | ||||||
Black Hills Corp. | 2,313 | 150,946 |
Security | Shares | Value | ||||||
CenterPoint Energy Inc. | 18,661 | $ | 551,992 | |||||
CMS Energy Corp. | 12,231 | 591,614 | ||||||
Consolidated Edison Inc. | 13,366 | 1,150,144 | ||||||
Dominion Energy Inc. | 27,778 | 2,253,907 | ||||||
DTE Energy Co. | 7,807 | 862,361 | ||||||
MDU Resources Group Inc. | 8,621 | 235,784 | ||||||
NiSource Inc. | 14,066 | 370,920 | ||||||
NorthWestern Corp. | 2,173 | 128,816 | ||||||
Public Service Enterprise Group Inc. | 21,876 | 1,076,299 | ||||||
SCANA Corp. | 6,165 | 265,958 | ||||||
Sempra Energy | 10,850 | 1,274,875 | ||||||
Vectren Corp. | 3,658 | 249,256 | ||||||
WEC Energy Group Inc. | 13,666 | 920,952 | ||||||
|
| |||||||
10,875,153 | ||||||||
MULTILINE RETAIL — 0.38% |
| |||||||
Big Lots Inc. | 1,978 | 101,491 | ||||||
Dillard’s Inc. Class Ab | 897 | 45,568 | ||||||
Dollar General Corp. | 11,318 | 914,947 | ||||||
Dollar Tree Inc.a | 10,213 | 931,936 | ||||||
JC Penney Co. Inc.a,b | 13,432 | 37,610 | ||||||
Kohl’s Corp. | 7,292 | 304,514 | ||||||
Macy’s Inc. | 13,193 | 247,501 | ||||||
Nordstrom Inc. | 5,052 | 200,312 | ||||||
Target Corp. | 23,734 | 1,401,255 | ||||||
|
| |||||||
4,185,134 | ||||||||
OIL, GAS & CONSUMABLE FUELS — 4.85% |
| |||||||
Anadarko Petroleum Corp. | 24,281 | 1,198,753 | ||||||
Andeavor | 6,268 | 665,912 | ||||||
Antero Resources Corp.a,b | 9,321 | 180,827 | ||||||
Apache Corp. | 16,384 | 677,806 | ||||||
Cabot Oil & Gas Corp. | 20,193 | 559,346 | ||||||
Cheniere Energy Inc.a,b | 8,784 | 410,564 | ||||||
Chesapeake Energy Corp.a | 39,444 | 153,832 | ||||||
Chevron Corp. | 82,095 | 9,513,989 | ||||||
Cimarex Energy Co. | 4,102 | 479,647 | ||||||
Concho Resources Inc.a | 6,412 | 860,554 | ||||||
ConocoPhillips | 52,644 | 2,692,741 | ||||||
CONSOL Energy Inc.a | 8,991 | 145,025 | ||||||
Continental Resources Inc./OKa,b | 3,748 | 152,581 | ||||||
Devon Energy Corp. | 22,777 | 840,471 | ||||||
Diamondback Energy Inc.a | 4,248 | 455,216 | ||||||
Energen Corp.a | 4,302 | 222,413 | ||||||
EOG Resources Inc. | 24,971 | 2,493,854 | ||||||
EQT Corp.b | 7,542 | 471,677 |
24 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® DOW JONES U.S. ETF
October 31, 2017
Security | Shares | Value | ||||||
Exxon Mobil Corp. | 183,566 | $ | 15,300,226 | |||||
Gulfport Energy Corp.a | 7,383 | 101,147 | ||||||
Hess Corp. | 11,645 | 514,243 | ||||||
HollyFrontier Corp. | 7,588 | 280,377 | ||||||
Kinder Morgan Inc./DE | 83,206 | 1,506,861 | ||||||
Marathon Oil Corp. | 36,509 | 519,158 | ||||||
Marathon Petroleum Corp. | 21,989 | 1,313,623 | ||||||
Murphy Oil Corp. | 6,956 | 186,073 | ||||||
Newfield Exploration Co.a | 8,664 | 266,764 | ||||||
Noble Energy Inc. | 21,133 | 588,977 | ||||||
Oasis Petroleum Inc.a | 10,289 | 97,231 | ||||||
Occidental Petroleum Corp. | 33,045 | 2,133,716 | ||||||
ONEOK Inc. | 16,482 | 894,478 | ||||||
Parsley Energy Inc. Class Aa,b | 9,892 | 263,127 | ||||||
PBF Energy Inc. Class A | 4,704 | 136,275 | ||||||
PDC Energy Inc.a | 2,860 | 145,660 | ||||||
Phillips 66 | 18,549 | 1,689,443 | ||||||
Pioneer Natural Resources Co. | 7,339 | 1,098,428 | ||||||
QEP Resources Inc.a | 10,062 | 90,055 | ||||||
Range Resources Corp.b | 9,811 | 177,677 | ||||||
Rice Energy Inc.a | 7,468 | 211,718 | ||||||
RSP Permian Inc.a | 5,441 | 187,225 | ||||||
SemGroup Corp. Class A | 2,869 | 74,737 | ||||||
SM Energy Co.b | 4,137 | 88,242 | ||||||
Southwestern Energy Co.a | 22,686 | 125,907 | ||||||
Targa Resources Corp. | 9,340 | 387,610 | ||||||
Valero Energy Corp. | 19,185 | 1,513,505 | ||||||
Whiting Petroleum Corp.a,b | 15,757 | 94,700 | ||||||
Williams Companies Inc. (The) | 35,724 | 1,018,134 | ||||||
World Fuel Services Corp. | 2,965 | 82,427 | ||||||
WPX Energy Inc.a | 17,495 | 197,344 | ||||||
|
| |||||||
53,460,296 | ||||||||
PAPER & FOREST PRODUCTS — 0.03% |
| |||||||
Domtar Corp. | 2,764 | 130,792 | ||||||
KapStone Paper and Packaging Corp. | 3,612 | 81,126 | ||||||
Louisiana-Pacific Corp.a | 6,271 | 170,446 | ||||||
|
| |||||||
382,364 | ||||||||
PERSONAL PRODUCTS — 0.18% |
| |||||||
Avon Products Inc.a | 19,150 | 43,662 | ||||||
Coty Inc. Class A | 20,488 | 315,515 | ||||||
Edgewell Personal Care Co.a | 2,483 | 161,221 | ||||||
Estee Lauder Companies Inc. (The) Class A | 9,692 | 1,083,663 | ||||||
Herbalife Ltd.a,b | 2,898 | 210,453 |
Security | Shares | Value | ||||||
Nu Skin Enterprises Inc. Class A | 2,191 | $ | 139,369 | |||||
|
| |||||||
1,953,883 | ||||||||
PHARMACEUTICALS — 4.21% |
| |||||||
Akorn Inc.a | 4,195 | 136,631 | ||||||
Allergan PLC | 14,459 | 2,562,569 | ||||||
Bristol-Myers Squibb Co. | 71,112 | 4,384,766 | ||||||
Catalent Inc.a | 5,790 | 246,596 | ||||||
Eli Lilly & Co. | 41,914 | 3,434,433 | ||||||
Endo International PLCa | 8,814 | 56,233 | ||||||
Horizon Pharma PLCa | 6,897 | 93,523 | ||||||
Impax Laboratories Inc.a | 3,011 | 54,650 | ||||||
Jazz Pharmaceuticals PLCa,b | 2,567 | 363,308 | ||||||
Johnson & Johnson | 116,275 | 16,209,898 | ||||||
Mallinckrodt PLCa,b | 4,327 | 137,036 | ||||||
Medicines Co. (The)a | 2,774 | 79,725 | ||||||
Merck & Co. Inc. | 118,492 | 6,527,724 | ||||||
Mylan NVa | 23,298 | 831,972 | ||||||
Nektar Therapeuticsa | 6,789 | 163,547 | ||||||
Pacira Pharmaceuticals Inc./DEa | 1,761 | 56,440 | ||||||
Perrigo Co. PLC | 5,759 | 466,421 | ||||||
Pfizer Inc. | 258,537 | 9,064,307 | ||||||
Prestige Brands Holdings Inc.a | 2,187 | 102,570 | ||||||
Zoetis Inc. | 21,301 | 1,359,430 | ||||||
|
| |||||||
46,331,779 | ||||||||
PROFESSIONAL SERVICES — 0.33% |
| |||||||
Advisory Board Co. (The)a | 1,756 | 94,692 | ||||||
Dun & Bradstreet Corp. (The) | 1,587 | 185,409 | ||||||
Equifax Inc. | 5,258 | 570,651 | ||||||
FTI Consulting Inc.a | 1,666 | 71,221 | ||||||
IHS Markit Ltd.a | 15,783 | 672,514 | ||||||
ManpowerGroup Inc. | 2,885 | 355,663 | ||||||
Nielsen Holdings PLC | 14,594 | 540,999 | ||||||
Robert Half International Inc. | 5,466 | 282,975 | ||||||
TransUniona | 6,479 | 340,083 | ||||||
Verisk Analytics Inc. Class Aa | 6,680 | 568,134 | ||||||
|
| |||||||
3,682,341 | ||||||||
REAL ESTATE MANAGEMENT & DEVELOPMENT — 0.11% |
| |||||||
CBRE Group Inc. Class Aa | 13,159 | 517,412 | ||||||
Howard Hughes Corp. (The)a | 1,693 | 216,078 | ||||||
Jones Lang LaSalle Inc. | 1,968 | 254,836 | ||||||
Realogy Holdings Corp. | 5,983 | 193,430 | ||||||
|
| |||||||
1,181,756 | ||||||||
ROAD & RAIL — 0.87% |
| |||||||
Avis Budget Group Inc.a | 3,163 | 130,474 | ||||||
CSX Corp. | 39,472 | 1,990,573 |
SCHEDULESOF INVESTMENTS | 25 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® DOW JONES U.S. ETF
October 31, 2017
Security | Shares | Value | ||||||
Genesee & Wyoming Inc. Class Aa | 2,634 | $ | 189,069 | |||||
JB Hunt Transport Services Inc. | 3,672 | 390,664 | ||||||
Kansas City Southern | 4,587 | 478,057 | ||||||
Landstar System Inc. | 1,778 | 175,577 | ||||||
Norfolk Southern Corp. | 12,519 | 1,645,247 | ||||||
Old Dominion Freight Line Inc. | 3,006 | 364,117 | ||||||
Ryder System Inc. | 2,266 | 183,727 | ||||||
Union Pacific Corp. | 34,627 | 4,009,460 | ||||||
|
| |||||||
9,556,965 | ||||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT — 3.89% |
| |||||||
Advanced Micro Devices Inc.a,b | 34,962 | 384,058 | ||||||
Analog Devices Inc. | 15,974 | 1,458,426 | ||||||
Applied Materials Inc. | 46,102 | 2,601,536 | ||||||
Broadcom Ltd. | 17,633 | 4,653,525 | ||||||
Cavium Inc.a | 2,937 | 202,624 | ||||||
Cirrus Logic Inc.a | 2,788 | 156,128 | ||||||
Cree Inc.a | 4,159 | 148,476 | ||||||
Cypress Semiconductor Corp. | 14,649 | 232,333 | ||||||
Entegris Inc. | 6,160 | 201,740 | ||||||
First Solar Inc.a | 3,437 | 188,416 | ||||||
Integrated Device Technology Inc.a | 5,908 | 183,562 | ||||||
Intel Corp. | 203,569 | 9,260,354 | ||||||
KLA-Tencor Corp. | 6,809 | 741,432 | ||||||
Lam Research Corp. | 7,063 | 1,473,130 | ||||||
Marvell Technology Group Ltd. | 19,014 | 351,189 | ||||||
Maxim Integrated Products Inc. | 12,278 | 645,086 | ||||||
Microchip Technology Inc. | 10,069 | 954,541 | ||||||
Micron Technology Inc.a | 48,375 | 2,143,496 | ||||||
Microsemi Corp.a,b | 4,979 | 265,729 | ||||||
MKS Instruments Inc. | 2,356 | 255,979 | ||||||
Monolithic Power Systems Inc. | 1,652 | 200,999 | ||||||
NVIDIA Corp. | 26,001 | 5,377,267 | ||||||
ON Semiconductor Corp.a | 18,003 | 383,824 | ||||||
Qorvo Inc.a | 5,455 | 413,543 | ||||||
QUALCOMM Inc. | 63,912 | 3,260,151 | ||||||
Semtech Corp.a | 2,831 | 116,213 | ||||||
Silicon Laboratories Inc.a | 1,790 | 169,871 | ||||||
Skyworks Solutions Inc. | 7,958 | 906,098 | ||||||
Synaptics Inc.a | 1,506 | 55,903 | ||||||
Teradyne Inc. | 8,537 | 366,152 | ||||||
Texas Instruments Inc. | 42,832 | 4,141,426 | ||||||
Versum Materials Inc. | 4,619 | 194,367 |
Security | Shares | Value | ||||||
Xilinx Inc. | 10,706 | $ | 788,925 | |||||
|
| |||||||
42,876,499 | ||||||||
SOFTWARE — 5.42% |
| |||||||
ACI Worldwide Inc.a | 5,138 | 123,723 | ||||||
Activision Blizzard Inc. | 32,625 | 2,136,611 | ||||||
Adobe Systems Inc.a | 21,344 | 3,738,615 | ||||||
ANSYS Inc.a | 3,674 | 502,273 | ||||||
Aspen Technology Inc.a | 3,122 | 201,432 | ||||||
Autodesk Inc.a | 9,520 | 1,189,619 | ||||||
Blackbaud Inc. | 2,119 | 214,655 | ||||||
CA Inc. | 13,660 | 442,311 | ||||||
Cadence Design Systems Inc.a | 12,052 | 520,164 | ||||||
CDK Global Inc. | 5,725 | 363,881 | ||||||
Citrix Systems Inc.a | 6,250 | 516,313 | ||||||
CommVault Systems Inc.a | 1,822 | 94,835 | ||||||
Dell Technologies Inc. Class Va | 8,822 | 730,197 | ||||||
Electronic Arts Inc.a | 13,412 | 1,604,075 | ||||||
Ellie Mae Inc.a,b | 1,495 | 134,475 | ||||||
Fair Isaac Corp. | 1,347 | 195,531 | ||||||
FireEye Inc.a,b | 7,667 | 129,726 | ||||||
Fortinet Inc.a | 6,630 | 261,288 | ||||||
Guidewire Software Inc.a,b | 3,287 | 262,894 | ||||||
Intuit Inc. | 10,551 | 1,593,412 | ||||||
Manhattan Associates Inc.a | 2,981 | 124,785 | ||||||
Microsoft Corp. | 333,674 | 27,755,003 | ||||||
Nuance Communications Inc.a | 11,759 | 173,328 | ||||||
Oracle Corp. | 130,862 | 6,660,876 | ||||||
Paycom Software Inc.a | 2,125 | 174,675 | ||||||
Proofpoint Inc.a | 1,957 | 180,846 | ||||||
PTC Inc.a | 5,084 | 337,832 | ||||||
Red Hat Inc.a | 7,694 | 929,666 | ||||||
salesforce.com Inc.a | 29,535 | 3,022,612 | ||||||
ServiceNow Inc.a,b | 7,397 | 934,759 | ||||||
Splunk Inc.a | 6,024 | 405,415 | ||||||
SS&C Technologies Holdings Inc. | 7,537 | 302,987 | ||||||
Symantec Corp. | 26,474 | 860,405 | ||||||
Synopsys Inc.a | 6,435 | 556,756 | ||||||
Tableau Software Inc. Class Aa,b | 2,658 | 215,537 | ||||||
Take-Two Interactive Software Inc.a | 4,626 | 511,867 | ||||||
Tyler Technologies Inc.a | 1,477 | 261,857 | ||||||
Ultimate Software Group Inc. (The)a,b | 1,232 | 249,591 | ||||||
Verint Systems Inc.a | 2,820 | 119,004 |
26 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® DOW JONES U.S. ETF
October 31, 2017
Security | Shares | Value | ||||||
VMware Inc. Class Aa,b | 3,173 | $ | 379,776 | |||||
Workday Inc. Class Aa | 5,678 | 630,201 | ||||||
|
| |||||||
59,743,808 | ||||||||
SPECIALTY RETAIL — 1.94% |
| |||||||
Aaron’s Inc. | 2,580 | 94,944 | ||||||
Advance Auto Parts Inc. | 3,213 | 262,631 | ||||||
American Eagle Outfitters Inc. | 7,383 | 96,127 | ||||||
AutoNation Inc.a,b | 2,909 | 137,887 | ||||||
AutoZone Inc.a | 1,219 | 718,600 | ||||||
Bed Bath & Beyond Inc. | 6,222 | 123,818 | ||||||
Best Buy Co. Inc. | 11,505 | 644,050 | ||||||
Burlington Stores Inc.a,b | 2,969 | 278,759 | ||||||
CarMax Inc.a | 7,950 | 597,045 | ||||||
Dick’s Sporting Goods Inc. | 3,849 | 94,185 | ||||||
Five Below Inc.a | 2,488 | 137,462 | ||||||
Foot Locker Inc. | 5,726 | 172,238 | ||||||
GameStop Corp. Class A | 4,366 | 81,601 | ||||||
Gap Inc. (The) | 9,435 | 245,216 | ||||||
Home Depot Inc. (The) | 51,068 | 8,466,053 | ||||||
L Brands Inc. | 10,843 | 466,683 | ||||||
Lithia Motors Inc. Class A | 990 | 112,048 | ||||||
Lowe’s Companies Inc. | 36,518 | 2,919,614 | ||||||
Murphy USA Inc.a | 1,459 | 108,491 | ||||||
O’Reilly Automotive Inc.a | 3,826 | 807,095 | ||||||
Office Depot Inc. | 23,194 | 71,901 | ||||||
Ross Stores Inc. | 16,905 | 1,073,298 | ||||||
Sally Beauty Holdings Inc.a | 5,710 | 98,840 | ||||||
Signet Jewelers Ltd. | 2,629 | 172,383 | ||||||
Tiffany & Co. | 4,435 | 415,205 | ||||||
TJX Companies Inc. (The) | 27,490 | 1,918,802 | ||||||
Tractor Supply Co. | 5,495 | 331,129 | ||||||
Ulta Salon Cosmetics & Fragrance Inc.a | 2,542 | 512,950 | ||||||
Urban Outfitters Inc.a,b | 3,395 | 83,245 | ||||||
Williams-Sonoma Inc. | 3,530 | 182,148 | ||||||
|
| |||||||
21,424,448 | ||||||||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS — 3.92% |
| |||||||
3D Systems Corp.a,b | 4,890 | 60,538 | ||||||
Apple Inc. | 223,766 | 37,825,405 | ||||||
Diebold Nixdorf Inc. | 3,182 | 61,413 | ||||||
Electronics For Imaging Inc.a | 2,123 | 65,516 | ||||||
Hewlett Packard Enterprise Co. | 71,358 | 993,303 | ||||||
HP Inc. | 72,551 | 1,563,474 | ||||||
NCR Corp.a | 5,152 | 165,328 |
Security | Shares | Value | ||||||
NetApp Inc. | 11,643 | $ | 517,182 | |||||
Seagate Technology PLC | 12,504 | 462,273 | ||||||
Western Digital Corp. | 12,809 | 1,143,459 | ||||||
Xerox Corp. | 9,095 | 275,669 | ||||||
|
| |||||||
43,133,560 | ||||||||
TEXTILES, APPAREL & LUXURY GOODS — 0.64% |
| |||||||
Carter’s Inc. | 2,076 | 200,811 | ||||||
Deckers Outdoor Corp.a | 1,413 | 96,423 | ||||||
Hanesbrands Inc. | 15,848 | 356,580 | ||||||
Lululemon Athletica Inc.a | 4,188 | 257,604 | ||||||
Michael Kors Holdings Ltd.a | 6,482 | 316,386 | ||||||
NIKE Inc. Class B | 56,844 | 3,125,851 | ||||||
PVH Corp. | 3,381 | 428,745 | ||||||
Ralph Lauren Corp. | 2,410 | 215,526 | ||||||
Skechers U.S.A. Inc. Class Aa | 6,004 | 191,648 | ||||||
Steven Madden Ltd.a | 2,311 | 90,129 | ||||||
Tapestry Inc. | 12,287 | 503,153 | ||||||
Under Armour Inc. Class Aa,b | 7,961 | 99,672 | ||||||
Under Armour Inc. Class Ca,b | 8,088 | 93,255 | ||||||
VF Corp. | 14,192 | 988,473 | ||||||
Wolverine World Wide Inc. | 4,112 | 112,257 | ||||||
|
| |||||||
7,076,513 | ||||||||
THRIFTS & MORTGAGE FINANCE — 0.10% |
| |||||||
Capitol Federal Financial Inc. | 5,742 | 79,182 | ||||||
Essent Group Ltd.a | 3,591 | 153,048 | ||||||
MGIC Investment Corp.a | 16,046 | 229,458 | ||||||
New York Community Bancorp. Inc. | 21,534 | 270,467 | ||||||
Radian Group Inc. | 9,349 | 195,955 | ||||||
Washington Federal Inc. | 3,770 | 131,196 | ||||||
|
| |||||||
1,059,306 | ||||||||
TOBACCO — 1.12% |
| |||||||
Altria Group Inc. | 83,175 | 5,341,499 | ||||||
Philip Morris International Inc. | 67,288 | 7,041,016 | ||||||
|
| |||||||
12,382,515 | ||||||||
TRADING COMPANIES & DISTRIBUTORS — 0.29% |
| |||||||
Air Lease Corp. | 4,041 | 175,581 | ||||||
Applied Industrial Technologies Inc. | 1,780 | 113,297 | ||||||
Beacon Roofing Supply Inc.a,b | 2,902 | 160,800 | ||||||
Fastenal Co. | 12,457 | 585,105 | ||||||
GATX Corp. | 1,719 | 102,126 | ||||||
HD Supply Holdings Inc.a | 8,076 | 285,810 | ||||||
MRC Global Inc.a | 4,180 | 71,687 |
SCHEDULESOF INVESTMENTS | 27 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® DOW JONES U.S. ETF
October 31, 2017
Security | Shares | Value | ||||||
MSC Industrial Direct Co. Inc. Class A | 1,902 | $ | 157,676 | |||||
NOW Inc.a | 4,413 | 55,251 | ||||||
United Rentals Inc.a | 3,678 | 520,363 | ||||||
Univar Inc.a | 4,446 | 132,268 | ||||||
Watsco Inc. | 1,303 | 217,041 | ||||||
WESCO International Inc.a | 2,085 | 131,668 | ||||||
WW Grainger Inc. | 2,269 | 448,581 | ||||||
|
| |||||||
3,157,254 | ||||||||
TRANSPORTATION INFRASTRUCTURE — 0.02% |
| |||||||
Macquarie Infrastructure Corp. | 3,370 | 234,384 | ||||||
|
| |||||||
234,384 | ||||||||
WATER UTILITIES — 0.09% |
| |||||||
American Water Works Co. Inc. | 7,778 | 682,597 | ||||||
Aqua America Inc. | 7,648 | 271,351 | ||||||
|
| |||||||
953,948 | ||||||||
WIRELESS TELECOMMUNICATION SERVICES — 0.10% |
| |||||||
Sprint Corp.a,b | 29,941 | 195,814 | ||||||
T-Mobile U.S. Inc.a | 12,658 | 756,569 | ||||||
Telephone & Data Systems Inc. | 4,142 | 120,739 | ||||||
|
| |||||||
1,073,122 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $722,599,843) | 1,099,586,173 | |||||||
SHORT-TERM INVESTMENTS — 2.25% |
| |||||||
MONEY MARKET FUNDS — 2.25% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
1.31%c,e,f | 23,373,001 | 23,377,675 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
1.00%c,e | 1,385,570 | 1,385,570 | ||||||
|
| |||||||
24,763,245 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $24,760,978) | 24,763,245 | |||||||
|
|
Value | ||||||
TOTAL INVESTMENTS | ||||||
(Cost: $747,360,821)g | $ | 1,124,349,418 | ||||
Other Assets Less Liabilities — (2.06)% | (22,692,091 | ) | ||||
|
| |||||
NET ASSETS — 100.00% | $ | 1,101,657,327 | ||||
|
|
NVS — Non-Voting Shares
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 1. |
c | Affiliated issuer. See Schedule 1. |
d | Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. |
e | The rate quoted is the annualized seven-day yield of the fund at period end. |
f | All or a portion of this security represents an investment of securities lending collateral. See Note 1. |
g | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $767,965,474. Net unrealized appreciation was $356,383,944, of which $413,816,176 represented gross unrealized appreciation on investments and $57,432,232 represented gross unrealized depreciation on investments. |
28 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® DOW JONES U.S. ETF
October 31, 2017
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 04/30/17 | Shares purchased | Shares sold | Shares held at 10/31/17 | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, | 22,121,552 | 1,251,449 | b | — | 23,373,001 | $ | 23,377,675 | $ | (3,056 | ) | $ | (3,134 | ) | $ | — | c | ||||||||||||||||
BlackRock Cash Funds: Treasury, | 1,579,277 | — | (193,707 | )b | 1,385,570 | 1,385,570 | — | — | 5,700 | |||||||||||||||||||||||
BlackRock Inc. | 5,699 | 153 | (491 | ) | 5,361 | 2,524,120 | 112,928 | 362,164 | 27,813 | |||||||||||||||||||||||
PNC Financial Services Group Inc. (The) | 22,797 | 220 | (2,284 | ) | 20,733 | 2,836,067 | 121,514 | 249,987 | 32,285 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 30,123,432 | $ | 231,386 | $ | 609,017 | $ | 65,798 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
c | Does not include income earned on the investment of securities lending cash collateral which is not direct income of the Fund and is reflected as a component of securities lending income in the statement of operations. |
Schedule 2 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: | ||||||||||||||||
Assets: | ||||||||||||||||
Common stocks | $ | 1,099,569,305 | $ | — | $ | 16,868 | $ | 1,099,586,173 | ||||||||
Money market funds | 24,763,245 | — | — | 24,763,245 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 1,124,332,550 | $ | — | $ | 16,868 | $ | 1,124,349,418 | ||||||||
|
|
|
|
|
|
|
| |||||||||
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 29 |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES® TRANSPORTATION AVERAGE ETF
October 31, 2017
Security | Shares | Value | ||||||
COMMON STOCKS — 99.93% |
| |||||||
AIR FREIGHT & LOGISTICS — 31.06% |
| |||||||
CH Robinson Worldwide Inc. | 500,392 | $ | 39,295,784 | |||||
Expeditors International of Washington Inc. | 590,854 | 34,494,057 | ||||||
FedEx Corp. | 524,922 | 118,532,637 | ||||||
United Parcel Service Inc. Class B | 544,997 | 64,053,497 | ||||||
|
| |||||||
256,375,975 | ||||||||
AIRLINES — 18.99% |
| |||||||
Alaska Air Group Inc. | 467,165 | 30,846,905 | ||||||
American Airlines Group Inc. | 550,968 | 25,796,322 | ||||||
Delta Air Lines Inc. | 567,775 | 28,405,783 | ||||||
JetBlue Airways Corp.a,b | 619,151 | 11,856,741 | ||||||
Southwest Airlines Co. | 568,781 | 30,634,545 | ||||||
United Continental Holdings Inc.a | 500,071 | 29,244,152 | ||||||
|
| |||||||
156,784,448 | ||||||||
MARINE — 6.45% |
| |||||||
Kirby Corp.a,b | 536,176 | 37,988,069 | ||||||
Matson Inc. | 559,203 | 15,227,098 | ||||||
|
| |||||||
53,215,167 | ||||||||
ROAD & RAIL — 43.43% |
| |||||||
Avis Budget Group Inc.a,b | 566,548 | 23,370,105 | ||||||
CSX Corp. | 578,396 | 29,168,510 | ||||||
JB Hunt Transport Services Inc. | 534,735 | 56,890,457 | ||||||
Kansas City Southern | 374,928 | 39,074,996 | ||||||
Landstar System Inc. | 400,277 | 39,527,354 | ||||||
Norfolk Southern Corp. | 530,680 | 69,741,966 | ||||||
Ryder System Inc. | 479,231 | 38,856,050 | ||||||
Union Pacific Corp. | 534,655 | 61,907,702 | ||||||
|
| |||||||
358,537,140 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $864,705,943) |
| 824,912,730 | ||||||
SHORT-TERM INVESTMENTS — 4.34% |
| |||||||
MONEY MARKET FUNDS — 4.34% |
| |||||||
BlackRock Cash Funds: Institutional, | ||||||||
1.31%c,d,e | 34,713,266 | 34,720,208 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
1.00%c,d | 1,111,285 | 1,111,285 | ||||||
|
| |||||||
35,831,493 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $35,833,638) |
| 35,831,493 | ||||||
|
|
Value | ||||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $900,539,581)f |
| $ | 860,744,223 | |||||
Other Assets, Less Liabilities — (4.27)% |
| (35,217,210 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% | $ | 825,527,013 | ||||||
|
|
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 1. |
c | Affiliated issuer. See Schedule 1. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 1. |
f | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $903,940,058. Net unrealized depreciation was $43,195,835, of which $27,555,139 represented gross unrealized appreciation on investments and $70,750,974 represented gross unrealized depreciation on investments. |
30 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® TRANSPORTATION AVERAGE ETF
October 31, 2017
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 04/30/17 | Shares purchased | Shares sold | Shares held at 10/31/17 | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, | 3,329,255 | 31,384,011 | b | — | 34,713,266 | $ | 34,720,208 | $ | 3,370 | $ | (2,632 | ) | $ | — | c | |||||||||||||||||
BlackRock Cash Funds: Treasury, | 1,356,987 | — | (245,702 | )b | 1,111,285 | 1,111,285 | — | — | 4,098 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 35,831,493 | $ | 3,370 | $ | (2,632 | ) | $ | 4,098 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
c | Does not include income earned on the investment of securities lending cash collateral which is not direct income of the Fund and is reflected as a component of securities lending income in the statement of operations. |
Schedule 2 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: | ||||||||||||||||
Assets: | ||||||||||||||||
Common stocks | $ | 824,912,730 | $ | — | $ | — | $ | 824,912,730 | ||||||||
Money market funds | 35,831,493 | — | — | 35,831,493 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 860,744,223 | $ | — | $ | — | $ | 860,744,223 | ||||||||
|
|
|
|
|
|
|
| |||||||||
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 31 |
Table of Contents
Schedule of Investments (Unaudited)
October 31, 2017
Security | Shares | Value | ||||||
COMMON STOCKS — 99.82% |
| |||||||
ELECTRIC UTILITIES — 0.51% |
| |||||||
OGE Energy Corp. | 153,183 | $ | 5,643,261 | |||||
|
| |||||||
5,643,261 | ||||||||
ENERGY EQUIPMENT & SERVICES — 13.80% |
| |||||||
Baker Hughes a GE Co. | 328,013 | 10,309,449 | ||||||
Core Laboratories NV | 33,840 | 3,380,616 | ||||||
Dril-Quip Inc.a,b | 28,931 | 1,217,995 | ||||||
Ensco PLC Class Aa | 330,923 | 1,783,675 | ||||||
Halliburton Co. | 665,290 | 28,434,495 | ||||||
Helmerich & Payne Inc. | 83,208 | 4,519,026 | ||||||
Nabors Industries Ltd. | 219,208 | 1,234,141 | ||||||
National Oilwell Varco Inc. | 291,182 | 9,955,513 | ||||||
Oceaneering International Inc. | 75,374 | 1,524,062 | ||||||
Patterson-UTI Energy Inc. | 163,644 | 3,236,878 | ||||||
Rowan Companies PLC Class Ab | 87,146 | 1,248,802 | ||||||
Schlumberger Ltd. | 1,065,142 | 68,169,088 | ||||||
Superior Energy Services Inc.b | 117,219 | 1,033,872 | ||||||
TechnipFMC PLCb | 336,864 | 9,226,705 | ||||||
Transocean Ltd.a,b | 300,054 | 3,150,567 | ||||||
U.S. Silica Holdings Inc. | 62,285 | 1,900,315 | ||||||
Weatherford International PLCa,b | 756,089 | 2,623,629 | ||||||
|
| |||||||
152,948,828 | ||||||||
OIL, GAS & CONSUMABLE FUELS — 85.20% |
| |||||||
Anadarko Petroleum Corp. | 429,543 | 21,206,538 | ||||||
Andeavor | 110,605 | 11,750,675 | ||||||
Antero Resources Corp.a,b | 164,548 | 3,192,231 | ||||||
Apache Corp. | 291,934 | 12,077,310 | ||||||
Cabot Oil & Gas Corp. | 354,321 | 9,814,692 | ||||||
Cheniere Energy Inc.a,b | 154,979 | 7,243,718 | ||||||
Chesapeake Energy Corp.a,b | 696,517 | 2,716,416 | ||||||
Chevron Corp. | 1,452,671 | 168,350,042 | ||||||
Cimarex Energy Co. | 73,073 | 8,544,426 | ||||||
Concho Resources Inc.b | 113,983 | 15,297,658 | ||||||
ConocoPhillips | 932,888 | 47,717,221 | ||||||
Continental Resources Inc./OKa,b | 66,192 | 2,694,676 | ||||||
Devon Energy Corp. | 402,910 | 14,867,379 | ||||||
Diamondback Energy Inc.a,b | 75,261 | 8,064,969 | ||||||
Energen Corp.b | 74,556 | 3,854,545 | ||||||
EOG Resources Inc. | 442,661 | 44,208,554 | ||||||
EQT Corp.a | 132,944 | 8,314,318 | ||||||
Exxon Mobil Corp. | 3,248,196 | 270,737,137 | ||||||
Gulfport Energy Corp.b | 126,209 | 1,729,063 | ||||||
Hess Corp. | 207,024 | 9,142,180 |
Security | Shares | Value | ||||||
HollyFrontier Corp. | 135,983 | $ | 5,024,572 | |||||
Kinder Morgan Inc./DE | 1,471,756 | 26,653,501 | ||||||
Marathon Oil Corp. | 651,964 | 9,270,928 | ||||||
Marathon Petroleum Corp. | 388,081 | 23,183,959 | ||||||
Murphy Oil Corp. | 124,283 | 3,324,570 | ||||||
Newfield Exploration Co.a,b | 152,665 | 4,700,555 | ||||||
Noble Energy Inc. | 372,803 | 10,390,020 | ||||||
Oasis Petroleum Inc.a,b | 182,119 | 1,721,025 | ||||||
Occidental Petroleum Corp. | 586,110 | 37,845,123 | ||||||
ONEOK Inc. | 291,191 | 15,802,936 | ||||||
Parsley Energy Inc. Class Aa,b | 178,551 | 4,749,457 | ||||||
PBF Energy Inc. Class A | 84,133 | 2,437,333 | ||||||
PDC Energy Inc.a,b | 50,536 | 2,573,798 | ||||||
Phillips 66 | 329,374 | 29,999,384 | ||||||
Pioneer Natural Resources Co. | 130,394 | 19,516,070 | ||||||
QEP Resources Inc.b | 184,475 | 1,651,051 | ||||||
Range Resources Corp. | 173,195 | 3,136,561 | ||||||
Rice Energy Inc.b | 136,762 | 3,877,203 | ||||||
RSP Permian Inc.a,b | 96,100 | 3,306,801 | ||||||
SemGroup Corp. Class A | 50,686 | 1,320,370 | ||||||
SM Energy Co.a | 78,519 | 1,674,810 | ||||||
Southwestern Energy Co.b | 390,554 | 2,167,575 | ||||||
Targa Resources Corp. | 165,278 | 6,859,037 | ||||||
Valero Energy Corp. | 338,568 | 26,709,630 | ||||||
Whiting Petroleum Corp.a,b | 278,201 | 1,671,988 | ||||||
Williams Companies Inc. (The) | 633,694 | 18,060,279 | ||||||
World Fuel Services Corp. | 52,437 | 1,457,749 | ||||||
WPX Energy Inc.b | 305,162 | 3,442,227 | ||||||
|
| |||||||
944,052,260 | ||||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT — 0.31% |
| |||||||
First Solar Inc.b | 62,406 | 3,421,097 | ||||||
|
| |||||||
3,421,097 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $1,408,266,247) |
| 1,106,065,446 |
32 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® U.S. ENERGY ETF
October 31, 2017
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS — 3.38% |
| |||||||
MONEY MARKET FUNDS — 3.38% |
| |||||||
BlackRock Cash Funds: Institutional, | ||||||||
1.31%c,d,e | 35,753,502 | $ | 35,760,653 | |||||
BlackRock Cash Funds: Treasury, | ||||||||
1.00%c,d | 1,705,243 | 1,705,243 | ||||||
|
| |||||||
37,465,896 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $37,463,819) |
| 37,465,896 | ||||||
|
|
Value | ||||||
TOTAL INVESTMENTS |
| |||||
(Cost: $1,445,730,066)f | $ | 1,143,531,342 | ||||
Other Assets, Less Liabilities — (3.20)% | (35,471,771 | ) | ||||
|
| |||||
NET ASSETS — 100.00% | $ | 1,108,059,571 | ||||
|
|
a | All or a portion of this security represents a security on loan. See Note 1. |
b | Non-income earning security. |
c | Affiliated issuer. See Schedule 1. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 1. |
f | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $1,485,103,832. Net unrealized depreciation was $341,572,490, of which $16,389,710 represented gross unrealized appreciation on investments and $357,962,200 represented gross unrealized depreciation on investments. |
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 04/30/17 | Shares purchased | Shares sold | Shares held at 10/31/17 | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, | 18,709,545 | 17,043,957 | b | — | 35,753,502 | $ | 35,760,653 | $ | (3,338 | ) | $ | (2,617 | ) | $ | — | c | ||||||||||||||||
BlackRock Cash Funds: Treasury, | 847,707 | 857,536 | b | — | 1,705,243 | 1,705,243 | — | — | 4,017 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 37,465,896 | $ | (3,338 | ) | $ | (2,617 | ) | $ | 4,017 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
c | Does not include income earned on the investment of securities lending cash collateral which is not direct income of the Fund and is reflected as a component of securities lending income in the statement of operations. |
Schedule 2 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: | ||||||||||||||||
Assets: | ||||||||||||||||
Common stocks | $ | 1,106,065,446 | $ | — | $ | — | $ | 1,106,065,446 | ||||||||
Money market funds | 37,465,896 | — | — | 37,465,896 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 1,143,531,342 | $ | — | $ | — | $ | 1,143,531,342 | ||||||||
|
|
|
|
|
|
|
| |||||||||
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 33 |
Table of Contents
Schedule of Investments (Unaudited)
October 31, 2017
Security | Shares | Value | ||||||
COMMON STOCKS — 99.84% |
| |||||||
BIOTECHNOLOGY — 22.89% |
| |||||||
AbbVie Inc. | 1,056,078 | $ | 95,311,040 | |||||
ACADIA Pharmaceuticals Inc.a,b | 64,121 | 2,233,334 | ||||||
Agios Pharmaceuticals Inc.a,b | 27,396 | 1,760,741 | ||||||
Alexion Pharmaceuticals Inc.a | 147,861 | 17,693,047 | ||||||
Alkermes PLCa | 101,929 | 4,970,058 | ||||||
Alnylam Pharmaceuticals Inc.a | 50,399 | 6,140,614 | ||||||
Amgen Inc. | 483,402 | 84,701,698 | ||||||
Biogen Inc.a | 140,073 | 43,655,151 | ||||||
BioMarin Pharmaceutical Inc.a | 116,116 | 9,531,962 | ||||||
Bioverativ Inc.a | 71,836 | 4,058,734 | ||||||
Bluebird Bio Inc.a,b | 30,280 | 4,211,948 | ||||||
Celgene Corp.a | 518,304 | 52,333,155 | ||||||
Clovis Oncology Inc.a,b | 32,136 | 2,422,090 | ||||||
Dyax Corp.a,c | 95,647 | 219,032 | ||||||
Exact Sciences Corp.a,b | 79,051 | 4,347,015 | ||||||
Exelixis Inc.a | 185,155 | 4,589,992 | ||||||
Gilead Sciences Inc. | 865,165 | 64,852,768 | ||||||
Incyte Corp.a | 113,112 | 12,809,934 | ||||||
Intercept Pharmaceuticals Inc.a,b | 11,912 | 734,137 | ||||||
Intrexon Corp.a,b | 40,910 | 668,879 | ||||||
Ionis Pharmaceuticals Inc.a,b | 82,567 | 4,715,401 | ||||||
Juno Therapeutics Inc.a,b | 53,336 | 2,395,320 | ||||||
Ligand Pharmaceuticals Inc.a | 13,801 | 2,005,975 | ||||||
Myriad Genetics Inc.a | 45,601 | 1,563,202 | ||||||
Neurocrine Biosciences Inc.a,b | 58,187 | 3,613,995 | ||||||
OPKO Health Inc.a,b | 241,057 | 1,622,314 | ||||||
Portola Pharmaceuticals Inc.a | 41,792 | 2,064,943 | ||||||
Radius Health Inc.a,b | 26,129 | 839,002 | ||||||
Regeneron Pharmaceuticals Inc.a,b | 50,897 | 20,492,150 | ||||||
Seattle Genetics Inc.a,b | 63,320 | 3,882,149 | ||||||
TESARO Inc.a,b | 25,190 | 2,916,246 | ||||||
Ultragenyx Pharmaceutical Inc.a,b | 26,354 | 1,214,656 | ||||||
United Therapeutics Corp.a | 28,718 | 3,405,668 | ||||||
Vertex Pharmaceuticals Inc.a | 167,029 | 24,424,651 | ||||||
|
| |||||||
492,401,001 | ||||||||
COMMERCIAL SERVICES & SUPPLIES — 0.12% |
| |||||||
Healthcare Services Group Inc. | 48,579 | 2,569,344 | ||||||
|
| |||||||
2,569,344 | ||||||||
HEALTH CARE EQUIPMENT & SUPPLIES — 21.17% |
| |||||||
Abbott Laboratories | 1,151,046 | 62,421,225 | ||||||
ABIOMED Inc.a | 27,794 | 5,362,018 | ||||||
Align Technology Inc.a,b | 47,793 | 11,421,571 |
Security | Shares | Value | ||||||
Baxter International Inc. | 332,097 | $ | 21,410,294 | |||||
Becton Dickinson and Co. | 150,758 | 31,458,672 | ||||||
Boston Scientific Corp.a | 909,022 | 25,579,879 | ||||||
C.R. Bard Inc. | 48,144 | 15,746,458 | ||||||
Cooper Companies Inc. (The) | 32,364 | 7,775,775 | ||||||
Danaher Corp. | 404,999 | 37,369,258 | ||||||
DENTSPLY SIRONA Inc. | 152,058 | 9,286,182 | ||||||
DexCom Inc.a,b | 57,187 | 2,571,699 | ||||||
Edwards Lifesciences Corp.a | 139,890 | 14,300,955 | ||||||
Haemonetics Corp.a | 34,702 | 1,650,427 | ||||||
Halyard Health Inc.a | 31,183 | 1,314,363 | ||||||
Hill-Rom Holdings Inc. | 43,749 | 3,530,982 | ||||||
Hologic Inc.a | 185,879 | 7,035,520 | ||||||
IDEXX Laboratories Inc.a | 57,816 | 9,607,285 | ||||||
Integra LifeSciences Holdings Corp.a,b | 41,738 | 1,952,504 | ||||||
Intuitive Surgical Inc.a,b | 74,100 | 27,814,176 | ||||||
Masimo Corp.a | 31,784 | 2,789,364 | ||||||
Medtronic PLC | 897,406 | 72,259,131 | ||||||
NuVasive Inc.a | 33,759 | 1,915,148 | ||||||
ResMed Inc. | 94,233 | 7,932,534 | ||||||
STERIS PLC | 56,362 | 5,260,265 | ||||||
Stryker Corp. | 213,122 | 33,006,204 | ||||||
Teleflex Inc. | 29,839 | 7,071,246 | ||||||
Varian Medical Systems Inc.a,b | 60,872 | 6,342,254 | ||||||
West Pharmaceutical Services Inc.b | 49,097 | 4,978,436 | ||||||
Zimmer Biomet Holdings Inc. | 133,957 | 16,291,850 | ||||||
|
| |||||||
455,455,675 | ||||||||
HEALTH CARE PROVIDERS & SERVICES — 17.66% |
| |||||||
Acadia Healthcare Co. Inc.a,b | 53,905 | 1,690,461 | ||||||
Aetna Inc. | 219,748 | 37,363,752 | ||||||
Anthem Inc. | 173,958 | 36,393,753 | ||||||
Brookdale Senior Living Inc.a | 122,615 | 1,229,828 | ||||||
Centene Corp.a | 114,261 | 10,702,828 | ||||||
Cigna Corp. | 166,802 | 32,896,690 | ||||||
DaVita Inc.a | 101,454 | 6,162,316 | ||||||
Envision Healthcare Corp.a,b | 80,278 | 3,419,843 | ||||||
Express Scripts Holding Co.a | 382,619 | 23,450,718 | ||||||
HCA Healthcare Inc.a,b | 191,462 | 14,484,100 | ||||||
HealthSouth Corp. | 65,229 | 3,009,666 | ||||||
Henry Schein Inc.a,b | 105,123 | 8,262,668 | ||||||
Humana Inc. | 95,742 | 24,447,720 | ||||||
Laboratory Corp. of America Holdingsa | 67,445 | 10,366,971 |
34 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® U.S. HEALTHCARE ETF
October 31, 2017
Security | Shares | Value | ||||||
LifePoint Health Inc.a,b | 26,504 | $ | 1,276,168 | |||||
Magellan Health Inc.a | 15,763 | 1,344,584 | ||||||
MEDNAX Inc.a | 62,082 | 2,718,571 | ||||||
Molina Healthcare Inc.a,b | 29,040 | 1,969,783 | ||||||
Owens & Minor Inc. | 40,268 | 989,385 | ||||||
Patterson Companies Inc. | 54,586 | 2,019,682 | ||||||
Quest Diagnostics Inc. | 90,385 | 8,476,305 | ||||||
Tenet Healthcare Corp.a | 53,752 | 767,579 | ||||||
UnitedHealth Group Inc. | 640,539 | 134,654,109 | ||||||
Universal Health Services Inc. Class B | 58,594 | 6,017,604 | ||||||
WellCare Health Plans Inc.a | 29,533 | 5,839,855 | ||||||
|
| |||||||
379,954,939 | ||||||||
LIFE SCIENCES TOOLS & SERVICES — 5.08% |
| |||||||
Bio-Rad Laboratories Inc. Class Aa | 13,297 | 2,922,548 | ||||||
Bio-Techne Corp. | 24,666 | 3,231,739 | ||||||
Bruker Corp. | 68,024 | 2,135,954 | ||||||
Charles River Laboratories International Inc.a | 31,445 | 3,656,739 | ||||||
Illumina Inc.a | 96,725 | 19,847,003 | ||||||
INC Research Holdings Inc. Class Aa | 37,092 | 2,119,808 | ||||||
PRA Health Sciences Inc.a | 32,666 | 2,659,992 | ||||||
Quintiles IMS Holdings Inc.a | 100,438 | 10,857,348 | ||||||
Thermo Fisher Scientific Inc. | 265,133 | 51,390,729 | ||||||
Waters Corp.a | 52,884 | 10,367,908 | ||||||
|
| |||||||
109,189,768 | ||||||||
PHARMACEUTICALS — 32.92% |
| |||||||
Akorn Inc.a,b | 61,818 | 2,013,412 | ||||||
Allergan PLC | 221,476 | 39,252,192 | ||||||
Bristol-Myers Squibb Co. | 1,086,437 | 66,989,705 | ||||||
Catalent Inc.a | 82,560 | 3,516,230 | ||||||
Eli Lilly & Co. | 641,869 | 52,594,746 | ||||||
Endo International PLCa | 134,242 | 856,464 | ||||||
Horizon Pharma PLCa | 107,885 | 1,462,921 | ||||||
Impax Laboratories Inc.a,b | 49,612 | 900,458 | ||||||
Jazz Pharmaceuticals PLCa,b | 39,844 | 5,639,121 | ||||||
Johnson & Johnson | 1,778,130 | 247,889,103 | ||||||
Mallinckrodt PLCa,b | 64,223 | 2,033,942 | ||||||
Medicines Co. (The)a,b | 42,321 | 1,216,306 | ||||||
Merck & Co. Inc. | 1,812,030 | 99,824,733 | ||||||
Mylan NVa | 355,283 | 12,687,156 | ||||||
Nektar Therapeuticsa,b | 103,159 | 2,485,100 | ||||||
Pacira Pharmaceuticals Inc./DEa | 26,764 | 857,786 | ||||||
Perrigo Co. PLC | 87,906 | 7,119,507 |
Security | Shares | Value | ||||||
Pfizer Inc. | 3,953,653 | $ | 138,615,074 | |||||
Prestige Brands Holdings Inc.a,b | 34,912 | 1,637,373 | ||||||
Zoetis Inc. | 325,147 | 20,750,882 | ||||||
|
| |||||||
708,342,211 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $2,038,820,838) |
| 2,147,912,938 | ||||||
SHORT-TERM INVESTMENTS — 3.73% |
| |||||||
MONEY MARKET FUNDS — 3.73% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
1.31%d,e,f | 77,391,439 | 77,406,917 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
1.00%d,e | 2,838,396 | 2,838,396 | ||||||
|
| |||||||
80,245,313 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $80,239,491) |
| 80,245,313 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $2,119,060,329)g |
| 2,228,158,251 | ||||||
Other Assets, Less Liabilities — (3.57)% |
| (76,790,124 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 2,151,368,127 | |||||
|
|
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 1. |
c | Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. |
d | Affiliated issuer. See Schedule 1. |
e | The rate quoted is the annualized seven-day yield of the fund at period end. |
f | All or a portion of this security represents an investment of securities lending collateral. See Note 1. |
g | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $2,131,328,410. Net unrealized appreciation was $96,829,841, of which $278,013,706 represented gross unrealized appreciation on investments and $181,183,865 represented gross unrealized depreciation on investments. |
SCHEDULESOF INVESTMENTS | 35 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® U.S. HEALTHCARE ETF
October 31, 2017
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 04/30/17 | Shares purchased | Shares sold | Shares held at 10/31/17 | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, | 36,258,180 | 41,133,259 | b | — | 77,391,439 | $ | 77,406,917 | $ | (4,280 | ) | $ | (6,486 | ) | $ | — | c | ||||||||||||||||
BlackRock Cash Funds: Treasury, | 936,859 | 1,901,537 | b | — | 2,838,396 | 2,838,396 | — | — | 8,011 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 80,245,313 | $ | (4,280 | ) | $ | (6,486 | ) | $ | 8,011 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
c | Does not include income earned on the investment of securities lending cash collateral which is not direct income of the Fund and is reflected as a component of securities lending income in the statement of operations. |
Schedule 2 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: | ||||||||||||||||
Assets: | ||||||||||||||||
Common stocks | $ | 2,147,693,906 | $ | — | $ | 219,032 | $ | 2,147,912,938 | ||||||||
Money market funds | 80,245,313 | — | — | 80,245,313 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 2,227,939,219 | $ | — | $ | 219,032 | $ | 2,228,158,251 | ||||||||
|
|
|
|
|
|
|
| |||||||||
See notes to financial statements.
36 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited)
October 31, 2017
Security | Shares | Value | ||||||
COMMON STOCKS — 99.97% |
| |||||||
COMMERCIAL SERVICES & SUPPLIES — 0.06% |
| |||||||
Pitney Bowes Inc. | 166,345 | $ | 2,285,580 | |||||
|
| |||||||
2,285,580 | ||||||||
COMMUNICATIONS EQUIPMENT — 5.70% |
| |||||||
Arista Networks Inc.a,b | 37,646 | 7,525,059 | ||||||
ARRIS International PLCa | 147,619 | 4,207,142 | ||||||
Brocade Communications Systems Inc. | 346,606 | 4,037,960 | ||||||
Ciena Corp.a | 124,425 | 2,646,520 | ||||||
Cisco Systems Inc. | 3,901,015 | 133,219,662 | ||||||
CommScope Holding Co. Inc.a,b | 159,319 | 5,120,513 | ||||||
EchoStar Corp. Class Aa | 42,581 | 2,382,407 | ||||||
F5 Networks Inc.a | 51,894 | 6,293,185 | ||||||
Finisar Corp.a,b | 101,650 | 2,392,841 | ||||||
Harris Corp. | 95,379 | 13,288,202 | ||||||
InterDigital Inc./PA | 30,973 | 2,271,870 | ||||||
Juniper Networks Inc. | 307,788 | 7,642,376 | ||||||
Lumentum Holdings Inc.a,b | 52,476 | 3,313,859 | ||||||
Motorola Solutions Inc. | 129,784 | 11,750,643 | ||||||
NetScout Systems Inc.a | 79,845 | 2,267,598 | ||||||
Palo Alto Networks Inc.a | 73,447 | 10,811,398 | ||||||
Plantronics Inc. | 32,325 | 1,466,262 | ||||||
ViaSat Inc.a,b | 46,435 | 3,022,919 | ||||||
Viavi Solutions Inc.a | 208,843 | 1,938,063 | ||||||
|
| |||||||
225,598,479 | ||||||||
CONSTRUCTION & ENGINEERING — 0.06% |
| |||||||
Dycom Industries Inc.a | 27,453 | 2,411,197 | ||||||
|
| |||||||
2,411,197 | ||||||||
DIVERSIFIED TELECOMMUNICATION SERVICES — 0.51% |
| |||||||
CenturyLink Inc. | 772,727 | 14,674,086 | ||||||
Zayo Group Holdings Inc.a,b | 151,702 | 5,470,374 | ||||||
|
| |||||||
20,144,460 | ||||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS — 0.94% |
| |||||||
CDW Corp./DE | 124,807 | 8,736,490 | ||||||
Corning Inc. | 712,300 | 22,302,113 | ||||||
SYNNEX Corp. | 24,863 | 3,353,521 | ||||||
Tech Data Corp.a | 30,163 | 2,798,222 | ||||||
|
| |||||||
37,190,346 | ||||||||
HEALTH CARE TECHNOLOGY — 0.83% |
| |||||||
Allscripts Healthcare Solutions Inc.a,b | 161,734 | 2,180,174 | ||||||
athenahealth Inc.a,b | 33,340 | 4,263,519 |
Security | Shares | Value | ||||||
Cerner Corp.a,b | 249,699 | $ | 16,859,676 | |||||
Medidata Solutions Inc.a | 49,585 | 3,730,280 | ||||||
Veeva Systems Inc. Class Aa | 93,941 | 5,724,765 | ||||||
|
| |||||||
32,758,414 | ||||||||
HOUSEHOLD DURABLES — 0.13% |
| |||||||
Garmin Ltd. | 91,532 | 5,181,627 | ||||||
|
| |||||||
5,181,627 | ||||||||
INTERNET SOFTWARE & SERVICES — 22.01% |
| |||||||
Akamai Technologies Inc.a,b | 139,027 | 7,264,161 | ||||||
Alphabet Inc. Class Aa | 224,449 | 231,864,795 | ||||||
Alphabet Inc. Class Ca | 227,312 | 231,094,472 | ||||||
Cars.com Inc.a,b | 67,504 | 1,607,945 | ||||||
eBay Inc.a | 782,705 | 29,461,016 | ||||||
Facebook Inc. Class Aa | 1,800,895 | 324,269,154 | ||||||
GrubHub Inc.a,b | 72,175 | 4,404,118 | ||||||
IAC/InterActiveCorpa | 59,875 | 7,726,869 | ||||||
j2 Global Inc. | 41,604 | 3,084,521 | ||||||
LogMeIn Inc. | 43,419 | 5,255,870 | ||||||
Pandora Media Inc.a,b | 229,288 | 1,676,095 | ||||||
Twitter Inc.a | 513,323 | 10,584,720 | ||||||
VeriSign Inc.a,b | 69,600 | 7,483,392 | ||||||
Zillow Group Inc. Class Aa,b | 43,686 | 1,804,669 | ||||||
Zillow Group Inc. Class Ca,b | 88,829 | 3,666,861 | ||||||
|
| |||||||
871,248,658 | ||||||||
IT SERVICES — 5.40% |
| |||||||
Amdocs Ltd. | 118,348 | 7,704,455 | ||||||
CACI International Inc. Class Aa | 21,003 | 3,019,181 | ||||||
Cognizant Technology Solutions Corp. Class A | 463,732 | 35,090,600 | ||||||
CSRA Inc. | 136,606 | 4,370,026 | ||||||
DST Systems Inc. | 52,089 | 3,053,457 | ||||||
DXC Technology Co. | 224,744 | 20,568,571 | ||||||
EPAM Systems Inc.a | 42,010 | 3,829,212 | ||||||
Gartner Inc.a | 72,837 | 9,127,204 | ||||||
International Business Machines Corp. | 676,629 | 104,241,464 | ||||||
Leidos Holdings Inc. | 115,394 | 7,214,433 | ||||||
Science Applications International Corp. | 37,988 | 2,786,040 | ||||||
Teradata Corp.a,b | 106,832 | 3,573,530 | ||||||
Vantiv Inc. Class Aa,b | 130,756 | 9,152,920 | ||||||
|
| |||||||
213,731,093 |
SCHEDULESOF INVESTMENTS | 37 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® U.S. TECHNOLOGY ETF
October 31, 2017
Security | Shares | Value | ||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT — 19.62% |
| |||||||
Advanced Micro Devices Inc.a,b | 651,464 | $ | 7,156,332 | |||||
Analog Devices Inc. | 289,377 | 26,420,120 | ||||||
Applied Materials Inc. | 835,405 | 47,141,904 | ||||||
Broadcom Ltd. | 317,679 | 83,838,665 | ||||||
Cavium Inc.a,b | 57,680 | 3,979,343 | ||||||
Cirrus Logic Inc.a,b | 54,752 | 3,066,112 | ||||||
Cree Inc.a,b | 84,747 | 3,025,468 | ||||||
Cypress Semiconductor Corp. | 276,780 | 4,389,731 | ||||||
Entegris Inc. | 119,426 | 3,911,202 | ||||||
Integrated Device Technology Inc.a | 113,879 | 3,538,221 | ||||||
Intel Corp. | 3,664,783 | 166,710,979 | ||||||
KLA-Tencor Corp. | 124,808 | 13,590,343 | ||||||
Lam Research Corp. | 127,845 | 26,664,632 | ||||||
Marvell Technology Group Ltd. | 355,559 | 6,567,175 | ||||||
Maxim Integrated Products Inc. | 225,077 | 11,825,546 | ||||||
Microchip Technology Inc. | 184,259 | 17,467,753 | ||||||
Micron Technology Inc.a | 874,556 | 38,751,576 | ||||||
Microsemi Corp.a | 95,290 | 5,085,627 | ||||||
MKS Instruments Inc. | 45,014 | 4,890,771 | ||||||
Monolithic Power Systems Inc. | 32,047 | 3,899,158 | ||||||
NVIDIA Corp. | 468,530 | 96,896,689 | ||||||
ON Semiconductor Corp.a | 342,155 | 7,294,745 | ||||||
Qorvo Inc.a,b | 103,083 | 7,814,722 | ||||||
QUALCOMM Inc. | 1,155,638 | 58,949,094 | ||||||
Semtech Corp.a | 58,663 | 2,408,116 | ||||||
Silicon Laboratories Inc.a | 36,141 | 3,429,781 | ||||||
Skyworks Solutions Inc. | 145,745 | 16,594,526 | ||||||
Synaptics Inc.a,b | 34,141 | 1,267,314 | ||||||
Teradyne Inc. | 160,935 | 6,902,502 | ||||||
Texas Instruments Inc. | 773,761 | 74,814,951 | ||||||
Versum Materials Inc. | 91,693 | 3,858,441 | ||||||
Xilinx Inc. | 197,574 | 14,559,228 | ||||||
|
| |||||||
776,710,767 | ||||||||
SOFTWARE — 25.26% |
| |||||||
ACI Worldwide Inc.a,b | 103,411 | 2,490,137 | ||||||
Adobe Systems Inc.a | 385,784 | 67,573,925 | ||||||
ANSYS Inc.a | 68,075 | 9,306,533 | ||||||
Aspen Technology Inc.a | 61,440 | 3,964,109 | ||||||
Autodesk Inc.a | 172,983 | 21,615,956 | ||||||
Blackbaud Inc. | 40,268 | 4,079,148 | ||||||
CA Inc. | 254,629 | 8,244,887 | ||||||
Cadence Design Systems Inc.a | 224,807 | 9,702,670 |
Security | Shares | Value | ||||||
CDK Global Inc. | 106,951 | $ | 6,797,806 | |||||
Citrix Systems Inc.a | 115,557 | 9,546,164 | ||||||
CommVault Systems Inc.a | 38,516 | 2,004,758 | ||||||
Dell Technologies Inc. Class Va | 161,648 | 13,379,605 | ||||||
Ellie Mae Inc.a,b | 30,067 | 2,704,527 | ||||||
Fair Isaac Corp. | 25,837 | 3,750,499 | ||||||
FireEye Inc.a,b | 151,813 | 2,568,676 | ||||||
Fortinet Inc.a | 125,224 | 4,935,078 | ||||||
Guidewire Software Inc.a,b | 61,695 | 4,934,366 | ||||||
Intuit Inc. | 191,371 | 28,900,848 | ||||||
Manhattan Associates Inc.a,b | 60,311 | 2,524,618 | ||||||
Microsoft Corp. | 5,900,877 | 490,834,949 | ||||||
Nuance Communications Inc.a | 226,136 | 3,333,245 | ||||||
Oracle Corp. | 2,356,615 | 119,951,704 | ||||||
Paycom Software Inc.a | 41,576 | 3,417,547 | ||||||
Proofpoint Inc.a,b | 37,823 | 3,495,223 | ||||||
PTC Inc.a | 94,327 | 6,268,029 | ||||||
Red Hat Inc.a | 140,579 | 16,986,161 | ||||||
salesforce.com Inc.a | 534,396 | 54,690,087 | ||||||
ServiceNow Inc.a,b | 134,568 | 17,005,358 | ||||||
Splunk Inc.a,b | 112,164 | 7,548,637 | ||||||
SS&C Technologies Holdings Inc. | 141,418 | 5,685,004 | ||||||
Symantec Corp. | 487,530 | 15,844,725 | ||||||
Synopsys Inc.a | 120,316 | 10,409,740 | ||||||
Tableau Software Inc. Class Aa,b | 52,555 | 4,261,685 | ||||||
Tyler Technologies Inc.a,b | 28,616 | 5,073,331 | ||||||
Ultimate Software Group Inc. (The)a,b | 23,526 | 4,766,132 | ||||||
Verint Systems Inc.a,b | 55,477 | 2,341,129 | ||||||
VMware Inc. Class Aa,b | 58,780 | 7,035,378 | ||||||
Workday Inc. Class Aa,b | 104,721 | 11,622,984 | ||||||
|
| |||||||
999,595,358 | ||||||||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS — 19.45% |
| |||||||
3D Systems Corp.a,b | 113,851 | 1,409,475 | ||||||
Apple Inc. | 3,971,637 | 671,365,518 | ||||||
Diebold Nixdorf Inc. | 73,549 | 1,419,496 | ||||||
Electronics For Imaging Inc.a | 45,995 | 1,419,406 | ||||||
Hewlett Packard Enterprise Co. | 1,299,162 | 18,084,335 | ||||||
HP Inc. | 1,313,635 | 28,308,834 | ||||||
NCR Corp.a | 103,425 | 3,318,908 | ||||||
NetApp Inc. | 216,587 | 9,620,795 | ||||||
Seagate Technology PLC | 232,072 | 8,579,702 |
38 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® U.S. TECHNOLOGY ETF
October 31, 2017
Security | Shares | Value | ||||||
Western Digital Corp. | 232,886 | $ | 20,789,733 | |||||
Xerox Corp. | 175,574 | 5,321,648 | ||||||
|
| |||||||
769,637,850 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $2,995,328,971) |
| 3,956,493,829 | ||||||
SHORT-TERM INVESTMENTS — 2.85% |
| |||||||
MONEY MARKET FUNDS — 2.85% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
1.31%c,d,e | 109,110,804 | 109,132,626 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
1.00%c,d | 3,761,903 | 3,761,903 | ||||||
|
| |||||||
112,894,529 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $112,885,357) |
| 112,894,529 | ||||||
|
|
Value | ||||||
TOTAL INVESTMENTS IN SECURITIES — 102.82% | ||||||
(Cost: $3,108,214,328)f | $ | 4,069,388,358 | ||||
Other Assets, Less Liabilities — (2.82)% | (111,698,898 | ) | ||||
|
| |||||
NET ASSETS — 100.00% | $ | 3,957,689,460 | ||||
|
|
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 1. |
c | Affiliated issuer. See Schedule 1. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 1. |
f | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $3,129,456,774. Net unrealized appreciation was $939,931,584, of which $1,047,411,473 represented gross unrealized appreciation on investments and $107,479,889 represented gross unrealized depreciation on investments. |
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 04/30/17 | Shares purchased | Shares sold | Shares held at 10/31/17 | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, | 92,564,009 | 16,546,795 | b | — | 109,110,804 | $ | 109,132,626 | $ | (10,208 | ) | $ | (10,960 | ) | $ | — | c | ||||||||||||||||
BlackRock Cash Funds: Treasury, | 1,741,261 | 2,020,642 | b | — | 3,761,903 | 3,761,903 | — | — | 11,576 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 112,894,529 | $ | (10,208 | ) | $ | (10,960 | ) | $ | 11,576 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
c | Does not include income earned on the investment of securities lending cash collateral which is not direct income of the Fund and is reflected as a component of securities lending income in the statement of operations. |
SCHEDULESOF INVESTMENTS | 39 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® U.S. TECHNOLOGY ETF
October 31, 2017
Schedule 2 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: | ||||||||||||||||
Assets: | ||||||||||||||||
Common stocks | $ | 3,956,493,829 | $ | — | $ | — | $ | 3,956,493,829 | ||||||||
Money market funds | 112,894,529 | — | — | 112,894,529 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 4,069,388,358 | $ | — | $ | — | $ | 4,069,388,358 | ||||||||
|
|
|
|
|
|
|
| |||||||||
See notes to financial statements.
40 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited)
October 31, 2017
Security | Shares | Value | ||||||
COMMON STOCKS — 99.90% |
| |||||||
ELECTRIC UTILITIES — 58.35% |
| |||||||
ALLETE Inc. | 52,195 | $ | 4,089,478 | |||||
Alliant Energy Corp. | 237,059 | 10,255,172 | ||||||
American Electric Power Co. Inc. | 504,606 | 37,547,733 | ||||||
Duke Energy Corp. | 718,049 | 63,410,907 | ||||||
Edison International | 334,266 | 26,724,567 | ||||||
El Paso Electric Co. | 41,566 | 2,390,045 | ||||||
Entergy Corp. | 184,180 | 15,887,367 | ||||||
Eversource Energy | 325,110 | 20,364,890 | ||||||
Exelon Corp. | 985,005 | 39,607,051 | ||||||
FirstEnergy Corp. | 455,836 | 15,019,796 | ||||||
Great Plains Energy Inc. | 221,253 | 7,263,736 | ||||||
Hawaiian Electric Industries Inc. | 111,642 | 4,070,467 | ||||||
IDACORP Inc. | 51,702 | 4,758,135 | ||||||
NextEra Energy Inc. | 480,313 | 74,482,137 | ||||||
PG&E Corp. | 526,132 | 30,394,646 | ||||||
Pinnacle West Capital Corp. | 114,523 | 10,044,812 | ||||||
PNM Resources Inc. | 81,775 | 3,549,035 | ||||||
Portland General Electric Co. | 91,389 | 4,362,911 | ||||||
PPL Corp. | 700,905 | 26,325,992 | ||||||
Southern Co. (The) | 1,025,414 | 53,526,611 | ||||||
Westar Energy Inc. | 145,732 | 7,793,747 | ||||||
Xcel Energy Inc. | 520,942 | 25,797,048 | ||||||
|
| |||||||
487,666,283 | ||||||||
GAS UTILITIES — 5.55% |
| |||||||
Atmos Energy Corp. | 108,819 | 9,493,370 | ||||||
National Fuel Gas Co. | 87,727 | 5,092,552 | ||||||
New Jersey Resources Corp. | 88,820 | 3,948,049 | ||||||
ONE Gas Inc. | 53,645 | 4,129,592 | ||||||
South Jersey Industries Inc. | 81,617 | 2,772,529 | ||||||
Southwest Gas Holdings Inc. | 48,828 | 4,022,939 | ||||||
Spire Inc. | 49,538 | 3,911,025 | ||||||
UGI Corp. | 177,874 | 8,513,050 | ||||||
WGL Holdings Inc. | 52,554 | 4,503,878 | ||||||
|
| |||||||
46,386,984 | ||||||||
INDEPENDENT POWER AND RENEWABLE ELECTRICITY PRODUCERS — 3.12% |
| |||||||
AES Corp./VA | 677,394 | 7,200,698 | ||||||
Calpine Corp.a | 370,031 | 5,528,263 | ||||||
NRG Energy Inc. | 308,441 | 7,711,025 | ||||||
Vistra Energy Corp.b | 289,531 | 5,628,483 | ||||||
|
| |||||||
26,068,469 |
Security | Shares | Value | ||||||
MULTI-UTILITIES — 30.18% |
| |||||||
Ameren Corp. | 248,933 | $ | 15,431,357 | |||||
Avista Corp. | 65,966 | 3,446,064 | ||||||
Black Hills Corp. | 54,879 | 3,581,403 | ||||||
CenterPoint Energy Inc. | 442,210 | 13,080,572 | ||||||
CMS Energy Corp. | 289,333 | 13,995,037 | ||||||
Consolidated Edison Inc. | 317,862 | 27,352,025 | ||||||
Dominion Energy Inc. | 659,264 | 53,492,681 | ||||||
DTE Energy Co. | 184,043 | 20,329,390 | ||||||
NiSource Inc. | 334,328 | 8,816,229 | ||||||
NorthWestern Corp. | 49,643 | 2,942,837 | ||||||
Public Service Enterprise Group Inc. | 519,009 | 25,535,243 | ||||||
SCANA Corp. | 146,626 | 6,325,446 | ||||||
Sempra Energy | 257,594 | 30,267,295 | ||||||
Vectren Corp. | 85,132 | 5,800,894 | ||||||
WEC Energy Group Inc. | 323,769 | 21,818,793 | ||||||
|
| |||||||
252,215,266 | ||||||||
WATER UTILITIES — 2.70% |
| |||||||
American Water Works Co. Inc. | 182,908 | 16,052,006 | ||||||
Aqua America Inc. | 182,263 | 6,466,692 | ||||||
|
| |||||||
22,518,698 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $820,376,882) |
| 834,855,700 | ||||||
SHORT-TERM INVESTMENTS — 0.11% |
| |||||||
MONEY MARKET FUNDS — 0.11% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
1.31%c,d,e | 98,780 | 98,800 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
1.00%c,d | 819,377 | 819,377 | ||||||
|
| |||||||
918,177 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $918,177) |
| 918,177 | ||||||
|
|
SCHEDULESOF INVESTMENTS | 41 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® U.S. UTILITIES ETF
October 31, 2017
Value | ||||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $821,295,059)f | $ | 835,773,877 | ||||||
Other Assets, Less Liabilities — (0.01)% |
| (53,269 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 835,720,608 | |||||
|
|
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 1. |
c | Affiliated issuer. See Schedule 1. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 1. |
f | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $823,755,907. Net unrealized appreciation was $12,017,970, of which $48,482,088 represented gross unrealized appreciation on investments and $36,464,118 represented gross unrealized depreciation on investments. |
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 04/30/17 | Shares purchased | Shares sold | Shares held at 10/31/17 | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, | 4,647,583 | — | (4,548,803 | )b | 98,780 | $ | 98,800 | $ | 156 | $ | (90 | ) | $ | — | c | |||||||||||||||||
BlackRock Cash Funds: Treasury, | 1,025,323 | — | (205,946 | )b | 819,377 | 819,377 | — | — | 4,137 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 918,177 | $ | 156 | $ | (90 | ) | $ | 4,137 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
c | Does not include income earned on the investment of securities lending cash collateral which is not direct income of the Fund and is reflected as a component of securities lending income in the statement of operations. |
Schedule 2 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: |
| |||||||||||||||
Assets: |
| |||||||||||||||
Common stocks | $ | 834,855,700 | $ | — | $ | — | $ | 834,855,700 | ||||||||
Money market funds | 918,177 | — | — | 918,177 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 835,773,877 | $ | — | $ | — | $ | 835,773,877 | ||||||||
|
|
|
|
|
|
|
| |||||||||
See notes to financial statements.
42 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Assets and Liabilities (Unaudited)
iSHARES® TRUST
October 31, 2017
iShares Dow Jones U.S. ETF | iShares Transportation ETF | iShares U.S. Energy ETF | ||||||||||
ASSETS |
| |||||||||||
Investments in securities, at cost: |
| |||||||||||
Unaffiliated | $ | 719,636,172 | $ | 864,705,943 | $ | 1,408,266,247 | ||||||
Affiliated (Note 2) | 27,724,649 | 35,833,638 | 37,463,819 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments in securities | $ | 747,360,821 | $ | 900,539,581 | $ | 1,445,730,066 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): |
| |||||||||||
Unaffiliated | $ | 1,094,225,986 | $ | 824,912,730 | $ | 1,106,065,446 | ||||||
Affiliated (Note 2) | 30,123,432 | 35,831,493 | 37,465,896 | |||||||||
Receivables: |
| |||||||||||
Investment securities sold | — | 20,782,738 | — | |||||||||
Dividends and interest | 871,427 | 7,445 | 689,691 | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 1,125,220,845 | 881,534,406 | 1,144,221,033 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES |
| |||||||||||
Payables: |
| |||||||||||
Investment securities purchased | — | 20,967,147 | — | |||||||||
Collateral for securities on loan (Note 1) | 23,375,887 | 34,714,129 | 35,758,282 | |||||||||
Investment advisory fees (Note 2) | 187,631 | 326,117 | 403,180 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 23,563,518 | 56,007,393 | 36,161,462 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 1,101,657,327 | $ | 825,527,013 | $ | 1,108,059,571 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: |
| |||||||||||
Paid-in capital | $ | 727,059,172 | $ | 867,650,699 | $ | 1,594,473,644 | ||||||
Undistributed (distributions in excess of) net investment income | 1,411,636 | (402,784 | ) | 318,119 | ||||||||
Accumulated net realized loss | (3,802,078 | ) | (1,925,544 | ) | (184,533,468 | ) | ||||||
Net unrealized appreciation (depreciation) | 376,988,597 | (39,795,358 | ) | (302,198,724 | ) | |||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 1,101,657,327 | $ | 825,527,013 | $ | 1,108,059,571 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingb | 8,550,000 | 4,700,000 | 29,850,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 128.85 | $ | 175.64 | $ | 37.12 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $22,896,245, $34,513,325 and $35,426,890, respectively. See Note 1. |
b | No par value, unlimited number of shares authorized. |
See notes to financial statements.
FINANCIAL STATEMENTS | 43 |
Table of Contents
Statements of Assets and Liabilities (Unaudited) (Continued)
iSHARES® TRUST
October 31, 2017
U.S. Healthcare ETF | iShares U.S. Technology ETF | iShares U.S. Utilities ETF | ||||||||||
ASSETS |
| |||||||||||
Investments in securities, at cost: |
| |||||||||||
Unaffiliated | $ | 2,038,820,838 | $ | 2,995,328,971 | $ | 820,376,882 | ||||||
Affiliated (Note 2) | 80,239,491 | 112,885,357 | 918,177 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments in securities | $ | 2,119,060,329 | $ | 3,108,214,328 | $ | 821,295,059 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): |
| |||||||||||
Unaffiliated | $ | 2,147,912,938 | $ | 3,956,493,829 | $ | 834,855,700 | ||||||
Affiliated (Note 2) | 80,245,313 | 112,894,529 | 918,177 | |||||||||
Receivables: |
| |||||||||||
Investment securities sold | — | 39,124,842 | — | |||||||||
Dividends and interest | 1,391,838 | 509,192 | 351,415 | |||||||||
Capital shares sold | — | 6,334 | — | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 2,229,550,089 | 4,109,028,726 | 836,125,292 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES |
| |||||||||||
Payables: |
| |||||||||||
Investment securities purchased | — | 40,856,995 | — | |||||||||
Collateral for securities on loan (Note 1) | 77,402,267 | 109,133,471 | 98,800 | |||||||||
Investment advisory fees (Note 2) | 779,695 | 1,348,800 | 305,884 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 78,181,962 | 151,339,266 | 404,684 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 2,151,368,127 | $ | 3,957,689,460 | $ | 835,720,608 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: |
| |||||||||||
Paid-in capital | $ | 2,041,909,788 | $ | 2,914,320,360 | $ | 841,069,235 | ||||||
Undistributed (distributions in excess of) net investment income | 1,182,376 | 759,413 | (913,998 | ) | ||||||||
Undistributed net realized gain (accumulated net realized loss) | (821,959 | ) | 81,435,657 | (18,913,447 | ) | |||||||
Net unrealized appreciation | 109,097,922 | 961,174,030 | 14,478,818 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 2,151,368,127 | $ | 3,957,689,460 | $ | 835,720,608 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingb | 12,600,000 | 24,500,000 | 6,050,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 170.74 | $ | 161.54 | $ | 138.14 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $76,472,958, $107,657,998 and $101,088, respectively. See Note 1. |
b | No par value, unlimited number of shares authorized. |
See notes to financial statements.
44 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Operations (Unaudited)
iSHARES® TRUST
Six months ended October 31, 2017
iShares Dow Jones U.S. ETF | iShares Transportation ETF | iShares U.S. Energy ETF | ||||||||||
NET INVESTMENT INCOME |
| |||||||||||
Dividends — unaffiliateda | $ | 11,192,396 | $ | 6,584,886 | $ | 21,562,005 | b | |||||
Dividends — affiliated (Note 2) | 65,798 | 4,098 | 4,017 | |||||||||
Securities lending income — affiliated — net (Note 2) | 60,709 | 30,355 | 55,888 | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 11,318,903 | 6,619,339 | 21,621,910 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES |
| |||||||||||
Investment advisory fees (Note 2) | 1,115,568 | 1,972,125 | 2,389,858 | |||||||||
Proxy fees | 24,055 | 20,830 | 24,837 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 1,139,623 | 1,992,955 | 2,414,695 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 10,179,280 | 4,626,384 | 19,207,215 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) |
| |||||||||||
Net realized gain (loss) from: |
| |||||||||||
Investments — unaffiliated | 80,438 | (4,331,799 | ) | (40,428,478 | ) | |||||||
Investments — affiliated (Note 2) | (2,867 | ) | 3,370 | (3,338 | ) | |||||||
In-kind redemptions — unaffiliated | 48,599,358 | 35,795,678 | (3,370,707 | ) | ||||||||
In-kind redemptions — affiliated (Note 2) | 234,253 | — | — | |||||||||
|
|
|
|
|
| |||||||
Net realized gain (loss) | 48,911,182 | 31,467,249 | (43,802,523 | ) | ||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: |
| |||||||||||
Investments — unaffiliated | 33,483,970 | 28,859,088 | 35,028,931 | |||||||||
Investments — affiliated (Note 2) | 609,017 | (2,632 | ) | (2,617 | ) | |||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | 34,092,987 | 28,856,456 | 35,026,314 | |||||||||
|
|
|
|
|
| |||||||
Net realized and unrealized gain (loss) | 83,004,169 | 60,323,705 | (8,776,209 | ) | ||||||||
|
|
|
|
|
| |||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 93,183,449 | $ | 64,950,089 | $ | 10,431,006 | ||||||
|
|
|
|
|
|
a | Net of foreign withholding tax of $596, $ — and $5,694, respectively. |
b | Includes $5,871,443 related to a special distribution from Baker Hughes Inc. |
See notes to financial statements.
FINANCIAL STATEMENTS | 45 |
Table of Contents
Statements of Operations (Unaudited) (Continued)
iSHARES® TRUST
Six months ended October 31, 2017
U.S. Healthcare ETF | iShares U.S. Technology ETF | iShares U.S. Utilities ETF | ||||||||||
NET INVESTMENT INCOME |
| |||||||||||
Dividends — unaffiliated | $ | 15,640,544 | $ | 24,407,670 | $ | 13,457,405 | ||||||
Dividends — affiliated (Note 2) | 8,011 | 11,576 | 4,137 | |||||||||
Securities lending income — affiliated — net (Note 2) | 96,003 | 152,832 | 2,028 | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 15,744,558 | 24,572,078 | 13,463,570 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES |
| |||||||||||
Investment advisory fees (Note 2) | 4,324,806 | 7,844,667 | 1,775,344 | |||||||||
Proxy fees | 40,265 | 74,301 | 17,235 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 4,365,071 | 7,918,968 | 1,792,579 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 11,379,487 | 16,653,110 | 11,670,991 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) |
| |||||||||||
Net realized gain (loss) from: |
| |||||||||||
Investments — unaffiliated | (5,070,013 | ) | (376,858 | ) | (4,339,966 | ) | ||||||
Investments — affiliated (Note 2) | (4,280 | ) | (10,208 | ) | 156 | |||||||
In-kind redemptions — unaffiliated | 36,956,823 | 159,327,909 | 16,466,589 | |||||||||
|
|
|
|
|
| |||||||
Net realized gain | 31,882,530 | 158,940,843 | 12,126,779 | |||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: |
| |||||||||||
Investments — unaffiliated | 105,158,337 | 411,134,393 | 34,304,740 | |||||||||
Investments — affiliated (Note 2) | (6,486 | ) | (10,960 | ) | (90 | ) | ||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | 105,151,851 | 411,123,433 | 34,304,650 | |||||||||
|
|
|
|
|
| |||||||
Net realized and unrealized gain | 137,034,381 | 570,064,276 | 46,431,429 | |||||||||
|
|
|
|
|
| |||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 148,413,868 | $ | 586,717,386 | $ | 58,102,420 | ||||||
|
|
|
|
|
|
See notes to financial statements.
46 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets
iSHARES® TRUST
iShares Dow Jones U.S. ETF | iShares Transportation Average ETF | |||||||||||||||
Six months October 31, 2017 (Unaudited) | Year ended April 30, 2017 | Six months October 31, 2017 (Unaudited) | Year ended April 30, 2017 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS |
| |||||||||||||||
OPERATIONS: |
| |||||||||||||||
Net investment income | $ | 10,179,280 | $ | 17,941,736 | $ | 4,626,384 | $ | 8,132,816 | ||||||||
Net realized gain | 48,911,182 | 11,828,394 | 31,467,249 | 65,334,280 | ||||||||||||
Net change in unrealized appreciation/depreciation | 34,092,987 | 134,033,913 | 28,856,456 | 51,399,806 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 93,183,449 | 163,804,043 | 64,950,089 | 124,866,902 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: |
| |||||||||||||||
From net investment income | (9,448,202 | ) | (18,010,104 | ) | (5,029,168 | ) | (8,584,148 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (9,448,202 | ) | (18,010,104 | ) | (5,029,168 | ) | (8,584,148 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: |
| |||||||||||||||
Proceeds from shares sold | — | 74,257,888 | 637,969,239 | 1,935,091,399 | ||||||||||||
Cost of shares redeemed | (92,949,907 | ) | (26,413,681 | ) | (838,961,117 | ) | (1,649,499,268 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | (92,949,907 | ) | 47,844,207 | (200,991,878 | ) | 285,592,131 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | (9,214,660 | ) | 193,638,146 | (141,070,957 | ) | 401,874,885 | ||||||||||
NET ASSETS |
| |||||||||||||||
Beginning of period | 1,110,871,987 | 917,233,841 | 966,597,970 | 564,723,085 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 1,101,657,327 | $ | 1,110,871,987 | $ | 825,527,013 | $ | 966,597,970 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of period | $ | 1,411,636 | $ | 680,558 | $ | (402,784 | ) | $ | — | |||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED |
| |||||||||||||||
Shares sold | — | 650,000 | 3,800,000 | 12,600,000 | ||||||||||||
Shares redeemed | (750,000 | ) | (250,000 | ) | (5,000,000 | ) | (10,700,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | (750,000 | ) | 400,000 | (1,200,000 | ) | 1,900,000 | ||||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
FINANCIAL STATEMENTS | 47 |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES® TRUST
iShares U.S. Energy ETF | iShares U.S. Healthcare ETF | |||||||||||||||
Six months October 31, 2017 (Unaudited) | Year ended April 30, 2017 | Six months October 31, 2017 (Unaudited) | Year ended April 30, 2017 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS |
| |||||||||||||||
OPERATIONS: |
| |||||||||||||||
Net investment income | $ | 19,207,215 | $ | 27,355,810 | $ | 11,379,487 | $ | 22,497,681 | ||||||||
Net realized gain (loss) | (43,802,523 | ) | (13,290,628 | ) | 31,882,530 | 20,613,874 | ||||||||||
Net change in unrealized appreciation/depreciation | 35,026,314 | (11,220,016 | ) | 105,151,851 | 130,548,641 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 10,431,006 | 2,845,166 | 148,413,868 | 173,660,196 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: |
| |||||||||||||||
From net investment income | (18,889,096 | ) | (27,753,775 | ) | (11,128,665 | ) | (24,154,405 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (18,889,096 | ) | (27,753,775 | ) | (11,128,665 | ) | (24,154,405 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: |
| |||||||||||||||
Proceeds from shares sold | 159,453,954 | 744,590,274 | 340,640,642 | 643,518,210 | ||||||||||||
Cost of shares redeemed | (202,061,774 | ) | (809,559,508 | ) | (237,943,843 | ) | (690,074,440 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | (42,607,820 | ) | (64,969,234 | ) | 102,696,799 | (46,556,230 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | (51,065,910 | ) | (89,877,843 | ) | 239,982,002 | 102,949,561 | ||||||||||
NET ASSETS |
| |||||||||||||||
Beginning of period | 1,159,125,481 | 1,249,003,324 | 1,911,386,125 | 1,808,436,564 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 1,108,059,571 | $ | 1,159,125,481 | $ | 2,151,368,127 | $ | 1,911,386,125 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed net investment income included in net assets at end of period | $ | 318,119 | $ | — | $ | 1,182,376 | $ | 931,554 | ||||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED |
| |||||||||||||||
Shares sold | 4,350,000 | 18,900,000 | 2,000,000 | 4,250,000 | ||||||||||||
Shares redeemed | (5,600,000 | ) | (20,750,000 | ) | (1,450,000 | ) | (4,700,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | (1,250,000 | ) | (1,850,000 | ) | 550,000 | (450,000 | ) | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
48 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES® TRUST
iShares U.S. Technology ETF | iShares U.S. Utilities ETF | |||||||||||||||
Six months October 31, 2017 (Unaudited) | Year ended April 30, 2017 | Six months October 31, 2017 (Unaudited) | Year ended April 30, 2017 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS |
| |||||||||||||||
OPERATIONS: |
| |||||||||||||||
Net investment income | $ | 16,653,110 | $ | 31,672,721 | $ | 11,670,991 | $ | 25,131,524 | ||||||||
Net realized gain | 158,940,843 | 187,187,468 | 12,126,779 | 42,209,275 | ||||||||||||
Net change in unrealized appreciation/depreciation | 411,123,433 | 665,112,454 | 34,304,650 | 5,477,996 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 586,717,386 | 883,972,643 | 58,102,420 | 72,818,795 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: |
| |||||||||||||||
From net investment income | (16,433,423 | ) | (31,233,037 | ) | (12,584,989 | ) | (25,227,655 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (16,433,423 | ) | (31,233,037 | ) | (12,584,989 | ) | (25,227,655 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: |
| |||||||||||||||
Proceeds from shares sold | 483,819,908 | 1,103,058,373 | 212,346,121 | 504,457,483 | ||||||||||||
Cost of shares redeemed | (488,648,305 | ) | (957,278,403 | ) | (223,815,798 | ) | (815,999,744 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | (4,828,397 | ) | 145,779,970 | (11,469,677 | ) | (311,542,261 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | 565,455,566 | 998,519,576 | 34,047,754 | (263,951,121 | ) | |||||||||||
NET ASSETS |
| |||||||||||||||
Beginning of period | 3,392,233,894 | 2,393,714,318 | 801,672,854 | 1,065,623,975 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 3,957,689,460 | $ | 3,392,233,894 | $ | 835,720,608 | $ | 801,672,854 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of period | $ | 759,413 | $ | 539,726 | $ | (913,998 | ) | $ | — | |||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED |
| |||||||||||||||
Shares sold | 3,300,000 | 9,200,000 | 1,550,000 | 4,000,000 | ||||||||||||
Shares redeemed | (3,350,000 | ) | (8,050,000 | ) | (1,700,000 | ) | (6,600,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | (50,000 | ) | 1,150,000 | (150,000 | ) | (2,600,000 | ) | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
FINANCIAL STATEMENTS | 49 |
Table of Contents
iSHARES® TRUST
(For a share outstanding throughout each period)
iShares Dow Jones U.S. ETF | ||||||||||||||||||||||||
Six months ended Oct. 31, 2017 (Unaudited) | Year ended Apr. 30, 2017 | Year ended Apr. 30, 2016 | Year ended Apr. 30, 2015 | Year ended Apr. 30, 2014 | Year ended Apr. 30, 2013 | |||||||||||||||||||
Net asset value, beginning of period | $ | 119.45 | $ | 103.06 | $ | 105.32 | $ | 95.10 | $ | 80.50 | $ | 70.31 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment incomea | 1.13 | 2.01 | 1.92 | 1.77 | 1.57 | 1.47 | ||||||||||||||||||
Net realized and unrealized gain (loss)b | 9.32 | 16.40 | (2.11 | ) | 10.22 | 14.58 | 10.20 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 10.45 | 18.41 | (0.19 | ) | 11.99 | 16.15 | 11.67 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (1.05 | ) | (2.02 | ) | (2.07 | ) | (1.77 | ) | (1.55 | ) | (1.48 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (1.05 | ) | (2.02 | ) | (2.07 | ) | (1.77 | ) | (1.55 | ) | (1.48 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 128.85 | $ | 119.45 | $ | 103.06 | $ | 105.32 | $ | 95.10 | $ | 80.50 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 8.79 | %c | 18.04 | % | (0.14 | )% | 12.68 | % | 20.23 | % | 16.85 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 1,101,657 | $ | 1,110,872 | $ | 917,234 | $ | 968,917 | $ | 889,168 | $ | 712,416 | ||||||||||||
Ratio of expenses to average net assetsd | 0.20 | % | 0.20 | % | 0.20 | % | 0.20 | % | 0.20 | % | 0.20 | % | ||||||||||||
Ratio of net investment income to average net assetsd | 1.82 | % | 1.82 | % | 1.88 | % | 1.74 | % | 1.78 | % | 2.04 | % | ||||||||||||
Portfolio turnover ratee | 2 | %c | 4 | % | 4 | % | 4 | % | 5 | % | 7 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
50 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES® TRUST
(For a share outstanding throughout each period)
iShares Transportation Average ETF | ||||||||||||||||||||||||
Six months ended Oct. 31, 2017 (Unaudited) | Year ended Apr. 30, 2017 | Year ended Apr. 30, 2016 | Year ended Apr. 30, 2015 | Year ended Apr. 30, 2014 | Year ended Apr. 30, 2013 | |||||||||||||||||||
Net asset value, beginning of period | $ | 163.83 | $ | 141.18 | $ | 153.92 | $ | 137.21 | $ | 110.07 | $ | 93.21 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment incomea | 0.87 | 1.54 | 1.50 | 1.24 | 1.24 | 1.09 | ||||||||||||||||||
Net realized and unrealized gain (loss)b | 11.89 | 22.75 | (12.63 | ) | 16.73 | 27.13 | 16.90 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 12.76 | 24.29 | (11.13 | ) | 17.97 | 28.37 | 17.99 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.95 | ) | (1.64 | ) | (1.61 | ) | (1.26 | ) | (1.23 | ) | (1.13 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (0.95 | ) | (1.64 | ) | (1.61 | ) | (1.26 | ) | (1.23 | ) | (1.13 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 175.64 | $ | 163.83 | $ | 141.18 | $ | 153.92 | $ | 137.21 | $ | 110.07 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 7.81 | %c | 17.32 | % | (7.24 | )% | 13.10 | % | 25.91 | % | 19.51 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 825,527 | $ | 966,598 | $ | 564,723 | $ | 1,192,848 | $ | 857,587 | $ | 539,321 | ||||||||||||
Ratio of expenses to average net assetsd | 0.44 | % | 0.44 | % | 0.44 | % | 0.43 | % | 0.45 | % | 0.46 | % | ||||||||||||
Ratio of net investment income to average net assetsd | 1.01 | % | 0.99 | % | 1.05 | % | 0.80 | % | 1.00 | % | 1.13 | % | ||||||||||||
Portfolio turnover ratee | 4 | %c | 5 | % | 11 | % | 22 | % | 12 | % | 12 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 51 |
Table of Contents
Financial Highlights (Continued)
iSHARES® TRUST
(For a share outstanding throughout each period)
iShares U.S. Energy ETF | ||||||||||||||||||||||||
Six months ended Oct. 31, 2017 (Unaudited) | Year ended Apr. 30, 2017 | Year ended Apr. 30, 2016 | Year ended Apr. 30, 2015 | Year ended Apr. 30, 2014 | Year ended Apr. 30, 2013 | |||||||||||||||||||
Net asset value, beginning of period | $ | 37.27 | $ | 37.91 | $ | 46.62 | $ | 53.49 | $ | 44.70 | $ | 41.05 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment incomea | 0.63 | b | 0.84 | 1.06 | 1.02 | 0.77 | 0.69 | |||||||||||||||||
Net realized and unrealized gain (loss)c | (0.14 | ) | (0.62 | ) | (8.66 | ) | (6.87 | ) | 8.77 | 3.69 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 0.49 | 0.22 | (7.60 | ) | (5.85 | ) | 9.54 | 4.38 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.64 | ) | (0.86 | ) | (1.11 | ) | (1.02 | ) | (0.75 | ) | (0.73 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (0.64 | ) | (0.86 | ) | (1.11 | ) | (1.02 | ) | (0.75 | ) | (0.73 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 37.12 | $ | 37.27 | $ | 37.91 | $ | 46.62 | $ | 53.49 | $ | 44.70 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 1.35 | %d | 0.52 | % | (16.20 | )% | (11.03 | )% | 21.57 | % | 10.81 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 1,108,060 | $ | 1,159,125 | $ | 1,249,003 | $ | 2,219,116 | $ | 2,414,897 | $ | 1,215,787 | ||||||||||||
Ratio of expenses to average net assetse | 0.44 | % | 0.44 | % | 0.44 | % | 0.43 | % | 0.45 | % | 0.46 | % | ||||||||||||
Ratio of net investment income to average net assets | 1.75 | %b,d | 2.17 | % | 2.80 | % | 2.04 | % | 1.58 | % | 1.65 | % | ||||||||||||
Portfolio turnover ratef | 4 | %d | 18 | % | 15 | % | 7 | % | 6 | % | 9 | % |
a | Based on average shares outstanding throughout each period. |
b | Includes a special distribution from Baker Hughes Inc. Excluding such special distribution, the net investment income would have been $0.44 per share and 1.21% of average net assets (not annualized). |
c | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
d | Not annualized. |
e | Annualized for periods of less than one year. |
f | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
52 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES® TRUST
(For a share outstanding throughout each period)
iShares U.S. Healthcare ETF | ||||||||||||||||||||||||
Six months ended Oct. 31, 2017 (Unaudited) | Year ended Apr. 30, 2017 | Year ended Apr. 30, 2016 | Year ended Apr. 30, 2015 | Year ended Apr. 30, 2014 | Year ended Apr. 30, 2013 | |||||||||||||||||||
Net asset value, beginning of period | $ | 158.62 | $ | 144.67 | $ | 151.70 | $ | 122.07 | $ | 99.61 | $ | 78.11 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment incomea | 0.96 | 1.81 | 1.70 | 1.45 | 1.37 | 1.39 | ||||||||||||||||||
Net realized and unrealized gain (loss)b | 12.09 | 14.07 | (5.63 | ) | 29.70 | 22.39 | 21.48 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 13.05 | 15.88 | (3.93 | ) | 31.15 | 23.76 | 22.87 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.93 | ) | (1.93 | ) | (3.10 | ) | (1.52 | ) | (1.30 | ) | (1.37 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (0.93 | ) | (1.93 | ) | (3.10 | ) | (1.52 | ) | (1.30 | ) | (1.37 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 170.74 | $ | 158.62 | $ | 144.67 | $ | 151.70 | $ | 122.07 | $ | 99.61 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 8.24 | %c | 11.06 | % | (2.64 | )% | 25.64 | % | 23.99 | % | 29.59 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 2,151,368 | $ | 1,911,386 | $ | 1,808,437 | $ | 2,358,873 | $ | 2,703,810 | $ | 986,141 | ||||||||||||
Ratio of expenses to average net assetsd | 0.44 | % | 0.44 | % | 0.44 | % | 0.43 | % | 0.45 | % | 0.46 | % | ||||||||||||
Ratio of net investment income to average net assetsd | 1.13 | % | 1.21 | % | 1.13 | % | 1.05 | % | 1.21 | % | 1.63 | % | ||||||||||||
Portfolio turnover ratee | 2 | %c | 6 | % | 7 | % | 8 | % | 5 | % | 6 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 53 |
Table of Contents
Financial Highlights (Continued)
iSHARES® TRUST
(For a share outstanding throughout each period)
iShares U.S. Technology ETF | ||||||||||||||||||||||||
Six months ended Oct. 31, 2017 (Unaudited) | Year ended Apr. 30, 2017 | Year ended Apr. 30, 2016 | Year ended Apr. 30, 2015 | Year ended Apr. 30, 2014 | Year ended Apr. 30, 2013 | |||||||||||||||||||
Net asset value, beginning of period | $ | 138.18 | $ | 102.30 | $ | 107.28 | $ | 90.83 | $ | 73.63 | $ | 75.75 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment incomea | 0.68 | 1.33 | 1.30 | 1.20 | 1.01 | 0.78 | ||||||||||||||||||
Net realized and unrealized gain (loss)b | 23.35 | 35.87 | (4.97 | ) | 16.47 | 17.18 | (2.14 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 24.03 | 37.20 | (3.67 | ) | 17.67 | 18.19 | (1.36 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.67 | ) | (1.32 | ) | (1.31 | ) | (1.22 | ) | (0.99 | ) | (0.76 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (0.67 | ) | (1.32 | ) | (1.31 | ) | (1.22 | ) | (0.99 | ) | (0.76 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 161.54 | $ | 138.18 | $ | 102.30 | $ | 107.28 | $ | 90.83 | $ | 73.63 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 17.45 | %c | 36.57 | % | (3.45 | )% | 19.53 | % | 24.84 | % | (1.77 | )% | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 3,957,689 | $ | 3,392,234 | $ | 2,393,714 | $ | 2,869,743 | $ | 3,946,472 | $ | 1,859,214 | ||||||||||||
Ratio of expenses to average net assetsd | 0.44 | % | 0.44 | % | 0.44 | % | 0.43 | % | 0.45 | % | 0.46 | % | ||||||||||||
Ratio of net investment income to average net assetsd | 0.92 | % | 1.11 | % | 1.24 | % | 1.18 | % | 1.21 | % | 1.08 | % | ||||||||||||
Portfolio turnover ratee | 11 | %c | 4 | % | 8 | % | 8 | % | 9 | % | 5 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
54 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES® TRUST
(For a share outstanding throughout each period)
iShares U.S. Utilities ETF | ||||||||||||||||||||||||
Six months ended Oct. 31, 2017 (Unaudited) | Year ended Apr. 30, 2017 | Year ended Apr. 30, 2016 | Year ended Apr. 30, 2015 | Year ended Apr. 30, 2014 | Year ended Apr. 30, 2013 | |||||||||||||||||||
Net asset value, beginning of period | $ | 129.30 | $ | 121.09 | $ | 111.09 | $ | 108.15 | $ | 102.50 | $ | 87.59 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment incomea | 1.91 | 3.69 | 3.37 | 3.31 | 3.28 | 3.10 | ||||||||||||||||||
Net realized and unrealized gainb | 8.84 | 8.46 | 11.18 | 3.11 | 5.60 | 14.84 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 10.75 | 12.15 | 14.55 | 6.42 | 8.88 | 17.94 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (1.91 | ) | (3.94 | ) | (4.55 | ) | (3.48 | ) | (3.23 | ) | (3.03 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (1.91 | ) | (3.94 | ) | (4.55 | ) | (3.48 | ) | (3.23 | ) | (3.03 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 138.14 | $ | 129.30 | $ | 121.09 | $ | 111.09 | $ | 108.15 | $ | 102.50 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 8.37 | %c | 10.16 | % | 13.61 | % | 5.97 | % | 9.08 | % | 21.00 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 835,721 | $ | 801,673 | $ | 1,065,624 | $ | 649,849 | $ | 740,802 | $ | 1,117,295 | ||||||||||||
Ratio of expenses to average net assetsd | 0.44 | % | 0.44 | % | 0.44 | % | 0.43 | % | 0.45 | % | 0.46 | % | ||||||||||||
Ratio of net investment income to average net assetsd | 2.83 | % | 2.96 | % | 3.02 | % | 2.96 | % | 3.38 | % | 3.41 | % | ||||||||||||
Portfolio turnover ratee | 2 | %c | 9 | % | 6 | % | 3 | % | 8 | % | 5 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 55 |
Table of Contents
Notes to Financial Statements (Unaudited)
iSHARES® TRUST
iShares Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust was established as a Delaware statutory trust pursuant to an Agreement and Declaration of Trust dated December 16, 1999.
These financial statements relate only to the following funds (each, a “Fund,” and collectively, the “Funds”):
iShares ETF | Diversification Classification | |
Dow Jones U.S. | Diversified | |
Transportation Average | Non-diversified | |
U.S. Energy | Non-diversified | |
U.S. Healthcare | Non-diversified | |
U.S. Technology | Non-diversified | |
U.S. Utilities | Non-diversified |
The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index. The investment adviser uses a “passive” or index approach to try to achieve each Fund’s investment objective.
Pursuant to the Trust’s organizational documents, the Funds’ officers and trustees are indemnified against certain liabilities that may arise out of the performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred.
1. | SIGNIFICANT ACCOUNTING POLICIES |
The following significant accounting policies are consistently followed by each Fund in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies.
SECURITY VALUATION
Each Fund’s investments are valued at fair value each day that the Fund’s listing exchange is open and, for financial reporting purposes, as of the report date should the reporting period end on a day that the Fund’s listing exchange is not open. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) provides oversight of the valuation of investments for the Funds. The investments of each Fund are valued pursuant to policies and procedures developed by the Global Valuation Committee and approved by the Board of Trustees of the Trust (the “Board”).
• | Equity investments traded on a recognized securities exchange are valued at that day’s last reported trade price or the official closing price, as applicable, on the exchange where the stock is primarily traded. Equity investments traded on a recognized exchange for which there were no sales on that day are valued at the last traded price. |
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• | Open-end U.S. mutual funds (including money market funds) are valued at that day’s published net asset value (“NAV”). |
In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the fair value of such investment or if a price is not available, the investment will be valued by the Global Valuation Committee, in accordance with policies approved by the Board. The fair valuation approaches that may be utilized by the Global Valuation Committee to determine fair value include market approach, income approach and the cost approach. The valuation techniques used under these approaches take into consideration inputs that include but are not limited to (i) attributes specific to the investment; (ii) the principal market for the investment; (iii) the customary participants in the principal market for the investment; (iv) data assumptions by market participants for the investment, if reasonably available; (v) quoted prices for similar investments in active markets; and (vi) other inputs, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and/or default rates. Valuations based on such inputs are reported to the Board on a quarterly basis.
The Global Valuation Committee employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the Trust’s pricing vendors, a regular review of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices, reviews of large movements in market values, and reviews of market related activity.
Fair value pricing could result in a difference between the prices used to calculate a Fund’s NAV and the prices used by the Fund’s underlying index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s underlying index.
Various inputs are used in determining the fair value of financial instruments. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs to valuation techniques are categorized into a fair value hierarchy consisting of three broad levels for financial reporting purposes as follows:
• | Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities; |
• | Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability (such as exchange rates, financing terms, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs; and |
• | Level 3 — Unobservable inputs for the asset or liability based on the best information available in the circumstances, to the extent observable inputs are not available, including the Global Valuation Committee’s assumptions used in determining the fair value of investments. |
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgement exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The fair value hierarchy for each Fund’s investments is included in its schedule of investments.
Changes in valuation techniques may result in transfers in or out of an assigned level within the fair value hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as
NOTESTO FINANCIAL STATEMENTS | 57 |
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of the beginning of the reporting period. The categorization of values determined for financial instruments are based on the pricing transparency of the financial instruments and are not necessarily an indication of the risks associated with investing in those securities.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are accounted for on trade date. Realized gains and losses on investment transactions are determined using the specific identification method. Dividend income and capital gain distributions, if any, are recognized on the ex-dividend date, net of any foreign taxes withheld at source. Any taxes withheld that are reclaimable from foreign tax authorities as of October 31, 2017 are reflected in tax reclaims receivable. Upon notification from issuers, some of the dividend income received from a real estate investment trust may be re-designated as a reduction of cost of the related investment and/or realized gain. Non-cash dividends, if any, are recognized on the ex-dividend date and recorded as non-cash dividend income at fair value. Distributions received by the Funds may include a return of capital that is estimated by management. Such amounts are recorded as a reduction of the cost of investments or reclassified to capital gains. Interest income is accrued daily.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends and distributions paid by each Fund are recorded on the ex-dividend dates. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds.
LOANS OF PORTFOLIO SECURITIES
Each Fund may lend its investment securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by an approved bank, or securities issued or guaranteed by the U.S. government. The initial collateral received by each Fund is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Funds. Any additional required collateral is delivered to the Funds and any excess collateral is returned by the Funds on the next business day. During the term of the loan, each Fund is entitled to all distributions made on or in respect of the loaned securities but does not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.
Cash received as collateral for securities on loan may be reinvested in certain short-term instruments either directly on behalf of a fund or through one or more joint accounts or money market funds, including those managed by BlackRock Fund Advisors (“BFA”), the Funds’ investment adviser, or its affiliates. As of October 31, 2017, any securities on loan were collateralized by cash and/or U.S. government obligations. Cash collateral received was invested in money market funds managed by BFA and is disclosed in the schedules of investments. Any non-cash collateral received cannot be sold, re-invested or pledged by the Fund, except in the event of borrower default. The securities on loan for each Fund are also disclosed in its schedule of investments. The total value of any securities on loan as of October 31, 2017 and the total value of the related cash collateral are disclosed in the statements of assets and liabilities. Income earned by the Funds from securities lending is disclosed in the statements of operations.
The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Funds benefit from a borrower default indemnity provided by
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BlackRock, Inc. (“BlackRock”). BlackRock’s indemnity allows for full replacement of securities loaned if the collateral received does not cover the value of the securities loaned in the event of borrower default. Each Fund could incur a loss if the value of an investment purchased with cash collateral falls below the value of the loaned securities or if the value of an investment purchased with cash collateral falls below the value of the original cash collateral received.
Securities lending transactions are entered into by the Funds under Master Securities Lending Agreements (“MSLA”) which provide the right, in the event of default (including bankruptcy or insolvency) for the non-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, a Fund, as lender, would offset the market value of the collateral received against the market value of the securities loaned. The value of the collateral is typically greater than that of the market value of the securities loaned, leaving the lender with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, the borrower can resell or re-pledge the loaned securities, and a Fund can reinvest cash collateral, or, upon an event of default, resell or re-pledge the collateral.
The following table is a summary of securities lending agreements which are subject to offset under an MSLA as of October 31, 2017:
iShares ETF and Counterparty | Market Value of Securities on Loan | Cash Collateral Received a | Net Amount b | |||||||||
Dow Jones U.S. | ||||||||||||
BNP Paribas New York Branch | $ | 757,994 | $ | 757,994 | $ | — | ||||||
BNP Paribas Prime Brokerage Inc. | 616,341 | 616,341 | — | |||||||||
BNP Paribas Prime Brokerage International Ltd. | 4,408 | 4,408 | — | |||||||||
Citigroup Global Markets Inc. | 3,103,521 | 3,094,431 | (9,090 | ) | ||||||||
Credit Suisse Securities (USA) LLC | 5,027,681 | 5,027,681 | — | |||||||||
Deutsche Bank Securities Inc. | 551,398 | 551,398 | — | |||||||||
Goldman Sachs & Co. | 3,249,541 | 3,249,541 | — | |||||||||
HSBC Bank PLC | 170,007 | 169,595 | (412 | ) | ||||||||
Jefferies LLC | 375,991 | 375,991 | — | |||||||||
JPMorgan Securities LLC | 1,929,398 | 1,929,398 | — | |||||||||
Merrill Lynch, Pierce, Fenner & Smith | 1,409,016 | 1,409,016 | — | |||||||||
Mizuho Securities USA Inc. | 129,347 | 129,347 | — | |||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 2,583,305 | 2,583,305 | — | |||||||||
National Financial Services LLC | 2,352 | 2,328 | (24 | ) | ||||||||
Nomura Securities International Inc. | 261,533 | 259,895 | (1,638 | ) | ||||||||
Scotia Capital (USA) Inc. | 123,423 | 123,423 | — | |||||||||
SG Americas Securities LLC | 12,393 | 12,393 | — | |||||||||
State Street Bank & Trust Company | 1,517,152 | 1,517,152 | — | |||||||||
Timber Hill LLC | 471,677 | 471,677 | — | |||||||||
UBS AG | 258,079 | 258,079 | — | |||||||||
UBS Securities LLC | 198,007 | 198,007 | — | |||||||||
Wells Fargo Securities LLC | 143,681 | 143,681 | — | |||||||||
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| |||||||
$ | 22,896,245 | $ | 22,885,081 | $ | (11,164 | ) | ||||||
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iShares ETF and Counterparty | Market Value of Securities on Loan | Cash Collateral Received a | Net Amount b | |||||||||
Transportation Average | ||||||||||||
Citigroup Global Markets Inc. | $ | 2,363,625 | $ | 2,363,625 | $ | — | ||||||
Goldman Sachs & Co. | 6,947,480 | 6,947,480 | — | |||||||||
HSBC Bank PLC | 3,585,409 | 3,451,289 | (134,120 | ) | ||||||||
Jefferies LLC | 37,125 | 37,125 | — | |||||||||
JPMorgan Securities LLC | 5,754,375 | 5,754,375 | — | |||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 1,655,311 | 1,655,311 | — | |||||||||
UBS Securities LLC | 14,170,000 | 14,170,000 | — | |||||||||
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$ | 34,513,325 | $ | 34,379,205 | $ | (134,120 | ) | ||||||
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U.S. Energy | ||||||||||||
Barclays Capital Inc. | $ | 980,216 | $ | 980,216 | $ | — | ||||||
BNP Paribas Prime Brokerage Inc. | 2,613,256 | 2,613,256 | — | |||||||||
Citigroup Global Markets Inc. | 2,465,077 | 2,465,077 | — | |||||||||
Credit Suisse Securities (USA) LLC | 5,465,160 | 5,465,160 | — | |||||||||
Deutsche Bank Securities Inc. | 590,979 | 590,979 | — | |||||||||
Goldman Sachs & Co. | 4,347,655 | 4,347,655 | — | |||||||||
HSBC Bank PLC | 3,238,916 | 3,209,981 | (28,935 | ) | ||||||||
JPMorgan Securities LLC | 11,700,842 | 11,700,842 | — | |||||||||
Merrill Lynch, Pierce, Fenner & Smith | 2,931,953 | 2,931,953 | — | |||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 1,086,750 | 1,086,750 | — | |||||||||
SG Americas Securities LLC | 529 | 529 | — | |||||||||
State Street Bank & Trust Company | 5,557 | 5,557 | — | |||||||||
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$ | 35,426,890 | $ | 35,397,955 | $ | (28,935 | ) | ||||||
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U.S. Healthcare | ||||||||||||
BNP Paribas New York Branch | $ | 153,635 | $ | 153,635 | $ | — | ||||||
BNP Paribas Prime Brokerage Inc. | 270,654 | 270,654 | — | |||||||||
Citigroup Global Markets Inc. | 4,655,005 | 4,655,005 | — | |||||||||
Credit Suisse Securities (USA) LLC | 5,554,885 | 5,554,885 | — | |||||||||
Deutsche Bank Securities Inc. | 4,826,137 | 4,573,916 | (252,221 | ) | ||||||||
Goldman Sachs & Co. | 2,880,168 | 2,880,168 | — | |||||||||
HSBC Bank PLC | 12,078,645 | 12,078,645 | — | |||||||||
Jefferies LLC | 1,022,760 | 1,022,760 | — | |||||||||
JPMorgan Securities LLC | 12,522,934 | 12,522,934 | — | |||||||||
Merrill Lynch, Pierce, Fenner & Smith | 16,044,761 | 16,026,575 | (18,186 | ) | ||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 11,649,091 | 11,649,091 | — | |||||||||
National Financial Services LLC | 521,687 | 521,687 | — | |||||||||
State Street Bank & Trust Company | 1,530,168 | 1,530,168 | — | |||||||||
UBS AG | 236,209 | 236,209 | — | |||||||||
UBS Securities LLC | 573,715 | 573,715 | — | |||||||||
Wells Fargo Securities LLC | 1,952,504 | 1,952,504 | — | |||||||||
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$ | 76,472,958 | $ | 76,202,551 | $ | (270,407 | ) | ||||||
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iShares ETF and Counterparty | Market Value of Securities on Loan | Cash Collateral Received a | Net Amount b | |||||||||
U.S. Technology | ||||||||||||
Barclays Capital Inc. | $ | 5,379,823 | $ | 5,355,169 | $ | (24,654 | ) | |||||
BNP Paribas New York Branch | 1,346,488 | 1,346,488 | — | |||||||||
BNP Paribas Prime Brokerage Inc. | 370,996 | 370,996 | — | |||||||||
BNP Paribas Prime Brokerage International Ltd. | 3,566,653 | 3,566,653 | — | |||||||||
Citigroup Global Markets Inc. | 17,876,598 | 17,876,598 | — | |||||||||
Credit Suisse Securities (USA) LLC | 5,136,868 | 5,136,868 | — | |||||||||
Deutsche Bank Securities Inc. | 6,065,814 | 6,065,814 | — | |||||||||
Goldman Sachs & Co. | 11,107,126 | 11,107,126 | — | |||||||||
JPMorgan Securities LLC | 11,422,772 | 11,422,772 | — | |||||||||
Merrill Lynch, Pierce, Fenner & Smith | 7,768,637 | 7,768,637 | — | |||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 12,439,055 | 12,439,055 | — | |||||||||
National Financial Services LLC | 269,797 | 267,483 | (2,314 | ) | ||||||||
Nomura Securities International Inc. | 12,856 | 12,856 | — | |||||||||
State Street Bank & Trust Company | 20,150,602 | 20,150,602 | — | |||||||||
UBS AG | 799,425 | 799,425 | — | |||||||||
UBS Securities LLC | 628,225 | 628,225 | — | |||||||||
Wells Fargo Securities LLC | 3,316,263 | 3,316,263 | — | |||||||||
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$ | 107,657,998 | $ | 107,631,030 | $ | (26,968 | ) | ||||||
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U.S. Utilities | ||||||||||||
Deutsche Bank Securities Inc. | $ | 101,088 | $ | 98,800 | $ | (2,288 | ) | |||||
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�� |
a | Collateral received in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by each Fund is disclosed in the Fund’s statement of assets and liabilities. |
b | Additional collateral is delivered to the Funds on the next business day in accordance with the MSLA. The net amount would be subject to the borrower default indemnity in the event of default by a counterparty. |
2. | INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES |
Pursuant to an Investment Advisory Agreement with the Trust, BFA manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock. Under the Investment Advisory Agreement, BFA is responsible for substantially all expenses of the Funds, except (i) interest and taxes; (ii) brokerage commissions and other expenses connected with the execution of portfolio transactions; (iii) distribution fees; (iv) the advisory fee payable to BFA; and (v) litigation expenses and any extraordinary expenses (in each case as determined by a majority of the independent trustees).
For its investment advisory services to the iShares Dow Jones U.S. ETF, BFA is entitled to an annual investment advisory fee of 0.20%, accrued daily and paid monthly by the Fund, based on the average daily net assets of the Fund.
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For its investment advisory services to each of the iShares Transportation Average, iShares U.S. Energy, iShares U.S. Healthcare, iShares U.S. Technology and iShares U.S. Utilities ETFs, BFA is entitled to an annual investment advisory fee, accrued daily and paid monthly by the Funds, based on each Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds, as follows:
Investment Advisory Fee | Aggregate Average Daily Net Assets | ||||
0.48 | % | First $10 billion | |||
0.43 | Over $10 billion, up to and including $20 billion | ||||
0.38 | Over $20 billion, up to and including $30 billion | ||||
0.34 | Over $30 billion, up to and including $40 billion | ||||
0.33 | Over $40 billion, up to and including $50 billion | ||||
0.31 | Over $50 billion |
The U.S. Securities and Exchange Commission has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (“BTC”), an affiliate of BFA, to serve as securities lending agent for the Funds, subject to applicable conditions. As securities lending agent, BTC bears all operational costs directly related to securities lending. Each Fund is responsible for fees in connection with the investment of cash collateral received for securities on loan in a money market fund managed by BFA, however, BTC has agreed to reduce the amount of securities lending income it receives in order to effectively limit the collateral investment fees each Fund bears to an annual rate of 0.04% (the “collateral investment fees”). Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment fees. The Funds retain a portion of securities lending income and remit the remaining portion to BTC as compensation for its services as securities lending agent.
Pursuant to a securities lending agreement, each Fund retains 71.5% of securities lending income and the amount retained can never be less than 65% of the total of securities lending income plus the collateral investment fees. In addition, commencing the business day following the date that the aggregate securities lending income plus the collateral investment fees generated across all 1940 Act iShares exchange-traded funds (the “iShares ETF Complex”) in a given calendar year exceeds the aggregate securities lending income generated across the iShares ETF Complex in the calendar year 2013, each Fund, pursuant to a securities lending agreement, will retain for the remainder of that calendar year 75% of securities lending income and the amount retained can never be less than 65% of the total of securities lending income plus the collateral investment fees.
For the six months ended October 31, 2017, the total of securities lending agent services and collateral investment fees paid were as follows:
iShares ETF | Fees Paid to BTC | |||
Dow Jones U.S. | $ | 28,075 | ||
Transportation Average | 15,887 | |||
U.S. Energy | 26,282 | |||
U.S. Healthcare | 46,727 | |||
U.S. Technology | 77,100 | |||
U.S. Utilities | 1,091 |
BlackRock Investments, LLC, an affiliate of BFA, is the distributor for each Fund. Pursuant to the distribution agreement, BFA is responsible for any fees or expenses for distribution services provided to the Funds.
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Cross trading is the buying or selling of portfolio securities between funds to which BFA (or an affiliate) serves as investment adviser. At its regularly scheduled quarterly meetings, the Board reviews such transactions as of the most recent calendar quarter for compliance with the requirements and restrictions set forth by Rule 17a-7.
For the six months ended October 31, 2017, transactions executed by the Funds pursuant to Rule 17a-7 under the 1940 Act were as follows:
iShares ETF | Purchases | Sales | ||||||
Dow Jones U.S. | $ | 4,072,653 | $ | 3,025,471 | ||||
U.S. Energy | 2,451,708 | 12,764,758 | ||||||
U.S. Healthcare | 5,973,035 | 8,034,283 | ||||||
U.S. Technology | 19,467,141 | 10,991,927 | ||||||
U.S. Utilities | 3,687,983 | 3,952,547 |
Each Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is included in “Dividends — affiliated” in the statements of operations.
The PNC Financial Services Group, Inc. is the largest stockholder of BlackRock and is considered to be an affiliate of the Funds for 1940 Act purposes.
Certain trustees and officers of the Trust are also officers of BTC and/or BFA.
3. | INVESTMENT PORTFOLIO TRANSACTIONS |
Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the six months ended October 31, 2017 were as follows:
iShares ETF | Purchases | Sales | ||||||
Dow Jones U.S. | $ | 32,786,019 | $ | 27,451,138 | ||||
Transportation Average | 32,983,627 | 34,024,002 | ||||||
U.S. Energy | 47,866,147 | 48,301,203 | ||||||
U.S. Healthcare | 49,028,428 | 50,528,539 | ||||||
U.S. Technology | 400,241,460 | 400,556,889 | ||||||
U.S. Utilities | 19,734,612 | 19,665,473 |
In-kind transactions (see Note 4) for the six months ended October 31, 2017 were as follows:
iShares ETF | In-kind Purchases | In-kind Sales | ||||||
Dow Jones U.S. | $ | — | $ | 92,211,970 | ||||
Transportation Average | 636,917,519 | 837,668,193 | ||||||
U.S. Energy | 158,476,587 | 200,813,696 | ||||||
U.S. Healthcare | 339,982,485 | 237,508,817 | ||||||
U.S. Technology | 483,136,520 | 487,517,029 | ||||||
U.S. Utilities | 210,908,778 | 222,933,910 |
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iSHARES® TRUST
4. | CAPITAL SHARE TRANSACTIONS |
Capital shares are issued and redeemed by each Fund only in aggregations of a specified number of shares or multiples thereof (“Creation Units”) at NAV. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the statements of changes in net assets.
The consideration for the purchase of Creation Units of a fund in the Trust generally consists of the in-kind deposit of a designated portfolio of securities and a specified amount of cash. Certain funds in the Trust may be offered in Creation Units solely or partially for cash in U.S. dollars. Investors purchasing and redeeming Creation Units may pay a purchase transaction fee and a redemption transaction fee directly to State Street Bank and Trust Company, the Trust’s administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash. Investors transacting in Creation Units for cash may also pay an additional variable charge to compensate the relevant fund for certain transaction costs (i.e., stamp taxes, taxes on currency or other financial transactions, and brokerage costs) and market impact expenses relating to investing in portfolio securities. Such variable charges, if any, are included in “Proceeds from shares sold” in the statements of changes in net assets.
5. | PRINCIPAL RISKS |
In the normal course of business, each Fund invests in securities or other instruments and may enter into certain transactions, and such activities subject the Fund to various risks, including, among others, fluctuations in the market (market risk) or failure of an issuer to meet all of its obligations. The value of securities or other instruments may also be affected by various factors, including, without limitation: (i) the general economy; (ii) the overall market as well as local, regional or global political and/or social instability; (iii) regulation, taxation or international tax treaties between various countries; or (iv) currency, interest rate or price fluctuations. Each Fund’s prospectus provides details of the risks to which the Fund is subject.
BFA uses a “passive” or index approach to try to achieve each Fund’s investment objective following the securities included in its underlying index during upturns as well as downturns. BFA does not take steps to reduce market exposure or to lessen the effects of a declining market. Divergence from the underlying index and the composition of the portfolio is monitored by BFA.
MARKET RISK
Market risk arises mainly from uncertainty about future values of financial instruments influenced by price, currency and interest rate movements. It represents the potential loss a fund may suffer through holding market positions in the face of market movements. A fund is exposed to market risk by its investment in equity, fixed income and/or financial derivative instruments or by its investment in underlying funds. The fair value of securities held by a fund may decline due to general market conditions, economic trends or events that are not specifically related to the issuers of the securities including local, regional or global political, social or economic instability or to factors that affect a particular industry or group of industries. The extent of a fund’s exposure to market risk is the market value of the investments held as shown in the fund’s schedule of investments.
A diversified portfolio, where this is appropriate and consistent with a fund’s objectives, minimizes the risk that a price change of a particular investment will have a material impact on the NAV of a fund. The investment concentrations within each Fund’s portfolio are disclosed in its schedule of investments.
When a fund concentrates its investments in securities within a single or limited number of market sectors, it assumes the risk that economic, political and social conditions affecting those market sectors may have a significant impact on its investment performance.
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CREDIT RISK
Credit risk is the risk that an issuer or guarantor of debt instruments or the counterparty to a financial transaction, including derivatives contracts, repurchase agreements or loans of portfolio securities, is unable or unwilling to make timely interest and/or principal payments or to otherwise honor its obligations. BFA and its affiliates manage counterparty credit risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose a fund to issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of a fund’s exposure to credit and counterparty risks with respect to those financial assets is approximated by their value recorded in its statement of assets and liabilities.
6. | INCOME TAX INFORMATION |
Each Fund is treated as an entity separate from the Trust’s other funds for federal income tax purposes. It is the policy of each Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its ordinary income and any net capital gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes is required.
For purposes of U.S. GAAP, in-kind redemptions are treated as sales of securities resulting in realized capital gains or losses to the Funds. Because such gains or losses are not taxable to the Funds and are not distributed to existing Fund shareholders, the gains or losses are reclassified from accumulated net realized gain (loss) to paid-in capital at the end of the Funds’ tax year. These reclassifications have no effect on net assets or NAV per share.
The tax character of current year distributions will be determined at the end of the current fiscal year.
As of April, 30, 2017, the Funds’ fiscal year-end, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:
iShares ETF | Non- Expiring a | Expiring 2018 | Expiring 2019 | Total | ||||||||||||
Dow Jones U.S. | $ | — | $ | 29,445,888 | $ | 2,653,096 | $ | 32,098,984 | ||||||||
Transportation Average | 21,306,416 | 3,834,866 | 4,851,034 | 29,992,316 | ||||||||||||
U.S. Energy | 43,425,789 | 47,146,200 | 10,785,190 | 101,357,179 | ||||||||||||
U.S. Healthcare | 13,179,695 | 5,013,547 | 2,243,166 | 20,436,408 | ||||||||||||
U.S. Technology | 30,147,510 | 19,733,772 | 6,381,458 | 56,262,740 | ||||||||||||
U.S. Utilities | 4,788,205 | 18,294,046 | 5,497,127 | 28,579,378 |
a | Must be utilized prior to losses subject to expiration. |
Management has analyzed tax laws and regulations and their application to the Funds as of October 31, 2017, inclusive of the open tax return years, and does not believe there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.
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7. | LEGAL PROCEEDINGS |
On June 16, 2016, investors (the “Plaintiffs”) in certain iShares funds (iShares Core S&P Small-Cap ETF, iShares Russell 1000 Growth ETF, iShares Core S&P 500 ETF, iShares Russell Mid-Cap Growth ETF, iShares Russell Mid-Cap ETF, iShares Russell Mid-Cap Value ETF, iShares Select Dividend ETF, iShares Morningstar Mid-Cap ETF, iShares Morningstar Large-Cap ETF, iShares U.S. Aerospace & Defense ETF and iShares U.S. Preferred Stock ETF) filed a putative class action lawsuit against iShares Trust, BlackRock, Inc. and certain of its advisory affiliates, and certain directors/trustees and officers of the Funds (collectively, “Defendants”). The lawsuit alleges the Defendants violated federal securities laws by failing to adequately disclose in the prospectuses issued by the funds noted above the risks of using stop-loss orders in the event of a ‘flash crash’, such as the one that occurred on May 6, 2010. On September 18, 2017, the Court issued a Statement of Decision holding that the Plaintiffs lack standing to assert their claims. On October 11, 2017, the Court entered final judgment dismissing all of the Plaintiffs’ claims with prejudice. Plaintiffs have appealed the Court’s decision.
8. | SUBSEQUENT EVENTS |
Management has evaluated the impact of all subsequent events on the Funds through the date the financial statements were available to be issued and has determined that there were no subsequent events requiring adjustment or disclosure in the financial statements.
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Board Review and Approval of Investment Advisory
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I. iShares Dow Jones U.S. ETF
Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required annually to consider and approve the Investment Advisory Contract between the Trust and BFA (the “Advisory Contract”) on behalf of the Fund. The Independent Trustees requested, and BFA provided, such information as the Independent Trustees, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management on May 5, 2017 and May 12, 2017. At these meetings, the 15(c) Committee reviewed and discussed information provided in response to the 15(c) Committee’s initial requests, and requested certain additional information, which management agreed to provide. At a meeting held on May 18, 2017, management presented information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its meetings. The Board, including the Independent Trustees, reviewed and discussed such information at length. The Independent Trustees requested from management certain additional information, which management agreed to provide. At a meeting held on June 19-21, 2017, the Board, including the Independent Trustees, reviewed the additional information provided by management in response to these requests. After extensive discussions, the Board, including all of the Independent Trustees, approved the continuance of the Advisory Contract for the Fund, based on a review of qualitative and quantitative information provided by BFA. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Board also noted that the Board and BFA agreed to discuss potential further enhancements to the 15(c) process for the coming year. The Independent Trustees were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Contract for the Fund, the Board, including the Independent Trustees, considered the following factors, no one of which was controlling, and reached the following conclusions:
Expenses and Performance of the Fund — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of the Fund in comparison with the same information for other exchange traded funds (“ETFs”) (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising the Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of the proprietary ETF methodology used by Broadridge to determine the Fund’s Peer Group. The Board further noted that due to the limitations in providing comparable funds in the Peer Group, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Fund in all instances.
The Board also noted that the investment advisory fee rate and overall expenses (net of waivers and reimbursements) for the Fund were within range of the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in its Peer Group, excluding iShares funds.
In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as the Fund, Broadridge also provided, and the Board reviewed, a comparison of the Fund’s performance for the one-, three-, five-, ten-year, and since inception periods, as applicable, and for the quarter ended December 31, 2016, to that of relevant comparison funds for the same periods.
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The Board noted that the Fund seeks to track its specified underlying index and that, during the year, the Board received periodic reports on the Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative performance information, including any additional detailed information requested by the Boards, was also considered. The Board noted that the Fund generally performed in line with its underlying index over the relevant periods.
Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and the historical performance of the Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, including information about recent and proposed enhancements to the iShares business, including with respect to capital markets support and analysis, technology, product design, compliance and risk management, and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the iShares funds and their shareholders. The Board also considered BFA’s compliance program and its compliance record with respect to the Fund. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Fund, as well as the resources available to them in managing the Fund. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the June 19-21, 2017 meeting and throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that the Fund had met its investment objective consistently since its inception date.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Fund under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Costs of Services Provided to Fund and Profits Realized by BFA and Affiliates — The Board reviewed information about the profitability of the Fund to BlackRock, based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and other sources of revenue and expense to BFA and its affiliates from the Fund’s operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, including supplemental information that was responsive to requests of the 15(c) Committee. The Board noted that the 15(c) Committee had focused on the methodology and profitability presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC, a BFA affiliate, from securities lending by the Fund. The Board also discussed BFA’s profit margin as reflected in the Fund’s profitability analysis and reviewed information regarding potential economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Fund and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.
Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Fund’s assets, noting that the issue of economies of scale had been focused on by the 15(c) Committee during its meetings and addressed by management, including through supplemental information. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through relatively
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low fee rates established at inception, breakpoints and waivers or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BlackRock’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished, among other things, between fixed and variable costs, and explained how the level of fixed and variable costs, as well as the nature of such costs, may impact the existence or size of scale benefits. The Board noted that the Advisory Contract for the Fund did not provide for any breakpoints in the Fund’s investment advisory fee rate as the assets of the Fund increase. However, the Board noted that should material economies of scale be identified in the future that are not otherwise shared, a breakpoint structure for the Fund may be appropriate, and that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding breakpoints in the future.
Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider the Advisory Contract at least annually, determined to approve the continuance of the Advisory Contract for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same investment objective and strategy as the Fund and that track the same index as the Fund. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Fund, including in terms of the different and generally more extensive services provided to the Fund, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Fund, as a publicly traded ETF, as compared to the Other Accounts that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged BFA’s expressed business purpose for launching a suite of iShares “Core” ETFs that generally are subject to lower investment advisory fees than iShares non-Core ETFs that may provide a similar investment exposure. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rate under the Advisory Contract for the Fund was generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.
Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Fund by BFA, such as payment of revenue to BTC, the Fund’s securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Fund in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board also noted the revenue received by BFA and/or its affiliates pursuant to an agreement that permits a service provider to use certain portions of BlackRock’s technology platform to service accounts managed by BFA and/or its affiliates, including the iShares funds. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Fund. The Board further noted that any portfolio transactions on behalf of the Fund placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board pursuant to
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Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Fund’s shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.
Conclusion — Based on the considerations described above, the Board determined that the Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded to approve the continuance of the Advisory Contract for the coming year.
II. iShares Transportation Average ETF and iShares U.S. Healthcare ETF
Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required annually to consider and approve the Investment Advisory Contract between the Trust and BFA (the “Advisory Contract”) on behalf of the Funds. The Independent Trustees requested, and BFA provided, such information as the Independent Trustees, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management on May 5, 2017 and May 12, 2017. At these meetings, the 15(c) Committee reviewed and discussed information provided in response to the 15(c) Committee’s initial requests, and requested certain additional information, which management agreed to provide. At a meeting held on May 18, 2017, management presented information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its meetings. The Board, including the Independent Trustees, reviewed and discussed such information at length. The Independent Trustees requested from management certain additional information, which management agreed to provide. At a meeting held on June 19-21, 2017, the Board, including the Independent Trustees, reviewed the additional information provided by management in response to these requests. After extensive discussions, the Board, including all of the Independent Trustees, approved the continuance of the Advisory Contract for the Funds, based on a review of qualitative and quantitative information provided by BFA. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Board also noted that the Board and BFA agreed to discuss potential further enhancements to the 15(c) process for the coming year. The Independent Trustees were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Contract for the Funds, the Board, including the Independent Trustees, considered the following factors, no one of which was controlling, and reached the following conclusions:
Expenses and Performance of the Funds — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of each Fund in comparison with the same information for other exchange traded funds (“ETFs”) (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising such Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of the proprietary ETF methodology used by Broadridge to determine the applicable Peer Groups. The Board further noted that due to the limitations in providing comparable funds in the various Peer Groups, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Funds in all instances.
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The Board also noted that the investment advisory fee rates and overall expenses (net of waivers and reimbursements) for the Funds were lower than the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in their respective Peer Group, excluding iShares funds.
In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as any particular Fund, Broadridge also provided, and the Board reviewed, a comparison of such Fund’s performance for the one-, three-, five-, ten-year, and since inception periods, as applicable, and for the quarter ended December 31, 2016, to that of relevant comparison funds for the same periods.
The Board noted that each Fund seeks to track its specified underlying index and that, during the year, the Board received periodic reports on each Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative performance information, including any additional detailed information requested by the Boards, was also considered. The Board noted that each Fund generally performed in line with its underlying index over the relevant periods.
Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and the historical performance of each Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, including information about recent and proposed enhancements to the iShares business, including with respect to capital markets support and analysis, technology, product design, compliance and risk management, and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the iShares funds and their shareholders. The Board also considered BFA’s compliance program and its compliance record with respect to the Funds. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Funds, as well as the resources available to them in managing the Funds. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the June 19-21, 2017 meeting and throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that each Fund had met its investment objective consistently since its respective inception date.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Funds under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Costs of Services Provided to Funds and Profits Realized by BFA and Affiliates — The Board reviewed information about the profitability of the Funds to BlackRock, on a Fund-by-Fund basis and in the aggregate, based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and other sources of revenue and expense to BFA and its affiliates from the Funds’ operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, including supplemental information that was responsive to requests of the 15(c) Committee. The Board noted that the 15(c) Committee had focused on the methodology and profitability presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC, a BFA affiliate, from securities lending by the
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Funds. The Board also discussed BFA’s profit margin as reflected in the Funds’ profitability analyses and reviewed information regarding potential economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Funds and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.
Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Funds’ assets, noting that the issue of economies of scale had been focused on by the 15(c) Committee during its meetings and addressed by management, including through supplemental information. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through relatively low fee rates established at inception, breakpoints and waivers or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BlackRock’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished, among other things, between fixed and variable costs, and explained how the level of fixed and variable costs, as well as the nature of such costs, may impact the existence or size of scale benefits. The Board noted that the Advisory Contract for the Funds already provided for breakpoints in the Funds’ investment advisory fee rates as the assets of the Funds, on an aggregated basis with the assets of certain other iShares funds, increase. The Board noted that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding new or revised breakpoints in the future.
Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider the Advisory Contract at least annually, determined to approve the continuance of the Advisory Contract for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same investment objectives and strategies as the Funds and that track the same index as the Funds. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Funds, including in terms of the different and generally more extensive services provided to the Funds, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Funds, as publicly traded ETFs, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged BFA’s expressed business purpose for launching a suite of iShares “Core” ETFs that generally are subject to lower investment advisory fees than iShares non-Core ETFs that may provide a similar investment exposure. The Board also considered the “all-inclusive” nature of the Funds’ advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rates under the Advisory Contract for the Funds were generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.
Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Funds by BFA, such as payment of revenue to BTC, the Funds’ securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant
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to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Funds in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board also noted the revenue received by BFA and/or its affiliates pursuant to an agreement that permits a service provider to use certain portions of BlackRock’s technology platform to service accounts managed by BFA and/or its affiliates, including the iShares funds. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Funds. The Board further noted that any portfolio transactions on behalf of the Funds placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Funds’ shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.
Conclusion — Based on the considerations described above, the Board determined that each Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded to approve the continuance of the Advisory Contract for the coming year.
III. iShares U.S. Energy ETF, iShares U.S. Technology ETF and iShares U.S. Utilities ETF
Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required annually to consider and approve the Investment Advisory Contract between the Trust and BFA (the “Advisory Contract”) on behalf of the Funds. The Independent Trustees requested, and BFA provided, such information as the Independent Trustees, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management on May 5, 2017 and May 12, 2017. At these meetings, the 15(c) Committee reviewed and discussed information provided in response to the 15(c) Committee’s initial requests, and requested certain additional information, which management agreed to provide. At a meeting held on May 18, 2017, management presented information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its meetings. The Board, including the Independent Trustees, reviewed and discussed such information at length. The Independent Trustees requested from management certain additional information, which management agreed to provide. At a meeting held on June 19-21, 2017, the Board, including the Independent Trustees, reviewed the additional information provided by management in response to these requests. After extensive discussions, the Board, including all of the Independent Trustees, approved the continuance of the Advisory Contract for the Funds, based on a review of qualitative and quantitative information provided by BFA. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Board also noted that the Board and BFA agreed to discuss potential further enhancements to the 15(c) process for the coming year. The Independent Trustees were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Contract for the Funds, the Board, including the Independent Trustees, considered the following factors, no one of which was controlling, and reached the following conclusions:
Expenses and Performance of the Funds — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of each Fund in comparison with the same information for other exchange traded funds (“ETFs”) (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison
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Board Review and Approval of Investment Advisory
Contract (Continued)
iSHARES® TRUST
group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising such Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of the proprietary ETF methodology used by Broadridge to determine the applicable Peer Groups. The Board further noted that due to the limitations in providing comparable funds in the various Peer Groups, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Funds in all instances.
The Board also noted that the investment advisory fee rates and overall expenses (net of waivers and reimbursements) for the Funds were within range of the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in their respective Peer Group, excluding iShares funds.
In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as any particular Fund, Broadridge also provided, and the Board reviewed, a comparison of such Fund’s performance for the one-, three-, five-, ten-year, and since inception periods, as applicable, and for the quarter ended December 31, 2016, to that of relevant comparison funds for the same periods.
The Board noted that each Fund seeks to track its specified underlying index and that, during the year, the Board received periodic reports on each Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative performance information, including any additional detailed information requested by the Boards, was also considered. The Board noted that each Fund generally performed in line with its underlying index over the relevant periods.
Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and the historical performance of each Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, including information about recent and proposed enhancements to the iShares business, including with respect to capital markets support and analysis, technology, product design, compliance and risk management, and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the iShares funds and their shareholders. The Board also considered BFA’s compliance program and its compliance record with respect to the Funds. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Funds, as well as the resources available to them in managing the Funds. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the June 19-21, 2017 meeting and throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that each Fund had met its investment objective consistently since its respective inception date.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Funds under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
74 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
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Board Review and Approval of Investment Advisory
Contract (Continued)
iSHARES® TRUST
Costs of Services Provided to Funds and Profits Realized by BFA and Affiliates — The Board reviewed information about the profitability of the Funds to BlackRock, on a Fund-by-Fund basis and in the aggregate, based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and other sources of revenue and expense to BFA and its affiliates from the Funds’ operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, including supplemental information that was responsive to requests of the 15(c) Committee. The Board noted that the 15(c) Committee had focused on the methodology and profitability presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC, a BFA affiliate, from securities lending by the Funds. The Board also discussed BFA’s profit margin as reflected in the Funds’ profitability analyses and reviewed information regarding potential economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Funds and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.
Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Funds’ assets, noting that the issue of economies of scale had been focused on by the 15(c) Committee during its meetings and addressed by management, including through supplemental information. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through relatively low fee rates established at inception, breakpoints and waivers or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BlackRock’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished, among other things, between fixed and variable costs, and explained how the level of fixed and variable costs, as well as the nature of such costs, may impact the existence or size of scale benefits. The Board noted that the Advisory Contract for the Funds already provided for breakpoints in the Funds’ investment advisory fee rates as the assets of the Funds, on an aggregated basis with the assets of certain other iShares funds, increase. The Board noted that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding new or revised breakpoints in the future.
Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider the Advisory Contract at least annually, determined to approve the continuance of the Advisory Contract for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same investment objectives and strategies as the Funds and that track the same index as the Funds. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Funds, including in terms of the different and generally more extensive services provided to the Funds, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Funds, as publicly traded ETFs, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged BFA’s expressed business purpose for launching a suite of iShares “Core” ETFs that generally are subject to lower investment advisory fees than iShares non-Core ETFs that may provide a similar investment exposure. The Board also considered the “all-inclusive” nature of the Funds’ advisory fee structure, and the Fund expenses borne
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 75 |
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Board Review and Approval of Investment Advisory
Contract (Continued)
iSHARES® TRUST
by BFA under this arrangement. The Board noted that the investment advisory fee rates under the Advisory Contract for the Funds were generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.
Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Funds by BFA, such as payment of revenue to BTC, the Funds’ securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Funds in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board also noted the revenue received by BFA and/or its affiliates pursuant to an agreement that permits a service provider to use certain portions of BlackRock’s technology platform to service accounts managed by BFA and/or its affiliates, including the iShares funds. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Funds. The Board further noted that any portfolio transactions on behalf of the Funds placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Funds’ shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.
Conclusion — Based on the considerations described above, the Board determined that each Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded to approve the continuance of the Advisory Contract for the coming year.
76 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
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Supplemental Information (Unaudited)
iSHARES® TRUST
Proxy Results
A special meeting of the shareholders of each series of iShares Trust (the “Trust”) was held on June 19, 2017, to elect five Trustees to the Board of Trustees of the Trust. The five nominees were Jane D. Carlin, Richard L. Fagnani, Drew E. Lawton, Madhav V. Rajan and Mark Wiedman, all of whom were elected as Trustees at the special meeting. The other Trustees whose terms of office as Trustees continued after the special meeting are Cecilia H. Herbert, Charles A. Hurty, John E. Kerrigan, John E. Martinez and Robert S. Kapito.
Trustee | Votes For | Votes Withheld | ||||||
Jane D. Carlin | 8,669,874,031 | 59,322,838 | ||||||
Richard L. Fagnani | 8,672,718,914 | 56,477,955 | ||||||
Drew E. Lawton | 8,670,713,236 | 58,483,633 | ||||||
Madhav V. Rajan | 8,653,682,870 | 75,513,999 | ||||||
Mark Wiedman | 8,664,674,816 | 64,522,053 |
Section 19(a) Notices
The amounts and sources of distributions reported are estimates and are provided pursuant to regulatory requirements and are not being provided for tax reporting purposes. The actual amounts and sources for tax reporting purposes will depend upon each Fund’s investment experience during the year and may be subject to changes based on the tax regulations. Shareholders will receive a Form 1099-DIV each calendar year that will inform them how to report these distributions for federal income tax purposes.
Total Cumulative Distributions for the Fiscal Year-to-Date | % Breakdown of the Total Cumulative Distributions for the Fiscal Year-to-Date | |||||||||||||||||||||||||||||||
iShares ETF | Net Investment Income | Net Realized Capital Gains | Return of Capital | Total Per Share | Net Investment Income | Net Realized Capital Gains | Return of Capital | Total Per Share | ||||||||||||||||||||||||
Dow Jones U.S. | $ | 1.036260 | $ | — | $ | 0.017071 | $ | 1.053331 | 98 | % | — | % | 2 | % | 100 | % | ||||||||||||||||
U.S. Utilities | 1.773339 | — | 0.141377 | 1.914716 | 93 | — | 7 | 100 |
SUPPLEMENTAL INFORMATION | 77 |
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Notes:
78 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
For more information visit www.iShares.com or call 1-800-iShares (1-800-474-2737)
This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.
Investing involves risk, including possible loss of principal.
The iShares Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by S&P Dow Jones Indices, LLC, nor does this company make any representation regarding the advisability of investing in the iShares Funds. BlackRock is not affiliated with the company listed above.
A description of the policies that the Funds use to determine how to vote proxies relating to portfolio securities and information about how the Funds voted proxies relating to portfolio securities during the most recent twelve-month period ending June 30 is available without charge, upon request, by calling toll-free 1-800-474-2737; on the Funds’ website at www.iShares.com; and on the U.S. Securities and Exchange Commission (SEC) website at www.sec.gov.
The Funds file their complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website or may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Funds also disclose their complete schedules of portfolio holdings on a daily basis on the Funds’ website.
©2017 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc. or its subsidiaries. All other marks are the property of their respective owners.
iS-SAR-401-1017
Table of Contents
OCTOBER 31, 2017
2017 SEMI-ANNUAL REPORT (UNAUDITED) |
iShares Trust
Ø | iShares U.S. Basic Materials ETF | IYM | NYSE Arca |
Ø | iShares U.S. Consumer Goods ETF | IYK | NYSE Arca |
Ø | iShares U.S. Consumer Services ETF | IYC | NYSE Arca |
Ø | iShares U.S. Financial Services ETF | IYG | NYSE Arca |
Ø | iShares U.S. Financials ETF | IYF | NYSE Arca |
Ø | iShares U.S. Industrials ETF | IYJ | Cboe BZX |
Ø | iShares MSCI KLD 400 Social ETF | DSI | NYSE Arca |
Ø | iShares MSCI USA ESG Select ETF | SUSA | NYSE Arca |
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Table of Contents
iSHARES® U.S. BASIC MATERIALS ETF
Performance as of October 31, 2017
The iShares U.S. Basic Materials ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. equities in the basic materials sector, as represented by the Dow Jones U.S. Basic Materials IndexTM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month reporting period ended October 31, 2017, the total return for the Fund was 12.31%, net of fees, while the total return for the Index was 12.38%.
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 30.48% | 30.51% | 30.85% | 30.48% | 30.51% | 30.85% | ||||||||||||||||||||||
5 Years | 10.18% | 10.19% | 10.61% | 62.36% | 62.41% | 65.56% | ||||||||||||||||||||||
10 Years | 4.26% | 4.28% | 4.70% | 51.82% | 51.99% | 58.23% |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 13 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,123.10 | $ | 2.35 | $ | 1,000.00 | $ | 1,023.00 | $ | 2.24 | 0.44% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 13 for more information. |
ALLOCATION BY SECTOR
As of 10/31/17
Sector | Percentage of Total Investments* |
Chemicals | 83.82 | % | ||
Metals & Mining | 14.94 | |||
Paper & Forest Products | 0.74 | |||
Oil, Gas & Consumable Fuels | 0.50 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 10/31/17
Security | Percentage of Total Investments* |
DowDuPont Inc. | 24.87 | % | ||
Monsanto Co. | 7.85 | |||
Praxair Inc. | 6.16 | |||
Air Products & Chemicals Inc. | 5.13 | |||
LyondellBasell Industries NV Class A | 4.96 | |||
Ecolab Inc. | 4.68 | |||
PPG Industries Inc. | 4.40 | |||
Newmont Mining Corp. | 2.85 | |||
Freeport-McMoRan Inc. | 2.78 | |||
Nucor Corp. | 2.73 | |||
|
| |||
TOTAL | 66.41 | % | ||
|
|
* | Excludes money market funds. |
FUND PERFORMANCE OVERVIEWS | 5 |
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Fund Performance Overview
iSHARES® U.S. CONSUMER GOODS ETF
Performance as of October 31, 2017
The iShares U.S. Consumer Goods ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. equities in the consumer goods sector, as represented by the Dow Jones U.S. Consumer Goods IndexTM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month reporting period ended October 31, 2017, the total return for the Fund was 2.23%, net of fees, while the total return for the Index was 2.45%.
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 10.15% | 10.15% | 10.62% | 10.15% | 10.15% | 10.62% | ||||||||||||||||||||||
5 Years | 12.58% | 12.56% | 13.06% | 80.84% | 80.71% | 84.72% | ||||||||||||||||||||||
10 Years | 8.71% | 8.74% | 9.19% | 130.61% | 131.14% | 140.89% |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 13 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,022.30 | $ | 2.24 | $ | 1,000.00 | $ | 1,023.00 | $ | 2.24 | 0.44% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 13 for more information. |
ALLOCATION BY SECTOR
As of 10/31/17
Sector | Percentage of Total Investments* |
Food, Beverage & Tobacco | 47.69 | % | ||
Household & Personal Products | 18.06 | |||
Consumer Durables & Apparel | 14.02 | |||
Automobiles & Components | 11.60 | |||
Software & Services | 4.43 | |||
Capital Goods | 2.16 | |||
Retailing | 1.34 | |||
Diversified Financials | 0.36 | |||
Food & Staples Retailing | 0.18 | |||
Commercial & Professional Services | 0.16 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 10/31/17
Security | Percentage of Total Investments* |
Procter & Gamble Co. (The) | 9.95 | % | ||
Coca-Cola Co. (The) | 7.97 | |||
Philip Morris International Inc. | 7.34 | |||
PepsiCo Inc. | 7.11 | |||
Altria Group Inc. | 5.57 | |||
NIKE Inc. Class B | 3.26 | |||
Mondelez International Inc. Class A | 2.82 | |||
Colgate-Palmolive Co. | 2.80 | |||
General Motors Co. | 2.55 | |||
Activision Blizzard Inc. | 2.23 | |||
|
| |||
TOTAL | 51.60 | % | ||
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* | Excludes money market funds. |
6 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Fund Performance Overview
iSHARES® U.S. CONSUMER SERVICES ETF
Performance as of October 31, 2017
The iShares U.S. Consumer Services ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. equities in the consumer services sector, as represented by the Dow Jones U.S. Consumer Services IndexTM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month reporting period ended October 31, 2017, the total return for the Fund was 0.53%, net of fees, while the total return for the Index was 0.67%.
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 16.19% | 16.20% | 16.67% | 16.19% | 16.20% | 16.67% | ||||||||||||||||||||||
5 Years | 15.36% | 15.35% | 15.85% | 104.30% | 104.24% | 108.70% | ||||||||||||||||||||||
10 Years | 10.55% | 10.59% | 11.00% | 172.66% | 173.63% | 183.99% |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 13 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,005.30 | $ | 2.22 | $ | 1,000.00 | $ | 1,023.00 | $ | 2.24 | 0.44% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 13 for more information. |
ALLOCATION BY SECTOR
As of 10/31/17
Sector | Percentage of Total Investments* |
Retailing | 40.37 | % | ||
Media | 21.78 | |||
Consumer Services | 17.41 | |||
Food & Staples Retailing | 12.38 | |||
Transportation | 3.90 | |||
Health Care Equipment & Services | 2.09 | |||
Commercial & Professional Services | 1.64 | |||
Software & Services | 0.19 | |||
Capital Goods | 0.13 | |||
Technology Hardware & Equipment | 0.11 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 10/31/17
Security | Percentage of Total Investments* |
Amazon.com Inc. | 14.10 | % | ||
Home Depot Inc. (The) | 6.26 | |||
Walt Disney Co. (The) | 4.67 | |||
Comcast Corp. Class A | 4.56 | |||
McDonald’s Corp. | 4.33 | |||
Wal-Mart Stores Inc. | 4.10 | |||
Priceline Group Inc. (The) | 3.01 | |||
Netflix Inc. | 2.72 | |||
Starbucks Corp. | 2.54 | |||
Time Warner Inc. | 2.45 | |||
|
| |||
TOTAL | 48.74 | % | ||
|
|
* | Excludes money market funds. |
FUND PERFORMANCE OVERVIEWS | 7 |
Table of Contents
Fund Performance Overview
iSHARES® U.S. FINANCIAL SERVICES ETF
Performance as of October 31, 2017
The iShares U.S. Financial Services ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. equities in the financial services sector, as represented by the Dow Jones U.S. Financial Services IndexTM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month reporting period ended October 31, 2017, the total return for the Fund was 14.82%, net of fees, while the total return for the Index was 15.08%.
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 39.05% | 39.03% | 39.65% | 39.05% | 39.03% | 39.65% | ||||||||||||||||||||||
5 Years | 18.39% | 18.39% | 18.89% | 132.57% | 132.58% | 137.57% | ||||||||||||||||||||||
10 Years | 1.79% | 1.79% | 2.15% | 19.40% | 19.44% | 23.73% |
Certain sectors and markets performed exceptionally well based on market conditions during the one-year period. Achieving such exceptional returns involves the risk of volatility and investors should not expect that such exceptional returns will be repeated.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 13 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,148.20 | $ | 2.38 | $ | 1,000.00 | $ | 1,023.00 | $ | 2.24 | 0.44% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 13 for more information. |
ALLOCATION BY SECTOR
As of 10/31/17
Sector | Percentage of Total Investments* |
Banks | 56.32 | % | ||
Diversified Financials | 31.54 | |||
Software & Services | 11.79 | |||
Insurance | 0.35 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 10/31/17
Security | Percentage of Total Investments* |
JPMorgan Chase & Co. | 11.95 | % | ||
Bank of America Corp. | 9.07 | |||
Wells Fargo & Co. | 8.46 | |||
Visa Inc. Class A | 6.79 | |||
Citigroup Inc. | 6.76 | |||
Mastercard Inc. Class A | 4.69 | |||
Goldman Sachs Group Inc. (The) | 2.94 | |||
U.S. Bancorp. | 2.92 | |||
Morgan Stanley | 2.39 | |||
American Express Co. | 2.36 | |||
|
| |||
TOTAL | 58.33 | % | ||
|
|
* | Excludes money market funds. |
8 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Fund Performance Overview
iSHARES® U.S. FINANCIALS ETF
Performance as of October 31, 2017
The iShares U.S. Financials ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. equities in the financials sector, as represented by the Dow Jones U.S. Financials IndexTM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month reporting period ended October 31, 2017, the total return for the Fund was 11.37%, net of fees, while the total return for the Index was 11.61%.
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 29.25% | 29.21% | 29.80% | 29.25% | 29.21% | 29.80% | ||||||||||||||||||||||
5 Years | 16.05% | 16.05% | 16.55% | 110.47% | 110.50% | 115.02% | ||||||||||||||||||||||
10 Years | 2.46% | 2.47% | 2.84% | 27.50% | 27.62% | 32.28% |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 13 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,113.70 | $ | 2.34 | $ | 1,000.00 | $ | 1,023.00 | $ | 2.24 | 0.44% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 13 for more information. |
ALLOCATION BY SECTOR
As of 10/31/17
Sector | Percentage of Total Investments* |
Banks | 32.74 | % | ||
Diversified Financials | 26.46 | |||
Real Estate | 19.26 | |||
Insurance | 14.69 | |||
Software & Services | 6.85 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 10/31/17
Security | Percentage of Total Investments* |
Berkshire Hathaway Inc. Class B | 7.05 | % | ||
JPMorgan Chase & Co. | 6.94 | |||
Bank of America Corp. | 5.27 | |||
Wells Fargo & Co. | 4.92 | |||
Visa Inc. Class A | 3.95 | |||
Citigroup Inc. | 3.93 | |||
MasterCard Inc. Class A | 2.72 | |||
Goldman Sachs Group Inc. (The) | 1.71 | |||
U.S. Bancorp. | 1.70 | |||
Morgan Stanley | 1.39 | |||
|
| |||
TOTAL | 39.58 | % | ||
|
|
* | Excludes money market funds. |
FUND PERFORMANCE OVERVIEWS | 9 |
Table of Contents
Fund Performance Overview
iSHARES® U.S. INDUSTRIALS ETF
Performance as of October 31, 2017
The iShares U.S. Industrials ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. equities in the industrials sector, as represented by the Dow Jones U.S. Industrials IndexTM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month reporting period ended October 31, 2017, the total return for the Fund was 10.78%, net of fees, while the total return for the Index was 11.05%.
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 28.59% | 28.95% | 29.21% | 28.59% | 28.95% | 29.21% | ||||||||||||||||||||||
5 Years | 16.69% | 16.74% | 17.21% | 116.36% | 116.84% | 121.24% | ||||||||||||||||||||||
10 Years | 8.09% | 8.14% | 8.55% | 117.68% | 118.66% | 127.08% |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 13 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,107.80 | $ | 2.34 | $ | 1,000.00 | $ | 1,023.00 | $ | 2.24 | 0.44% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 13 for more information. |
ALLOCATION BY SECTOR
As of 10/31/17
Sector | Percentage of Total Investments* |
Capital Goods | 57.57 | % | ||
Software & Services | 13.45 | |||
Transportation | 12.06 | |||
Materials | 6.12 | |||
Technology Hardware & Equipment | 4.96 | |||
Commercial & Professional Services | 4.22 | |||
Pharmaceuticals, Biotechnology & Life Sciences | 1.46 | |||
Utilities | 0.16 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 10/31/17
Security | Percentage of Total Investments* |
General Electric Co. | 5.37 | % | ||
Boeing Co. (The) | 4.41 | |||
3M Co. | 4.22 | |||
Honeywell International Inc. | 3.38 | |||
Union Pacific Corp. | 2.85 | |||
United Technologies Corp. | 2.74 | |||
Accenture PLC Class A | 2.70 | |||
PayPal Holdings Inc. | 2.52 | |||
United Parcel Service Inc. Class B | 2.49 | |||
Caterpillar Inc. | 2.47 | |||
|
| |||
TOTAL | 33.15 | % | ||
|
|
* | Excludes money market funds. |
10 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Fund Performance Overview
iSHARES® MSCI KLD 400 SOCIAL ETF
Performance as of October 31, 2017
The iShares MSCI KLD 400 Social ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. companies that have positive environmental, social and governance characteristics, as represented by the MSCI KLD 400 Social Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month reporting period ended October 31, 2017, the total return for the Fund was 8.83%, net of fees, while the total return for the Index was 9.13%.
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 23.05% | 23.08% | 23.70% | 23.05% | 23.08% | 23.70% | ||||||||||||||||||||||
5 Years | 14.93% | 14.94% | 15.52% | 100.54% | 100.60% | 105.74% | ||||||||||||||||||||||
10 Years | 7.18% | 7.19% | 7.72% | 100.14% | 100.22% | 110.39% |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 13 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,088.30 | $ | 2.63 | $ | 1,000.00 | $ | 1,022.70 | $ | 2.55 | 0.50% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 13 for more information. |
ALLOCATION BY SECTOR
As of 10/31/17
Sector | Percentage of Total Investments* |
Information Technology | 29.77 | % | ||
Consumer Discretionary | 12.99 | |||
Health Care | 11.69 | |||
Financials | 10.87 | |||
Industrials | 10.54 | |||
Consumer Staples | 8.28 | |||
Energy | 4.53 | |||
Real Estate | 4.36 | |||
Materials | 2.93 | |||
Telecommunication Services | 2.24 | |||
Utilities | 1.80 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 10/31/17
Security | Percentage of Total Investments* |
Microsoft Corp. | 6.00 | % | ||
Alphabet Inc. Class C | 3.12 | |||
Alphabet Inc. Class A | 3.02 | |||
Procter & Gamble Co. (The) | 2.17 | |||
Intel Corp. | 2.11 | |||
Verizon Communications Inc. | 1.92 | |||
Coca-Cola Co. (The) | 1.84 | |||
Cisco Systems Inc. | 1.68 | |||
Oracle Corp. | 1.55 | |||
Walt Disney Co. (The) | 1.51 | |||
|
| |||
TOTAL | 24.92 | % | ||
|
|
* | Excludes money market funds. |
FUND PERFORMANCE OVERVIEWS | 11 |
Table of Contents
Fund Performance Overview
iSHARES® MSCI USA ESG SELECT ETF
Performance as of October 31, 2017
The iShares MSCI USA ESG Select ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. companies that have positive environmental, social and governance characteristics, as represented by the MSCI USA ESG Select Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month reporting period ended October 31, 2017, the total return for the Fund was 8.88%, net of fees, while the total return for the Index was 9.17%.
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 24.00% | 24.00% | 24.66% | 24.00% | 24.00% | 24.66% | ||||||||||||||||||||||
5 Years | 14.63% | 14.62% | 15.21% | 97.91% | 97.86% | 102.96% | ||||||||||||||||||||||
10 Years | 6.97% | 6.97% | 7.49% | 96.09% | 96.21% | 106.00% |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 13 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,088.80 | $ | 2.63 | $ | 1,000.00 | $ | 1,022.70 | $ | 2.55 | 0.50% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 13 for more information. |
ALLOCATION BY SECTOR
As of 10/31/17
Sector | Percentage of Total Investments* |
Information Technology | 28.01 | % | ||
Industrials | 13.54 | |||
Health Care | 13.13 | |||
Financials | 11.53 | |||
Consumer Staples | 9.84 | |||
Consumer Discretionary | 9.32 | |||
Real Estate | 4.92 | |||
Materials | 4.19 | |||
Energy | 2.85 | |||
Utilities | 2.67 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 10/31/17
Security | Percentage of Total Investments* |
Microsoft Corp. | 5.46 | % | ||
3M Co. | 4.99 | |||
Apple Inc. | 3.93 | |||
Accenture PLC Class A | 3.81 | |||
Ecolab Inc. | 3.51 | |||
Rockwell Collins Inc. | 2.62 | |||
Alphabet Inc. Class A | 2.44 | |||
BlackRock Inc. | 2.39 | |||
Cummins Inc. | 2.33 | |||
Henry Schein Inc. | 2.04 | |||
|
| |||
TOTAL | 33.52 | % | ||
|
|
* | Excludes money market funds. |
12 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
About Fund Performance
Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.ishares.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are redeemed or sold in the market. Performance for certain funds may reflect a waiver of a portion of investment advisory fees. Without such a waiver, performance would have been lower.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Certain funds may have a NAV which is determined prior to the opening of regular trading on its listed exchange and their market returns are calculated using the midpoint of the bid/ask spread as of the opening of regular trading on the exchange. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower.
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of fund shares and (2) ongoing costs, including management fees and other fund expenses. The expense example, which is based on an investment of $1,000 invested on May 1, 2017 and held through October 31, 2017, is intended to help you understand your ongoing costs (in dollars and cents) of investing in a Fund and to compare these costs with the ongoing costs of investing in other funds.
Actual Expenses — The table provides information about actual account values and actual expenses. Annualized expense ratios reflect contractual and voluntary fee waivers, if any. To estimate the expenses that you paid on your account over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number corresponding to your Fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Example for Comparison Purposes — The table also provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of fund shares. Therefore, the hypothetical examples are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
ABOUT FUND PERFORMANCE / SHAREHOLDER EXPENSES | 13 |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES® U.S. BASIC MATERIALS ETF
October 31, 2017
Security | Shares | Value | ||||||
COMMON STOCKS — 99.94% | ||||||||
CHEMICALS — 83.77% | ||||||||
Air Products & Chemicals Inc. | 302,010 | $ | 48,149,454 | |||||
Albemarle Corp. | 153,335 | 21,603,368 | ||||||
Ashland Global Holdings Inc. | 87,294 | 5,934,246 | ||||||
Axalta Coating Systems Ltd.a,b | 304,862 | 10,136,661 | ||||||
Cabot Corp. | 87,159 | 5,313,213 | ||||||
Celanese Corp. Series A | 190,921 | 19,914,970 | ||||||
CF Industries Holdings Inc. | 324,530 | 12,325,649 | ||||||
Chemours Co. (The) | 256,837 | 14,539,543 | ||||||
DowDuPont Inc. | 3,229,631 | 233,534,618 | ||||||
Eastman Chemical Co. | 201,199 | 18,270,881 | ||||||
Ecolab Inc. | 336,240 | 43,933,118 | ||||||
FMC Corp. | 186,312 | 17,300,932 | ||||||
GCP Applied Technologies Inc.a,b | 101,165 | 2,959,076 | ||||||
HB Fuller Co. | 71,039 | 4,039,988 | ||||||
Huntsman Corp. | 294,343 | 9,424,863 | ||||||
Ingevity Corp.a | 59,164 | 4,214,252 | ||||||
International Flavors & Fragrances Inc. | 109,710 | 16,173,448 | ||||||
LyondellBasell Industries NV Class A | 449,736 | 46,561,168 | ||||||
Minerals Technologies Inc. | 49,460 | 3,556,174 | ||||||
Monsanto Co. | 608,458 | 73,684,264 | ||||||
Mosaic Co. (The) | 488,791 | 10,919,591 | ||||||
NewMarket Corp. | 12,951 | 5,185,451 | ||||||
Olin Corp. | 231,878 | 8,470,503 | ||||||
Platform Specialty Products Corp.a,b | 303,688 | 3,249,462 | ||||||
PolyOne Corp. | 114,654 | 5,282,110 | ||||||
PPG Industries Inc. | 355,486 | 41,321,693 | ||||||
Praxair Inc. | 396,300 | 57,907,356 | ||||||
RPM International Inc. | 185,976 | 9,918,100 | ||||||
Scotts Miracle-Gro Co. (The) Class A | 57,248 | 5,703,046 | ||||||
Sensient Technologies Corp. | 61,549 | 4,680,801 | ||||||
Trinseo SA | 61,486 | 4,365,506 | ||||||
Valvoline Inc. | 283,156 | 6,801,407 | ||||||
Westlake Chemical Corp. | 50,749 | 4,309,098 | ||||||
WR Grace & Co. | 95,252 | 7,285,825 | ||||||
|
| |||||||
786,969,835 | ||||||||
METALS & MINING — 14.93% | ||||||||
Alcoa Corp.a | 238,581 | 11,399,400 | ||||||
Allegheny Technologies Inc.a | 153,321 | 3,860,623 | ||||||
Carpenter Technology Corp. | 65,997 | 3,285,991 | ||||||
Commercial Metals Co. | 163,567 | 3,186,285 | ||||||
Compass Minerals International Inc.b | 47,783 | 3,134,565 |
Security | Shares | Value | ||||||
Freeport-McMoRan Inc.a | 1,866,666 | $ | 26,095,991 | |||||
Newmont Mining Corp. | 739,698 | 26,747,480 | ||||||
Nucor Corp. | 443,137 | 25,626,613 | ||||||
Reliance Steel & Aluminum Co. | 101,707 | 7,815,166 | ||||||
Royal Gold Inc. | 91,174 | 7,668,645 | ||||||
Steel Dynamics Inc. | 333,648 | 12,415,042 | ||||||
U.S. Steel Corp. | 244,154 | 6,181,979 | ||||||
Worthington Industries Inc. | 63,373 | 2,883,471 | ||||||
|
| |||||||
140,301,251 | ||||||||
OIL, GAS & CONSUMABLE FUELS — 0.50% |
| |||||||
CONSOL Energy Inc.a | 290,434 | 4,684,700 | ||||||
|
| |||||||
4,684,700 | ||||||||
PAPER & FOREST PRODUCTS — 0.74% |
| |||||||
Domtar Corp. | 87,977 | 4,163,072 | ||||||
KapStone Paper and Packaging Corp. | 123,668 | 2,777,583 | ||||||
|
| |||||||
6,940,655 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| 938,896,441 | ||||||
SHORT-TERM INVESTMENTS — 0.61% |
| |||||||
MONEY MARKET FUNDS — 0.61% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
1.31%c,d,e | 4,798,812 | 4,799,772 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
1.00%c,d | 970,770 | 970,770 | ||||||
|
| |||||||
5,770,542 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| 5,770,542 | ||||||
|
| |||||||
TOTAL INVESTMENTS | ||||||||
(Cost: $935,579,223)f |
| 944,666,983 | ||||||
Other Assets, Less Liabilities — (0.55)% |
| (5,155,400 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 939,511,583 | |||||
|
|
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 1. |
c | Affiliated issuer. See Schedule 1. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 1. |
f | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $939,770,838. Net unrealized appreciation was $4,896,145, of which $60,960,553 represented gross unrealized appreciation on investments and $56,064,408 represented gross unrealized depreciation on investments. |
14 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® U.S. BASIC MATERIALS ETF
October 31, 2017
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 04/30/17 | Shares purchased | Shares sold | Shares held at 10/31/17 | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, | 2,222,421 | 2,576,391 | b | — | 4,798,812 | $ | 4,799,772 | $ | (555 | ) | $ | (764 | ) | $ | — | c | ||||||||||||||||
BlackRock Cash Funds: Treasury, | 1,436,557 | — | (465,787 | )b | 970,770 | 970,770 | — | — | 2,431 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 5,770,542 | $ | (555 | ) | $ | (764 | ) | $ | 2,431 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
c | Does not include income earned on the investment of securities lending cash collateral which is not direct income of the Fund and is reflected as a component of securities lending income in the statement of operations. |
Schedule 2 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: | ||||||||||||||||
Assets: | ||||||||||||||||
Common stocks | $ | 938,896,441 | $ | — | $ | — | $ | 938,896,441 | ||||||||
Money market funds | 5,770,542 | — | — | 5,770,542 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 944,666,983 | $ | — | $ | — | $ | 944,666,983 | ||||||||
|
|
|
|
|
|
|
| |||||||||
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 15 |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES® U.S. CONSUMER GOODS ETF
October 31, 2017
Security | Shares | Value | ||||||
COMMON STOCKS — 99.83% | ||||||||
AUTO COMPONENTS — 4.24% | ||||||||
Adient PLC | 23,962 | $ | 2,021,434 | |||||
Autoliv Inc.a | 22,203 | 2,772,267 | ||||||
BorgWarner Inc. | 50,690 | 2,672,377 | ||||||
Cooper Tire & Rubber Co. | 13,354 | 438,011 | ||||||
Dana Inc. | 36,887 | 1,124,685 | ||||||
Delphi Automotive PLC | 68,242 | 6,781,890 | ||||||
Gentex Corp. | 73,075 | 1,418,386 | ||||||
Goodyear Tire & Rubber Co. (The) | 64,344 | 1,968,283 | ||||||
Lear Corp. | 17,382 | 3,052,105 | ||||||
Tenneco Inc. | 13,611 | 790,935 | ||||||
Visteon Corp.b | 7,976 | 1,005,295 | ||||||
|
| |||||||
24,045,668 | ||||||||
AUTOMOBILES — 7.34% | ||||||||
Ford Motor Co. | 1,000,225 | 12,272,761 | ||||||
General Motors Co. | 335,397 | 14,415,363 | ||||||
Harley-Davidson Inc. | 43,600 | 2,064,024 | ||||||
Tesla Inc.b | 33,717 | 11,178,197 | ||||||
Thor Industries Inc. | 12,507 | 1,703,703 | ||||||
|
| |||||||
41,634,048 | ||||||||
BEVERAGES — 19.87% | ||||||||
Brown-Forman Corp. Class A | 15,569 | 892,571 | ||||||
Brown-Forman Corp. Class B | 50,027 | 2,852,539 | ||||||
Coca-Cola Co. (The) | 981,720 | 45,139,486 | ||||||
Constellation Brands Inc. Class A | 43,962 | 9,631,634 | ||||||
Dr Pepper Snapple Group Inc. | 46,474 | 3,980,963 | ||||||
Molson Coors Brewing Co. Class B | 47,233 | 3,819,733 | ||||||
Monster Beverage Corp.a,b | 106,071 | 6,144,693 | ||||||
PepsiCo Inc. | 365,322 | 40,269,444 | ||||||
|
| |||||||
112,731,063 | ||||||||
COMMERCIAL SERVICES & SUPPLIES — 0.16% |
| |||||||
Herman Miller Inc. | 15,182 | 510,115 | ||||||
HNI Corp. | 11,327 | 387,610 | ||||||
|
| |||||||
897,725 | ||||||||
DISTRIBUTORS — 1.33% | ||||||||
Genuine Parts Co. | 37,555 | 3,313,478 | ||||||
LKQ Corp.b | 78,896 | 2,973,590 | ||||||
Pool Corp. | 10,549 | 1,274,108 | ||||||
|
| |||||||
7,561,176 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 0.36% |
| |||||||
Leucadia National Corp. | 80,977 | 2,048,718 | ||||||
|
| |||||||
2,048,718 |
Security | Shares | Value | ||||||
FOOD & STAPLES RETAILING — 0.18% |
| |||||||
U.S. Foods Holding Corp.b | 36,649 | $ | 999,785 | |||||
|
| |||||||
999,785 | ||||||||
FOOD PRODUCTS — 14.86% | ||||||||
Archer-Daniels-Midland Co. | 143,865 | 5,879,763 | ||||||
B&G Foods Inc. | 17,057 | 542,413 | ||||||
Bunge Ltd. | 35,922 | 2,470,715 | ||||||
Campbell Soup Co. | 49,568 | 2,348,036 | ||||||
Conagra Brands Inc. | 106,299 | 3,631,174 | ||||||
Darling Ingredients Inc.a,b | 41,957 | 765,715 | ||||||
Dean Foods Co. | 23,325 | 227,419 | ||||||
Flowers Foods Inc. | 46,936 | 893,192 | ||||||
General Mills Inc. | 147,586 | 7,662,665 | ||||||
Hain Celestial Group Inc. (The)a,b | 26,411 | 951,324 | ||||||
Hershey Co. (The) | 36,138 | 3,837,133 | ||||||
Hormel Foods Corp. | 68,897 | 2,146,831 | ||||||
Ingredion Inc. | 18,320 | 2,296,412 | ||||||
JM Smucker Co. (The) | 29,059 | 3,081,707 | ||||||
Kellogg Co. | 63,550 | 3,973,782 | ||||||
Kraft Heinz Co. (The) | 152,661 | 11,805,275 | ||||||
Lamb Weston Holdings Inc. | 37,381 | 1,906,057 | ||||||
Lancaster Colony Corp. | 4,952 | 620,089 | ||||||
McCormick & Co. Inc./MD NVS | 30,375 | 3,023,224 | ||||||
Mondelez International Inc. Class A | 385,561 | 15,973,792 | ||||||
Pinnacle Foods Inc. | 30,389 | 1,653,769 | ||||||
Post Holdings Inc.b | 16,867 | 1,398,780 | ||||||
Snyder’s-Lance Inc. | 21,762 | 818,904 | ||||||
TreeHouse Foods Inc.a,b | 14,618 | 970,343 | ||||||
Tyson Foods Inc. Class A | 73,977 | 5,393,663 | ||||||
|
| |||||||
84,272,177 | ||||||||
HOUSEHOLD DURABLES — 5.44% |
| |||||||
CalAtlantic Group Inc. | 19,457 | 960,008 | ||||||
DR Horton Inc. | 87,107 | 3,851,001 | ||||||
Helen of Troy Ltd.b | 6,938 | 644,540 | ||||||
Leggett & Platt Inc. | 33,830 | 1,598,806 | ||||||
Lennar Corp. Class A | 51,910 | 2,889,830 | ||||||
Lennar Corp. Class B | 2,414 | 115,751 | ||||||
Mohawk Industries Inc.b | 16,159 | 4,229,780 | ||||||
Newell Brands Inc. | 125,337 | 5,111,243 | ||||||
NVR Inc.b | 893 | 2,930,263 | ||||||
PulteGroup Inc. | 70,986 | 2,145,907 | ||||||
Tempur Sealy International Inc.b | 11,737 | 767,248 | ||||||
Toll Brothers Inc. | 38,904 | 1,791,140 | ||||||
Tupperware Brands Corp. | 13,020 | 764,925 | ||||||
Whirlpool Corp. | 18,638 | 3,055,327 | ||||||
|
| |||||||
30,855,769 |
16 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® U.S. CONSUMER GOODS ETF
October 31, 2017
Security | Shares | Value | ||||||
HOUSEHOLD PRODUCTS — 16.00% |
| |||||||
Church & Dwight Co. Inc. | 63,721 | $ | 2,878,278 | |||||
Clorox Co. (The) | 33,008 | 4,176,502 | ||||||
Colgate-Palmolive Co. | 225,265 | 15,869,919 | ||||||
Energizer Holdings Inc. | 15,745 | 676,878 | ||||||
Kimberly-Clark Corp. | 90,353 | 10,165,616 | ||||||
Procter & Gamble Co. (The) | 652,135 | 56,305,336 | ||||||
Spectrum Brands Holdings Inc. | 6,086 | 668,973 | ||||||
|
| |||||||
90,741,502 | ||||||||
LEISURE PRODUCTS — 1.21% | ||||||||
Brunswick Corp./DE | 22,702 | 1,149,856 | ||||||
Hasbro Inc. | 29,077 | 2,692,240 | ||||||
Mattel Inc.a | 87,557 | 1,236,305 | ||||||
Polaris Industries Inc. | 14,879 | 1,762,120 | ||||||
|
| |||||||
6,840,521 | ||||||||
MACHINERY — 2.16% | ||||||||
Middleby Corp. (The)a,b | 14,715 | 1,705,468 | ||||||
Snap-on Inc. | 14,713 | 2,321,417 | ||||||
Stanley Black & Decker Inc. | 39,167 | 6,327,429 | ||||||
WABCO Holdings Inc.b | 12,893 | 1,902,620 | ||||||
|
| |||||||
12,256,934 | ||||||||
PERSONAL PRODUCTS — 2.03% | ||||||||
Avon Products Inc.b | 112,865 | 257,332 | ||||||
Coty Inc. Class A | 120,625 | 1,857,625 | ||||||
Edgewell Personal Care Co.b | 14,581 | 946,744 | ||||||
Estee Lauder Companies Inc. (The) Class A | 57,252 | 6,401,346 | ||||||
Herbalife Ltd.a,b | 16,983 | 1,233,306 | ||||||
Nu Skin Enterprises Inc. Class A | 12,735 | 810,073 | ||||||
|
| |||||||
11,506,426 | ||||||||
SOFTWARE — 4.42% | ||||||||
Activision Blizzard Inc. | 193,062 | 12,643,630 | ||||||
Electronic Arts Inc.b | 78,953 | 9,442,779 | ||||||
Take-Two Interactive Software Inc.b | 27,211 | 3,010,897 | ||||||
|
| |||||||
25,097,306 | ||||||||
TEXTILES, APPAREL & LUXURY GOODS — 7.35% |
| |||||||
Carter’s Inc. | 12,238 | 1,183,782 | ||||||
Deckers Outdoor Corp.b | 8,131 | 554,859 | ||||||
Hanesbrands Inc. | 93,137 | 2,095,582 | ||||||
Lululemon Athletica Inc.b | 24,674 | 1,517,698 | ||||||
Michael Kors Holdings Ltd.a,b | 38,773 | 1,892,510 | ||||||
NIKE Inc. Class B | 336,027 | 18,478,125 | ||||||
PVH Corp. | 19,786 | 2,509,063 | ||||||
Ralph Lauren Corp. | 14,148 | 1,265,256 |
Security | Shares | Value | ||||||
Skechers U.S.A. Inc. Class Ab | 34,279 | $ | 1,094,186 | |||||
Steven Madden Ltd.a,b | 13,590 | 530,010 | ||||||
Tapestry Inc. | 72,177 | 2,955,648 | ||||||
Under Armour Inc. Class Aa,b | 47,045 | 589,003 | ||||||
Under Armour Inc. Class Ca,b | 47,313 | 545,519 | ||||||
VF Corp. | 83,551 | 5,819,327 | ||||||
Wolverine World Wide Inc. | 24,653 | 673,027 | ||||||
|
| |||||||
41,703,595 | ||||||||
TOBACCO — 12.88% | ||||||||
Altria Group Inc. | 490,651 | 31,509,607 | ||||||
Philip Morris International Inc. | 397,198 | 41,562,799 | ||||||
|
| |||||||
73,072,406 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| 566,264,819 | ||||||
SHORT-TERM INVESTMENTS — 1.35% |
| |||||||
MONEY MARKET FUNDS — 1.35% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
1.31%c,d,e | 7,346,638 | 7,348,108 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
1.00%c,d | 322,456 | 322,456 | ||||||
|
| |||||||
7,670,564 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| 7,670,564 | ||||||
|
| |||||||
TOTAL INVESTMENTS | ||||||||
(Cost: $596,775,348)f |
| 573,935,383 | ||||||
Other Assets, Less Liabilities — (1.18)% |
| (6,680,335 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 567,255,048 | |||||
|
|
NVS — Non-Voting Shares
a | All or a portion of this security represents a security on loan. See Note 1. |
b | Non-income earning security. |
c | Affiliated issuer. See Schedule 1. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 1. |
f | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $598,871,119. Net unrealized depreciation was $24,935,736, of which $24,605,490 represented gross unrealized appreciation on investments and $49,541,226 represented gross unrealized depreciation on investments. |
SCHEDULESOF INVESTMENTS | 17 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® U.S. CONSUMER GOODS ETF
October 31, 2017
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2017, for purposes of Section��2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 04/30/17 | Shares purchased | Shares sold | Shares held at 10/31/17 | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, | 28,154,555 | — | (20,807,917 | )b | 7,346,638 | $ | 7,348,108 | $ | 259 | $ | (3,759 | ) | $ | — | c | |||||||||||||||||
BlackRock Cash Funds: Treasury, | 403,730 | — | (81,274 | )b | 322,456 | 322,456 | — | — | 4,058 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 7,670,564 | $ | 259 | $ | (3,759 | ) | $ | 4,058 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
c | Does not include income earned on the investment of securities lending cash collateral which is not direct income of the Fund and is reflected as a component of securities lending income in the statement of operations. |
Schedule 2 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: | ||||||||||||||||
Assets: | ||||||||||||||||
Common stocks | $ | 566,264,819 | $ | — | $ | — | $ | 566,264,819 | ||||||||
Money market funds | 7,670,564 | — | — | 7,670,564 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 573,935,383 | $ | — | $ | — | $ | 573,935,383 | ||||||||
|
|
|
|
|
|
|
| |||||||||
See notes to financial statements.
18 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES® U.S. CONSUMER SERVICES ETF
October 31, 2017
Security | Shares | Value | ||||||
COMMON STOCKS — 99.96% |
| |||||||
AIRLINES — 3.80% |
| |||||||
Alaska Air Group Inc. | 26,052 | $ | 1,720,214 | |||||
Allegiant Travel Co. | 2,872 | 391,741 | ||||||
American Airlines Group Inc. | 90,096 | 4,218,295 | ||||||
Delta Air Lines Inc. | 137,977 | 6,902,989 | ||||||
JetBlue Airways Corp.a | 69,828 | 1,337,206 | ||||||
Southwest Airlines Co. | 114,158 | 6,148,550 | ||||||
Spirit Airlines Inc.a,b | 15,376 | 570,296 | ||||||
United Continental Holdings Inc.a | 53,928 | 3,153,709 | ||||||
|
| |||||||
24,443,000 | ||||||||
COMMERCIAL SERVICES & SUPPLIES — 0.59% |
| |||||||
Copart Inc.a,b | 42,424 | 1,539,567 | ||||||
KAR Auction Services Inc. | 29,104 | 1,377,492 | ||||||
Rollins Inc. | 20,684 | 908,235 | ||||||
|
| |||||||
3,825,294 | ||||||||
DIVERSIFIED CONSUMER SERVICES — 1.12% |
| |||||||
Adtalem Global Education Inc. | 13,881 | 512,903 | ||||||
Bright Horizons Family Solutions Inc.a | 10,698 | 923,237 | ||||||
Graham Holdings Co. Class B | 1,023 | 569,248 | ||||||
Grand Canyon Education Inc.a | 10,354 | 926,786 | ||||||
H&R Block Inc. | 44,593 | 1,103,231 | ||||||
Service Corp. International/U.S. | 39,710 | 1,408,117 | ||||||
ServiceMaster Global Holdings Inc.a | 28,369 | 1,336,464 | ||||||
Sotheby’sa | 8,494 | 440,159 | ||||||
|
| |||||||
7,220,145 | ||||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS — 0.11% |
| |||||||
Dolby Laboratories Inc. Class A | 12,670 | 734,100 | ||||||
|
| |||||||
734,100 | ||||||||
FOOD & STAPLES RETAILING — 12.38% |
| |||||||
Casey’s General Stores Inc. | 8,227 | 942,567 | ||||||
Costco Wholesale Corp. | 90,574 | 14,589,660 | ||||||
CVS Health Corp. | 209,934 | 14,386,777 | ||||||
Kroger Co. (The) | 186,797 | 3,866,698 | ||||||
Rite Aid Corp.a,b | 243,346 | 401,521 | ||||||
Sprouts Farmers Market Inc.a | 28,272 | 522,749 | ||||||
Sysco Corp. | 100,778 | 5,605,272 | ||||||
United Natural Foods Inc.a | 11,457 | 444,188 | ||||||
Wal-Mart Stores Inc. | 301,924 | 26,360,985 | ||||||
Walgreens Boots Alliance Inc. | 190,175 | 12,602,897 | ||||||
|
| |||||||
79,723,314 |
Security | Shares | Value | ||||||
HEALTH CARE PROVIDERS & SERVICES — 2.09% |
| |||||||
AmerisourceBergen Corp. | 33,915 | $ | 2,609,759 | |||||
Cardinal Health Inc. | 65,832 | 4,075,001 | ||||||
Chemed Corp.b | 3,472 | 775,749 | ||||||
McKesson Corp. | 43,603 | 6,011,982 | ||||||
|
| |||||||
13,472,491 | ||||||||
HOTELS, RESTAURANTS & LEISURE — 16.28% |
| |||||||
Aramark | 51,389 | 2,245,185 | ||||||
Bloomin’ Brands Inc. | 21,440 | 381,203 | ||||||
Brinker International Inc. | 11,421 | 350,853 | ||||||
Buffalo Wild Wings Inc.a | 3,441 | 406,726 | ||||||
Carnival Corp. | 84,594 | 5,616,196 | ||||||
Cheesecake Factory Inc. (The) | 9,891 | 442,523 | ||||||
Chipotle Mexican Grill Inc.a,b | 5,314 | 1,444,877 | ||||||
Choice Hotels International Inc. | 8,039 | 560,720 | ||||||
Cracker Barrel Old Country Store Inc.b | 5,212 | 813,750 | ||||||
Darden Restaurants Inc. | 26,313 | 2,164,771 | ||||||
Domino’s Pizza Inc. | 9,230 | 1,689,090 | ||||||
Dunkin’ Brands Group Inc. | 19,324 | 1,141,469 | ||||||
Extended Stay America Inc. | 41,616 | 824,829 | ||||||
Hilton Grand Vacations Inc.a | 14,256 | 583,926 | ||||||
Hilton Worldwide Holdings Inc. | 42,625 | 3,080,935 | ||||||
Hyatt Hotels Corp. Class Aa | 10,449 | 654,734 | ||||||
Jack in the Box Inc. | 6,441 | 666,708 | ||||||
Las Vegas Sands Corp. | 75,606 | 4,791,908 | ||||||
Marriott International Inc./MD Class A | 64,773 | 7,739,078 | ||||||
Marriott Vacations Worldwide Corp. | 5,265 | 692,979 | ||||||
McDonald’s Corp. | 167,063 | 27,884,485 | ||||||
MGM Resorts International | 107,911 | 3,383,010 | ||||||
Norwegian Cruise Line Holdings Ltd.a | 37,393 | 2,084,660 | ||||||
Royal Caribbean Cruises Ltd. | 35,761 | 4,426,139 | ||||||
Six Flags Entertainment Corp. | 17,045 | 1,070,256 | ||||||
Starbucks Corp. | 298,126 | 16,349,230 | ||||||
Texas Roadhouse Inc. | 14,257 | 712,993 | ||||||
Vail Resorts Inc. | 8,416 | 1,927,432 | ||||||
Wendy’s Co. (The) | 40,236 | 611,990 | ||||||
Wyndham Worldwide Corp. | 21,558 | 2,303,472 | ||||||
Wynn Resorts Ltd. | 16,764 | 2,472,522 | ||||||
Yum! Brands Inc. | 71,554 | 5,327,195 | ||||||
|
| |||||||
104,845,844 |
SCHEDULESOF INVESTMENTS | 19 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® U.S. CONSUMER SERVICES ETF
October 31, 2017
Security | Shares | Value | ||||||
INTERNET & DIRECT MARKETING RETAIL — 21.22% |
| |||||||
Amazon.com Inc.a | 82,150 | $ | 90,798,752 | |||||
Expedia Inc. | 25,490 | 3,177,583 | ||||||
Groupon Inc.a | 89,829 | 428,484 | ||||||
Liberty Expedia Holdings Inc. Class Aa | 12,065 | 556,197 | ||||||
Liberty Interactive Corp. QVC Group Series Aa | 88,714 | 2,015,582 | ||||||
Liberty Ventures Series Aa | 17,509 | 997,313 | ||||||
Netflix Inc.a | 89,126 | 17,507,020 | ||||||
Priceline Group Inc. (The)a | 10,125 | 19,358,595 | ||||||
Shutterfly Inc.a | 7,857 | 335,494 | ||||||
TripAdvisor Inc.a | 23,429 | 878,587 | ||||||
Wayfair Inc. Class Aa | 8,955 | 625,955 | ||||||
|
| |||||||
136,679,562 | ||||||||
INTERNET SOFTWARE & SERVICES — 0.12% |
| |||||||
Yelp Inc.a | 16,386 | 765,554 | ||||||
|
| |||||||
765,554 | ||||||||
IT SERVICES — 0.07% | ||||||||
Acxiom Corp.a,b | 17,994 | 452,729 | ||||||
|
| |||||||
452,729 | ||||||||
MEDIA — 21.77% | ||||||||
AMC Networks Inc. Class Aa,b | 11,509 | 585,578 | ||||||
Cable One Inc. | 1,024 | 726,845 | ||||||
CBS Corp. Class A | 2,255 | 128,152 | ||||||
CBS Corp. Class B NVS | 75,701 | 4,248,340 | ||||||
Charter Communications Inc. Class Aa | 41,552 | 13,885,432 | ||||||
Cinemark Holdings Inc. | 22,927 | 833,167 | ||||||
Comcast Corp. Class A | 814,580 | 29,349,317 | ||||||
Discovery Communications Inc. Class Aa,b | 33,874 | 639,541 | ||||||
Discovery Communications Inc. Class C NVSa,b | 44,172 | 786,703 | ||||||
DISH Network Corp. Class Aa | 47,771 | 2,318,804 | ||||||
Interpublic Group of Companies Inc. (The) | 83,050 | 1,598,713 | ||||||
John Wiley & Sons Inc. Class A | 9,929 | 542,620 | ||||||
Liberty Broadband Corp. Class Aa | 5,891 | 507,863 | ||||||
Liberty Broadband Corp. Class Ca,b | 32,004 | 2,793,629 | ||||||
Liberty Global PLC Series Aa | 47,757 | 1,473,304 | ||||||
Liberty Global PLC Series C NVSa | 124,032 | 3,707,317 | ||||||
Liberty Global PLC LiLAC Class Aa | 12,146 | 263,811 | ||||||
Liberty Global PLC LiLAC Class Ca,b | 25,548 | 562,056 |
Security | Shares | Value | ||||||
Liberty Media Corp.-Liberty Formula One Class Aa | 6,399 | $ | 232,924 | |||||
Liberty Media Corp.-Liberty Formula One Class Ca,b | 42,589 | 1,624,345 | ||||||
Liberty Media Corp.-Liberty SiriusXM Class Aa | 18,237 | 760,665 | ||||||
Liberty Media Corp.-Liberty SiriusXM Class Ca | 35,925 | 1,496,276 | ||||||
Lions Gate Entertainment Corp. Class Aa | 14,565 | 422,676 | ||||||
Lions Gate Entertainment Corp. Class Ba | 24,246 | 670,644 | ||||||
Live Nation Entertainment Inc.a | 28,530 | 1,249,043 | ||||||
Madison Square Garden Co. (The)a | 3,588 | 799,012 | ||||||
Meredith Corp. | 8,140 | 431,420 | ||||||
New York Times Co. (The) Class A | 27,950 | 533,845 | ||||||
News Corp. Class A | 81,597 | 1,114,615 | ||||||
News Corp. Class B | 28,048 | 389,867 | ||||||
Nexstar Media Group Inc. Class A | 10,148 | 647,442 | ||||||
Omnicom Group Inc. | 48,117 | 3,232,981 | ||||||
Regal Entertainment Group Class A | 25,737 | 420,800 | ||||||
Scripps Networks Interactive Inc. Class A | 20,256 | 1,686,920 | ||||||
Sinclair Broadcast Group Inc. Class A | 17,150 | 543,655 | ||||||
Sirius XM Holdings Inc.b | 311,425 | 1,694,152 | ||||||
TEGNA Inc. | 47,558 | 581,634 | ||||||
Time Inc. | 23,991 | 278,296 | ||||||
Time Warner Inc. | 160,603 | 15,785,669 | ||||||
Tribune Media Co. Class A | 15,885 | 650,173 | ||||||
Twenty-First Century Fox Inc. Class A | 218,313 | 5,708,885 | ||||||
Twenty-First Century Fox Inc. Class B | 91,986 | 2,341,044 | ||||||
Viacom Inc. Class Ab | 3,050 | 91,653 | ||||||
Viacom Inc. Class B NVS | 74,287 | 1,785,117 | ||||||
Walt Disney Co. (The) | 307,299 | 30,056,915 | ||||||
|
| |||||||
140,181,860 | ||||||||
MULTILINE RETAIL — 3.14% | ||||||||
Big Lots Inc.b | 9,875 | 506,686 | ||||||
Dillard’s Inc. Class Ab | 5,120 | 260,096 | ||||||
Dollar General Corp. | 54,133 | 4,376,112 | ||||||
Dollar Tree Inc.a | 49,203 | 4,489,774 |
20 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® U.S. CONSUMER SERVICES ETF
October 31, 2017
Security | Shares | Value | ||||||
JC Penney Co. Inc.a,b | 77,331 | $ | 216,527 | |||||
Kohl’s Corp. | 35,671 | 1,489,621 | ||||||
Macy’s Inc. | 64,798 | 1,215,610 | ||||||
Nordstrom Inc. | 24,983 | 990,576 | ||||||
Target Corp. | 113,150 | 6,680,376 | ||||||
|
| |||||||
20,225,378 | ||||||||
PROFESSIONAL SERVICES — 1.05% |
| |||||||
Dun & Bradstreet Corp. (The) | 7,959 | 929,850 | ||||||
IHS Markit Ltd.a,b | 75,740 | 3,227,281 | ||||||
Nielsen Holdings PLC | 70,198 | 2,602,240 | ||||||
|
| |||||||
6,759,371 | ||||||||
ROAD & RAIL — 0.10% | ||||||||
Avis Budget Group Inc.a | 15,955 | 658,144 | ||||||
|
| |||||||
658,144 | ||||||||
SPECIALTY RETAIL — 15.99% | ||||||||
Aaron’s Inc. | 13,858 | 509,974 | ||||||
Advance Auto Parts Inc. | 15,701 | 1,283,400 | ||||||
American Eagle Outfitters Inc. | 37,540 | 488,771 | ||||||
AutoNation Inc.a,b | 14,285 | 677,109 | ||||||
AutoZone Inc.a | 5,844 | 3,445,038 | ||||||
Bed Bath & Beyond Inc. | 31,713 | 631,089 | ||||||
Best Buy Co. Inc. | 55,363 | 3,099,221 | ||||||
Burlington Stores Inc.a,b | 14,824 | 1,391,825 | ||||||
CarMax Inc.a | 38,280 | 2,874,828 | ||||||
Dick’s Sporting Goods Inc. | 18,982 | 464,490 | ||||||
Five Below Inc.a | 12,082 | 667,530 | ||||||
Foot Locker Inc. | 27,224 | 818,898 | ||||||
GameStop Corp. Class A | 22,979 | 429,477 | ||||||
Gap Inc. (The) | 46,788 | 1,216,020 | ||||||
Home Depot Inc. (The) | 243,020 | 40,287,856 | ||||||
L Brands Inc. | 52,291 | 2,250,605 | ||||||
Lithia Motors Inc. Class A | 5,301 | 599,967 | ||||||
Lowe’s Companies Inc. | 174,379 | 13,941,601 | ||||||
Murphy USA Inc.a | 7,442 | 553,387 | ||||||
O’Reilly Automotive Inc.a | 18,317 | 3,863,971 | ||||||
Office Depot Inc. | 117,876 | 365,416 | ||||||
Ross Stores Inc. | 80,786 | 5,129,103 | ||||||
Sally Beauty Holdings Inc.a,b | 29,421 | 509,277 | ||||||
Signet Jewelers Ltd. | 13,053 | 855,885 | ||||||
Tiffany & Co. | 21,466 | 2,009,647 | ||||||
TJX Companies Inc. (The) | 131,627 | 9,187,565 | ||||||
Tractor Supply Co. | 26,782 | 1,613,883 | ||||||
Ulta Salon Cosmetics & Fragrance Inc.a | 12,226 | 2,467,085 | ||||||
Urban Outfitters Inc.a,b | 18,331 | 449,476 |
Security | Shares | Value | ||||||
Williams-Sonoma Inc. | 17,200 | $ | 887,520 | |||||
|
| |||||||
102,969,914 | ||||||||
TRADING COMPANIES & DISTRIBUTORS — 0.13% |
| |||||||
Beacon Roofing Supply Inc.a | 14,511 | 804,054 | ||||||
|
| |||||||
804,054 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| 643,760,754 | ||||||
SHORT-TERM INVESTMENTS — 2.43% |
| |||||||
MONEY MARKET FUNDS — 2.43% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
1.31%c,d,e | 14,754,498 | 14,757,448 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
1.00%c,d | 891,815 | 891,815 | ||||||
|
| |||||||
15,649,263 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| 15,649,263 | ||||||
|
| |||||||
TOTAL INVESTMENTS | ||||||||
(Cost: $673,529,162)f |
| 659,410,017 | ||||||
Other Assets, Less Liabilities — (2.39)% |
| (15,376,486 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 644,033,531 | |||||
|
|
NVS -— Non-Voting Shares
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 1. |
c | Affiliated issuer. See Schedule 1. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 1. |
f | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $677,892,892. Net unrealized depreciation was $18,482,875, of which $57,595,944 represented gross unrealized appreciation on investments and $76,078,819 represented gross unrealized depreciation on investments. |
SCHEDULESOF INVESTMENTS | 21 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® U.S. CONSUMER SERVICES ETF
October 31, 2017
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 04/30/17 | Shares purchased | Shares sold | Shares held at 10/31/17 | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | 15,419,209 | — | (664,711 | )b | 14,754,498 | $ | 14,757,448 | $ | (4,155 | ) | $ | (1,271 | ) | $ | — | c | ||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | 814,889 | 76,926 | b | — | 891,815 | 891,815 | — | — | 4,177 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 15,649,263 | $ | (4,155 | ) | $ | (1,271 | ) | $ | 4,177 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
c | Does not include income earned on the investment of securities lending cash collateral which is not direct income of the Fund and is reflected as a component of securities lending income in the statement of operations. |
Schedule 2 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: | ||||||||||||||||
Assets: | ||||||||||||||||
Common stocks | $ | 643,760,754 | $ | — | $ | — | $ | 643,760,754 | ||||||||
Money market funds | 15,649,263 | — | — | 15,649,263 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 659,410,017 | $ | — | $ | — | $ | 659,410,017 | ||||||||
|
|
|
|
|
|
|
| |||||||||
See notes to financial statements.
22 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES® U.S. FINANCIAL SERVICES ETF
October 31, 2017
Security | Shares | Value | ||||||
COMMON STOCKS — 99.93% |
| |||||||
BANKS — 55.45% |
| |||||||
Associated Banc-Corp. | 79,614 | $ | 2,014,234 | |||||
BancorpSouth Inc. | 44,535 | 1,407,306 | ||||||
Bank of America Corp. | 5,152,593 | 141,129,522 | ||||||
Bank of Hawaii Corp. | 22,438 | 1,831,165 | ||||||
Bank of the Ozarks Inc. | 64,015 | 2,984,379 | ||||||
BankUnited Inc. | 56,000 | 1,951,600 | ||||||
BB&T Corp. | 424,353 | 20,895,142 | ||||||
BOK Financial Corp. | 13,069 | 1,130,076 | ||||||
Cathay General Bancorp. | 39,878 | 1,666,900 | ||||||
Chemical Financial Corp. | 37,553 | 1,978,668 | ||||||
CIT Group Inc. | 71,339 | 3,325,824 | ||||||
Citigroup Inc. | 1,430,745 | 105,159,757 | ||||||
Citizens Financial Group Inc. | 262,949 | 9,994,691 | ||||||
Comerica Inc. | 92,438 | 7,262,854 | ||||||
Commerce Bancshares Inc./MO | 47,042 | 2,735,963 | ||||||
Cullen/Frost Bankers Inc. | 30,743 | 3,028,186 | ||||||
East West Bancorp. Inc. | 76,026 | 4,549,396 | ||||||
F.N.B. Corp. | 170,035 | 2,293,772 | ||||||
Fifth Third Bancorp. | 386,877 | 11,180,745 | ||||||
First Citizens BancShares Inc./NC Class A | 4,591 | 1,859,355 | ||||||
First Financial Bankshares Inc. | 34,806 | 1,588,894 | ||||||
First Horizon National Corp. | 122,778 | 2,304,543 | ||||||
First Republic Bank/CA | 81,063 | 7,895,536 | ||||||
Fulton Financial Corp. | 91,736 | 1,669,595 | ||||||
Glacier Bancorp. Inc. | 41,101 | 1,560,194 | ||||||
Hancock Holding Co. | 44,712 | 2,179,710 | ||||||
Home BancShares Inc./AR | 82,998 | 1,865,795 | ||||||
Huntington Bancshares Inc./OH | 572,699 | 7,903,246 | ||||||
IBERIABANK Corp. | 28,205 | 2,080,119 | ||||||
International Bancshares Corp. | 28,500 | 1,157,100 | ||||||
Investors Bancorp. Inc. | 134,776 | 1,853,170 | ||||||
JPMorgan Chase & Co. | 1,847,913 | 185,918,527 | ||||||
KeyCorp | 571,123 | 10,422,995 | ||||||
M&T Bank Corp. | 79,783 | 13,305,411 | ||||||
MB Financial Inc. | 44,072 | 2,024,668 | ||||||
PacWest Bancorp. | 68,210 | 3,295,907 | ||||||
People’s United Financial Inc. | 181,140 | 3,380,072 | ||||||
Pinnacle Financial Partners Inc. | 38,862 | 2,572,664 | ||||||
PNC Financial Services Group Inc. (The)a | 251,645 | 34,422,520 | ||||||
Popular Inc. | 53,476 | 1,961,500 | ||||||
Prosperity Bancshares Inc. | 36,552 | 2,404,391 |
Security | Shares | Value | ||||||
Regions Financial Corp. | 627,660 | $ | 9,716,177 | |||||
Signature Bank/New York NYb | 28,919 | 3,759,759 | ||||||
Sterling Bancorp./DE | 118,048 | 2,957,102 | ||||||
SunTrust Banks Inc. | 252,029 | 15,174,666 | ||||||
SVB Financial Groupb | 27,669 | 6,067,258 | ||||||
Synovus Financial Corp. | 63,922 | 2,994,746 | ||||||
TCF Financial Corp. | 89,917 | 1,638,288 | ||||||
Texas Capital Bancshares Inc.b,c | 26,100 | 2,245,905 | ||||||
Trustmark Corp. | 35,629 | 1,173,619 | ||||||
U.S. Bancorp. | 834,499 | 45,380,056 | ||||||
UMB Financial Corp. | 23,086 | 1,697,514 | ||||||
Umpqua Holdings Corp. | 115,844 | 2,370,168 | ||||||
United Bankshares Inc./WV | 55,033 | 1,978,436 | ||||||
Valley National Bancorp. | 138,858 | 1,596,867 | ||||||
Webster Financial Corp. | 48,430 | 2,663,166 | ||||||
Wells Fargo & Co. | 2,346,043 | 131,706,854 | ||||||
Western Alliance Bancorp.b | 51,076 | 2,850,041 | ||||||
Wintrust Financial Corp. | 29,437 | 2,392,934 | ||||||
Zions BanCorp. | 106,354 | 4,941,207 | ||||||
|
| |||||||
863,450,855 | ||||||||
CAPITAL MARKETS — 25.09% |
| |||||||
Affiliated Managers Group Inc. | 29,417 | 5,486,271 | ||||||
Ameriprise Financial Inc. | 78,740 | 12,325,960 | ||||||
Bank of New York Mellon Corp. (The) | 542,541 | 27,913,734 | ||||||
BGC Partners Inc. Class A | 124,845 | 1,893,899 | ||||||
BlackRock Inc.a | 65,091 | 30,646,796 | ||||||
Cboe Global Markets Inc. | 59,283 | 6,702,536 | ||||||
Charles Schwab Corp. (The) | 625,857 | 28,063,428 | ||||||
CME Group Inc. | 178,497 | 24,484,433 | ||||||
E*TRADE Financial Corp.b | 144,583 | 6,302,373 | ||||||
Eaton Vance Corp. NVS | 60,589 | 3,057,927 | ||||||
Evercore Inc. Class A | 20,567 | 1,647,417 | ||||||
FactSet Research Systems Inc. | 20,638 | 3,918,537 | ||||||
Federated Investors Inc. Class B NVS | 43,239 | 1,343,436 | ||||||
Financial Engines Inc. | 33,213 | 1,198,989 | ||||||
Franklin Resources Inc. | 172,904 | 7,284,446 | ||||||
Goldman Sachs Group Inc. (The) | 188,938 | 45,813,686 | ||||||
Intercontinental Exchange Inc. | 309,035 | 20,427,213 | ||||||
Invesco Ltd. | 213,774 | 7,650,971 | ||||||
Janus Henderson Group PLC | 95,025 | 3,302,119 | ||||||
Lazard Ltd. Class A | 68,262 | 3,245,175 | ||||||
Legg Mason Inc. | 45,791 | 1,748,300 | ||||||
LPL Financial Holdings Inc. | 47,313 | 2,347,198 |
SCHEDULESOF INVESTMENTS | 23 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® U.S. FINANCIAL SERVICES ETF
October 31, 2017
Security | Shares | Value | ||||||
MarketAxess Holdings Inc. | 19,775 | $ | 3,440,850 | |||||
Moody’s Corp. | 87,261 | 12,426,839 | ||||||
Morgan Stanley | 742,621 | 37,131,050 | ||||||
MSCI Inc. | 47,347 | 5,556,644 | ||||||
Nasdaq Inc. | 61,436 | 4,463,325 | ||||||
Northern Trust Corp. | 112,787 | 10,547,840 | ||||||
Raymond James Financial Inc. | 67,476 | 5,720,615 | ||||||
S&P Global Inc. | 134,957 | 21,116,722 | ||||||
SEI Investments Co. | 69,031 | 4,453,190 | ||||||
State Street Corp. | 196,376 | 18,066,592 | ||||||
Stifel Financial Corp. | 35,941 | 1,905,951 | ||||||
T Rowe Price Group Inc. | 126,219 | 11,725,745 | ||||||
TD Ameritrade Holding Corp. | 133,250 | 6,661,168 | ||||||
Waddell & Reed Financial Inc. Class A | 36,325 | 678,914 | ||||||
|
| |||||||
390,700,289 | ||||||||
CONSUMER FINANCE — 6.43% |
| |||||||
Ally Financial Inc. | 236,492 | 6,179,536 | ||||||
American Express Co. | 385,289 | 36,802,805 | ||||||
Capital One Financial Corp. | 254,002 | 23,413,904 | ||||||
Credit Acceptance Corp.b,c | 6,717 | 1,925,965 | ||||||
Discover Financial Services | 195,533 | 13,008,811 | ||||||
LendingClub Corp.b | 194,659 | 1,107,610 | ||||||
Navient Corp. | 144,207 | 1,796,819 | ||||||
PRA Group Inc.b | 23,755 | 662,765 | ||||||
SLM Corp.b | 226,294 | 2,396,454 | ||||||
Synchrony Financial | 392,594 | 12,806,416 | ||||||
|
| |||||||
100,101,085 | ||||||||
INSURANCE — 0.35% |
| |||||||
FNF Group | 143,189 | 5,358,132 | ||||||
|
| |||||||
5,358,132 | ||||||||
IT SERVICES — 11.78% |
| |||||||
Mastercard Inc. Class A | 490,350 | 72,949,370 | ||||||
Visa Inc. Class A | 960,656 | 105,652,947 | ||||||
Western Union Co. (The) | 244,070 | 4,847,230 | ||||||
|
| |||||||
183,449,547 | ||||||||
THRIFTS & MORTGAGE FINANCE — 0.83% |
| |||||||
Capitol Federal Financial Inc. | 72,667 | 1,002,078 | ||||||
Essent Group Ltd.b | 43,665 | 1,861,002 | ||||||
MGIC Investment Corp.b | 194,311 | 2,778,647 | ||||||
New York Community Bancorp. Inc. | 257,687 | 3,236,549 | ||||||
Radian Group Inc. | 113,284 | 2,374,433 |
Security | Shares | Value | ||||||
Washington Federal Inc. | 46,681 | $ | 1,624,499 | |||||
|
| |||||||
12,877,208 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $1,336,835,379) |
| 1,555,937,116 | ||||||
SHORT-TERM INVESTMENTS — 0.21% |
| |||||||
MONEY MARKET FUNDS — 0.21% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
1.31%a,d,e | 2,547,775 | 2,548,285 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
1.00%a,d | 781,182 | 781,182 | ||||||
|
| |||||||
3,329,467 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $3,329,680) |
| 3,329,467 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $1,340,165,059)f |
| 1,559,266,583 | ||||||
Other Assets, Less Liabilities — (0.14)% |
| (2,207,290 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 1,557,059,293 | |||||
|
|
NVS — Non-Voting Shares
a | Affiliated issuer. See Schedule 1. |
b | Non-income earning security. |
c | All or a portion of this security represents a security on loan. See Note 1. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 1. |
f | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $1,347,982,163. Net unrealized appreciation was $211,284,420, of which $225,290,839 represented gross unrealized appreciation on investments and $14,006,419 represented gross unrealized depreciation on investments. |
24 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® U.S. FINANCIAL SERVICES ETF
October 31, 2017
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 04/30/17 | Shares purchased | Shares sold | Shares held at 10/31/17 | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, | 1,620,552 | 927,223 | b | — | 2,547,775 | $ | 2,548,285 | $ | (28 | ) | $ | (213 | ) | $ | — | c | ||||||||||||||||
BlackRock Cash Funds: Treasury, | 1,357,821 | — | (576,639 | )b | 781,182 | 781,182 | — | — | 7,285 | |||||||||||||||||||||||
BlackRock Inc. | 66,895 | 12,796 | (14,600 | ) | 65,091 | 30,646,796 | 725,394 | 4,542,489 | 293,280 | |||||||||||||||||||||||
PNC Financial Services Group Inc. (The) | 267,357 | 45,744 | (61,456 | ) | 251,645 | 34,422,520 | 1,782,797 | 2,303,506 | 359,995 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 68,398,783 | $ | 2,508,163 | $ | 6,845,782 | $ | 660,560 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
c | Does not include income earned on the investment of securities lending cash collateral which is not direct income of the Fund and is reflected as a component of securities lending income in the statement of operations. |
Schedule 2 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: | ||||||||||||||||
Assets: | ||||||||||||||||
Common stocks | $ | 1,555,937,116 | $ | — | $ | — | $ | 1,555,937,116 | ||||||||
Money market funds | 3,329,467 | — | — | 3,329,467 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 1,559,266,583 | $ | — | $ | — | $ | 1,559,266,583 | ||||||||
|
|
|
|
|
|
|
| |||||||||
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 25 |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES® U.S. FINANCIALS ETF
Security | Shares | Value | ||||||
COMMON STOCKS — 99.88% |
| |||||||
BANKS — 32.22% |
| |||||||
Associated Banc-Corp. | 62,316 | $ | 1,576,595 | |||||
BancorpSouth Inc. | 34,954 | 1,104,546 | ||||||
Bank of America Corp. | 4,013,077 | 109,918,179 | ||||||
Bank of Hawaii Corp. | 17,421 | 1,421,728 | ||||||
Bank of the Ozarks Inc. | 49,917 | 2,327,131 | ||||||
BankUnited Inc. | 43,770 | 1,525,385 | ||||||
BB&T Corp. | 330,506 | 16,274,115 | ||||||
BOK Financial Corp. | 10,264 | 887,528 | ||||||
Cathay General Bancorp. | 31,261 | 1,306,710 | ||||||
Chemical Financial Corp. | 29,158 | 1,536,335 | ||||||
CIT Group Inc. | 55,489 | 2,586,897 | ||||||
Citigroup Inc. | 1,114,332 | 81,903,402 | ||||||
Citizens Financial Group Inc. | 205,014 | 7,792,582 | ||||||
Comerica Inc. | 72,098 | 5,664,740 | ||||||
Commerce Bancshares Inc./MO | 36,771 | 2,138,601 | ||||||
Cullen/Frost Bankers Inc. | 24,030 | 2,366,955 | ||||||
East West Bancorp. Inc. | 59,222 | 3,543,844 | ||||||
F.N.B. Corp. | 132,478 | 1,787,128 | ||||||
Fifth Third Bancorp. | 301,589 | 8,715,922 | ||||||
First Citizens BancShares Inc./NC Class A | 3,585 | 1,451,925 | ||||||
First Financial Bankshares Inc. | 27,430 | 1,252,180 | ||||||
First Horizon National Corp. | 96,397 | 1,809,372 | ||||||
First Republic Bank/CA | 63,205 | 6,156,167 | ||||||
Fulton Financial Corp. | 72,504 | 1,319,573 | ||||||
Glacier Bancorp. Inc. | 32,091 | 1,218,174 | ||||||
Hancock Holding Co. | 34,605 | 1,686,994 | ||||||
Home BancShares Inc./AR | 64,638 | 1,453,062 | ||||||
Huntington Bancshares Inc./OH | 446,619 | 6,163,342 | ||||||
IBERIABANK Corp. | 22,071 | 1,627,736 | ||||||
International Bancshares Corp. | 22,374 | 908,384 | ||||||
Investors Bancorp. Inc. | 105,411 | 1,449,401 | ||||||
JPMorgan Chase & Co. | 1,439,239 | 144,801,836 | ||||||
KeyCorp | 445,234 | 8,125,521 | ||||||
M&T Bank Corp. | 62,163 | 10,366,924 | ||||||
MB Financial Inc. | 34,355 | 1,578,269 | ||||||
PacWest Bancorp. | 52,954 | 2,558,737 | ||||||
People’s United Financial Inc. | 140,613 | 2,623,839 | ||||||
Pinnacle Financial Partners Inc. | 30,333 | 2,008,045 | ||||||
PNC Financial Services Group Inc. (The)a | 195,995 | 26,810,156 | ||||||
Popular Inc. | 42,085 | 1,543,678 | ||||||
Prosperity Bancshares Inc. | 28,722 | 1,889,333 | ||||||
Regions Financial Corp. | 489,404 | 7,575,974 |
Security | Shares | Value | ||||||
Signature Bank/New York NYb | 22,533 | $ | 2,929,515 | |||||
Sterling Bancorp./DE | 91,969 | 2,303,823 | ||||||
SunTrust Banks Inc. | 196,327 | 11,820,849 | ||||||
SVB Financial Groupb | 21,516 | 4,718,028 | ||||||
Synovus Financial Corp. | 49,948 | 2,340,064 | ||||||
TCF Financial Corp. | 70,946 | 1,292,636 | ||||||
Texas Capital Bancshares Inc.b | 20,485 | 1,762,734 | ||||||
Trustmark Corp. | 27,412 | 902,951 | ||||||
U.S. Bancorp. | 649,946 | 35,344,063 | ||||||
UMB Financial Corp. | 18,261 | 1,342,731 | ||||||
Umpqua Holdings Corp. | 89,924 | 1,839,845 | ||||||
United Bankshares Inc./WV | 43,224 | 1,553,903 | ||||||
Valley National Bancorp. | 108,990 | 1,253,385 | ||||||
Webster Financial Corp. | 37,742 | 2,075,433 | ||||||
Wells Fargo & Co. | 1,827,206 | 102,579,345 | ||||||
Western Alliance Bancorp.b | 39,936 | 2,228,429 | ||||||
Wintrust Financial Corp. | 22,795 | 1,853,006 | ||||||
Zions BanCorp. | 82,867 | 3,850,001 | ||||||
|
| |||||||
672,747,686 | ||||||||
CAPITAL MARKETS — 14.58% |
| |||||||
Affiliated Managers Group Inc. | 22,936 | 4,277,564 | ||||||
Ameriprise Financial Inc. | 61,363 | 9,605,764 | ||||||
Bank of New York Mellon Corp. (The) | 422,555 | 21,740,455 | ||||||
BGC Partners Inc. Class A | 97,407 | 1,477,664 | ||||||
BlackRock Inc.a | 50,697 | 23,869,669 | ||||||
Cboe Global Markets Inc. | 46,223 | 5,225,972 | ||||||
Charles Schwab Corp. (The) | 487,448 | 21,857,168 | ||||||
CME Group Inc. | 139,021 | 19,069,511 | ||||||
E*TRADE Financial Corp.b | 112,327 | 4,896,334 | ||||||
Eaton Vance Corp. NVS | 47,270 | 2,385,717 | ||||||
Evercore Inc. Class A | 16,086 | 1,288,489 | ||||||
FactSet Research Systems Inc. | 16,076 | 3,052,350 | ||||||
Federated Investors Inc. Class B NVS | 35,686 | 1,108,764 | ||||||
Financial Engines Inc. | 26,093 | 941,957 | ||||||
Franklin Resources Inc. | 134,855 | 5,681,441 | ||||||
Goldman Sachs Group Inc. (The) | 147,155 | 35,682,145 | ||||||
Intercontinental Exchange Inc. | 240,692 | 15,909,741 | ||||||
Invesco Ltd. | 166,709 | 5,966,515 | ||||||
Janus Henderson Group PLC | 73,926 | 2,568,929 | ||||||
Lazard Ltd. Class A | 52,996 | 2,519,430 | ||||||
Legg Mason Inc. | 35,712 | 1,363,484 | ||||||
LPL Financial Holdings Inc. | 37,021 | 1,836,612 | ||||||
MarketAxess Holdings Inc. | 15,401 | 2,679,774 | ||||||
Moody’s Corp. | 67,996 | 9,683,310 |
26 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® U.S. FINANCIALS ETF
October 31, 2017
Security | Shares | Value | ||||||
Morgan Stanley | 578,388 | $ | 28,919,400 | |||||
MSCI Inc. | 36,776 | 4,316,031 | ||||||
Nasdaq Inc. | 47,848 | 3,476,157 | ||||||
Northern Trust Corp. | 87,927 | 8,222,933 | ||||||
Raymond James Financial Inc. | 52,590 | 4,458,580 | ||||||
S&P Global Inc. | 105,111 | 16,446,718 | ||||||
SEI Investments Co. | 53,789 | 3,469,928 | ||||||
State Street Corp. | 152,947 | 14,071,124 | ||||||
Stifel Financial Corp. | 27,999 | 1,484,787 | ||||||
T Rowe Price Group Inc. | 98,383 | 9,139,781 | ||||||
TD Ameritrade Holding Corp. | 103,519 | 5,174,915 | ||||||
Waddell & Reed Financial Inc. Class A | 29,341 | 548,383 | ||||||
|
| |||||||
304,417,496 | ||||||||
CONSUMER FINANCE — 3.74% |
| |||||||
Ally Financial Inc. | 183,706 | 4,800,238 | ||||||
American Express Co. | 300,083 | 28,663,928 | ||||||
Capital One Financial Corp. | 197,830 | 18,235,969 | ||||||
Credit Acceptance Corp.b,c | 5,219 | 1,496,444 | ||||||
Discover Financial Services | 152,377 | 10,137,642 | ||||||
LendingClub Corp.b | 152,810 | 869,489 | ||||||
Navient Corp. | 112,803 | 1,405,525 | ||||||
PRA Group Inc.b,c | 18,514 | 516,541 | ||||||
SLM Corp.b | 176,875 | 1,873,106 | ||||||
Synchrony Financial | 305,959 | 9,980,383 | ||||||
|
| |||||||
77,979,265 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 7.19% |
| |||||||
Berkshire Hathaway Inc. Class Bb | 786,971 | 147,116,359 | ||||||
Voya Financial Inc. | 73,831 | 2,965,053 | ||||||
|
| |||||||
150,081,412 | ||||||||
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) — 18.70% |
| |||||||
Acadia Realty Trust | 31,782 | 894,663 | ||||||
Alexander & Baldwin Inc. | 19,246 | 870,689 | ||||||
Alexandria Real Estate Equities Inc. | 38,368 | 4,756,097 | ||||||
American Campus Communities Inc. | 55,921 | 2,325,195 | ||||||
American Homes 4 Rent Class Ac | 93,966 | 1,999,596 | ||||||
American Tower Corp. | 175,532 | 25,218,682 | ||||||
Apartment Investment & Management Co. Class A | 64,120 | 2,819,998 | ||||||
Apple Hospitality REIT Inc. | 86,285 | 1,634,238 | ||||||
AvalonBay Communities Inc. | 56,506 | 10,246,233 | ||||||
Boston Properties Inc. | 63,176 | 7,655,668 | ||||||
Brandywine Realty Trust | 72,347 | 1,265,349 |
Security | Shares | Value | ||||||
Brixmor Property Group Inc. | 125,302 | $ | 2,189,026 | |||||
Camden Property Trust | 37,798 | 3,448,690 | ||||||
CBL & Associates Properties Inc.c | 63,207 | 495,543 | ||||||
Colony NorthStar Inc. Class A | 225,159 | 2,764,953 | ||||||
Columbia Property Trust Inc. | 49,696 | 1,097,288 | ||||||
CoreCivic Inc. | 48,810 | 1,203,655 | ||||||
CoreSite Realty Corp. | 14,087 | 1,560,135 | ||||||
Corporate Office Properties Trust | 41,284 | 1,318,198 | ||||||
Cousins Properties Inc.c | 172,911 | 1,559,657 | ||||||
Crown Castle International Corp. | 166,163 | 17,792,734 | ||||||
CubeSmartc | 73,573 | 2,002,657 | ||||||
CyrusOne Inc. | 37,521 | 2,303,414 | ||||||
DCT Industrial Trust Inc. | 38,295 | 2,221,876 | ||||||
DDR Corp. | 125,123 | 959,693 | ||||||
DiamondRock Hospitality Co. | 82,838 | 899,621 | ||||||
Digital Realty Trust Inc. | 83,736 | 9,917,692 | ||||||
Douglas Emmett Inc. | 62,923 | 2,503,706 | ||||||
Duke Realty Corp.c | 145,806 | 4,152,555 | ||||||
EastGroup Properties Inc. | 14,004 | 1,268,622 | ||||||
Education Realty Trust Inc. | 30,367 | 1,059,808 | ||||||
EPR Properties | 26,264 | 1,816,944 | ||||||
Equinix Inc. | 31,864 | 14,768,964 | ||||||
Equity Commonwealthb | 51,188 | 1,538,199 | ||||||
Equity LifeStyle Properties Inc. | 35,733 | 3,161,656 | ||||||
Equity Residential | 150,307 | 10,109,649 | ||||||
Essex Property Trust Inc.c | 27,029 | 7,093,220 | ||||||
Extra Space Storage Inc.c | 51,692 | 4,217,550 | ||||||
Federal Realty Investment Trust | 29,610 | 3,568,597 | ||||||
First Industrial Realty Trust Inc. | 49,189 | 1,518,956 | ||||||
Forest City Realty Trust Inc. Class A | 109,584 | 2,699,054 | ||||||
Four Corners Property Trust Inc. | 25,373 | 626,206 | ||||||
Gaming and Leisure Properties Inc. | 82,034 | 2,997,522 | ||||||
GEO Group Inc. (The) | 51,226 | 1,329,315 | ||||||
GGP Inc.c | 255,730 | 4,976,506 | ||||||
Gramercy Property Trust | 62,468 | 1,855,300 | ||||||
HCP Inc. | 192,208 | 4,966,655 | ||||||
Healthcare Realty Trust Inc. | 51,007 | 1,644,466 | ||||||
Healthcare Trust of America Inc. Class A | 82,238 | 2,471,252 | ||||||
Highwoods Properties Inc. | 42,316 | 2,160,232 | ||||||
Hospitality Properties Trust | 57,642 | 1,647,408 | ||||||
Host Hotels & Resorts Inc. | 302,205 | 5,911,130 | ||||||
Hudson Pacific Properties Inc. | 63,654 | 2,152,778 | ||||||
Iron Mountain Inc.c | 108,367 | 4,334,680 |
SCHEDULESOF INVESTMENTS | 27 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® U.S. FINANCIALS ETF
October 31, 2017
Security | Shares | Value | ||||||
JBG SMITH Propertiesb | 38,474 | $ | 1,200,774 | |||||
Kilroy Realty Corp. | 40,319 | 2,871,922 | ||||||
Kimco Realty Corp.c | 174,455 | 3,168,103 | ||||||
Kite Realty Group Trust | 32,477 | 606,995 | ||||||
Lamar Advertising Co. Class Ac | 34,268 | 2,413,838 | ||||||
LaSalle Hotel Properties | 46,817 | 1,320,708 | ||||||
Lexington Realty Trust | 89,969 | 910,486 | ||||||
Liberty Property Trust | 60,381 | 2,589,137 | ||||||
Life Storage Inc. | 19,188 | 1,550,774 | ||||||
Macerich Co. (The) | 44,751 | 2,443,405 | ||||||
Mack-Cali Realty Corp. | 36,822 | 838,437 | ||||||
Medical Properties Trust Inc. | 149,223 | 1,974,220 | ||||||
Mid-America Apartment Communities Inc. | 46,388 | 4,747,812 | ||||||
National Health Investors Inc. | 16,795 | 1,279,611 | ||||||
National Retail Properties Inc.c | 61,314 | 2,463,597 | ||||||
Omega Healthcare Investors Inc.c | 81,138 | 2,341,643 | ||||||
Outfront Media Inc. | 57,171 | 1,340,660 | ||||||
Paramount Group Inc.c | 83,601 | 1,330,928 | ||||||
Park Hotels & Resorts Inc. | 58,760 | 1,691,700 | ||||||
Pebblebrook Hotel Trustc | 28,705 | 1,023,620 | ||||||
Physicians Realty Trust | 73,279 | 1,273,589 | ||||||
Piedmont Office Realty Trust Inc. Class A | 60,204 | 1,164,345 | ||||||
Potlatch Corp. | 16,648 | 862,366 | ||||||
Prologis Inc. | 217,528 | 14,047,958 | ||||||
Public Storagec | 61,208 | 12,685,358 | ||||||
Quality Care Properties Inc.b | 38,965 | 616,816 | ||||||
Rayonier Inc.c | 52,829 | 1,583,813 | ||||||
Realty Income Corp. | 112,282 | 6,026,175 | ||||||
Regency Centers Corp. | 60,683 | 3,735,039 | ||||||
Retail Properties of America Inc. Class A | 95,143 | 1,162,647 | ||||||
RLJ Lodging Trust | 72,068 | 1,560,993 | ||||||
Ryman Hospitality Properties Inc. | 21,069 | 1,393,293 | ||||||
Sabra Health Care REIT Inc. | 71,920 | 1,432,646 | ||||||
SBA Communications Corp.b | 49,288 | 7,747,088 | ||||||
Senior Housing Properties Trust | 83,355 | 1,533,732 | ||||||
Simon Property Group Inc. | 127,131 | 19,747,258 | ||||||
SL Green Realty Corp. | 40,636 | 3,888,052 | ||||||
Spirit Realty Capital Inc.c | 188,645 | 1,567,640 | ||||||
Starwood Waypoint Homes | 52,437 | 1,903,987 | ||||||
STORE Capital Corp. | 68,008 | 1,679,118 | ||||||
Sun Communities Inc. | 32,452 | 2,929,118 | ||||||
Sunstone Hotel Investors Inc. | 92,444 | 1,508,686 | ||||||
Tanger Factory Outlet Centers Inc.c | 39,194 | 891,664 |
Security | Shares | Value | ||||||
Taubman Centers Inc. | 24,876 | $ | 1,174,645 | |||||
UDR Inc. | 109,841 | 4,260,732 | ||||||
Uniti Group Inc.b | 67,950 | 1,189,125 | ||||||
Urban Edge Propertiesc | 43,987 | 1,031,935 | ||||||
Ventas Inc. | 145,776 | 9,147,444 | ||||||
VEREIT Inc. | 400,043 | 3,156,339 | ||||||
Vornado Realty Trust | 70,402 | 5,270,294 | ||||||
Washington Prime Group Inc.c | 78,489 | 614,569 | ||||||
Washington REIT | 31,615 | 1,017,687 | ||||||
Weingarten Realty Investors | 49,414 | 1,504,656 | ||||||
Welltower Inc. | 150,942 | 10,107,076 | ||||||
Weyerhaeuser Co. | 308,081 | 11,063,189 | ||||||
WP Carey Inc. | 43,651 | 2,974,816 | ||||||
Xenia Hotels & Resorts Inc. | 44,055 | 958,637 | ||||||
|
| |||||||
390,493,065 | ||||||||
INSURANCE — 14.67% |
| |||||||
Aflac Inc. | 161,647 | 13,560,567 | ||||||
Alleghany Corp.b | 5,528 | 3,130,064 | ||||||
Allstate Corp. (The) | 147,795 | 13,872,039 | ||||||
American Financial Group Inc./OH | 28,200 | 2,974,818 | ||||||
American International Group Inc. | 369,489 | 23,872,684 | ||||||
AmTrust Financial Services Inc. | 39,027 | 490,179 | ||||||
Aon PLC | 104,022 | 14,919,875 | ||||||
Arch Capital Group Ltd.b | 53,608 | 5,341,501 | ||||||
Arthur J Gallagher & Co. | 73,570 | 4,659,188 | ||||||
Aspen Insurance Holdings Ltd. | 24,839 | 1,065,593 | ||||||
Assurant Inc. | 22,158 | 2,230,203 | ||||||
Assured Guaranty Ltd. | 48,946 | 1,815,897 | ||||||
Athene Holding Ltd. Class Ab | 30,306 | 1,579,852 | ||||||
Axis Capital Holdings Ltd. | 34,106 | 1,855,025 | ||||||
Brighthouse Financial Inc.b,c | 39,388 | 2,449,146 | ||||||
Brown & Brown Inc. | 47,826 | 2,383,648 | ||||||
Chubb Ltd. | 190,353 | 28,709,039 | ||||||
Cincinnati Financial Corp. | 60,932 | 4,275,598 | ||||||
CNO Financial Group Inc. | 60,114 | 1,440,933 | ||||||
Erie Indemnity Co. Class A | 7,575 | 915,060 | ||||||
Everest Re Group Ltd. | 16,856 | 4,002,457 | ||||||
First American Financial Corp. | 45,285 | 2,464,410 | ||||||
FNF Group | 111,210 | 4,161,478 | ||||||
Genworth Financial Inc. Class Ab | 202,087 | 668,908 | ||||||
Hanover Insurance Group Inc. (The) | 17,375 | 1,709,352 | ||||||
Hartford Financial Services Group Inc. (The) | 149,141 | 8,210,212 | ||||||
Kemper Corp. | 20,073 | 1,286,679 |
28 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® U.S. FINANCIALS ETF
October 31, 2017
Security | Shares | Value | ||||||
Lincoln National Corp. | 90,469 | $ | 6,855,741 | |||||
Loews Corp. | 112,717 | 5,580,619 | ||||||
Markel Corp.b | 5,717 | 6,198,943 | ||||||
Marsh & McLennan Companies Inc. | 209,620 | 16,964,547 | ||||||
Mercury General Corp. | 15,009 | 840,054 | ||||||
MetLife Inc. | 434,709 | 23,291,708 | ||||||
Old Republic International Corp. | 100,775 | 2,044,725 | ||||||
Primerica Inc. | 18,403 | 1,628,666 | ||||||
Principal Financial Group Inc. | 110,042 | 7,246,266 | ||||||
ProAssurance Corp. | 22,082 | 1,237,696 | ||||||
Progressive Corp. (The) | 238,049 | 11,581,084 | ||||||
Prudential Financial Inc. | 174,640 | 19,290,734 | ||||||
Reinsurance Group of America Inc. | 26,333 | 3,933,624 | ||||||
RenaissanceRe Holdings Ltd. | 16,476 | 2,279,619 | ||||||
RLI Corp. | 15,822 | 934,922 | ||||||
Torchmark Corp. | 44,423 | 3,737,307 | ||||||
Travelers Companies Inc. (The) | 112,861 | 14,948,439 | ||||||
Unum Group | 92,497 | 4,813,544 | ||||||
Validus Holdings Ltd. | 32,712 | 1,703,641 | ||||||
White Mountains Insurance Group Ltd. | 1,455 | 1,293,713 | ||||||
Willis Towers Watson PLC | 54,977 | 8,855,695 | ||||||
WR Berkley Corp. | 39,270 | 2,693,137 | ||||||
XL Group Ltd. | 105,715 | 4,278,286 | ||||||
|
| |||||||
306,277,115 | ||||||||
IT SERVICES — 6.84% |
| |||||||
MasterCard Inc. Class A | 381,908 | 56,816,453 | ||||||
Visa Inc. Class A | 748,202 | 82,287,256 | ||||||
Western Union Co. (The) | 190,516 | 3,783,648 | ||||||
|
| |||||||
142,887,357 | ||||||||
MORTGAGE REAL ESTATE INVESTMENT — 0.93% |
| |||||||
AGNC Investment Corp. | 158,533 | 3,191,269 | ||||||
Annaly Capital Management Inc. | 471,439 | 5,402,691 | ||||||
Blackstone Mortgage Trust Inc. Class Ac | 38,866 | 1,237,105 | ||||||
Chimera Investment Corp. | 77,306 | 1,414,700 | ||||||
Invesco Mortgage Capital Inc. | 45,566 | 784,646 | ||||||
MFA Financial Inc. | 162,433 | 1,338,448 | ||||||
New Residential Investment Corp. | 126,722 | 2,234,109 | ||||||
Starwood Property Trust Inc.c | 106,398 | 2,288,621 | ||||||
Two Harbors Investment Corp.c | 146,821 | 1,438,846 | ||||||
|
| |||||||
19,330,435 |
Security | Shares | Value | ||||||
REAL ESTATE MANAGEMENT & DEVELOPMENT — 0.53% |
| |||||||
CBRE Group Inc. Class Ab | 122,814 | $ | 4,829,047 | |||||
Howard Hughes Corp. (The)b | 15,867 | 2,025,105 | ||||||
Jones Lang LaSalle Inc. | 18,666 | 2,417,060 | ||||||
Realogy Holdings Corp. | 55,882 | 1,806,665 | ||||||
|
| |||||||
11,077,877 | ||||||||
THRIFTS & MORTGAGE FINANCE — 0.48% |
| |||||||
Capitol Federal Financial Inc. | 57,117 | 787,643 | ||||||
Essent Group Ltd.b | 34,061 | 1,451,680 | ||||||
MGIC Investment Corp.b | 151,872 | 2,171,770 | ||||||
New York Community Bancorp. Inc. | 200,447 | 2,517,614 | ||||||
Radian Group Inc. | 88,223 | 1,849,154 | ||||||
Washington Federal Inc. | 36,887 | 1,283,668 | ||||||
|
| |||||||
10,061,529 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $1,890,842,114) |
| 2,085,353,237 | ||||||
SHORT-TERM INVESTMENTS — 1.75% |
| |||||||
MONEY MARKET FUNDS — 1.75% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
1.31%a,d,e | 34,281,929 | 34,288,785 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
1.00%a,d | 2,363,036 | 2,363,036 | ||||||
|
| |||||||
36,651,821 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $36,648,624) |
| 36,651,821 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $1,927,490,738)f |
| 2,122,005,058 | ||||||
Other Assets, Less Liabilities — (1.63)% |
| (34,109,360 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 2,087,895,698 | |||||
|
|
NVS — Non-Voting Shares
a | Affiliated issuer. See Schedule 1. |
b | Non-income earning security. |
c | All or a portion of this security represents a security on loan. See Note 1. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 1. |
f | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $1,932,907,528. Net unrealized appreciation was $189,097,530, of which $253,234,463 represented gross unrealized appreciation on investments and $64,136,933 represented gross unrealized depreciation on investments. |
SCHEDULESOF INVESTMENTS | 29 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® U.S. FINANCIALS ETF
October 31, 2017
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 04/30/17 | Shares purchased | Shares sold | Shares held at 10/31/17 | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, | 19,888,080 | 14,393,849 | b | — | 34,281,929 | $ | 34,288,785 | $ | (4,824 | ) | $ | (3,544 | ) | $ | — | c | ||||||||||||||||
BlackRock Cash Funds: Treasury, | 2,174,793 | 188,243 | b | — | 2,363,036 | 2,363,036 | — | — | 8,758 | |||||||||||||||||||||||
BlackRock Inc. | 44,442 | 15,910 | (9,655 | ) | 50,697 | 23,869,669 | 489,837 | 3,528,584 | 225,833 | |||||||||||||||||||||||
PNC Financial Services Group Inc. (The) | 177,540 | 60,282 | (41,827 | ) | 195,995 | 26,810,156 | 1,078,714 | 2,034,497 | 285,669 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 87,331,646 | $ | 1,563,727 | $ | 5,559,537 | $ | 520,260 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
c | Does not include income earned on the investment of securities lending cash collateral which is not direct income of the Fund and is reflected as a component of securities lending income in the statement of operations. |
Schedule 2 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: | ||||||||||||||||
Assets: | ||||||||||||||||
Common stocks | $ | 2,085,353,237 | $ | — | $ | — | $ | 2,085,353,237 | ||||||||
Money market funds | 36,651,821 | — | — | 36,651,821 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 2,122,005,058 | $ | — | $ | — | $ | 2,122,005,058 | ||||||||
|
|
|
|
|
|
|
| |||||||||
See notes to financial statements.
30 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited)
October 31, 2017
Security | Shares | Value | ||||||
COMMON STOCKS — 99.80% |
| |||||||
AEROSPACE & DEFENSE — 18.69% |
| |||||||
Arconic Inc. | 154,917 | $ | 3,891,515 | |||||
Boeing Co. (The) | 203,787 | 52,572,970 | ||||||
BWX Technologies Inc. | 36,348 | 2,177,972 | ||||||
Curtiss-Wright Corp. | 16,242 | 1,920,617 | ||||||
Esterline Technologies Corp.a | 9,696 | 919,666 | ||||||
General Dynamics Corp. | 102,134 | 20,731,159 | ||||||
HEICO Corp. | 9,580 | 868,714 | ||||||
HEICO Corp. Class A | 16,661 | 1,267,902 | ||||||
Hexcel Corp. | 32,835 | 1,992,756 | ||||||
Huntington Ingalls Industries Inc. | 16,667 | 3,880,578 | ||||||
KLX Inc.a | 18,928 | 1,038,390 | ||||||
L3 Technologies Inc. | 28,694 | 5,370,943 | ||||||
Lockheed Martin Corp. | 91,901 | 28,320,212 | ||||||
Moog Inc. Class Aa | 11,831 | 1,038,289 | ||||||
Northrop Grumman Corp. | 63,874 | 18,876,683 | ||||||
Orbital ATK Inc. | 21,117 | 2,807,083 | ||||||
Raytheon Co. | 106,456 | 19,183,371 | ||||||
Rockwell Collins Inc. | 59,602 | 8,082,031 | ||||||
Spirit AeroSystems Holdings Inc. Class A | 43,403 | 3,476,580 | ||||||
Teledyne Technologies Inc.a | 12,986 | 2,207,101 | ||||||
Textron Inc. | 97,075 | 5,119,735 | ||||||
TransDigm Group Inc. | 17,713 | 4,915,358 | ||||||
United Technologies Corp. | 272,451 | 32,628,732 | ||||||
|
| |||||||
223,288,357 | ||||||||
AIR FREIGHT & LOGISTICS — 5.06% |
| |||||||
CH Robinson Worldwide Inc. | 51,480 | 4,042,724 | ||||||
Expeditors International of Washington Inc. | 66,282 | 3,869,543 | ||||||
FedEx Corp. | 90,529 | 20,442,354 | ||||||
United Parcel Service Inc. Class B | 252,624 | 29,690,899 | ||||||
XPO Logistics Inc.a,b | 35,817 | 2,483,909 | ||||||
|
| |||||||
60,529,429 | ||||||||
BUILDING PRODUCTS — 3.08% |
| |||||||
Allegion PLC | 34,822 | 2,903,807 | ||||||
AO Smith Corp. | 53,705 | 3,179,336 | ||||||
Armstrong World Industries Inc.a | 19,461 | 994,457 | ||||||
Fortune Brands Home & Security Inc. | 56,479 | 3,731,003 | ||||||
Johnson Controls International PLC | 341,987 | 14,154,842 |
Security | Shares | Value | ||||||
Lennox International Inc. | 13,898 | $ | 2,656,325 | |||||
Masco Corp. | 116,838 | 4,652,489 | ||||||
Owens Corning | 40,766 | 3,370,940 | ||||||
USG Corp.a,b | 33,240 | 1,141,129 | ||||||
|
| |||||||
36,784,328 | ||||||||
CHEMICALS — 1.00% |
| |||||||
Sherwin-Williams Co. (The) | 30,137 | 11,908,636 | ||||||
|
| |||||||
11,908,636 | ||||||||
COMMERCIAL SERVICES & SUPPLIES — 2.59% |
| |||||||
Brink’s Co. (The) | 18,582 | 1,414,090 | ||||||
Cintas Corp. | 31,313 | 4,666,890 | ||||||
Clean Harbors Inc.a | 19,079 | 1,020,917 | ||||||
Covanta Holding Corp. | 47,763 | 768,984 | ||||||
Deluxe Corp. | 17,743 | 1,235,800 | ||||||
MSA Safety Inc. | 12,509 | 994,466 | ||||||
Republic Services Inc. | 83,990 | 5,465,229 | ||||||
Stericycle Inc.a,b | 31,249 | 2,213,992 | ||||||
Tetra Tech Inc. | 20,810 | 1,024,892 | ||||||
Waste Management Inc. | 148,492 | 12,201,588 | ||||||
|
| |||||||
31,006,848 | ||||||||
CONSTRUCTION & ENGINEERING — 1.22% |
| |||||||
AECOMa | 57,576 | 2,018,615 | ||||||
Chicago Bridge & Iron Co. NVb | 36,883 | 514,149 | ||||||
EMCOR Group Inc. | 21,785 | 1,753,910 | ||||||
Fluor Corp. | 51,209 | 2,206,596 | ||||||
Jacobs Engineering Group Inc. | 44,087 | 2,566,304 | ||||||
KBR Inc. | 51,496 | 1,010,866 | ||||||
MasTec Inc.a,b | 24,672 | 1,074,466 | ||||||
Quanta Services Inc.a | 55,321 | 2,087,261 | ||||||
Valmont Industries Inc. | 8,300 | 1,318,870 | ||||||
|
| |||||||
14,551,037 | ||||||||
CONSTRUCTION MATERIALS — 1.17% |
| |||||||
Eagle Materials Inc. | 17,741 | 1,872,917 | ||||||
Martin Marietta Materials Inc. | 23,037 | 4,995,574 | ||||||
Summit Materials Inc. Class Aa,b | 39,565 | 1,242,341 | ||||||
Vulcan Materials Co. | 48,512 | 5,906,336 | ||||||
|
| |||||||
14,017,168 | ||||||||
CONTAINERS & PACKAGING — 3.82% |
| |||||||
AptarGroup Inc. | 22,961 | 1,999,214 | ||||||
Avery Dennison Corp. | 32,421 | 3,442,137 | ||||||
Ball Corp. | 129,010 | 5,538,399 | ||||||
Bemis Co. Inc. | 33,429 | 1,504,974 | ||||||
Berry Global Group Inc.a | 47,827 | 2,843,315 | ||||||
Crown Holdings Inc.a | 49,504 | 2,978,656 | ||||||
Graphic Packaging Holding Co. | 114,067 | 1,766,898 |
SCHEDULESOF INVESTMENTS | 31 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® U.S. INDUSTRIALS ETF
October 31, 2017
Security | Shares | Value | ||||||
International Paper Co. | 151,434 | $ | 8,672,625 | |||||
Owens-Illinois Inc.a | 59,692 | 1,426,042 | ||||||
Packaging Corp. of America | 34,611 | 4,024,221 | ||||||
Sealed Air Corp. | 69,664 | 3,081,239 | ||||||
Silgan Holdings Inc. | 27,205 | 795,746 | ||||||
Sonoco Products Co. | 36,344 | 1,882,256 | ||||||
WestRock Co. | 93,152 | 5,713,012 | ||||||
|
| |||||||
45,668,734 | ||||||||
ELECTRICAL EQUIPMENT — 4.61% |
| |||||||
Acuity Brands Inc. | 15,415 | 2,577,388 | ||||||
AMETEK Inc. | 84,652 | 5,713,163 | ||||||
Eaton Corp. PLC | 163,129 | 13,053,582 | ||||||
Emerson Electric Co. | 234,739 | 15,131,276 | ||||||
EnerSys | 15,934 | 1,105,342 | ||||||
Generac Holdings Inc.a,b | 22,865 | 1,191,038 | ||||||
Hubbell Inc. | 20,045 | 2,522,062 | ||||||
Regal Beloit Corp. | 16,411 | 1,331,753 | ||||||
Rockwell Automation Inc. | 47,090 | 9,456,614 | ||||||
Sensata Technologies Holding NVa,b | 62,768 | 3,069,983 | ||||||
|
| |||||||
55,152,201 | ||||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & |
| |||||||
Amphenol Corp. Class A | 112,030 | 9,746,610 | ||||||
Anixter International Inc.a | 10,596 | 727,945 | ||||||
Arrow Electronics Inc.a | 32,330 | 2,702,465 | ||||||
Avnet Inc. | 44,990 | 1,790,602 | ||||||
Belden Inc. | 15,512 | 1,239,564 | ||||||
Cognex Corp. | 31,756 | 3,910,751 | ||||||
Coherent Inc.a | 9,010 | 2,367,017 | ||||||
FLIR Systems Inc. | 50,182 | 2,349,521 | ||||||
IPG Photonics Corp.a | 13,814 | 2,941,139 | ||||||
Itron Inc.a,b | 12,520 | 978,438 | ||||||
Jabil Inc. | 65,579 | 1,854,574 | ||||||
Keysight Technologies Inc.a | 67,941 | 3,034,924 | ||||||
Littelfuse Inc. | 8,346 | 1,744,314 | ||||||
National Instruments Corp. | 39,166 | 1,762,470 | ||||||
TE Connectivity Ltd. | 129,612 | 11,790,804 | ||||||
Trimble Inc.a | 92,836 | 3,795,136 | ||||||
Universal Display Corp.b | 15,328 | 2,245,552 | ||||||
VeriFone Systems Inc.a | 40,761 | 777,720 | ||||||
Vishay Intertechnology Inc.b | 49,448 | 1,100,218 | ||||||
Zebra Technologies Corp. Class Aa | 19,471 | 2,258,441 | ||||||
|
| |||||||
59,118,205 |
Security | Shares | Value | ||||||
INDUSTRIAL CONGLOMERATES — 13.97% |
| |||||||
3M Co. | 218,871 | $ | 50,381,916 | |||||
Carlisle Companies Inc. | 23,137 | 2,541,137 | ||||||
General Electric Co. | 3,175,457 | 64,017,213 | ||||||
Honeywell International Inc. | 279,588 | 40,305,406 | ||||||
Roper Technologies Inc. | 37,496 | 9,680,342 | ||||||
|
| |||||||
166,926,014 | ||||||||
INTERNET SOFTWARE & SERVICES — 0.32% |
| |||||||
CoStar Group Inc.a | 13,086 | 3,870,184 | ||||||
|
| |||||||
3,870,184 | ||||||||
IT SERVICES — 13.10% |
| |||||||
Accenture PLC Class A | 226,652 | 32,266,179 | ||||||
Alliance Data Systems Corp. | 17,711 | 3,962,482 | ||||||
Automatic Data Processing Inc. | 162,971 | 18,947,008 | ||||||
Booz Allen Hamilton Holding Corp. | 54,540 | 2,061,067 | ||||||
Broadridge Financial Solutions Inc. | 42,726 | 3,671,018 | ||||||
Conduent Inc.a,b | 72,435 | 1,121,294 | ||||||
Convergys Corp. | 34,329 | 883,285 | ||||||
CoreLogic Inc./U.S.a | 31,144 | 1,460,654 | ||||||
Euronet Worldwide Inc.a | 19,223 | 1,857,711 | ||||||
Fidelity National Information Services Inc. | 121,907 | 11,308,093 | ||||||
First Data Corp. Class Aa | 156,808 | 2,792,750 | ||||||
Fiserv Inc.a | 77,198 | 9,991,737 | ||||||
FleetCor Technologies Inc.a | 33,831 | 5,591,249 | ||||||
Genpact Ltd. | 45,444 | 1,383,770 | ||||||
Global Payments Inc.b | 55,928 | 5,813,716 | ||||||
Jack Henry & Associates Inc. | 28,389 | 3,126,481 | ||||||
MAXIMUS Inc. | 23,787 | 1,580,170 | ||||||
Paychex Inc. | 117,310 | 7,483,205 | ||||||
PayPal Holdings Inc.a | 414,543 | 30,079,240 | ||||||
Sabre Corp. | 76,399 | 1,494,364 | ||||||
Square Inc. Class Aa,b | 92,300 | 3,432,637 | ||||||
Total System Services Inc. | 61,495 | 4,430,715 | ||||||
WEX Inc.a | 14,689 | 1,815,413 | ||||||
|
| |||||||
156,554,238 | ||||||||
LIFE SCIENCES TOOLS & SERVICES — 1.45% |
| |||||||
Agilent Technologies Inc. | 117,845 | 8,016,995 | ||||||
Mettler-Toledo International Inc.a | 9,423 | 6,432,423 | ||||||
PerkinElmer Inc. | 40,395 | 2,921,366 | ||||||
|
| |||||||
17,370,784 | ||||||||
MACHINERY — 13.76% |
| |||||||
Actuant Corp. Class Ab | 22,111 | 563,830 |
32 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® U.S. INDUSTRIALS ETF
October 31, 2017
Security | Shares | Value | ||||||
AGCO Corp. | 24,121 | $ | 1,653,977 | |||||
Allison Transmission Holdings Inc. | 51,710 | 2,197,158 | ||||||
Barnes Group Inc. | 18,234 | 1,186,851 | ||||||
Caterpillar Inc. | 216,762 | 29,436,280 | ||||||
Colfax Corp.a | 36,218 | 1,510,653 | ||||||
Crane Co. | 18,637 | 1,549,107 | ||||||
Cummins Inc. | 57,790 | 10,221,895 | ||||||
Deere & Co. | 117,310 | 15,588,153 | ||||||
Donaldson Co. Inc. | 47,993 | 2,265,750 | ||||||
Dover Corp. | 57,099 | 5,452,384 | ||||||
Flowserve Corp. | 48,031 | 2,116,726 | ||||||
Fortive Corp. | 111,864 | 8,083,293 | ||||||
Graco Inc. | 20,512 | 2,703,276 | ||||||
Hillenbrand Inc. | 23,146 | 915,424 | ||||||
IDEX Corp. | 28,034 | 3,594,239 | ||||||
Illinois Tool Works Inc. | 113,595 | 17,779,889 | ||||||
Ingersoll-Rand PLC | 93,050 | 8,244,230 | ||||||
ITT Inc. | 32,400 | 1,511,136 | ||||||
Kennametal Inc. | 29,644 | 1,293,961 | ||||||
Lincoln Electric Holdings Inc. | 22,673 | 2,078,434 | ||||||
Mueller Industries Inc. | 21,016 | 730,306 | ||||||
Nordson Corp. | 18,588 | 2,354,914 | ||||||
Oshkosh Corp. | 27,393 | 2,508,103 | ||||||
PACCAR Inc. | 128,885 | 9,244,921 | ||||||
Parker-Hannifin Corp. | 48,830 | 8,916,846 | ||||||
Pentair PLC | 60,559 | 4,266,987 | ||||||
Terex Corp. | 31,261 | 1,472,706 | ||||||
Timken Co. (The) | 25,208 | 1,188,557 | ||||||
Toro Co. (The) | 39,535 | 2,484,775 | ||||||
Trinity Industries Inc. | 55,714 | 1,811,819 | ||||||
Wabtec Corp./DEb | 31,286 | 2,393,379 | ||||||
Welbilt Inc.a,b | 51,042 | 1,125,987 | ||||||
Woodward Inc. | 20,282 | 1,568,407 | ||||||
Xylem Inc./NY | 65,868 | 4,382,198 | ||||||
|
| |||||||
164,396,551 | ||||||||
MARINE — 0.12% |
| |||||||
Kirby Corp.a,b | 19,710 | 1,396,454 | ||||||
|
| |||||||
1,396,454 | ||||||||
MULTI-UTILITIES — 0.16% |
| |||||||
MDU Resources Group Inc. | 71,447 | 1,954,075 | ||||||
|
| |||||||
1,954,075 | ||||||||
PAPER & FOREST PRODUCTS — 0.12% |
| |||||||
Louisiana-Pacific Corp.a | 53,285 | 1,448,286 | ||||||
|
| |||||||
1,448,286 |
Security | Shares | Value | ||||||
PROFESSIONAL SERVICES — 1.62% |
| |||||||
Advisory Board Co. (The)a,b | 14,856 | $ | 801,110 | |||||
Equifax Inc. | 44,142 | 4,790,731 | ||||||
FTI Consulting Inc.a | 14,551 | 622,055 | ||||||
ManpowerGroup Inc. | 24,469 | 3,016,539 | ||||||
Robert Half International Inc. | 46,195 | 2,391,515 | ||||||
TransUniona | 54,637 | 2,867,896 | ||||||
Verisk Analytics Inc. Class Aa | 56,994 | 4,847,340 | ||||||
|
| |||||||
19,337,186 | ||||||||
ROAD & RAIL — 6.69% |
| |||||||
CSX Corp. | 334,970 | 16,892,537 | ||||||
Genesee & Wyoming Inc. Class Aa | 22,645 | 1,625,458 | ||||||
JB Hunt Transport Services Inc. | 31,300 | 3,330,007 | ||||||
Kansas City Southern | 38,671 | 4,030,292 | ||||||
Landstar System Inc. | 15,422 | 1,522,922 | ||||||
Norfolk Southern Corp. | 105,684 | 13,888,991 | ||||||
Old Dominion Freight Line Inc. | 25,051 | 3,034,428 | ||||||
Ryder System Inc. | 19,490 | 1,580,249 | ||||||
Union Pacific Corp. | 293,554 | 33,990,618 | ||||||
|
| |||||||
79,895,502 | ||||||||
TRADING COMPANIES & DISTRIBUTORS — 2.13% |
| |||||||
Air Lease Corp. | 35,328 | 1,535,002 | ||||||
Applied Industrial Technologies Inc. | 14,263 | 907,840 | ||||||
Fastenal Co. | 105,621 | 4,961,018 | ||||||
GATX Corp. | 14,236 | 845,761 | ||||||
HD Supply Holdings Inc.a | 68,336 | 2,418,411 | ||||||
MRC Global Inc.a | 34,857 | 597,798 | ||||||
MSC Industrial Direct Co. Inc. Class A | 16,511 | 1,368,762 | ||||||
NOW Inc.a,b | 39,912 | 499,698 | ||||||
United Rentals Inc.a | 30,985 | 4,383,758 | ||||||
Univar Inc.a,b | 37,672 | 1,120,742 | ||||||
Watsco Inc. | 11,116 | 1,851,592 | ||||||
WESCO International Inc.a,b | 17,643 | 1,114,155 | ||||||
WW Grainger Inc. | 19,256 | 3,806,911 | ||||||
|
| |||||||
25,411,448 | ||||||||
TRANSPORTATION INFRASTRUCTURE — 0.17% |
| |||||||
Macquarie Infrastructure Corp. | 28,436 | 1,977,724 | ||||||
|
| |||||||
1,977,724 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $1,091,632,219) |
| 1,192,563,389 |
SCHEDULESOF INVESTMENTS | 33 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® U.S. INDUSTRIALS ETF
October 31, 2017
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS — 2.26% |
| |||||||
MONEY MARKET FUNDS — 2.26% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
1.31%c,d,e | 25,098,536 | $ | 25,103,556 | |||||
BlackRock Cash Funds: Treasury, |
| |||||||
1.00%c,d | 1,979,336 | 1,979,336 | ||||||
|
| |||||||
27,082,892 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $27,083,088) | 27,082,892 | |||||||
|
|
Value | ||||||
TOTAL INVESTMENTS | ||||||
(Cost: $1,118,715,307)f | $ | 1,219,646,281 | ||||
Other Assets, Less Liabilities — (2.06)% | (24,673,937 | ) | ||||
|
| |||||
NET ASSETS — 100.00% | $ | 1,194,972,344 | ||||
|
|
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 1. |
c | Affiliated issuer. See Schedule 1. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 1. |
f | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $1,123,022,569. Net unrealized appreciation was $96,623,712, of which $153,630,459 represented gross unrealized appreciation on investments and $57,006,747 represented gross unrealized depreciation on investments. |
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 04/30/17 | Shares purchased | Shares sold | Shares held at 10/31/17 | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | 11,211,689 | 13,886,847 | b | — | 25,098,536 | $ | 25,103,556 | $ | (3,015 | ) | $ | (1,370 | ) | $ | — | c | ||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | 502,321 | 1,477,015 | b | — | 1,979,336 | 1,979,336 | — | — | 5,574 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 27,082,892 | $ | (3,015 | ) | $ | (1,370 | ) | $ | 5,574 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
c | Does not include income earned on the investment of securities lending cash collateral which is not direct income of the Fund and is reflected as a component of securities lending income in the statement of operations. |
Schedule 2 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: | ||||||||||||||||
Assets: | ||||||||||||||||
Common stocks | $ | 1,192,563,389 | $ | — | $ | — | $ | 1,192,563,389 | ||||||||
Money market funds | 27,082,892 | — | — | 27,082,892 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 1,219,646,281 | $ | — | $ | — | $ | 1,219,646,281 | ||||||||
|
|
|
|
|
|
|
| |||||||||
See notes to financial statements.
34 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES® MSCI KLD 400 SOCIAL ETF
October 31, 2017
Security | Shares | Value | ||||||
COMMON STOCKS — 99.88% |
| |||||||
AEROSPACE & DEFENSE — 0.01% |
| |||||||
Wesco Aircraft Holdings Inc.a | 5,369 | $ | 48,589 | |||||
|
| |||||||
48,589 | ||||||||
AIR FREIGHT & LOGISTICS — 1.01% |
| |||||||
CH Robinson Worldwide Inc. | 12,953 | 1,017,199 | ||||||
Echo Global Logistics Inc.a | 2,393 | 57,552 | ||||||
Expeditors International of Washington Inc. | 16,445 | 960,059 | ||||||
United Parcel Service Inc. Class B | 63,124 | 7,418,964 | ||||||
|
| |||||||
9,453,774 | ||||||||
AIRLINES — 0.17% |
| |||||||
Delta Air Lines Inc. | 16,929 | 846,958 | ||||||
Southwest Airlines Co. | 13,853 | 746,122 | ||||||
|
| |||||||
1,593,080 | ||||||||
AUTO COMPONENTS — 0.22% |
| |||||||
Autoliv Inc.b | 8,097 | 1,010,991 | ||||||
BorgWarner Inc. | 19,459 | 1,025,879 | ||||||
|
| |||||||
2,036,870 | ||||||||
AUTOMOBILES — 0.51% |
| |||||||
Harley-Davidson Inc. | 16,084 | 761,417 | ||||||
Tesla Inc.a,b | 12,052 | 3,995,599 | ||||||
|
| |||||||
4,757,016 | ||||||||
BANKS — 2.06% |
| |||||||
Bank of Hawaii Corp. | 3,899 | 318,197 | ||||||
Cathay General Bancorp. | 7,061 | 295,150 | ||||||
CIT Group Inc. | 13,365 | 623,076 | ||||||
Citizens Financial Group Inc. | 46,458 | 1,765,869 | ||||||
Comerica Inc. | 16,214 | 1,273,934 | ||||||
Heartland Financial USA Inc. | 1,998 | 98,402 | ||||||
International Bancshares Corp. | 5,095 | 206,857 | ||||||
KeyCorp | 100,429 | 1,832,829 | ||||||
M&T Bank Corp. | 12,717 | 2,120,814 | ||||||
Old National Bancorp./IN | 12,266 | 223,241 | ||||||
People’s United Financial Inc. | 31,339 | 584,786 | ||||||
PNC Financial Services Group Inc. (The)c | 44,282 | 6,057,335 | ||||||
Regions Financial Corp. | 110,140 | 1,704,967 | ||||||
Signature Bank/New York NYa | 5,007 | 650,960 | ||||||
SVB Financial Groupa | 4,833 | 1,059,780 | ||||||
Umpqua Holdings Corp. | 20,012 | 409,446 | ||||||
|
| |||||||
19,225,643 | ||||||||
BEVERAGES — 1.99% |
| |||||||
Coca-Cola Co. (The) | 371,992 | 17,104,192 |
Security | Shares | Value | ||||||
Dr Pepper Snapple Group Inc. | 16,843 | $ | 1,442,772 | |||||
|
| |||||||
18,546,964 | ||||||||
BIOTECHNOLOGY — 4.20% |
| |||||||
Amgen Inc. | 67,398 | 11,809,477 | ||||||
Biogen Inc.a | 19,577 | 6,101,368 | ||||||
BioMarin Pharmaceutical Inc.a | 15,990 | 1,312,619 | ||||||
Celgene Corp.a | 71,561 | 7,225,514 | ||||||
Gilead Sciences Inc. | 119,759 | 8,977,135 | ||||||
TESARO Inc.a | 3,457 | 400,217 | ||||||
Vertex Pharmaceuticals Inc.a | 22,852 | 3,341,648 | ||||||
|
| |||||||
39,167,978 | ||||||||
BUILDING PRODUCTS — 0.95% |
| |||||||
Allegion PLC | 8,733 | 728,245 | ||||||
AO Smith Corp. | 13,470 | 797,424 | ||||||
Builders FirstSource Inc.a | 10,341 | 186,345 | ||||||
Fortune Brands Home & Security Inc. | 14,126 | 933,163 | ||||||
Johnson Controls International PLC | 86,007 | 3,559,830 | ||||||
Lennox International Inc. | 3,519 | 672,586 | ||||||
Masco Corp. | 29,313 | 1,167,244 | ||||||
Owens Corning | 10,284 | 850,384 | ||||||
|
| |||||||
8,895,221 | ||||||||
CAPITAL MARKETS — 4.23% |
| |||||||
Ameriprise Financial Inc. | 13,967 | 2,186,394 | ||||||
Bank of New York Mellon Corp. (The) | 95,336 | 4,905,037 | ||||||
BlackRock Inc.c | 11,111 | 5,231,392 | ||||||
Charles Schwab Corp. (The) | 110,333 | 4,947,332 | ||||||
CME Group Inc. | 31,165 | 4,274,903 | ||||||
FactSet Research Systems Inc. | 3,642 | 691,506 | ||||||
Franklin Resources Inc. | 30,782 | 1,296,846 | ||||||
Invesco Ltd. | 37,277 | 1,334,144 | ||||||
Legg Mason Inc. | 7,962 | 303,989 | ||||||
Moody’s Corp. | 15,801 | 2,250,220 | ||||||
Northern Trust Corp. | 20,032 | 1,873,393 | ||||||
S&P Global Inc. | 23,648 | 3,700,203 | ||||||
State Street Corp. | 34,525 | 3,176,300 | ||||||
T Rowe Price Group Inc. | 22,108 | 2,053,833 | ||||||
TD Ameritrade Holding Corp. | 24,144 | 1,206,959 | ||||||
|
| |||||||
39,432,451 | ||||||||
CHEMICALS — 2.17% |
| |||||||
Air Products & Chemicals Inc. | 19,960 | 3,182,223 | ||||||
Albemarle Corp. | 10,149 | 1,429,893 | ||||||
Axalta Coating Systems Ltd.a | 19,832 | 659,414 |
SCHEDULESOF INVESTMENTS | 35 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI KLD 400 SOCIAL ETF
October 31, 2017
Security | Shares | Value | ||||||
Ecolab Inc. | 23,959 | $ | 3,130,483 | |||||
HB Fuller Co. | 4,569 | 259,839 | ||||||
International Flavors & Fragrances Inc. | 7,236 | 1,066,731 | ||||||
Minerals Technologies Inc. | 3,163 | 227,420 | ||||||
Mosaic Co. (The) | 30,525 | 681,928 | ||||||
PPG Industries Inc. | 23,520 | 2,733,965 | ||||||
Praxair Inc. | 26,223 | 3,831,705 | ||||||
Sherwin-Williams Co. (The) | 7,682 | 3,035,542 | ||||||
|
| |||||||
20,239,143 | ||||||||
COMMERCIAL SERVICES & SUPPLIES — 0.21% |
| |||||||
ACCO Brands Corp.a | 9,742 | 127,133 | ||||||
Copart Inc.a | 19,094 | 692,921 | ||||||
Deluxe Corp. | 4,434 | 308,828 | ||||||
Essendant Inc. | 3,384 | 32,757 | ||||||
HNI Corp. | 4,049 | 138,557 | ||||||
Interface Inc. | 5,889 | 134,269 | ||||||
Knoll Inc. | 4,469 | 94,832 | ||||||
RR Donnelley & Sons Co. | 6,583 | 60,564 | ||||||
Steelcase Inc. Class A | 7,968 | 115,935 | ||||||
Team Inc.a | 2,534 | 31,168 | ||||||
Tetra Tech Inc. | 5,221 | 257,134 | ||||||
|
| |||||||
1,994,098 | ||||||||
COMMUNICATIONS EQUIPMENT — 1.92% |
| |||||||
Calix Inc.a | 3,983 | 21,907 | ||||||
Cisco Systems Inc. | 458,243 | 15,648,998 | ||||||
F5 Networks Inc.a | 5,951 | 721,678 | ||||||
Motorola Solutions Inc. | 14,934 | 1,352,124 | ||||||
Plantronics Inc. | 3,008 | 136,443 | ||||||
|
| |||||||
17,881,150 | ||||||||
CONSTRUCTION & ENGINEERING — 0.13% |
| |||||||
EMCOR Group Inc. | 5,393 | 434,190 | ||||||
Granite Construction Inc. | 3,592 | 228,775 | ||||||
Quanta Services Inc.a | 13,925 | 525,390 | ||||||
|
| |||||||
1,188,355 | ||||||||
CONSUMER FINANCE — 0.83% |
| |||||||
Ally Financial Inc. | 42,076 | 1,099,446 | ||||||
American Express Co. | 69,626 | 6,650,675 | ||||||
|
| |||||||
7,750,121 | ||||||||
CONTAINERS & PACKAGING — 0.52% |
| |||||||
Avery Dennison Corp. | 8,089 | 858,809 | ||||||
Ball Corp. | 30,566 | 1,312,199 | ||||||
Sealed Air Corp. | 17,944 | 793,663 | ||||||
Sonoco Products Co. | 9,101 | 471,341 |
Security | Shares | Value | ||||||
WestRock Co. | 23,010 | $ | 1,411,203 | |||||
|
| |||||||
4,847,215 | ||||||||
DISTRIBUTORS — 0.17% |
| |||||||
LKQ Corp.a | 28,191 | 1,062,519 | ||||||
Pool Corp. | 3,827 | 462,225 | ||||||
Weyco Group Inc. | 576 | 15,661 | ||||||
|
| |||||||
1,540,405 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 0.07% |
| |||||||
Voya Financial Inc. | 17,037 | 684,206 | ||||||
|
| |||||||
684,206 | ||||||||
DIVERSIFIED TELECOMMUNICATION SERVICES — 2.19% |
| |||||||
CenturyLink Inc. | 50,360 | 956,336 | ||||||
Cincinnati Bell Inc.a | 3,441 | 65,723 | ||||||
Level 3 Communications Inc.a | 28,152 | 1,509,792 | ||||||
Verizon Communications Inc. | 373,865 | 17,896,918 | ||||||
|
| |||||||
20,428,769 | ||||||||
ELECTRIC UTILITIES — 0.29% |
| |||||||
Alliant Energy Corp. | 20,867 | 902,707 | ||||||
Eversource Energy | 29,052 | 1,819,817 | ||||||
|
| |||||||
2,722,524 | ||||||||
ELECTRICAL EQUIPMENT — 0.76% |
| |||||||
Acuity Brands Inc. | 4,033 | 674,318 | ||||||
Eaton Corp. PLC | 41,052 | 3,284,981 | ||||||
Rockwell Automation Inc. | 11,789 | 2,367,467 | ||||||
Sensata Technologies Holding NVa,b | 15,712 | 768,474 | ||||||
|
| |||||||
7,095,240 | ||||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & |
| |||||||
Corning Inc. | 84,315 | 2,639,903 | ||||||
Flex Ltd.a | 48,490 | 863,122 | ||||||
Itron Inc.a | 3,132 | 244,766 | ||||||
TE Connectivity Ltd. | 32,489 | 2,955,524 | ||||||
Trimble Inc.a | 23,150 | 946,372 | ||||||
|
| |||||||
7,649,687 | ||||||||
ENERGY EQUIPMENT & SERVICES — 1.29% |
| |||||||
Baker Hughes a GE Co. | 37,165 | 1,168,096 | ||||||
Core Laboratories NV | 4,005 | 400,099 | ||||||
National Oilwell Varco Inc. | 34,852 | 1,191,590 | ||||||
Schlumberger Ltd. | 127,342 | 8,149,888 | ||||||
TechnipFMC PLCa | 40,461 | 1,108,227 | ||||||
|
| |||||||
12,017,900 |
36 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI KLD 400 SOCIAL ETF
October 31, 2017
Security | Shares | Value | ||||||
EQUITY REAL ESTATE INVESTMENT TRUSTS |
| |||||||
American Tower Corp. | 38,958 | $ | 5,597,096 | |||||
AvalonBay Communities Inc. | 12,622 | 2,288,747 | ||||||
Boston Properties Inc. | 14,105 | 1,709,244 | ||||||
Corporate Office Properties Trust | 9,221 | 294,426 | ||||||
Digital Realty Trust Inc. | 18,796 | 2,226,198 | ||||||
Duke Realty Corp. | 32,662 | 930,214 | ||||||
Equinix Inc. | 7,148 | 3,313,098 | ||||||
Equity Residential | 33,596 | 2,259,667 | ||||||
Federal Realty Investment Trust | 6,610 | 796,637 | ||||||
Forest City Realty Trust Inc. Class A | 19,553 | 481,590 | ||||||
HCP Inc. | 43,045 | 1,112,283 | ||||||
Host Hotels & Resorts Inc. | 67,973 | 1,329,552 | ||||||
Iron Mountain Inc. | 22,980 | 919,200 | ||||||
Liberty Property Trust | 13,540 | 580,595 | ||||||
Macerich Co. (The) | 11,040 | 602,784 | ||||||
Potlatch Corp. | 3,687 | 190,987 | ||||||
Prologis Inc. | 48,675 | 3,143,431 | ||||||
SBA Communications Corp.a | 11,116 | 1,747,213 | ||||||
Simon Property Group Inc. | 28,626 | 4,446,477 | ||||||
UDR Inc. | 24,488 | 949,889 | ||||||
Vornado Realty Trust | 15,652 | 1,171,709 | ||||||
Weyerhaeuser Co. | 68,905 | 2,474,379 | ||||||
|
| |||||||
38,565,416 | ||||||||
FOOD & STAPLES RETAILING — 0.30% |
| |||||||
Sysco Corp. | 46,525 | 2,587,721 | ||||||
United Natural Foods Inc.a | 4,572 | 177,256 | ||||||
|
| |||||||
2,764,977 | ||||||||
FOOD PRODUCTS — 2.42% |
| |||||||
Archer-Daniels-Midland Co. | 52,078 | 2,128,428 | ||||||
Bunge Ltd. | 12,887 | 886,368 | ||||||
Campbell Soup Co. | 16,684 | 790,321 | ||||||
Darling Ingredients Inc.a | 14,954 | 272,910 | ||||||
General Mills Inc. | 52,722 | 2,737,326 | ||||||
Hain Celestial Group Inc. (The)a | 9,403 | 338,696 | ||||||
Hormel Foods Corp. | 26,767 | 834,060 | ||||||
Ingredion Inc. | 6,584 | 825,304 | ||||||
JM Smucker Co. (The) | 10,633 | 1,127,630 | ||||||
Kellogg Co. | 24,018 | 1,501,846 | ||||||
Kraft Heinz Co. (The) | 55,833 | 4,317,566 | ||||||
McCormick & Co. Inc./MD NVS | 10,399 | 1,035,012 | ||||||
Mondelez International Inc. Class A | 139,071 | 5,761,712 | ||||||
|
| |||||||
22,557,179 |
Security | Shares | Value | ||||||
GAS UTILITIES — 0.10% |
| |||||||
New Jersey Resources Corp. | 7,821 | $ | 347,644 | |||||
Northwest Natural Gas Co. | 2,638 | 175,031 | ||||||
WGL Holdings Inc. | 4,646 | 398,162 | ||||||
|
| |||||||
920,837 | ||||||||
HEALTH CARE EQUIPMENT & SUPPLIES — 1.57% |
| |||||||
Align Technology Inc.a | 6,994 | 1,671,426 | ||||||
Becton Dickinson and Co. | 20,849 | 4,350,561 | ||||||
Cooper Companies Inc. (The) | 4,488 | 1,078,287 | ||||||
DENTSPLY SIRONA Inc. | 21,086 | 1,287,722 | ||||||
Edwards Lifesciences Corp.a | 19,223 | 1,965,167 | ||||||
Hologic Inc.a | 25,767 | 975,281 | ||||||
IDEXX Laboratories Inc.a | 8,096 | 1,345,312 | ||||||
ResMed Inc. | 13,025 | 1,096,445 | ||||||
Varian Medical Systems Inc.a | 8,423 | 877,592 | ||||||
|
| |||||||
14,647,793 | ||||||||
HEALTH CARE PROVIDERS & SERVICES — 2.10% |
| |||||||
AmerisourceBergen Corp. | 15,008 | 1,154,866 | ||||||
Cardinal Health Inc. | 28,904 | 1,789,158 | ||||||
Centene Corp.a | 15,802 | 1,480,173 | ||||||
Cigna Corp. | 23,478 | 4,630,331 | ||||||
Envision Healthcare Corp.a | 10,838 | 461,699 | ||||||
HCA Healthcare Inc.a | 26,893 | 2,034,456 | ||||||
Henry Schein Inc.a | 14,572 | 1,145,359 | ||||||
Humana Inc. | 13,243 | 3,381,600 | ||||||
Laboratory Corp. of America Holdingsa | 9,406 | 1,445,796 | ||||||
MEDNAX Inc.a | 8,503 | 372,346 | ||||||
Patterson Companies Inc. | 7,655 | 283,235 | ||||||
Quest Diagnostics Inc. | 12,559 | 1,177,783 | ||||||
Select Medical Holdings Corp.a | 9,565 | 183,170 | ||||||
|
| |||||||
19,539,972 | ||||||||
HEALTH CARE TECHNOLOGY — 0.20% |
| |||||||
Cerner Corp.a | 27,213 | 1,837,422 | ||||||
|
| |||||||
1,837,422 | ||||||||
HOTELS, RESTAURANTS & LEISURE — 3.28% |
| |||||||
Aramark | 22,339 | 975,991 | ||||||
Choice Hotels International Inc. | 3,317 | 231,361 | ||||||
Darden Restaurants Inc. | 11,358 | 934,423 | ||||||
Domino’s Pizza Inc. | 4,433 | 811,239 | ||||||
Hilton Worldwide Holdings Inc. | 18,062 | 1,305,521 | ||||||
Jack in the Box Inc. | 2,697 | 279,166 | ||||||
Marriott International Inc./MD Class A | 29,552 | 3,530,873 |
SCHEDULESOF INVESTMENTS | 37 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI KLD 400 SOCIAL ETF
October 31, 2017
Security | Shares | Value | ||||||
McDonald’s Corp. | 74,699 | $ | 12,468,010 | |||||
Royal Caribbean Cruises Ltd. | 15,744 | 1,948,635 | ||||||
Starbucks Corp. | 132,715 | 7,278,091 | ||||||
Vail Resorts Inc. | 3,674 | 841,419 | ||||||
|
| �� | ||||||
30,604,729 | ||||||||
HOUSEHOLD DURABLES — 0.49% |
| |||||||
CSS Industries Inc. | 784 | 23,504 | ||||||
Ethan Allen Interiors Inc. | 2,279 | 67,800 | ||||||
Garmin Ltd. | 11,200 | 634,032 | ||||||
La-Z-Boy Inc. | 4,473 | 120,547 | ||||||
Meritage Homes Corp.a | 3,463 | 168,648 | ||||||
Mohawk Industries Inc.a | 5,798 | 1,517,685 | ||||||
Newell Brands Inc. | 44,373 | 1,809,531 | ||||||
Tupperware Brands Corp. | 4,584 | 269,310 | ||||||
|
| |||||||
4,611,057 | ||||||||
HOUSEHOLD PRODUCTS — 3.31% |
| |||||||
Clorox Co. (The) | 11,836 | 1,497,609 | ||||||
Colgate-Palmolive Co. | 76,918 | 5,418,873 | ||||||
Kimberly-Clark Corp. | 32,563 | 3,663,663 | ||||||
Procter & Gamble Co. (The) | 234,399 | 20,238,010 | ||||||
|
| |||||||
30,818,155 | ||||||||
INDEPENDENT POWER AND RENEWABLE |
| |||||||
AES Corp./VA | 60,641 | 644,614 | ||||||
Ormat Technologies Inc. | 3,374 | 219,074 | ||||||
|
| |||||||
863,688 | ||||||||
INDUSTRIAL CONGLOMERATES — 1.61% |
| |||||||
3M Co. | 54,736 | 12,599,680 | ||||||
Roper Technologies Inc. | 9,338 | 2,410,791 | ||||||
|
| |||||||
15,010,471 | ||||||||
INSURANCE — 3.60% |
| |||||||
Aflac Inc. | 36,426 | 3,055,777 | ||||||
Allstate Corp. (The) | 33,457 | 3,140,274 | ||||||
Chubb Ltd. | 42,793 | 6,454,040 | ||||||
Hartford Financial Services Group Inc. (The) | 33,661 | 1,853,038 | ||||||
Loews Corp. | 26,153 | 1,294,835 | ||||||
Marsh & McLennan Companies Inc. | 47,270 | 3,825,561 | ||||||
Principal Financial Group Inc. | 26,375 | 1,736,794 | ||||||
Progressive Corp. (The) | 53,157 | 2,586,088 | ||||||
Prudential Financial Inc. | 39,341 | 4,345,607 | ||||||
Travelers Companies Inc. (The) | 25,637 | 3,395,621 | ||||||
Willis Towers Watson PLC | 11,767 | 1,895,428 | ||||||
|
| |||||||
33,583,063 |
Security | Shares | Value | ||||||
INTERNET & DIRECT MARKETING RETAIL — 1.80% |
| |||||||
HSN Inc. | 3,093 | $ | 116,606 | |||||
Netflix Inc.a | 39,501 | 7,759,181 | ||||||
Nutrisystem Inc. | 2,691 | 134,416 | ||||||
Priceline Group Inc. (The)a | 4,504 | 8,611,468 | ||||||
Shutterfly Inc.a | 2,749 | 117,382 | ||||||
|
| |||||||
16,739,053 | ||||||||
INTERNET SOFTWARE & SERVICES — 6.14% |
| |||||||
Alphabet Inc. Class Aa | 27,277 | 28,178,232 | ||||||
Alphabet Inc. Class Ca | 28,619 | 29,095,220 | ||||||
|
| |||||||
57,273,452 | ||||||||
IT SERVICES — 3.48% |
| |||||||
Accenture PLC Class A | 56,829 | 8,090,177 | ||||||
Automatic Data Processing Inc. | 41,023 | 4,769,334 | ||||||
Cognizant Technology Solutions Corp. Class A | 54,023 | 4,087,920 | ||||||
Convergys Corp. | 8,708 | 224,057 | ||||||
FleetCor Technologies Inc.a | 8,456 | 1,397,523 | ||||||
International Business Machines Corp. | 81,798 | 12,601,800 | ||||||
Teradata Corp.a | 11,863 | 396,817 | ||||||
Western Union Co. (The) | 43,177 | 857,495 | ||||||
|
| |||||||
32,425,123 | ||||||||
LEISURE PRODUCTS — 0.16% |
| |||||||
Callaway Golf Co. | 8,548 | 123,348 | ||||||
Hasbro Inc. | 10,328 | 956,269 | ||||||
Mattel Inc. | 31,288 | 441,787 | ||||||
|
| |||||||
1,521,404 | ||||||||
LIFE SCIENCES TOOLS & SERVICES — 0.74% |
| |||||||
Agilent Technologies Inc. | 29,530 | 2,008,926 | ||||||
Bio-Techne Corp. | 3,386 | 443,634 | ||||||
Mettler-Toledo International Inc.a | 2,369 | 1,617,150 | ||||||
Quintiles IMS Holdings Inc.a | 12,856 | 1,389,733 | ||||||
Waters Corp.a | 7,315 | 1,434,106 | ||||||
|
| |||||||
6,893,549 | ||||||||
MACHINERY — 3.67% |
| |||||||
AGCO Corp. | 5,770 | 395,649 | ||||||
Caterpillar Inc. | 53,989 | 7,331,706 | ||||||
Cummins Inc. | 14,624 | 2,586,693 | ||||||
Deere & Co. | 24,812 | 3,297,019 | ||||||
Dover Corp. | 14,318 | 1,367,226 | ||||||
Flowserve Corp. | 12,050 | 531,043 | ||||||
Fortive Corp. | 28,545 | 2,062,662 | ||||||
Graco Inc. | 5,077 | 669,098 |
38 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI KLD 400 SOCIAL ETF
October 31, 2017
Security | Shares | Value | ||||||
Illinois Tool Works Inc. | 28,511 | $ | 4,462,542 | |||||
Ingersoll-Rand PLC | 23,460 | 2,078,556 | ||||||
Lincoln Electric Holdings Inc. | 5,408 | 495,751 | ||||||
Meritor Inc.a | 7,578 | 197,104 | ||||||
Middleby Corp. (The)a,b | 5,237 | 606,968 | ||||||
Parker-Hannifin Corp. | 12,219 | 2,231,312 | ||||||
Snap-on Inc. | 5,339 | 842,387 | ||||||
Stanley Black & Decker Inc. | 14,046 | 2,269,131 | ||||||
Tennant Co. | 1,640 | 113,734 | ||||||
Timken Co. (The) | 6,404 | 301,949 | ||||||
WABCO Holdings Inc.a | 4,702 | 693,874 | ||||||
Wabtec Corp./DEb | 7,974 | 610,011 | ||||||
Xylem Inc./NY | 16,443 | 1,093,953 | ||||||
|
| |||||||
34,238,368 | ||||||||
MEDIA — 3.43% |
| |||||||
Charter Communications Inc. Class Aa,b | 19,767 | 6,605,538 | ||||||
Discovery Communications Inc. Class Aa,b | 14,008 | 264,471 | ||||||
Discovery Communications Inc. Class C NVSa,b | 19,345 | 344,534 | ||||||
John Wiley & Sons Inc. Class A | 4,174 | 228,109 | ||||||
Liberty Global PLC Series Aa | 19,558 | 603,364 | ||||||
Liberty Global PLC Series C NVSa | 53,011 | 1,584,499 | ||||||
Liberty Global PLC LiLAC Class Aa | 4,305 | 93,505 | ||||||
Liberty Global PLC LiLAC Class Ca,b | 10,944 | 240,768 | ||||||
New York Times Co. (The) Class A | 11,640 | 222,324 | ||||||
Scholastic Corp. | 2,681 | 99,036 | ||||||
Scripps Networks Interactive Inc. Class A | 7,899 | 657,829 | ||||||
Time Warner Inc. | 71,076 | 6,986,060 | ||||||
Walt Disney Co. (The) | 143,418 | 14,027,715 | ||||||
|
| |||||||
31,957,752 | ||||||||
METALS & MINING — 0.21% |
| |||||||
Compass Minerals International Inc. | 3,078 | 201,917 | ||||||
Nucor Corp. | 29,232 | 1,690,487 | ||||||
Schnitzer Steel Industries Inc. Class A | 2,401 | 70,709 | ||||||
|
| |||||||
1,963,113 | ||||||||
MULTI-UTILITIES — 1.16% |
| |||||||
Avista Corp. | 5,872 | 306,753 | ||||||
CenterPoint Energy Inc. | 37,438 | 1,107,416 | ||||||
CMS Energy Corp. | 25,765 | 1,246,253 |
Security | Shares | Value | ||||||
Consolidated Edison Inc. | 28,045 | $ | 2,413,272 | |||||
MDU Resources Group Inc. | 16,842 | 460,629 | ||||||
NiSource Inc. | 29,630 | 781,343 | ||||||
Sempra Energy | 21,805 | 2,562,088 | ||||||
WEC Energy Group Inc. | 28,937 | 1,950,064 | ||||||
|
| |||||||
10,827,818 | ||||||||
MULTILINE RETAIL — 0.12% |
| |||||||
Kohl’s Corp. | 15,795 | 659,599 | ||||||
Nordstrom Inc. | 11,410 | 452,407 | ||||||
|
| |||||||
1,112,006 | ||||||||
OIL, GAS & CONSUMABLE FUELS — 3.23% |
| |||||||
Apache Corp. | 34,859 | 1,442,117 | ||||||
Clean Energy Fuels Corp.a,b | 10,135 | 23,817 | ||||||
ConocoPhillips | 113,394 | 5,800,103 | ||||||
Denbury Resources Inc.a | 36,205 | 44,532 | ||||||
Devon Energy Corp. | 45,761 | 1,688,581 | ||||||
Energen Corp.a | 8,831 | 456,563 | ||||||
EQT Corp.b | 15,838 | 990,508 | ||||||
Hess Corp. | 26,249 | 1,159,156 | ||||||
Marathon Oil Corp. | 77,607 | 1,103,572 | ||||||
Marathon Petroleum Corp. | 47,468 | 2,835,738 | ||||||
Newfield Exploration Co.a | 18,251 | 561,948 | ||||||
Noble Energy Inc. | 42,669 | 1,189,185 | ||||||
Occidental Petroleum Corp. | 70,109 | 4,526,938 | ||||||
ONEOK Inc. | 34,759 | 1,886,371 | ||||||
Phillips 66 | 40,238 | 3,664,877 | ||||||
Pioneer Natural Resources Co. | 15,618 | 2,337,546 | ||||||
QEP Resources Inc.a | 21,769 | 194,833 | ||||||
Southwestern Energy Co.a | 46,212 | 256,477 | ||||||
|
| |||||||
30,162,862 | ||||||||
PAPER & FOREST PRODUCTS — 0.03% |
| |||||||
Domtar Corp. | 5,717 | 270,528 | ||||||
|
| |||||||
270,528 | ||||||||
PERSONAL PRODUCTS — 0.26% |
| |||||||
Avon Products Inc.a | 39,723 | 90,569 | ||||||
Estee Lauder Companies Inc. (The) Class A | 20,514 | 2,293,670 | ||||||
|
| |||||||
2,384,239 | ||||||||
PHARMACEUTICALS — 2.87% |
| |||||||
Bristol-Myers Squibb Co. | 150,984 | 9,309,674 | ||||||
Jazz Pharmaceuticals PLCa,b | 5,494 | 777,566 | ||||||
Merck & Co. Inc. | 250,671 | 13,809,465 | ||||||
Zoetis Inc. | 44,992 | 2,871,389 | ||||||
|
| |||||||
26,768,094 |
SCHEDULESOF INVESTMENTS | 39 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI KLD 400 SOCIAL ETF
October 31, 2017
Security | Shares | Value | ||||||
PROFESSIONAL SERVICES — 0.46% |
| |||||||
Dun & Bradstreet Corp. (The) | 3,379 | $ | 394,769 | |||||
Exponent Inc. | 2,361 | 174,360 | ||||||
Heidrick & Struggles International Inc. | 1,601 | 39,785 | ||||||
ICF International Inc.a | 1,644 | 88,283 | ||||||
IHS Markit Ltd.a | 37,279 | 1,588,458 | ||||||
Kelly Services Inc. Class A | 2,825 | 74,326 | ||||||
ManpowerGroup Inc. | 6,122 | 754,720 | ||||||
Navigant Consulting Inc.a | 4,309 | 74,589 | ||||||
On Assignment Inc.a | 4,596 | 281,367 | ||||||
Resources Connection Inc. | 2,538 | 39,973 | ||||||
Robert Half International Inc. | 11,607 | 600,894 | ||||||
RPX Corp.a | 3,856 | 50,205 | ||||||
TrueBlue Inc.a | 3,867 | 104,796 | ||||||
|
| |||||||
4,266,525 | ||||||||
REAL ESTATE MANAGEMENT & DEVELOPMENT — 0.22% |
| |||||||
CBRE Group Inc. Class Aa | 27,953 | 1,099,112 | ||||||
Jones Lang LaSalle Inc. | 4,180 | 541,268 | ||||||
Realogy Holdings Corp. | 12,673 | 409,718 | ||||||
|
| |||||||
2,050,098 | ||||||||
ROAD & RAIL — 1.10% |
| |||||||
AMERCO | 628 | 246,578 | ||||||
ArcBest Corp. | 2,216 | 72,242 | ||||||
Avis Budget Group Inc.a,b | 6,899 | 284,584 | ||||||
CSX Corp. | 84,607 | 4,266,731 | ||||||
Genesee & Wyoming Inc. Class Aa,b | 5,689 | 408,356 | ||||||
Hertz Global Holdings Inc.a | 4,690 | 116,640 | ||||||
Kansas City Southern | 9,764 | 1,017,604 | ||||||
Norfolk Southern Corp. | 26,587 | 3,494,064 | ||||||
Ryder System Inc. | 4,865 | 394,454 | ||||||
|
| |||||||
10,301,253 | ||||||||
SEMICONDUCTORS & SEMICONDUCTOR |
| |||||||
Advanced Micro Devices Inc.a,b | 73,602 | 808,518 | ||||||
Analog Devices Inc. | 33,688 | 3,075,714 | ||||||
Applied Materials Inc. | 98,506 | 5,558,694 | ||||||
Intel Corp. | 431,569 | 19,632,074 | ||||||
Lam Research Corp. | 14,778 | 3,082,247 | ||||||
Microchip Technology Inc. | 21,017 | 1,992,412 | ||||||
NVIDIA Corp. | 54,530 | 11,277,349 | ||||||
Skyworks Solutions Inc. | 16,873 | 1,921,160 | ||||||
Texas Instruments Inc. | 91,311 | 8,828,861 | ||||||
|
| |||||||
56,177,029 |
Security | Shares | Value | ||||||
SOFTWARE — 10.70% |
| |||||||
Adobe Systems Inc.a | 45,338 | $ | 7,941,404 | |||||
ANSYS Inc.a | 7,820 | 1,069,072 | ||||||
Autodesk Inc.a | 18,176 | 2,271,273 | ||||||
CA Inc. | 28,825 | 933,354 | ||||||
Cadence Design Systems Inc.a | 25,537 | 1,102,177 | ||||||
Citrix Systems Inc.a | 13,851 | 1,144,231 | ||||||
Dell Technologies Inc. Class Va | 18,742 | 1,551,275 | ||||||
Fortinet Inc.a | 13,690 | 539,523 | ||||||
Intuit Inc. | 22,339 | 3,373,636 | ||||||
Microsoft Corp. | 672,189 | 55,912,681 | ||||||
Oracle Corp. | 282,826 | 14,395,843 | ||||||
salesforce.com Inc.a | 62,009 | 6,346,001 | ||||||
Symantec Corp. | 55,728 | 1,811,160 | ||||||
Workday Inc. Class Aa,b | 12,011 | 1,333,101 | ||||||
|
| |||||||
99,724,731 | ||||||||
SPECIALTY RETAIL — 1.49% |
| |||||||
AutoNation Inc.a,b | 5,953 | 282,172 | ||||||
Best Buy Co. Inc. | 25,348 | 1,418,981 | ||||||
Buckle Inc. (The) | 2,655 | 43,675 | ||||||
Caleres Inc. | 3,942 | 107,735 | ||||||
CarMax Inc.a | 16,972 | 1,274,597 | ||||||
Foot Locker Inc. | 11,914 | 358,373 | ||||||
GameStop Corp. Class A | 9,444 | 176,508 | ||||||
Gap Inc. (The) | 21,721 | 564,529 | ||||||
Lowe’s Companies Inc. | 78,175 | 6,250,091 | ||||||
Office Depot Inc. | 46,349 | 143,682 | ||||||
Pier 1 Imports Inc. | 7,572 | 31,499 | ||||||
Signet Jewelers Ltd. | 5,681 | 372,503 | ||||||
Tiffany & Co. | 11,453 | 1,072,230 | ||||||
Tractor Supply Co. | 11,779 | 709,803 | ||||||
Ulta Salon Cosmetics & Fragrance Inc.a | 5,396 | 1,088,859 | ||||||
|
| |||||||
13,895,237 | ||||||||
TECHNOLOGY HARDWARE, STORAGE & |
| |||||||
Hewlett Packard Enterprise Co. | 150,852 | 2,099,860 | ||||||
HP Inc. | 154,464 | 3,328,699 | ||||||
Super Micro Computer Inc.a,b | 3,537 | 70,386 | ||||||
Xerox Corp. | 19,794 | 599,956 | ||||||
|
| |||||||
6,098,901 | ||||||||
TEXTILES, APPAREL & LUXURY GOODS — 1.31% |
| |||||||
Columbia Sportswear Co. | 2,537 | 158,258 | ||||||
Deckers Outdoor Corp.a | 2,898 | 197,759 | ||||||
Hanesbrands Inc. | 33,364 | 750,690 |
40 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI KLD 400 SOCIAL ETF
October 31, 2017
Security | Shares | Value | ||||||
Michael Kors Holdings Ltd.a | 14,280 | $ | 697,007 | |||||
NIKE Inc. Class B | 121,114 | 6,660,059 | ||||||
PVH Corp. | 7,144 | 905,931 | ||||||
Under Armour Inc. Class Aa,b | 17,182 | 215,119 | ||||||
Under Armour Inc. Class Ca,b | 17,498 | 201,752 | ||||||
VF Corp. | 31,187 | 2,172,174 | ||||||
Wolverine World Wide Inc. | 9,037 | 246,710 | ||||||
|
| |||||||
12,205,459 | ||||||||
THRIFTS & MORTGAGE FINANCE — 0.06% |
| |||||||
New York Community Bancorp. Inc. | 45,003 | 565,238 | ||||||
|
| |||||||
565,238 | ||||||||
TRADING COMPANIES & DISTRIBUTORS — 0.44% |
| |||||||
Air Lease Corp. | 9,091 | 395,004 | ||||||
Applied Industrial Technologies Inc. | 3,537 | 225,130 | ||||||
Fastenal Co. | 26,450 | 1,242,356 | ||||||
H&E Equipment Services Inc. | 2,905 | 95,691 | ||||||
United Rentals Inc.a | 7,765 | 1,098,592 | ||||||
WW Grainger Inc.b | 5,074 | 1,003,130 | ||||||
|
| |||||||
4,059,903 | ||||||||
WATER UTILITIES — 0.15% |
| |||||||
American Water Works Co. Inc. | 16,383 | 1,437,772 | ||||||
|
| |||||||
1,437,772 | ||||||||
WIRELESS TELECOMMUNICATION SERVICES — 0.05% |
| |||||||
Sprint Corp.a,b | 73,331 | 479,585 | ||||||
|
| |||||||
479,585 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $745,301,072) | 931,320,250 | |||||||
SHORT-TERM INVESTMENTS — 1.88% |
| |||||||
MONEY MARKET FUNDS — 1.88% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
1.31%c,d,e | 16,978,643 | 16,982,038 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
1.00%c,d | 531,487 | 531,487 | ||||||
|
| |||||||
17,513,525 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $17,512,579) | 17,513,525 | |||||||
|
|
Value | ||||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $762,813,651)f | $ | 948,833,775 | ||||||
Other Assets, Less Liabilities — (1.76)% |
| (16,365,538 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 932,468,237 | |||||
|
|
NVS — Non-Voting Shares
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 1. |
c | Affiliated issuer. See Schedule 1. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 1. |
f | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $772,299,821. Net unrealized appreciation was $176,533,954, of which $204,141,831 represented gross unrealized appreciation on investments and $27,607,877 represented gross unrealized depreciation on investments. |
SCHEDULESOF INVESTMENTS | 41 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI KLD 400 SOCIAL ETF
October 31, 2017
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 04/30/17 | Shares purchased | Shares sold | Shares held at 10/31/17 | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, | 10,860,508 | 6,118,135 | b | — | 16,978,643 | $ | 16,982,038 | $ | (961 | ) | $ | (1,669 | ) | $ | — | c | ||||||||||||||||
BlackRock Cash Funds: Treasury, | 603,275 | — | (71,788 | )b | 531,487 | 531,487 | — | — | 4,138 | |||||||||||||||||||||||
BlackRock Inc. | 10,570 | 1,801 | (1,260 | ) | 11,111 | 5,231,392 | 276,018 | 656,568 | 53,538 | |||||||||||||||||||||||
PNC Financial Services Group Inc. (The) | 42,308 | 7,022 | (5,048 | ) | 44,282 | 6,057,335 | 310,705 | 441,769 | 66,711 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 28,802,252 | $ | 585,762 | $ | 1,096,668 | $ | 124,387 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
c | Does not include income earned on the investment of securities lending cash collateral which is not direct income of the Fund and is reflected as a component of securities lending income in the statement of operations. |
Schedule 2 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: | ||||||||||||||||
Assets: | ||||||||||||||||
Common stocks | $ | 931,320,250 | $ | — | $ | — | $ | 931,320,250 | ||||||||
Money market funds | 17,513,525 | — | — | 17,513,525 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 948,833,775 | $ | — | $ | — | $ | 948,833,775 | ||||||||
|
|
|
|
|
|
|
| |||||||||
See notes to financial statements.
42 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES® MSCI USA ESG SELECT ETF
October 31, 2017
Security | Shares | Value | ||||||
COMMON STOCKS — 99.88% |
| |||||||
AEROSPACE & DEFENSE — 2.61% |
| |||||||
Rockwell Collins Inc. | 123,471 | $ | 16,742,668 | |||||
|
| |||||||
16,742,668 | ||||||||
AIR FREIGHT & LOGISTICS — 1.02% |
| |||||||
Expeditors International of Washington Inc. | 86,444 | 5,046,601 | ||||||
United Parcel Service Inc. Class B | 12,856 | 1,510,965 | ||||||
|
| |||||||
6,557,566 | ||||||||
AUTOMOBILES — 0.86% |
| |||||||
Tesla Inc.a,b | 16,667 | 5,525,610 | ||||||
|
| |||||||
5,525,610 | ||||||||
BANKS — 2.24% |
| |||||||
Comerica Inc. | 57,971 | 4,554,782 | ||||||
KeyCorp | 111,399 | 2,033,032 | ||||||
People’s United Financial Inc. | 289,850 | 5,408,601 | ||||||
PNC Financial Services Group Inc. (The)c | 6,503 | 889,545 | ||||||
SVB Financial Groupa | 6,786 | 1,488,034 | ||||||
|
| |||||||
14,373,994 | ||||||||
BEVERAGES — 2.57% |
| |||||||
Coca-Cola Co. (The) | 139,554 | 6,416,693 | ||||||
PepsiCo Inc. | 91,078 | 10,039,528 | ||||||
|
| |||||||
16,456,221 | ||||||||
BIOTECHNOLOGY — 1.67% |
| |||||||
AbbVie Inc. | 13,893 | 1,253,843 | ||||||
Biogen Inc.a | 9,003 | 2,805,875 | ||||||
Gilead Sciences Inc. | 36,912 | 2,766,924 | ||||||
Vertex Pharmaceuticals Inc.a | 26,556 | 3,883,284 | ||||||
|
| |||||||
10,709,926 | ||||||||
BUILDING PRODUCTS — 0.21% |
| |||||||
Johnson Controls International PLC | 32,862 | 1,360,158 | ||||||
|
| |||||||
1,360,158 | ||||||||
CAPITAL MARKETS — 6.49% |
| |||||||
Bank of New York Mellon Corp. (The) | 29,632 | 1,524,566 | ||||||
BlackRock Inc.c | 32,517 | 15,309,979 | ||||||
Franklin Resources Inc. | 85,212 | 3,589,982 | ||||||
Northern Trust Corp. | 132,231 | 12,366,243 | ||||||
State Street Corp. | 95,454 | 8,781,768 | ||||||
|
| |||||||
41,572,538 | ||||||||
CHEMICALS — 4.19% |
| |||||||
Ecolab Inc. | 172,202 | 22,499,913 |
Security | Shares | Value | ||||||
International Flavors & Fragrances Inc. | 29,498 | $ | 4,348,595 | |||||
|
| |||||||
26,848,508 | ||||||||
COMMUNICATIONS EQUIPMENT — 2.10% |
| |||||||
Cisco Systems Inc. | 304,051 | 10,383,342 | ||||||
Motorola Solutions Inc. | 34,111 | 3,088,410 | ||||||
|
| |||||||
13,471,752 | ||||||||
CONSUMER FINANCE — 1.23% |
| |||||||
American Express Co. | 82,778 | 7,906,955 | ||||||
|
| |||||||
7,906,955 | ||||||||
DISTRIBUTORS — 0.14% |
| |||||||
LKQ Corp.a | 24,309 | 916,206 | ||||||
|
| |||||||
916,206 | ||||||||
ELECTRIC UTILITIES — 1.44% |
| |||||||
Edison International | 16,751 | 1,339,243 | ||||||
Eversource Energy | 83,071 | 5,203,567 | ||||||
Xcel Energy Inc. | 54,443 | 2,696,017 | ||||||
|
| |||||||
9,238,827 | ||||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS — 0.69% |
| |||||||
Corning Inc. | 54,621 | 1,710,184 | ||||||
TE Connectivity Ltd. | 30,119 | 2,739,925 | ||||||
|
| |||||||
4,450,109 | ||||||||
ENERGY EQUIPMENT & SERVICES — 1.55% |
| |||||||
Baker Hughes a GE Co. | 54,295 | 1,706,492 | ||||||
Core Laboratories NV | 37,156 | 3,711,884 | ||||||
National Oilwell Varco Inc. | 20,015 | 684,313 | ||||||
Schlumberger Ltd. | 18,106 | 1,158,784 | ||||||
TechnipFMC PLCa | 97,914 | 2,681,865 | ||||||
|
| |||||||
9,943,338 | ||||||||
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) — 4.02% |
| |||||||
American Tower Corp. | 29,671 | 4,262,833 | ||||||
Equinix Inc. | 5,882 | 2,726,307 | ||||||
Liberty Property Trust | 168,673 | 7,232,698 | ||||||
Prologis Inc. | 178,492 | 11,527,013 | ||||||
|
| |||||||
25,748,851 | ||||||||
FOOD PRODUCTS — 4.45% |
| |||||||
Bunge Ltd. | 79,132 | 5,442,699 | ||||||
Campbell Soup Co. | 81,759 | 3,872,924 | ||||||
General Mills Inc. | 109,212 | 5,670,287 | ||||||
Kellogg Co. | 203,952 | 12,753,119 | ||||||
Mondelez International Inc. Class A | 18,998 | 787,087 | ||||||
|
| |||||||
28,526,116 |
SCHEDULESOF INVESTMENTS | 43 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI USA ESG SELECT ETF
October 31, 2017
Security | Shares | Value | ||||||
HEALTH CARE PROVIDERS & SERVICES — 5.56% |
| |||||||
AmerisourceBergen Corp. | 42,419 | $ | 3,264,142 | |||||
Cardinal Health Inc. | 178,241 | 11,033,118 | ||||||
HCA Healthcare Inc.a | 7,771 | 587,876 | ||||||
Henry Schein Inc.a,b | 166,180 | 13,061,748 | ||||||
Patterson Companies Inc. | 189,422 | 7,008,614 | ||||||
Quest Diagnostics Inc. | 7,527 | 705,882 | ||||||
|
| |||||||
35,661,380 | ||||||||
HOTELS, RESTAURANTS & LEISURE — 1.01% |
| |||||||
Hilton Worldwide Holdings Inc. | 14,729 | 1,064,612 | ||||||
Marriott International Inc./MD Class A | 45,138 | 5,393,088 | ||||||
|
| |||||||
6,457,700 | ||||||||
HOUSEHOLD DURABLES — 0.46% |
| |||||||
Newell Brands Inc. | 71,886 | 2,931,511 | ||||||
|
| |||||||
2,931,511 | ||||||||
HOUSEHOLD PRODUCTS — 2.81% |
| |||||||
Clorox Co. (The) | 52,033 | 6,583,735 | ||||||
Kimberly-Clark Corp. | 27,626 | 3,108,201 | ||||||
Procter & Gamble Co. (The) | 96,178 | 8,304,009 | ||||||
|
| |||||||
17,995,945 | ||||||||
INDUSTRIAL CONGLOMERATES — 4.98% |
| |||||||
3M Co. | 138,648 | 31,915,383 | ||||||
|
| |||||||
31,915,383 | ||||||||
INSURANCE — 1.56% |
| |||||||
Marsh & McLennan Companies Inc. | 123,401 | 9,986,843 | ||||||
|
| |||||||
9,986,843 | ||||||||
INTERNET SOFTWARE & SERVICES — 2.44% |
| |||||||
Alphabet Inc. Class Aa | 15,140 | 15,640,226 | ||||||
|
| |||||||
15,640,226 | ||||||||
IT SERVICES — 4.90% |
| |||||||
Accenture PLC Class A | 171,325 | 24,389,827 | ||||||
International Business Machines Corp. | 45,728 | 7,044,856 | ||||||
|
| |||||||
31,434,683 | ||||||||
LEISURE PRODUCTS — 0.12% |
| |||||||
Mattel Inc.b | 54,830 | 774,200 | ||||||
|
| |||||||
774,200 | ||||||||
LIFE SCIENCES TOOLS & SERVICES — 3.97% |
| |||||||
Agilent Technologies Inc. | 184,886 | 12,577,794 | ||||||
Mettler-Toledo International Inc.a | 7,573 | 5,169,557 | ||||||
Waters Corp.a | 39,435 | 7,731,232 | ||||||
|
| |||||||
25,478,583 |
Security | Shares | Value | ||||||
MACHINERY — 4.58% |
| |||||||
Caterpillar Inc. | 68,317 | $ | 9,277,449 | |||||
Cummins Inc. | 84,482 | 14,943,176 | ||||||
Ingersoll-Rand PLC | 25,342 | 2,245,301 | ||||||
Xylem Inc./NY | 43,115 | 2,868,441 | ||||||
|
| |||||||
29,334,367 | ||||||||
MEDIA — 1.45% |
| |||||||
Liberty Global PLC Series Aa,b | 20,181 | 622,584 | ||||||
Scripps Networks Interactive Inc. Class A | 7,097 | 591,038 | ||||||
Time Warner Inc. | 23,470 | 2,306,866 | ||||||
Walt Disney Co. (The) | 59,175 | 5,787,907 | ||||||
|
| |||||||
9,308,395 | ||||||||
MULTI-UTILITIES — 1.22% |
| |||||||
Sempra Energy | 66,688 | 7,835,840 | ||||||
|
| |||||||
7,835,840 | ||||||||
MULTILINE RETAIL — 0.09% |
| |||||||
Nordstrom Inc. | 14,509 | 575,282 | ||||||
|
| |||||||
575,282 | ||||||||
OIL, GAS & CONSUMABLE FUELS — 1.30% |
| |||||||
ConocoPhillips | 73,907 | 3,780,343 | ||||||
Hess Corp. | 67,134 | 2,964,638 | ||||||
Marathon Oil Corp. | 59,133 | 840,871 | ||||||
Noble Energy Inc. | 25,828 | 719,826 | ||||||
|
| |||||||
8,305,678 | ||||||||
PHARMACEUTICALS — 1.91% |
| |||||||
Merck & Co. Inc. | 124,457 | 6,856,336 | ||||||
Zoetis Inc. | 84,365 | 5,384,174 | ||||||
|
| |||||||
12,240,510 | ||||||||
REAL ESTATE MANAGEMENT & DEVELOPMENT — 0.90% |
| |||||||
CBRE Group Inc. Class Aa | 146,616 | 5,764,941 | ||||||
|
| |||||||
5,764,941 | ||||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT — 3.80% |
| |||||||
Applied Materials Inc. | 88,036 | 4,967,871 | ||||||
Intel Corp. | 228,199 | 10,380,773 | ||||||
NVIDIA Corp. | 17,873 | 3,696,315 | ||||||
Texas Instruments Inc. | 55,087 | 5,326,362 | ||||||
|
| |||||||
24,371,321 | ||||||||
SOFTWARE — 9.03% |
| |||||||
Autodesk Inc.a | 33,060 | 4,131,178 | ||||||
CA Inc. | 75,922 | 2,458,354 | ||||||
Cadence Design Systems Inc.a | 21,566 | 930,789 | ||||||
Microsoft Corp. | 420,208 | 34,952,901 |
44 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI USA ESG SELECT ETF
October 31, 2017
Security | Shares | Value | ||||||
Oracle Corp. | 168,626 | $ | 8,583,063 | |||||
salesforce.com Inc.a | 38,103 | 3,899,461 | ||||||
Symantec Corp. | 90,586 | 2,944,045 | ||||||
|
| |||||||
57,899,791 | ||||||||
SPECIALTY RETAIL — 3.16% |
| |||||||
Best Buy Co. Inc. | 132,796 | 7,433,920 | ||||||
Gap Inc. (The) | 69,710 | 1,811,763 | ||||||
Signet Jewelers Ltd. | 35,067 | 2,299,343 | ||||||
Tiffany & Co. | 92,910 | 8,698,234 | ||||||
|
| |||||||
20,243,260 | ||||||||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS — 5.01% |
| |||||||
Apple Inc. | 148,908 | 25,171,408 | ||||||
Hewlett Packard Enterprise Co. | 197,141 | 2,744,203 | ||||||
HP Inc. | 195,029 | 4,202,875 | ||||||
|
| |||||||
32,118,486 | ||||||||
TEXTILES, APPAREL & LUXURY GOODS — 2.02% |
| |||||||
Hanesbrands Inc. | 38,563 | 867,667 | ||||||
NIKE Inc. Class B | 164,894 | 9,067,521 | ||||||
PVH Corp. | 17,264 | 2,189,248 | ||||||
VF Corp. | 11,627 | 809,821 | ||||||
|
| |||||||
12,934,257 | ||||||||
TRADING COMPANIES & DISTRIBUTORS — 0.12% |
| |||||||
WW Grainger Inc. | 3,838 | 758,773 | ||||||
|
| |||||||
758,773 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $505,980,733) |
| 640,316,698 | ||||||
SHORT-TERM INVESTMENTS — 1.16% |
| |||||||
MONEY MARKET FUNDS — 1.16% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
1.31%c,d,e | 7,057,448 | 7,058,860 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
1.00%c,d | 368,200 | 368,200 | ||||||
|
| |||||||
7,427,060 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $7,427,031) |
| 7,427,060 | ||||||
|
|
Value | ||||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $513,407,764)f | $ | 647,743,758 | ||||||
Other Assets, Less Liabilities — (1.04)% |
| (6,643,844 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 641,099,914 | |||||
|
|
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 1. |
c | Affiliated issuer. See Schedule 1. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 1. |
f | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $518,435,379. Net unrealized appreciation was $129,308,379, of which $147,469,104 represented gross unrealized appreciation on investments and $18,160,725 represented gross unrealized depreciation on investments. |
SCHEDULESOF INVESTMENTS | 45 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MSCI USA ESG SELECT ETF
October 31, 2017
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 04/30/17 | Shares purchased | Shares sold | Shares held at 10/31/17 | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, | 4,956,622 | 2,100,826 | b | — | 7,057,448 | $ | 7,058,860 | $ | (151 | ) | $ | (333 | ) | $ | — | c | ||||||||||||||||
BlackRock Cash Funds: Treasury, | 682,676 | — | (314,476 | )b | 368,200 | 368,200 | — | — | 3,376 | |||||||||||||||||||||||
BlackRock Inc. | 28,832 | 5,213 | (1,528 | ) | 32,517 | 15,309,979 | 63,458 | 2,611,641 | 154,253 | |||||||||||||||||||||||
PNC Financial Services Group Inc. (The) | 5,759 | 986 | (242 | ) | 6,503 | 889,545 | 3,063 | 104,395 | 9,547 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 23,626,584 | $ | 66,370 | $ | 2,715,703 | $ | 167,176 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
c | Does not include income earned on the investment of securities lending cash collateral which is not direct income of the Fund and is reflected as a component of securities lending income in the statement of operations. |
Schedule 2 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: | ||||||||||||||||
Assets: | ||||||||||||||||
Common stocks | $ | 640,316,698 | $ | — | $ | — | $ | 640,316,698 | ||||||||
Money market funds | 7,427,060 | — | — | 7,427,060 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 647,743,758 | $ | — | $ | — | $ | 647,743,758 | ||||||||
|
|
|
|
|
|
|
| |||||||||
See notes to financial statements.
46 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Assets and Liabilities (Unaudited)
iSHARES® TRUST
October 31, 2017
iShares U.S. Basic Materials ETF | iShares U.S. Consumer Goods ETF | iShares U.S. Consumer Services ETF | ||||||||||
ASSETS | ||||||||||||
Investments in securities, at cost: | ||||||||||||
Unaffiliated | $ | 929,808,802 | $ | 589,105,673 | $ | 657,881,693 | ||||||
Affiliated (Note 2) | 5,770,421 | 7,669,675 | 15,647,469 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments in securities | $ | 935,579,223 | $ | 596,775,348 | $ | 673,529,162 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 938,896,441 | $ | 566,264,819 | $ | 643,760,754 | ||||||
Affiliated (Note 2) | 5,770,542 | 7,670,564 | 15,649,263 | |||||||||
Receivables: | ||||||||||||
Investment securities sold | 3,120,728 | — | 5,587,823 | |||||||||
Dividends and interest | 507,386 | 875,609 | 305,066 | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 948,295,097 | 574,810,992 | 665,302,906 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 3,664,056 | — | 6,248,412 | |||||||||
Collateral for securities on loan (Note 1) | 4,799,111 | 7,345,677 | 14,756,526 | |||||||||
Capital shares redeemed | — | — | 18,374 | |||||||||
Investment advisory fees (Note 2) | 320,347 | 210,267 | 246,063 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 8,783,514 | 7,555,944 | 21,269,375 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 939,511,583 | $ | 567,255,048 | $ | 644,033,531 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 1,008,529,095 | $ | 571,500,675 | $ | 630,260,953 | ||||||
Undistributed net investment income | 633,670 | 922,449 | 284,015 | |||||||||
Undistributed net realized gain (accumulated net realized loss) | (78,738,942 | ) | 17,671,889 | 27,607,708 | ||||||||
Net unrealized appreciation (depreciation) | 9,087,760 | (22,839,965 | ) | (14,119,145 | ) | |||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 939,511,583 | $ | 567,255,048 | $ | 644,033,531 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingb | 9,450,000 | 4,700,000 | 3,900,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 99.42 | $ | 120.69 | $ | 165.14 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $4,729,436, $6,716,650 and $14,412,028, respectively. See Note 1. |
b | No par value, unlimited number of shares authorized. |
See notes to financial statements.
FINANCIAL STATEMENTS | 47 |
Table of Contents
Statements of Assets and Liabilities (Unaudited) (Continued)
iSHARES® TRUST
October 31, 2017
iShares U.S. Financial Services ETF | iShares U.S. Financials ETF | iShares U.S. Industrials ETF | ||||||||||
ASSETS | ||||||||||||
Investments in securities, at cost: | ||||||||||||
Unaffiliated | $ | 1,283,515,131 | $ | 1,849,218,701 | $ | 1,091,632,219 | ||||||
Affiliated (Note 2) | 56,649,928 | 78,272,037 | 27,083,088 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments in securities | $ | 1,340,165,059 | $ | 1,927,490,738 | $ | 1,118,715,307 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 1,490,867,800 | $ | 2,034,673,412 | $ | 1,192,563,389 | ||||||
Affiliated (Note 2) | 68,398,783 | 87,331,646 | 27,082,892 | |||||||||
Cash | — | 43,250 | — | |||||||||
Receivables: | ||||||||||||
Dividends and interest | 922,638 | 1,166,807 | 839,158 | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 1,560,189,221 | 2,123,215,115 | 1,220,485,439 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Collateral for securities on loan (Note 1) | 2,548,526 | 34,288,480 | 25,105,550 | |||||||||
Capital shares redeemed | 24,307 | 273,053 | — | |||||||||
Investment advisory fees (Note 2) | 557,095 | 757,884 | 407,545 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 3,129,928 | 35,319,417 | 25,513,095 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 1,557,059,293 | $ | 2,087,895,698 | $ | 1,194,972,344 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 1,346,607,980 | $ | 1,909,352,712 | $ | 1,075,045,278 | ||||||
Undistributed (distributions in excess of) net investment income | 1,852,029 | (574,932 | ) | 534,747 | ||||||||
Undistributed net realized gain (accumulated net realized loss) | (10,502,240 | ) | (15,396,402 | ) | 18,461,345 | |||||||
Net unrealized appreciation | 219,101,524 | 194,514,320 | 100,930,974 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 1,557,059,293 | $ | 2,087,895,698 | $ | 1,194,972,344 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingb | 12,600,000 | 18,200,000 | 8,450,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 123.58 | $ | 114.72 | $ | 141.42 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $2,432,511, $33,106,082 and $24,909,280, respectively. See Note 1. |
b | No par value, unlimited number of shares authorized. |
See notes to financial statements.
48 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Assets and Liabilities (Unaudited) (Continued)
iSHARES® TRUST
October 31, 2017
iShares MSCI KLD 400 Social ETF | iShares MSCI USA ESG Select ETF | |||||||
ASSETS | ||||||||
Investments in securities, at cost: | ||||||||
Unaffiliated | $ | 737,582,765 | $ | 493,369,471 | ||||
Affiliated (Note 2) | 25,230,886 | 20,038,293 | ||||||
|
|
|
| |||||
Total cost of investments in securities | $ | 762,813,651 | $ | 513,407,764 | ||||
|
|
|
| |||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||
Unaffiliated | $ | 920,031,523 | $ | 624,117,174 | ||||
Affiliated (Note 2) | 28,802,252 | 23,626,584 | ||||||
Receivables: | ||||||||
Dividends and interest | 1,006,930 | 682,701 | ||||||
|
|
|
| |||||
Total Assets | 949,840,705 | 648,426,459 | ||||||
|
|
|
| |||||
LIABILITIES | ||||||||
Payables: | ||||||||
Collateral for securities on loan (Note 1) | 16,981,948 | 7,058,488 | ||||||
Investment advisory fees (Note 2) | 390,520 | 268,057 | ||||||
|
|
|
| |||||
Total Liabilities | 17,372,468 | 7,326,545 | ||||||
|
|
|
| |||||
NET ASSETS | $ | 932,468,237 | $ | 641,099,914 | ||||
|
|
|
| |||||
Net assets consist of: | ||||||||
Paid-in capital | $ | 722,552,388 | $ | 506,906,384 | ||||
Undistributed net investment income | 985,228 | 825,725 | ||||||
Undistributed net realized gain (accumulated net realized loss) | 22,910,497 | (968,189 | ) | |||||
Net unrealized appreciation | 186,020,124 | 134,335,994 | ||||||
|
|
|
| |||||
NET ASSETS | $ | 932,468,237 | $ | 641,099,914 | ||||
|
|
|
| |||||
Shares outstandingb | 9,800,000 | 5,950,000 | ||||||
|
|
|
| |||||
Net asset value per share | $ | 95.15 | $ | 107.75 | ||||
|
|
|
|
a | Securities on loan with values of $16,851,455 and $7,011,810, respectively. See Note 1. |
b | No par value, unlimited number of shares authorized. |
See notes to financial statements.
FINANCIAL STATEMENTS | 49 |
Table of Contents
Statements of Operations (Unaudited)
iSHARES® TRUST
Six months ended October 31, 2017
iShares U.S. Basic Materials ETF | iShares U.S. Consumer Goods ETF | iShares U.S. Consumer Services ETF | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliated | $ | 7,284,860 | $ | 7,952,550 | $ | 5,973,515 | ||||||
Dividends — affiliated (Note 2) | 2,431 | 4,058 | 4,177 | |||||||||
Securities lending income — affiliated — net (Note 2) | 9,181 | 92,557 | 78,846 | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 7,296,472 | 8,049,165 | 6,056,538 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 1,665,999 | 1,431,431 | 1,621,024 | |||||||||
Proxy fees | 20,654 | 14,242 | 15,602 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 1,686,653 | 1,445,673 | 1,636,626 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 5,609,819 | 6,603,492 | 4,419,912 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | (3,400,102 | ) | (1,409,532 | ) | (9,811,540 | ) | ||||||
Investments — affiliated (Note 2) | (555 | ) | 259 | (4,155 | ) | |||||||
In-kind redemptions — unaffiliated | 41,809,718 | 37,011,215 | 64,384,348 | |||||||||
|
|
|
|
|
| |||||||
Net realized gain | 38,409,061 | 35,601,942 | 54,568,653 | |||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments — unaffiliated | 35,555,000 | (31,479,280 | ) | (56,711,309 | ) | |||||||
Investments — affiliated (Note 2) | (764 | ) | (3,759 | ) | (1,271 | ) | ||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | 35,554,236 | (31,483,039 | ) | (56,712,580 | ) | |||||||
|
|
|
|
|
| |||||||
Net realized and unrealized gain (loss) | 73,963,297 | 4,118,903 | (2,143,927 | ) | ||||||||
|
|
|
|
|
| |||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 79,573,116 | $ | 10,722,395 | $ | 2,275,985 | ||||||
|
|
|
|
|
|
See notes to financial statements.
50 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Operations (Unaudited) (Continued)
iSHARES® TRUST
Six months ended October 31, 2017
iShares U.S. Financial Services ETF | iShares U.S. Financials ETF | iShares U.S. Industrials ETF | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliateda | $ | 11,460,517 | $ | 16,763,571 | $ | 9,602,517 | ||||||
Dividends — affiliated (Note 2) | 660,560 | 520,260 | 5,574 | |||||||||
Securities lending income — affiliated — net (Note 2) | 4,189 | 42,538 | 24,870 | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 12,125,266 | 17,326,369 | 9,632,961 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 2,931,367 | 3,993,329 | 2,221,582 | |||||||||
Proxy fees | 30,855 | 36,598 | 21,966 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 2,962,222 | 4,029,927 | 2,243,548 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 9,163,044 | 13,296,442 | 7,389,413 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | (1,986,903 | ) | (3,960,836 | ) | (3,078,302 | ) | ||||||
Investments — affiliated (Note 2) | (16,774 | ) | (21,606 | ) | (3,015 | ) | ||||||
In-kind redemptions — unaffiliated | 57,111,721 | 45,013,917 | 43,529,773 | |||||||||
In-kind redemptions — affiliated (Note 2) | 2,524,937 | 1,585,333 | — | |||||||||
|
|
|
|
|
| |||||||
Net realized gain | 57,632,981 | 42,616,808 | 40,448,456 | |||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments — unaffiliated | 117,323,533 | 135,873,043 | 54,970,098 | |||||||||
Investments — affiliated (Note 2) | 6,845,782 | 5,559,537 | (1,370 | ) | ||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | 124,169,315 | 141,432,580 | 54,968,728 | |||||||||
|
|
|
|
|
| |||||||
Net realized and unrealized gain | 181,802,296 | 184,049,388 | 95,417,184 | |||||||||
|
|
|
|
|
| |||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 190,965,340 | $ | 197,345,830 | $ | 102,806,597 | ||||||
|
|
|
|
|
|
a | Net of foreign withholding tax of $2,475, $1,933 and $23, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 51 |
Table of Contents
Statements of Operations (Unaudited) (Continued)
iSHARES® TRUST
Six months ended October 31, 2017
iShares MSCI KLD 400 Social ETF | iShares MSCI USA ESG Select ETF | |||||||
NET INVESTMENT INCOME | ||||||||
Dividends — unaffiliateda | $ | 8,712,900 | $ | 6,433,419 | ||||
Dividends — affiliated (Note 2) | 124,387 | 167,176 | ||||||
Securities lending income — affiliated — net (Note 2) | 42,369 | 20,942 | ||||||
|
|
|
| |||||
Total investment income | 8,879,656 | 6,621,537 | ||||||
|
|
|
| |||||
EXPENSES | ||||||||
Investment advisory fees (Note 2) | 2,199,334 | 1,487,539 | ||||||
Proxy fees | 17,802 | 11,533 | ||||||
|
|
|
| |||||
Total expenses | 2,217,136 | 1,499,072 | ||||||
|
|
|
| |||||
Net investment income | 6,662,520 | 5,122,465 | ||||||
|
|
|
| |||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||
Net realized gain (loss) from: | ||||||||
Investments — unaffiliated | 878,842 | (161,623 | ) | |||||
Investments — affiliated (Note 2) | (4,232 | ) | (1,656 | ) | ||||
In-kind redemptions — unaffiliated | 36,590,431 | 10,284,492 | ||||||
In-kind redemptions — affiliated (Note 2) | 589,994 | 68,026 | ||||||
|
|
|
| |||||
Net realized gain | 38,055,035 | 10,189,239 | ||||||
|
|
|
| |||||
Net change in unrealized appreciation/depreciation on: | ||||||||
Investments — unaffiliated | 29,254,122 | 32,546,550 | ||||||
Investments — affiliated (Note 2) | 1,096,668 | 2,715,703 | ||||||
|
|
|
| |||||
Net change in unrealized appreciation/depreciation | 30,350,790 | 35,262,253 | ||||||
|
|
|
| |||||
Net realized and unrealized gain | 68,405,825 | 45,451,492 | ||||||
|
|
|
| |||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 75,068,345 | $ | 50,573,957 | ||||
|
|
|
|
a | Net of foreign withholding tax of $664 and $5,519, respectively. |
See notes to financial statements.
52 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets
iSHARES® TRUST
iShares U.S. Basic Materials ETF | iShares U.S. Consumer Goods ETF | |||||||||||||||
Six months ended October 31, 2017 (Unaudited) | Year ended April 30, 2017 | Six months October 31, 2017 (Unaudited) | Year ended April 30, 2017 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 5,609,819 | $ | 10,506,440 | $ | 6,603,492 | $ | 13,763,792 | ||||||||
Net realized gain | 38,409,061 | 35,502,872 | 35,601,942 | 47,450,962 | ||||||||||||
Net change in unrealized appreciation/depreciation | 35,554,236 | 55,005,749 | (31,483,039 | ) | (6,378,723 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 79,573,116 | 101,015,061 | 10,722,395 | 54,836,031 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (6,509,374 | ) | (9,748,115 | ) | (5,681,043 | ) | (16,041,659 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (6,509,374 | ) | (9,748,115 | ) | (5,681,043 | ) | (16,041,659 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 522,201,014 | 1,056,402,271 | 214,750,737 | 298,891,859 | ||||||||||||
Cost of shares redeemed | (616,500,114 | ) | �� | (738,205,121 | ) | (372,721,000 | ) | (569,371,600 | ) | |||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital | (94,299,100 | ) | 318,197,150 | (157,970,263 | ) | (270,479,741 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | (21,235,358 | ) | 409,464,096 | (152,928,911 | ) | (231,685,369 | ) | |||||||||
NET ASSETS | ||||||||||||||||
Beginning of period | 960,746,941 | 551,282,845 | 720,183,959 | 951,869,328 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 939,511,583 | $ | 960,746,941 | $ | 567,255,048 | $ | 720,183,959 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed net investment income included in net assets at end of period | $ | 633,670 | $ | 1,533,225 | $ | 922,449 | $ | — | ||||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 5,500,000 | 12,500,000 | 1,750,000 | 2,550,000 | ||||||||||||
Shares redeemed | (6,800,000 | ) | (8,850,000 | ) | (3,100,000 | ) | (5,000,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | (1,300,000 | ) | 3,650,000 | (1,350,000 | ) | (2,450,000 | ) | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
FINANCIAL STATEMENTS | 53 |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES® TRUST
iShares U.S. Consumer Services ETF | iShares U.S. Financial Services ETF | |||||||||||||||
Six months ended October 31, 2017 (Unaudited) | Year ended April 30, 2017 | Six months October 31, 2017 (Unaudited) | Year ended April 30, 2017 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 4,419,912 | $ | 8,631,087 | $ | 9,163,044 | $ | 13,475,920 | ||||||||
Net realized gain | 54,568,653 | 88,366,547 | 57,632,981 | 70,758,107 | ||||||||||||
Net change in unrealized appreciation/depreciation | (56,712,580 | ) | 17,754,845 | 124,169,315 | 160,824,534 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 2,275,985 | 114,752,479 | 190,965,340 | 245,058,561 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (4,672,244 | ) | (9,488,256 | ) | (9,243,964 | ) | (12,364,655 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (4,672,244 | ) | (9,488,256 | ) | (9,243,964 | ) | (12,364,655 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 306,802,445 | 188,529,023 | 258,983,620 | 1,101,417,991 | ||||||||||||
Cost of shares redeemed | (329,591,009 | ) | (584,451,919 | ) | (314,291,961 | ) | (471,125,581 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital | (22,788,564 | ) | (395,922,896 | ) | (55,308,341 | ) | 630,292,410 | |||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | (25,184,823 | ) | (290,658,673 | ) | 126,413,035 | 862,986,316 | ||||||||||
NET ASSETS | ||||||||||||||||
Beginning of period | 669,218,354 | 959,877,027 | 1,430,646,258 | 567,659,942 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 644,033,531 | $ | 669,218,354 | $ | 1,557,059,293 | $ | 1,430,646,258 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed net investment income included in net assets at end of period | $ | 284,015 | $ | 536,347 | $ | 1,852,029 | $ | 1,932,949 | ||||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 1,850,000 | 1,250,000 | 2,200,000 | 11,200,000 | ||||||||||||
Shares redeemed | (2,000,000 | ) | (3,850,000 | ) | (2,800,000 | ) | (4,650,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | (150,000 | ) | (2,600,000 | ) | (600,000 | ) | 6,550,000 | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
54 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES® TRUST
iShares U.S. Financials ETF | iShares U.S. Industrials ETF | |||||||||||||||
Six months ended October 31, 2017 (Unaudited) | Year ended April 30, 2017 | Six months October 31, 2017 (Unaudited) | Year ended April 30, 2017 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 13,296,442 | $ | 26,637,247 | $ | 7,389,413 | $ | 14,443,747 | ||||||||
Net realized gain | 42,616,808 | 103,212,261 | 40,448,456 | 83,006,910 | ||||||||||||
Net change in unrealized appreciation/depreciation | 141,432,580 | 173,407,649 | 54,968,728 | 71,275,827 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 197,345,830 | 303,257,157 | 102,806,597 | 168,726,484 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (13,957,270 | ) | (27,974,695 | ) | (7,122,157 | ) | (14,219,187 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (13,957,270 | ) | (27,974,695 | ) | (7,122,157 | ) | (14,219,187 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 585,286,498 | 1,520,325,655 | 412,344,726 | 740,482,618 | ||||||||||||
Cost of shares redeemed | (362,103,424 | ) | (1,287,579,008 | ) | (296,876,827 | ) | (644,587,072 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets from capital | 223,183,074 | 232,746,647 | 115,467,899 | 95,895,546 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE IN NET ASSETS | 406,571,634 | 508,029,109 | 211,152,339 | 250,402,843 | ||||||||||||
NET ASSETS | ||||||||||||||||
Beginning of period | 1,681,324,064 | 1,173,294,955 | 983,820,005 | 733,417,162 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 2,087,895,698 | $ | 1,681,324,064 | $ | 1,194,972,344 | $ | 983,820,005 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of period | $ | (574,932 | ) | $ | 85,896 | $ | 534,747 | $ | 267,491 | |||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 5,400,000 | 16,250,000 | 3,050,000 | 6,300,000 | ||||||||||||
Shares redeemed | (3,400,000 | ) | (13,550,000 | ) | (2,250,000 | ) | (5,400,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in shares outstanding | 2,000,000 | 2,700,000 | 800,000 | 900,000 | ||||||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
FINANCIAL STATEMENTS | 55 |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES® TRUST
iShares MSCI KLD 400 Social ETF | iShares MSCI USA ESG Select ETF | |||||||||||||||
Six months ended October 31, 2017 (Unaudited) | Year ended April 30, 2017 | Six months October 31, 2017 (Unaudited) | Year ended April 30, 2017 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 6,662,520 | $ | 9,867,601 | $ | 5,122,465 | $ | 6,759,534 | ||||||||
Net realized gain | 38,055,035 | 13,082,371 | 10,189,239 | 24,102,405 | ||||||||||||
Net change in unrealized appreciation/depreciation | 30,350,790 | 83,380,091 | 35,262,253 | 46,774,848 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 75,068,345 | 106,330,063 | 50,573,957 | 77,636,787 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (5,912,874 | ) | (9,805,524 | ) | (4,547,629 | ) | (6,710,825 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (5,912,874 | ) | (9,805,524 | ) | (4,547,629 | ) | (6,710,825 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 131,491,973 | 266,035,782 | 92,366,795 | 158,914,934 | ||||||||||||
Cost of shares redeemed | (91,124,660 | ) | (40,292,161 | ) | (25,801,733 | ) | (58,843,156 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets from capital share transactions | 40,367,313 | 225,743,621 | 66,565,062 | 100,071,778 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE IN NET ASSETS | 109,522,784 | 322,268,160 | 112,591,390 | 170,997,740 | ||||||||||||
NET ASSETS | ||||||||||||||||
Beginning of period | 822,945,453 | 500,677,293 | 528,508,524 | 357,510,784 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 932,468,237 | $ | 822,945,453 | $ | 641,099,914 | $ | 528,508,524 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed net investment income included in net assets at end of period | $ | 985,228 | $ | 235,582 | $ | 825,725 | $ | 250,889 | ||||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 1,450,000 | 3,300,000 | 900,000 | 1,750,000 | ||||||||||||
Shares redeemed | (1,000,000 | ) | (500,000 | ) | (250,000 | ) | (650,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in shares outstanding | 450,000 | 2,800,000 | 650,000 | 1,100,000 | ||||||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
56 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® TRUST
(For a share outstanding throughout each period)
iShares U.S. Basic Materials ETF | ||||||||||||||||||||||||
Six months ended Oct. 31, 2017 (Unaudited) | Year ended Apr. 30, 2017 | Year ended Apr. 30, 2016 | Year ended Apr. 30, 2015 | Year ended Apr. 30, 2014 | Year ended Apr. 30, 2013 | |||||||||||||||||||
Net asset value, beginning of period | $ | 89.37 | $ | 77.65 | $ | 84.59 | $ | 83.92 | $ | 69.93 | $ | 69.97 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment incomea | 0.67 | 1.34 | 1.39 | 1.34 | 1.49 | 1.51 | ||||||||||||||||||
Net realized and unrealized gain (loss)b | 10.26 | 11.62 | (6.93 | ) | 0.82 | 13.89 | (0.12 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 10.93 | 12.96 | (5.54 | ) | 2.16 | 15.38 | 1.39 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.88 | ) | (1.24 | ) | (1.40 | ) | (1.49 | ) | (1.39 | ) | (1.43 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (0.88 | ) | (1.24 | ) | (1.40 | ) | (1.49 | ) | (1.39 | ) | (1.43 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 99.42 | $ | 89.37 | $ | 77.65 | $ | 84.59 | $ | 83.92 | $ | 69.93 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 12.31 | %c | 16.88 | % | (6.42 | )% | 2.58 | % | 22.27 | % | 2.06 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 939,512 | $ | 960,747 | $ | 551,283 | $ | 494,880 | $ | 939,881 | $ | 506,979 | ||||||||||||
Ratio of expenses to average net assetsd | 0.44 | % | 0.44 | % | 0.44 | % | 0.43 | % | 0.45 | % | 0.46 | % | ||||||||||||
Ratio of net investment income to average net assetsd | 1.45 | % | 1.62 | % | 1.88 | % | 1.57 | % | 1.94 | % | 2.23 | % | ||||||||||||
Portfolio turnover ratee | 4 | %c | 13 | % | 13 | % | 7 | % | 16 | % | 8 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 57 |
Table of Contents
Financial Highlights (Continued)
iSHARES® TRUST
(For a share outstanding throughout each period)
iShares U.S. Consumer Goods ETF | ||||||||||||||||||||||||
Six months ended Oct. 31, 2017 (Unaudited) | Year ended Apr. 30, 2017 | Year ended Apr. 30, 2016 | Year ended Apr. 30, 2015 | Year ended Apr. 30, 2014 | Year ended Apr. 30, 2013 | |||||||||||||||||||
Net asset value, beginning of period | $ | 119.04 | $ | 111.98 | $ | 105.19 | $ | 96.90 | $ | 87.54 | $ | 73.95 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment incomea | 1.22 | 2.32 | 2.31 | 2.03 | 1.81 | 1.70 | ||||||||||||||||||
Net realized and unrealized gainb | 1.44 | 7.66 | 6.90 | 8.23 | 9.37 | 13.60 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 2.66 | 9.98 | 9.21 | 10.26 | 11.18 | 15.30 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (1.01 | ) | (2.92 | ) | (2.42 | ) | (1.97 | ) | (1.82 | ) | (1.71 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (1.01 | ) | (2.92 | ) | (2.42 | ) | (1.97 | ) | (1.82 | ) | (1.71 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 120.69 | $ | 119.04 | $ | 111.98 | $ | 105.19 | $ | 96.90 | $ | 87.54 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 2.23 | %c | 9.04 | % | 8.88 | % | 10.66 | % | 12.92 | % | 21.06 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 567,255 | $ | 720,184 | $ | 951,869 | $ | 778,411 | $ | 460,252 | $ | 494,612 | ||||||||||||
Ratio of expenses to average net assetsd | 0.44 | % | 0.44 | % | 0.44 | % | 0.43 | % | 0.45 | % | 0.46 | % | ||||||||||||
Ratio of net investment income to average net assetsd | 1.99 | % | 2.03 | % | 2.15 | % | 1.98 | % | 1.97 | % | 2.22 | % | ||||||||||||
Portfolio turnover ratee | 4 | %c | 7 | % | 4 | % | 4 | % | 9 | % | 7 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
58 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES® TRUST
(For a share outstanding throughout each period)
iShares U.S. Consumer Services ETF | ||||||||||||||||||||||||
Six months ended Oct. 31, 2017 (Unaudited) | Year ended Apr. 30, 2017 | Year ended Apr. 30, 2016 | Year ended Apr. 30, 2015 | Year ended Apr. 30, 2014 | Year ended Apr. 30, 2013 | |||||||||||||||||||
Net asset value, beginning of period | $ | 165.24 | $ | 144.34 | $ | 142.60 | $ | 118.79 | $ | 99.99 | $ | 81.99 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment incomea | 0.98 | 1.52 | 1.42 | 1.44 | 1.08 | 1.30 | ||||||||||||||||||
Net realized and unrealized gain (loss)b | (0.12 | ) | 20.99 | 1.74 | 23.64 | 18.72 | 18.02 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 0.86 | 22.51 | 3.16 | 25.08 | 19.80 | 19.32 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.96 | ) | (1.61 | ) | (1.42 | ) | (1.27 | ) | (1.00 | ) | (1.32 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (0.96 | ) | (1.61 | ) | (1.42 | ) | (1.27 | ) | (1.00 | ) | (1.32 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 165.14 | $ | 165.24 | $ | 144.34 | $ | 142.60 | $ | 118.79 | $ | 99.99 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 0.53 | %c | 15.71 | % | 2.23 | % | 21.19 | % | 19.85 | % | 23.82 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 644,034 | $ | 669,218 | $ | 959,877 | $ | 1,055,273 | $ | 421,694 | $ | 379,975 | ||||||||||||
Ratio of expenses to average net assetsd | 0.44 | % | 0.44 | % | 0.44 | % | 0.43 | % | 0.45 | % | 0.46 | % | ||||||||||||
Ratio of net investment income to average net assetsd | 1.18 | % | 1.01 | % | 0.99 | % | 1.08 | % | 0.96 | % | 1.50 | % | ||||||||||||
Portfolio turnover ratee | 5 | %c | 8 | % | 9 | % | 8 | % | 5 | % | 9 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 59 |
Table of Contents
Financial Highlights (Continued)
iSHARES® TRUST
(For a share outstanding throughout each period)
iShares U.S. Financial Services ETF | ||||||||||||||||||||||||
Six months ended Oct. 31, 2017 (Unaudited) | Year ended Apr. 30, 2017 | Year ended Apr. 30, 2016 | Year ended Apr. 30, 2015 | Year ended Apr. 30, 2014 | Year ended Apr. 30, 2013 | |||||||||||||||||||
Net asset value, beginning of period | $ | 108.38 | $ | 85.36 | $ | 91.03 | $ | 81.22 | $ | 66.98 | $ | 55.38 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment incomea | 0.78 | 1.47 | 1.28 | 1.15 | 0.94 | 0.84 | ||||||||||||||||||
Net realized and unrealized gain (loss)b | 15.21 | 22.88 | (5.66 | ) | 9.77 | 14.22 | 11.60 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 15.99 | 24.35 | (4.38 | ) | 10.92 | 15.16 | 12.44 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.79 | ) | (1.33 | ) | (1.29 | ) | (1.11 | ) | (0.92 | ) | (0.84 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (0.79 | ) | (1.33 | ) | (1.29 | ) | (1.11 | ) | (0.92 | ) | (0.84 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 123.58 | $ | 108.38 | $ | 85.36 | $ | 91.03 | $ | 81.22 | $ | 66.98 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 14.82 | %c | 28.74 | % | (4.85 | )% | 13.50 | % | 22.68 | % | 22.74 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 1,557,059 | $ | 1,430,646 | $ | 567,660 | $ | 564,372 | $ | 592,917 | $ | 428,658 | ||||||||||||
Ratio of expenses to average net assetsd | 0.44 | % | 0.44 | % | 0.44 | % | 0.43 | % | 0.45 | % | 0.46 | % | ||||||||||||
Ratio of net investment income to average net assetsd | 1.35 | % | 1.49 | % | 1.44 | % | 1.32 | % | 1.20 | % | 1.43 | % | ||||||||||||
Portfolio turnover ratee | 3 | %c | 4 | % | 5 | % | 3 | % | 4 | % | 5 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
60 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES® TRUST
(For a share outstanding throughout each period)
iShares U.S. Financials ETF | ||||||||||||||||||||||||
Six months ended Oct. 31, 2017 (Unaudited) | Year ended Apr. 30, 2017 | Year ended Apr. 30, 2016 | Year ended Apr. 30, 2015 | Year ended Apr. 30, 2014 | Year ended Apr. 30, 2013 | |||||||||||||||||||
Net asset value, beginning of period | $ | 103.79 | $ | 86.91 | $ | 88.81 | $ | 80.39 | $ | 69.55 | $ | 57.76 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment incomea | 0.79 | 1.64 | 1.44 | 1.27 | 1.15 | 1.06 | ||||||||||||||||||
Net realized and unrealized gain (loss)b | 10.96 | 16.91 | (1.81 | ) | 8.46 | 10.84 | 11.76 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 11.75 | 18.55 | (0.37 | ) | 9.73 | 11.99 | 12.82 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.82 | ) | (1.67 | ) | (1.53 | ) | (1.31 | ) | (1.15 | ) | (1.03 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (0.82 | ) | (1.67 | ) | (1.53 | ) | (1.31 | ) | (1.15 | ) | (1.03 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 114.72 | $ | 103.79 | $ | 86.91 | $ | 88.81 | $ | 80.39 | $ | 69.55 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 11.37 | %c | 21.52 | % | (0.41 | )% | 12.15 | % | 17.32 | % | 22.50 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 2,087,896 | $ | 1,681,324 | $ | 1,173,295 | $ | 1,163,414 | $ | 1,559,644 | $ | 879,785 | ||||||||||||
Ratio of expenses to average net assetsd | 0.43 | % | 0.44 | % | 0.44 | % | 0.43 | % | 0.45 | % | 0.46 | % | ||||||||||||
Ratio of net investment income to average net assetsd | 1.44 | % | 1.70 | % | 1.64 | % | 1.48 | % | 1.50 | % | 1.73 | % | ||||||||||||
Portfolio turnover ratee | 3 | %c | 6 | % | 6 | % | 6 | % | 6 | % | 10 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 61 |
Table of Contents
Financial Highlights (Continued)
iSHARES® TRUST
(For a share outstanding throughout each period)
iShares U.S. Industrials ETF | ||||||||||||||||||||||||
Six months ended Oct. 31, 2017 (Unaudited) | Year ended Apr. 30, 2017 | Year ended Apr. 30, 2016 | Year ended Apr. 30, 2015 | Year ended Apr. 30, 2014 | Year ended Apr. 30, 2013 | |||||||||||||||||||
Net asset value, beginning of period | $ | 128.60 | $ | 108.65 | $ | 107.35 | $ | 101.19 | $ | 81.15 | $ | 70.81 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment incomea | 0.97 | 1.82 | 1.59 | 1.43 | 1.28 | 1.24 | ||||||||||||||||||
Net realized and unrealized gainb | 12.85 | 19.89 | 1.35 | 6.17 | 20.14 | 10.30 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 13.82 | 21.71 | 2.94 | 7.60 | 21.42 | 11.54 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (1.00 | ) | (1.76 | ) | (1.64 | ) | (1.44 | ) | (1.38 | ) | (1.20 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (1.00 | ) | (1.76 | ) | (1.64 | ) | (1.44 | ) | (1.38 | ) | (1.20 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 141.42 | $ | 128.60 | $ | 108.65 | $ | 107.35 | $ | 101.19 | $ | 81.15 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 10.78 | %c | 20.13 | % | 2.83 | % | 7.54 | % | 26.53 | % | 16.53 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 1,194,972 | $ | 983,820 | $ | 733,417 | $ | 917,854 | $ | 895,493 | $ | 917,039 | ||||||||||||
Ratio of expenses to average net assetsd | 0.44 | % | 0.44 | % | 0.44 | % | 0.43 | % | 0.45 | % | 0.46 | % | ||||||||||||
Ratio of net investment income to average net assetsd | 1.43 | % | 1.55 | % | 1.54 | % | 1.37 | % | 1.37 | % | 1.69 | % | ||||||||||||
Portfolio turnover ratee | 2 | %c | 10 | % | 7 | % | 6 | % | 6 | % | 7 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
62 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES® TRUST
(For a share outstanding throughout each period)
iShares MSCI KLD 400 Social ETF | ||||||||||||||||||||||||
Six months ended Oct. 31, 2017 (Unaudited) | Year ended Apr. 30, 2017 | Year ended Apr. 30, 2016 | Year ended Apr. 30, 2015 | Year ended Apr. 30, 2014 | Year ended Apr. 30, 2013 | |||||||||||||||||||
Net asset value, beginning of period | $ | 88.02 | $ | 76.44 | $ | 77.09 | $ | 70.16 | $ | 59.39 | $ | 51.54 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment incomea | 0.69 | 1.22 | 1.17 | 1.04 | 0.95 | 0.90 | ||||||||||||||||||
Net realized and unrealized gain (loss)b | 7.05 | 11.54 | (0.62 | ) | 6.89 | 10.72 | 7.86 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 7.74 | 12.76 | 0.55 | 7.93 | 11.67 | 8.76 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.61 | ) | (1.18 | ) | (1.20 | ) | (1.00 | ) | (0.90 | ) | (0.91 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (0.61 | ) | (1.18 | ) | (1.20 | ) | (1.00 | ) | (0.90 | ) | (0.91 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 95.15 | $ | 88.02 | $ | 76.44 | $ | 77.09 | $ | 70.16 | $ | 59.39 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 8.83 | %c | 16.83 | % | 0.75 | % | 11.34 | % | 19.76 | % | 17.25 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 932,468 | $ | 822,945 | $ | 500,677 | $ | 431,703 | $ | 350,800 | $ | 210,836 | ||||||||||||
Ratio of expenses to average net assetsd | 0.50 | % | 0.50 | % | 0.50 | % | 0.50 | % | 0.50 | % | 0.50 | % | ||||||||||||
Ratio of net investment income to average net assetsd | 1.51 | % | 1.49 | % | 1.55 | % | 1.39 | % | 1.45 | % | 1.71 | % | ||||||||||||
Portfolio turnover ratee | 3 | %c | 10 | % | 16 | % | 14 | % | 13 | % | 11 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 63 |
Table of Contents
Financial Highlights (Continued)
iSHARES® TRUST
(For a share outstanding throughout each period)
iShares MSCI USA ESG Select ETF | ||||||||||||||||||||||||
Six months ended Oct. 31, 2017 (Unaudited) | Year ended Apr. 30, 2017 | Year ended Apr. 30, 2016 | Year ended Apr. 30, 2015 | Year ended Apr. 30, 2014 | Year ended Apr. 30, 2013 | |||||||||||||||||||
Net asset value, beginning of period | $ | 99.72 | $ | 85.12 | $ | 86.39 | $ | 78.49 | $ | 67.40 | $ | 60.98 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment incomea | 0.90 | 1.41 | 1.32 | 1.08 | 1.01 | 1.04 | ||||||||||||||||||
Net realized and unrealized gain (loss)b | 7.92 | 14.57 | (1.29 | ) | 7.89 | 11.12 | 6.42 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 8.82 | 15.98 | 0.03 | 8.97 | 12.13 | 7.46 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.79 | ) | (1.38 | ) | (1.30 | ) | (1.07 | ) | (1.04 | ) | (1.04 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (0.79 | ) | (1.38 | ) | (1.30 | ) | (1.07 | ) | (1.04 | ) | (1.04 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 107.75 | $ | 99.72 | $ | 85.12 | $ | 86.39 | $ | 78.49 | $ | 67.40 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 8.88 | %c | 18.92 | % | 0.07 | % | 11.46 | % | 18.12 | % | 12.45 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 641,100 | $ | 528,509 | $ | 357,511 | $ | 328,277 | $ | 255,081 | $ | 208,935 | ||||||||||||
Ratio of expenses to average net assetsd | 0.50 | % | 0.50 | % | 0.50 | % | 0.50 | % | 0.50 | % | 0.50 | % | ||||||||||||
Ratio of net investment income to average net assetsd | 1.72 | % | 1.53 | % | 1.58 | % | 1.29 | % | 1.38 | % | 1.71 | % | ||||||||||||
Portfolio turnover ratee | 6 | %c | 19 | % | 20 | % | 19 | % | 20 | % | 34 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
64 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Unaudited)
iSHARES® TRUST
iShares Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust was established as a Delaware statutory trust pursuant to an Agreement and Declaration of Trust dated December 16, 1999.
These financial statements relate only to the following funds (each, a “Fund,” and collectively, the “Funds”):
iShares ETF | Diversification Classification | |||
U.S. Basic Materials | Non-diversified | |||
U.S. Consumer Goods | Non-diversified | |||
U.S. Consumer Services | Diversified | |||
U.S. Financial Services | Non-diversified |
iShares ETF | Diversification Classification | |||
U.S. Financials | Diversified | |||
U.S. Industrials | Diversified | |||
MSCI KLD 400 Social | Diversified | |||
MSCI USA ESG Select | Diversified |
The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index. The investment adviser uses a “passive” or index approach to try to achieve each Fund’s investment objective.
Pursuant to the Trust’s organizational documents, the Funds’ officers and trustees are indemnified against certain liabilities that may arise out of the performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred.
1. | SIGNIFICANT ACCOUNTING POLICIES |
The following significant accounting policies are consistently followed by each Fund in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies.
SECURITY VALUATION
Each Fund’s investments are valued at fair value each day that the Fund’s listing exchange is open and, for financial reporting purposes, as of the report date should the reporting period end on a day that the Fund’s listing exchange is not open. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) provides oversight of the valuation of investments for the Funds. The investments of each Fund are valued pursuant to policies and procedures developed by the Global Valuation Committee and approved by the Board of Trustees of the Trust (the “Board”).
• | Equity investments traded on a recognized securities exchange are valued at that day’s last reported trade price or the official closing price, as applicable, on the exchange where the stock is primarily traded. Equity investments traded on a recognized exchange for which there were no sales on that day are valued at the last traded price. |
• | Open-end U.S. mutual funds (including money market funds) are valued at that day’s published net asset value (“NAV”). |
NOTESTO FINANCIAL STATEMENTS | 65 |
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iSHARES® TRUST
In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the fair value of such investment or if a price is not available, the investment will be valued by the Global Valuation Committee, in accordance with policies approved by the Board. The fair valuation approaches that may be utilized by the Global Valuation Committee to determine fair value include market approach, income approach and the cost approach. The valuation techniques used under these approaches take into consideration inputs that include but are not limited to (i) attributes specific to the investment; (ii) the principal market for the investment; (iii) the customary participants in the principal market for the investment; (iv) data assumptions by market participants for the investment, if reasonably available; (v) quoted prices for similar investments in active markets; and (vi) other inputs, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and/or default rates. Valuations based on such inputs are reported to the Board on a quarterly basis.
The Global Valuation Committee employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the Trust’s pricing vendors, a regular review of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices, reviews of large movements in market values, and reviews of market related activity.
Fair value pricing could result in a difference between the prices used to calculate a Fund’s NAV and the prices used by the Fund’s underlying index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s underlying index.
Various inputs are used in determining the fair value of financial instruments. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs to valuation techniques are categorized into a fair value hierarchy consisting of three broad levels for financial reporting purposes as follows:
• | Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities; |
• | Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability (such as exchange rates, financing terms, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs; and |
• | Level 3 — Unobservable inputs for the asset or liability based on the best information available in the circumstances, to the extent observable inputs are not available, including the Global Valuation Committee’s assumptions used in determining the fair value of investments. |
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgement exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The fair value hierarchy for each Fund’s investments is included in its schedule of investments.
Changes in valuation techniques may result in transfers in or out of an assigned level within the fair value hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of values determined for financial instruments are based on the pricing transparency of the financial instruments and are not necessarily an indication of the risks associated with investing in those securities.
66 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
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iSHARES® TRUST
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are accounted for on trade date. Realized gains and losses on investment transactions are determined using the specific identification method. Dividend income and capital gain distributions, if any, are recognized on the ex-dividend date, net of any foreign taxes withheld at source. Any taxes withheld that are reclaimable from foreign tax authorities as of October 31, 2017 are reflected in tax reclaims receivable. Upon notification from issuers, some of the dividend income received from a real estate investment trust may be re-designated as a reduction of cost of the related investment and/or realized gain. Non-cash dividends, if any, are recognized on the ex-dividend date and recorded as non-cash dividend income at fair value. Distributions received by the Funds may include a return of capital that is estimated by management. Such amounts are recorded as a reduction of the cost of investments or reclassified to capital gains. Interest income is accrued daily.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends and distributions paid by each Fund are recorded on the ex-dividend dates. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds.
LOANS OF PORTFOLIO SECURITIES
Each Fund may lend its investment securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by an approved bank, or securities issued or guaranteed by the U.S. government. The initial collateral received by each Fund is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Funds. Any additional required collateral is delivered to the Funds and any excess collateral is returned by the Funds on the next business day. During the term of the loan, each Fund is entitled to all distributions made on or in respect of the loaned securities but does not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.
Cash received as collateral for securities on loan may be reinvested in certain short-term instruments either directly on behalf of a fund or through one or more joint accounts or money market funds, including those managed by BlackRock Fund Advisors (“BFA”), the Funds’ investment adviser, or its affiliates. As of October 31, 2017, any securities on loan were collateralized by cash and/or U.S. government obligations. Cash collateral received was invested in money market funds managed by BFA and is disclosed in the schedules of investments. Any non-cash collateral received cannot be sold, re-invested or pledged by the Fund, except in the event of borrower default. The securities on loan for each Fund are also disclosed in its schedule of investments. The total value of any securities on loan as of October 31, 2017 and the total value of the related cash collateral are disclosed in the statements of assets and liabilities. Income earned by the Funds from securities lending is disclosed in the statements of operations.
The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Funds benefit from a borrower default indemnity provided by BlackRock, Inc. (“BlackRock”). BlackRock’s indemnity allows for full replacement of securities loaned if the collateral received does not cover the value of the securities loaned in the event of borrower default. Each Fund could incur a loss if the value of an investment purchased with cash collateral falls below the value of the loaned securities or if the value of an investment purchased with cash collateral falls below the value of the original cash collateral received.
NOTESTO FINANCIAL STATEMENTS | 67 |
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iSHARES® TRUST
Securities lending transactions are entered into by the Funds under Master Securities Lending Agreements (“MSLA”) which provide the right, in the event of default (including bankruptcy or insolvency) for the non-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, a Fund, as lender, would offset the market value of the collateral received against the market value of the securities loaned. The value of the collateral is typically greater than that of the market value of the securities loaned, leaving the lender with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, the borrower can resell or re-pledge the loaned securities, and a Fund can reinvest cash collateral, or, upon an event of default, resell or re-pledge the collateral.
The following table is a summary of securities lending agreements which are subject to offset under an MSLA as of October 31, 2017:
iShares ETF and Counterparty | Market Value of Securities on Loan | Cash Collateral Received a | Net Amount b | |||||||||
U.S. Basic Materials | ||||||||||||
Goldman Sachs & Co. | $ | 560,946 | $ | 560,946 | $ | — | ||||||
Jefferies LLC | 1,429,750 | 1,429,750 | — | |||||||||
Merrill Lynch, Pierce, Fenner & Smith | 1,263,600 | 1,263,600 | — | |||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 208,750 | 208,750 | — | |||||||||
State Street Bank & Trust Company | 39,676 | 39,676 | — | |||||||||
UBS AG | 589 | 589 | — | |||||||||
UBS Securities LLC | 1,220,275 | 1,214,937 | (5,338 | ) | ||||||||
Wells Fargo Securities LLC | 5,850 | 5,850 | — | |||||||||
|
|
|
|
|
| |||||||
$ | 4,729,436 | $ | 4,724,098 | $ | (5,338 | ) | ||||||
|
|
|
|
|
| |||||||
U.S. Consumer Goods | ||||||||||||
Barclays Capital Inc. | $ | 1,231,054 | $ | 1,231,054 | $ | — | ||||||
BNP Paribas Prime Brokerage Inc. | 2,251 | 2,251 | — | |||||||||
Citigroup Global Markets Inc. | 2,218,028 | 2,218,028 | — | |||||||||
Credit Suisse Securities (USA) LLC | 830,262 | 830,262 | — | |||||||||
Deutsche Bank Securities Inc. | 108,749 | 108,749 | — | |||||||||
Goldman Sachs & Co. | 570,917 | 570,917 | — | |||||||||
JPMorgan Securities LLC | 1,321,827 | 1,321,827 | — | |||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 18,404 | 18,404 | — | |||||||||
Nomura Securities International Inc. | 80,148 | 80,148 | — | |||||||||
Wells Fargo Securities LLC | 335,010 | 335,010 | — | |||||||||
|
|
|
|
|
| |||||||
$ | 6,716,650 | $ | 6,716,650 | $ | — | |||||||
|
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| |||||||
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iShares ETF and Counterparty | Market Value of Securities on Loan | Cash Collateral Received a | Net Amount b | |||||||||
U.S. Consumer Services | ||||||||||||
Barclays Capital Inc. | $ | 101,455 | $ | 101,455 | $ | — | ||||||
BNP Paribas New York Branch | 521,880 | 521,880 | — | |||||||||
BNP Paribas Prime Brokerage Inc. | 54,360 | 54,360 | — | |||||||||
Citigroup Global Markets Inc. | 1,857,915 | 1,857,915 | — | |||||||||
Credit Suisse Securities (USA) LLC | 301,249 | 301,249 | — | |||||||||
Deutsche Bank Securities Inc. | 853 | 853 | — | |||||||||
Goldman Sachs & Co. | 2,012,923 | 2,012,923 | — | |||||||||
Jefferies LLC | 1,810,334 | 1,795,246 | (15,088 | ) | ||||||||
JPMorgan Securities LLC | 1,633,949 | 1,633,949 | — | |||||||||
Merrill Lynch, Pierce, Fenner & Smith | 597,992 | 597,992 | — | |||||||||
Mizuho Securities USA Inc. | 7,646 | 7,646 | — | |||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 2,816,754 | 2,816,754 | — | |||||||||
Scotia Capital (USA) Inc. | 1,681,221 | 1,681,221 | — | |||||||||
State Street Bank & Trust Company | 263,447 | 263,447 | — | |||||||||
UBS Securities LLC | 750,050 | 750,050 | — | |||||||||
|
|
|
|
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| |||||||
$ | 14,412,028 | $ | 14,396,940 | $ | (15,088 | ) | ||||||
|
|
|
|
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| |||||||
U.S. Financial Services | ||||||||||||
Deutsche Bank Securities Inc. | $ | 228,811 | $ | 228,811 | $ | — | ||||||
Goldman Sachs & Co. | 1,674,790 | 1,674,790 | — | |||||||||
JPMorgan Securities LLC | 29,820 | 29,820 | — | |||||||||
UBS Securities LLC | 499,090 | 499,090 | — | |||||||||
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| |||||||
$ | 2,432,511 | $ | 2,432,511 | $ | — | |||||||
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| |||||||
U.S. Financials | ||||||||||||
Barclays Capital Inc. | $ | 447,962 | $ | 447,962 | $ | — | ||||||
Citigroup Global Markets Inc. | 2,210,481 | 2,210,481 | — | |||||||||
Credit Suisse Securities (USA) LLC | 1,607,561 | 1,607,561 | — | |||||||||
Deutsche Bank Securities Inc. | 605,203 | 605,203 | — | |||||||||
Goldman Sachs & Co. | 9,353,519 | 9,353,519 | — | |||||||||
HSBC Bank PLC | 1,662 | 1,662 | — | |||||||||
Jefferies LLC | 11,920 | 11,920 | — | |||||||||
JPMorgan Securities LLC | 5,676,616 | 5,676,616 | — | |||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 5,377,647 | 5,377,647 | — | |||||||||
Nomura Securities International Inc. | 2,282,186 | 2,282,186 | — | |||||||||
SG Americas Securities LLC | 957,950 | 957,950 | — | |||||||||
State Street Bank & Trust Company | 1,093,290 | 1,093,290 | — | |||||||||
UBS Securities LLC | 2,915,953 | 2,915,953 | — | |||||||||
Wells Fargo Securities LLC | 564,132 | 564,132 | — | |||||||||
|
|
|
|
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| |||||||
$ | 33,106,082 | $ | 33,106,082 | $ | — | |||||||
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| |||||||
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iSHARES® TRUST
iShares ETF and Counterparty | Market Value of Securities on Loan | Cash Collateral Received a | Net Amount b | |||||||||
U.S. Industrials | ||||||||||||
Barclays Capital Inc. | $ | 2,816 | $ | 2,816 | $ | — | ||||||
Citigroup Global Markets Inc. | 1,187,034 | 1,186,155 | (879 | ) | ||||||||
Credit Suisse Securities (USA) LLC | 794 | 794 | — | |||||||||
Deutsche Bank Securities Inc. | 47,229 | 47,229 | — | |||||||||
Goldman Sachs & Co. | 3,880,952 | 3,880,952 | — | |||||||||
HSBC Bank PLC | 1,548 | 1,548 | — | |||||||||
JPMorgan Securities LLC | 4,652,931 | 4,652,931 | — | |||||||||
Merrill Lynch, Pierce, Fenner & Smith | 8,670,901 | 8,620,517 | (50,384 | ) | ||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 4,189,741 | 4,189,741 | — | |||||||||
Nomura Securities International Inc. | 164,190 | 164,190 | — | |||||||||
State Street Bank & Trust Company | 1,816,619 | 1,816,619 | — | |||||||||
UBS Securities LLC | 294,525 | 294,525 | — | |||||||||
|
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| |||||||
$ | 24,909,280 | $ | 24,858,017 | $ | (51,263 | ) | ||||||
|
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| |||||||
MSCI KLD 400 Social | ||||||||||||
Barclays Capital Inc. | $ | 90,101 | $ | 90,101 | $ | — | ||||||
BNP Paribas Prime Brokerage Inc. | 129,307 | 129,307 | — | |||||||||
Citigroup Global Markets Inc. | 615,184 | 615,184 | — | |||||||||
Credit Suisse Securities (USA) LLC | 7,514,539 | 7,513,297 | (1,242 | ) | ||||||||
Deutsche Bank Securities Inc. | 21,482 | 21,482 | — | |||||||||
Goldman Sachs & Co. | 1,382,932 | 1,382,932 | — | |||||||||
JPMorgan Securities LLC | 4,817,024 | 4,817,024 | — | |||||||||
Merrill Lynch, Pierce, Fenner & Smith | 618,227 | 618,227 | — | |||||||||
Mizuho Securities USA Inc. | 4,021 | 4,021 | — | |||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 1,414,197 | 1,414,197 | — | |||||||||
SG Americas Securities LLC | 182,802 | 182,802 | — | |||||||||
State Street Bank & Trust Company | 61,639 | 61,569 | (70 | ) | ||||||||
|
|
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|
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| |||||||
$ | 16,851,455 | $ | 16,850,143 | $ | (1,312 | ) | ||||||
|
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|
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| |||||||
MSCI USA ESG Select | ||||||||||||
JPMorgan Securities LLC | $ | 6,041,110 | $ | 5,982,423 | $ | (58,687 | ) | |||||
Nomura Securities International Inc. | 55,020 | 55,020 | — | |||||||||
Wells Fargo Securities LLC | 915,680 | 915,680 | — | |||||||||
|
|
|
|
|
| |||||||
$ | 7,011,810 | $ | 6,953,123 | $ | (58,687 | ) | ||||||
|
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| |||||||
a | Collateral received in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by each Fund is disclosed in the Fund’s statement of assets and liabilities. |
b | Additional collateral is delivered to the Funds on the next business day in accordance with the MSLA. The net amount would be subject to the borrower default indemnity in the event of default by a counterparty. |
2. | INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES |
Pursuant to an Investment Advisory Agreement with the Trust, BFA manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock. Under the Investment Advisory Agreement, BFA is responsible for substantially all expenses of the Funds, except (i) interest and taxes; (ii) brokerage commissions and other expenses connected with the execution of portfolio transactions; (iii) distribution fees; (iv) the advisory fee payable to BFA; and (v) litigation expenses and any extraordinary expenses (in each case as determined by a majority of the independent trustees).
70 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
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iSHARES® TRUST
For its investment advisory services to each of the iShares U.S. Basic Materials, iShares U.S. Consumer Goods, iShares U.S. Consumer Services, iShares U.S. Financial Services, iShares U.S. Financials and iShares U.S. Industrials ETFs, BFA is entitled to an annual investment advisory fee, accrued daily and paid monthly by the Funds, based on each Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds, as follows:
Investment Advisory Fee | Aggregate Average Daily Net Assets | ||||
0.48 | % | First $10 billion | |||
0.43 | Over $10 billion, up to and including $20 billion | ||||
0.38 | Over $20 billion, up to and including $30 billion | ||||
0.34 | Over $30 billion, up to and including $40 billion | ||||
0.33 | Over $40 billion, up to and including $50 billion | ||||
0.31 | Over $50 billion |
For its investment advisory services to each of the following Funds, BFA is entitled to an annual investment advisory fee, accrued daily and paid monthly by the Funds, based on the average daily net assets of each Fund as follows:
iShares ETF | Investment Advisory Fee | |||
MSCI KLD 400 Social | 0.50 | % | ||
MSCI USA ESG Select | 0.50 |
The U.S. Securities and Exchange Commission has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (“BTC”), an affiliate of BFA, to serve as securities lending agent for the Funds, subject to applicable conditions. As securities lending agent, BTC bears all operational costs directly related to securities lending. Each Fund is responsible for fees in connection with the investment of cash collateral received for securities on loan in a money market fund managed by BFA, however, BTC has agreed to reduce the amount of securities lending income it receives in order to effectively limit the collateral investment fees each Fund bears to an annual rate of 0.04% (the “collateral investment fees”). Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment fees. The Funds retain a portion of securities lending income and remit the remaining portion to BTC as compensation for its services as securities lending agent.
Pursuant to a securities lending agreement, each Fund retains 71.5% of securities lending income and the amount retained can never be less than 65% of the total of securities lending income plus the collateral investment fees. In addition, commencing the business day following the date that the aggregate securities lending income plus the collateral investment fees generated across all 1940 Act iShares exchange-traded funds (the “iShares ETF Complex”) in a given calendar year exceeds the aggregate securities lending income generated across the iShares ETF Complex in the calendar year 2013, each Fund, pursuant to a securities lending agreement, will retain for the remainder of that calendar year 75% of securities lending income and the amount retained can never be less than 65% of the total of securities lending income plus the collateral investment fees.
NOTESTO FINANCIAL STATEMENTS | 71 |
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Notes to Financial Statements (Unaudited) (Continued)
iSHARES® TRUST
For the six months ended October 31, 2017, the total of securities lending agent services and collateral investment fees paid were as follows:
iShares ETF | Fees Paid to BTC | |||
U.S. Basic Materials | $ | 4,687 | ||
U.S. Consumer Goods | 39,594 | |||
U.S. Consumer Services | 33,964 | |||
U.S. Financial Services | 2,020 |
iShares ETF | Fees Paid to BTC | |||
U.S. Financials | $ | 22,206 | ||
U.S. Industrials | 11,957 | |||
MSCI KLD 400 Social | 19,337 | |||
MSCI USA ESG Select | 9,453 |
BlackRock Investments, LLC, an affiliate of BFA, is the distributor for each Fund. Pursuant to the distribution agreement, BFA is responsible for any fees or expenses for distribution services provided to the Funds.
Cross trading is the buying or selling of portfolio securities between funds to which BFA (or an affiliate) serves as investment adviser. At its regularly scheduled quarterly meetings, the Board reviews such transactions as of the most recent calendar quarter for compliance with the requirements and restrictions set forth by Rule 17a-7.
For the six months ended October 31, 2017, transactions executed by the Funds pursuant to Rule 17a-7 under the 1940 Act were as follows:
iShares ETF | Purchases | Sales | ||||||
U.S. Basic Materials | $ | 6,579,488 | $ | 10,545,726 | ||||
U.S. Consumer Goods | 4,680,161 | 1,660,063 | ||||||
U.S. Consumer Services | 1,809,352 | 2,970,954 | ||||||
U.S. Financial Services | 4,927,747 | 2,781,690 | ||||||
U.S. Financials | 7,365,331 | 4,011,613 | ||||||
U.S. Industrials | 5,820,923 | 2,877,316 | ||||||
MSCI KLD 400 Social | 4,885,379 | 3,430,917 |
Each Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is included in “Dividends – affiliated” in the statements of operations.
The PNC Financial Services Group, Inc. is the largest stockholder of BlackRock and is considered to be an affiliate of the Funds for 1940 Act purposes.
Certain trustees and officers of the Trust are also officers of BTC and/or BFA.
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iSHARES® TRUST
3. | INVESTMENT PORTFOLIO TRANSACTIONS |
Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the six months ended October 31, 2017 were as follows:
iShares ETF | Purchases | Sales | ||||||
U.S. Basic Materials | $ | 28,629,775 | $ | 43,670,293 | ||||
U.S. Consumer Goods | 37,057,176 | 27,771,287 | ||||||
U.S. Consumer Services | 34,839,900 | 34,291,046 | ||||||
U.S. Financial Services | 34,795,099 | 35,493,928 | ||||||
U.S. Financials | 55,214,494 | 50,728,119 | ||||||
U.S. Industrials | 25,155,622 | 26,604,289 | ||||||
MSCI KLD 400 Social | 30,697,426 | 29,846,144 | ||||||
MSCI USA ESG Select | 37,263,148 | 36,344,890 |
In-kind transactions (see Note 4) for the six months ended October 31, 2017 were as follows:
iShares ETF | In-kind Purchases | In-kind Sales | ||||||
U.S. Basic Materials | $ | 519,025,505 | $ | 602,474,509 | ||||
U.S. Consumer Goods | 214,098,329 | 371,805,325 | ||||||
U.S. Consumer Services | 305,794,868 | 328,841,397 | ||||||
U.S. Financial Services | 258,053,046 | 309,812,936 | ||||||
U.S. Financials | 577,524,660 | 354,636,802 | ||||||
U.S. Industrials | 411,598,030 | 295,957,449 | ||||||
MSCI KLD 400 Social | 131,146,687 | 90,885,536 | ||||||
MSCI USA ESG Select | 92,069,390 | 25,623,088 |
4. | CAPITAL SHARE TRANSACTIONS |
Capital shares are issued and redeemed by each Fund only in aggregations of a specified number of shares or multiples thereof (“Creation Units”) at NAV. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the statements of changes in net assets.
The consideration for the purchase of Creation Units of a fund in the Trust generally consists of the in-kind deposit of a designated portfolio of securities and a specified amount of cash. Certain funds in the Trust may be offered in Creation Units solely or partially for cash in U.S. dollars. Investors purchasing and redeeming Creation Units may pay a purchase transaction fee and a redemption transaction fee directly to State Street Bank and Trust Company, the Trust’s administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash. Investors transacting in Creation Units for cash may also pay an additional variable charge to compensate the relevant fund for certain transaction costs (i.e., stamp taxes, taxes on currency or other financial transactions, and brokerage costs) and market impact expenses relating to investing in portfolio securities. Such variable charges, if any, are included in “Proceeds from shares sold” in the statements of changes in net assets.
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5. | PRINCIPAL RISKS |
In the normal course of business, each Fund invests in securities or other instruments and may enter into certain transactions, and such activities subject the Fund to various risks, including, among others, fluctuations in the market (market risk) or failure of an issuer to meet all of its obligations. The value of securities or other instruments may also be affected by various factors, including, without limitation: (i) the general economy; (ii) the overall market as well as local, regional or global political and/or social instability; (iii) regulation, taxation or international tax treaties between various countries; or (iv) currency, interest rate or price fluctuations. Each Fund’s prospectus provides details of the risks to which the Fund is subject.
BFA uses a “passive” or index approach to try to achieve each Fund’s investment objective following the securities included in its underlying index during upturns as well as downturns. BFA does not take steps to reduce market exposure or to lessen the effects of a declining market. Divergence from the underlying index and the composition of the portfolio is monitored by BFA.
MARKET RISK
Market risk arises mainly from uncertainty about future values of financial instruments influenced by price, currency and interest rate movements. It represents the potential loss a fund may suffer through holding market positions in the face of market movements. A fund is exposed to market risk by its investment in equity, fixed income and/or financial derivative instruments or by its investment in underlying funds. The fair value of securities held by a fund may decline due to general market conditions, economic trends or events that are not specifically related to the issuers of the securities including local, regional or global political, social or economic instability or to factors that affect a particular industry or group of industries. The extent of a fund’s exposure to market risk is the market value of the investments held as shown in the fund’s schedule of investments.
A diversified portfolio, where this is appropriate and consistent with a fund’s objectives, minimizes the risk that a price change of a particular investment will have a material impact on the NAV of a fund. The investment concentrations within each Fund’s portfolio are disclosed in its schedule of investments.
When a fund concentrates its investments in securities within a single or limited number of market sectors, it assumes the risk that economic, political and social conditions affecting those market sectors may have a significant impact on its investment performance.
CREDIT RISK
Credit risk is the risk that an issuer or guarantor of debt instruments or the counterparty to a financial transaction, including derivatives contracts, repurchase agreements or loans of portfolio securities, is unable or unwilling to make timely interest and/or principal payments or to otherwise honor its obligations. BFA and its affiliates manage counterparty credit risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose a fund to issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of a fund’s exposure to credit and counterparty risks with respect to those financial assets is approximated by their value recorded in its statement of assets and liabilities.
6. | INCOME TAX INFORMATION |
Each Fund is treated as an entity separate from the Trust’s other funds for federal income tax purposes. It is the policy of each Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute
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substantially all of its ordinary income and any net capital gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes is required.
For purposes of U.S. GAAP, in-kind redemptions are treated as sales of securities resulting in realized capital gains or losses to the Funds. Because such gains or losses are not taxable to the Funds and are not distributed to existing Fund shareholders, the gains or losses are reclassified from accumulated net realized gain (loss) to paid-in capital at the end of the Funds’ tax year. These reclassifications have no effect on net assets or NAV per share.
The tax character of current year distributions will be determined at the end of the current fiscal year.
As of April 30, 2017, the Funds’ fiscal year-end, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:
iShares ETF | Non- Expiring a | Expiring 2018 | Expiring 2019 | Total | ||||||||||||
U.S. Basic Materials | $ | 102,078,857 | $ | 10,812,780 | $ | 64,751 | $ | 112,956,388 | ||||||||
U.S. Consumer Goods | 3,940,502 | 11,893,780 | — | 15,834,282 | ||||||||||||
U.S. Consumer Services | 14,467,536 | 6,983,187 | 1,146,492 | 22,597,215 | ||||||||||||
U.S. Financial Services | 12,113,737 | 41,743,037 | 6,373,191 | 60,229,965 | ||||||||||||
U.S. Financials | — | 52,510,524 | — | 52,510,524 | ||||||||||||
U.S. Industrials | 8,634,018 | 9,045,831 | — | 17,679,849 | ||||||||||||
MSCI KLD 400 Social | 3,140,225 | 2,143,183 | 374,960 | 5,658,368 | ||||||||||||
MSCI USA ESG Select | — | 6,055,688 | 74,125 | 6,129,813 |
a | Must be utilized prior to losses subjected to expiration. |
Management has analyzed tax laws and regulations and their application to the Funds as of October 31, 2017, inclusive of the open tax return years, and does not believe there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.
7. LEGAL PROCEEDINGS
On June 16, 2016, investors (the “Plaintiffs”) in certain iShares funds (iShares Core S&P Small-Cap ETF, iShares Russell 1000 Growth ETF, iShares Core S&P 500 ETF, iShares Russell Mid-Cap Growth ETF, iShares Russell Mid-Cap ETF, iShares Russell Mid-Cap Value ETF, iShares Select Dividend ETF, iShares Morningstar Mid-Cap ETF, iShares Morningstar Large-Cap ETF, iShares U.S. Aerospace & Defense ETF and iShares U.S. Preferred Stock ETF) filed a putative class action lawsuit against iShares Trust, BlackRock, Inc. and certain of its advisory affiliates, and certain directors/trustees and officers of the Funds (collectively, “Defendants”). The lawsuit alleges the Defendants violated federal securities laws by failing to adequately disclose in the prospectuses issued by the funds noted above the risks of using stop-loss orders in the event of a ‘flash crash’, such as the one that occurred on May 6, 2010. On September 18, 2017, the Court issued a Statement of Decision holding that the Plaintiffs lack standing to assert their claims. On October 11, 2017, the Court entered final judgment dismissing all of the Plaintiffs’ claims with prejudice. Plaintiffs have appealed the Court’s decision.
8. | SUBSEQUENT EVENTS |
Management has evaluated the impact of all subsequent events on the Funds through the date the financial statements were available to be issued and has determined that there were no subsequent events requiring adjustment or disclosure in the financial statements.
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I. iShares U.S. Basic Materials ETF, iShares U.S. Financial Services ETF and iShares U.S. Financials ETF
Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required annually to consider and approve the Investment Advisory Contract between the Trust and BFA (the “Advisory Contract”) on behalf of the Funds. The Independent Trustees requested, and BFA provided, such information as the Independent Trustees, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management on May 5, 2017 and May 12, 2017. At these meetings, the 15(c) Committee reviewed and discussed information provided in response to the 15(c) Committee’s initial requests, and requested certain additional information, which management agreed to provide. At a meeting held on May 18, 2017, management presented information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its meetings. The Board, including the Independent Trustees, reviewed and discussed such information at length. The Independent Trustees requested from management certain additional information, which management agreed to provide. At a meeting held on June 19-21, 2017, the Board, including the Independent Trustees, reviewed the additional information provided by management in response to these requests. After extensive discussions, the Board, including all of the Independent Trustees, approved the continuance of the Advisory Contract for the Funds, based on a review of qualitative and quantitative information provided by BFA. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Board also noted that the Board and BFA agreed to discuss potential further enhancements to the 15(c) process for the coming year. The Independent Trustees were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Contract for the Funds, the Board, including the Independent Trustees, considered the following factors, no one of which was controlling, and reached the following conclusions:
Expenses and Performance of the Funds — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of each Fund in comparison with the same information for other exchange traded funds (“ETFs”) (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising such Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of the proprietary ETF methodology used by Broadridge to determine the applicable Peer Groups. The Board further noted that due to the limitations in providing comparable funds in the various Peer Groups, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Funds in all instances.
The Board also noted that the investment advisory fee rates and overall expenses (net of waivers and reimbursements) for the Funds were within range of the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in their respective Peer Group, excluding iShares funds.
In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as any particular Fund, Broadridge also provided, and the Board reviewed, a comparison of such Fund’s performance for the one-, three-, five-, ten-year, and since inception periods, as applicable, and for the quarter ended December 31, 2016, to that of relevant comparison funds for the same periods.
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The Board noted that each Fund seeks to track its specified underlying index and that, during the year, the Board received periodic reports on each Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative performance information, including any additional detailed information requested by the Boards, was also considered. The Board noted that each Fund generally performed in line with its underlying index over the relevant periods.
Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and the historical performance of each Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, including information about recent and proposed enhancements to the iShares business, including with respect to capital markets support and analysis, technology, product design, compliance and risk management, and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the iShares funds and their shareholders. The Board also considered BFA’s compliance program and its compliance record with respect to the Funds. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Funds, as well as the resources available to them in managing the Funds. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the June 19-21, 2017 meeting and throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that each Fund had met its investment objective consistently since its respective inception date.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Funds under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Costs of Services Provided to Funds and Profits Realized by BFA and Affiliates — The Board reviewed information about the profitability of the Funds to BlackRock, on a Fund-by-Fund basis and in the aggregate, based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and other sources of revenue and expense to BFA and its affiliates from the Funds’ operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, including supplemental information that was responsive to requests of the 15(c) Committee. The Board noted that the 15(c) Committee had focused on the methodology and profitability presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC, a BFA affiliate, from securities lending by the Funds. The Board also discussed BFA’s profit margin as reflected in the Funds’ profitability analyses and reviewed information regarding potential economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Funds and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.
Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Funds’ assets, noting that the issue of economies of scale had been focused on by the 15(c) Committee during its meetings and addressed by management, including through supplemental information. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through relatively
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low fee rates established at inception, breakpoints and waivers or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BlackRock’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished, among other things, between fixed and variable costs, and explained how the level of fixed and variable costs, as well as the nature of such costs, may impact the existence or size of scale benefits. The Board noted that the Advisory Contract for the Funds already provided for breakpoints in the Funds’ investment advisory fee rates as the assets of the Funds, on an aggregated basis with the assets of certain other iShares funds, increase. The Board noted that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding new or revised breakpoints in the future.
Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider the Advisory Contract at least annually, determined to approve the continuance of the Advisory Contract for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same investment objectives and strategies as the Funds and that track the same index as the Funds. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Funds, including in terms of the different and generally more extensive services provided to the Funds, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Funds, as publicly traded ETFs, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged BFA’s expressed business purpose for launching a suite of iShares “Core” ETFs that generally are subject to lower investment advisory fees than iShares non-Core ETFs that may provide a similar investment exposure. The Board also considered the “all-inclusive” nature of the Funds’ advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rates under the Advisory Contract for the Funds were generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.
Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Funds by BFA, such as payment of revenue to BTC, the Funds’ securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Funds in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board also noted the revenue received by BFA and/or its affiliates pursuant to an agreement that permits a service provider to use certain portions of BlackRock’s technology platform to service accounts managed by BFA and/or its affiliates, including the iShares funds. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Funds. The Board further noted that any portfolio transactions on behalf of the Funds placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits
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would not be disadvantageous to the Funds’ shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.
Conclusion — Based on the considerations described above, the Board determined that each Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded to approve the continuance of the Advisory Contract for the coming year.
II. iShares U.S. Consumer Goods ETF, iShares U.S. Consumer Services ETF and iShares U.S. Industrials ETF
Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required annually to consider and approve the Investment Advisory Contract between the Trust and BFA (the “Advisory Contract”) on behalf of the Funds. The Independent Trustees requested, and BFA provided, such information as the Independent Trustees, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management on May 5, 2017 and May 12, 2017. At these meetings, the 15(c) Committee reviewed and discussed information provided in response to the 15(c) Committee’s initial requests, and requested certain additional information, which management agreed to provide. At a meeting held on May 18, 2017, management presented information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its meetings. The Board, including the Independent Trustees, reviewed and discussed such information at length. The Independent Trustees requested from management certain additional information, which management agreed to provide. At a meeting held on June 19-21, 2017, the Board, including the Independent Trustees, reviewed the additional information provided by management in response to these requests. After extensive discussions, the Board, including all of the Independent Trustees, approved the continuance of the Advisory Contract for the Funds, based on a review of qualitative and quantitative information provided by BFA. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Board also noted that the Board and BFA agreed to discuss potential further enhancements to the 15(c) process for the coming year. The Independent Trustees were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Contract for the Funds, the Board, including the Independent Trustees, considered the following factors, no one of which was controlling, and reached the following conclusions:
Expenses and Performance of the Funds — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of each Fund in comparison with the same information for other exchange traded funds (“ETFs”) (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising such Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of the proprietary ETF methodology used by Broadridge to determine the applicable Peer Groups. The Board further noted that due to the limitations in providing comparable funds in the various Peer Groups, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Funds in all instances.
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The Board also noted that the investment advisory fee rates and overall expenses (net of waivers and reimbursements) for the Funds were lower than the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in their respective Peer Group, excluding iShares funds.
In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as any particular Fund, Broadridge also provided, and the Board reviewed, a comparison of such Fund’s performance for the one-, three-, five-, ten-year, and since inception periods, as applicable, and for the quarter ended December 31, 2016, to that of relevant comparison funds for the same periods.
The Board noted that each Fund seeks to track its specified underlying index and that, during the year, the Board received periodic reports on each Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative performance information, including any additional detailed information requested by the Boards, was also considered. The Board noted that each Fund generally performed in line with its underlying index over the relevant periods.
Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and the historical performance of each Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, including information about recent and proposed enhancements to the iShares business, including with respect to capital markets support and analysis, technology, product design, compliance and risk management, and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the iShares funds and their shareholders. The Board also considered BFA’s compliance program and its compliance record with respect to the Funds. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Funds, as well as the resources available to them in managing the Funds. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the June 19-21, 2017 meeting and throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that each Fund had met its investment objective consistently since its respective inception date.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Funds under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Costs of Services Provided to Funds and Profits Realized by BFA and Affiliates — The Board reviewed information about the profitability of the Funds to BlackRock, on a Fund-by-Fund basis and in the aggregate, based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and other sources of revenue and expense to BFA and its affiliates from the Funds’ operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, including supplemental information that was responsive to requests of the 15(c) Committee. The Board noted that the 15(c) Committee had focused on the methodology and profitability presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC, a BFA affiliate, from securities lending
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by the Funds. The Board also discussed BFA’s profit margin as reflected in the Funds’ profitability analyses and reviewed information regarding potential economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Funds and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.
Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Funds’ assets, noting that the issue of economies of scale had been focused on by the 15(c) Committee during its meetings and addressed by management, including through supplemental information. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through relatively low fee rates established at inception, breakpoints and waivers or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BlackRock’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished, among other things, between fixed and variable costs, and explained how the level of fixed and variable costs, as well as the nature of such costs, may impact the existence or size of scale benefits. The Board noted that the Advisory Contract for the Funds already provided for breakpoints in the Funds’ investment advisory fee rates as the assets of the Funds, on an aggregated basis with the assets of certain other iShares funds, increase. The Board noted that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding new or revised breakpoints in the future.
Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider the Advisory Contract at least annually, determined to approve the continuance of the Advisory Contract for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same investment objectives and strategies as the Funds and that track the same index as the Funds. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Funds, including in terms of the different and generally more extensive services provided to the Funds, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Funds, as publicly traded ETFs, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged BFA’s expressed business purpose for launching a suite of iShares “Core” ETFs that generally are subject to lower investment advisory fees than iShares non-Core ETFs that may provide a similar investment exposure. The Board also considered the “all-inclusive” nature of the Funds’ advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rates under the Advisory Contract for the Funds were generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.
Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Funds by BFA, such as payment of revenue to BTC, the Funds’ securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant
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Contract (Continued)
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to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Funds in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board also noted the revenue received by BFA and/or its affiliates pursuant to an agreement that permits a service provider to use certain portions of BlackRock’s technology platform to service accounts managed by BFA and/or its affiliates, including the iShares funds. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Funds. The Board further noted that any portfolio transactions on behalf of the Funds placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Funds’ shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.
Conclusion — Based on the considerations described above, the Board determined that each Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded to approve the continuance of the Advisory Contract for the coming year.
III. iShares MSCI KLD 400 Social ETF and iShares MSCI USA ESG Select ETF
Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required annually to consider and approve the Investment Advisory Contract between the Trust and BFA (the “Advisory Contract”) on behalf of the Funds. The Independent Trustees requested, and BFA provided, such information as the Independent Trustees, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management on May 5, 2017 and May 12, 2017. At these meetings, the 15(c) Committee reviewed and discussed information provided in response to the 15(c) Committee’s initial requests, and requested certain additional information, which management agreed to provide. At a meeting held on May 18, 2017, management presented information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its meetings. The Board, including the Independent Trustees, reviewed and discussed such information at length. The Independent Trustees requested from management certain additional information, which management agreed to provide. At a meeting held on June 19-21, 2017, the Board, including the Independent Trustees, reviewed the additional information provided by management in response to these requests. After extensive discussions, the Board, including all of the Independent Trustees, approved the continuance of the Advisory Contract for the Funds, based on a review of qualitative and quantitative information provided by BFA. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Board also noted that the Board and BFA agreed to discuss potential further enhancements to the 15(c) process for the coming year. The Independent Trustees were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Contract for the Funds, the Board, including the Independent Trustees, considered the following factors, no one of which was controlling, and reached the following conclusions:
Expenses and Performance of the Funds — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of each Fund in comparison with the same information for other exchange traded funds (“ETFs”) (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison
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Board Review and Approval of Investment Advisory
Contract (Continued)
iSHARES® TRUST
group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising such Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of the proprietary ETF methodology used by Broadridge to determine the applicable Peer Groups. The Board further noted that due to the limitations in providing comparable funds in the various Peer Groups, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Funds in all instances.
The Board also noted that the investment advisory fee rates and overall expenses (net of waivers and reimbursements) for the Funds were within range of the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in their respective Peer Group, excluding iShares funds.
In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as any particular Fund, Broadridge also provided, and the Board reviewed, a comparison of such Fund’s performance for the one-, three-, five-, ten-year, and since inception periods, as applicable, and for the quarter ended December 31, 2016, to that of relevant comparison funds for the same periods.
The Board noted that each Fund seeks to track its specified underlying index and that, during the year, the Board received periodic reports on each Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative performance information, including any additional detailed information requested by the Boards, was also considered. The Board noted that each Fund generally performed in line with its underlying index over the relevant periods.
Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and the historical performance of each Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, including information about recent and proposed enhancements to the iShares business, including with respect to capital markets support and analysis, technology, product design, compliance and risk management, and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the iShares funds and their shareholders. The Board also considered BFA’s compliance program and its compliance record with respect to the Funds. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Funds, as well as the resources available to them in managing the Funds. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the June 19-21, 2017 meeting and throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that each Fund had met its investment objective consistently since its respective inception date.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Funds under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 83 |
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Board Review and Approval of Investment Advisory
Contract (Continued)
iSHARES® TRUST
Costs of Services Provided to Funds and Profits Realized by BFA and Affiliates — The Board reviewed information about the profitability of the Funds to BlackRock, on a Fund-by-Fund basis and in the aggregate, based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and other sources of revenue and expense to BFA and its affiliates from the Funds’ operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, including supplemental information that was responsive to requests of the 15(c) Committee. The Board noted that the 15(c) Committee had focused on the methodology and profitability presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC, a BFA affiliate, from securities lending by the Funds. The Board also discussed BFA’s profit margin as reflected in the Funds’ profitability analyses and reviewed information regarding potential economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Funds and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.
Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Funds’ assets, noting that the issue of economies of scale had been focused on by the 15(c) Committee during its meetings and addressed by management, including through supplemental information. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through relatively low fee rates established at inception, breakpoints and waivers or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BlackRock’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished, among other things, between fixed and variable costs, and explained how the level of fixed and variable costs, as well as the nature of such costs, may impact the existence or size of scale benefits. The Board noted that the Advisory Contract for the Funds did not provide for any breakpoints in the Funds’ investment advisory fee rates as the assets of the Funds increase. However, the Board noted that should material economies of scale be identified in the future that are not otherwise shared, a breakpoint structure for the Funds may be appropriate, and that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding breakpoints in the future.
Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider the Advisory Contract at least annually, determined to approve the continuance of the Advisory Contract for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same investment objectives and strategies as the Funds and that track the same index as the Funds. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Funds, including in terms of the different and generally more extensive services provided to the Funds, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Funds, as publicly traded ETFs, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged BFA’s expressed business purpose for launching a suite of iShares “Core” ETFs that generally are subject to lower investment advisory fees than iShares non-Core ETFs that may provide a similar investment
84 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
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Board Review and Approval of Investment Advisory
Contract (Continued)
iSHARES® TRUST
exposure. The Board also considered the “all-inclusive” nature of the Funds’ advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rates under the Advisory Contract for the Funds were generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.
Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Funds by BFA, such as payment of revenue to BTC, the Funds’ securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Funds in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board also noted the revenue received by BFA and/or its affiliates pursuant to an agreement that permits a service provider to use certain portions of BlackRock’s technology platform to service accounts managed by BFA and/or its affiliates, including the iShares funds. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Funds. The Board further noted that any portfolio transactions on behalf of the Funds placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Funds’ shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.
Conclusion — Based on the considerations described above, the Board determined that each Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded to approve the continuance of the Advisory Contract for the coming year.
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 85 |
Table of Contents
Supplemental Information (Unaudited)
iSHARES® TRUST
Proxy Results
A special meeting of the shareholders of each series of iShares Trust (the “Trust”) was held on June 19, 2017, to elect five Trustees to the Board of Trustees of the Trust. The five nominees were Jane D. Carlin, Richard L. Fagnani, Drew E. Lawton, Madhav V. Rajan and Mark Wiedman, all of whom were elected as Trustees at the special meeting. The other Trustees whose terms of office as Trustees continued after the special meeting are Cecilia H. Herbert, Charles A. Hurty, John E. Kerrigan, John E. Martinez and Robert S. Kapito.
Trustee | Votes For | Votes Withheld | ||||||
Jane D. Carlin | 49,298,818 | 57,986 | ||||||
Richard L. Fagnani | 49,294,053 | 62,752 | ||||||
Drew E. Lawton | 49,296,485 | 60,320 | ||||||
Madhav V. Rajan | 49,289,721 | 67,084 | ||||||
Mark Wiedman | 49,289,957 | 66,848 |
Section 19(a) Notices
The amounts and sources of distributions reported are estimates and are provided pursuant to regulatory requirements and are not being provided for tax reporting purposes. The actual amounts and sources for tax reporting purposes will depend upon each Fund’s investment experience during the year and may be subject to changes based on the tax regulations. Shareholders will receive a Form 1099-DIV each calendar year that will inform them how to report these distributions for federal income tax purposes.
Total Cumulative Distributions for the Fiscal Year-to-Date | % Breakdown of the Total Cumulative Distributions for the Fiscal Year-to-Date | |||||||||||||||||||||||||||||||
iShares ETF | Net Investment Income | Net Realized Capital Gains | Return of Capital | Total Per | Net Investment | Net Realized Capital Gains | Return of Capital | Total Per Share | ||||||||||||||||||||||||
U.S. Consumer Goods | $ | 0.950462 | $ | — | $ | 0.062699 | $ | 1.013161 | 94 | % | — | % | 6 | % | 100 | % | ||||||||||||||||
U.S. Financial Services | 0.790919 | — | 0.000792 | 0.791711 | 100 | — | 0 | a | 100 | |||||||||||||||||||||||
U.S. Financials | 0.663660 | — | 0.155100 | 0.818760 | 81 | — | 19 | 100 | ||||||||||||||||||||||||
MSCI KLD 400 Social | 0.602251 | — | 0.010890 | 0.613141 | 98 | — | 2 | 100 | ||||||||||||||||||||||||
MSCI USA ESG Select | 0.778315 | — | 0.011902 | 0.790217 | 98 | — | 2 | 100 |
a | Rounds to less than 1%. |
86 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
For more information visit www.iShares.com or call 1-800-iShares (1-800-474-2737)
This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.
Investing involves risk, including possible loss of principal.
The iShares Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).
The iShares Funds are not sponsored, endorsed, issued, sold, or promoted by S&P Dow Jones Indices, LLC or MSCI Inc., nor do these companies make any representation regarding the advisability of investing in the iShares Funds. BlackRock is not affiliated with the companies listed above.
A description of the policies that the Funds use to determine how to vote proxies relating to portfolio securities and information about how the Funds voted proxies relating to portfolio securities during the most recent twelve-month period ending June 30 is available without charge, upon request, by calling toll-free 1-800-474-2737; on the Funds’ website at www.iShares.com; and on the U.S. Securities and Exchange Commission (SEC) website at www.sec.gov.
The Funds file their complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website or may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Funds also disclose their complete schedules of portfolio holdings on a daily basis on the Funds’ website.
©2017 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc. or its subsidiaries. All other marks are the property of their respective owners.
iS-SAR-402-1017
Table of Contents
OCTOBER 31, 2017
2017 SEMI-ANNUAL REPORT (UNAUDITED) |
iShares Trust
Ø | iShares Core Dividend Growth ETF | DGRO | NYSE Arca |
Ø | iShares Core High Dividend ETF | HDV | NYSE Arca |
Ø | iShares International Select Dividend ETF | IDV | Cboe BZX |
Ø | iShares Select Dividend ETF | DVY | NASDAQ |
Table of Contents
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9 | ||||
9 | ||||
10 | ||||
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22 | ||||
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Table of Contents
iSHARES® CORE DIVIDEND GROWTH ETF
Performance as of October 31, 2017
The iShares Core Dividend Growth ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. equities with a history of consistently growing dividends, as represented by the Morningstar® U.S. Dividend Growth IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month reporting period ended October 31, 2017, the total return for the Fund was 9.00%, net of fees, while the total return for the Index was 9.01%.
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 24.53% | 24.52% | 24.59% | 24.53% | 24.52% | 24.59% | ||||||||||||||||||||||
Since Inception | 11.16% | 11.17% | 11.21% | 43.22% | 43.25% | 43.36% |
The inception date of the Fund was 6/10/14. The first day of secondary market trading was 6/12/14.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 9 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,090.00 | $ | 0.42 | $ | 1,000.00 | $ | 1,024.80 | $ | 0.41 | 0.08% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 9 for more information. |
ALLOCATION BY SECTOR
As of 10/31/17
Sector | Percentage of Total Investments* | |||
Information Technology | 18.28 | % | ||
Financials | 16.84 | |||
Health Care | 16.04 | |||
Industrials | 12.59 | |||
Consumer Staples | 12.26 | |||
Consumer Discretionary | 10.90 | |||
Materials | 5.29 | |||
Energy | 3.96 | |||
Utilities | 3.82 | |||
Real Estate | 0.01 | |||
Telecommunication Services | 0.01 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 10/31/17
Security | Percentage of Total Investments* | |||
Microsoft Corp. | 3.23 | % | ||
Exxon Mobil Corp. | 3.03 | |||
Johnson & Johnson | 3.02 | |||
Apple Inc. | 2.99 | |||
Pfizer Inc. | 2.91 | |||
JPMorgan Chase & Co. | 2.90 | |||
Wells Fargo & Co. | 2.89 | |||
Procter & Gamble Co. (The) | 2.41 | |||
Cisco Systems Inc. | 2.29 | |||
Coca-Cola Co. (The) | 2.10 | |||
|
| |||
TOTAL | 27.77 | % | ||
|
|
* | Excludes money market funds. |
FUND PERFORMANCE OVERVIEW | 5 |
Table of Contents
Fund Performance Overview
iSHARES® CORE HIGH DIVIDEND ETF
Performance as of October 31, 2017
The iShares Core High Dividend ETF (the “Fund”) seeks to track the investment results of an index composed of relatively high dividend paying U.S. equities, as represented by the Morningstar® Dividend Yield Focus IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month reporting period ended October 31, 2017, the total return for the Fund was 4.69%, net of fees, while the total return for the Index was 4.72%.
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 11.79% | 11.77% | 11.85% | 11.79% | 11.77% | 11.85% | ||||||||||||||||||||||
5 Years | 11.03% | 11.01% | 11.24% | 68.70% | 68.59% | 70.35% | ||||||||||||||||||||||
Since Inception | 12.02% | 12.02% | 12.32% | 111.40% | 111.36% | 115.04% |
The inception date of the Fund was 3/29/11. The first day of secondary market trading was 3/31/11.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 9 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,046.90 | $ | 0.41 | $ | 1,000.00 | $ | 1,024.80 | $ | 0.41 | 0.08% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 9 for more information. |
ALLOCATION BY SECTOR
As of 10/31/17
Sector | Percentage of Total Investments* |
Consumer Staples | 21.74 | % | ||
Energy | 19.22 | |||
Telecommunication Services | 13.46 | |||
Information Technology | 12.69 | |||
Health Care | 11.11 | |||
Financials | 7.43 | |||
Utilities | 7.06 | |||
Industrials | 4.06 | |||
Consumer Discretionary | 2.37 | |||
Materials | 0.86 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 10/31/17
Security | Percentage of Total Investments* |
Exxon Mobil Corp. | 8.98 | % | ||
AT&T Inc. | 7.20 | |||
Verizon Communications Inc. | 6.25 | |||
Chevron Corp. | 5.52 | |||
Pfizer Inc. | 5.13 | |||
Wells Fargo & Co. | 5.10 | |||
Procter & Gamble Co. (The) | 4.26 | |||
Intel Corp. | 4.24 | |||
Cisco Systems Inc. | 4.04 | |||
Philip Morris International Inc. | 3.71 | |||
|
| |||
TOTAL | 54.43 | % | ||
|
|
* | Excludes money market funds. |
6 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Fund Performance Overview
iSHARES® INTERNATIONAL SELECT DIVIDEND ETF
Performance as of October 31, 2017
The iShares International Select Dividend ETF (the “Fund”) seeks to track the investment results of an index composed of relatively high dividend paying equities in non-U.S. developed markets, as represented by the Dow Jones EPAC Select Dividend IndexTM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month reporting period ended October 31, 2017, the total return for the Fund was 7.83%, net of fees, while the total return for the Index was 7.86%.
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 19.66% | 19.72% | 20.00% | 19.66% | 19.72% | 20.00% | ||||||||||||||||||||||
5 Years | 5.66% | 5.58% | 5.86% | 31.69% | 31.18% | 32.95% | ||||||||||||||||||||||
10 Years | 0.61% | 0.40% | 0.73% | 6.28% | 4.06% | 7.54% |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 9 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,078.30 | $ | 2.62 | $ | 1,000.00 | $ | 1,022.70 | $ | 2.55 | 0.50% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 9 for more information. |
ALLOCATION BY SECTOR
As of 10/31/17
Sector | Percentage of Total Investments* |
Financials | 31.76 | % | ||
Utilities | 12.08 | |||
Energy | 11.66 | |||
Consumer Discretionary | 10.06 | |||
Telecommunication Services | 9.62 | |||
Industrials | 7.85 | |||
Health Care | 6.58 | |||
Consumer Staples | 4.28 | |||
Materials | 2.93 | |||
Information Technology | 2.58 | |||
Real Estate | 0.60 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST COUNTRIES
As of 10/31/17
Country | Percentage of Total Investments* |
United Kingdom | 23.85 | % | ||
Australia | 15.80 | |||
France | 10.16 | |||
Italy | 7.93 | |||
Canada | 6.69 | |||
Finland | 5.74 | |||
Spain | 4.86 | |||
Sweden | 3.90 | |||
Switzerland | 3.85 | |||
New Zealand | 3.56 | |||
|
| |||
TOTAL | 86.34 | % | ||
|
|
* | Excludes money market funds. |
FUND PERFORMANCE OVERVIEW | 7 |
Table of Contents
Fund Performance Overview
iSHARES® SELECT DIVIDEND ETF
Performance as of October 31, 2017
The iShares Select Dividend ETF (the “Fund”) seeks to track the investment results of an index composed of relatively high dividend paying U.S. equities, as represented by the Dow Jones U.S. Select Dividend IndexTM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month reporting period ended October 31, 2017, the total return for the Fund was 5.18%, net of fees, while the total return for the Index was 5.40%.
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 16.33% | 16.31% | 16.82% | 16.33% | 16.31% | 16.82% | ||||||||||||||||||||||
5 Years | 14.03% | 14.03% | 14.47% | 92.80% | 92.81% | 96.53% | ||||||||||||||||||||||
10 Years | 6.98% | 7.00% | 7.63% | 96.39% | 96.77% | 108.69% |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 9 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,051.80 | $ | 2.02 | $ | 1,000.00 | $ | 1,023.20 | $ | 1.99 | 0.39% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 9 for more information. |
ALLOCATION BY SECTOR
As of 10/31/17
Sector | Percentage of Total Investments* |
Utilities | 29.90 | % | ||
Consumer Discretionary | 14.42 | |||
Financials | 14.11 | |||
Industrials | 11.45 | |||
Energy | 9.32 | |||
Consumer Staples | 7.88 | |||
Materials | 7.13 | |||
Health Care | 2.46 | |||
Telecommunication Services | 1.70 | |||
Information Technology | 1.63 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 10/31/17
Security | Percentage of Total Investments* |
Lockheed Martin Corp. | 4.17 | % | ||
CME Group Inc. | 3.26 | |||
McDonald’s Corp. | 2.44 | |||
NextEra Energy Inc. | 2.34 | |||
Chevron Corp. | 2.27 | |||
Caterpillar Inc. | 2.23 | |||
Entergy Corp. | 2.04 | |||
Philip Morris International Inc. | 1.98 | |||
DTE Energy Co. | 1.81 | |||
Sempra Energy | 1.78 | |||
|
| |||
TOTAL | 24.32 | % | ||
|
|
* | Excludes money market funds. |
8 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.ishares.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are redeemed or sold in the market. Performance for certain funds may reflect a waiver of a portion of investment advisory fees. Without such a waiver, performance would have been lower.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Certain funds may have a NAV which is determined prior to the opening of regular trading on its listed exchange and their market returns are calculated using the midpoint of the bid/ask spread as of the opening of regular trading on the exchange. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower.
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of fund shares and (2) ongoing costs, including management fees and other fund expenses. The expense example, which is based on an investment of $1,000 invested on May 1, 2017 and held through October 31, 2017, is intended to help you understand your ongoing costs (in dollars and cents) of investing in a Fund and to compare these costs with the ongoing costs of investing in other funds.
Actual Expenses — The table provides information about actual account values and actual expenses. Annualized expense ratios reflect contractual and voluntary fee waivers, if any. To estimate the expenses that you paid on your account over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number corresponding to your Fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Example for Comparison Purposes — The table also provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of fund shares. Therefore, the hypothetical examples are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
ABOUT FUND PERFORMANCE / SHAREHOLDER EXPENSES | 9 |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES® CORE DIVIDEND GROWTH ETF
October 31, 2017
Security | Shares | Value | ||||||
COMMON STOCKS — 99.74% |
| |||||||
AEROSPACE & DEFENSE — 3.94% |
| |||||||
Boeing Co. (The) | 114,318 | $ | 29,491,758 | |||||
BWX Technologies Inc. | 7,128 | 427,110 | ||||||
General Dynamics Corp. | 40,464 | 8,213,383 | ||||||
HEICO Corp. | 657 | 59,577 | ||||||
HEICO Corp. Class A | 993 | 75,567 | ||||||
Huntington Ingalls Industries Inc. | 4,412 | 1,027,246 | ||||||
L3 Technologies Inc. | 11,059 | 2,070,024 | ||||||
Lockheed Martin Corp. | 51,447 | 15,853,907 | ||||||
Northrop Grumman Corp. | 22,357 | 6,607,164 | ||||||
Raytheon Co. | 43,678 | 7,870,775 | ||||||
United Technologies Corp. | 161,312 | 19,318,725 | ||||||
|
| |||||||
91,015,236 | ||||||||
AIR FREIGHT & LOGISTICS — 1.22% |
| |||||||
CH Robinson Worldwide Inc. | 29,577 | 2,322,682 | ||||||
Expeditors International of Washington Inc. | 23,290 | 1,359,670 | ||||||
FedEx Corp. | 19,829 | 4,477,587 | ||||||
United Parcel Service Inc. Class B | 170,802 | 20,074,359 | ||||||
|
| |||||||
28,234,298 | ||||||||
AIRLINES — 0.11% |
| |||||||
Southwest Airlines Co. | 45,442 | 2,447,506 | ||||||
|
| |||||||
2,447,506 | ||||||||
AUTO COMPONENTS — 0.19% |
| |||||||
Autoliv Inc. | 16,363 | 2,043,084 | ||||||
Gentex Corp. | 54,325 | 1,054,448 | ||||||
Lear Corp. | 7,712 | 1,354,150 | ||||||
|
| |||||||
4,451,682 | ||||||||
AUTOMOBILES — 0.12% |
| |||||||
Harley-Davidson Inc. | 45,544 | 2,156,053 | ||||||
Thor Industries Inc. | 5,000 | 681,100 | ||||||
|
| |||||||
2,837,153 | ||||||||
BANKS — 9.05% |
| |||||||
Associated Banc-Corp. | 29,559 | 747,843 | ||||||
Bank of the Ozarks Inc. | 18,453 | 860,279 | ||||||
BB&T Corp. | 201,281 | 9,911,076 | ||||||
BOK Financial Corp. | 4,953 | 428,286 | ||||||
Chemical Financial Corp. | 15,556 | 819,646 | ||||||
Columbia Banking System Inc. | 12,307 | 535,478 | ||||||
Comerica Inc. | 23,342 | 1,833,981 | ||||||
Commerce Bancshares Inc./MO | 13,106 | 762,245 | ||||||
Community Bank System Inc. | 11,374 | 628,868 |
Security | Shares | Value | ||||||
Cullen/Frost Bankers Inc. | 13,536 | $ | 1,333,296 | |||||
First Financial Bankshares Inc. | 11,267 | 514,339 | ||||||
First Horizon National Corp. | 44,335 | 832,168 | ||||||
First Republic Bank/CA | 9,623 | 937,280 | ||||||
Home BancShares Inc./AR | 22,598 | 508,003 | ||||||
Hope Bancorp Inc. | 37,793 | 697,281 | ||||||
Huntington Bancshares Inc./OH | 237,723 | 3,280,577 | ||||||
Independent Bank Corp./Rockland MA | 4,675 | 337,068 | ||||||
JPMorgan Chase & Co. | 663,692 | 66,774,052 | ||||||
KeyCorp | 208,370 | 3,802,752 | ||||||
LegacyTexas Financial Group Inc. | 5,273 | 210,340 | ||||||
MB Financial Inc. | 15,812 | 726,403 | ||||||
Old National Bancorp./IN | 38,033 | 692,201 | ||||||
People’s United Financial Inc. | 123,639 | 2,307,104 | ||||||
PNC Financial Services Group Inc. (The)a | 98,860 | 13,523,059 | ||||||
Prosperity Bancshares Inc. | 14,271 | 938,746 | ||||||
Simmons First National Corp. Class A | 5,553 | 320,408 | ||||||
South State Corp. | 4,316 | 388,656 | ||||||
SunTrust Banks Inc. | 121,445 | 7,312,203 | ||||||
TowneBank/Portsmouth VA | 9,448 | 316,508 | ||||||
U.S. Bancorp. | 297,192 | 16,161,301 | ||||||
UMB Financial Corp. | 6,186 | 454,857 | ||||||
Umpqua Holdings Corp. | 70,459 | 1,441,591 | ||||||
Union Bankshares Corp. | 10,345 | 357,006 | ||||||
Webster Financial Corp. | 18,319 | 1,007,362 | ||||||
Wells Fargo & Co. | 1,187,326 | 66,656,482 | ||||||
WesBanco Inc. | 10,395 | 419,958 | ||||||
Westamerica Bancorp. | 7,254 | 422,400 | ||||||
|
| |||||||
209,201,103 | ||||||||
BEVERAGES — 3.91% |
| |||||||
Brown-Forman Corp. Class A | 7,042 | 403,718 | ||||||
Brown-Forman Corp. Class B | 22,718 | 1,295,380 | ||||||
Coca-Cola Co. (The) | 1,050,500 | 48,301,990 | ||||||
Dr Pepper Snapple Group Inc. | 39,048 | 3,344,852 | ||||||
PepsiCo Inc. | 335,973 | 37,034,304 | ||||||
|
| |||||||
90,380,244 | ||||||||
BIOTECHNOLOGY — 2.97% |
| |||||||
AbbVie Inc. | 450,105 | 40,621,976 | ||||||
Amgen Inc. | 159,931 | 28,023,110 | ||||||
|
| |||||||
68,645,086 | ||||||||
BUILDING PRODUCTS — 0.43% |
| |||||||
AO Smith Corp. | 12,893 | 763,266 |
10 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® CORE DIVIDEND GROWTH ETF
October 31, 2017
Security | Shares | Value | ||||||
Apogee Enterprises Inc. | 3,628 | $ | 173,164 | |||||
Johnson Controls International PLC | 200,229 | 8,287,478 | ||||||
Lennox International Inc. | 4,174 | 797,777 | ||||||
|
| |||||||
10,021,685 | ||||||||
CAPITAL MARKETS — 3.47% |
| |||||||
Ameriprise Financial Inc. | 31,417 | 4,918,017 | ||||||
Bank of New York Mellon Corp. (The) | 164,565 | 8,466,869 | ||||||
BlackRock Inc.a | 25,536 | 12,023,115 | ||||||
Cboe Global Markets Inc. | 10,189 | 1,151,968 | ||||||
CME Group Inc. | 59,492 | 8,160,518 | ||||||
Cohen & Steers Inc. | 5,498 | 239,108 | ||||||
Eaton Vance Corp. NVS | 24,517 | 1,237,373 | ||||||
Evercore Inc. Class A | 6,690 | 535,869 | ||||||
FactSet Research Systems Inc. | 4,784 | 908,338 | ||||||
Franklin Resources Inc. | 53,972 | 2,273,840 | ||||||
Goldman Sachs Group Inc. (The) | 41,942 | 10,170,096 | ||||||
Invesco Ltd. | 125,526 | 4,492,576 | ||||||
Janus Henderson Group PLC | 59,423 | 2,064,949 | ||||||
Legg Mason Inc. | 23,193 | 885,509 | ||||||
MarketAxess Holdings Inc. | 2,541 | 442,134 | ||||||
Moody’s Corp. | 16,097 | 2,292,374 | ||||||
Morningstar Inc. | 1,967 | 167,608 | ||||||
Northern Trust Corp. | 35,469 | 3,317,061 | ||||||
S&P Global Inc. | 23,769 | 3,719,135 | ||||||
SEI Investments Co. | 11,503 | 742,059 | ||||||
State Street Corp. | 52,878 | 4,864,776 | ||||||
T Rowe Price Group Inc. | 56,381 | 5,237,795 | ||||||
TD Ameritrade Holding Corp. | 36,230 | 1,811,138 | ||||||
|
| |||||||
80,122,225 | ||||||||
CHEMICALS — 4.44% |
| |||||||
Air Products & Chemicals Inc. | 48,786 | 7,777,952 | ||||||
Albemarle Corp. | 10,294 | 1,450,322 | ||||||
Ashland Global Holdings Inc. | 8,176 | 555,804 | ||||||
Balchem Corp. | 1,606 | 135,370 | ||||||
Cabot Corp. | 13,055 | 795,833 | ||||||
Celanese Corp. Series A | 22,245 | 2,320,376 | ||||||
DowDuPont Inc. | 562,403 | 40,667,361 | ||||||
Eastman Chemical Co. | 29,602 | 2,688,158 | ||||||
Ecolab Inc. | 25,112 | 3,281,134 | ||||||
FMC Corp. | 8,912 | 827,568 | ||||||
HB Fuller Co. | 5,148 | 292,767 | ||||||
International Flavors & Fragrances Inc. | 12,406 | 1,828,892 |
Security | Shares | Value | ||||||
LyondellBasell Industries NV Class A | 108,354 | $ | 11,217,890 | |||||
Monsanto Co. | 68,668 | 8,315,695 | ||||||
NewMarket Corp. | 1,380 | 552,538 | ||||||
PolyOne Corp. | 10,774 | 496,358 | ||||||
PPG Industries Inc. | 37,754 | 4,388,525 | ||||||
Praxair Inc. | 58,211 | 8,505,791 | ||||||
Quaker Chemical Corp. | 1,321 | 205,178 | ||||||
RPM International Inc. | 28,318 | 1,510,199 | ||||||
Scotts Miracle-Gro Co. (The) Class A | 8,131 | 810,010 | ||||||
Sensient Technologies Corp. | 6,518 | 495,694 | ||||||
Sherwin-Williams Co. (The) | 6,966 | 2,752,615 | ||||||
Valvoline Inc. | 16,493 | 396,162 | ||||||
Westlake Chemical Corp. | 3,360 | 285,297 | ||||||
|
| |||||||
102,553,489 | ||||||||
COMMERCIAL SERVICES & SUPPLIES — 0.58% |
| |||||||
ABM Industries Inc. | 7,630 | 320,231 | ||||||
Brady Corp. Class A | 10,759 | 409,380 | ||||||
Cintas Corp. | 7,389 | 1,101,256 | ||||||
Healthcare Services Group Inc. | 9,619 | 508,749 | ||||||
Herman Miller Inc. | 11,097 | 372,859 | ||||||
HNI Corp. | 12,230 | 418,511 | ||||||
Matthews International Corp. Class A | 3,340 | 209,919 | ||||||
MSA Safety Inc. | 5,955 | 473,422 | ||||||
Republic Services Inc. | 38,783 | 2,523,610 | ||||||
Rollins Inc. | 8,925 | 391,897 | ||||||
Steelcase Inc. Class A | 29,834 | 434,085 | ||||||
Waste Management Inc. | 76,987 | 6,326,022 | ||||||
|
| |||||||
13,489,941 | ||||||||
COMMUNICATIONS EQUIPMENT — 2.51% |
| |||||||
Cisco Systems Inc. | 1,546,521 | 52,813,692 | ||||||
Harris Corp. | 17,683 | 2,463,596 | ||||||
Motorola Solutions Inc. | 30,433 | 2,755,404 | ||||||
|
| |||||||
58,032,692 | ||||||||
CONSUMER FINANCE — 0.60% |
| |||||||
American Express Co. | 93,723 | 8,952,421 | ||||||
Discover Financial Services | 75,472 | 5,021,152 | ||||||
|
| |||||||
13,973,573 | ||||||||
CONTAINERS & PACKAGING — 0.47% |
| |||||||
AptarGroup Inc. | 8,448 | 735,567 | ||||||
Avery Dennison Corp. | 14,788 | 1,570,042 | ||||||
Bemis Co. Inc. | 22,306 | 1,004,216 |
SCHEDULESOF INVESTMENTS | 11 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® CORE DIVIDEND GROWTH ETF
October 31, 2017
Security | Shares | Value | ||||||
Packaging Corp. of America | 18,160 | $ | 2,111,463 | |||||
Silgan Holdings Inc. | 8,227 | 240,640 | ||||||
Sonoco Products Co. | 27,307 | 1,414,230 | ||||||
WestRock Co. | 60,995 | 3,740,823 | ||||||
|
| |||||||
10,816,981 | ||||||||
DISTRIBUTORS — 0.19% |
| |||||||
Core-Mark Holding Co. Inc. | 5,726 | 195,027 | ||||||
Genuine Parts Co. | 39,565 | 3,490,820 | ||||||
Pool Corp. | 5,350 | 646,173 | ||||||
|
| |||||||
4,332,020 | ||||||||
DIVERSIFIED CONSUMER SERVICES — 0.05% |
| |||||||
Adtalem Global Education Inc. | 6,359 | 234,965 | ||||||
Service Corp. International/U.S. | 24,603 | 872,422 | ||||||
|
| |||||||
1,107,387 | ||||||||
DIVERSIFIED TELECOMMUNICATION SERVICES — 0.01% |
| |||||||
ATN International Inc. | 2,288 | 124,215 | ||||||
|
| |||||||
124,215 | ||||||||
ELECTRIC UTILITIES — 1.97% |
| |||||||
ALLETE Inc. | 12,222 | 957,594 | ||||||
Alliant Energy Corp. | 58,292 | 2,521,712 | ||||||
Edison International | 75,684 | 6,050,936 | ||||||
El Paso Electric Co. | 8,527 | 490,302 | ||||||
Eversource Energy | 81,993 | 5,136,042 | ||||||
IDACORP Inc. | 10,581 | 973,769 | ||||||
MGE Energy Inc. | 6,329 | 418,030 | ||||||
NextEra Energy Inc. | 105,537 | 16,365,623 | ||||||
Pinnacle West Capital Corp. | 28,010 | 2,456,757 | ||||||
PNM Resources Inc. | 15,943 | 691,926 | ||||||
Portland General Electric Co. | 22,401 | 1,069,424 | ||||||
Westar Energy Inc. | 38,460 | 2,056,841 | ||||||
Xcel Energy Inc. | 125,651 | 6,222,237 | ||||||
|
| |||||||
45,411,193 | ||||||||
ELECTRICAL EQUIPMENT — 0.71% |
| |||||||
AZZ Inc. | 3,265 | 156,067 | ||||||
Eaton Corp. PLC | 127,258 | 10,183,185 | ||||||
Hubbell Inc. | 11,941 | 1,502,417 | ||||||
Regal Beloit Corp. | 5,603 | 454,683 | ||||||
Rockwell Automation Inc. | 20,550 | 4,126,851 | ||||||
|
| |||||||
16,423,203 | ||||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS — 0.60% |
| |||||||
Amphenol Corp. Class A | 20,704 | 1,801,248 | ||||||
AVX Corp. | 10,651 | 200,665 | ||||||
Corning Inc. | 167,009 | 5,229,052 |
Security | Shares | Value | ||||||
FLIR Systems Inc. | 18,941 | $ | 886,817 | |||||
Littelfuse Inc. | 1,476 | 308,484 | ||||||
TE Connectivity Ltd. | 60,866 | 5,536,980 | ||||||
|
| |||||||
13,963,246 | ||||||||
FOOD & STAPLES RETAILING — 3.02% |
| |||||||
Casey’s General Stores Inc. | 3,223 | 369,259 | ||||||
Costco Wholesale Corp. | 47,024 | 7,574,626 | ||||||
CVS Health Corp. | 216,371 | 14,827,905 | ||||||
Kroger Co. (The) | 169,543 | 3,509,540 | ||||||
Sysco Corp. | 103,230 | 5,741,652 | ||||||
Wal-Mart Stores Inc. | 316,894 | 27,668,015 | ||||||
Walgreens Boots Alliance Inc. | 153,166 | 10,150,311 | ||||||
|
| |||||||
69,841,308 | ||||||||
FOOD PRODUCTS — 1.53% |
| |||||||
Archer-Daniels-Midland Co. | 144,608 | 5,910,129 | ||||||
Bunge Ltd. | 29,169 | 2,006,244 | ||||||
General Mills Inc. | 175,892 | 9,132,313 | ||||||
Hershey Co. (The) | 30,020 | 3,187,524 | ||||||
Hormel Foods Corp. | 51,349 | 1,600,035 | ||||||
Ingredion Inc. | 10,033 | 1,257,636 | ||||||
J&J Snack Foods Corp. | 1,785 | 237,708 | ||||||
JM Smucker Co. (The) | 28,393 | 3,011,078 | ||||||
Kellogg Co. | 67,426 | 4,216,148 | ||||||
Lancaster Colony Corp. | 3,117 | 390,311 | ||||||
McCormick & Co. Inc./MD NVS | 19,531 | 1,943,920 | ||||||
Tyson Foods Inc. Class A | 34,228 | 2,495,563 | ||||||
|
| |||||||
35,388,609 | ||||||||
GAS UTILITIES — 0.34% |
| |||||||
Atmos Energy Corp. | 19,023 | 1,659,567 | ||||||
National Fuel Gas Co. | 21,036 | 1,221,140 | ||||||
New Jersey Resources Corp. | 17,909 | 796,055 | ||||||
Southwest Gas Holdings Inc. | 10,367 | 854,137 | ||||||
Spire Inc. | 11,500 | 907,925 | ||||||
UGI Corp. | 30,941 | 1,480,836 | ||||||
WGL Holdings Inc. | 10,873 | 931,816 | ||||||
|
| |||||||
7,851,476 | ||||||||
HEALTH CARE EQUIPMENT & SUPPLIES — 2.54% |
| |||||||
Abbott Laboratories | 305,810 | 16,584,076 | ||||||
Baxter International Inc. | 43,707 | 2,817,790 | ||||||
Becton Dickinson and Co. | 28,382 | 5,922,472 | ||||||
C.R. Bard Inc. | 2,013 | 658,392 | ||||||
Cantel Medical Corp. | 764 | 74,933 | ||||||
DENTSPLY SIRONA Inc. | 12,444 | 759,955 | ||||||
Hill-Rom Holdings Inc. | 5,574 | 449,878 |
12 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® CORE DIVIDEND GROWTH ETF
October 31, 2017
Security | Shares | Value | ||||||
Medtronic PLC | 265,235 | $ | 21,356,722 | |||||
ResMed Inc. | 21,890 | 1,842,700 | ||||||
STERIS PLC | 10,510 | 980,898 | ||||||
Stryker Corp. | 33,069 | 5,121,396 | ||||||
West Pharmaceutical Services Inc. | 3,957 | 401,240 | ||||||
Zimmer Biomet Holdings Inc. | 14,470 | 1,759,842 | ||||||
|
| |||||||
58,730,294 | ||||||||
HEALTH CARE PROVIDERS & SERVICES — 1.95% |
| |||||||
AmerisourceBergen Corp. | 25,002 | 1,923,904 | ||||||
Anthem Inc. | 29,876 | 6,250,358 | ||||||
Cardinal Health Inc. | 72,721 | 4,501,430 | ||||||
Chemed Corp. | 931 | 208,013 | ||||||
Humana Inc. | 7,726 | 1,972,834 | ||||||
McKesson Corp. | 16,163 | 2,228,554 | ||||||
Owens & Minor Inc. | 14 | 344 | ||||||
Patterson Companies Inc. | 260 | 9,620 | ||||||
Quest Diagnostics Inc. | 19,516 | 1,830,211 | ||||||
UnitedHealth Group Inc. | 124,265 | 26,122,988 | ||||||
|
| |||||||
45,048,256 | ||||||||
HOTELS, RESTAURANTS & LEISURE — 2.60% |
| |||||||
Brinker International Inc. | 104 | 3,195 | ||||||
Cheesecake Factory Inc. (The) | 196 | 8,769 | ||||||
Cracker Barrel Old Country Store Inc. | 6,969 | 1,088,070 | ||||||
Darden Restaurants Inc. | 34,381 | 2,828,525 | ||||||
Dunkin’ Brands Group Inc. | 19,422 | 1,147,258 | ||||||
Marriott International Inc./MD Class A | 34,597 | 4,133,650 | ||||||
McDonald’s Corp. | 163,583 | 27,303,638 | ||||||
Royal Caribbean Cruises Ltd. | 23,708 | 2,934,339 | ||||||
Starbucks Corp. | 225,992 | 12,393,401 | ||||||
Texas Roadhouse Inc. | 10,829 | 541,558 | ||||||
Vail Resorts Inc. | 6,395 | 1,464,583 | ||||||
Wendy’s Co. (The) | 30,927 | 470,400 | ||||||
Wyndham Worldwide Corp. | 20,835 | 2,226,220 | ||||||
Yum! Brands Inc. | 46,278 | 3,445,397 | ||||||
|
| |||||||
59,989,003 | ||||||||
HOUSEHOLD DURABLES — 0.19% |
| |||||||
Leggett & Platt Inc. | 35,343 | 1,670,310 | ||||||
Whirlpool Corp. | 16,129 | 2,644,027 | ||||||
|
| |||||||
4,314,337 | ||||||||
HOUSEHOLD PRODUCTS — 3.62% |
| |||||||
Church & Dwight Co. Inc. | 32,923 | 1,487,132 | ||||||
Clorox Co. (The) | 27,073 | 3,425,547 |
Security | Shares | Value | ||||||
Colgate-Palmolive Co. | 167,658 | $ | 11,811,506 | |||||
Kimberly-Clark Corp. | 96,938 | 10,906,494 | ||||||
Procter & Gamble Co. (The) | 644,637 | 55,657,959 | ||||||
WD-40 Co. | 2,294 | 254,290 | ||||||
|
| |||||||
83,542,928 | ||||||||
INDUSTRIAL CONGLOMERATES — 2.06% |
| |||||||
3M Co. | 117,998 | 27,161,960 | ||||||
Carlisle Companies Inc. | 8,609 | 945,526 | ||||||
Honeywell International Inc. | 126,250 | 18,200,200 | ||||||
Roper Technologies Inc. | 5,334 | 1,377,079 | ||||||
|
| |||||||
47,684,765 | ||||||||
INSURANCE — 3.60% |
| |||||||
Aflac Inc. | 70,910 | 5,948,640 | ||||||
Allstate Corp. (The) | 52,082 | 4,888,416 | ||||||
American Equity Investment Life Holding Co. | 2,309 | 68,139 | ||||||
American Financial Group Inc./OH | 7,724 | 814,805 | ||||||
AmTrust Financial Services Inc. | 47,385 | 595,156 | ||||||
Aon PLC | 22,283 | 3,196,051 | ||||||
Arthur J Gallagher & Co. | 41,237 | 2,611,539 | ||||||
Aspen Insurance Holdings Ltd. | 11,754 | 504,247 | ||||||
Assurant Inc. | 10,957 | 1,102,822 | ||||||
Assured Guaranty Ltd. | 14,954 | 554,793 | ||||||
Axis Capital Holdings Ltd. | 19,782 | 1,075,943 | ||||||
Brown & Brown Inc. | 12,104 | 603,263 | ||||||
Chubb Ltd. | 81,645 | 12,313,699 | ||||||
Cincinnati Financial Corp. | 33,853 | 2,375,465 | ||||||
CNO Financial Group Inc. | 2,808 | 67,308 | ||||||
Erie Indemnity Co. Class A | 4,245 | 512,796 | ||||||
FBL Financial Group Inc. Class A | 2,515 | 194,535 | ||||||
First American Financial Corp. | 26,959 | 1,467,109 | ||||||
FNF Group | 50,819 | 1,901,647 | ||||||
Horace Mann Educators Corp. | 11,537 | 505,321 | ||||||
Lincoln National Corp. | 32,588 | 2,469,519 | ||||||
Marsh & McLennan Companies Inc. | 82,845 | 6,704,646 | ||||||
Primerica Inc. | 4,404 | 389,754 | ||||||
Principal Financial Group Inc. | 70,225 | 4,624,316 | ||||||
Prudential Financial Inc. | 108,308 | 11,963,702 | ||||||
Reinsurance Group of America Inc. | 6,950 | 1,038,191 | ||||||
RenaissanceRe Holdings Ltd. | 3,554 | 491,731 | ||||||
RLI Corp. | 5,551 | 328,008 | ||||||
Torchmark Corp. | 7,526 | 633,162 | ||||||
Travelers Companies Inc. (The) | 57,443 | 7,608,325 | ||||||
Unum Group | 37,092 | 1,930,268 |
SCHEDULESOF INVESTMENTS | 13 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® CORE DIVIDEND GROWTH ETF
October 31, 2017
Security | Shares | Value | ||||||
Validus Holdings Ltd. | 22,967 | $ | 1,196,121 | |||||
WR Berkley Corp. | 7,496 | 514,076 | ||||||
XL Group Ltd. | 50,309 | 2,036,005 | ||||||
|
| |||||||
83,229,518 | ||||||||
INTERNET & DIRECT MARKETING RETAIL — 0.05% |
| |||||||
Expedia Inc. | 8,783 | 1,094,889 | ||||||
|
| |||||||
1,094,889 | ||||||||
INTERNET SOFTWARE & SERVICES — 0.03% |
| |||||||
j2 Global Inc. | 8,947 | 663,331 | ||||||
|
| |||||||
663,331 | ||||||||
IT SERVICES — 4.16% |
| |||||||
Accenture PLC Class A | 96,994 | 13,808,066 | ||||||
Automatic Data Processing Inc. | 79,747 | 9,271,386 | ||||||
Booz Allen Hamilton Holding Corp. | 25,400 | 959,866 | ||||||
Broadridge Financial Solutions Inc. | 16,965 | 1,457,633 | ||||||
Convergys Corp. | 14,319 | 368,428 | ||||||
Fidelity National Information Services Inc. | 35,572 | 3,299,659 | ||||||
International Business Machines Corp. | 307,253 | 47,335,397 | ||||||
Jack Henry & Associates Inc. | 8,149 | 897,449 | ||||||
Mastercard Inc. Class A | 52,647 | 7,832,294 | ||||||
Visa Inc. Class A | 99,473 | 10,940,041 | ||||||
|
| |||||||
96,170,219 | ||||||||
LEISURE PRODUCTS — 0.15% |
| |||||||
Hasbro Inc. | 23,621 | 2,187,068 | ||||||
Polaris Industries Inc. | 11,729 | 1,389,066 | ||||||
|
| |||||||
3,576,134 | ||||||||
MACHINERY — 1.82% |
| |||||||
Albany International Corp. Class A | 3,394 | 204,828 | ||||||
Barnes Group Inc. | 4,216 | 274,419 | ||||||
Cummins Inc. | 36,344 | 6,428,527 | ||||||
Donaldson Co. Inc. | 17,762 | 838,544 | ||||||
Dover Corp. | 29,045 | 2,773,507 | ||||||
Flowserve Corp. | 21,697 | 956,187 | ||||||
Franklin Electric Co. Inc. | 4,237 | 192,784 | ||||||
Graco Inc. | 6,160 | 811,826 | ||||||
Hillenbrand Inc. | 13,137 | 519,568 | ||||||
IDEX Corp. | 8,415 | 1,078,887 | ||||||
Illinois Tool Works Inc. | 50,074 | 7,837,583 | ||||||
Ingersoll-Rand PLC | 41,028 | 3,635,081 | ||||||
ITT Inc. | 10,135 | 472,696 | ||||||
Kennametal Inc. | 16,319 | 712,324 | ||||||
Lincoln Electric Holdings Inc. | 8,823 | 808,804 |
Security | Shares | Value | ||||||
Nordson Corp. | 4,926 | $ | 624,075 | |||||
PACCAR Inc. | 45,940 | 3,295,276 | ||||||
Pentair PLC | 31,641 | 2,229,425 | ||||||
Snap-on Inc. | 9,580 | 1,511,532 | ||||||
Stanley Black & Decker Inc. | 23,085 | 3,729,382 | ||||||
Toro Co. (The) | 11,193 | 703,480 | ||||||
Trinity Industries Inc. | 23,650 | 769,098 | ||||||
Wabtec Corp./DE | 5,351 | 409,352 | ||||||
Xylem Inc./NY | 17,807 | 1,184,700 | ||||||
|
| |||||||
42,001,885 | ||||||||
MARINE — 0.00% |
| |||||||
Matson Inc. | 148 | 4,030 | ||||||
|
| |||||||
4,030 | ||||||||
MEDIA — 2.63% |
| |||||||
CBS Corp. Class B NVS | 36,074 | 2,024,473 | ||||||
Comcast Corp. Class A | 611,815 | 22,043,694 | ||||||
John Wiley & Sons Inc. Class A | 9,528 | 520,705 | ||||||
Meredith Corp. | 12,698 | 672,994 | ||||||
Omnicom Group Inc. | 59,162 | 3,975,095 | ||||||
Scripps Networks Interactive Inc. Class A | 11,741 | 977,791 | ||||||
Sinclair Broadcast Group Inc. Class A | 16,688 | 529,010 | ||||||
Time Warner Inc. | 105,660 | 10,385,321 | ||||||
Walt Disney Co. (The) | 201,654 | 19,723,778 | ||||||
|
| |||||||
60,852,861 | ||||||||
METALS & MINING — 0.36% |
| |||||||
Compass Minerals International Inc. | 3,798 | 249,149 | ||||||
Kaiser Aluminum Corp. | 3,132 | 310,632 | ||||||
Nucor Corp. | 74,364 | 4,300,470 | ||||||
Reliance Steel & Aluminum Co. | 15,316 | 1,176,881 | ||||||
Royal Gold Inc. | 6,037 | 507,772 | ||||||
Steel Dynamics Inc. | 37,157 | 1,382,612 | ||||||
Worthington Industries Inc. | 6,608 | 300,664 | ||||||
|
| |||||||
8,228,180 | ||||||||
MULTI-UTILITIES — 1.30% |
| |||||||
Avista Corp. | 15,213 | 794,727 | ||||||
Black Hills Corp. | 11,784 | 769,024 | ||||||
CMS Energy Corp. | 66,386 | 3,211,091 | ||||||
DTE Energy Co. | 45,152 | 4,987,490 | ||||||
MDU Resources Group Inc. | 48,018 | 1,313,292 | ||||||
NiSource Inc. | 72,590 | 1,914,198 | ||||||
NorthWestern Corp. | 14,194 | 841,420 |
14 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® CORE DIVIDEND GROWTH ETF
October 31, 2017
Security | Shares | Value | ||||||
SCANA Corp. | 49,747 | $ | 2,146,086 | |||||
Sempra Energy | 60,004 | 7,050,470 | ||||||
Vectren Corp. | 18,303 | 1,247,167 | ||||||
WEC Energy Group Inc. | 85,272 | 5,746,480 | ||||||
|
| |||||||
30,021,445 | ||||||||
MULTILINE RETAIL — 0.79% |
| |||||||
Dillard’s Inc. Class A | 1,243 | 63,144 | ||||||
Kohl’s Corp. | 74,743 | 3,121,268 | ||||||
Macy’s Inc. | 176,958 | 3,319,732 | ||||||
Target Corp. | 198,441 | 11,715,957 | ||||||
|
| |||||||
18,220,101 | ||||||||
OIL, GAS & CONSUMABLE FUELS — 3.95% |
| |||||||
Andeavor | 29,203 | 3,102,527 | ||||||
Exxon Mobil Corp. | 837,643 | 69,817,544 | ||||||
Marathon Petroleum Corp. | 118,526 | 7,080,743 | ||||||
Phillips 66 | 122,701 | 11,175,607 | ||||||
|
| |||||||
91,176,421 | ||||||||
PAPER & FOREST PRODUCTS — 0.01% |
| |||||||
Neenah Paper Inc. | 2,797 | 242,780 | ||||||
|
| |||||||
242,780 | ||||||||
PERSONAL PRODUCTS — 0.14% |
| |||||||
Estee Lauder Companies Inc. (The) Class A | 24,007 | 2,684,222 | ||||||
Nu Skin Enterprises Inc. Class A | 10,103 | 642,652 | ||||||
|
| |||||||
3,326,874 | ||||||||
PHARMACEUTICALS — 8.54% |
| |||||||
Bristol-Myers Squibb Co. | 363,202 | 22,395,035 | ||||||
Johnson & Johnson | 498,867 | 69,547,049 | ||||||
Merck & Co. Inc. | 682,794 | 37,615,121 | ||||||
Perrigo Co. PLC | 9,535 | 772,240 | ||||||
Pfizer Inc. | 1,909,724 | 66,954,923 | ||||||
|
| |||||||
197,284,368 | ||||||||
PROFESSIONAL SERVICES — 0.15% |
| |||||||
Dun & Bradstreet Corp. (The) | 5,819 | 679,834 | ||||||
Equifax Inc. | 1,113 | 120,794 | ||||||
Insperity Inc. | 2,331 | 221,212 | ||||||
ManpowerGroup Inc. | 9,615 | 1,185,337 | ||||||
Robert Half International Inc. | 23,642 | 1,223,946 | ||||||
|
| |||||||
3,431,123 | ||||||||
REAL ESTATE MANAGEMENT & DEVELOPMENT — 0.01% |
| |||||||
Jones Lang LaSalle Inc. | 2,432 | 314,920 | ||||||
|
| |||||||
314,920 |
Security | Shares | Value | ||||||
ROAD & RAIL — 1.18% |
| |||||||
CSX Corp. | 123,925 | $ | 6,249,538 | |||||
JB Hunt Transport Services Inc. | 6,991 | 743,772 | ||||||
Kansas City Southern | 11,642 | 1,213,329 | ||||||
Ryder System Inc. | 10,921 | 885,475 | ||||||
Union Pacific Corp. | 156,770 | 18,152,398 | ||||||
|
| |||||||
27,244,512 | ||||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT — 3.66% |
| |||||||
Analog Devices Inc. | 68,320 | 6,237,616 | ||||||
Broadcom Ltd. | 56,569 | 14,929,125 | ||||||
KLA-Tencor Corp. | 33,379 | 3,634,639 | ||||||
Maxim Integrated Products Inc. | 74,317 | 3,904,615 | ||||||
Microchip Technology Inc. | 33,375 | 3,163,950 | ||||||
MKS Instruments Inc. | 4,148 | 450,680 | ||||||
QUALCOMM Inc. | 567,462 | 28,946,237 | ||||||
Texas Instruments Inc. | 205,072 | 19,828,412 | ||||||
Xilinx Inc. | 46,262 | 3,409,047 | ||||||
|
| |||||||
84,504,321 | ||||||||
SOFTWARE — 4.29% |
| |||||||
Activision Blizzard Inc. | 30,430 | 1,992,861 | ||||||
Intuit Inc. | 19,961 | 3,014,510 | ||||||
Microsoft Corp. | 896,229 | 74,548,328 | ||||||
Oracle Corp. | 382,421 | 19,465,229 | ||||||
|
| |||||||
99,020,928 | ||||||||
SPECIALTY RETAIL — 3.28% |
| |||||||
Best Buy Co. Inc. | 55,268 | 3,093,903 | ||||||
Chico’s FAS Inc. | 31 | 248 | ||||||
DSW Inc. Class A | 27,961 | 535,453 | ||||||
Foot Locker Inc. | 27 | 812 | ||||||
Gap Inc. (The) | 66,760 | 1,735,092 | ||||||
Group 1 Automotive Inc. | 2,687 | 211,118 | ||||||
Home Depot Inc. (The) | 227,781 | 37,761,534 | ||||||
L Brands Inc. | 136,383 | 5,869,924 | ||||||
Lithia Motors Inc. Class A | 2,187 | 247,525 | ||||||
Lowe’s Companies Inc. | 151,925 | 12,146,404 | ||||||
Monro Inc. | 4,224 | 208,454 | ||||||
Penske Automotive Group Inc. | 9,848 | 459,114 | ||||||
Ross Stores Inc. | 36,031 | 2,287,608 | ||||||
Signet Jewelers Ltd. | 10,113 | 663,109 | ||||||
Tiffany & Co. | 18,864 | 1,766,048 | ||||||
TJX Companies Inc. (The) | 92,730 | 6,472,554 | ||||||
Tractor Supply Co. | 19,829 | 1,194,895 | ||||||
Williams-Sonoma Inc. | 22,865 | 1,179,834 | ||||||
|
| |||||||
75,833,629 |
SCHEDULESOF INVESTMENTS | 15 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® CORE DIVIDEND GROWTH ETF
October 31, 2017
Security | Shares | Value | ||||||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS — 2.98% |
| |||||||
Apple Inc. | 407,514 | $ | 68,886,167 | |||||
|
| |||||||
68,886,167 | ||||||||
TEXTILES, APPAREL & LUXURY GOODS — 0.64% |
| |||||||
Columbia Sportswear Co. | 3,412 | 212,841 | ||||||
NIKE Inc. Class B | 152,565 | 8,389,549 | ||||||
Ralph Lauren Corp. | 10,694 | 956,364 | ||||||
VF Corp. | 73,861 | 5,144,419 | ||||||
|
| |||||||
14,703,173 | ||||||||
THRIFTS & MORTGAGE FINANCE — 0.07% |
| |||||||
Northwest Bancshares Inc. | 37,491 | 632,473 | ||||||
Provident Financial Services Inc. | 17,693 | 481,250 | ||||||
Washington Federal Inc. | 15,084 | 524,923 | ||||||
|
| |||||||
1,638,646 | ||||||||
TRADING COMPANIES & DISTRIBUTORS — 0.35% |
| |||||||
Applied Industrial Technologies Inc. | 6,950 | 442,368 | ||||||
Fastenal Co. | 74,157 | 3,483,154 | ||||||
GATX Corp. | 9,520 | 565,583 | ||||||
MSC Industrial Direct Co. Inc. Class A | 10,246 | 849,394 | ||||||
WW Grainger Inc. | 13,976 | 2,763,055 | ||||||
|
| |||||||
8,103,554 | ||||||||
WATER UTILITIES — 0.21% |
| |||||||
American States Water Co. | 6,610 | 355,287 | ||||||
American Water Works Co. Inc. | 31,172 | 2,735,655 | ||||||
Aqua America Inc. | 37,516 | 1,331,068 | ||||||
California Water Service Group | 8,390 | 352,380 | ||||||
|
| |||||||
4,774,390 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $2,070,974,252) | 2,304,523,533 |
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS — 0.16% |
| |||||||
MONEY MARKET FUNDS — 0.16% |
| |||||||
BlackRock Cash Funds: Treasury, | ||||||||
1.00%a,b | 3,779,191 | $ | 3,779,191 | |||||
|
| |||||||
3,779,191 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $3,779,191) | 3,779,191 | |||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $2,074,753,443)c | 2,308,302,724 | |||||||
Other Assets, Less Liabilities — 0.10% |
| 2,241,861 | ||||||
|
| |||||||
NET ASSETS — 100.00% | $ | 2,310,544,585 | ||||||
|
|
NVS — Non-Voting Shares
a | Affiliated issuer. See Schedule 1. |
b | The rate quoted is the annualized seven-day yield of the fund at period end. |
c | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $2,083,064,123. Net unrealized appreciation was $225,333,515, of which $259,588,516 represented gross unrealized appreciation on investments and $34,255,001 represented gross unrealized depreciation on investments. |
16 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® CORE DIVIDEND GROWTH ETF
October 31, 2017
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 04/30/17 | Shares purchased | Shares sold | Shares held at 10/31/17 | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Treasury, | 4,399,548 | — | (620,357 | )b | 3,779,191 | $ | 3,779,191 | $ | — | $ | — | $ | 16,026 | |||||||||||||||||||
BlackRock Inc. | 16,407 | 10,051 | (922 | ) | 25,536 | 12,023,115 | 27,094 | 1,860,016 | 105,133 | |||||||||||||||||||||||
PNC Financial Services Group Inc. (The) | 47,338 | 52,840 | (1,318 | ) | 98,860 | 13,523,059 | 37,390 | 1,249,352 | 117,605 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 29,325,365 | $ | 64,484 | $ | 3,109,368 | $ | 238,764 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
Schedule 2 — Futures Contracts (Note 5)
Futures contracts outstanding as of October 31, 2017 were as follows:
Description | Number of contracts | Expiration date | Notional amount (000) | Value / unrealized appreciation (depreciation) | ||||||||||||
Long Contracts: |
| |||||||||||||||
S&P 500 E-Mini | 44 | Dec 2017 | $ | 5,660 | $ | 94,914 | ||||||||||
|
| |||||||||||||||
Schedule 3 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: |
| |||||||||||||||
Assets: |
| |||||||||||||||
Common stocks | $ | 2,304,523,533 | $ | — | $ | — | $ | 2,304,523,533 | ||||||||
Money market funds | 3,779,191 | — | — | 3,779,191 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 2,308,302,724 | $ | — | $ | — | $ | 2,308,302,724 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Derivative financial instrumentsa: |
| |||||||||||||||
Assets: |
| |||||||||||||||
Futures contracts | $ | 94,914 | $ | — | $ | — | $ | 94,914 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 94,914 | $ | — | $ | — | $ | 94,914 | ||||||||
|
|
|
|
|
|
|
| |||||||||
a | Shown at the unrealized appreciation (depreciation) on the contracts. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 17 |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES® CORE HIGH DIVIDEND ETF
October 31, 2017
Security | Shares | Value | ||||||
COMMON STOCKS — 99.83% |
| |||||||
AIR FREIGHT & LOGISTICS — 1.53% |
| |||||||
United Parcel Service Inc. Class B | 841,208 | $ | 98,867,176 | |||||
|
| |||||||
98,867,176 | ||||||||
BANKS — 5.85% |
| |||||||
BB&T Corp. | 991,571 | 48,824,956 | ||||||
Wells Fargo & Co. | 5,846,348 | 328,213,977 | ||||||
|
| |||||||
377,038,933 | ||||||||
BEVERAGES — 6.52% |
| |||||||
Coca-Cola Co. (The) | 5,172,896 | 237,849,758 | ||||||
PepsiCo Inc. | 1,654,540 | 182,379,944 | ||||||
|
| |||||||
420,229,702 | ||||||||
BIOTECHNOLOGY — 3.10% |
| |||||||
AbbVie Inc. | 2,216,263 | 200,017,736 | ||||||
|
| |||||||
200,017,736 | ||||||||
CAPITAL MARKETS — 0.90% |
| |||||||
Cohen & Steers Inc. | 27,584 | 1,199,628 | ||||||
Federated Investors Inc. Class B NVS | 131,722 | 4,092,603 | ||||||
Invesco Ltd. | 620,495 | 22,207,516 | ||||||
Legg Mason Inc. | 113,005 | 4,314,531 | ||||||
T Rowe Price Group Inc. | 278,548 | 25,877,109 | ||||||
Waddell & Reed Financial Inc. Class A | 8,963 | 167,518 | ||||||
|
| |||||||
57,858,905 | ||||||||
CHEMICALS — 0.86% |
| |||||||
LyondellBasell Industries NV Class A | 533,539 | 55,237,293 | ||||||
|
| |||||||
55,237,293 | ||||||||
COMMERCIAL SERVICES & SUPPLIES — 0.12% |
| |||||||
KAR Auction Services Inc. | 163,284 | 7,728,232 | ||||||
|
| |||||||
7,728,232 | ||||||||
COMMUNICATIONS EQUIPMENT — 4.04% |
| |||||||
Cisco Systems Inc. | 7,615,454 | 260,067,754 | ||||||
|
| |||||||
260,067,754 | ||||||||
DISTRIBUTORS — 0.27% |
| |||||||
Genuine Parts Co. | 195,732 | 17,269,434 | ||||||
|
| |||||||
17,269,434 | ||||||||
DIVERSIFIED TELECOMMUNICATION SERVICES — 13.43% |
| |||||||
AT&T Inc. | 13,768,346 | 463,304,843 | ||||||
Verizon Communications Inc. | 8,404,908 | 402,342,946 | ||||||
|
| |||||||
865,647,789 |
Security | Shares | Value | ||||||
ELECTRIC UTILITIES — 5.97% |
| |||||||
ALLETE Inc. | 59,653 | $ | 4,673,813 | |||||
Alliant Energy Corp. | 288,273 | 12,470,690 | ||||||
American Electric Power Co. Inc. | 663,398 | 49,363,445 | ||||||
Duke Energy Corp. | 1,199,125 | 105,894,729 | ||||||
Edison International | 373,981 | 29,899,781 | ||||||
NextEra Energy Inc. | 519,705 | 80,590,654 | ||||||
Pinnacle West Capital Corp. | 138,612 | 12,157,658 | ||||||
Portland General Electric Co. | 109,209 | 5,213,638 | ||||||
PPL Corp. | 1,156,439 | 43,435,849 | ||||||
Westar Energy Inc. | 190,475 | 10,186,603 | ||||||
Xcel Energy Inc. | 620,809 | 30,742,462 | ||||||
|
| |||||||
384,629,322 | ||||||||
ELECTRICAL EQUIPMENT — 1.64% |
| |||||||
Eaton Corp. PLC | 626,935 | 50,167,339 | ||||||
Emerson Electric Co. | 859,301 | 55,390,542 | ||||||
|
| |||||||
105,557,881 | ||||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS — 0.02% |
| |||||||
AVX Corp. | 52,532 | 989,703 | ||||||
|
| |||||||
989,703 | ||||||||
ENERGY EQUIPMENT & SERVICES — 1.77% |
| |||||||
Frank’s International NV | 129,651 | 856,993 | ||||||
Schlumberger Ltd. | 1,770,187 | 113,291,968 | ||||||
|
| |||||||
114,148,961 | ||||||||
FOOD & STAPLES RETAILING — 2.11% |
| |||||||
Wal-Mart Stores Inc. | 1,560,532 | 136,250,049 | ||||||
|
| |||||||
136,250,049 | ||||||||
FOOD PRODUCTS — 1.20% |
| |||||||
Campbell Soup Co. | 241,510 | 11,440,329 | ||||||
General Mills Inc. | 868,844 | 45,110,380 | ||||||
Kellogg Co. | 332,941 | 20,818,801 | ||||||
|
| |||||||
77,369,510 | ||||||||
GAS UTILITIES — 0.09% |
| |||||||
National Fuel Gas Co. | 102,607 | 5,956,336 | ||||||
|
| |||||||
5,956,336 | ||||||||
HOTELS, RESTAURANTS & LEISURE — 0.78% |
| |||||||
Cracker Barrel Old Country Store Inc.a | 34,099 | 5,323,877 | ||||||
Las Vegas Sands Corp. | 704,205 | 44,632,513 | ||||||
|
| |||||||
49,956,390 | ||||||||
HOUSEHOLD DURABLES — 0.29% |
| |||||||
Garmin Ltd. | 183,497 | 10,387,765 |
18 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® CORE HIGH DIVIDEND ETF
October 31, 2017
Security | Shares | Value | ||||||
Leggett & Platt Inc. | 173,630 | $ | 8,205,754 | |||||
|
| |||||||
18,593,519 | ||||||||
HOUSEHOLD PRODUCTS — 5.09% |
| |||||||
Kimberly-Clark Corp. | 477,378 | 53,709,799 | ||||||
Procter & Gamble Co. (The) | 3,174,416 | 274,079,077 | ||||||
|
| |||||||
327,788,876 | ||||||||
INSURANCE — 0.61% |
| |||||||
Arthur J Gallagher & Co. | 203,774 | 12,905,007 | ||||||
Cincinnati Financial Corp. | 167,553 | 11,757,194 | ||||||
Erie Indemnity Co. Class A | 21,201 | 2,561,081 | ||||||
Mercury General Corp. | 68,940 | 3,858,572 | ||||||
Old Republic International Corp. | 421,011 | 8,542,313 | ||||||
|
| |||||||
39,624,167 | ||||||||
IT SERVICES — 4.08% |
| |||||||
International Business Machines Corp. | 1,513,095 | 233,107,416 | ||||||
Paychex Inc. | 470,756 | 30,029,525 | ||||||
|
| |||||||
263,136,941 | ||||||||
MACHINERY — 0.49% |
| |||||||
Cummins Inc. | 179,606 | 31,768,709 | ||||||
|
| |||||||
31,768,709 | ||||||||
MEDIA — 0.30% |
| |||||||
Omnicom Group Inc. | 292,558 | 19,656,972 | ||||||
|
| |||||||
19,656,972 | ||||||||
MULTI-UTILITIES — 0.99% |
| |||||||
CenterPoint Energy Inc. | 660,186 | 19,528,302 | ||||||
CMS Energy Corp. | 328,457 | 15,887,465 | ||||||
WEC Energy Group Inc. | 421,303 | 28,391,609 | ||||||
|
| |||||||
63,807,376 | ||||||||
OIL, GAS & CONSUMABLE FUELS — 17.41% |
| |||||||
Chevron Corp. | 3,063,895 | 355,074,792 | ||||||
Exxon Mobil Corp. | 6,930,864 | 577,687,514 | ||||||
Marathon Petroleum Corp. | 585,310 | 34,966,419 | ||||||
Phillips 66 | 604,605 | 55,067,423 | ||||||
Valero Energy Corp. | 760,464 | 59,993,005 | ||||||
Williams Companies Inc. (The) | 1,380,563 | 39,346,046 | ||||||
|
| |||||||
1,122,135,199 | ||||||||
PHARMACEUTICALS — 7.99% |
| |||||||
Merck & Co. Inc. | 3,362,441 | 185,236,875 | ||||||
Pfizer Inc. | 9,403,518 | 329,687,341 | ||||||
|
| |||||||
514,924,216 |
Security | Shares | Value | ||||||
SEMICONDUCTORS & SEMICONDUCTOR |
| |||||||
Intel Corp. | 5,993,457 | $ | 272,642,358 | |||||
Maxim Integrated Products Inc. | 367,420 | 19,304,247 | ||||||
|
| |||||||
291,946,605 | ||||||||
SPECIALTY RETAIL — 0.09% |
| |||||||
Williams-Sonoma Inc. | 112,113 | 5,785,031 | ||||||
|
| |||||||
5,785,031 | ||||||||
TEXTILES, APPAREL & LUXURY GOODS — 0.64% |
| |||||||
Tapestry Inc. | 388,860 | 15,923,817 | ||||||
VF Corp. | 364,450 | 25,383,943 | ||||||
|
| |||||||
41,307,760 | ||||||||
THRIFTS & MORTGAGE FINANCE — 0.06% |
| |||||||
Provident Financial Services Inc. | 86,791 | 2,360,715 | ||||||
TFS Financial Corp. | 83,498 | 1,287,539 | ||||||
|
| |||||||
3,648,254 | ||||||||
TOBACCO — 6.79% |
| |||||||
Altria Group Inc. | 3,096,071 | 198,829,679 | ||||||
Philip Morris International Inc. | 2,279,309 | 238,506,894 | ||||||
|
| |||||||
437,336,573 | ||||||||
TRADING COMPANIES & DISTRIBUTORS — 0.27% |
| |||||||
Fastenal Co. | 367,008 | 17,238,366 | ||||||
|
| |||||||
17,238,366 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $6,079,855,796) | 6,433,519,670 | |||||||
SHORT-TERM INVESTMENTS — 0.12% |
| |||||||
MONEY MARKET FUNDS — 0.12% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
1.31%b,c,d | 47,803 | 47,813 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
1.00%b,c | 7,932,221 | 7,932,221 | ||||||
|
| |||||||
7,980,034 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $7,980,038) |
| 7,980,034 | ||||||
|
|
SCHEDULESOF INVESTMENTS | 19 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® CORE HIGH DIVIDEND ETF
October 31, 2017
Value | ||||||||
TOTAL INVESTMENTS | ||||||||
(Cost: $6,087,835,834)e | $ | 6,441,499,704 | ||||||
Other Assets, Less Liabilities — 0.05% |
| 3,091,303 | ||||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 6,444,591,007 | |||||
|
|
NVS — Non-Voting | Shares |
a | All or a portion of this security represents a security on loan. See Note 1. |
b | Affiliated issuer. See Schedule 1. |
c | The rate quoted is the annualized seven-day yield of the fund at period end. |
d | All or a portion of this security represents an investment of securities lending collateral. See Note 1. |
e | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $6,155,111,031. Net unrealized appreciation was $286,819,490, of which $512,580,128 represented gross unrealized appreciation on investments and $225,760,638 represented gross unrealized depreciation on investments. |
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 04/30/17 | Shares purchased | Shares sold | Shares held at 10/31/17 | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, | — | 47,803 | b | — | 47,803 | $ | 47,813 | $ | — | $ | (4 | ) | $ | — | c | |||||||||||||||||
BlackRock Cash Funds: Treasury, | 10,411,346 | — | (2,479,124 | )b | 7,932,221 | 7,932,221 | — | — | 56,417 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 7,980,034 | $ | — | $ | (4 | ) | $ | 56,417 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
c | Does not include income earned on the investment of securities lending cash collateral which is not direct income of the Fund and is reflected as a component of securities lending income in the statement of operations. |
Schedule 2 — Futures Contracts (Note 5)
Futures contracts outstanding as of October 31, 2017 were as follows:
Description | Number of contracts | Expiration date | Notional amount (000) | Value / unrealized appreciation (depreciation) | ||||||||||||
Long Contracts: |
| |||||||||||||||
S&P 500 E-Mini | 79 | Dec 2017 | $ | 10,162 | $ | 430,817 | ||||||||||
|
| |||||||||||||||
20 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® CORE HIGH DIVIDEND ETF
October 31, 2017
Schedule 3 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: |
| |||||||||||||||
Assets: |
| |||||||||||||||
Common stocks | $ | 6,433,519,670 | $ | — | $ | — | $ | 6,433,519,670 | ||||||||
Money market funds | 7,980,034 | — | — | 7,980,034 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 6,441,499,704 | $ | — | $ | — | $ | 6,441,499,704 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Derivative financial instrumentsa: |
| |||||||||||||||
Assets: |
| |||||||||||||||
Futures contracts | $ | 430,817 | $ | — | $ | — | $ | 430,817 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 430,817 | $ | — | $ | — | $ | 430,817 | ||||||||
|
|
|
|
|
|
|
| |||||||||
a | Shown at the unrealized appreciation (depreciation) on the contracts. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 21 |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES® INTERNATIONAL SELECT DIVIDEND ETF
October 31, 2017
Security | Shares | Value | ||||||
COMMON STOCKS — 99.49% |
| |||||||
AUSTRALIA — 15.72% |
| |||||||
Amcor Ltd./Australia | 1,665,790 | $ | 20,231,554 | |||||
APA Group | 2,099,875 | 13,782,278 | ||||||
AusNet Services | 2,620,948 | 3,557,013 | ||||||
Australia & New Zealand Banking Group Ltd. | 2,208,848 | 50,673,538 | ||||||
Bendigo & Adelaide Bank Ltd. | 2,542,512 | 22,184,982 | ||||||
Commonwealth Bank of Australia | 2,227,510 | 132,587,644 | ||||||
Flight Centre Travel Group Ltd. | 2,085,738 | 74,844,418 | ||||||
Harvey Norman Holdings Ltd. | 2,704,796 | 7,839,351 | ||||||
Macquarie Group Ltd. | 2,155,134 | 162,518,367 | ||||||
National Australia Bank Ltd. | 2,644,555 | 66,225,095 | ||||||
Suncorp Group Ltd. | 2,459,233 | 25,606,679 | ||||||
Sydney Airport | 2,254,245 | 12,289,226 | ||||||
Tabcorp Holdings Ltd. | 2,863,603 | 9,858,548 | ||||||
Tatts Group Ltd. | 2,126,540 | 6,799,288 | ||||||
Telstra Corp. Ltd. | 2,941,839 | 7,985,019 | ||||||
Wesfarmers Ltd. | 2,046,638 | 65,595,058 | ||||||
Westpac Banking Corp. | 2,456,985 | 62,149,641 | ||||||
|
| |||||||
744,727,699 | ||||||||
AUSTRIA — 1.16% |
| |||||||
Oesterreichische Post AG | 1,240,135 | 55,129,568 | ||||||
|
| |||||||
55,129,568 | ||||||||
BELGIUM — 1.06% |
| |||||||
Proximus SADP | 1,508,480 | 50,100,727 | ||||||
|
| |||||||
50,100,727 | ||||||||
CANADA — 6.66% |
| |||||||
Bank of Nova Scotia (The) | 857,823 | 55,418,121 | ||||||
Canadian Imperial Bank of Commerce | 943,853 | 83,146,340 | ||||||
Corus Entertainment Inc. Class B | 2,271,297 | 21,090,237 | ||||||
Emera Inc. | 1,123,957 | 42,373,990 | ||||||
IGM Financial Inc. | 1,209,573 | 42,664,870 | ||||||
National Bank of Canada | 855,960 | 41,572,923 | ||||||
Russel Metals Inc. | 1,297,605 | 29,030,276 | ||||||
|
| |||||||
315,296,757 | ||||||||
DENMARK — 1.03% |
| |||||||
Tryg A/S | 2,054,929 | 48,931,477 | ||||||
|
| |||||||
48,931,477 | ||||||||
FINLAND — 5.71% |
| |||||||
Elisa OYJ | 1,511,359 | 60,901,144 | ||||||
Fortum OYJ | 2,486,763 | 52,811,478 |
Security | Shares | Value | ||||||
Metso OYJ | 1,187,185 | $ | 43,163,775 | |||||
Nokian Renkaat OYJ | 1,268,151 | 58,162,577 | ||||||
Stora Enso OYJ Class R | 1,064,384 | 16,652,583 | ||||||
UPM-Kymmene OYJ | 1,296,850 | 38,977,745 | ||||||
|
| |||||||
270,669,302 | ||||||||
FRANCE — 10.12% |
| |||||||
Bouygues SA | 1,288,241 | 61,852,845 | ||||||
Casino Guichard Perrachon SA | 1,918,623 | 109,598,114 | ||||||
CNP Assurances | 1,329,067 | 30,927,222 | ||||||
Engie SA | 2,452,014 | 41,447,431 | ||||||
Lagardere SCA | 1,605,797 | 52,893,282 | ||||||
Natixis SA | 1,889,883 | 14,821,299 | ||||||
Orange SA | 1,514,055 | 24,843,098 | ||||||
SES SA | 2,706,104 | 44,008,560 | ||||||
TOTAL SA | 1,772,838 | 98,864,354 | ||||||
|
| |||||||
479,256,205 | ||||||||
GERMANY — 1.63% |
| |||||||
Freenet AG | 1,183,997 | 39,565,141 | ||||||
ProSiebenSat.1 Media SE Registered | 1,085,616 | 37,871,090 | ||||||
|
| |||||||
77,436,231 | ||||||||
HONG KONG — 3.25% |
| |||||||
New World Development Co. Ltd. | 10,645,000 | 15,854,662 | ||||||
PCCW Ltd. | 17,927,000 | 9,880,553 | ||||||
SJM Holdings Ltd. | 7,936,000 | 6,815,248 | ||||||
VTech Holdings Ltd. | 8,539,200 | 121,381,896 | ||||||
|
| |||||||
153,932,359 | ||||||||
ITALY — 7.89% |
| |||||||
Azimut Holding SpA | 6,001,695 | 118,578,793 | ||||||
Banca Mediolanum SpA | 5,811,171 | 49,520,525 | ||||||
Enel SpA | 3,837,963 | 23,808,260 | ||||||
Eni SpA | 5,251,749 | 85,897,065 | ||||||
Italgas SpA | 5,136,649 | 30,009,453 | ||||||
Snam SpA | 7,291,002 | 37,253,158 | ||||||
Terna Rete Elettrica Nazionale SpA | 4,776,603 | 28,824,127 | ||||||
|
| |||||||
373,891,381 | ||||||||
NETHERLANDS — 0.90% |
| |||||||
Aegon NV | 7,241,238 | 42,752,024 | ||||||
|
| |||||||
42,752,024 | ||||||||
NEW ZEALAND — 3.54% |
| |||||||
Fletcher Building Ltd. | 9,931,169 | 50,072,652 | ||||||
Sky Network Television Ltd.a | 22,960,479 | 39,322,703 |
22 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® INTERNATIONAL SELECT DIVIDEND ETF
October 31, 2017
Security | Shares | Value | ||||||
SKYCITY Entertainment Group Ltd. | 12,396,799 | $ | 33,035,552 | |||||
Spark New Zealand Ltd. | 17,930,822 | 45,203,330 | ||||||
|
| |||||||
167,634,237 | ||||||||
NORWAY — 1.04% |
| |||||||
Statoil ASA | 2,441,899 | 49,363,851 | ||||||
|
| |||||||
49,363,851 | ||||||||
PORTUGAL — 1.27% |
| |||||||
EDP – Energias de Portugal SA | 16,854,123 | 60,139,583 | ||||||
|
| |||||||
60,139,583 | ||||||||
SINGAPORE — 1.08% |
| |||||||
StarHub Ltd. | 26,571,500 | 51,294,073 | ||||||
|
| |||||||
51,294,073 | ||||||||
SOUTH KOREA — 1.16% |
| |||||||
Korea Electric Power Corp. ADR | 3,113,485 | 54,859,606 | ||||||
|
| |||||||
54,859,606 | ||||||||
SPAIN — 4.82% |
| |||||||
Enagas SA | 1,863,075 | 53,673,722 | ||||||
Ferrovial SA | 2,458,058 | 53,404,545 | ||||||
Gas Natural SDG SA | 2,683,791 | 57,433,476 | ||||||
Mapfre SA | 5,092,898 | 16,665,716 | ||||||
Telefonica SA | 4,471,213 | 46,909,905 | ||||||
|
| |||||||
228,087,364 | ||||||||
SWEDEN — 3.88% |
| |||||||
Nordea Bank AB | 3,468,979 | 41,933,715 | ||||||
Skandinaviska Enskilda Banken AB Class A | 3,122,893 | 38,496,208 | ||||||
Swedbank AB Class A | 3,574,935 | 88,734,979 | ||||||
Telia Co. AB | 3,194,556 | 14,786,431 | ||||||
|
| |||||||
183,951,333 | ||||||||
SWITZERLAND — 3.83% |
| |||||||
Swiss Prime Site AG Registered | 146,704 | 12,531,948 | ||||||
Swiss Re AG | 184,877 | 17,406,407 | ||||||
Swisscom AG Registered | 175,509 | 88,740,506 | ||||||
Zurich Insurance Group AG | 205,044 | 62,636,334 | ||||||
|
| |||||||
181,315,195 | ||||||||
UNITED KINGDOM — 23.74% |
| |||||||
Ashmore Group PLC | 3,540,403 | 18,095,999 | ||||||
AstraZeneca PLC | 3,638,578 | 243,138,804 | ||||||
Bovis Homes Group PLC | 4,419,190 | 69,013,166 | ||||||
BP PLC | 6,190,263 | 41,940,298 | ||||||
Capita PLC | 4,904,671 | 34,128,965 | ||||||
Centamin PLC | 6,454,733 | 11,940,193 |
Security | Shares | Value | ||||||
Dairy Crest Group PLC | 3,302,014 | $ | 26,638,339 | |||||
easyJet PLC | 4,504,815 | 80,101,287 | ||||||
GlaxoSmithKline PLC | 3,714,442 | 66,959,989 | ||||||
HSBC Holdings PLC | 4,711,195 | 45,939,532 | ||||||
IG Group Holdings PLC | 4,768,293 | 41,379,999 | ||||||
Legal & General Group PLC | 4,287,965 | 15,203,530 | ||||||
National Grid PLC | 3,140,940 | 37,789,382 | ||||||
Old Mutual PLC | 2,993,801 | 7,593,435 | ||||||
Phoenix Group Holdings | 5,282,467 | 53,102,458 | ||||||
Royal Dutch Shell PLC Class A ADR | 5,814,706 | 182,655,464 | ||||||
SSE PLC | 4,763,648 | 87,423,796 | ||||||
Taylor Wimpey PLC | 4,866,458 | 12,892,521 | ||||||
United Utilities Group PLC | 3,182,759 | 35,207,137 | ||||||
Vodafone Group PLC | 4,674,450 | 13,383,239 | ||||||
|
| |||||||
1,124,527,533 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | 4,713,296,505 | |||||||
RIGHTS — 0.03% |
| |||||||
SPAIN — 0.03% |
| |||||||
Ferrovial SA (Expires 11/13/17)b | 2,458,058 | 1,182,631 | ||||||
|
| |||||||
1,182,631 | ||||||||
|
| |||||||
TOTAL RIGHTS | ||||||||
(Cost: $1,146,101) | 1,182,631 | |||||||
SHORT-TERM INVESTMENTS — 0.05% |
| |||||||
MONEY MARKET FUNDS — 0.05% |
| |||||||
BlackRock Cash Funds: Treasury, | ||||||||
1.00%a,c | 2,497,088 | 2,497,088 | ||||||
|
| |||||||
2,497,088 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $2,497,088) |
| 2,497,088 | ||||||
|
|
SCHEDULESOF INVESTMENTS | 23 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® INTERNATIONAL SELECT DIVIDEND ETF
October 31, 2017
Value | ||||||||
TOTAL INVESTMENTS IN |
| |||||||
(Cost: $4,432,422,155)d |
| $ | 4,716,976,224 | |||||
Other Assets, Less Liabilities — 0.43% |
| 20,504,834 | ||||||
|
| |||||||
NET ASSETS — 100.00% | $ | 4,737,481,058 | ||||||
|
|
ADR — American Depositary Receipts
a | Affiliated issuer. See Schedule 1. |
b | Non-income earning security. |
c | The rate quoted is the annualized seven-day yield of the fund at period end. |
d | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $4,476,604,610. Net unrealized appreciation was $241,107,349, of which $461,703,477 represented gross unrealized appreciation on investments and $220,596,128 represented gross unrealized depreciation on investments. |
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 04/30/17 | Shares purchased | Shares sold | Shares held at 10/31/17 | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, | — | — | —b | — | $ | — | $ | (151 | ) | $ | — | $ | — | c | ||||||||||||||||||
BlackRock Cash Funds: Treasury, | 500,569 | 1,996,519 | b | — | 2,497,088 | 2,497,088 | — | — | 12,589 | |||||||||||||||||||||||
Sky Network Television Ltd. | 20,784,033 | 2,176,446 | — | 22,960,479 | 39,322,703 | — | (20,770,971 | ) | 2,337,304 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 41,819,791 | $ | (151 | ) | $ | (20,770,971 | ) | $ | 2,349,893 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
c | Does not include income earned on the investment of securities lending cash collateral which is not direct income of the Fund and is reflected as a component of securities lending income in the statement of operations. |
Schedule 2 — Futures Contracts (Note 5)
Futures contracts outstanding as of October 31, 2017 were as follows:
Description | Number of contracts | Expiration date | Notional amount (000) | Value / unrealized appreciation (depreciation) | ||||||||||||
Long Contracts: |
| |||||||||||||||
ASX SPI 200 Index | 48 | Dec 2017 | $ | 5,418 | $ | 165,364 | ||||||||||
Euro STOXX 50 | 198 | Dec 2017 | 8,484 | 348,741 | ||||||||||||
FTSE 100 Index | 78 | Dec 2017 | 7,735 | 221,630 | ||||||||||||
|
| |||||||||||||||
Total |
| $ | 735,735 | |||||||||||||
|
| |||||||||||||||
24 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® INTERNATIONAL SELECT DIVIDEND ETF
October 31, 2017
Schedule 3 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: |
| |||||||||||||||
Assets: |
| |||||||||||||||
Common stocks | $ | 4,713,296,505 | $ | — | $ | — | $ | 4,713,296,505 | ||||||||
Rights | 1,182,631 | — | — | 1,182,631 | ||||||||||||
Money market funds | 2,497,088 | — | — | 2,497,088 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 4,716,976,224 | $ | — | $ | — | $ | 4,716,976,224 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Derivative financial instrumentsa: |
| |||||||||||||||
Assets: |
| |||||||||||||||
Futures contracts | $ | 735,735 | $ | — | $ | — | $ | 735,735 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 735,735 | $ | — | $ | — | $ | 735,735 | ||||||||
|
|
|
|
|
|
|
| |||||||||
a | Shown at the unrealized appreciation (depreciation) on the contracts. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 25 |
Table of Contents
Schedule of Investments (Unaudited)
October 31, 2017
Security | Shares | Value | ||||||
COMMON STOCKS — 99.81% |
| |||||||
AEROSPACE & DEFENSE — 4.16% |
| |||||||
Lockheed Martin Corp. | 2,310,321 | $ | 711,948,520 | |||||
|
| |||||||
711,948,520 | ||||||||
AUTOMOBILES — 0.30% |
| |||||||
Ford Motor Co. | 4,120,505 | 50,558,596 | ||||||
|
| |||||||
50,558,596 | ||||||||
BANKS — 4.21% |
| |||||||
Bank of Hawaii Corp. | 2,024,127 | 165,189,004 | ||||||
BB&T Corp. | 2,138,063 | 105,278,222 | ||||||
F.N.B. Corp. | 2,615,368 | 35,281,314 | ||||||
PacWest Bancorp. | 3,061,507 | 147,932,018 | ||||||
People’s United Financial Inc. | 3,093,698 | 57,728,405 | ||||||
Trustmark Corp. | 2,433,937 | 80,173,885 | ||||||
United Bankshares Inc./WV | 2,583,204 | 92,866,184 | ||||||
Valley National Bancorp. | 3,051,038 | 35,086,937 | ||||||
|
| |||||||
719,535,969 | ||||||||
BEVERAGES — 0.81% |
| |||||||
Coca-Cola Co. (The) | 2,995,592 | 137,737,320 | ||||||
|
| |||||||
137,737,320 | ||||||||
CAPITAL MARKETS — 6.18% |
| |||||||
CME Group Inc. | 4,061,980 | 557,181,797 | ||||||
Federated Investors Inc. Class B NVS | 3,137,321 | 97,476,564 | ||||||
Lazard Ltd. Class A | 5,385,171 | 256,011,029 | ||||||
Waddell & Reed Financial Inc. Class Aa | 7,841,538 | 146,558,345 | ||||||
|
| |||||||
1,057,227,735 | ||||||||
CHEMICALS — 1.59% |
| |||||||
CF Industries Holdings Inc. | 3,443,419 | 130,781,054 | ||||||
Huntsman Corp. | 1,937,387 | 62,035,132 | ||||||
Olin Corp. | 2,149,150 | 78,508,449 | ||||||
|
| |||||||
271,324,635 | ||||||||
COMMERCIAL SERVICES & SUPPLIES — 1.53% |
| |||||||
Pitney Bowes Inc. | 4,841,395 | 66,520,767 | ||||||
RR Donnelley & Sons Co. | 3,258,443 | 29,977,676 | ||||||
Waste Management Inc. | 2,001,348 | 164,450,765 | ||||||
|
| |||||||
260,949,208 | ||||||||
CONTAINERS & PACKAGING — 4.26% |
| |||||||
International Paper Co. | 3,050,401 | 174,696,465 | ||||||
Packaging Corp. of America | 2,303,235 | 267,797,134 | ||||||
Sonoco Products Co. | 2,378,821 | 123,199,140 | ||||||
WestRock Co. | 2,650,643 | 162,563,935 | ||||||
|
| |||||||
728,256,674 |
Security | Shares | Value | ||||||
DISTRIBUTORS — 1.27% |
| |||||||
Genuine Parts Co. | 2,463,064 | $ | 217,316,137 | |||||
|
| |||||||
217,316,137 | ||||||||
DIVERSIFIED CONSUMER SERVICES — 0.45% |
| |||||||
H&R Block Inc. | 3,145,350 | 77,815,959 | ||||||
|
| |||||||
77,815,959 | ||||||||
DIVERSIFIED TELECOMMUNICATION SERVICES — 1.69% |
| |||||||
AT&T Inc. | 3,987,874 | 134,191,960 | ||||||
CenturyLink Inc. | 8,176,642 | 155,274,432 | ||||||
|
| |||||||
289,466,392 | ||||||||
ELECTRIC UTILITIES — 16.46% |
| |||||||
Alliant Energy Corp. | 2,789,638 | 120,679,740 | ||||||
American Electric Power Co. Inc. | 3,078,189 | 229,048,043 | ||||||
Edison International | 2,360,582 | 188,728,531 | ||||||
Entergy Corp. | 4,034,578 | 348,022,698 | ||||||
Eversource Energy | 2,807,149 | 175,839,813 | ||||||
Exelon Corp. | 3,117,139 | 125,340,159 | ||||||
FirstEnergy Corp. | 3,934,122 | 129,629,320 | ||||||
Great Plains Energy Inc. | 3,292,302 | 108,086,275 | ||||||
IDACORP Inc. | 2,329,625 | 214,395,389 | ||||||
NextEra Energy Inc. | 2,579,733 | 400,039,196 | ||||||
OGE Energy Corp. | 2,882,427 | 106,188,611 | ||||||
PG&E Corp. | 2,556,253 | 147,674,736 | ||||||
Pinnacle West Capital Corp. | 2,750,618 | 241,256,705 | ||||||
PPL Corp. | 3,725,942 | 139,946,381 | ||||||
Xcel Energy Inc. | 2,842,878 | 140,779,319 | ||||||
|
| |||||||
2,815,654,916 | ||||||||
ELECTRICAL EQUIPMENT — 2.36% |
| |||||||
Eaton Corp. PLC | 2,839,268 | 227,198,225 | ||||||
Emerson Electric Co. | 2,729,001 | 175,911,405 | ||||||
|
| |||||||
403,109,630 | ||||||||
ENERGY EQUIPMENT & SERVICES — 1.14% |
| |||||||
Helmerich & Payne Inc. | 3,579,224 | 194,387,656 | ||||||
|
| |||||||
194,387,656 | ||||||||
FOOD & STAPLES RETAILING — 0.70% |
| |||||||
Sysco Corp. | 2,144,005 | 119,249,558 | ||||||
|
| |||||||
119,249,558 | ||||||||
FOOD PRODUCTS — 0.82% |
| |||||||
General Mills Inc. | 2,716,520 | 141,041,718 | ||||||
|
| |||||||
141,041,718 | ||||||||
GAS UTILITIES — 0.59% |
| |||||||
New Jersey Resources Corp. | 2,289,512 | 101,768,808 | ||||||
|
| |||||||
101,768,808 |
26 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® SELECT DIVIDEND ETF
October 31, 2017
Security | Shares | Value | ||||||
HOTELS, RESTAURANTS & LEISURE — 3.65% |
| |||||||
Darden Restaurants Inc. | 2,531,971 | $ | 208,305,254 | |||||
McDonald’s Corp. | 2,494,143 | 416,297,408 | ||||||
|
| |||||||
624,602,662 | ||||||||
HOUSEHOLD DURABLES — 3.07% |
| |||||||
Garmin Ltd. | 3,334,527 | 188,767,573 | ||||||
Leggett & Platt Inc. | 2,373,158 | 112,155,447 | ||||||
Tupperware Brands Corp.a | 3,815,333 | 224,150,814 | ||||||
|
| |||||||
525,073,834 | ||||||||
HOUSEHOLD PRODUCTS — 1.64% |
| |||||||
Kimberly-Clark Corp. | 2,491,039 | 280,266,798 | ||||||
|
| |||||||
280,266,798 | ||||||||
INDUSTRIAL CONGLOMERATES — 0.32% |
| |||||||
General Electric Co. | 2,758,452 | 55,610,392 | ||||||
|
| |||||||
55,610,392 | ||||||||
INSURANCE — 3.40% |
| |||||||
Arthur J Gallagher & Co. | 2,361,202 | 149,534,923 | ||||||
Cincinnati Financial Corp. | 2,335,951 | 163,913,682 | ||||||
Mercury General Corp.a | 3,632,017 | 203,283,991 | ||||||
Old Republic International Corp. | 3,215,531 | 65,243,124 | ||||||
|
| |||||||
581,975,720 | ||||||||
LEISURE PRODUCTS — 0.43% |
| |||||||
Mattel Inc. | 5,174,261 | 73,060,565 | ||||||
|
| |||||||
73,060,565 | ||||||||
MACHINERY — 3.05% |
| |||||||
Caterpillar Inc. | 2,807,050 | 381,197,390 | ||||||
PACCAR Inc. | 1,968,954 | 141,233,070 | ||||||
|
| |||||||
522,430,460 | ||||||||
MEDIA — 1.36% |
| |||||||
Cinemark Holdings Inc. | 2,367,814 | 86,046,361 | ||||||
Meredith Corp.a | 2,769,694 | 146,793,782 | ||||||
|
| |||||||
232,840,143 | ||||||||
METALS & MINING — 0.25% |
| |||||||
Commercial Metals Co. | 2,183,574 | 42,536,022 | ||||||
|
| |||||||
42,536,022 | ||||||||
MULTI-UTILITIES — 12.79% |
| |||||||
Avista Corp. | 3,159,575 | 165,056,198 | ||||||
Black Hills Corp. | 2,365,500 | 154,372,530 | ||||||
CenterPoint Energy Inc. | 3,334,564 | 98,636,403 | ||||||
CMS Energy Corp. | 2,588,564 | 125,208,841 | ||||||
Dominion Energy Inc. | 3,415,664 | 277,146,977 | ||||||
DTE Energy Co. | 2,800,947 | 309,392,606 | ||||||
NiSource Inc. | 2,604,449 | 68,679,320 |
Security | Shares | Value | ||||||
NorthWestern Corp.a | 3,147,025 | $ | 186,555,642 | |||||
Public Service Enterprise Group Inc. | 3,325,166 | 163,598,167 | ||||||
SCANA Corp. | 3,062,935 | 132,135,016 | ||||||
Sempra Energy | 2,577,975 | 302,912,062 | ||||||
WEC Energy Group Inc. | 3,027,700 | 204,036,703 | ||||||
|
| |||||||
2,187,730,465 | ||||||||
MULTILINE RETAIL — 2.85% |
| |||||||
Kohl’s Corp. | 4,615,021 | 192,723,277 | ||||||
Macy’s Inc. | 4,064,221 | 76,244,786 | ||||||
Target Corp. | 3,706,732 | 218,845,457 | ||||||
|
| |||||||
487,813,520 | ||||||||
OIL, GAS & CONSUMABLE FUELS — 8.17% |
| |||||||
Chevron Corp. | 3,348,279 | 388,032,053 | ||||||
ConocoPhillips | 1,975,111 | 101,026,928 | ||||||
HollyFrontier Corp. | 4,113,777 | 152,004,060 | ||||||
Occidental Petroleum Corp. | 4,162,387 | 268,765,328 | ||||||
ONEOK Inc. | 3,816,774 | 207,136,325 | ||||||
Valero Energy Corp. | 3,557,976 | 280,688,727 | ||||||
|
| |||||||
1,397,653,421 | ||||||||
PAPER & FOREST PRODUCTS — 1.03% |
| |||||||
Domtar Corp.a | 3,709,563 | 175,536,521 | ||||||
|
| |||||||
175,536,521 | ||||||||
PERSONAL PRODUCTS — 0.90% |
| |||||||
Nu Skin Enterprises Inc. Class A | 2,432,527 | 154,733,043 | ||||||
|
| |||||||
154,733,043 | ||||||||
PHARMACEUTICALS — 2.45% |
| |||||||
Eli Lilly & Co. | 2,119,188 | 173,646,265 | ||||||
Merck & Co. Inc. | 2,428,166 | 133,767,665 | ||||||
Pfizer Inc. | 3,208,347 | 112,484,646 | ||||||
|
| |||||||
419,898,576 | ||||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT — 0.66% |
| |||||||
Intel Corp. | 2,497,613 | 113,616,415 | ||||||
|
| |||||||
113,616,415 | ||||||||
SPECIALTY RETAIL — 1.01% |
| |||||||
L Brands Inc. | 4,006,300 | 172,431,152 | ||||||
|
| |||||||
172,431,152 | ||||||||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS — 0.96% |
| |||||||
Seagate Technology PLC | 4,451,636 | 164,576,983 | ||||||
|
| |||||||
164,576,983 |
SCHEDULESOF INVESTMENTS | 27 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® SELECT DIVIDEND ETF
October 31, 2017
Security | Shares | Value | ||||||
THRIFTS & MORTGAGE FINANCE — 0.30% |
| |||||||
New York Community Bancorp. Inc. | 4,036,598 | $ | 50,699,671 | |||||
|
| |||||||
50,699,671 | ||||||||
TOBACCO — 3.00% |
| |||||||
Altria Group Inc. | 2,734,140 | 175,586,471 | ||||||
Philip Morris International Inc. | 3,221,044 | 337,050,044 | ||||||
|
| |||||||
512,636,515 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $13,264,935,639) | 17,073,072,309 | |||||||
SHORT-TERM INVESTMENTS — 0.13% |
| |||||||
MONEY MARKET FUNDS — 0.13% |
| |||||||
BlackRock Cash Funds: Treasury, |
| |||||||
1.00%a,b | 21,526,457 | 21,526,457 | ||||||
|
| |||||||
21,526,457 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $21,526,457) | 21,526,457 | |||||||
|
|
Value | ||||||||
TOTAL INVESTMENTS | ||||||||
(Cost: $13,286,462,096)c | $ | 17,094,598,766 | ||||||
Other Assets, Less Liabilities — 0.06% |
| 11,114,737 | ||||||
|
| |||||||
NET ASSETS — 100.00% | $ | 17,105,713,503 | ||||||
|
|
NVS — Non-Voting Shares
a | Affiliated issuer. See Schedule 1. |
b | The rate quoted is the annualized seven-day yield of the fund at period end. |
c | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $13,418,398,378. Net unrealized appreciation was $3,677,457,603, of which $4,298,685,820 represented gross unrealized appreciation on investments and $621,228,217 represented gross unrealized depreciation on investments. |
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 04/30/17 | Shares purchased | Shares sold | Shares held at 10/31/17 | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
Avista Corp.b | 3,303,168 | 53,993 | (197,586 | ) | 3,159,575 | $ | 165,056,198 | $ | 3,121,735 | $ | 35,357,355 | $ | 2,308,849 | |||||||||||||||||||
BlackRock Cash Funds: Treasury, | 22,860,912 | — | (1,334,455 | )c | 21,526,457 | 21,526,457 | — | — | 138,301 | |||||||||||||||||||||||
Domtar Corp. | 3,853,291 | 88,778 | (232,506 | ) | 3,709,563 | 175,536,521 | 553,492 | 27,979,912 | 3,116,419 | |||||||||||||||||||||||
Mercury General Corp. | 3,768,815 | 81,943 | (218,741 | ) | 3,632,017 | 203,283,991 | 3,251,477 | (24,149,727 | ) | 4,584,271 | ||||||||||||||||||||||
Meredith Corp. | 2,876,639 | 56,433 | (163,378 | ) | 2,769,694 | 146,793,782 | 1,803,906 | (17,533,661 | ) | 2,926,300 | ||||||||||||||||||||||
NorthWestern Corp. | 3,261,463 | 40,996 | (155,434 | ) | 3,147,025 | 186,555,642 | 177,576 | (1,740,012 | ) | 3,361,577 | ||||||||||||||||||||||
Tupperware Brands Corp. | 3,961,396 | 118,800 | (264,863 | ) | 3,815,333 | 224,150,814 | 1,191,866 | (51,634,300 | ) | 5,291,407 | ||||||||||||||||||||||
Waddell & Reed Financial Inc. Class A | 7,819,876 | 21,662 | — | 7,841,538 | 146,558,345 | — | 5,439,765 | 7,194,286 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 1,269,461,750 | $ | 10,100,052 | $ | (26,280,668 | ) | $ | 28,921,410 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Not an affiliate at the end of the period. |
c | Net of shares purchased and sold. |
28 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® SELECT DIVIDEND ETF
October 31, 2017
Schedule 2 — Futures Contracts (Note 5)
Futures contracts outstanding as of October 31, 2017 were as follows:
Description | Number of contracts | Expiration date | Notional amount (000) | Value / unrealized appreciation (depreciation) | ||||||||||||
Long Contracts: |
| |||||||||||||||
S&P 500 E-Mini | 229 | Dec 2017 | $ | 29,457 | $ | 1,257,215 | ||||||||||
|
| |||||||||||||||
Schedule 3 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: | ||||||||||||||||
Assets: | ||||||||||||||||
Common stocks | $ | 17,073,072,309 | $ | — | $ | — | $ | 17,073,072,309 | ||||||||
Money market funds | 21,526,457 | — | — | 21,526,457 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 17,094,598,766 | $ | — | $ | — | $ | 17,094,598,766 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Derivative financial instrumentsa: | ||||||||||||||||
Assets: | ||||||||||||||||
Futures contracts | $ | 1,257,215 | $ | — | $ | — | $ | 1,257,215 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 1,257,215 | $ | — | $ | — | $ | 1,257,215 | ||||||||
|
|
|
|
|
|
|
| |||||||||
a | Shown at the unrealized appreciation (depreciation) on the contracts. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 29 |
Table of Contents
Statements of Assets and Liabilities (Unaudited)
iSHARES® TRUST
October 31, 2017
iShares Core Dividend Growth ETF | iShares Core High Dividend ETF | iShares International Select Dividend ETF | ||||||||||
ASSETS | ||||||||||||
Investments in securities, at cost: | ||||||||||||
Unaffiliated | $ | 2,049,829,552 | $ | 6,079,855,796 | $ | 4,361,032,861 | ||||||
Affiliated (Note 2) | 24,923,891 | 7,980,038 | 71,389,294 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments in securities | $ | 2,074,753,443 | $ | 6,087,835,834 | $ | 4,432,422,155 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 2,278,977,359 | $ | 6,433,519,670 | $ | 4,675,156,433 | ||||||
Affiliated (Note 2) | 29,325,365 | 7,980,034 | 41,819,791 | |||||||||
Foreign currency, at valueb | — | — | 10,680,739 | |||||||||
Cash pledged to broker for futures contracts | 200,400 | 359,600 | 1,045,495 | |||||||||
Receivables: | ||||||||||||
Investment securities sold | — | 52,723 | — | |||||||||
Due from custodian (Note 4) | — | — | 1,728,249 | |||||||||
Dividends and interest | 2,127,604 | 16,379,267 | 3,367,864 | |||||||||
Capital shares sold | 55,792 | — | — | |||||||||
Futures variation margin | 9,680 | 17,380 | 63,800 | |||||||||
Tax reclaims | — | — | 2,826,558 | |||||||||
Foreign withholding tax claims (Note 8) | — | — | 4,543,200 | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 2,310,696,200 | 6,458,308,674 | 4,741,232,129 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | — | 13,028,185 | 1,728,249 | |||||||||
Collateral for securities on loan (Note 1) | — | 47,817 | — | |||||||||
Capital shares redeemed | — | 198,135 | — | |||||||||
Professional fees (Note 8) | — | — | 45,432 | |||||||||
Investment advisory fees (Note 2) | 151,615 | 443,530 | 1,977,390 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 151,615 | 13,717,667 | 3,751,071 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 2,310,544,585 | $ | 6,444,591,007 | $ | 4,737,481,058 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 2,064,551,164 | $ | 6,051,693,815 | $ | 5,033,537,316 | ||||||
Undistributed net investment income | 3,131,260 | 19,415,529 | 839,397 | |||||||||
Undistributed net realized gain (accumulated net realized loss) | 9,217,966 | 19,386,976 | (582,292,335 | ) | ||||||||
Net unrealized appreciation | 233,644,195 | 354,094,687 | 285,396,680 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 2,310,544,585 | $ | 6,444,591,007 | $ | 4,737,481,058 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingc | 69,700,000 | 75,200,000 | 141,750,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 33.15 | $ | 85.70 | $ | 33.42 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $ —, $46,371 and $ —, respectively. See Note 1. |
b | Cost of foreign currency including currency pledged to broker for futures contracts: $ —, $ — and $11,834,514, respectively. |
c | No par value, unlimited number of shares authorized. |
See notes to financial statements.
30 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Assets and Liabilities (Unaudited) (Continued)
iSHARES® TRUST
October 31, 2017
iShares Select | ||||
ASSETS | ||||
Investments in securities, at cost: | ||||
Unaffiliated | $ | 12,265,491,880 | ||
Affiliated (Note 2) | 1,020,970,216 | |||
|
| |||
Total cost of investments in securities | $ | 13,286,462,096 | ||
|
| |||
Investments in securities, at fair value (Note 1): | ||||
Unaffiliated | $ | 15,990,193,214 | ||
Affiliated (Note 2) | 1,104,405,552 | |||
Cash pledged to broker for futures contracts | 1,041,200 | |||
Receivables: | ||||
Dividends and interest | 15,652,941 | |||
Futures variation margin | 50,380 | |||
|
| |||
Total Assets | 17,111,343,287 | |||
|
| |||
LIABILITIES | ||||
Payables: | ||||
Investment advisory fees (Note 2) | 5,629,784 | |||
|
| |||
Total Liabilities | 5,629,784 | |||
|
| |||
NET ASSETS | $ | 17,105,713,503 | ||
|
| |||
Net assets consist of: | ||||
Paid-in capital | $ | 14,331,719,172 | ||
Undistributed net investment income | 8,704,031 | |||
Accumulated net realized loss | (1,044,103,585 | ) | ||
Net unrealized appreciation | 3,809,393,885 | |||
|
| |||
NET ASSETS | $ | 17,105,713,503 | ||
|
| |||
Shares outstandinga | 180,500,000 | |||
|
| |||
Net asset value per share | $ | 94.77 | ||
|
|
a | No par value, unlimited number of shares authorized. |
See notes to financial statements.
FINANCIAL STATEMENTS | 31 |
Table of Contents
Statements of Operations (Unaudited)
iSHARES® TRUST
Six months ended October 31, 2017
iShares Core Dividend | iShares Core High | iShares International Select Dividend ETF | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliateda | $ | 23,566,756 | $ | 116,115,376 | $ | 105,686,976 | ||||||
Dividends — affiliated (Note 2) | 238,764 | 56,417 | 2,349,893 | |||||||||
Interest — unaffiliated | 567 | 2,532 | — | |||||||||
Securities lending income — affiliated — net (Note 2) | — | 5,320 | 58,991 | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 23,806,087 | 116,179,645 | 108,095,860 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 769,817 | 2,588,805 | 11,142,281 | |||||||||
Proxy fees | 30,899 | 142,906 | 87,285 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 800,716 | 2,731,711 | 11,229,566 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 23,005,371 | 113,447,934 | 96,866,294 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | (9,504,309 | ) | (14,211,287 | ) | (35,921,993 | ) | ||||||
Investments — affiliated (Note 2) | (3,342 | ) | — | (151 | ) | |||||||
In-kind redemptions — unaffiliated | 27,665,016 | 291,355,525 | — | |||||||||
In-kind redemptions — affiliated (Note 2) | 67,826 | — | — | |||||||||
Futures contracts | 379,471 | 1,797,245 | 429,564 | |||||||||
Foreign currency transactions | — | — | 907,127 | |||||||||
|
|
|
|
|
| |||||||
Net realized gain (loss) | 18,604,662 | 278,941,483 | (34,585,453 | ) | ||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments — unaffiliated | 124,233,060 | (95,050,963 | ) | 279,763,010 | ||||||||
Investments — affiliated (Note 2) | 3,109,369 | (4 | ) | (20,770,971 | ) | |||||||
Futures contracts | 64,044 | 312,053 | 735,735 | |||||||||
Translation of assets and liabilities in foreign currencies | — | — | 113,737 | |||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | 127,406,473 | (94,738,914 | ) | 259,841,511 | ||||||||
|
|
|
|
|
| |||||||
Net realized and unrealized gain | 146,011,135 | 184,202,569 | 225,256,058 | |||||||||
|
|
|
|
|
| |||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 169,016,506 | $ | 297,650,503 | $ | 322,122,352 | ||||||
|
|
|
|
|
|
a | Net of foreign withholding tax of $ —, $1,068 and $9,091,375, respectively. |
See notes to financial statements.
32 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Operations (Unaudited) (Continued)
iSHARES® TRUST
Six months ended October 31, 2017
iShares Select | ||||
NET INVESTMENT INCOME | ||||
Dividends — unaffiliated | $ | 270,235,262 | ||
Dividends — affiliated (Note 2) | 28,921,410 | |||
Interest — unaffiliated | 5,900 | |||
|
| |||
Total investment income | 299,162,572 | |||
|
| |||
EXPENSES | ||||
Investment advisory fees (Note 2) | 33,264,419 | |||
Proxy fees | 370,023 | |||
|
| |||
Total expenses | 33,634,442 | |||
|
| |||
Net investment income | 265,528,130 | |||
|
| |||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||
Net realized gain (loss) from: | ||||
Investments — unaffiliated | (22,613,513 | ) | ||
Investments — affiliated (Note 2) | (1,517,426 | ) | ||
In-kind redemptions — unaffiliated | 272,779,847 | |||
In-kind redemptions — affiliated (Note 2) | 11,617,478 | |||
Futures contracts | 3,239,181 | |||
|
| |||
Net realized gain | 263,505,567 | |||
|
| |||
Net change in unrealized appreciation/depreciation on: | ||||
Investments — unaffiliated | 357,770,491 | |||
Investments — affiliated (Note 2) | (26,280,668 | ) | ||
Futures contracts | 983,906 | |||
|
| |||
Net change in unrealized appreciation/depreciation | 332,473,729 | |||
|
| |||
Net realized and unrealized gain | 595,979,296 | |||
|
| |||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 861,507,426 | ||
|
|
See notes to financial statements.
FINANCIAL STATEMENTS | 33 |
Table of Contents
Statements of Changes in Net Assets
iSHARES® TRUST
iShares Core Dividend Growth ETF | iShares Core High Dividend ETF | |||||||||||||||
Six months October 31, 2017 (Unaudited) | Year ended April 30, 2017 | Six months October 31, 2017 (Unaudited) | Year ended April 30, 2017 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 23,005,371 | $ | 20,722,879 | $ | 113,447,934 | $ | 218,573,510 | ||||||||
Net realized gain | 18,604,662 | 43,245,701 | 278,941,483 | 90,233,452 | ||||||||||||
Net change in unrealized appreciation/depreciation | 127,406,473 | 80,114,372 | (94,738,914 | ) | 207,346,383 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 169,016,506 | 144,082,952 | 297,650,503 | 516,153,345 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (21,326,255 | ) | (19,794,874 | ) | (108,846,852 | ) | (210,133,528 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (21,326,255 | ) | (19,794,874 | ) | (108,846,852 | ) | (210,133,528 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 856,722,277 | 1,097,954,043 | 1,067,785,775 | 2,208,470,716 | ||||||||||||
Cost of shares redeemed | (123,865,151 | ) | (269,200,028 | ) | (1,444,677,185 | ) | (958,764,601 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | 732,857,126 | 828,754,015 | (376,891,410 | ) | 1,249,706,115 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | 880,547,377 | 953,042,093 | (188,087,759 | ) | 1,555,725,932 | |||||||||||
NET ASSETS | ||||||||||||||||
Beginning of period | 1,429,997,208 | 476,955,115 | 6,632,678,766 | 5,076,952,834 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 2,310,544,585 | $ | 1,429,997,208 | $ | 6,444,591,007 | $ | 6,632,678,766 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed net investment income included in net assets at end of period | $ | 3,131,260 | $ | 1,452,144 | $ | 19,415,529 | $ | 14,814,447 | ||||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 27,100,000 | 38,000,000 | 12,550,000 | 27,050,000 | ||||||||||||
Shares redeemed | (3,900,000 | ) | (9,350,000 | ) | (17,000,000 | ) | (11,800,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | 23,200,000 | 28,650,000 | (4,450,000 | ) | 15,250,000 | |||||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
34 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES® TRUST
iShares International Select Dividend ETF | iShares Select Dividend ETF | |||||||||||||||
Six months October 31, 2017 (Unaudited) | Year ended April 30, 2017 | Six months October 31, 2017 (Unaudited) | Year ended April 30, 2017 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 96,866,294 | $ | 152,231,450 | $ | 265,528,130 | $ | 526,773,529 | ||||||||
Net realized gain (loss) | (34,585,453 | ) | (35,215,676 | ) | 263,505,567 | 722,778,082 | ||||||||||
Net change in unrealized appreciation/depreciation | 259,841,511 | 268,939,681 | 332,473,729 | 1,022,663,840 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 322,122,352 | 385,955,455 | 861,507,426 | 2,272,215,451 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (111,002,818 | ) | (144,141,129 | ) | (267,214,642 | ) | (517,278,307 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (111,002,818 | ) | (144,141,129 | ) | (267,214,642 | ) | (517,278,307 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 515,645,172 | 1,044,369,320 | 208,576,292 | 2,397,347,228 | ||||||||||||
Cost of shares redeemed | — | (12,858,231 | ) | (897,214,504 | ) | (1,597,585,625 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | 515,645,172 | 1,031,511,089 | (688,638,212 | ) | 799,761,603 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | 726,764,706 | 1,273,325,415 | (94,345,428 | ) | 2,554,698,747 | |||||||||||
NET ASSETS | ||||||||||||||||
Beginning of period | 4,010,716,352 | 2,737,390,937 | 17,200,058,931 | 14,645,360,184 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 4,737,481,058 | $ | 4,010,716,352 | $ | 17,105,713,503 | $ | 17,200,058,931 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed net investment income included in net assets at end of period | $ | 839,397 | $ | 14,975,921 | $ | 8,704,031 | $ | 10,390,543 | ||||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 15,550,000 | 34,950,000 | 2,250,000 | 27,800,000 | ||||||||||||
Shares redeemed | — | (450,000 | ) | (9,700,000 | ) | (18,350,000 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | 15,550,000 | 34,500,000 | (7,450,000 | ) | 9,450,000 | |||||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
FINANCIAL STATEMENTS | 35 |
Table of Contents
iSHARES® TRUST
(For a share outstanding throughout each period)
iShares Core Dividend Growth ETF | ||||||||||||||||
Six months ended Oct. 31, 2017 (Unaudited) | Year ended Apr. 30, 2017 | Year ended Apr. 30, 2016 | Period from to | |||||||||||||
Net asset value, beginning of period | $ | 30.75 | $ | 26.72 | $ | 26.35 | $ | 24.96 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Income from investment operations: | ||||||||||||||||
Net investment incomeb | 0.38 | 0.71 | 0.67 | 0.53 | ||||||||||||
Net realized and unrealized gainc | 2.37 | 3.98 | 0.34 | 1.29 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total from investment operations | 2.75 | 4.69 | 1.01 | 1.82 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Less distributions from: | ||||||||||||||||
Net investment income | (0.35 | ) | (0.66 | ) | (0.64 | ) | (0.43 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions | (0.35 | ) | (0.66 | ) | (0.64 | ) | (0.43 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net asset value, end of period | $ | 33.15 | $ | 30.75 | $ | 26.72 | $ | 26.35 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total return | 9.00 | %d | 17.78 | % | 3.95 | % | 7.31 | %d | ||||||||
|
|
|
|
|
|
|
| |||||||||
Ratios/Supplemental data: | ||||||||||||||||
Net assets, end of period (000s) | $ | 2,310,545 | $ | 1,429,997 | $ | 476,955 | $ | 168,627 | ||||||||
Ratio of expenses to average net assetse | 0.08 | % | 0.09 | % | 0.10 | % | 0.05 | % | ||||||||
Ratio of expenses to average net assets prior to waived feese | n/a | n/a | 0.12 | % | 0.12 | % | ||||||||||
Ratio of net investment income to average net assetse | 2.39 | % | 2.46 | % | 2.62 | % | 2.31 | % | ||||||||
Portfolio turnover ratef | 11 | %d | 27 | % | 45 | % | 47 | %d |
a | Commencement of operations. |
b | Based on average shares outstanding throughout each period. |
c | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
d | Not annualized. |
e | Annualized for periods of less than one year. |
f | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
36 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES® TRUST
(For a share outstanding throughout each period)
iShares Core High Dividend ETF | ||||||||||||||||||||||||
Six months ended Oct. 31, 2017 (Unaudited) | Year ended Apr. 30, 2017 | Year ended Apr. 30, 2016 | Year ended Apr. 30, 2015 | Year ended Apr. 30, 2014 | Year ended Apr. 30, 2013 | |||||||||||||||||||
Net asset value, beginning of period | $ | 83.27 | $ | 78.83 | $ | 77.18 | $ | 73.80 | $ | 68.58 | $ | 57.95 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: |
| |||||||||||||||||||||||
Net investment incomea | 1.49 | 2.85 | 2.70 | 2.71 | 2.27 | 2.11 | ||||||||||||||||||
Net realized and unrealized gainb | 2.39 | 4.34 | 1.79 | 3.27 | 5.21 | 10.63 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 3.88 | 7.19 | 4.49 | 5.98 | 7.48 | 12.74 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Less distributions from: |
| |||||||||||||||||||||||
Net investment income | (1.45 | ) | (2.75 | ) | (2.84 | ) | (2.60 | ) | (2.26 | ) | (2.11 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (1.45 | ) | (2.75 | ) | (2.84 | ) | (2.60 | ) | (2.26 | ) | (2.11 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 85.70 | $ | 83.27 | $ | 78.83 | $ | 77.18 | $ | 73.80 | $ | 68.58 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 4.69 | %c | 9.22 | % | 6.12 | % | 8.21 | % | 11.20 | % | 22.49 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios/Supplemental data: |
| |||||||||||||||||||||||
Net assets, end of period (000s) | $ | 6,444,591 | $ | 6,632,679 | $ | 5,076,953 | $ | 4,858,218 | $ | 3,542,299 | $ | 3,518,312 | ||||||||||||
Ratio of expenses to average net assetsd | 0.08 | % | 0.10 | % | 0.12 | % | 0.14 | % | 0.40 | % | 0.40 | % | ||||||||||||
Ratio of net investment income to average net assetsd | 3.51 | % | 3.49 | % | 3.63 | % | 3.57 | % | 3.29 | % | 3.45 | % | ||||||||||||
Portfolio turnover ratee | 25 | %c | 49 | % | 74 | % | 63 | % | 47 | % | 43 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 37 |
Table of Contents
Financial Highlights (Continued)
iSHARES® TRUST
(For a share outstanding throughout each period)
iShares International Select Dividend ETF | ||||||||||||||||||||||||
Six months ended Oct. 31, 2017 (Unaudited) | Year ended Apr. 30, 2017 | Year ended Apr. 30, 2016 | Year ended Apr. 30, 2015 | Year ended Apr. 30, 2014 | Year ended Apr. 30, 2013 | |||||||||||||||||||
Net asset value, beginning of period | $ | 31.78 | $ | 29.85 | $ | 35.09 | $ | 39.73 | $ | 36.07 | $ | 31.73 | ||||||||||||
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Income from investment operations: |
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Net investment incomea | 0.72 | 1.42 | b | 1.51 | 1.61 | 1.93 | 1.70 | |||||||||||||||||
Net realized and unrealized gain (loss)c | 1.75 | 1.88 | (5.18 | ) | (4.40 | ) | 3.56 | 4.29 | ||||||||||||||||
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Total from investment operations | 2.47 | 3.30 | (3.67 | ) | (2.79 | ) | 5.49 | 5.99 | ||||||||||||||||
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Less distributions from: |
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Net investment income | (0.83 | ) | (1.37 | ) | (1.57 | ) | (1.74 | ) | (1.83 | ) | (1.65 | ) | ||||||||||||
Net realized gain | — | — | — | (0.11 | ) | — | — | |||||||||||||||||
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Total distributions | (0.83 | ) | (1.37 | ) | (1.57 | ) | (1.85 | ) | (1.83 | ) | (1.65 | ) | ||||||||||||
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Net asset value, end of period | $ | 33.42 | $ | 31.78 | $ | 29.85 | $ | 35.09 | $ | 39.73 | $ | 36.07 | ||||||||||||
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Total return | 7.83 | %d | 11.47 | %b | (10.37 | )% | (7.20 | )% | 16.20 | % | 19.76 | % | ||||||||||||
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Ratios/Supplemental data: |
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Net assets, end of period (000s) | $ | 4,737,481 | $ | 4,010,716 | $ | 2,737,391 | $ | 4,612,557 | $ | 3,744,611 | $ | 2,059,371 | ||||||||||||
Ratio of expenses to average net assetse | 0.50 | % | 0.50 | % | 0.50 | % | 0.50 | % | 0.50 | % | 0.50 | % | ||||||||||||
Ratio of expenses to average net assets excluding professional fees for foreign withholding tax claims (Note 8)e | n/a | 0.50 | % | n/a | n/a | n/a | n/a | |||||||||||||||||
Ratio of net investment income to average net assetse | 4.29 | % | 4.75 | %b | 4.97 | % | 4.42 | % | 5.27 | % | 5.21 | % | ||||||||||||
Portfolio turnover ratef | 3 | %d | 29 | % | 27 | % | 53 | % | 55 | % | 24 | % |
a | Based on average shares outstanding throughout each period. |
b | Reflects the one-time, positive effect of foreign withholding tax claims, net of the associated professional fees (See Note 8), which resulted in the following increases: |
• | Net investment income per share by $0.04. |
• | Total return by 0.10%. |
• | Ratio of net investment income to average net assets by 0.13%. |
c | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
d | Not annualized. |
e | Annualized for periods of less than one year. |
f | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
38 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES® TRUST
(For a share outstanding throughout each period)
iShares Select Dividend ETF | ||||||||||||||||||||||||
Six months Oct. 31, 2017 | Year ended Apr. 30, 2017 | Year ended Apr. 30, 2016 | Year ended Apr. 30, 2015 | Year ended Apr. 30, 2014 | Year ended Apr. 30, 2013 | |||||||||||||||||||
Net asset value, beginning of period | $ | 91.51 | $ | 82.05 | $ | 78.32 | $ | 74.82 | $ | 65.47 | $ | 56.70 | ||||||||||||
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| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment incomea | 1.45 | 2.82 | 2.57 | 2.43 | 2.18 | 2.17 | ||||||||||||||||||
Net realized and unrealized gainb | 3.27 | 9.41 | 3.78 | 3.47 | 9.40 | 8.78 | ||||||||||||||||||
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Total from investment operations | 4.72 | 12.23 | 6.35 | 5.90 | 11.58 | 10.95 | ||||||||||||||||||
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| |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (1.46 | ) | (2.77 | ) | (2.62 | ) | (2.40 | ) | (2.23 | ) | (2.18 | ) | ||||||||||||
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| |||||||||||||
Total distributions | (1.46 | ) | (2.77 | ) | (2.62 | ) | (2.40 | ) | (2.23 | ) | (2.18 | ) | ||||||||||||
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| |||||||||||||
Net asset value, end of period | $ | 94.77 | $ | 91.51 | $ | 82.05 | $ | 78.32 | $ | 74.82 | $ | 65.47 | ||||||||||||
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Total return | 5.18 | %c | 15.12 | % | 8.42 | % | 7.97 | % | 18.06 | % | 19.83 | % | ||||||||||||
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Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 17,105,714 | $ | 17,200,059 | $ | 14,645,360 | $ | 14,853,105 | $ | 13,567,826 | $ | 12,430,015 | ||||||||||||
Ratio of expenses to average net assetsd | 0.39 | % | 0.39 | % | 0.39 | % | 0.39 | % | 0.39 | % | 0.40 | % | ||||||||||||
Ratio of net investment income to average net assetsd | 3.09 | % | 3.23 | % | 3.36 | % | 3.16 | % | 3.18 | % | 3.72 | % | ||||||||||||
Portfolio turnover ratee | 2 | %c | 19 | % | 21 | % | 20 | % | 22 | % | 13 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 39 |
Table of Contents
Notes to Financial Statements (Unaudited)
iSHARES® TRUST
iShares Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust was established as a Delaware statutory trust pursuant to an Agreement and Declaration of Trust dated December 16, 1999.
These financial statements relate only to the following funds (each, a “Fund,” and collectively, the “Funds”):
iShares ETF | Diversification Classification | |
Core Dividend Growth | Diversified | |
Core High Dividend | Non-diversified | |
International Select Dividend | Diversified | |
Select Dividend | Diversified |
The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index. The investment adviser uses a “passive” or index approach to try to achieve each Fund’s investment objective.
Pursuant to the Trust’s organizational documents, the Funds’ officers and trustees are indemnified against certain liabilities that may arise out of the performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred.
1. | SIGNIFICANT ACCOUNTING POLICIES |
The following significant accounting policies are consistently followed by each Fund in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies.
SECURITY VALUATION
Each Fund’s investments are valued at fair value each day that the Fund’s listing exchange is open and, for financial reporting purposes, as of the report date should the reporting period end on a day that the Fund’s listing exchange is not open. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) provides oversight of the valuation of investments for the Funds. The investments of each Fund are valued pursuant to policies and procedures developed by the Global Valuation Committee and approved by the Board of Trustees of the Trust (the “Board”).
• | Equity investments traded on a recognized securities exchange are valued at that day’s last reported trade price or the official closing price, as applicable, on the exchange where the stock is primarily traded. Equity investments traded on a recognized exchange for which there were no sales on that day are valued at the last traded price. |
• | Open-end U.S. mutual funds (including money market funds) are valued at that day’s published net asset value (“NAV”). |
40 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Unaudited) (Continued)
iSHARES® TRUST
• | Futures contract notional values are determined based on that day’s last reported settlement price on the exchange where the contract is traded. |
In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the fair value of such investment or if a price is not available, the investment will be valued by the Global Valuation Committee, in accordance with policies approved by the Board. The fair valuation approaches that may be utilized by the Global Valuation Committee to determine fair value include market approach, income approach and the cost approach. The valuation techniques used under these approaches take into consideration inputs that include but are not limited to (i) attributes specific to the investment; (ii) the principal market for the investment; (iii) the customary participants in the principal market for the investment; (iv) data assumptions by market participants for the investment, if reasonably available; (v) quoted prices for similar investments in active markets; and (vi) other inputs, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and/or default rates. Valuations based on such inputs are reported to the Board on a quarterly basis.
The Global Valuation Committee employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the Trust’s pricing vendors, a regular review of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices, reviews of large movements in market values, and reviews of market related activity.
Fair value pricing could result in a difference between the prices used to calculate a Fund’s NAV and the prices used by the Fund’s underlying index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s underlying index.
Various inputs are used in determining the fair value of financial instruments. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs to valuation techniques are categorized into a fair value hierarchy consisting of three broad levels for financial reporting purposes as follows:
• | Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities; |
• | Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability (such as exchange rates, financing terms, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs; and |
• | Level 3 — Unobservable inputs for the asset or liability based on the best information available in the circumstances, to the extent observable inputs are not available, including the Global Valuation Committee’s assumptions used in determining the fair value of investments. |
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgement exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The fair value hierarchy for each Fund’s investments is included in its schedule of investments.
Changes in valuation techniques may result in transfers in or out of an assigned level within the fair value hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning
NOTESTO FINANCIAL STATEMENTS | 41 |
Table of Contents
Notes to Financial Statements (Unaudited) (Continued)
iSHARES® TRUST
of the reporting period. The categorization of values determined for financial instruments are based on the pricing transparency of the financial instruments and are not necessarily an indication of the risks associated with investing in those securities.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are accounted for on trade date. Realized gains and losses on investment transactions are determined using the specific identification method. Dividend income and capital gain distributions, if any, are recognized on the ex-dividend date, net of any foreign taxes withheld at source. Any taxes withheld that are reclaimable from foreign tax authorities as of October 31, 2017 are reflected in tax reclaims receivable. Upon notification from issuers, some of the dividend income received from a real estate investment trust may be re-designated as a reduction of cost of the related investment and/or realized gain. Non-cash dividends, if any, are recognized on the ex-dividend date and recorded as non-cash dividend income at fair value. Distributions received by the Funds may include a return of capital that is estimated by management. Such amounts are recorded as a reduction of the cost of investments or reclassified to capital gains. Interest income is accrued daily.
FOREIGN CURRENCY TRANSLATION
The accounting records of the Funds are maintained in U.S. dollars. Foreign currencies, as well as investment securities and other assets and liabilities denominated in foreign currencies, are translated into U.S. dollars using exchange rates deemed appropriate by the investment adviser. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars on the respective dates of such transactions.
Each Fund does not isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of securities. Such fluctuations are reflected by the Funds as a component of realized and unrealized gains and losses from investments for financial reporting purposes. Each Fund reports realized currency gains (losses) on foreign currency related transactions as components of net realized gain (loss) for financial reporting purposes, whereas such components are generally treated as ordinary income for U.S. federal income tax purposes.
FOREIGN TAXES
The Funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, capital gains on investments, or certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the Funds invest. These foreign taxes, if any, are paid by the Funds and are reflected in their statements of operations as follows: foreign taxes withheld at source are presented as a reduction of income, foreign taxes on securities lending income are presented as a reduction of securities lending income, foreign taxes on stock dividends are presented as “other foreign taxes”, and foreign taxes on capital gains from sales of investments and foreign taxes on foreign currency transactions are included in their respective net realized gain (loss) categories. Foreign taxes payable or deferred as of October 31, 2017, if any, are disclosed in the Funds’ statements of assets and liabilities.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends and distributions paid by each Fund are recorded on the ex-dividend dates. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds.
LOANS OF PORTFOLIO SECURITIES
Each Fund may lend its investment securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by an
42 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Unaudited) (Continued)
iSHARES® TRUST
approved bank, or securities issued or guaranteed by the U.S. government. The initial collateral received by each Fund is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Funds. Any additional required collateral is delivered to the Funds and any excess collateral is returned by the Funds on the next business day. During the term of the loan, each Fund is entitled to all distributions made on or in respect of the loaned securities but does not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.
Cash received as collateral for securities on loan may be reinvested in certain short-term instruments either directly on behalf of a fund or through one or more joint accounts or money market funds, including those managed by BlackRock Fund Advisors (“BFA”), the Funds’ investment adviser, or its affiliates. As of October 31, 2017, any securities on loan were collateralized by cash and/or U.S. government obligations. Cash collateral received was invested in money market funds managed by BFA and is disclosed in the schedules of investments. Any non-cash collateral received cannot be sold, re-invested or pledged by the Fund, except in the event of borrower default. The securities on loan for each Fund are also disclosed in its schedule of investments. The total value of any securities on loan as of October 31, 2017 and the total value of the related cash collateral are disclosed in the statements of assets and liabilities. Income earned by the Funds from securities lending is disclosed in the statements of operations.
The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Funds benefit from a borrower default indemnity provided by BlackRock, Inc. (“BlackRock”). BlackRock’s indemnity allows for full replacement of securities loaned if the collateral received does not cover the value of the securities loaned in the event of borrower default. Each Fund could incur a loss if the value of an investment purchased with cash collateral falls below the value of the loaned securities or if the value of an investment purchased with cash collateral falls below the value of the original cash collateral received.
Securities lending transactions are entered into by the Funds under Master Securities Lending Agreements (“MSLA”) which provide the right, in the event of default (including bankruptcy or insolvency) for the non-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, a Fund, as lender, would offset the market value of the collateral received against the market value of the securities loaned. The value of the collateral is typically greater than that of the market value of the securities loaned, leaving the lender with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, the borrower can resell or re-pledge the loaned securities, and a Fund can reinvest cash collateral, or, upon an event of default, resell or re-pledge the collateral.
The following table is a summary of securities lending agreements which are subject to offset under an MSLA as of October 31, 2017:
iShares ETF and Counterparty | Market Value of Securities on Loan | Cash Collateral Received a | Net Amount | |||||||||
Core High Dividend | ||||||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | $ | 46,371 | $ | 46,371 | $ | — | ||||||
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a | Collateral received in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by the Fund is disclosed in the Fund’s statement of assets and liabilities. |
NOTESTO FINANCIAL STATEMENTS | 43 |
Table of Contents
Notes to Financial Statements (Unaudited) (Continued)
iSHARES® TRUST
2. | INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES |
Pursuant to an Investment Advisory Agreement with the Trust, BFA manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock. Under the Investment Advisory Agreement, BFA is responsible for substantially all expenses of the Funds, except (i) interest and taxes; (ii) brokerage commissions and other expenses connected with the execution of portfolio transactions; (iii) distribution fees; (iv) the advisory fee payable to BFA; and (v) litigation expenses and any extraordinary expenses (in each case as determined by a majority of the independent trustees).
For its investment advisory services to each of the iShares Core Dividend Growth ETF and iShares Core High Dividend ETF, BFA is entitled to an annual investment advisory fee of 0.08%, accrued daily and paid monthly by the Funds, based on the average daily net assets of each Fund.
For its investment advisory services to the iShares International Select Dividend ETF, BFA is entitled to an annual investment advisory fee, accrued daily and paid monthly by the Fund, based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds, as follows:
Investment Advisory Fee | Aggregate Average Daily Net Assets | ||||
0.5000 | % | First $12 billion | |||
0.4750 | a | Over $12 billion, up to and including $18 billion | |||
0.4513 | a | Over $18 billion, up to and including $24 billion | |||
0.4287a | Over $24 billion |
a | Investment advisory fee level reflects a 5% reduction (rounded to the fourth decimal place) from the investment advisory fee at the prior aggregate average daily net asset level. |
For its investment advisory services to the iShares Select Dividend ETF, BFA is entitled to an annual investment advisory fee, accrued daily and paid monthly by the Fund, based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds, as follows:
Investment Advisory Fee | Aggregate Average Daily Net Assets | ||||
0.4000 | % | First $46 billion | |||
0.3800 | a | Over $46 billion, up to and including $81 billion | |||
0.3610 | a | Over $81 billion, up to and including $111 billion | |||
0.3430 | a | Over $111 billion, up to and including $141 billion | |||
0.3259a | Over $141 billion |
a | Investment advisory fee level reflects a 5% reduction (rounded to the fourth decimal place) from the investment advisory fee at the prior aggregate average daily net asset level. |
The U.S. Securities and Exchange Commission has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (“BTC”), an affiliate of BFA, to serve as securities lending agent for the Funds, subject to applicable conditions. As securities lending agent, BTC bears all operational costs directly related to securities lending. Each Fund is responsible for fees in connection with the investment of cash collateral received for securities on loan in a money market fund managed by BFA, however, BTC has agreed to reduce the amount of securities lending income it receives in order to effectively limit the collateral investment fees each Fund bears to an annual rate of 0.04% (the “collateral investment fees”). Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment fees. The Funds retain a portion of securities lending income and remit the remaining portion to BTC as compensation for its services as securities lending agent.
44 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Unaudited) (Continued)
iSHARES® TRUST
Pursuant to a securities lending agreement, the iShares Core Dividend Growth ETF, iShares Core High Dividend ETF and iShares Select Dividend ETF (the “Group 1 Funds”), retain 71.5% of securities lending income and the amount retained can never be less than 65% of the total of securities lending income plus the collateral investment fees.
Pursuant to a securities lending agreement, the iShares International Select Dividend ETF (the “Group 2 Fund”), retains 80% of securities lending income and the amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees.
In addition, commencing the business day following the date that the aggregate securities lending income plus the collateral investment fees generated across all 1940 Act iShares exchange-traded funds (the “iShares ETF Complex”) in a given calendar year exceeds the aggregate securities lending income generated across the iShares ETF Complex in the calendar year 2013, each Group 1 Fund, pursuant to a securities lending agreement, will retain for the remainder of that calendar year 75% of securities lending income and the amount retained can never be less than 65% of the total of securities lending income plus the collateral investment fees. The Group 2 Fund will receive for the remainder of that calendar year 85% of securities lending income and the amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees.
For the six months ended October 31, 2017, the total of securities lending agent services and collateral investment fees paid were as follows:
iShares ETF | Fees Paid to BTC | |||
Core High Dividend | $ | 2,175 | ||
International Select Dividend | 10,441 |
BlackRock Investments, LLC, an affiliate of BFA, is the distributor for each Fund. Pursuant to the distribution agreement, BFA is responsible for any fees or expenses for distribution services provided to the Funds.
Cross trading is the buying or selling of portfolio securities between funds to which BFA (or an affiliate) serves as investment adviser. At its regularly scheduled quarterly meetings, the Board reviews such transactions as of the most recent calendar quarter for compliance with the requirements and restrictions set forth by Rule 17a-7.
iShares ETF | Purchases | Sales | ||||||
Core High Dividend | $ | 150,930,628 | $ | 369,674,480 | ||||
Select Dividend | 48,243,087 | — |
Each Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is included in “Dividends – affiliated” in the statements of operations.
The PNC Financial Services Group, Inc. is the largest stockholder of BlackRock and is considered to be an affiliate of the Funds for 1940 Act purposes.
Certain trustees and officers of the Trust are also officers of BTC and/or BFA.
NOTESTO FINANCIAL STATEMENTS | 45 |
Table of Contents
Notes to Financial Statements (Unaudited) (Continued)
iSHARES® TRUST
3. | INVESTMENT PORTFOLIO TRANSACTIONS |
Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the six months ended October 31, 2017 were as follows:
iShares ETF | Purchases | Sales | ||||||
Core Dividend Growth | $ | 214,307,531 | $ | 200,847,780 | ||||
Core High Dividend | 1,624,283,064 | 1,590,464,405 | ||||||
International Select Dividend | 189,359,595 | 118,627,652 | ||||||
Select Dividend | 274,753,497 | 289,983,277 |
In-kind transactions (see Note 4) for the six months ended October 31, 2017 were as follows:
iShares ETF | In-kind Purchases | In-kind Sales | ||||||
Core Dividend Growth | $ | 852,041,261 | $ | 123,297,582 | ||||
Core High Dividend | 1,063,001,024 | 1,438,238,749 | ||||||
International Select Dividend | 432,604,825 | — | ||||||
Select Dividend | 202,010,812 | 865,180,899 |
4. | CAPITAL SHARE TRANSACTIONS |
Capital shares are issued and redeemed by each Fund only in aggregations of a specified number of shares or multiples thereof (“Creation Units”) at NAV. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the statements of changes in net assets.
The consideration for the purchase of Creation Units of a fund in the Trust generally consists of the in-kind deposit of a designated portfolio of securities and a specified amount of cash. Certain funds in the Trust may be offered in Creation Units solely or partially for cash in U.S. dollars. Investors purchasing and redeeming Creation Units may pay a purchase transaction fee and a redemption transaction fee directly to State Street Bank and Trust Company, the Trust’s administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash. Investors transacting in Creation Units for cash may also pay an additional variable charge to compensate the relevant fund for certain transaction costs (i.e., stamp taxes, taxes on currency or other financial transactions, and brokerage costs) and market impact expenses relating to investing in portfolio securities. Such variable charges, if any, are included in “Proceeds from shares sold” in the statements of changes in net assets.
From time to time, settlement of securities related to in-kind contributions or in-kind redemptions may be delayed. In such cases, securities related to in-kind contributions are reflected as “Due from custodian” and securities related to in-kind redemptions are reflected as “Securities related to in-kind transactions” in the statements of assets and liabilities.
5. | FUTURES CONTRACTS |
Each Fund’s use of futures contracts is generally limited to cash equitization. This involves the use of available cash to invest in index futures contracts in order to gain exposure to the equity markets represented in or by the Fund’s underlying index and is intended to allow the Fund to better track its underlying index. Futures contracts are standardized, exchange-traded agreements to buy or sell a financial instrument at a set price on a future date. Upon entering into a futures contract, a fund is required to
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pledge to the executing broker which holds segregated from its own assets, an amount of cash, U.S. government securities or other high-quality debt and equity securities equal to the minimum initial margin requirements of the exchange on which the contract is traded.
Pursuant to the contract, the fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in notional value of the contract. Such receipts or payments are known as margin variation and are recorded by the fund as unrealized appreciation or depreciation. When the contract is closed, the fund records a realized gain or loss equal to the difference between the notional value of the contract at the time it was opened and the notional value at the time it was closed. Losses may arise if the notional value of a futures contract decreases due to an unfavorable change in the market rates or values of the underlying instrument during the term of the contract or if the counterparty does not perform under the contract. The use of futures contracts also involves the risk of an imperfect correlation in the movements in the price of futures contracts and the assets underlying such contracts.
The following table shows the value of futures contracts held as of October 31, 2017 and the related locations in the statements of assets and liabilities, presented by risk exposure category:
Assets | ||||||||||||||||
iShares Core Dividend | iShares Core High Dividend ETF | iShares International Select | iShares Select Dividend ETF | |||||||||||||
Equity contracts: | ||||||||||||||||
Variation margin / Net assets consist of – net unrealized appreciationa | $ | 94,914 | $ | 430,817 | $ | 735,735 | $ | 1,257,215 | ||||||||
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a | Represents cumulative appreciation of futures contracts as reported in the schedules of investments. Only current day’s variation margin is reported separately within the statements of assets and liabilities. |
The following table shows the realized and unrealized gains (losses) on futures contracts held during the six months ended October 31, 2017 and the related locations in the statements of operations, presented by risk exposure category:
Net Realized Gain (Loss) | ||||||||||||||||
iShares Core Dividend | iShares Core High Dividend ETF | iShares International Select | iShares Select Dividend ETF | |||||||||||||
Equity contracts: |
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Futures contracts | $ | 379,471 | $ | 1,797,245 | $ | 429,564 | $ | 3,239,181 | ||||||||
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Net Change in Unrealized Appreciation/Depreciation | ||||||||||||||||
iShares Core Dividend | iShares Core High Dividend ETF | iShares International Select | iShares Select Dividend ETF | |||||||||||||
Equity contracts: |
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Futures contracts | $ | 64,044 | $ | 312,053 | $ | 735,735 | $ | 983,906 | ||||||||
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The following table shows the average quarter-end balances of open futures contracts for the six months ended October 31, 2017:
iShares Core Dividend | iShares Core High Dividend ETF | iShares International Select | iShares Select Dividend ETF | |||||||||||||
Average notional value of contracts purchased | $ | 4,200,622 | $ | 13,477,622 | $ | 7,212,025 | $ | 31,088,372 | ||||||||
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6. | PRINCIPAL RISKS |
In the normal course of business, each Fund invests in securities or other instruments and may enter into certain transactions, and such activities subject the Fund to various risks, including, among others, fluctuations in the market (market risk) or failure of an issuer to meet all of its obligations. The value of securities or other instruments may also be affected by various factors, including, without limitation: (i) the general economy; (ii) the overall market as well as local, regional or global political and/or social instability; (iii) regulation, taxation or international tax treaties between various countries; or (iv) currency, interest rate or price fluctuations. Each Fund’s prospectus provides details of the risks to which the Fund is subject.
BFA uses a “passive” or index approach to try to achieve each Fund’s investment objective following the securities included in its underlying index during upturns as well as downturns. BFA does not take steps to reduce market exposure or to lessen the effects of a declining market. Divergence from the underlying index and the composition of the portfolio is monitored by BFA.
MARKET RISK
Market risk arises mainly from uncertainty about future values of financial instruments influenced by price, currency and interest rate movements. It represents the potential loss a fund may suffer through holding market positions in the face of market movements. A fund is exposed to market risk by its investment in equity, fixed income and/or financial derivative instruments or by its investment in underlying funds. The fair value of securities held by a fund may decline due to general market conditions, economic trends or events that are not specifically related to the issuers of the securities including local, regional or global political, social or economic instability or to factors that affect a particular industry or group of industries. The extent of a fund’s exposure to market risk is the market value of the investments held as shown in the fund’s schedule of investments.
A diversified portfolio, where this is appropriate and consistent with a fund’s objectives, minimizes the risk that a price change of a particular investment will have a material impact on the NAV of a fund. The investment concentrations within each Fund’s portfolio are disclosed in its schedule of investments.
Investing in the securities of non-U.S. issuers involves certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: differences in accounting, auditing and financial reporting standards; more substantial governmental involvement in the economy; higher inflation rates, greater social, economic and political uncertainties; possible nationalization or expropriation of assets; less availability of public information about issuers; imposition of withholding or other taxes; higher transaction and custody costs and delays in settlement procedures; and lower level of regulation of the securities markets and issuers. Non-U.S. securities may be less liquid, more difficult to value, and have greater price volatility due to exchange rate fluctuations. These and other risks are heightened for investments in issuers from countries with less developed capital markets.
The economies and markets of European countries are often closely connected and interdependent, and events in one country in Europe can have an adverse impact on other European countries. The European financial markets have experienced volatility
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and adverse trends in recent years due to concerns about economic downturns or rising government debt levels in several European countries. These events have adversely affected the exchange rate of the euro and may continue to significantly affect European countries. The occurrence of terrorist incidents throughout Europe also could impact financial markets. In addition, the United Kingdom has voted to withdraw from the European Union. The referendum may introduce significant new uncertainties and instability in the financial markets as the United Kingdom negotiates its exit from the European Union.
CREDIT RISK
Credit risk is the risk that an issuer or guarantor of debt instruments or the counterparty to a financial transaction, including derivatives contracts, repurchase agreements or loans of portfolio securities, is unable or unwilling to make timely interest and/or principal payments or to otherwise honor its obligations. BFA and its affiliates manage counterparty credit risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose a fund to issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of a fund’s exposure to credit and counterparty risks with respect to those financial assets is approximated by their value recorded in its statement of assets and liabilities.
7. | INCOME TAX INFORMATION |
Each Fund is treated as an entity separate from the Trust’s other funds for federal income tax purposes. It is the policy of each Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its ordinary income and any net capital gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes is required.
For purposes of U.S. GAAP, in-kind redemptions are treated as sales of securities resulting in realized capital gains or losses to the Funds. Because such gains or losses are not taxable to the Funds and are not distributed to existing Fund shareholders, the gains or losses are reclassified from accumulated net realized gain (loss) to paid-in capital at the end of the Funds’ tax year. These reclassifications have no effect on net assets or NAV per share.
The tax character of current year distributions will be determined at the end of the current fiscal year.
As of April 30, 2017, the Funds’ fiscal year-end, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:
iShares ETF | Non- Expiring a | Expiring 2018 | Total | |||||||||
Core Dividend Growth | $ | 1,045,146 | $ | — | $ | 1,045,146 | ||||||
Core High Dividend | 192,160,546 | — | 192,160,546 | |||||||||
International Select Dividend | 504,903,684 | — | 504,903,684 | |||||||||
Select Dividend | — | 1,175,399,561 | 1,175,399,561 |
a | Must be utilized prior to losses subject to expiration. |
The Funds may own shares in certain foreign investment entities, referred to, under U.S. tax law, as “passive foreign investment companies.” The Funds may elect to mark-to-market annually the shares of each passive foreign investment company and would be required to distribute to shareholders any such marked-to-market gains.
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Management has analyzed tax laws and regulations and their application to the Funds as of October 31, 2017, inclusive of the open tax return years, and does not believe there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.
8. | FOREIGN WITHHOLDING TAX CLAIMS |
The iShares International Select Dividend ETF has filed claims to recover taxes withheld by Finland on dividend income on the basis that Finland had purportedly violated certain provisions in the Treaty on the Functioning of the European Union. The Fund has recorded a receivable for all recoverable taxes withheld by Finland based upon recent favorable determinations issued by the Finnish Tax Authority. Withholding tax claims may be potentially for a limited number of prior calendar years, depending upon the member state’s statute of limitation on taxes. The Fund continues to evaluate developments in Finland for potential impacts to the receivables and payables recorded. Such foreign withholding tax claims are disclosed in the statement of assets and liabilities and statement of operations. Professional fees associated with the filing of these claims that result in the recovery of foreign withholding taxes have been approved by the Board as appropriate expenses of the Fund.
The Internal Revenue Service has issued guidance to address U.S. income tax liabilities attributable to fund shareholders resulting from the recovery of foreign taxes withheld in prior calendar years. These withheld foreign taxes were passed through to shareholders in the form of foreign tax credits in the year the taxes were withheld. Assuming there are sufficient foreign taxes paid which the Fund is able to pass through to its shareholders as a foreign tax credit in the current year, the Fund will be able to offset the prior years’ withholding taxes recovered against the foreign taxes paid in the current year. Accordingly, no federal income tax liability is recorded by the Fund.
9. | LEGAL PROCEEDINGS |
On June 16, 2016, investors (the “Plaintiffs”) in certain iShares funds (iShares Core S&P Small-Cap ETF, iShares Russell 1000 Growth ETF, iShares Core S&P 500 ETF, iShares Russell Mid-Cap Growth ETF, iShares Russell Mid-Cap ETF, iShares Russell Mid-Cap Value ETF, iShares Select Dividend ETF, iShares Morningstar Mid-Cap ETF, iShares Morningstar Large-Cap ETF, iShares U.S. Aerospace & Defense ETF and iShares U.S. Preferred Stock ETF) filed a putative class action lawsuit against iShares Trust, BlackRock, Inc. and certain of its advisory affiliates, and certain directors/trustees and officers of the Funds (collectively, “Defendants”). The lawsuit alleges the Defendants violated federal securities laws by failing to adequately disclose in the prospectuses issued by the funds noted above the risks of using stop-loss orders in the event of a ‘flash crash’, such as the one that occurred on May 6, 2010. On September 18, 2017, the Court issued a Statement of Decision holding that the Plaintiffs lack standing to assert their claims. On October 11, 2017, the Court entered final judgment dismissing all of the Plaintiffs’ claims with prejudice. Plaintiffs have appealed the Court’s decision.
10. | SUBSEQUENT EVENTS |
Management has evaluated the impact of all subsequent events on the Funds through the date the financial statements were available to be issued and has determined that there were no subsequent events requiring adjustment or disclosure in the financial statements.
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I. iShares Core Dividend Growth ETF and iShares Core High Dividend ETF
Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required annually to consider and approve the Investment Advisory Contract between the Trust and BFA (the “Advisory Contract”) on behalf of the Funds. The Independent Trustees requested, and BFA provided, such information as the Independent Trustees, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management on May 5, 2017 and May 12, 2017. At these meetings, the 15(c) Committee reviewed and discussed information provided in response to the 15(c) Committee’s initial requests, and requested certain additional information, which management agreed to provide. At a meeting held on May 18, 2017, management presented information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its meetings. The Board, including the Independent Trustees, reviewed and discussed such information at length. The Independent Trustees requested from management certain additional information, which management agreed to provide. At a meeting held on June 19-21, 2017, the Board, including the Independent Trustees, reviewed the additional information provided by management in response to these requests. After extensive discussions, the Board, including all of the Independent Trustees, approved the continuance of the Advisory Contract for the Funds, based on a review of qualitative and quantitative information provided by BFA. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Board also noted that the Board and BFA agreed to discuss potential further enhancements to the 15(c) process for the coming year. The Independent Trustees were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Contract for the Funds, the Board, including the Independent Trustees, considered the following factors, no one of which was controlling, and reached the following conclusions:
Expenses and Performance of the Funds — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of each Fund in comparison with the same information for other exchange traded funds (“ETFs”) (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising such Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of the proprietary ETF methodology used by Broadridge to determine the applicable Peer Groups. The Board further noted that due to the limitations in providing comparable funds in the various Peer Groups, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Funds in all instances.
The Board also noted that the investment advisory fee rates and overall expenses (net of waivers and reimbursements) for the Funds were lower than the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in their respective Peer Group, excluding iShares funds.
In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as any particular Fund, Broadridge also provided, and the Board reviewed, a comparison of such Fund’s performance for the one-, three-, five-, ten-year, and since inception periods, as applicable, and for the quarter ended December 31, 2016, to that of relevant comparison funds for the same periods.
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The Board noted that each Fund seeks to track its specified underlying index and that, during the year, the Board received periodic reports on each Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative performance information, including any additional detailed information requested by the Boards, was also considered. The Board noted that each Fund generally performed in line with its underlying index over the relevant periods.
Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and the historical performance of each Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, including information about recent and proposed enhancements to the iShares business, including with respect to capital markets support and analysis, technology, product design, compliance and risk management, and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the iShares funds and their shareholders. The Board also considered BFA’s compliance program and its compliance record with respect to the Funds. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Funds, as well as the resources available to them in managing the Funds. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the June 19-21, 2017 meeting and throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that each Fund had met its investment objective consistently since its respective inception date.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Funds under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Costs of Services Provided to Funds and Profits Realized by BFA and Affiliates — The Board reviewed information about the profitability of the Funds to BlackRock, on a Fund-by-Fund basis and in the aggregate, based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and other sources of revenue and expense to BFA and its affiliates from the Funds’ operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, including supplemental information that was responsive to requests of the 15(c) Committee. The Board noted that the 15(c) Committee had focused on the methodology and profitability presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC, a BFA affiliate, from securities lending by the Funds. The Board also discussed BFA’s profit margin as reflected in the Funds’ profitability analyses and reviewed information regarding potential economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Funds and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.
Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Funds’ assets, noting that the issue of economies of scale had been focused on by the 15(c) Committee during its meetings and addressed by management, including through supplemental information. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through relatively
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low fee rates established at inception, breakpoints and waivers or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BlackRock’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished, among other things, between fixed and variable costs, and explained how the level of fixed and variable costs, as well as the nature of such costs, may impact the existence or size of scale benefits. The Board noted that the Advisory Contract for the Funds did not provide for any breakpoints in the Funds’ investment advisory fee rates as the assets of the Funds increase. However, the Board noted that should material economies of scale be identified in the future that are not otherwise shared, a breakpoint structure for the Funds may be appropriate, and that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding breakpoints in the future.
Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider the Advisory Contract at least annually, determined to approve the continuance of the Advisory Contract for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same investment objectives and strategies as the Funds and that track the same index as the Funds. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Funds, including in terms of the different and generally more extensive services provided to the Funds, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Funds, as publicly traded ETFs, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged BFA’s expressed business purpose for launching a suite of iShares “Core” ETFs that generally are subject to lower investment advisory fees than iShares non-Core ETFs that may provide a similar investment exposure. The Board also considered the “all-inclusive” nature of the Funds’ advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rates under the Advisory Contract for the Funds were generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.
Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Funds by BFA, such as payment of revenue to BTC, the Funds’ securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Funds in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board also noted the revenue received by BFA and/or its affiliates pursuant to an agreement that permits a service provider to use certain portions of BlackRock’s technology platform to service accounts managed by BFA and/or its affiliates, including the iShares funds. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Funds. The Board further noted that any portfolio transactions on behalf of the Funds placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board
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pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Funds’ shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.
Conclusion — Based on the considerations described above, the Board determined that each Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded to approve the continuance of the Advisory Contract for the coming year.
II. iShares International Select Dividend ETF
Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required annually to consider and approve the Investment Advisory Contract between the Trust and BFA (the “Advisory Contract”) on behalf of the Fund. The Independent Trustees requested, and BFA provided, such information as the Independent Trustees, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management on May 5, 2017 and May 12, 2017. At these meetings, the 15(c) Committee reviewed and discussed information provided in response to the 15(c) Committee’s initial requests, and requested certain additional information, which management agreed to provide. At a meeting held on May 18, 2017, management presented information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its meetings. The Board, including the Independent Trustees, reviewed and discussed such information at length. The Independent Trustees requested from management certain additional information, which management agreed to provide. At a meeting held on June 19-21, 2017, the Board, including the Independent Trustees, reviewed the additional information provided by management in response to these requests. After extensive discussions, the Board, including all of the Independent Trustees, approved the continuance of the Advisory Contract for the Fund, based on a review of qualitative and quantitative information provided by BFA. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Board also noted that the Board and BFA agreed to discuss potential further enhancements to the 15(c) process for the coming year. The Independent Trustees were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Contract for the Fund, the Board, including the Independent Trustees, considered the following factors, no one of which was controlling, and reached the following conclusions:
Expenses and Performance of the Fund — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of the Fund in comparison with the same information for other exchange traded funds (“ETFs”) (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising the Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of the proprietary ETF methodology used by Broadridge to determine the Fund’s Peer Group. The Board further noted that due to the limitations in providing comparable funds in the Peer Group, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Fund in all instances.
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The Board also noted that the investment advisory fee rate and overall expenses (net of waivers and reimbursements) for the Fund were within range of the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in its Peer Group, excluding iShares funds.
In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as the Fund, Broadridge also provided, and the Board reviewed, a comparison of the Fund’s performance for the one-, three-, five-, ten-year, and since inception periods, as applicable, and for the quarter ended December 31, 2016, to that of relevant comparison funds for the same periods.
The Board noted that the Fund seeks to track its specified underlying index and that, during the year, the Board received periodic reports on the Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative performance information, including any additional detailed information requested by the Boards, was also considered. The Board noted that the Fund generally performed in line with its underlying index over the relevant periods.
Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and the historical performance of the Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, including information about recent and proposed enhancements to the iShares business, including with respect to capital markets support and analysis, technology, product design, compliance and risk management, and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the iShares funds and their shareholders. The Board also considered BFA’s compliance program and its compliance record with respect to the Fund. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Fund, as well as the resources available to them in managing the Fund. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the June 19-21, 2017 meeting and throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that the Fund had met its investment objective consistently since its inception date.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Fund under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Costs of Services Provided to Fund and Profits Realized by BFA and Affiliates — The Board reviewed information about the profitability of the Fund to BlackRock, based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and other sources of revenue and expense to BFA and its affiliates from the Fund’s operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, including supplemental information that was responsive to requests of the 15(c) Committee. The Board noted that the 15(c) Committee had focused on the methodology and profitability presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC, a BFA affiliate, from securities lending by the Fund. The Board also discussed
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BFA’s profit margin as reflected in the Fund’s profitability analysis and reviewed information regarding potential economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Fund and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.
Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Fund’s assets, noting that the issue of economies of scale had been focused on by the 15(c) Committee during its meetings and addressed by management, including through supplemental information. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through relatively low fee rates established at inception, breakpoints and waivers or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BlackRock’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished, among other things, between fixed and variable costs, and explained how the level of fixed and variable costs, as well as the nature of such costs, may impact the existence or size of scale benefits. The Board noted that the Advisory Contract for the Fund already provided for breakpoints in the Fund’s investment advisory fee rate as the assets of the Fund, on an aggregated basis with the assets of certain other iShares funds, increase. The Board noted that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding new or revised breakpoints in the future.
Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider the Advisory Contract at least annually, determined to approve the continuance of the Advisory Contract for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same investment objective and strategy as the Fund and that track the same index as the Fund. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Fund, including in terms of the different and generally more extensive services provided to the Fund, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Fund, as a publicly traded ETF, as compared to the Other Accounts that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged BFA’s expressed business purpose for launching a suite of iShares “Core” ETFs that generally are subject to lower investment advisory fees than iShares non-Core ETFs that may provide a similar investment exposure. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rate under the Advisory Contract for the Fund was generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.
Other Benefits to BFA and/or its Affiliates – The Board reviewed the “fallout” benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Fund by BFA, such as payment of revenue to BTC, the Fund’s securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant
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to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Fund in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board also noted the revenue received by BFA and/or its affiliates pursuant to an agreement that permits a service provider to use certain portions of BlackRock’s technology platform to service accounts managed by BFA and/or its affiliates, including the iShares funds. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Fund. The Board further noted that any portfolio transactions on behalf of the Fund placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Fund’s shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.
Conclusion — Based on the considerations described above, the Board determined that the Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded to approve the continuance of the Advisory Contract for the coming year.
III. iShares Select Dividend ETF
Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board��), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required annually to consider and approve the Investment Advisory Contract between the Trust and BFA (the “Advisory Contract”) on behalf of the Fund. The Independent Trustees requested, and BFA provided, such information as the Independent Trustees, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management on May 5, 2017 and May 12, 2017. At these meetings, the 15(c) Committee reviewed and discussed information provided in response to the 15(c) Committee’s initial requests, and requested certain additional information, which management agreed to provide. At a meeting held on May 18, 2017, management presented information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its meetings. The Board, including the Independent Trustees, reviewed and discussed such information at length. The Independent Trustees requested from management certain additional information, which management agreed to provide. At a meeting held on June 19-21, 2017, the Board, including the Independent Trustees, reviewed the additional information provided by management in response to these requests. After extensive discussions, the Board, including all of the Independent Trustees, approved the continuance of the Advisory Contract for the Fund, based on a review of qualitative and quantitative information provided by BFA. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Board also noted that the Board and BFA agreed to discuss potential further enhancements to the 15(c) process for the coming year. The Independent Trustees were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Contract for the Fund, the Board, including the Independent Trustees, considered the following factors, no one of which was controlling, and reached the following conclusions:
Expenses and Performance of the Fund — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of the Fund in comparison with the same information for other exchange traded funds (“ETFs”) (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison
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group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising the Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of the proprietary ETF methodology used by Broadridge to determine the Fund’s Peer Group. The Board further noted that due to the limitations in providing comparable funds in the Peer Group, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Fund in all instances.
The Board also noted that the investment advisory fee rate and overall expenses (net of waivers and reimbursements) for the Fund were within range of the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in its Peer Group, excluding iShares funds.
In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as the Fund, Broadridge also provided, and the Board reviewed, a comparison of the Fund’s performance for the one-, three-, five-, ten-year, and since inception periods, as applicable, and for the quarter ended December 31, 2016, to that of relevant comparison funds for the same periods.
The Board noted that the Fund seeks to track its specified underlying index and that, during the year, the Board received periodic reports on the Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative performance information, including any additional detailed information requested by the Boards, was also considered. The Board noted that the Fund generally performed in line with its underlying index over the relevant periods.
Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and the historical performance of the Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, including information about recent and proposed enhancements to the iShares business, including with respect to capital markets support and analysis, technology, product design, compliance and risk management, and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the iShares funds and their shareholders. The Board also considered BFA’s compliance program and its compliance record with respect to the Fund. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Fund, as well as the resources available to them in managing the Fund. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the June 19-21, 2017 meeting and throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that the Fund had met its investment objective consistently since its inception date.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Fund under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
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Costs of Services Provided to Fund and Profits Realized by BFA and Affiliates — The Board reviewed information about the profitability of the Fund to BlackRock, based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and other sources of revenue and expense to BFA and its affiliates from the Fund’s operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, including supplemental information that was responsive to requests of the 15(c) Committee. The Board noted that the 15(c) Committee had focused on the methodology and profitability presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC, a BFA affiliate, from securities lending by the Fund. The Board also discussed BFA’s profit margin as reflected in the Fund’s profitability analysis and reviewed information regarding potential economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Fund and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.
Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Fund’s assets, noting that the issue of economies of scale had been focused on by the 15(c) Committee during its meetings and addressed by management, including through supplemental information. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through relatively low fee rates established at inception, breakpoints and waivers or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BlackRock’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished, among other things, between fixed and variable costs, and explained how the level of fixed and variable costs, as well as the nature of such costs, may impact the existence or size of scale benefits. The Board noted that the Advisory Contract for the Fund already provided for breakpoints in the Fund’s investment advisory fee rate as the assets of the Fund, on an aggregated basis with the assets of certain other iShares funds, increase. The Board noted that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding new or revised breakpoints in the future.
Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider the Advisory Contract at least annually, determined to approve the continuance of the Advisory Contract for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do manage Other Accounts with substantially the same investment objective and strategy as the Fund and that track the same index as the Fund. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Fund, including in terms of the different and generally more extensive services provided to the Fund, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Fund, as a publicly traded ETF, as compared to the Other Accounts that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged BFA’s expressed business purpose for launching a suite of iShares “Core” ETFs that generally are subject to lower investment advisory fees than iShares non-Core ETFs that may provide a similar investment exposure. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund expenses borne by BFA under this
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arrangement. The Board noted that the investment advisory fee rate under the Advisory Contract for the Fund was generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.
Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Fund by BFA, such as payment of revenue to BTC, the Fund’s securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Fund in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board also noted the revenue received by BFA and/or its affiliates pursuant to an agreement that permits a service provider to use certain portions of BlackRock’s technology platform to service accounts managed by BFA and/or its affiliates, including the iShares funds. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Fund. The Board further noted that any portfolio transactions on behalf of the Fund placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Fund’s shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.
Conclusion — Based on the considerations described above, the Board determined that the Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded to approve the continuance of the Advisory Contract for the coming year.
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Supplemental Information (Unaudited)
iSHARES® TRUST
Proxy Results
A special meeting of the shareholders of each series of iShares Trust (the “Trust”) was held on June 19, 2017, to elect five Trustees to the Board of Trustees of the Trust. The five nominees were Jane D. Carlin, Richard L. Fagnani, Drew E. Lawton, Madhav V. Rajan and Mark Wiedman, all of whom were elected as Trustees at the special meeting. The other Trustees whose terms of office as Trustees continued after the special meeting are Cecilia H. Herbert, Charles A. Hurty, John E. Kerrigan, John E. Martinez and Robert S. Kapito.
Trustee | Votes For | Votes Withheld | ||||||
Jane D. Carlin | 8,669,874,031 | 59,322,838 | ||||||
Richard L. Fagnani | 8,672,718,914 | 56,477,955 | ||||||
Drew E. Lawton | 8,670,713,236 | 58,483,633 | ||||||
Madhav V. Rajan | 8,653,682,870 | 75,513,999 | ||||||
Mark Wiedman | 8,664,674,816 | 64,522,053 |
Section 19(a) Notices
The amounts and sources of distributions reported are estimates and are provided pursuant to regulatory requirements and are not being provided for tax reporting purposes. The actual amounts and sources for tax reporting purposes will depend upon each Fund’s investment experience during the year and may be subject to changes based on the tax regulations. Shareholders will receive a Form 1099-DIV each calendar year that will inform them how to report these distributions for federal income tax purposes.
Total Cumulative Distributions for the Fiscal Year-to-Date | % Breakdown of the Total Cumulative Distributions for the Fiscal Year-to-Date | |||||||||||||||||||||||||||||||
iShares ETF | Net Investment Income | Net Realized Capital Gains | Return of Capital | Total Per Share | Net Investment Income | Net Realized Capital Gains | Return of Capital | Total Per Share | ||||||||||||||||||||||||
Core Dividend Growth | $ | 0.350820 | $ | — | $ | — | $ | 0.350820 | 100 | % | — | % | — | % | 100 | % | ||||||||||||||||
International Select Dividend | 0.779797 | — | 0.048774 | 0.828571 | 94 | — | 6 | 100 | ||||||||||||||||||||||||
Select Dividend | 1.442405 | — | 0.014391 | 1.456796 | 99 | — | 1 | 100 |
SUPPLEMENTAL INFORMATION | 61 |
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Notes:
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For more information visit www.iShares.com or call 1-800-iShares (1-800-474-2737)
This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.
Investing involves risk, including possible loss of principal.
The iShares Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by S&P Dow Jones Indices, LLC or Morningstar, Inc., nor do these companies make any representation regarding the advisability of investing in the iShares Funds. BlackRock is not affiliated with the companies listed above.
A description of the policies that the Funds use to determine how to vote proxies relating to portfolio securities and information about how the Funds voted proxies relating to portfolio securities during the most recent twelve-month period ending June 30 is available without charge, upon request, by calling toll-free 1-800-474-2737; on the Funds’ website at www.iShares.com; and on the U.S. Securities and Exchange Commission (SEC) website at www.sec.gov.
The Funds file their complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website or may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Funds also disclose their complete schedules of portfolio holdings on a daily basis on the Funds’ website.
©2017 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc. or its subsidiaries. All other marks are the property of their respective owners.
iS-SAR-406-1017
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OCTOBER 31, 2017
2017 SEMI-ANNUAL REPORT (UNAUDITED) |
iShares Trust
Ø | iShares Morningstar Large-Cap ETF | JKD | NYSE Arca |
Ø | iShares Morningstar Large-Cap Growth ETF | JKE | NYSE Arca |
Ø | iShares Morningstar Large-Cap Value ETF | JKF | NYSE Arca |
Ø | iShares Morningstar Mid-Cap ETF | JKG | NYSE Arca |
Ø | iShares Morningstar Mid-Cap Growth ETF | JKH | NYSE Arca |
Ø | iShares Morningstar Mid-Cap Value ETF | JKI | NASDAQ |
Ø | iShares Morningstar Small-Cap ETF | JKJ | NYSE Arca |
Ø | iShares Morningstar Small-Cap Growth ETF | JKK | NYSE Arca |
Ø | iShares Morningstar Small-Cap Value ETF | JKL | NYSE Arca |
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iSHARES® MORNINGSTAR LARGE-CAP ETF
Performance as of October 31, 2017
The iShares Morningstar Large-Cap ETF (the “Fund”) seeks to track the investment results of an index composed of large-capitalization U.S. equities, as represented by the Morningstar® Large Core IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month reporting period ended October 31, 2017, the total return for the Fund was 8.91%, net of fees, while the total return for the Index was 9.14%.
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 24.15% | 24.09% | 24.46% | 24.15% | 24.09% | 24.46% | ||||||||||||||||||||||
5 Years | 16.15% | 16.14% | 16.41% | 111.41% | 111.34% | 113.73% | ||||||||||||||||||||||
10 Years | 8.58% | 8.57% | 8.79% | 127.82% | 127.57% | 132.31% |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 14 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending (10/31/17) | Expenses Paid During Period a | Beginning (5/1/17) | Ending (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,089.10 | $ | 1.05 | $ | 1,000.00 | $ | 1,024.20 | $ | 1.02 | 0.20% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 14 for more information. |
ALLOCATION BY SECTOR
As of 10/31/17
Sector | Percentage of Total Investments* |
Health Care | 21.63 | % | ||
Industrials | 20.45 | |||
Information Technology | 19.51 | |||
Financials | 10.42 | |||
Consumer Staples | 9.90 | |||
Consumer Discretionary | 7.20 | |||
Energy | 5.65 | |||
Utilities | 2.60 | |||
Materials | 1.85 | |||
Real Estate | 0.79 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 10/31/17
Security | Percentage of Total Investments* |
Apple Inc. | 14.70 | % | ||
Johnson & Johnson | 6.30 | |||
Bank of America Corp. | 4.53 | |||
Chevron Corp. | 3.70 | |||
General Electric Co. | 2.94 | |||
PepsiCo Inc. | 2.65 | |||
Oracle Corp. | 2.59 | |||
AbbVie Inc. | 2.42 | |||
Boeing Co. (The) | 2.41 | |||
3M Co. | 2.31 | |||
|
| |||
TOTAL | 44.55 | % | ||
|
|
* | Excludes money market funds. |
FUND PERFORMANCE OVERVIEWS | 5 |
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Fund Performance Overview
iSHARES® MORNINGSTAR LARGE-CAP GROWTH ETF
Performance as of October 31, 2017
The iShares Morningstar Large-Cap Growth ETF (the “Fund”) seeks to track the investment results of an index composed of large-capitalization U.S. equities that exhibit growth characteristics, as represented by the Morningstar® Large Growth IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month reporting period ended October 31, 2017, the total return for the Fund was 11.81%, net of fees, while the total return for the Index was 12.10%.
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 28.85% | 28.80% | 29.36% | 28.85% | 28.80% | 29.36% | ||||||||||||||||||||||
5 Years | 16.07% | 16.06% | 16.40% | 110.68% | 110.60% | 113.67% | ||||||||||||||||||||||
10 Years | 8.22% | 8.22% | 8.50% | 120.35% | 120.33% | 126.13% |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 14 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,118.10 | $ | 1.33 | $ | 1,000.00 | $ | 1,023.90 | $ | 1.28 | 0.25% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 14 for more information. |
ALLOCATION BY SECTOR
As of 10/31/17
Sector | Percentage of Total Investments* |
Information Technology | 45.72 | % | ||
Consumer Discretionary | 22.28 | |||
Health Care | 14.74 | |||
Real Estate | 4.22 | |||
Financials | 3.91 | |||
Consumer Staples | 3.14 | |||
Energy | 2.48 | |||
Materials | 1.80 | |||
Industrials | 1.44 | |||
Telecommunication Services | 0.27 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 10/31/17
Security | Percentage of Total Investments* |
Microsoft Corp. | 9.38 | % | ||
Facebook Inc. Class A | 6.25 | |||
Amazon.com Inc. | 4.77 | |||
Alphabet Inc. Class A | 4.52 | |||
Alphabet Inc. Class C | 4.50 | |||
UnitedHealth Group Inc. | 2.99 | |||
Visa Inc. Class A | 2.96 | |||
Home Depot Inc. (The) | 2.87 | |||
Comcast Corp. Class A | 2.50 | |||
Walt Disney Co. (The) | 2.22 | |||
|
| |||
TOTAL | 42.96 | % | ||
|
|
* | Excludes money market funds. |
6 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Fund Performance Overview
iSHARES® MORNINGSTAR LARGE-CAP VALUE ETF
Performance as of October 31, 2017
The iShares Morningstar Large-Cap Value ETF (the “Fund”) seeks to track the investment results of an index composed of large-capitalization U.S. equities that exhibit value characteristics, as represented by the Morningstar® Large Value IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month reporting period ended October 31, 2017, the total return for the Fund was 7.76%, net of fees, while the total return for the Index was 7.92%.
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 19.42% | 19.38% | 19.74% | 19.42% | 19.38% | 19.74% | ||||||||||||||||||||||
5 Years | 12.31% | 12.30% | 12.59% | 78.68% | 78.61% | 80.92% | ||||||||||||||||||||||
10 Years | 4.62% | 4.63% | 4.87% | 57.10% | 57.17% | 60.85% |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 14 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,077.60 | $ | 1.31 | $ | 1,000.00 | $ | 1,023.90 | $ | 1.28 | 0.25% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 14 for more information. |
ALLOCATION BY SECTOR
As of 10/31/17
Sector | Percentage of Total Investments* |
Financials | 31.48 | % | ||
Consumer Staples | 12.64 | |||
Information Technology | 12.17 | |||
Energy | 9.75 | |||
Health Care | 8.73 | |||
Telecommunication Services | 6.64 | |||
Industrials | 6.54 | |||
Utilities | 5.67 | |||
Materials | 3.30 | |||
Consumer Discretionary | 2.23 | |||
Real Estate | 0.85 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 10/31/17
Security | Percentage of Total Investments* |
Berkshire Hathaway Inc. Class B | 5.88 | % | ||
JPMorgan Chase & Co. | 5.78 | |||
Exxon Mobil Corp. | 5.77 | |||
Wells Fargo & Co. | 4.10 | |||
Procter & Gamble Co. (The) | 3.60 | |||
Intel Corp. | 3.49 | |||
Pfizer Inc. | 3.42 | |||
AT&T Inc. | 3.37 | |||
Citigroup Inc. | 3.27 | |||
Verizon Communications Inc. | 3.19 | |||
|
| |||
TOTAL | 41.87 | % | ||
|
|
* | Excludes money market funds. |
FUND PERFORMANCE OVERVIEWS | 7 |
Table of Contents
Fund Performance Overview
iSHARES® MORNINGSTAR MID-CAP ETF
Performance as of October 31, 2017
The iShares Morningstar Mid-Cap ETF (the “Fund”) seeks to track the investment results of an index composed of mid-capitalization U.S. equities, as represented by the Morningstar® Mid Core IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month reporting period ended October 31, 2017, the total return for the Fund was 6.53%, net of fees, while the total return for the Index was 6.65%.
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 21.08% | 21.07% | 21.40% | 21.08% | 21.07% | 21.40% | ||||||||||||||||||||||
5 Years | 14.98% | 14.98% | 15.25% | 100.96% | 100.97% | 103.35% | ||||||||||||||||||||||
10 Years | 8.70% | 8.71% | 8.94% | 130.33% | 130.46% | 135.42% |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 14 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,065.30 | $ | 1.30 | $ | 1,000.00 | $ | 1,023.90 | $ | 1.28 | 0.25% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 14 for more information. |
ALLOCATION BY SECTOR
As of 10/31/17
Sector | Percentage of Total Investments* |
Industrials | 19.40 | % | ||
Financials | 15.24 | |||
Consumer Discretionary | 14.79 | |||
Real Estate | 12.81 | |||
Information Technology | 11.97 | |||
Health Care | 8.81 | |||
Materials | 6.38 | |||
Consumer Staples | 6.03 | |||
Utilities | 2.33 | |||
Energy | 2.24 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 10/31/17
Security | Percentage of Total Investments* |
Delphi Automotive PLC | 1.43 | % | ||
DXC Technology Co. | 1.41 | |||
Rockwell Automation Inc. | 1.39 | |||
Stanley Black & Decker Inc. | 1.34 | |||
Parker-Hannifin Corp. | 1.31 | |||
Ameriprise Financial Inc. | 1.27 | |||
T Rowe Price Group Inc. | 1.21 | |||
Microchip Technology Inc. | 1.19 | |||
Rockwell Collins Inc. | 1.19 | |||
Agilent Technologies Inc. | 1.18 | |||
|
| |||
TOTAL | 12.92 | % | ||
|
|
* | Excludes money market funds. |
8 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Fund Performance Overview
iSHARES® MORNINGSTAR MID-CAP GROWTH ETF
Performance as of October 31, 2017
The iShares Morningstar Mid-Cap Growth ETF (the “Fund”) seeks to track the investment results of an index composed of mid-capitalization U.S. equities that exhibit growth characteristics, as represented by the Morningstar® Mid Growth IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month reporting period ended October 31, 2017, the total return for the Fund was 10.33%, net of fees, while the total return for the Index was 10.48%.
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 25.72% | 25.66% | 25.97% | 25.72% | 25.66% | 25.97% | ||||||||||||||||||||||
5 Years | 14.17% | 14.18% | 14.41% | 94.01% | 94.06% | 96.05% | ||||||||||||||||||||||
10 Years | 6.98% | 6.98% | 7.22% | 96.35% | 96.38% | 100.83% |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 14 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,103.30 | $ | 1.59 | $ | 1,000.00 | $ | 1,023.70 | $ | 1.53 | 0.30% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 14 for more information. |
ALLOCATION BY SECTOR
As of 10/31/17
Sector | Percentage of Total Investments* |
Information Technology | 26.52 | % | ||
Industrials | 14.65 | |||
Consumer Discretionary | 14.61 | |||
Health Care | 14.61 | |||
Real Estate | 9.64 | |||
Financials | 8.37 | |||
Energy | 5.22 | |||
Materials | 3.04 | |||
Consumer Staples | 2.98 | |||
Telecommunication Services | 0.36 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 10/31/17
Security | Percentage of Total Investments* |
Autodesk Inc. | 1.48 | % | ||
Estee Lauder Companies Inc. (The) Class A | 1.35 | |||
Digital Realty Trust Inc. | 1.31 | |||
CR Bard Inc. | 1.28 | |||
Fortive Corp. | 1.19 | |||
Dollar Tree Inc. | 1.16 | |||
ServiceNow Inc. | 1.16 | |||
Red Hat Inc. | 1.15 | |||
Skyworks Solutions Inc. | 1.13 | |||
Northern Trust Corp. | 1.08 | |||
|
| |||
TOTAL | 12.29 | % | ||
|
|
* | Excludes money market funds. |
FUND PERFORMANCE OVERVIEWS | 9 |
Table of Contents
Fund Performance Overview
iSHARES® MORNINGSTAR MID-CAP VALUE ETF
Performance as of October 31, 2017
The iShares Morningstar Mid-Cap Value ETF (the “Fund”) seeks to track the investment results of an index composed of mid-capitalization U.S. equities that exhibit value characteristics, as represented by the Morningstar® Mid Value IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month reporting period ended October 31, 2017, the total return for the Fund was 3.72%, net of fees, while the total return for the Index was 3.84%.
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 17.31% | 17.22% | 17.67% | 17.31% | 17.22% | 17.67% | ||||||||||||||||||||||
5 Years | 16.23% | 16.25% | 16.58% | 112.17% | 112.35% | 115.37% | ||||||||||||||||||||||
10 Years | 8.52% | 8.53% | 8.81% | 126.49% | 126.65% | 132.74% |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 14 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,037.20 | $ | 1.54 | $ | 1,000.00 | $ | 1,023.70 | $ | 1.53 | 0.30% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 14 for more information. |
ALLOCATION BY SECTOR
As of 10/31/17
Sector | Percentage of Total Investments* |
Financials | 20.34 | % | ||
Utilities | 14.38 | |||
Materials | 13.21 | |||
Consumer Discretionary | 12.68 | |||
Information Technology | 10.30 | |||
Energy | 8.96 | |||
Industrials | 8.86 | |||
Consumer Staples | 5.23 | |||
Real Estate | 3.36 | |||
Health Care | 1.52 | |||
Telecommunication Services | 1.16 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 10/31/17
Security | Percentage of Total Investments* |
International Paper Co. | 1.48 | % | ||
Fifth Third Bancorp. | 1.34 | |||
Tyson Foods Inc. Class A | 1.32 | |||
Hartford Financial Services Group Inc. (The) | 1.26 | |||
Eversource Energy | 1.25 | |||
KeyCorp | 1.24 | |||
DTE Energy Co. | 1.24 | |||
Devon Energy Corp. | 1.22 | |||
Newmont Mining Corp. | 1.21 | |||
Freeport-McMoRan Inc. | 1.18 | |||
|
| |||
TOTAL | 12.74 | % | ||
|
|
* | Excludes money market funds. |
10 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Fund Performance Overview
iSHARES® MORNINGSTAR SMALL-CAP ETF
Performance as of October 31, 2017
The iShares Morningstar Small-Cap ETF (the “Fund”) seeks to track the investment results of an index composed of small-capitalization U.S. equities, as represented by the Morningstar® Small Core IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month reporting period ended October 31, 2017, the total return for the Fund was 4.12%, net of fees, while the total return for the Index was 4.20%.
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 21.09% | 21.03% | 21.29% | 21.09% | 21.03% | 21.29% | ||||||||||||||||||||||
5 Years | 14.15% | 14.17% | 14.26% | 93.84% | 93.95% | 94.76% | ||||||||||||||||||||||
10 Years | 7.80% | 7.82% | 7.92% | 111.89% | 112.29% | 114.25% |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 14 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,041.20 | $ | 1.29 | $ | 1,000.00 | $ | 1,023.90 | $ | 1.28 | 0.25% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 14 for more information. |
ALLOCATION BY SECTOR
As of 10/31/17
Sector | Percentage of Total Investments* |
Financials | 20.81 | % | ||
Industrials | 19.93 | |||
Real Estate | 14.79 | |||
Consumer Discretionary | �� | 11.13 | ||
Information Technology | 10.10 | |||
Materials | 7.52 | |||
Health Care | 5.93 | |||
Consumer Staples | 3.72 | |||
Utilities | 3.60 | |||
Energy | 2.19 | |||
Telecommunication Services | 0.28 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 10/31/17
Security | Percentage of Total Investments* |
Sterling Bancorp./DE | 0.94 | % | ||
Catalent Inc. | 0.93 | |||
Calpine Corp. | 0.90 | |||
Curtiss-Wright Corp. | 0.87 | |||
Gramercy Property Trust | 0.80 | |||
Versum Materials Inc. | 0.76 | |||
HealthSouth Corp. | 0.76 | |||
Wintrust Financial Corp. | 0.76 | |||
LPL Financial Holdings Inc. | 0.75 | |||
First Horizon National Corp. | 0.73 | |||
|
| |||
TOTAL | 8.20 | % | ||
|
|
* | Excludes money market funds. |
FUND PERFORMANCE OVERVIEWS | 11 |
Table of Contents
Fund Performance Overview
iSHARES® MORNINGSTAR SMALL-CAP GROWTH ETF
Performance as of October 31, 2017
The iShares Morningstar Small-Cap Growth ETF (the “Fund”) seeks to track the investment results of an index composed of small-capitalization U.S. equities that exhibit growth characteristics, as represented by the Morningstar® Small Growth IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month reporting period ended October 31, 2017, the total return for the Fund was 13.15%, net of fees, while the total return for the Index was 13.28%.
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 30.87% | 30.98% | 31.14% | 30.87% | 30.98% | 31.14% | ||||||||||||||||||||||
5 Years | 14.83% | 14.87% | 14.88% | 99.68% | 100.03% | 100.08% | ||||||||||||||||||||||
10 Years | 7.90% | 7.91% | 8.01% | 113.87% | 114.17% | 116.04% |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 14 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,131.50 | $ | 1.61 | $ | 1,000.00 | $ | 1,023.70 | $ | 1.53 | 0.30% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 14 for more information. |
ALLOCATION BY SECTOR
As of 10/31/17
Sector | Percentage of Total Investments* |
Information Technology | 34.14 | % | ||
Health Care | 23.59 | |||
Industrials | 11.18 | |||
Consumer Discretionary | 10.98 | |||
Financials | 6.12 | |||
Real Estate | 5.42 | |||
Energy | 3.47 | |||
Consumer Staples | 2.76 | |||
Telecommunication Services | 0.94 | |||
Materials | 0.74 | |||
Utilities | 0.66 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 10/31/17
Security | Percentage of Total Investments* |
Square Inc. Class A | 1.45 | % | ||
Exact Sciences Corp. | 1.01 | |||
Bluebird Bio Inc. | 0.98 | |||
Universal Display Corp. | 0.95 | |||
MKS Instruments Inc. | 0.91 | |||
Charles River Laboratories International Inc. | 0.85 | |||
Knight-Swift Transportation Holdings Inc. | 0.82 | |||
GrubHub Inc. | 0.81 | |||
athenahealth Inc. | 0.79 | |||
Tableau Software Inc. Class A | 0.79 | |||
|
| |||
TOTAL | 9.36 | % | ||
|
|
* | Excludes money market funds. |
12 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Fund Performance Overview
iSHARES® MORNINGSTAR SMALL-CAP VALUE ETF
Performance as of October 31, 2017
The iShares Morningstar Small-Cap Value ETF (the “Fund”) seeks to track the investment results of an index composed of small-capitalization U.S. equities that exhibit value characteristics, as represented by the Morningstar® Small Value IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month reporting period ended October 31, 2017, the total return for the Fund was 2.82%, net of fees, while the total return for the Index was 2.98%.
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 19.16% | 19.09% | 19.48% | 19.16% | 19.09% | 19.48% | ||||||||||||||||||||||
5 Years | 13.30% | 13.31% | 13.52% | 86.68% | 86.82% | 88.48% | ||||||||||||||||||||||
10 Years | 8.85% | 8.76% | 9.08% | 133.56% | 131.62% | 138.48% |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 14 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,028.20 | $ | 1.53 | $ | 1,000.00 | $ | 1,023.70 | $ | 1.53 | 0.30% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 14 for more information. |
ALLOCATION BY SECTOR
As of 10/31/17
Sector | Percentage of Total Investments* |
Financials | 26.76 | % | ||
Industrials | 14.70 | |||
Consumer Discretionary | 14.40 | |||
Utilities | 8.40 | |||
Information Technology | 7.80 | |||
Energy | 7.18 | |||
Real Estate | 6.93 | |||
Materials | 5.99 | |||
Health Care | 3.70 | |||
Consumer Staples | 3.38 | |||
Telecommunication Services | 0.76 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 10/31/17
Security | Percentage of Total Investments* |
Janus Henderson Group PLC | 1.14 | % | ||
MGIC Investment Corp. | 0.97 | |||
Trinity Industries Inc. | 0.90 | |||
Radian Group Inc. | 0.82 | |||
Umpqua Holdings Corp. | 0.82 | |||
First Solar Inc. | 0.82 | |||
U.S. Steel Corp. | 0.81 | |||
Dana Inc. | 0.81 | |||
WGL Holdings Inc. | 0.80 | |||
Ryder System Inc. | 0.78 | |||
|
| |||
TOTAL | 8.67 | % | ||
|
|
* | Excludes money market funds. |
FUND PERFORMANCE OVERVIEWS | 13 |
Table of Contents
Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.ishares.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are redeemed or sold in the market. Performance for certain funds may reflect a waiver of a portion of investment advisory fees. Without such a waiver, performance would have been lower.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Certain funds may have a NAV which is determined prior to the opening of regular trading on its listed exchange and their market returns are calculated using the midpoint of the bid/ask spread as of the opening of regular trading on the exchange. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower.
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of fund shares and (2) ongoing costs, including management fees and other fund expenses. The expense example, which is based on an investment of $1,000 invested on May 1, 2017 and held through October 31, 2017, is intended to help you understand your ongoing costs (in dollars and cents) of investing in a Fund and to compare these costs with the ongoing costs of investing in other funds.
Actual Expenses — The table provides information about actual account values and actual expenses. Annualized expense ratios reflect contractual and voluntary fee waivers, if any. To estimate the expenses that you paid on your account over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number corresponding to your Fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Example for Comparison Purposes — The table also provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of fund shares. Therefore, the hypothetical examples are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
14 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES® MORNINGSTAR LARGE-CAP ETF
October 31, 2017
Security | Shares | Value | ||||||
COMMON STOCKS — 99.89% |
| |||||||
AEROSPACE & DEFENSE — 6.41% |
| |||||||
Boeing Co. (The) | 89,986 | $ | 23,214,588 | |||||
General Dynamics Corp. | 45,105 | 9,155,413 | ||||||
Lockheed Martin Corp. | 40,579 | 12,504,825 | ||||||
Northrop Grumman Corp. | 28,205 | 8,335,424 | ||||||
Raytheon Co. | 47,008 | 8,470,841 | ||||||
|
| |||||||
61,681,091 | ||||||||
AIR FREIGHT & LOGISTICS — 2.30% |
| |||||||
FedEx Corp. | 39,971 | 9,025,852 | ||||||
United Parcel Service Inc. Class B | 111,551 | 13,110,589 | ||||||
|
| |||||||
22,136,441 | ||||||||
AIRLINES — 1.06% |
| |||||||
Delta Air Lines Inc. | 107,881 | 5,397,286 | ||||||
Southwest Airlines Co. | 89,195 | 4,804,043 | ||||||
|
| |||||||
10,201,329 | ||||||||
BANKS — 5.97% |
| |||||||
Bank of America Corp. | 1,589,130 | 43,526,271 | ||||||
U.S. Bancorp. | 257,371 | 13,995,835 | ||||||
|
| |||||||
57,522,106 | ||||||||
BEVERAGES — 2.65% |
| |||||||
PepsiCo Inc. | 231,356 | 25,502,372 | ||||||
|
| |||||||
25,502,372 | ||||||||
BIOTECHNOLOGY — 5.68% |
| |||||||
AbbVie Inc. | 258,175 | 23,300,294 | ||||||
Amgen Inc. | 118,176 | 20,706,799 | ||||||
Biogen Inc.a | 34,243 | 10,672,173 | ||||||
|
| |||||||
54,679,266 | ||||||||
CAPITAL MARKETS — 0.89% |
| |||||||
Bank of New York Mellon Corp. (The) | 167,327 | 8,608,974 | ||||||
|
| |||||||
8,608,974 | ||||||||
CHEMICALS — 1.79% |
| |||||||
Air Products & Chemicals Inc. | 35,302 | 5,628,198 | ||||||
PPG Industries Inc. | 41,550 | 4,829,772 | ||||||
Praxair Inc. | 46,330 | 6,769,739 | ||||||
|
| |||||||
17,227,709 | ||||||||
COMMERCIAL SERVICES & SUPPLIES — 0.56% |
| |||||||
Waste Management Inc. | 65,579 | 5,388,626 | ||||||
|
| |||||||
5,388,626 | ||||||||
ELECTRIC UTILITIES — 1.22% |
| |||||||
NextEra Energy Inc. | 75,822 | 11,757,718 | ||||||
|
| |||||||
11,757,718 |
Security | Shares | Value | ||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS — 1.02% |
| |||||||
Corning Inc. | 146,346 | $ | 4,582,093 | |||||
TE Connectivity Ltd. | 57,244 | 5,207,487 | ||||||
|
| |||||||
9,789,580 | ||||||||
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) — 0.79% |
| |||||||
Ventas Inc. | 57,737 | 3,622,997 | ||||||
Welltower Inc. | 59,781 | 4,002,936 | ||||||
|
| |||||||
7,625,933 | ||||||||
FOOD & STAPLES RETAILING — 1.63% |
| |||||||
CVS Health Corp. | 164,640 | 11,282,779 | ||||||
Sysco Corp. | 78,695 | 4,377,016 | ||||||
|
| |||||||
15,659,795 | ||||||||
FOOD PRODUCTS — 1.83% |
| |||||||
Kraft Heinz Co. (The) | 96,679 | 7,476,187 | ||||||
Mondelez International Inc. Class A | 244,173 | 10,116,087 | ||||||
|
| |||||||
17,592,274 | ||||||||
HEALTH CARE EQUIPMENT & SUPPLIES — 4.78% |
| |||||||
Abbott Laboratories | 281,391 | 15,259,834 | ||||||
Danaher Corp. | 99,009 | 9,135,560 | ||||||
Medtronic PLC | 219,386 | 17,664,961 | ||||||
Zimmer Biomet Holdings Inc. | 32,771 | 3,985,609 | ||||||
|
| |||||||
46,045,964 | ||||||||
HEALTH CARE PROVIDERS & SERVICES — 3.52% |
| |||||||
Aetna Inc. | 53,721 | 9,134,181 | ||||||
Anthem Inc. | 42,527 | 8,897,074 | ||||||
Cardinal Health Inc. | 51,163 | 3,166,990 | ||||||
Cigna Corp. | 40,777 | 8,042,040 | ||||||
McKesson Corp. | 34,060 | 4,696,193 | ||||||
|
| |||||||
33,936,478 | ||||||||
HOTELS, RESTAURANTS & LEISURE — 3.91% |
| |||||||
Carnival Corp. | 66,082 | 4,387,184 | ||||||
Las Vegas Sands Corp. | 59,007 | 3,739,864 | ||||||
McDonald’s Corp. | 131,185 | 21,896,088 | ||||||
Royal Caribbean Cruises Ltd. | 27,820 | 3,443,281 | ||||||
Yum! Brands Inc. | 55,869 | 4,159,447 | ||||||
|
| |||||||
37,625,864 | ||||||||
HOUSEHOLD DURABLES — 0.34% |
| |||||||
Newell Brands Inc. | 79,239 | 3,231,366 | ||||||
|
| |||||||
3,231,366 |
SCHEDULESOF INVESTMENTS | 15 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR LARGE-CAP ETF
October 31, 2017
Security | Shares | Value | ||||||
HOUSEHOLD PRODUCTS — 1.71% |
| |||||||
Colgate-Palmolive Co. | 142,659 | $ | 10,050,327 | |||||
Kimberly-Clark Corp. | 57,220 | 6,437,822 | ||||||
|
| |||||||
16,488,149 | ||||||||
INDUSTRIAL CONGLOMERATES — 7.09% |
| |||||||
3M Co. | 96,651 | 22,248,094 | ||||||
General Electric Co. | 1,402,216 | 28,268,674 | ||||||
Honeywell International Inc. | 123,466 | 17,798,859 | ||||||
|
| |||||||
68,315,627 | ||||||||
INSURANCE — 3.54% |
| |||||||
Allstate Corp. (The) | 58,527 | 5,493,344 | ||||||
Aon PLC | 41,192 | 5,908,169 | ||||||
Chubb Ltd. | 75,377 | 11,368,359 | ||||||
Marsh & McLennan Companies Inc. | 83,007 | 6,717,757 | ||||||
Progressive Corp. (The) | 94,279 | 4,586,673 | ||||||
|
| |||||||
34,074,302 | ||||||||
INTERNET SOFTWARE & SERVICES — 0.63% |
| |||||||
eBay Inc.a | 161,211 | 6,067,982 | ||||||
|
| |||||||
6,067,982 | ||||||||
MACHINERY — 0.82% |
| |||||||
Illinois Tool Works Inc. | 50,164 | 7,851,669 | ||||||
|
| |||||||
7,851,669 | ||||||||
MEDIA — 1.94% |
| |||||||
Time Warner Inc. | 125,970 | 12,381,592 | ||||||
Twenty-First Century Fox Inc. Class A | 170,522 | 4,459,150 | ||||||
Twenty-First Century Fox Inc. Class B | 70,987 | 1,806,619 | ||||||
|
| |||||||
18,647,361 | ||||||||
METALS & MINING — 0.06% |
| |||||||
Southern Copper Corp. | 13,814 | 593,311 | ||||||
|
| |||||||
593,311 | ||||||||
MULTI-UTILITIES — 1.37% |
| |||||||
Dominion Energy Inc. | 104,071 | 8,444,321 | ||||||
Sempra Energy | 40,680 | 4,779,900 | ||||||
|
| |||||||
13,224,221 | ||||||||
MULTILINE RETAIL — 0.35% |
| |||||||
Dollar General Corp. | 42,119 | 3,404,900 | ||||||
|
| |||||||
3,404,900 | ||||||||
OIL, GAS & CONSUMABLE FUELS — 5.64% |
| |||||||
Chevron Corp. | 306,909 | 35,567,684 | ||||||
EOG Resources Inc. | 93,522 | 9,340,042 |
Security | Shares | Value | ||||||
Kinder Morgan Inc./DE | 310,942 | $ | 5,631,160 | |||||
Williams Companies Inc. (The) | 133,981 | 3,818,458 | ||||||
|
| |||||||
54,357,344 | ||||||||
PHARMACEUTICALS — 7.63% |
| |||||||
Eli Lilly & Co. | 156,915 | 12,857,615 | ||||||
Johnson & Johnson | 434,693 | 60,600,551 | ||||||
|
| |||||||
73,458,166 | ||||||||
ROAD & RAIL — 2.20% |
| |||||||
Norfolk Southern Corp. | 46,673 | 6,133,766 | ||||||
Union Pacific Corp. | 129,628 | 15,009,626 | ||||||
|
| |||||||
21,143,392 | ||||||||
SEMICONDUCTORS & SEMICONDUCTOR |
| |||||||
Lam Research Corp. | 26,312 | 5,487,894 | ||||||
|
| |||||||
5,487,894 | ||||||||
SOFTWARE — 2.58% |
| |||||||
Oracle Corp. | 489,075 | 24,893,917 | ||||||
|
| |||||||
24,893,917 | ||||||||
SPECIALTY RETAIL — 0.28% |
| |||||||
AutoZone Inc.a | 4,531 | 2,671,025 | ||||||
|
| |||||||
2,671,025 | ||||||||
TECHNOLOGY HARDWARE, STORAGE & |
| |||||||
Apple Inc. | 836,546 | 141,409,736 | ||||||
|
| |||||||
141,409,736 | ||||||||
TEXTILES, APPAREL & LUXURY GOODS — 0.38% |
| |||||||
VF Corp. | 52,822 | 3,679,052 | ||||||
|
| |||||||
3,679,052 | ||||||||
TOBACCO — 2.07% |
| |||||||
Altria Group Inc. | 310,726 | 19,954,824 | ||||||
|
| |||||||
19,954,824 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $786,158,973) | 961,935,758 | |||||||
SHORT-TERM INVESTMENTS — 0.06% |
| |||||||
MONEY MARKET FUNDS — 0.06% |
| |||||||
BlackRock Cash Funds: Treasury, | ||||||||
1.00%b,c | 574,826 | 574,826 | ||||||
|
| |||||||
574,826 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $574,826) | 574,826 | |||||||
|
|
16 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR LARGE-CAP ETF
October 31, 2017
Value | ||||||
TOTAL INVESTMENTS | ||||||
(Cost: $786,733,799)d | $ | 962,510,584 | ||||
Other Assets, Less Liabilities — 0.05% | 494,138 | |||||
|
| |||||
NET ASSETS — 100.00% | $ | 963,004,722 | ||||
|
|
a | Non-income earning security. |
b | Affiliated issuer. See Schedule 1. |
c | The rate quoted is the annualized seven-day yield of the fund at period end. |
d | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $790,347,647. Net unrealized appreciation was $172,162,937, of which $194,817,229 represented gross unrealized appreciation on investments and $22,654,292 represented gross unrealized depreciation on investments. |
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 04/30/17 | Shares purchased | Shares sold | Shares held at 10/31/17 | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, | 387,409 | — | (387,409 | )b | — | $ | — | $ | (148 | ) | $ | — | $ | — | c | |||||||||||||||||
BlackRock Cash Funds: Treasury, | 504,487 | 70,339 | b | — | 574,826 | 574,826 | — | — | 4,736 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 574,826 | $ | (148 | ) | $ | — | $ | 4,736 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
c | Does not include income earned on investment of securities lending cash collateral which is not direct income of the Fund and is reflected as a component of securities lending income in the statement of operations. |
Schedule 2 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: | ||||||||||||||||
Assets: | ||||||||||||||||
Common stocks | $ | 961,935,758 | $ | — | $ | — | $ | 961,935,758 | ||||||||
Money market funds | 574,826 | — | — | 574,826 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 962,510,584 | $ | — | $ | — | $ | 962,510,584 | ||||||||
|
|
|
|
|
|
|
| |||||||||
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 17 |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES® MORNINGSTAR LARGE-CAP GROWTH ETF
October 31, 2017
Security | Shares | Value | ||||||
COMMON STOCKS — 99.85% |
| |||||||
AUTOMOBILES — 0.66% |
| |||||||
Tesla Inc.a | 16,651 | $ | 5,520,306 | |||||
|
| |||||||
5,520,306 | ||||||||
BEVERAGES — 1.17% |
| |||||||
Constellation Brands Inc. Class A | 21,810 | 4,778,353 | ||||||
Molson Coors Brewing Co. Class B | 24,594 | 1,988,917 | ||||||
Monster Beverage Corp.a | 53,566 | 3,103,078 | ||||||
|
| |||||||
9,870,348 | ||||||||
BIOTECHNOLOGY — 2.90% |
| |||||||
Alexion Pharmaceuticals Inc.a | 28,566 | 3,418,208 | ||||||
Celgene Corp.a | 97,553 | 9,849,926 | ||||||
Incyte Corp.a | 22,254 | 2,520,265 | ||||||
Regeneron Pharmaceuticals Inc.a | 9,798 | 3,944,871 | ||||||
Vertex Pharmaceuticals Inc.a,b | 31,948 | 4,671,756 | ||||||
|
| |||||||
24,405,026 | ||||||||
CAPITAL MARKETS — 3.90% |
| |||||||
BlackRock Inc.c | 15,224 | 7,167,916 | ||||||
Charles Schwab Corp. (The) | 149,630 | 6,709,409 | ||||||
CME Group Inc. | 42,814 | 5,872,796 | ||||||
Intercontinental Exchange Inc. | 74,531 | 4,926,499 | ||||||
Moody’s Corp. | 21,426 | 3,051,277 | ||||||
S&P Global Inc. | 32,472 | 5,080,894 | ||||||
|
| |||||||
32,808,791 | ||||||||
CHEMICALS — 1.80% |
| |||||||
Ecolab Inc. | 33,108 | 4,325,891 | ||||||
Monsanto Co. | 55,159 | 6,679,755 | ||||||
Sherwin-Williams Co. (The) | 10,469 | 4,136,826 | ||||||
|
| |||||||
15,142,472 | ||||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS — 0.41% |
| |||||||
Amphenol Corp. Class A | 39,232 | 3,413,184 | ||||||
|
| |||||||
3,413,184 | ||||||||
ENERGY EQUIPMENT & SERVICES — 2.09% |
| |||||||
Baker Hughes a GE Co. | 57,361 | 1,802,856 | ||||||
Halliburton Co. | 110,072 | 4,704,478 | ||||||
Schlumberger Ltd. | 172,900 | 11,065,600 | ||||||
|
| |||||||
17,572,934 | ||||||||
EQUITY REAL ESTATE INVESTMENT TRUSTS |
| |||||||
American Tower Corp. | 53,758 | 7,723,412 | ||||||
AvalonBay Communities Inc. | 17,779 | 3,223,866 | ||||||
Crown Castle International Corp. | 51,324 | 5,495,774 |
Security | Shares | Value | ||||||
Equinix Inc. | 9,893 | $ | 4,585,405 | |||||
Prologis Inc. | 67,610 | 4,366,254 | ||||||
Public Storage | 19,096 | 3,957,646 | ||||||
Simon Property Group Inc. | 39,112 | 6,075,267 | ||||||
|
| |||||||
35,427,624 | ||||||||
FOOD & STAPLES RETAILING — 1.96% |
| |||||||
Costco Wholesale Corp. | 54,757 | 8,820,258 | ||||||
Walgreens Boots Alliance Inc. | 115,285 | 7,639,937 | ||||||
|
| |||||||
16,460,195 | ||||||||
HEALTH CARE EQUIPMENT & SUPPLIES — 3.49% |
| |||||||
Baxter International Inc. | 63,821 | 4,114,540 | ||||||
Becton Dickinson and Co. | 28,647 | 5,977,769 | ||||||
Boston Scientific Corp.a | 173,698 | 4,887,862 | ||||||
Edwards Lifesciences Corp.a | 27,398 | 2,800,897 | ||||||
Intuitive Surgical Inc.a | 14,131 | 5,304,212 | ||||||
Stryker Corp. | 40,426 | 6,260,775 | ||||||
|
| |||||||
29,346,055 | ||||||||
HEALTH CARE PROVIDERS & SERVICES — 3.54% |
| |||||||
Humana Inc. | 18,320 | 4,678,012 | ||||||
UnitedHealth Group Inc. | 119,367 | 25,093,331 | ||||||
|
| |||||||
29,771,343 | ||||||||
HEALTH CARE TECHNOLOGY — 0.33% |
| |||||||
Cerner Corp.a | 40,974 | 2,766,565 | ||||||
|
| |||||||
2,766,565 | ||||||||
HOTELS, RESTAURANTS & LEISURE — 1.74% |
| |||||||
Marriott International Inc./MD Class A | 39,664 | 4,739,055 | ||||||
Starbucks Corp. | 179,955 | 9,868,732 | ||||||
|
| |||||||
14,607,787 | ||||||||
INDUSTRIAL CONGLOMERATES — 0.40% |
| |||||||
Roper Technologies Inc. | 13,132 | 3,390,288 | ||||||
|
| |||||||
3,390,288 | ||||||||
INTERNET & DIRECT MARKETING RETAIL — 7.41% |
| |||||||
Amazon.com Inc.a | 36,254 | 40,070,821 | ||||||
Netflix Inc.a | 53,743 | 10,556,738 | ||||||
Priceline Group Inc. (The)a | 6,101 | 11,664,868 | ||||||
|
| |||||||
62,292,427 | ||||||||
INTERNET SOFTWARE & SERVICES — 15.25% |
| |||||||
Alphabet Inc. Class Aa | 36,723 | 37,936,328 | ||||||
Alphabet Inc. Class Ca | 37,194 | 37,812,908 | ||||||
Facebook Inc. Class Aa | 291,626 | 52,510,178 | ||||||
|
| |||||||
128,259,414 |
18 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR LARGE-CAP GROWTH ETF
October 31, 2017
Security | Shares | Value | ||||||
IT SERVICES — 10.16% |
| |||||||
Accenture PLC Class A | 76,896 | $ | 10,946,914 | |||||
Automatic Data Processing Inc. | 55,814 | 6,488,936 | ||||||
Cognizant Technology Solutions Corp. Class A | 74,489 | 5,636,583 | ||||||
Fidelity National Information Services Inc. | 42,360 | 3,929,314 | ||||||
Fiserv Inc.a | 26,991 | 3,493,445 | ||||||
Mastercard Inc. Class A | 115,613 | 17,199,746 | ||||||
Paychex Inc. | 41,567 | 2,651,559 | ||||||
PayPal Holdings Inc.a | 140,836 | 10,219,060 | ||||||
Visa Inc. Class A | 225,883 | 24,842,612 | ||||||
|
| |||||||
85,408,169 | ||||||||
LIFE SCIENCES TOOLS & SERVICES — 1.61% |
| |||||||
Illumina Inc.a | 18,638 | 3,824,331 | ||||||
Thermo Fisher Scientific Inc. | 49,900 | 9,672,117 | ||||||
|
| |||||||
13,496,448 | ||||||||
MACHINERY — 0.35% |
| |||||||
Ingersoll-Rand PLC | 32,790 | 2,905,194 | ||||||
|
| |||||||
2,905,194 | ||||||||
MEDIA — 6.16% |
| |||||||
CBS Corp. Class B NVS | 47,343 | 2,656,889 | ||||||
Charter Communications Inc. Class Aa | 25,159 | 8,407,383 | ||||||
Comcast Corp. Class A | 581,389 | 20,947,446 | ||||||
Sirius XM Holdings Inc.b | 208,460 | 1,134,022 | ||||||
Walt Disney Co. (The) | 190,958 | 18,677,602 | ||||||
|
| |||||||
51,823,342 | ||||||||
OIL, GAS & CONSUMABLE FUELS — 0.39% |
| |||||||
Pioneer Natural Resources Co. | 21,914 | 3,279,868 | ||||||
|
| |||||||
3,279,868 | ||||||||
PHARMACEUTICALS — 2.85% |
| |||||||
Allergan PLC | 41,873 | 7,421,152 | ||||||
Bristol-Myers Squibb Co. | 203,779 | 12,565,013 | ||||||
Zoetis Inc. | 62,593 | 3,994,685 | ||||||
|
| |||||||
23,980,850 | ||||||||
ROAD & RAIL — 0.69% |
| |||||||
CSX Corp. | 114,963 | 5,797,584 | ||||||
|
| |||||||
5,797,584 | ||||||||
SEMICONDUCTORS & SEMICONDUCTOR |
| |||||||
Analog Devices Inc. | 46,779 | 4,270,923 | ||||||
Applied Materials Inc. | 133,550 | 7,536,227 |
Security | Shares | Value | ||||||
Broadcom Ltd. | 50,496 | $ | 13,326,399 | |||||
NVIDIA Corp. | 74,383 | 15,383,148 | ||||||
Texas Instruments Inc. | 123,061 | 11,898,768 | ||||||
|
| |||||||
52,415,465 | ||||||||
SOFTWARE — 13.60% |
| |||||||
Activision Blizzard Inc. | 95,004 | 6,221,812 | ||||||
Adobe Systems Inc.a | 61,405 | 10,755,700 | ||||||
Electronic Arts Inc.a | 39,182 | 4,686,167 | ||||||
Intuit Inc. | 30,857 | 4,660,024 | ||||||
Microsoft Corp. | 946,532 | 78,732,532 | ||||||
salesforce.com Inc.a,b | 85,293 | 8,728,886 | ||||||
Snap Inc. Class Aa,b | 36,672 | 562,548 | ||||||
|
| |||||||
114,347,669 | ||||||||
SPECIALTY RETAIL — 5.21% |
| |||||||
Home Depot Inc. (The) | 145,571 | 24,132,761 | ||||||
Lowe’s Companies Inc. | 105,482 | 8,433,286 | ||||||
O’Reilly Automotive Inc.a | 11,499 | 2,425,714 | ||||||
Ross Stores Inc. | 50,131 | 3,182,817 | ||||||
TJX Companies Inc. (The) | 80,229 | 5,599,984 | ||||||
|
| |||||||
43,774,562 | ||||||||
TEXTILES, APPAREL & LUXURY GOODS — 1.07% |
| |||||||
NIKE Inc. Class B | 163,954 | 9,015,830 | ||||||
|
| |||||||
9,015,830 | ||||||||
WIRELESS TELECOMMUNICATION SERVICES — 0.27% |
| |||||||
T-Mobile U.S. Inc.a | 38,099 | 2,277,177 | ||||||
|
| |||||||
2,277,177 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $569,336,364) |
| 839,576,917 | ||||||
SHORT-TERM INVESTMENTS — 0.64% |
| |||||||
MONEY MARKET FUNDS — 0.64% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
1.31%c,d,e | 4,604,099 | 4,605,020 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
1.00%c,d | 743,007 | 743,007 | ||||||
|
| |||||||
5,348,027 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS | ||||||||
(Cost: $5,347,749) | 5,348,027 | |||||||
|
|
SCHEDULESOF INVESTMENTS | 19 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR LARGE-CAP GROWTH ETF
October 31, 2017
Value | ||||||
TOTAL INVESTMENTS | ||||||
(Cost: $574,684,113)f | $ | 844,924,944 | ||||
Other Assets, Less Liabilities — (0.49)% | (4,093,702 | ) | ||||
|
| |||||
NET ASSETS — 100.00% | $ | 840,831,242 | ||||
|
|
NVS — Non-Voting Shares
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 1. |
c | Affiliated issuer. See Schedule 1. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 1. |
f | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $577,129,415. Net unrealized appreciation was $267,795,529, of which $281,884,146 represented gross unrealized appreciation on investments and $14,088,617 represented gross unrealized depreciation on investments. |
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 04/30/17 | Shares purchased | Shares sold | Shares held at 10/31/17 | Value at 10/31/17 | Net realized gain (loss)a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, | 5,943,789 | — | (1,339,690 | )b | 4,604,099 | $ | 4,605,020 | $ | (1,898 | ) | $ | (1,140 | ) | $ | —c | |||||||||||||||||
BlackRock Cash Funds: Treasury, | 577,634 | 165,373 | b | — | 743,007 | 743,007 | — | — | 3,455 | |||||||||||||||||||||||
BlackRock Inc. | 14,944 | 1,143 | (863 | ) | 15,224 | 7,167,916 | 62,876 | 1,234,652 | 75,009 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 12,515,943 | $ | 60,978 | $ | 1,233,512 | $ | 78,464 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
c | Does not include income earned on investment of securities lending cash collateral which is not direct income of the Fund and is reflected as a component of securities lending income in the statement of operations. |
Schedule 2 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: | ||||||||||||||||
Assets: | ||||||||||||||||
Common stocks | $ | 839,576,917 | $ | — | $ | — | $ | 839,576,917 | ||||||||
Money market funds | 5,348,027 | — | — | 5,348,027 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 844,924,944 | $ | — | $ | — | $ | 844,924,944 | ||||||||
|
|
|
|
|
|
|
| |||||||||
See notes to financial statements.
20 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES® MORNINGSTAR LARGE-CAP VALUE ETF
October 31, 2017
Security | Shares | Value | ||||||
COMMON STOCKS — 99.81% |
| |||||||
AEROSPACE & DEFENSE — 1.45% |
| |||||||
United Technologies Corp. | 45,957 | $ | 5,503,810 | |||||
|
| |||||||
5,503,810 | ||||||||
AIRLINES — 0.33% | ||||||||
American Airlines Group Inc. | 26,766 | 1,253,184 | ||||||
|
| |||||||
1,253,184 | ||||||||
AUTOMOBILES — 1.70% | ||||||||
Ford Motor Co. | 241,966 | 2,968,923 | ||||||
General Motors Co. | 81,136 | 3,487,225 | ||||||
|
| |||||||
6,456,148 | ||||||||
BANKS — 15.73% | ||||||||
BB&T Corp. | 49,994 | 2,461,704 | ||||||
Citigroup Inc. | 168,558 | 12,389,013 | ||||||
JPMorgan Chase & Co. | 217,705 | 21,903,300 | ||||||
M&T Bank Corp. | 9,406 | 1,568,639 | ||||||
PNC Financial Services Group Inc. (The)a | 29,645 | 4,055,139 | ||||||
SunTrust Banks Inc. | 29,703 | 1,788,418 | ||||||
Wells Fargo & Co. | 276,390 | 15,516,535 | ||||||
|
| |||||||
59,682,748 | ||||||||
BEVERAGES — 2.88% | ||||||||
Coca-Cola Co. (The) | 237,488 | 10,919,698 | ||||||
|
| |||||||
10,919,698 | ||||||||
BIOTECHNOLOGY — 1.60% | ||||||||
Gilead Sciences Inc. | 80,793 | 6,056,243 | ||||||
|
| |||||||
6,056,243 | ||||||||
BUILDING PRODUCTS — 0.63% |
| |||||||
Johnson Controls International PLC | 57,683 | 2,387,499 | ||||||
|
| |||||||
2,387,499 | ||||||||
CAPITAL MARKETS — 3.36% | ||||||||
Franklin Resources Inc. | 20,319 | 856,040 | ||||||
Goldman Sachs Group Inc. (The) | 22,259 | 5,397,362 | ||||||
Morgan Stanley | 87,489 | 4,374,450 | ||||||
State Street Corp. | 23,135 | 2,128,420 | ||||||
|
| |||||||
12,756,272 | ||||||||
CHEMICALS — 3.30% | ||||||||
DowDuPont Inc. | 144,348 | 10,437,804 | ||||||
LyondellBasell Industries NV Class A | 20,082 | 2,079,089 | ||||||
|
| |||||||
12,516,893 |
Security | Shares | Value | ||||||
COMMUNICATIONS EQUIPMENT — 2.78% |
| |||||||
Cisco Systems Inc. | 309,332 | $ | 10,563,688 | |||||
|
| |||||||
10,563,688 | ||||||||
CONSUMER FINANCE — 2.67% |
| |||||||
American Express Co. | 45,391 | 4,335,748 | ||||||
Capital One Financial Corp. | 29,925 | 2,758,486 | ||||||
Discover Financial Services | 23,052 | 1,533,650 | ||||||
Synchrony Financial | 46,285 | 1,509,817 | ||||||
|
| |||||||
10,137,701 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 5.87% |
| |||||||
Berkshire Hathaway Inc. Class Bb | 119,040 | 22,253,338 | ||||||
|
| |||||||
22,253,338 | ||||||||
DIVERSIFIED TELECOMMUNICATION SERVICES — 6.55% |
| |||||||
AT&T Inc. | 379,857 | 12,782,188 | ||||||
Verizon Communications Inc. | 252,373 | 12,081,096 | ||||||
|
| |||||||
24,863,284 | ||||||||
ELECTRIC UTILITIES — 4.82% |
| |||||||
American Electric Power Co. Inc. | 30,428 | 2,264,147 | ||||||
Duke Energy Corp. | 43,299 | 3,823,735 | ||||||
Edison International | 20,170 | 1,612,591 | ||||||
Exelon Corp. | 59,396 | 2,388,313 | ||||||
PG&E Corp. | 31,738 | 1,833,504 | ||||||
PPL Corp. | 42,291 | 1,588,450 | ||||||
Southern Co. (The) | 61,833 | 3,227,683 | ||||||
Xcel Energy Inc. | 31,436 | 1,556,711 | ||||||
|
| |||||||
18,295,134 | ||||||||
ELECTRICAL EQUIPMENT — 1.25% |
| |||||||
Eaton Corp. PLC | 27,518 | 2,201,990 | ||||||
Emerson Electric Co. | 39,595 | 2,552,294 | ||||||
|
| |||||||
4,754,284 | ||||||||
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) — 0.84% |
| |||||||
Equity Residential | 22,742 | 1,529,627 | ||||||
Weyerhaeuser Co. | 46,609 | 1,673,729 | ||||||
|
| |||||||
3,203,356 | ||||||||
FOOD & STAPLES RETAILING — 2.39% |
| |||||||
Kroger Co. (The) | 55,413 | 1,147,049 | ||||||
Wal-Mart Stores Inc. | 90,555 | 7,906,357 | ||||||
|
| |||||||
9,053,406 | ||||||||
FOOD PRODUCTS — 1.12% |
| |||||||
Archer-Daniels-Midland Co. | 34,739 | 1,419,783 | ||||||
General Mills Inc. | 35,714 | 1,854,271 | ||||||
Kellogg Co. | 15,345 | 959,523 | ||||||
|
| |||||||
4,233,577 |
SCHEDULESOF INVESTMENTS | 21 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR LARGE-CAP VALUE ETF
October 31, 2017
Security | Shares | Value | ||||||
HEALTH CARE PROVIDERS & SERVICES — 0.93% |
| |||||||
Express Scripts Holding Co.b | 35,731 | $ | 2,189,953 | |||||
HCA Healthcare Inc.b | 17,846 | 1,350,050 | ||||||
|
| |||||||
3,540,003 | ||||||||
HOUSEHOLD PRODUCTS — 3.59% |
| |||||||
Procter & Gamble Co. (The) | 157,758 | 13,620,826 | ||||||
|
| |||||||
13,620,826 | ||||||||
INSURANCE — 3.79% |
| |||||||
Aflac Inc. | 24,454 | 2,051,446 | ||||||
American International Group Inc. | 55,890 | 3,611,053 | ||||||
MetLife Inc. | 65,756 | 3,523,207 | ||||||
Prudential Financial Inc. | 26,416 | 2,917,911 | ||||||
Travelers Companies Inc. (The) | 17,072 | 2,261,186 | ||||||
|
| |||||||
14,364,803 | ||||||||
IT SERVICES — 2.18% |
| |||||||
International Business Machines Corp. | 53,619 | 8,260,543 | ||||||
|
| |||||||
8,260,543 | ||||||||
MACHINERY — 2.87% |
| |||||||
Caterpillar Inc. | 36,560 | 4,964,848 | ||||||
Cummins Inc. | 9,751 | 1,724,757 | ||||||
Deere & Co. | 19,789 | 2,629,562 | ||||||
PACCAR Inc. | 21,754 | 1,560,415 | ||||||
|
| |||||||
10,879,582 | ||||||||
MULTI-UTILITIES — 0.84% |
| |||||||
Consolidated Edison Inc. | 19,178 | 1,650,267 | ||||||
Public Service Enterprise Group Inc. | 31,318 | 1,540,845 | ||||||
|
| |||||||
3,191,112 | ||||||||
MULTILINE RETAIL — 0.53% |
| |||||||
Target Corp. | 33,792 | 1,995,080 | ||||||
|
| |||||||
1,995,080 | ||||||||
OIL, GAS & CONSUMABLE FUELS — 9.73% |
| |||||||
Anadarko Petroleum Corp. | 34,686 | 1,712,448 | ||||||
ConocoPhillips | 75,288 | 3,850,981 | ||||||
Exxon Mobil Corp. | 262,142 | 21,849,536 | ||||||
Marathon Petroleum Corp. | 31,331 | 1,871,714 | ||||||
Occidental Petroleum Corp. | 47,301 | 3,054,226 | ||||||
Phillips 66 | 26,581 | 2,420,997 | ||||||
Valero Energy Corp. | 27,325 | 2,155,669 | ||||||
|
| |||||||
36,915,571 |
Security | Shares | Value | ||||||
PHARMACEUTICALS — 6.18% |
| |||||||
Merck & Co. Inc. | 169,213 | $ | 9,321,944 | |||||
Mylan NVb | 33,116 | 1,182,573 | ||||||
Pfizer Inc. | 369,205 | 12,944,327 | ||||||
|
| |||||||
23,448,844 | ||||||||
SEMICONDUCTORS & SEMICONDUCTOR |
| |||||||
Intel Corp. | 290,708 | 13,224,307 | ||||||
Micron Technology Inc.b | 68,923 | 3,053,978 | ||||||
QUALCOMM Inc. | 91,404 | 4,662,518 | ||||||
|
| |||||||
20,940,803 | ||||||||
SOFTWARE — 0.27% |
| |||||||
Dell Technologies Inc. Class Vb | 12,545 | 1,038,350 | ||||||
|
| |||||||
1,038,350 | ||||||||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS — 1.39% |
| |||||||
Hewlett Packard Enterprise Co. | 101,438 | 1,412,017 | ||||||
HP Inc. | 103,332 | 2,226,805 | ||||||
Western Digital Corp. | 18,253 | 1,629,445 | ||||||
|
| |||||||
5,268,267 | ||||||||
TOBACCO — 2.65% |
| |||||||
Philip Morris International Inc. | 96,086 | 10,054,439 | ||||||
|
| |||||||
10,054,439 | ||||||||
WIRELESS TELECOMMUNICATION SERVICES — 0.07% |
| |||||||
Sprint Corp.b | 42,185 | 275,890 | ||||||
|
| |||||||
275,890 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $329,102,712) | 378,684,376 | |||||||
|
| |||||||
SHORT-TERM INVESTMENTS — 0.04% |
| |||||||
MONEY MARKET FUNDS — 0.04% |
| |||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | ||||||||
1.00%a,c | 160,082 | 160,082 | ||||||
|
| |||||||
160,082 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $160,082) |
| 160,082 | ||||||
|
|
22 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR LARGE-CAP VALUE ETF
October 31, 2017
Value | ||||||
TOTAL INVESTMENTS | ||||||
(Cost: $329,262,794)d | $ | 378,844,458 | ||||
Other Assets, Less Liabilities — 0.15% | 550,538 | |||||
|
| |||||
NET ASSETS — 100.00% | $ | 379,394,996 | ||||
|
|
a | Affiliated issuer. See Schedule 1. |
b | Non-income earning security. |
c | The rate quoted is the annualized seven-day yield of the fund at period end. |
d | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $331,814,071. Net unrealized appreciation was $47,030,387, of which $58,882,885 represented gross unrealized appreciation on investments and $11,852,498 represented gross unrealized depreciation on investments. |
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 04/30/17 | Shares purchased | Shares sold | Shares held at 10/31/17 | Value at 10/31/17 | Net realized gain (loss)a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, | — | — | b | — | — | $ | — | $ | (160 | ) | $ | — | $ | — | c | |||||||||||||||||
BlackRock Cash Funds: Treasury, | 663,156 | — | (503,074 | )b | 160,082 | 160,082 | — | — | 1,963 | |||||||||||||||||||||||
PNC Financial Services Group Inc. (The) | 31,698 | 2,155 | (4,208 | ) | 29,645 | 4,055,139 | 179,529 | 342,888 | 46,048 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 4,215,221 | $ | 179,369 | $ | 342,888 | $ | 48,011 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
c | Does not include income earned on investment of securities lending cash collateral which is not direct income of the Fund and is reflected as a component of securities lending income in the statement of operations. |
Schedule 2 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: |
| |||||||||||||||
Assets: |
| |||||||||||||||
Common stocks | $ | 378,684,376 | $ | — | $ | — | $ | 378,684,376 | ||||||||
Money market funds | 160,082 | ��� | — | 160,082 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 378,844,458 | $ | — | $ | — | $ | 378,844,458 | ||||||||
|
|
|
|
|
|
|
| |||||||||
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 23 |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES® MORNINGSTAR MID-CAP ETF
October 31, 2017
Security | Shares | Value | ||||||
COMMON STOCKS — 99.88% |
| |||||||
AEROSPACE & DEFENSE — 3.62% |
| |||||||
Arconic Inc. | 178,150 | $ | 4,475,128 | |||||
BWX Technologies Inc. | 41,879 | 2,509,390 | ||||||
L3 Technologies Inc. | 32,993 | 6,175,630 | ||||||
Rockwell Collins Inc. | 68,594 | 9,301,346 | ||||||
Textron Inc. | 111,659 | 5,888,895 | ||||||
|
| |||||||
28,350,389 | ||||||||
AIR FREIGHT & LOGISTICS — 1.16% |
| |||||||
CH Robinson Worldwide Inc. | 59,272 | 4,654,630 | ||||||
Expeditors International of Washington Inc. | 76,235 | 4,450,599 | ||||||
|
| |||||||
9,105,229 | ||||||||
AIRLINES — 0.44% | ||||||||
Alaska Air Group Inc. | 52,108 | 3,440,691 | ||||||
|
| |||||||
3,440,691 | ||||||||
AUTO COMPONENTS — 1.73% |
| |||||||
Delphi Automotive PLC | 112,634 | 11,193,567 | ||||||
Gentex Corp. | 120,378 | 2,336,537 | ||||||
|
| |||||||
13,530,104 | ||||||||
AUTOMOBILES — 0.36% | ||||||||
Thor Industries Inc. | 20,621 | 2,808,993 | ||||||
|
| |||||||
2,808,993 | ||||||||
BANKS — 4.90% | ||||||||
Citizens Financial Group Inc. | 211,392 | 8,035,010 | ||||||
Comerica Inc. | 74,200 | 5,829,894 | ||||||
Commerce Bancshares Inc./MO | 37,741 | 2,195,017 | ||||||
Cullen/Frost Bankers Inc. | 24,641 | 2,427,138 | ||||||
East West Bancorp. Inc. | 60,940 | 3,646,650 | ||||||
F.N.B. Corp. | 136,281 | 1,838,431 | ||||||
PacWest Bancorp. | 54,610 | 2,638,755 | ||||||
SVB Financial Groupa | 22,223 | 4,873,059 | ||||||
Synovus Financial Corp. | 51,221 | 2,399,704 | ||||||
Webster Financial Corp. | 38,819 | 2,134,657 | ||||||
Western Alliance Bancorp.a | 40,938 | 2,284,340 | ||||||
|
| |||||||
38,302,655 | ||||||||
BEVERAGES — 1.63% | ||||||||
Brown-Forman Corp. Class A | 25,646 | 1,470,285 | ||||||
Brown-Forman Corp. Class B | 82,597 | 4,709,681 | ||||||
Dr Pepper Snapple Group Inc. | 76,739 | 6,573,463 | ||||||
|
| |||||||
12,753,429 |
Security | Shares | Value | ||||||
BUILDING PRODUCTS — 0.66% |
| |||||||
Owens Corning | 46,911 | $ | 3,879,071 | |||||
USG Corp.a,b | 38,088 | 1,307,561 | ||||||
|
| |||||||
5,186,632 | ||||||||
CAPITAL MARKETS — 3.93% |
| |||||||
Affiliated Managers Group Inc. | 23,598 | 4,401,027 | ||||||
Ameriprise Financial Inc. | 63,298 | 9,908,669 | ||||||
Eaton Vance Corp. NVS | 48,475 | 2,446,533 | ||||||
Raymond James Financial Inc. | 54,131 | 4,589,226 | ||||||
T Rowe Price Group Inc. | 101,471 | 9,426,656 | ||||||
|
| |||||||
30,772,111 | ||||||||
CHEMICALS — 4.16% |
| |||||||
Albemarle Corp. | 46,598 | 6,565,192 | ||||||
Chemours Co. (The) | 77,935 | 4,411,900 | ||||||
FMC Corp. | 56,576 | 5,253,647 | ||||||
International Flavors & Fragrances Inc. | 33,310 | 4,910,560 | ||||||
NewMarket Corp. | 3,902 | 1,562,322 | ||||||
Olin Corp. | 70,092 | 2,560,461 | ||||||
RPM International Inc. | 56,294 | 3,002,159 | ||||||
Valvoline Inc. | 85,424 | 2,051,885 | ||||||
WR Grace & Co. | 28,789 | 2,202,071 | ||||||
|
| |||||||
32,520,197 | ||||||||
COMMERCIAL SERVICES & SUPPLIES — 1.48% |
| |||||||
KAR Auction Services Inc. | 57,816 | 2,736,431 | ||||||
Republic Services Inc. | 96,592 | 6,285,242 | ||||||
Stericycle Inc.a | 36,021 | 2,552,088 | ||||||
|
| |||||||
11,573,761 | ||||||||
COMMUNICATIONS EQUIPMENT — 1.12% |
| |||||||
ARRIS International PLCa | 74,410 | 2,120,685 | ||||||
CommScope Holding Co. Inc.a,b | 81,481 | 2,618,800 | ||||||
Juniper Networks Inc. | 160,422 | 3,983,278 | ||||||
|
| |||||||
8,722,763 | ||||||||
CONTAINERS & PACKAGING — 1.22% |
| |||||||
AptarGroup Inc. | 26,441 | 2,302,218 | ||||||
Avery Dennison Corp. | 37,285 | 3,958,548 | ||||||
Berry Global Group Inc.a | 55,013 | 3,270,523 | ||||||
|
| |||||||
9,531,289 | ||||||||
DIVERSIFIED FINANCIAL SERVICES — 0.88% |
| |||||||
FNFV Groupa | 27,455 | 473,599 | ||||||
Leucadia National Corp. | 133,528 | 3,378,258 | ||||||
Voya Financial Inc. | 75,754 | 3,042,281 | ||||||
|
| |||||||
6,894,138 |
24 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR MID-CAP ETF
October 31, 2017
Security | Shares | Value | ||||||
ELECTRICAL EQUIPMENT — 3.06% |
| |||||||
AMETEK Inc. | 97,467 | $ | 6,578,048 | |||||
Hubbell Inc. | 23,074 | 2,903,171 | ||||||
Rockwell Automation Inc. | 54,187 | 10,881,833 | ||||||
Sensata Technologies Holding NVa,b | 72,198 | 3,531,204 | ||||||
|
| |||||||
23,894,256 | ||||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS — 1.87% |
| |||||||
CDW Corp./DE | 65,330 | 4,573,100 | ||||||
Flex Ltd.a,b | 224,656 | 3,998,877 | ||||||
SYNNEX Corp. | 12,306 | 1,659,833 | ||||||
Trimble Inc.a | 106,932 | 4,371,380 | ||||||
|
| |||||||
14,603,190 | ||||||||
EQUITY REAL ESTATE INVESTMENT TRUSTS |
| |||||||
Alexandria Real Estate Equities Inc. | 39,543 | 4,901,750 | ||||||
Apartment Investment & Management Co. Class A | 66,278 | 2,914,906 | ||||||
Apple Hospitality REIT Inc.b | 88,367 | 1,673,671 | ||||||
Boston Properties Inc. | 65,155 | 7,895,483 | ||||||
Brixmor Property Group Inc. | 128,693 | 2,248,267 | ||||||
Camden Property Trust | 38,973 | 3,555,897 | ||||||
Duke Realty Corp. | 150,066 | 4,273,880 | ||||||
Forest City Realty Trust Inc. Class A | 112,588 | 2,773,042 | ||||||
Gaming and Leisure Properties Inc. | 84,239 | 3,078,093 | ||||||
GGP Inc.b | 264,143 | 5,140,223 | ||||||
Healthcare Trust of America Inc. Class A | 84,692 | 2,544,995 | ||||||
Highwoods Properties Inc. | 43,561 | 2,223,789 | ||||||
Iron Mountain Inc.b | 111,522 | 4,460,880 | ||||||
Kimco Realty Corp. | 179,454 | 3,258,885 | ||||||
Lamar Advertising Co. Class A | 35,293 | 2,486,039 | ||||||
Liberty Property Trust | 62,181 | 2,666,321 | ||||||
Macerich Co. (The) | 45,896 | 2,505,922 | ||||||
Medical Properties Trust Inc.b | 153,458 | 2,030,249 | ||||||
Mid-America Apartment Communities Inc. | 47,918 | 4,904,407 | ||||||
National Retail Properties Inc. | 62,990 | 2,530,938 | ||||||
Realty Income Corp. | 115,741 | 6,211,819 | ||||||
SL Green Realty Corp. | 41,748 | 3,994,449 | ||||||
STORE Capital Corp. | 69,770 | 1,722,621 | ||||||
Sun Communities Inc. | 33,310 | 3,006,561 |
Security | Shares | Value | ||||||
VEREIT Inc. | 410,800 | $ | 3,241,212 | |||||
Vornado Realty Trust | 72,726 | 5,444,268 | ||||||
Weingarten Realty Investorsb | 50,410 | 1,534,985 | ||||||
|
| |||||||
93,223,552 | ||||||||
FOOD & STAPLES RETAILING — 0.21% |
| |||||||
U.S. Foods Holding Corp.a | 60,355 | 1,646,484 | ||||||
|
| |||||||
1,646,484 | ||||||||
FOOD PRODUCTS — 3.30% |
| |||||||
Hershey Co. (The) | 59,676 | 6,336,398 | ||||||
Hormel Foods Corp. | 113,710 | 3,543,204 | ||||||
JM Smucker Co. (The) | 47,911 | 5,080,961 | ||||||
Lamb Weston Holdings Inc. | 61,697 | 3,145,930 | ||||||
McCormick & Co. Inc./MD NVS | 50,154 | 4,991,828 | ||||||
Pinnacle Foods Inc. | 50,117 | 2,727,367 | ||||||
|
| |||||||
25,825,688 | ||||||||
HEALTH CARE EQUIPMENT & SUPPLIES — 1.84% |
| |||||||
DENTSPLY SIRONA Inc. | 96,794 | 5,911,210 | ||||||
Hologic Inc.a,b | 118,311 | 4,478,071 | ||||||
Varian Medical Systems Inc.a,b | 38,722 | 4,034,445 | ||||||
|
| |||||||
14,423,726 | ||||||||
HEALTH CARE PROVIDERS & SERVICES — 4.46% |
| |||||||
AmerisourceBergen Corp. | 68,392 | 5,262,764 | ||||||
Centene Corp.a | 72,832 | 6,822,174 | ||||||
DaVita Inc.a | 64,523 | 3,919,127 | ||||||
Laboratory Corp. of America Holdingsa | 42,990 | 6,607,993 | ||||||
MEDNAX Inc.a,b | 39,494 | 1,729,442 | ||||||
Patterson Companies Inc. | 34,767 | 1,286,379 | ||||||
Quest Diagnostics Inc. | 57,536 | 5,395,726 | ||||||
Universal Health Services Inc. Class B | 37,332 | 3,833,996 | ||||||
|
| |||||||
34,857,601 | ||||||||
HOTELS, RESTAURANTS & LEISURE — 2.04% |
| |||||||
Aramark | 103,377 | 4,516,541 | ||||||
Darden Restaurants Inc. | 52,950 | 4,356,197 | ||||||
Six Flags Entertainment Corp. | 33,590 | 2,109,116 | ||||||
Wynn Resorts Ltd. | 33,743 | 4,976,755 | ||||||
|
| |||||||
15,958,609 | ||||||||
HOUSEHOLD DURABLES — 4.15% |
| |||||||
DR Horton Inc. | 143,667 | 6,351,518 | ||||||
Leggett & Platt Inc. | 55,765 | 2,635,454 | ||||||
Lennar Corp. Class A | 85,712 | 4,771,587 | ||||||
Lennar Corp. Class B | 4,095 | 196,355 | ||||||
Mohawk Industries Inc.a | 26,683 | 6,984,542 |
SCHEDULESOF INVESTMENTS | 25 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR MID-CAP ETF
October 31, 2017
Security | Shares | Value | ||||||
PulteGroup Inc. | 117,161 | $ | 3,541,777 | |||||
Toll Brothers Inc. | 64,127 | 2,952,407 | ||||||
Whirlpool Corp. | 30,782 | 5,046,094 | ||||||
|
| |||||||
32,479,734 | ||||||||
HOUSEHOLD PRODUCTS — 0.88% |
| |||||||
Clorox Co. (The) | 54,502 | 6,896,138 | ||||||
|
| |||||||
6,896,138 | ||||||||
INDUSTRIAL CONGLOMERATES — 0.37% |
| |||||||
Carlisle Companies Inc. | 26,632 | 2,924,993 | ||||||
|
| |||||||
2,924,993 | ||||||||
INSURANCE — 5.51% |
| |||||||
Alleghany Corp.a | 6,075 | 3,439,786 | ||||||
Arch Capital Group Ltd.a | 55,146 | 5,494,747 | ||||||
Arthur J Gallagher & Co. | 75,983 | 4,812,003 | ||||||
First American Financial Corp. | 46,673 | 2,539,945 | ||||||
FNF Group | 115,171 | 4,309,699 | ||||||
RenaissanceRe Holdings Ltd. | 16,910 | 2,339,668 | ||||||
Torchmark Corp. | 45,633 | 3,839,104 | ||||||
Willis Towers Watson PLC | 56,695 | 9,132,431 | ||||||
WR Berkley Corp. | 40,384 | 2,769,535 | ||||||
XL Group Ltd. | 108,817 | 4,403,824 | ||||||
|
| |||||||
43,080,742 | ||||||||
INTERNET & DIRECT MARKETING RETAIL — 0.52% |
| |||||||
Liberty Interactive Corp. QVC Group Series Aa | 178,234 | 4,049,476 | ||||||
|
| |||||||
4,049,476 | ||||||||
IT SERVICES — 3.13% |
| |||||||
Alliance Data Systems Corp. | 20,362 | 4,555,590 | ||||||
Booz Allen Hamilton Holding Corp. | 62,683 | 2,368,791 | ||||||
DXC Technology Co. | 120,155 | 10,996,586 | ||||||
First Data Corp. Class Aa | 180,453 | 3,213,868 | ||||||
Genpact Ltd. | 52,041 | 1,584,648 | ||||||
Sabre Corp. | 88,034 | 1,721,945 | ||||||
|
| |||||||
24,441,428 | ||||||||
LEISURE PRODUCTS — 0.24% |
| |||||||
Brunswick Corp./DE | 37,404 | 1,894,513 | ||||||
|
| |||||||
1,894,513 | ||||||||
LIFE SCIENCES TOOLS & SERVICES — 2.49% |
| |||||||
Agilent Technologies Inc. | 135,661 | 9,229,018 | ||||||
PerkinElmer Inc. | 46,491 | 3,362,229 | ||||||
Quintiles IMS Holdings Inc.a | 63,932 | 6,911,049 | ||||||
|
| |||||||
19,502,296 |
Security | Shares | Value | ||||||
MACHINERY — 5.62% |
| |||||||
AGCO Corp. | 27,802 | $ | 1,906,383 | |||||
Allison Transmission Holdings Inc. | 59,597 | 2,532,276 | ||||||
Donaldson Co. Inc. | 55,258 | 2,608,730 | ||||||
Lincoln Electric Holdings Inc. | 26,116 | 2,394,054 | ||||||
Parker-Hannifin Corp. | 56,200 | 10,262,682 | ||||||
Pentair PLC | 69,661 | 4,908,314 | ||||||
Snap-on Inc. | 24,293 | 3,832,950 | ||||||
Stanley Black & Decker Inc. | 64,651 | 10,444,369 | ||||||
Xylem Inc./NY | 75,743 | 5,039,182 | ||||||
|
| |||||||
43,928,940 | ||||||||
MEDIA — 3.20% |
| |||||||
Cinemark Holdings Inc. | 44,686 | 1,623,889 | ||||||
Discovery Communications Inc. Class Aa,b | 64,883 | 1,224,991 | ||||||
Discovery Communications Inc. Class C NVSa,b | 85,662 | 1,525,640 | ||||||
DISH Network Corp. Class Aa | 96,036 | 4,661,588 | ||||||
Interpublic Group of Companies Inc. (The) | 165,823 | 3,192,093 | ||||||
News Corp. Class A | 161,097 | 2,200,585 | ||||||
News Corp. Class B | 51,400 | 714,460 | ||||||
Omnicom Group Inc. | 97,438 | 6,546,859 | ||||||
Scripps Networks Interactive Inc. Class A | 40,461 | 3,369,592 | ||||||
|
| |||||||
25,059,697 | ||||||||
METALS & MINING — 1.00% |
| |||||||
Nucor Corp. | 134,873 | 7,799,706 | ||||||
|
| |||||||
7,799,706 | ||||||||
MULTI-UTILITIES — 1.15% |
| |||||||
WEC Energy Group Inc. | 133,236 | 8,978,774 | ||||||
|
| |||||||
8,978,774 | ||||||||
OIL, GAS & CONSUMABLE FUELS — 2.23% |
| |||||||
Cimarex Energy Co. | 40,190 | 4,699,417 | ||||||
Continental Resources Inc./OKa,b | 36,382 | 1,481,111 | ||||||
Newfield Exploration Co.a,b | 83,990 | 2,586,052 | ||||||
ONEOK Inc. | 160,383 | 8,703,985 | ||||||
|
| |||||||
17,470,565 | ||||||||
PROFESSIONAL SERVICES — 1.19% |
| |||||||
IHS Markit Ltd.a | 153,406 | 6,536,630 | ||||||
Robert Half International Inc. | 53,199 | 2,754,112 | ||||||
|
| |||||||
9,290,742 |
26 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR MID-CAP ETF
October 31, 2017
Security | Shares | Value | ||||||
REAL ESTATE MANAGEMENT & DEVELOPMENT — 0.88% |
| |||||||
CBRE Group Inc. Class Aa | 126,863 | $ | 4,988,253 | |||||
Realogy Holdings Corp. | 57,455 | 1,857,520 | ||||||
|
| |||||||
6,845,773 | ||||||||
ROAD & RAIL — 0.83% |
| |||||||
Genesee & Wyoming Inc. Class Aa,b | 25,934 | 1,861,543 | ||||||
Kansas City Southern | 44,466 | 4,634,246 | ||||||
|
| |||||||
6,495,789 | ||||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT — 4.77% |
| |||||||
Maxim Integrated Products Inc. | 118,977 | 6,251,051 | ||||||
Microchip Technology Inc. | 98,252 | 9,314,289 | ||||||
Microsemi Corp.a | 48,681 | 2,598,105 | ||||||
ON Semiconductor Corp.a | 177,799 | 3,790,675 | ||||||
Qorvo Inc.a | 53,684 | 4,069,784 | ||||||
Teradyne Inc. | 83,503 | 3,581,444 | ||||||
Xilinx Inc. | 104,972 | 7,735,387 | ||||||
|
| |||||||
37,340,735 | ||||||||
SOFTWARE — 1.08% |
| |||||||
Symantec Corp. | 259,453 | 8,432,222 | ||||||
|
| |||||||
8,432,222 | ||||||||
SPECIALTY RETAIL — 1.69% |
| |||||||
CarMax Inc.a,b | 77,295 | 5,804,855 | ||||||
Dick’s Sporting Goods Inc. | 35,674 | 872,943 | ||||||
Foot Locker Inc. | 52,306 | 1,573,364 | ||||||
Michaels Companies Inc. (The)a,b | 46,527 | 903,554 | ||||||
Tiffany & Co. | 43,054 | 4,030,716 | ||||||
|
| |||||||
13,185,432 | ||||||||
TEXTILES, APPAREL & LUXURY GOODS — 0.84% |
| |||||||
Hanesbrands Inc. | 153,727 | 3,458,858 | ||||||
Michael Kors Holdings Ltd.a | 63,908 | 3,119,349 | ||||||
|
| |||||||
6,578,207 | ||||||||
TRADING COMPANIES & DISTRIBUTORS — 0.65% |
| |||||||
United Rentals Inc.a | 35,650 | 5,043,762 | ||||||
|
| |||||||
5,043,762 | ||||||||
TRANSPORTATION INFRASTRUCTURE — 0.29% |
| |||||||
Macquarie Infrastructure Corp. | 32,752 | 2,277,902 | ||||||
|
| |||||||
2,277,902 |
Security | Shares | Value | ||||||
WATER UTILITIES — 1.18% |
| |||||||
American Water Works Co. Inc. | 75,201 | $ | 6,599,639 | |||||
Aqua America Inc. | 74,985 | 2,660,468 | ||||||
|
| |||||||
9,260,107 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $657,940,902) |
| 781,183,160 | ||||||
SHORT-TERM INVESTMENTS — 2.81% |
| |||||||
MONEY MARKET FUNDS — 2.81% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
1.31%c,d,e | 21,240,313 | 21,244,561 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
1.00%c,d | 762,272 | 762,272 | ||||||
|
| |||||||
22,006,833 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $22,004,753) |
| 22,006,833 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $679,945,655)f |
| 803,189,993 | ||||||
Other Assets, Less Liabilities — (2.69)% |
| (21,065,866 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 782,124,127 | |||||
|
|
NVS — Non-Voting Shares
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 1. |
c | Affiliated issuer. See Schedule 1. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 1. |
f | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $687,712,371. Net unrealized appreciation was $115,477,622, of which $139,624,905 represented gross unrealized appreciation on investments and $24,147,283 represented gross unrealized depreciation on investments. |
SCHEDULESOF INVESTMENTS | 27 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR MID-CAP ETF
October 31, 2017
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 04/30/17 | Shares purchased | Shares sold | Shares held at 10/31/17 | Value at 10/31/17 | Net realized gain (loss)a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, | 33,366,332 | — | (12,126,019 | )b | 21,240,313 | $ | 21,244,561 | $ | (1,304 | ) | $ | (1,810 | ) | $ | —c | |||||||||||||||||
BlackRock Cash Funds: Treasury, | 623,456 | 138,816 | b | — | 762,272 | 762,272 | — | — | 4,207 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 22,006,833 | $ | (1,304 | ) | $ | (1,810 | ) | $ | 4,207 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
c | Does not include income earned on investment of securities lending cash collateral which is not direct income of the Fund and is reflected as a component of securities lending income in the statement of operations. |
Schedule 2 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: | ||||||||||||||||
Assets: | ||||||||||||||||
Common stocks | $ | 781,183,160 | $ | — | $ | — | $ | 781,183,160 | ||||||||
Money market funds | 22,006,833 | — | — | 22,006,833 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 803,189,993 | $ | — | $ | — | $ | 803,189,993 | ||||||||
|
|
|
|
|
|
|
| |||||||||
See notes to financial statements.
28 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES® MORNINGSTAR MID-CAP GROWTH ETF
October 31, 2017
Security | Shares | Value | ||||||
COMMON STOCKS — 99.89% |
| |||||||
AEROSPACE & DEFENSE — 2.22% |
| |||||||
HEICO Corp.a | 3,403 | $ | 308,584 | |||||
HEICO Corp. Class A | 5,957 | 453,328 | ||||||
Hexcel Corp. | 11,793 | 715,717 | ||||||
Huntington Ingalls Industries Inc. | 5,963 | 1,388,365 | ||||||
Teledyne Technologies Inc.a,b | 4,640 | 788,615 | ||||||
TransDigm Group Inc. | 6,340 | 1,759,350 | ||||||
|
| |||||||
5,413,959 | ||||||||
AIR FREIGHT & LOGISTICS — 0.36% |
| |||||||
XPO Logistics Inc.a,b | 12,844 | 890,731 | ||||||
|
| |||||||
890,731 | ||||||||
BANKS — 2.19% |
| |||||||
Bank of the Ozarks Inc. | 15,948 | 743,496 | ||||||
First Republic Bank/CA | 20,263 | 1,973,616 | ||||||
Investors Bancorp. Inc. | 33,678 | 463,073 | ||||||
Signature Bank/New York NYb | 7,220 | 938,672 | ||||||
Zions BanCorp. | 26,551 | 1,233,559 | ||||||
|
| |||||||
5,352,416 | ||||||||
BIOTECHNOLOGY — 3.76% |
| |||||||
Alkermes PLCb | 20,180 | 983,977 | ||||||
Alnylam Pharmaceuticals Inc.b | 9,973 | 1,215,110 | ||||||
BioMarin Pharmaceutical Inc.b | 23,018 | 1,889,548 | ||||||
Bioverativ Inc.b | 14,205 | 802,582 | ||||||
Dyax Corp.b,c | 23,054 | 52,794 | ||||||
Exelixis Inc.b | 36,669 | 909,025 | ||||||
Ionis Pharmaceuticals Inc.a,b | 16,332 | 932,721 | ||||||
Neurocrine Biosciences Inc.a,b | 11,568 | 718,488 | ||||||
OPKO Health Inc.a,b | 47,594 | 320,308 | ||||||
Seattle Genetics Inc.b | 12,585 | 771,586 | ||||||
TESARO Inc.b | 4,981 | 576,651 | ||||||
|
| |||||||
9,172,790 | ||||||||
BUILDING PRODUCTS — 2.51% |
| |||||||
Allegion PLC | 12,474 | 1,040,207 | ||||||
AO Smith Corp. | 19,230 | 1,138,416 | ||||||
Fortune Brands Home & Security Inc. | 20,226 | 1,336,129 | ||||||
Lennox International Inc. | 4,986 | 952,974 | ||||||
Masco Corp. | 41,841 | 1,666,109 | ||||||
|
| |||||||
6,133,835 | ||||||||
CAPITAL MARKETS — 4.87% |
| |||||||
Cboe Global Markets Inc. | 14,811 | 1,674,532 | ||||||
E*TRADE Financial Corp.b | 36,123 | 1,574,601 |
Security | Shares | Value | ||||||
FactSet Research Systems Inc. | 5,152 | $ | 978,210 | |||||
MarketAxess Holdings Inc. | 4,936 | 858,864 | ||||||
MSCI Inc. | 11,827 | 1,388,017 | ||||||
Northern Trust Corp. | 28,207 | 2,637,919 | ||||||
SEI Investments Co. | 17,234 | 1,111,765 | ||||||
TD Ameritrade Holding Corp. | 33,294 | 1,664,367 | ||||||
|
| |||||||
11,888,275 | ||||||||
CHEMICALS — 0.61% |
| |||||||
Axalta Coating Systems Ltd.b | 28,741 | 955,638 | ||||||
Scotts Miracle-Gro Co. (The) Class A | 5,377 | 535,657 | ||||||
|
| |||||||
1,491,295 | ||||||||
COMMERCIAL SERVICES & SUPPLIES — 1.30% |
| |||||||
Cintas Corp. | 11,216 | 1,671,633 | ||||||
Copart Inc.b | 26,317 | 955,044 | ||||||
Rollins Inc. | 12,609 | 553,661 | ||||||
|
| |||||||
3,180,338 | ||||||||
COMMUNICATIONS EQUIPMENT — 1.72% |
| |||||||
Arista Networks Inc.a,b | 6,096 | 1,218,529 | ||||||
F5 Networks Inc.b | 8,346 | 1,012,119 | ||||||
Palo Alto Networks Inc.a,b | 12,059 | 1,775,085 | ||||||
Ubiquiti Networks Inc.a,b | 3,047 | 189,463 | ||||||
|
| |||||||
4,195,196 | ||||||||
CONSTRUCTION MATERIALS — 1.88% |
| |||||||
Eagle Materials Inc. | 6,371 | 672,586 | ||||||
Martin Marietta Materials Inc. | 8,253 | 1,789,663 | ||||||
Vulcan Materials Co. | 17,372 | 2,115,041 | ||||||
|
| |||||||
4,577,290 | ||||||||
CONTAINERS & PACKAGING — 0.26% |
| |||||||
Graphic Packaging Holding Co. | 40,735 | 630,985 | ||||||
|
| |||||||
630,985 | ||||||||
DISTRIBUTORS — 0.89% |
| |||||||
LKQ Corp.b | 40,563 | 1,528,819 | ||||||
Pool Corp. | 5,418 | 654,386 | ||||||
|
| |||||||
2,183,205 | ||||||||
DIVERSIFIED CONSUMER SERVICES — 0.93% |
| |||||||
Bright Horizons Family Solutions Inc.a,b | 6,526 | 563,194 | ||||||
Service Corp. International/U.S. | 24,589 | 871,926 | ||||||
ServiceMaster Global Holdings Inc.b | 17,525 | 825,602 | ||||||
|
| |||||||
2,260,722 |
SCHEDULESOF INVESTMENTS | 29 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR MID-CAP GROWTH ETF
October 31, 2017
Security | Shares | Value | ||||||
DIVERSIFIED TELECOMMUNICATION SERVICES — 0.36% |
| |||||||
Zayo Group Holdings Inc.b | 24,206 | $ | 872,868 | |||||
|
| |||||||
872,868 | ||||||||
ELECTRICAL EQUIPMENT — 0.38% |
| |||||||
Acuity Brands Inc.a | 5,528 | 924,282 | ||||||
|
| |||||||
924,282 | ||||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS — 1.96% |
| |||||||
Cognex Corp. | 11,370 | 1,400,215 | ||||||
Coherent Inc.b | 3,235 | 849,867 | ||||||
FLIR Systems Inc. | 18,018 | 843,603 | ||||||
IPG Photonics Corp.b | 4,948 | 1,053,479 | ||||||
National Instruments Corp. | 14,053 | 632,385 | ||||||
|
| |||||||
4,779,549 | ||||||||
ENERGY EQUIPMENT & SERVICES — 0.24% |
| |||||||
Core Laboratories NV | 5,799 | 579,320 | ||||||
|
| |||||||
579,320 | ||||||||
EQUITY REAL ESTATE INVESTMENT TRUSTS |
| |||||||
American Campus Communities Inc. | 17,917 | 744,989 | ||||||
American Homes 4 Rent Class A | 30,023 | 638,889 | ||||||
CubeSmart | 23,676 | 644,461 | ||||||
CyrusOne Inc.a | 11,990 | 736,066 | ||||||
DCT Industrial Trust Inc. | 12,224 | 709,236 | ||||||
DDR Corp. | 39,959 | 306,486 | ||||||
Digital Realty Trust Inc. | 26,872 | 3,182,720 | ||||||
Douglas Emmett Inc.a | 20,107 | 800,058 | ||||||
Equity LifeStyle Properties Inc. | 11,426 | 1,010,973 | ||||||
Essex Property Trust Inc. | 8,666 | 2,274,218 | ||||||
Extra Space Storage Inc.a | 16,536 | 1,349,172 | ||||||
Federal Realty Investment Trusta | 9,489 | 1,143,614 | ||||||
Host Hotels & Resorts Inc. | 97,191 | 1,901,056 | ||||||
Hudson Pacific Properties Inc. | 20,400 | 689,928 | ||||||
Invitation Homes Inc.a | 10,206 | 230,349 | ||||||
Kilroy Realty Corp.a | 12,918 | 920,149 | ||||||
Regency Centers Corp.a | 19,433 | 1,196,101 | ||||||
SBA Communications Corp.b | 15,807 | 2,484,544 | ||||||
Spirit Realty Capital Inc. | 60,281 | 500,935 | ||||||
UDR Inc. | 35,140 | 1,363,081 | ||||||
|
| |||||||
22,827,025 | ||||||||
FOOD & STAPLES RETAILING — 0.24% |
| |||||||
Casey’s General Stores Inc. | 5,027 | 575,943 | ||||||
|
| |||||||
575,943 |
Security | Shares | Value | ||||||
FOOD PRODUCTS — 0.65% |
| |||||||
Blue Buffalo Pet Products Inc.b | 12,385 | $ | 358,298 | |||||
Post Holdings Inc.b | 8,688 | 720,496 | ||||||
TreeHouse Foods Inc.a,b | 7,522 | 499,310 | ||||||
|
| |||||||
1,578,104 | ||||||||
HEALTH CARE EQUIPMENT & SUPPLIES — 6.83% |
| |||||||
ABIOMED Inc.b | 5,502 | 1,061,446 | ||||||
Align Technology Inc.b | 9,474 | 2,264,096 | ||||||
C.R. Bard Inc. | 9,544 | 3,121,556 | ||||||
Cooper Companies Inc. (The) | 6,416 | 1,541,508 | ||||||
DexCom Inc.b | 11,368 | 511,219 | ||||||
Hill-Rom Holdings Inc. | 8,652 | 698,303 | ||||||
IDEXX Laboratories Inc.b | 11,462 | 1,904,640 | ||||||
Masimo Corp.b | 6,283 | 551,396 | ||||||
ResMed Inc. | 18,676 | 1,572,146 | ||||||
STERIS PLC | 11,154 | 1,041,003 | ||||||
Teleflex Inc. | 5,915 | 1,401,737 | ||||||
West Pharmaceutical Services Inc.a | 9,719 | 985,507 | ||||||
|
| |||||||
16,654,557 | ||||||||
HEALTH CARE PROVIDERS & SERVICES — 1.14% |
| |||||||
Henry Schein Inc.b | 20,837 | 1,637,788 | ||||||
WellCare Health Plans Inc.b | 5,845 | 1,155,790 | ||||||
|
| |||||||
2,793,578 | ||||||||
HEALTH CARE TECHNOLOGY — 0.38% |
| |||||||
Veeva Systems Inc. Class Aa,b | 15,038 | 916,416 | ||||||
|
| |||||||
916,416 | ||||||||
HOTELS, RESTAURANTS & LEISURE — 3.78% |
| |||||||
Chipotle Mexican Grill Inc.a,b | 3,295 | 895,911 | ||||||
Domino’s Pizza Inc. | 5,746 | 1,051,518 | ||||||
Dunkin’ Brands Group Inc. | 11,857 | 700,393 | ||||||
Hilton Worldwide Holdings Inc. | 26,825 | 1,938,911 | ||||||
MGM Resorts International | 67,986 | 2,131,361 | ||||||
Norwegian Cruise Line Holdings Ltd.b | 23,372 | 1,302,989 | ||||||
Vail Resorts Inc. | 5,254 | 1,203,271 | ||||||
|
| |||||||
9,224,354 | ||||||||
HOUSEHOLD DURABLES — 0.61% |
| |||||||
NVR Inc.b | 457 | 1,499,586 | ||||||
|
| |||||||
1,499,586 | ||||||||
HOUSEHOLD PRODUCTS — 0.75% |
| |||||||
Church & Dwight Co. Inc. | 32,768 | 1,480,130 | ||||||
Spectrum Brands Holdings Inc. | 3,115 | 342,401 | ||||||
|
| |||||||
1,822,531 |
30 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR MID-CAP GROWTH ETF
October 31, 2017
Security | Shares | Value | ||||||
INSURANCE — 1.25% |
| |||||||
Brown & Brown Inc. | 15,240 | $ | 759,562 | |||||
Erie Indemnity Co. Class A | 2,424 | 292,819 | ||||||
Markel Corp.b | 1,837 | 1,991,859 | ||||||
|
| |||||||
3,044,240 | ||||||||
INTERNET & DIRECT MARKETING RETAIL — 1.29% |
| |||||||
Expedia Inc. | 16,045 | 2,000,170 | ||||||
Liberty Ventures Series Ab | 10,686 | 608,674 | ||||||
TripAdvisor Inc.b | 14,226 | 533,475 | ||||||
|
| |||||||
3,142,319 | ||||||||
INTERNET SOFTWARE & SERVICES — 4.03% |
| |||||||
Akamai Technologies Inc.b | 22,513 | 1,176,304 | ||||||
CoStar Group Inc.b | 4,688 | 1,386,476 | ||||||
IAC/InterActiveCorpb | 9,714 | 1,253,592 | ||||||
LogMeIn Inc. | 6,919 | 837,545 | ||||||
MercadoLibre Inc.a | 5,799 | 1,393,558 | ||||||
Twitter Inc.b | 84,310 | 1,738,472 | ||||||
VeriSign Inc.a,b | 11,285 | 1,213,363 | ||||||
Zillow Group Inc. Class Aa,b | 6,170 | 254,883 | ||||||
Zillow Group Inc. Class Ca,b | 13,797 | 569,540 | ||||||
|
| |||||||
9,823,733 | ||||||||
IT SERVICES — 5.09% |
| |||||||
Broadridge Financial Solutions Inc. | 15,297 | 1,314,318 | ||||||
Euronet Worldwide Inc.a,b | 6,899 | 666,719 | ||||||
FleetCor Technologies Inc.b | 12,116 | 2,002,411 | ||||||
Gartner Inc.b | 11,898 | 1,490,939 | ||||||
Global Payments Inc. | 20,026 | 2,081,703 | ||||||
Jack Henry & Associates Inc. | 10,170 | 1,120,022 | ||||||
Total System Services Inc. | 22,018 | 1,586,397 | ||||||
Vantiv Inc. Class Aa,b | 21,342 | 1,493,940 | ||||||
WEX Inc.b | 5,245 | 648,230 | ||||||
|
| |||||||
12,404,679 | ||||||||
LEISURE PRODUCTS — 0.94% |
| |||||||
Hasbro Inc. | 14,949 | 1,384,128 | ||||||
Polaris Industries Inc. | 7,641 | 904,924 | ||||||
|
| |||||||
2,289,052 | ||||||||
LIFE SCIENCES TOOLS & SERVICES — 2.02% |
| |||||||
Bio-Rad Laboratories Inc. Class Ab | 2,644 | 581,125 | ||||||
Mettler-Toledo International Inc.b | 3,371 | 2,301,146 | ||||||
Waters Corp.a,b | 10,483 | 2,055,192 | ||||||
|
| |||||||
4,937,463 | ||||||||
MACHINERY — 3.93% |
| |||||||
Fortive Corp. | 40,055 | 2,894,374 | ||||||
Graco Inc. | 7,354 | 969,184 |
Security | Shares | Value | ||||||
IDEX Corp. | 10,037 | $ | 1,286,844 | |||||
Middleby Corp. (The)a,b | 7,566 | 876,899 | ||||||
Nordson Corp. | 6,668 | 844,769 | ||||||
Toro Co. (The) | 14,173 | 890,773 | ||||||
WABCO Holdings Inc.b | 6,621 | 977,061 | ||||||
Wabtec Corp./DEa | 11,219 | 858,254 | ||||||
|
| |||||||
9,598,158 | ||||||||
MEDIA — 2.45% |
| |||||||
Liberty Broadband Corp. Class Aa,b | 3,441 | 296,649 | ||||||
Liberty Broadband Corp. Class Cb | 20,094 | 1,754,005 | ||||||
Liberty Media Corp.-Liberty Formula One Class Aa,b | 3,353 | 122,049 | ||||||
Liberty Media Corp.-Liberty Formula One Class Ca,b | 26,445 | 1,008,612 | ||||||
Liberty Media Corp.-Liberty SiriusXM Class Ab | 11,043 | 460,603 | ||||||
Liberty Media Corp.-Liberty SiriusXM Class Cb | 22,288 | 928,295 | ||||||
Lions Gate Entertainment Corp. Class Ab | 8,394 | 243,594 | ||||||
Lions Gate Entertainment Corp. Class Bb | 14,574 | 403,117 | ||||||
Live Nation Entertainment Inc.a,b | 17,597 | 770,397 | ||||||
|
| |||||||
5,987,321 | ||||||||
METALS & MINING — 0.30% |
| |||||||
Royal Gold Inc. | 8,581 | 721,748 | ||||||
|
| |||||||
721,748 | ||||||||
MULTILINE RETAIL — 1.16% |
| |||||||
Dollar Tree Inc.b | 31,105 | 2,838,331 | ||||||
|
| |||||||
2,838,331 | ||||||||
OIL, GAS & CONSUMABLE FUELS — 4.98% |
| |||||||
Antero Resources Corp.a,b | 28,198 | 547,041 | ||||||
Cabot Oil & Gas Corp. | 60,739 | 1,682,470 | ||||||
Cheniere Energy Inc.b | 26,549 | 1,240,900 | ||||||
Concho Resources Inc.b | 19,530 | 2,621,122 | ||||||
Diamondback Energy Inc.a,b | 12,887 | 1,380,971 | ||||||
Energen Corp.b | 12,767 | 660,054 | ||||||
EQT Corp. | 22,762 | 1,423,536 | ||||||
Parsley Energy Inc. Class Ab | 30,572 | 813,215 | ||||||
Range Resources Corp. | 29,673 | 537,378 | ||||||
Rice Energy Inc.b | 23,508 | 666,452 | ||||||
RSP Permian Inc.b | 16,469 | 566,698 | ||||||
|
| |||||||
12,139,837 |
SCHEDULESOF INVESTMENTS | 31 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR MID-CAP GROWTH ETF
October 31, 2017
Security | Shares | Value | ||||||
PERSONAL PRODUCTS — 1.35% |
| |||||||
Estee Lauder Companies Inc. (The) Class A | 29,401 | $ | 3,287,326 | |||||
|
| |||||||
3,287,326 | ||||||||
PHARMACEUTICALS — 0.46% |
| |||||||
Jazz Pharmaceuticals PLCa,b | 7,892 | 1,116,955 | ||||||
|
| |||||||
1,116,955 | ||||||||
PROFESSIONAL SERVICES — 1.84% |
| |||||||
Equifax Inc. | 15,809 | 1,715,751 | ||||||
TransUnionb | 19,589 | 1,028,227 | ||||||
Verisk Analytics Inc. Class Ab | 20,411 | 1,735,955 | ||||||
|
| |||||||
4,479,933 | ||||||||
REAL ESTATE MANAGEMENT & DEVELOPMENT — 0.27% |
| |||||||
Howard Hughes Corp. (The)a,b | 5,104 | 651,424 | ||||||
|
| |||||||
651,424 | ||||||||
ROAD & RAIL — 1.07% |
| |||||||
AMERCO | 873 | 342,775 | ||||||
JB Hunt Transport Services Inc. | 11,210 | 1,192,632 | ||||||
Old Dominion Freight Line Inc. | 8,980 | 1,087,747 | ||||||
|
| |||||||
2,623,154 | ||||||||
SEMICONDUCTORS & SEMICONDUCTOR |
| |||||||
Advanced Micro Devices Inc.a,b | 105,690 | 1,161,005 | ||||||
Cavium Inc.a,b | 9,036 | 623,393 | ||||||
Cypress Semiconductor Corp. | 43,666 | 692,543 | ||||||
Skyworks Solutions Inc. | 24,131 | 2,747,556 | ||||||
|
| |||||||
5,224,497 | ||||||||
SOFTWARE — 11.56% |
| |||||||
ANSYS Inc.b | 11,132 | 1,521,856 | ||||||
Aspen Technology Inc.a,b | 9,600 | 619,392 | ||||||
Autodesk Inc.b | 28,787 | 3,597,223 | ||||||
Cadence Design Systems Inc.b | 36,799 | 1,588,245 | ||||||
CDK Global Inc. | 17,298 | 1,099,461 | ||||||
Citrix Systems Inc.b | 18,903 | 1,561,577 | ||||||
Fortinet Inc.b | 19,851 | 782,328 | ||||||
Guidewire Software Inc.a,b | 9,768 | 781,245 | ||||||
PTC Inc.b | 15,183 | 1,008,910 | ||||||
Red Hat Inc.b | 23,306 | 2,816,064 | ||||||
ServiceNow Inc.a,b | 22,310 | 2,819,315 | ||||||
Splunk Inc.a,b | 18,172 | 1,222,976 | ||||||
SS&C Technologies Holdings Inc. | 22,662 | 911,012 | ||||||
Synopsys Inc.b | 19,731 | 1,707,126 |
Security | Shares | Value | ||||||
Take-Two Interactive Software Inc.b | 13,990 | $ | 1,547,993 | |||||
Tyler Technologies Inc.a,b | 4,556 | 807,733 | ||||||
Ultimate Software Group Inc. (The)b | 3,722 | 754,040 | ||||||
VMware Inc. Class Aa,b | 9,505 | 1,137,653 | ||||||
Workday Inc. Class Ab | 17,218 | 1,911,026 | ||||||
|
| |||||||
28,195,175 | ||||||||
SPECIALTY RETAIL — 1.72% |
| |||||||
Advance Auto Parts Inc. | 9,700 | 792,878 | ||||||
Burlington Stores Inc.b | 9,170 | 860,971 | ||||||
Tractor Supply Co. | 16,639 | 1,002,666 | ||||||
Ulta Salon Cosmetics & Fragrance Inc.b | 7,664 | 1,546,519 | ||||||
|
| |||||||
4,203,034 | ||||||||
TEXTILES, APPAREL & LUXURY GOODS — 0.81% |
| |||||||
Carter’s Inc. | 6,282 | 607,658 | ||||||
Lululemon Athletica Inc.b | 12,669 | 779,270 | ||||||
Under Armour Inc. Class Aa,b | 24,209 | 303,097 | ||||||
Under Armour Inc. Class Ca,b | 24,445 | 281,851 | ||||||
|
| |||||||
1,971,876 | ||||||||
THRIFTS & MORTGAGE FINANCE — 0.05% |
| |||||||
TFS Financial Corp. | 7,441 | 114,740 | ||||||
|
| |||||||
114,740 | ||||||||
TRADING COMPANIES & DISTRIBUTORS — 1.00% |
| |||||||
Fastenal Co. | 37,820 | 1,776,405 | ||||||
Watsco Inc. | 3,992 | 664,947 | ||||||
|
| |||||||
2,441,352 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $179,467,861) |
| 243,655,497 | ||||||
SHORT-TERM INVESTMENTS — 12.72% |
| |||||||
MONEY MARKET FUNDS — 12.72% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
1.31%d,e,f | 30,753,928 | 30,760,079 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
1.00%d,e | 264,921 | 264,921 | ||||||
|
| |||||||
31,025,000 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $31,024,414) |
| 31,025,000 | ||||||
|
|
32 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR MID-CAP GROWTH ETF
October 31, 2017
Value | ||||||
TOTAL INVESTMENTS | ||||||
(Cost: $210,492,275)g | $ | 274,680,497 | ||||
Other Assets, Less Liabilities — (12.61)% | (30,765,168 | ) | ||||
|
| |||||
NET ASSETS — 100.00% | $ | 243,915,329 | ||||
|
|
a | All or a portion of this security represents a security on loan. See Note 1. |
b | Non-income earning security. |
c | Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. |
d | Affiliated issuer. See Schedule 1. |
e | The rate quoted is the annualized seven-day yield of the fund at period end. |
f | All or a portion of this security represents an investment of securities lending collateral. See Note 1. |
g | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $211,281,324. Net unrealized appreciation was $63,399,173, of which $69,562,579 represented gross unrealized appreciation on investments and $6,163,406 represented gross unrealized depreciation on investments. |
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 04/30/17 | Shares purchased | Shares sold | Shares held at 10/31/17 | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, | 13,868,227 | 16,885,701 | b | — | 30,753,928 | $ | 30,760,079 | $ | (3,724 | ) | $ | (3,201 | ) | $ | — | c | ||||||||||||||||
BlackRock Cash Funds: Treasury, | 151,345 | 113,576 | b | — | 264,921 | 264,921 | — | — | 855 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 31,025,000 | $ | (3,724 | ) | $ | (3,201 | ) | $ | 855 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
c | Does not include income earned on investment of securities lending cash collateral which is not direct income of the Fund and is reflected as a component of securities lending income in the statement of operations. |
Schedule 2 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: | ||||||||||||||||
Assets: | ||||||||||||||||
Common stocks | $ | 243,602,703 | $ | — | $ | 52,794 | $ | 243,655,497 | ||||||||
Money market funds | 31,025,000 | — | — | 31,025,000 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 274,627,703 | $ | — | $ | 52,794 | $ | 274,680,497 | ||||||||
|
|
|
|
|
|
|
| |||||||||
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 33 |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES® MORNINGSTAR MID-CAP VALUE ETF
October 31, 2017
Security | Shares | Value | ||||||
COMMON STOCKS — 99.85% |
| |||||||
AEROSPACE & DEFENSE — 1.08% |
| |||||||
Orbital ATK Inc. | 14,616 | $ | 1,942,905 | |||||
Spirit AeroSystems Holdings Inc. Class A | 29,818 | 2,388,422 | ||||||
|
| |||||||
4,331,327 | ||||||||
AIRLINES — 1.34% |
| |||||||
JetBlue Airways Corp.a | 83,486 | 1,598,757 | ||||||
United Continental Holdings Inc.a | 65,166 | 3,810,908 | ||||||
|
| |||||||
5,409,665 | ||||||||
AUTO COMPONENTS — 3.07% |
| |||||||
Adient PLC | 23,769 | 2,005,153 | ||||||
Autoliv Inc.b | 21,903 | 2,734,808 | ||||||
BorgWarner Inc. | 50,324 | 2,653,081 | ||||||
Goodyear Tire & Rubber Co. (The) | 63,856 | 1,953,355 | ||||||
Lear Corp. | 17,152 | 3,011,720 | ||||||
|
| |||||||
12,358,117 | ||||||||
AUTOMOBILES — 0.51% |
| |||||||
Harley-Davidson Inc. | 43,385 | 2,053,846 | ||||||
|
| |||||||
2,053,846 | ||||||||
BANKS — 5.90% |
| |||||||
BOK Financial Corp. | 6,332 | 547,528 | ||||||
CIT Group Inc. | 34,121 | 1,590,721 | ||||||
Fifth Third Bancorp. | 185,658 | 5,365,516 | ||||||
Huntington Bancshares Inc./OH | 274,688 | 3,790,695 | ||||||
KeyCorp | 274,066 | 5,001,705 | ||||||
People’s United Financial Inc. | 86,777 | 1,619,259 | ||||||
Prosperity Bancshares Inc. | 17,512 | 1,151,939 | ||||||
Regions Financial Corp. | 301,165 | 4,662,034 | ||||||
|
| |||||||
23,729,397 | ||||||||
BIOTECHNOLOGY — 0.33% |
| |||||||
United Therapeutics Corp.a | 11,052 | 1,310,657 | ||||||
|
| |||||||
1,310,657 | ||||||||
CAPITAL MARKETS — 1.44% |
| |||||||
Invesco Ltd. | 102,530 | 3,669,549 | ||||||
Nasdaq Inc. | 29,423 | 2,137,581 | ||||||
|
| |||||||
5,807,130 | ||||||||
CHEMICALS — 3.67% |
| |||||||
Ashland Global Holdings Inc. | 15,909 | 1,081,494 | ||||||
Celanese Corp. Series A | 34,659 | 3,615,280 | ||||||
CF Industries Holdings Inc. | 59,166 | 2,247,125 | ||||||
Eastman Chemical Co. | 36,510 | 3,315,473 | ||||||
Huntsman Corp. | 53,730 | 1,720,435 |
Security | Shares | Value | ||||||
Mosaic Co. (The) | 89,066 | $ | 1,989,734 | |||||
Westlake Chemical Corp. | 9,199 | 781,087 | ||||||
|
| |||||||
14,750,628 | ||||||||
COMMUNICATIONS EQUIPMENT — 2.27% |
| |||||||
Brocade Communications Systems Inc. | 105,262 | 1,226,302 | ||||||
Harris Corp. | 30,181 | 4,204,817 | ||||||
Motorola Solutions Inc. | 40,989 | 3,711,144 | ||||||
|
| |||||||
9,142,263 | ||||||||
CONSTRUCTION & ENGINEERING — 1.53% |
| |||||||
AECOMa | 39,837 | 1,396,685 | ||||||
Fluor Corp. | 35,669 | 1,536,977 | ||||||
Jacobs Engineering Group Inc. | 30,534 | 1,777,384 | ||||||
Quanta Services Inc.a | 38,460 | 1,451,096 | ||||||
|
| |||||||
6,162,142 | ||||||||
CONSUMER FINANCE — 1.36% |
| |||||||
Ally Financial Inc. | 113,365 | 2,962,228 | ||||||
Navient Corp. | 69,755 | 869,147 | ||||||
Santander Consumer USA Holdings Inc.a | 29,334 | 488,118 | ||||||
SLM Corp.a | 110,453 | 1,169,697 | ||||||
|
| |||||||
5,489,190 | ||||||||
CONTAINERS & PACKAGING — 5.71% |
| |||||||
Ball Corp. | 88,651 | 3,805,787 | ||||||
Bemis Co. Inc. | 23,073 | 1,038,746 | ||||||
Crown Holdings Inc.a | 34,244 | 2,060,462 | ||||||
International Paper Co. | 104,051 | 5,959,001 | ||||||
Packaging Corp. of America | 23,777 | 2,764,552 | ||||||
Sealed Air Corp. | 48,104 | 2,127,640 | ||||||
Sonoco Products Co. | 25,048 | 1,297,236 | ||||||
WestRock Co. | 64,009 | 3,925,672 | ||||||
|
| |||||||
22,979,096 | ||||||||
DISTRIBUTORS — 0.81% |
| |||||||
Genuine Parts Co. | 37,002 | 3,264,686 | ||||||
|
| |||||||
3,264,686 | ||||||||
DIVERSIFIED CONSUMER SERVICES — 0.33% | ||||||||
H&R Block Inc. | 53,182 | 1,315,723 | ||||||
|
| |||||||
1,315,723 | ||||||||
DIVERSIFIED TELECOMMUNICATION SERVICES — 1.15% |
| |||||||
CenturyLink Inc. | 244,755 | 4,647,897 | ||||||
|
| |||||||
4,647,897 |
34 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR MID-CAP VALUE ETF
October 31, 2017
Security | Shares | Value | ||||||
ELECTRIC UTILITIES — 6.23% |
| |||||||
Alliant Energy Corp. | 58,229 | $ | 2,518,987 | |||||
Avangrid Inc. | 14,173 | 733,169 | ||||||
Entergy Corp. | 45,240 | 3,902,402 | ||||||
Eversource Energy | 79,857 | 5,002,243 | ||||||
FirstEnergy Corp. | 111,966 | 3,689,280 | ||||||
Great Plains Energy Inc. | 54,346 | 1,784,179 | ||||||
IDACORP Inc. | 12,908 | 1,187,923 | ||||||
OGE Energy Corp. | 50,326 | 1,854,010 | ||||||
Pinnacle West Capital Corp. | 28,130 | 2,467,282 | ||||||
Westar Energy Inc. | 35,796 | 1,914,370 | ||||||
|
| |||||||
25,053,845 | ||||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS — 2.01% |
| |||||||
Arrow Electronics Inc.a,b | 22,396 | 1,872,082 | ||||||
Avnet Inc. | 31,246 | 1,243,591 | ||||||
Jabil Inc. | 45,505 | 1,286,881 | ||||||
Keysight Technologies Inc.a | 47,151 | 2,106,235 | ||||||
Zebra Technologies Corp. Class Aa | 13,538 | 1,570,273 | ||||||
|
| |||||||
8,079,062 | ||||||||
ENERGY EQUIPMENT & SERVICES — 1.67% |
| |||||||
Helmerich & Payne Inc. | 27,719 | 1,505,419 | ||||||
National Oilwell Varco Inc. | 95,772 | 3,274,445 | ||||||
Transocean Ltd.a | 100,074 | 1,050,777 | ||||||
Weatherford International PLCa,b | 252,013 | 874,485 | ||||||
|
| |||||||
6,705,126 | ||||||||
EQUITY REAL ESTATE INVESTMENT TRUSTS |
| |||||||
Colony NorthStar Inc. Class A | 138,945 | 1,706,245 | ||||||
EPR Properties | 16,360 | 1,131,785 | ||||||
HCP Inc. | 118,181 | 3,053,797 | ||||||
Hospitality Properties Trust | 36,033 | 1,029,823 | ||||||
Omega Healthcare Investors Inc.b | 50,296 | 1,451,542 | ||||||
Park Hotels & Resorts Inc. | 36,781 | 1,058,925 | ||||||
Uniti Group Inc.a | 41,984 | 734,720 | ||||||
WP Carey Inc. | 27,191 | 1,853,067 | ||||||
|
| |||||||
12,019,904 | ||||||||
FOOD & STAPLES RETAILING — 0.11% |
| |||||||
Rite Aid Corp.a,b | 270,381 | 446,129 | ||||||
|
| |||||||
446,129 | ||||||||
FOOD PRODUCTS — 4.14% |
| |||||||
Bunge Ltd. | 35,430 | 2,436,875 | ||||||
Campbell Soup Co. | 48,879 | 2,315,398 | ||||||
Conagra Brands Inc. | 104,747 | 3,578,158 |
Security | Shares | Value | ||||||
Ingredion Inc. | 18,179 | $ | 2,278,738 | |||||
Pilgrim’s Pride Corp.a,b | 13,461 | 427,791 | ||||||
Seaboard Corp. | 70 | 308,008 | ||||||
Tyson Foods Inc. Class A | 72,896 | 5,314,847 | ||||||
|
| |||||||
16,659,815 | ||||||||
GAS UTILITIES — 1.41% |
| |||||||
Atmos Energy Corp. | 26,729 | 2,331,838 | ||||||
National Fuel Gas Co. | 21,802 | 1,265,606 | ||||||
UGI Corp. | 43,691 | 2,091,051 | ||||||
|
| |||||||
5,688,495 | ||||||||
HEALTH CARE PROVIDERS & SERVICES — 0.33% |
| |||||||
Envision Healthcare Corp.a | 30,735 | 1,309,311 | ||||||
|
| |||||||
1,309,311 | ||||||||
HOTELS, RESTAURANTS & LEISURE — 0.69% |
| |||||||
Wyndham Worldwide Corp. | 25,902 | 2,767,629 | ||||||
|
| |||||||
2,767,629 | ||||||||
HOUSEHOLD DURABLES — 0.63% |
| |||||||
CalAtlantic Group Inc. | 19,332 | 953,841 | ||||||
Garmin Ltd. | 28,227 | 1,597,930 | ||||||
|
| |||||||
2,551,771 | ||||||||
INDEPENDENT POWER AND RENEWABLE ELECTRICITY PRODUCERS — 1.26% |
| |||||||
AES Corp./VA | 166,387 | 1,768,694 | ||||||
NRG Energy Inc. | 76,464 | 1,911,600 | ||||||
Vistra Energy Corp. | 71,798 | 1,395,753 | ||||||
|
| |||||||
5,076,047 | ||||||||
INSURANCE — 9.21% |
| |||||||
American Financial Group Inc./OH | 17,462 | 1,842,067 | ||||||
Assurant Inc. | 13,680 | 1,376,892 | ||||||
Assured Guaranty Ltd. | 30,243 | 1,122,015 | ||||||
Axis Capital Holdings Ltd. | 21,132 | 1,149,370 | ||||||
Brighthouse Financial Inc.a | 24,376 | 1,515,700 | ||||||
Cincinnati Financial Corp. | 37,843 | 2,655,443 | ||||||
Everest Re Group Ltd. | 10,436 | 2,478,028 | ||||||
Hartford Financial Services Group Inc. (The) | 91,805 | 5,053,865 | ||||||
Lincoln National Corp. | 55,826 | 4,230,494 | ||||||
Loews Corp. | 69,556 | 3,443,718 | ||||||
Old Republic International Corp. | 62,287 | 1,263,803 | ||||||
Principal Financial Group Inc. | 67,722 | 4,459,494 | ||||||
Reinsurance Group of America Inc. | 16,253 | 2,427,873 | ||||||
Unum Group | 57,234 | 2,978,457 | ||||||
Validus Holdings Ltd. | 20,302 | 1,057,328 | ||||||
|
| |||||||
37,054,547 |
SCHEDULESOF INVESTMENTS | 35 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR MID-CAP VALUE ETF
October 31, 2017
Security | Shares | Value | ||||||
IT SERVICES — 1.47% |
| |||||||
CSRA Inc. | 41,589 | $ | 1,330,432 | |||||
Leidos Holdings Inc. | 36,045 | 2,253,533 | ||||||
Western Union Co. (The) | 116,929 | 2,322,210 | ||||||
|
| |||||||
5,906,175 | ||||||||
LEISURE PRODUCTS — 0.30% |
| |||||||
Mattel Inc. | 86,368 | 1,219,516 | ||||||
|
| |||||||
1,219,516 | ||||||||
MACHINERY — 2.26% |
| |||||||
Colfax Corp.a | 25,142 | 1,048,673 | ||||||
Crane Co. | 12,978 | 1,078,731 | ||||||
Dover Corp. | 39,229 | 3,745,977 | ||||||
Flowserve Corp. | 33,338 | 1,469,206 | ||||||
Oshkosh Corp. | 19,082 | 1,747,148 | ||||||
|
| |||||||
9,089,735 | ||||||||
MEDIA — 0.71% |
| |||||||
TEGNA Inc. | 55,044 | 673,188 | ||||||
Viacom Inc. Class Ab | 2,243 | 67,402 | ||||||
Viacom Inc. Class B NVS | 88,886 | 2,135,931 | ||||||
|
| |||||||
2,876,521 | ||||||||
METALS & MINING — 3.82% |
| |||||||
Alcoa Corp.a | 43,601 | 2,083,256 | ||||||
Freeport-McMoRan Inc.a | 339,080 | 4,740,338 | ||||||
Newmont Mining Corp. | 134,377 | 4,859,072 | ||||||
Reliance Steel & Aluminum Co. | 18,372 | 1,411,705 | ||||||
Steel Dynamics Inc. | 60,835 | 2,263,670 | ||||||
|
| |||||||
15,358,041 | ||||||||
MORTGAGE REAL ESTATE INVESTMENT — 2.01% |
| |||||||
AGNC Investment Corp. | 98,506 | 1,982,926 | ||||||
Annaly Capital Management Inc. | 290,442 | 3,328,465 | ||||||
New Residential Investment Corp.b | 77,449 | 1,365,426 | ||||||
Starwood Property Trust Inc. | 66,505 | 1,430,522 | ||||||
|
| |||||||
8,107,339 | ||||||||
MULTI-UTILITIES — 5.45% |
| |||||||
Ameren Corp. | 61,145 | 3,790,378 | ||||||
CenterPoint Energy Inc. | 108,620 | 3,212,980 | ||||||
CMS Energy Corp. | 71,068 | 3,437,559 | ||||||
DTE Energy Co. | 45,206 | 4,993,455 | ||||||
MDU Resources Group Inc. | 49,842 | 1,363,179 | ||||||
NiSource Inc. | 82,121 | 2,165,531 | ||||||
SCANA Corp. | 36,016 | 1,553,730 | ||||||
Vectren Corp. | 20,911 | 1,424,875 | ||||||
|
| |||||||
21,941,687 |
Security | Shares | Value | ||||||
MULTILINE RETAIL — 1.09% |
| |||||||
Kohl’s Corp. | 42,777 | $ | 1,786,367 | |||||
Macy’s Inc. | 76,750 | 1,439,830 | ||||||
Nordstrom Inc. | 29,603 | 1,173,759 | ||||||
|
| |||||||
4,399,956 | ||||||||
OIL, GAS & CONSUMABLE FUELS — 7.28% |
| |||||||
Andeavor | 36,377 | 3,864,693 | ||||||
Apache Corp. | 95,997 | 3,971,396 | ||||||
Chesapeake Energy Corp.a,b | 231,119 | 901,364 | ||||||
Devon Energy Corp. | 132,478 | 4,888,438 | ||||||
Hess Corp. | 68,527 | 3,026,152 | ||||||
HollyFrontier Corp. | 44,675 | 1,650,741 | ||||||
Marathon Oil Corp. | 215,560 | 3,065,263 | ||||||
Murphy Oil Corp. | 41,479 | 1,109,563 | ||||||
Noble Energy Inc. | 122,611 | 3,417,169 | ||||||
Targa Resources Corp. | 54,655 | 2,268,183 | ||||||
WPX Energy Inc.a | 101,950 | 1,149,996 | ||||||
|
| |||||||
29,312,958 | ||||||||
PERSONAL PRODUCTS — 0.97% |
| |||||||
Coty Inc. Class A | 118,863 | 1,830,490 | ||||||
Edgewell Personal Care Co.a | 14,479 | 940,121 | ||||||
Herbalife Ltd.a,b | 15,617 | 1,134,107 | ||||||
|
| |||||||
3,904,718 | ||||||||
PHARMACEUTICALS — 0.87% |
| |||||||
Mallinckrodt PLCa | 24,721 | 782,914 | ||||||
Perrigo Co. PLC | 33,423 | 2,706,929 | ||||||
|
| |||||||
3,489,843 | ||||||||
PROFESSIONAL SERVICES — 1.57% |
| |||||||
Dun & Bradstreet Corp. (The) | 9,455 | 1,104,628 | ||||||
ManpowerGroup Inc. | 16,927 | 2,086,760 | ||||||
Nielsen Holdings PLC | 84,639 | 3,137,568 | ||||||
|
| |||||||
6,328,956 | ||||||||
REAL ESTATE MANAGEMENT & DEVELOPMENT — 0.37% |
| |||||||
Jones Lang LaSalle Inc. | 11,425 | 1,479,423 | ||||||
|
| |||||||
1,479,423 | ||||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT — 1.58% |
| |||||||
KLA-Tencor Corp. | 39,524 | 4,303,769 | ||||||
Marvell Technology Group Ltd. | 110,709 | 2,044,795 | ||||||
|
| |||||||
6,348,564 | ||||||||
SOFTWARE — 0.89% |
| |||||||
CA Inc. | 79,621 | 2,578,128 | ||||||
Nuance Communications Inc.a | 67,561 | 995,849 | ||||||
|
| |||||||
3,573,977 |
36 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR MID-CAP VALUE ETF
October 31, 2017
Security | Shares | Value | ||||||
SPECIALTY RETAIL — 2.85% |
| |||||||
AutoNation Inc.a,b | 16,865 | $ | 799,401 | |||||
Bed Bath & Beyond Inc. | 36,319 | 722,748 | ||||||
Best Buy Co. Inc. | 66,861 | 3,742,879 | ||||||
Gap Inc. (The) | 55,758 | 1,449,150 | ||||||
L Brands Inc. | 62,888 | 2,706,700 | ||||||
Signet Jewelers Ltd. | 15,385 | 1,008,795 | ||||||
Williams-Sonoma Inc. | 20,454 | 1,055,426 | ||||||
|
| |||||||
11,485,099 | ||||||||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS — 2.07% |
| |||||||
NCR Corp.a | 30,956 | 993,378 | ||||||
NetApp Inc. | 68,411 | 3,038,817 | ||||||
Seagate Technology PLC | 72,534 | 2,681,582 | ||||||
Xerox Corp. | 53,798 | 1,630,617 | ||||||
|
| |||||||
8,344,394 | ||||||||
TEXTILES, APPAREL & LUXURY GOODS — 1.66% |
| |||||||
PVH Corp. | 19,630 | 2,489,280 | ||||||
Ralph Lauren Corp. | 14,116 | 1,262,394 | ||||||
Tapestry Inc. | 71,213 | 2,916,173 | ||||||
|
| |||||||
6,667,847 | ||||||||
THRIFTS & MORTGAGE FINANCE — 0.38% |
| |||||||
New York Community Bancorp. Inc. | 123,244 | 1,547,945 | ||||||
|
| |||||||
1,547,945 | ||||||||
TRADING COMPANIES & DISTRIBUTORS — 1.07% |
| |||||||
HD Supply Holdings Inc.a | 47,432 | 1,678,618 | ||||||
WW Grainger Inc. | 13,230 | 2,615,571 | ||||||
|
| |||||||
4,294,189 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $354,172,234) | 401,840,328 |
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS — 1.52% |
| |||||||
MONEY MARKET FUNDS — 1.52% |
| |||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | ||||||||
1.31%c,d,e | 5,768,370 | $ | 5,769,524 | |||||
BlackRock Cash Funds: Treasury, | ||||||||
1.00%c,d | 339,040 | 339,040 | ||||||
|
| |||||||
6,108,564 | ||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $6,108,243) |
| 6,108,564 | ||||||
|
| |||||||
TOTAL INVESTMENTS IN |
| |||||||
(Cost: $360,280,477)f |
| 407,948,892 | ||||||
Other Assets, Less Liabilities — (1.37)% |
| (5,512,724 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 402,436,168 | |||||
|
|
NVS — Non-Voting Shares
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 1. |
c | Affiliated issuer. See Schedule 1. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 1. |
f | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $367,060,855. Net unrealized appreciation was $40,888,037, of which $64,647,913 represented gross unrealized appreciation on investments and $23,759,876 represented gross unrealized depreciation on investments. |
SCHEDULESOF INVESTMENTS | 37 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR MID-CAP VALUE ETF
October 31, 2017
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 04/30/17 | Shares purchased | Shares sold | Shares held at 10/31/17 | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, | 15,647,082 | — | (9,878,712 | )b | 5,768,370 | $ | 5,769,524 | $ | (1,820 | ) | $ | (232 | ) | $ | — | c | ||||||||||||||||
BlackRock Cash Funds: Treasury, | 172,460 | 166,579 | b | — | 339,040 | 339,040 | — | — | 2,195 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 6,108,564 | $ | (1,820 | ) | $ | (232 | ) | $ | 2,195 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
c | Does not include income earned on investment of securities lending cash collateral which is not direct income of the Fund and is reflected as a component of securities lending income in the statement of operations. |
Schedule 2 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: |
| |||||||||||||||
Assets: |
| |||||||||||||||
Common stocks | $ | 401,840,328 | $ | — | $ | — | $ | 401,840,328 | ||||||||
Money market funds | 6,108,564 | — | — | 6,108,564 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 407,948,892 | $ | — | $ | — | $ | 407,948,892 | ||||||||
|
|
|
|
|
|
|
| |||||||||
See notes to financial statements.
38 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES® MORNINGSTAR SMALL-CAP ETF
October 31, 2017
Security | Shares | Value | ||||||
COMMON STOCKS — 99.93% |
| |||||||
AEROSPACE & DEFENSE — 1.74% |
| |||||||
Aerojet Rocketdyne Holdings Inc.a,b | 31,361 | $ | 990,380 | |||||
Curtiss-Wright Corp. | 18,407 | 2,176,628 | ||||||
KLX Inc.a,b | 21,427 | 1,175,485 | ||||||
|
| |||||||
4,342,493 | ||||||||
AIR FREIGHT & LOGISTICS — 0.24% |
| |||||||
Hub Group Inc. Class Aa | 13,986 | 605,594 | ||||||
|
| |||||||
605,594 | ||||||||
AIRLINES — 1.02% |
| |||||||
Allegiant Travel Co. | 5,237 | 714,327 | ||||||
Hawaiian Holdings Inc.a | 22,369 | 749,361 | ||||||
Spirit Airlines Inc.a,b | 28,968 | 1,074,423 | ||||||
|
| |||||||
2,538,111 | ||||||||
AUTO COMPONENTS — 1.17% |
| |||||||
Tenneco Inc. | 22,176 | 1,288,647 | ||||||
Visteon Corp.a | 12,997 | 1,638,142 | ||||||
|
| |||||||
2,926,789 | ||||||||
BANKS — 12.72% |
| |||||||
Ameris Bancorp. | 15,513 | 743,073 | ||||||
BancFirst Corp. | 7,017 | 383,479 | ||||||
Bank of Hawaii Corp. | 17,783 | 1,451,271 | ||||||
BankUnited Inc. | 44,526 | 1,551,731 | ||||||
Banner Corp. | 13,821 | 792,220 | ||||||
Capital Bank Financial Corp. Class A | 12,010 | 487,606 | ||||||
Cathay General Bancorp. | 31,649 | 1,322,928 | ||||||
Columbia Banking System Inc. | 24,379 | 1,060,730 | ||||||
CVB Financial Corp. | 42,778 | 1,020,683 | ||||||
First Citizens BancShares Inc./NC Class A | 3,623 | 1,467,315 | ||||||
First Financial Bancorp. | 25,967 | 708,899 | ||||||
First Horizon National Corp. | 97,644 | 1,832,778 | ||||||
First Merchants Corp. | 17,387 | 747,641 | ||||||
Glacier Bancorp. Inc. | 32,505 | 1,233,890 | ||||||
Great Western Bancorp. Inc. | 24,509 | 994,820 | ||||||
Hilltop Holdings Inc. | 31,383 | 739,384 | ||||||
Home BancShares Inc./AR | 65,898 | 1,481,387 | ||||||
IBERIABANK Corp. | 22,363 | 1,649,271 | ||||||
Independent Bank Corp./Rockland MA | 11,458 | 826,122 | ||||||
MB Financial Inc. | 34,951 | 1,605,649 | ||||||
Renasant Corp. | 17,923 | 742,012 | ||||||
South State Corp. | 12,188 | 1,097,529 |
Security | Shares | Value | ||||||
Sterling Bancorp./DE | 93,687 | $ | 2,346,859 | |||||
TowneBank/Portsmouth VA | 23,784 | 796,764 | ||||||
UMB Financial Corp. | 18,344 | 1,348,834 | ||||||
Union Bankshares Corp. | 18,261 | 630,187 | ||||||
United Community Banks Inc./GA | 30,487 | 835,954 | ||||||
Wintrust Financial Corp. | 23,272 | 1,891,781 | ||||||
|
| |||||||
31,790,797 | ||||||||
BEVERAGES — 0.27% |
| |||||||
Boston Beer Co. Inc. (The) Class Aa,b | 3,727 | 663,592 | ||||||
|
| |||||||
663,592 | ||||||||
BIOTECHNOLOGY — 0.34% |
| |||||||
Array BioPharma Inc.a | 80,276 | 838,884 | ||||||
|
| |||||||
838,884 | ||||||||
BUILDING PRODUCTS — 1.40% |
| |||||||
Apogee Enterprises Inc. | 12,053 | 575,289 | ||||||
Armstrong World Industries Inc.a | 22,037 | 1,126,091 | ||||||
Builders FirstSource Inc.a | 47,041 | 847,679 | ||||||
Universal Forest Products Inc. | 8,529 | 962,924 | ||||||
|
| |||||||
3,511,983 | ||||||||
CAPITAL MARKETS — 1.87% |
| |||||||
Evercore Inc. Class A | 16,359 | 1,310,356 | ||||||
LPL Financial Holdings Inc. | 37,524 | 1,861,566 | ||||||
Stifel Financial Corp. | 28,477 | 1,510,135 | ||||||
|
| |||||||
4,682,057 | ||||||||
CHEMICALS — 4.41% |
| |||||||
Cabot Corp. | 25,942 | 1,581,424 | ||||||
Ferro Corp.a | 34,962 | 832,795 | ||||||
GCP Applied Technologies Inc.a | 29,843 | 872,908 | ||||||
HB Fuller Co. | 21,057 | 1,197,511 | ||||||
Ingevity Corp.a | 17,581 | 1,252,295 | ||||||
Innospec Inc. | 10,049 | 621,531 | ||||||
Minerals Technologies Inc. | 14,654 | 1,053,623 | ||||||
PolyOne Corp. | 34,093 | 1,570,664 | ||||||
Sensient Technologies Corp. | 18,285 | 1,390,574 | ||||||
Stepan Co. | 8,262 | 659,803 | ||||||
|
| |||||||
11,033,128 | ||||||||
COMMERCIAL SERVICES & SUPPLIES — 4.26% |
| |||||||
ABM Industries Inc. | 23,171 | 972,487 | ||||||
Brady Corp. Class A | 19,952 | 759,173 | ||||||
Brink’s Co. (The) | 21,049 | 1,601,829 | ||||||
Covanta Holding Corp. | 54,715 | 880,911 | ||||||
Deluxe Corp. | 20,157 | 1,403,935 | ||||||
Herman Miller Inc. | 24,973 | 839,093 |
SCHEDULESOF INVESTMENTS | 39 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR SMALL-CAP ETF
October 31, 2017
Security | Shares | Value | ||||||
HNI Corp. | 18,421 | $ | 630,367 | |||||
Matthews International Corp. Class A | 13,442 | 844,830 | ||||||
Steelcase Inc. Class A | 36,577 | 532,195 | ||||||
Tetra Tech Inc. | 23,615 | 1,163,039 | ||||||
UniFirst Corp./MA | 6,440 | 1,014,300 | ||||||
|
| |||||||
10,642,159 | ||||||||
COMMUNICATIONS EQUIPMENT — 2.87% |
| |||||||
Ciena Corp.a,b | 59,086 | 1,256,759 | ||||||
EchoStar Corp. Class Aa | 20,028 | 1,120,566 | ||||||
Finisar Corp.a,b | 47,542 | 1,119,139 | ||||||
Infinera Corp.a,b | 61,927 | 518,329 | ||||||
NetScout Systems Inc.a | 37,313 | 1,059,689 | ||||||
Oclaro Inc.a,b | 70,485 | 582,911 | ||||||
Plantronics Inc. | 14,042 | 636,945 | ||||||
Viavi Solutions Inc.a | 95,020 | 881,786 | ||||||
|
| |||||||
7,176,124 | ||||||||
CONSTRUCTION & ENGINEERING — 1.97% |
| |||||||
Dycom Industries Inc.a,b | 12,978 | 1,139,858 | ||||||
Granite Construction Inc. | 16,637 | 1,059,611 | ||||||
MasTec Inc.a,b | 27,935 | 1,216,569 | ||||||
Valmont Industries Inc. | 9,418 | 1,496,520 | ||||||
|
| |||||||
4,912,558 | ||||||||
CONSTRUCTION MATERIALS — 0.56% |
| |||||||
Summit Materials Inc. Class Aa,b | 44,814 | 1,407,160 | ||||||
|
| |||||||
1,407,160 | ||||||||
CONSUMER FINANCE — 1.90% |
| |||||||
Credit Acceptance Corp.a,b | 5,313 | 1,523,397 | ||||||
FirstCash Inc. | 19,886 | 1,269,721 | ||||||
Green Dot Corp. Class Aa | 18,963 | 1,073,685 | ||||||
LendingClub Corp.a | 154,615 | 879,759 | ||||||
|
| |||||||
4,746,562 | ||||||||
CONTAINERS & PACKAGING — 0.36% |
| |||||||
Silgan Holdings Inc. | 30,864 | 902,772 | ||||||
|
| |||||||
902,772 | ||||||||
DIVERSIFIED TELECOMMUNICATION SERVICES — 0.28% |
| |||||||
Vonage Holdings Corp.a | 86,440 | 702,757 | ||||||
|
| |||||||
702,757 | ||||||||
ELECTRIC UTILITIES — 0.30% |
| |||||||
Otter Tail Corp. | 16,471 | 756,842 | ||||||
|
| |||||||
756,842 |
Security | Shares | Value | ||||||
ELECTRICAL EQUIPMENT — 1.31% |
| |||||||
Atkore International Group Inc.a | 8,261 | $ | 159,520 | |||||
AZZ Inc. | 10,863 | 519,252 | ||||||
EnerSys | 18,087 | 1,254,695 | ||||||
Generac Holdings Inc.a,b | 25,901 | 1,349,183 | ||||||
|
| |||||||
3,282,650 | ||||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS — 2.12% |
| |||||||
Belden Inc.b | 17,632 | 1,408,973 | ||||||
Dolby Laboratories Inc. Class A | 24,182 | 1,401,105 | ||||||
Fabrineta,b | 15,613 | 580,491 | ||||||
Insight Enterprises Inc.a | 14,951 | 673,543 | ||||||
Knowles Corp.a,b | 37,365 | 618,765 | ||||||
TTM Technologies Inc.a | 38,295 | 604,295 | ||||||
|
| |||||||
5,287,172 | ||||||||
ENERGY EQUIPMENT & SERVICES — 0.59% |
| |||||||
Forum Energy Technologies Inc.a,b | 30,686 | 441,878 | ||||||
U.S. Silica Holdings Inc. | 33,913 | 1,034,686 | ||||||
|
| |||||||
1,476,564 | ||||||||
EQUITY REAL ESTATE INVESTMENT TRUSTS |
| |||||||
American Assets Trust Inc. | 17,324 | 671,998 | ||||||
Chesapeake Lodging Trust | 25,016 | 697,946 | ||||||
Columbia Property Trust Inc.b | 50,626 | 1,117,822 | ||||||
Corporate Office Properties Trust | 41,460 | 1,323,818 | ||||||
Cousins Properties Inc.b | 175,117 | 1,579,555 | ||||||
EastGroup Properties Inc.b | 14,297 | 1,295,165 | ||||||
Education Realty Trust Inc.b | 30,566 | 1,066,753 | ||||||
Empire State Realty Trust Inc. Class A | 53,318 | 1,069,026 | ||||||
First Industrial Realty Trust Inc. | 49,962 | 1,542,827 | ||||||
Four Corners Property Trust Inc. | 25,572 | 631,117 | ||||||
GEO Group Inc. (The) | 51,699 | 1,341,589 | ||||||
Gramercy Property Trustb | 66,997 | 1,989,811 | ||||||
Healthcare Realty Trust Inc. | 51,617 | 1,664,132 | ||||||
Life Storage Inc.b | 19,414 | 1,569,040 | ||||||
LTC Properties Inc. | 16,528 | 768,717 | ||||||
National Health Investors Inc.b | 17,081 | 1,301,401 | ||||||
Paramount Group Inc.b | 84,594 | 1,346,736 | ||||||
Pebblebrook Hotel Trustb | 28,794 | 1,026,794 | ||||||
Piedmont Office Realty Trust Inc. Class Ab | 60,629 | 1,172,565 | ||||||
PS Business Parks Inc. | 8,296 | 1,097,810 | ||||||
Rayonier Inc.b | 53,740 | 1,611,125 |
40 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR SMALL-CAP ETF
October 31, 2017
Security | Shares | Value | ||||||
RLJ Lodging Trust | 72,869 | $ | 1,578,343 | |||||
Ryman Hospitality Properties Inc. | 21,335 | 1,410,884 | ||||||
Sabra Health Care REIT Inc. | 73,359 | 1,461,311 | ||||||
Saul Centers Inc.b | 4,986 | 304,744 | ||||||
STAG Industrial Inc.b | 38,515 | 1,051,460 | ||||||
Sunstone Hotel Investors Inc.b | 93,942 | 1,533,133 | ||||||
Taubman Centers Inc. | 25,300 | 1,194,666 | ||||||
Washington REIT | 32,124 | 1,034,072 | ||||||
Xenia Hotels & Resorts Inc. | 44,567 | 969,778 | ||||||
|
| |||||||
36,424,138 | ||||||||
FOOD & STAPLES RETAILING — 0.50% |
| |||||||
Performance Food Group Co.a | 35,089 | 993,019 | ||||||
Weis Markets Inc. | 6,840 | 265,597 | ||||||
|
| |||||||
1,258,616 | ||||||||
FOOD PRODUCTS — 1.60% |
| |||||||
B&G Foods Inc. | 27,769 | 883,054 | ||||||
Cal-Maine Foods Inc.a,b | 12,440 | 559,800 | ||||||
Darling Ingredients Inc.a | 68,641 | 1,252,698 | ||||||
Lancaster Colony Corp. | 8,138 | 1,019,040 | ||||||
Tootsie Roll Industries Inc.b | 7,969 | 283,697 | ||||||
|
| |||||||
3,998,289 | ||||||||
GAS UTILITIES — 1.76% |
| |||||||
New Jersey Resources Corp. | 36,078 | 1,603,667 | ||||||
ONE Gas Inc. | 21,793 | 1,677,625 | ||||||
South Jersey Industries Inc. | 33,116 | 1,124,951 | ||||||
|
| |||||||
4,406,243 | ||||||||
HEALTH CARE EQUIPMENT & SUPPLIES — 0.42% |
| |||||||
Haemonetics Corp.a | 21,967 | 1,044,751 | ||||||
|
| |||||||
1,044,751 | ||||||||
HEALTH CARE PROVIDERS & SERVICES — 2.01% |
| |||||||
Acadia Healthcare Co. Inc.a,b | 34,054 | 1,067,933 | ||||||
AMN Healthcare Services Inc.a,b | 20,022 | 878,966 | ||||||
HealthSouth Corp. | 41,175 | 1,899,814 | ||||||
Premier Inc. Class Aa,b | 21,553 | 704,137 | ||||||
Tenet Healthcare Corp.a,b | 33,708 | 481,350 | ||||||
|
| |||||||
5,032,200 | ||||||||
HEALTH CARE TECHNOLOGY — 0.41% |
| |||||||
Allscripts Healthcare Solutions Inc.a | 75,421 | 1,016,675 | ||||||
|
| |||||||
1,016,675 | ||||||||
HOTELS, RESTAURANTS & LEISURE — 2.88% |
| |||||||
Belmond Ltd. Class Aa | 35,079 | 461,289 | ||||||
Bloomin’ Brands Inc. | 39,030 | 693,953 | ||||||
Boyd Gaming Corp. | 34,283 | 1,002,092 | ||||||
Choice Hotels International Inc. | 15,099 | 1,053,155 |
Security | Shares | Value | ||||||
Cracker Barrel Old Country Store Inc.b | 10,023 | $ | 1,564,891 | |||||
Hilton Grand Vacations Inc.a,b | 26,882 | 1,101,087 | ||||||
ILG Inc. | 44,250 | 1,312,898 | ||||||
|
| |||||||
7,189,365 | ||||||||
HOUSEHOLD DURABLES — 0.81% |
| |||||||
Helen of Troy Ltd.a | 11,369 | 1,056,180 | ||||||
TopBuild Corp.a | 14,842 | 979,424 | ||||||
|
| |||||||
2,035,604 | ||||||||
HOUSEHOLD PRODUCTS — 0.28% |
| |||||||
Central Garden & Pet Co.a | 4,319 | 164,899 | ||||||
Central Garden & Pet Co. Class Aa | 14,593 | 538,628 | ||||||
|
| |||||||
703,527 | ||||||||
INDEPENDENT POWER AND RENEWABLE ELECTRICITY PRODUCERS — 1.20% |
| |||||||
Calpine Corp.a | 150,440 | 2,247,574 | ||||||
NRG Yield Inc. Class A | 14,452 | 265,194 | ||||||
NRG Yield Inc. Class C | 26,233 | 487,934 | ||||||
|
| |||||||
3,000,702 | ||||||||
INSURANCE — 3.54% |
| |||||||
Athene Holding Ltd. Class Aa,b | 30,894 | 1,610,504 | ||||||
Enstar Group Ltd.a | 4,389 | 999,814 | ||||||
National General Holdings Corp. | 25,415 | 512,875 | ||||||
Navigators Group Inc. (The) | 9,323 | 540,734 | ||||||
Primerica Inc. | 18,713 | 1,656,100 | ||||||
ProAssurance Corp. | 22,251 | 1,247,169 | ||||||
RLI Corp. | 16,186 | 956,431 | ||||||
White Mountains Insurance Group Ltd. | 1,485 | 1,320,388 | ||||||
|
| |||||||
8,844,015 | ||||||||
INTERNET & DIRECT MARKETING RETAIL — 0.42% |
| |||||||
Liberty Expedia Holdings Inc. Class Aa,b | 22,636 | 1,043,520 | ||||||
|
| |||||||
1,043,520 | ||||||||
IT SERVICES — 2.79% |
| |||||||
Blackhawk Network Holdings Inc.a | 23,658 | 803,189 | ||||||
CACI International Inc. Class Aa | 10,197 | 1,465,819 | ||||||
CoreLogic Inc./U.S.a | 35,291 | 1,655,148 | ||||||
DST Systems Inc. | 25,222 | 1,478,514 | ||||||
Science Applications International Corp. | 18,214 | 1,335,815 | ||||||
TeleTech Holdings Inc. | 5,910 | 246,151 | ||||||
|
| |||||||
6,984,636 |
SCHEDULESOF INVESTMENTS | 41 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR SMALL-CAP ETF
October 31, 2017
Security | Shares | Value | ||||||
LEISURE PRODUCTS — 0.13% |
| |||||||
American Outdoor Brands Corp.a,b | 22,449 | $ | 321,694 | |||||
|
| |||||||
321,694 | ||||||||
MACHINERY — 3.96% |
| |||||||
Astec Industries Inc. | 8,007 | 415,964 | ||||||
Barnes Group Inc. | 20,647 | 1,343,913 | ||||||
EnPro Industries Inc. | 8,909 | 746,040 | ||||||
Franklin Electric Co. Inc. | 16,068 | 731,094 | ||||||
Hillenbrand Inc. | 26,320 | 1,040,956 | ||||||
ITT Inc. | 36,690 | 1,711,222 | ||||||
Mueller Industries Inc. | 24,067 | 836,328 | ||||||
REV Group Inc. | 11,419 | 294,610 | ||||||
SPX FLOW Inc.a | 17,674 | 728,699 | ||||||
Watts Water Technologies Inc. Class A | 11,615 | 782,851 | ||||||
Welbilt Inc.a,b | 57,974 | 1,278,906 | ||||||
|
| |||||||
9,910,583 | ||||||||
MARINE — 0.20% |
| |||||||
Matson Inc. | 18,017 | 490,603 | ||||||
|
| |||||||
490,603 | ||||||||
MEDIA — 2.19% |
| |||||||
Cable One Inc. | 1,955 | 1,387,679 | ||||||
EW Scripps Co. (The) Class Aa,b | 23,080 | 400,207 | ||||||
John Wiley & Sons Inc. Class A | 18,609 | 1,016,982 | ||||||
New York Times Co. (The) Class A | 52,494 | 1,002,635 | ||||||
Nexstar Media Group Inc. Class A | 19,259 | 1,228,724 | ||||||
Scholastic Corp. | 11,555 | 426,842 | ||||||
|
| |||||||
5,463,069 | ||||||||
METALS & MINING — 1.93% |
| |||||||
Carpenter Technology Corp. | 19,525 | 972,150 | ||||||
Coeur Mining Inc.a,b | 75,819 | 575,466 | ||||||
Commercial Metals Co. | 48,348 | 941,819 | ||||||
Hecla Mining Co. | 166,644 | 786,560 | ||||||
Kaiser Aluminum Corp. | 7,045 | 698,723 | ||||||
Worthington Industries Inc. | 18,692 | 850,486 | ||||||
|
| |||||||
4,825,204 | ||||||||
MULTILINE RETAIL — 0.38% |
| |||||||
Big Lots Inc. | 18,462 | 947,285 | ||||||
|
| |||||||
947,285 | ||||||||
OIL, GAS & CONSUMABLE FUELS — 1.59% |
| |||||||
CONSOL Energy Inc.a | 86,308 | 1,392,148 | ||||||
Gulfport Energy Corp.a | 68,715 | 941,396 | ||||||
Laredo Petroleum Inc.a,b | 55,724 | 664,230 | ||||||
SemGroup Corp. Class A | 27,601 | 719,006 |
Security | Shares | Value | ||||||
Tellurian Inc.a,b | 24,561 | $ | 264,522 | |||||
|
| |||||||
3,981,302 | ||||||||
PAPER & FOREST PRODUCTS — 0.24% |
| |||||||
Neenah Paper Inc. | 7,021 | 609,423 | ||||||
|
| |||||||
609,423 | ||||||||
PERSONAL PRODUCTS — 0.69% |
| |||||||
Nu Skin Enterprises Inc. Class A | 20,740 | 1,319,271 | ||||||
Revlon Inc. Class Aa,b | 4,158 | 93,555 | ||||||
USANA Health Sciences Inc.a,b | 4,790 | 314,703 | ||||||
|
| |||||||
1,727,529 | ||||||||
PHARMACEUTICALS — 2.75% |
| |||||||
Akorn Inc.a,b | 39,046 | 1,271,728 | ||||||
Catalent Inc.a | 54,797 | 2,333,804 | ||||||
Horizon Pharma PLCa | 68,216 | 925,009 | ||||||
Medicines Co. (The)a | 26,693 | 767,157 | ||||||
Nektar Therapeuticsa | 65,177 | 1,570,114 | ||||||
|
| |||||||
6,867,812 | ||||||||
PROFESSIONAL SERVICES — 0.91% |
| |||||||
Korn/Ferry International | 24,144 | 1,009,944 | ||||||
On Assignment Inc.a | 20,682 | 1,266,152 | ||||||
|
| |||||||
2,276,096 | ||||||||
REAL ESTATE MANAGEMENT & DEVELOPMENT — 0.21% |
| |||||||
St. Joe Co. (The)a,b | 29,292 | 521,398 | ||||||
|
| |||||||
521,398 | ||||||||
ROAD & RAIL — 0.13% |
| |||||||
Schneider National Inc. Class B | 12,544 | 328,527 | ||||||
|
| |||||||
328,527 | ||||||||
SEMICONDUCTORS & SEMICONDUCTOR |
| |||||||
Amkor Technology Inc.a | 52,984 | 613,025 | ||||||
Kulicke & Soffa Industries Inc.a | 29,703 | 672,773 | ||||||
Semtech Corp.a | 27,644 | 1,134,786 | ||||||
Versum Materials Inc. | 45,365 | 1,908,959 | ||||||
|
| |||||||
4,329,543 | ||||||||
SOFTWARE — 0.34% |
| |||||||
Progress Software Corp. | 20,173 | 853,923 | ||||||
|
| |||||||
853,923 | ||||||||
SPECIALTY RETAIL — 2.09% |
| |||||||
Aaron’s Inc. | 25,990 | 956,432 | ||||||
American Eagle Outfitters Inc. | 70,236 | 914,473 | ||||||
Children’s Place Inc. (The) | 7,367 | 801,530 | ||||||
Murphy USA Inc.a,b | 14,001 | 1,041,114 | ||||||
Office Depot Inc. | 216,479 | 671,085 |
42 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR SMALL-CAP ETF
October 31, 2017
Security | Shares | Value | ||||||
Party City Holdco Inc.a,b | 12,916 | $ | 144,013 | |||||
RHa | 7,856 | 706,412 | ||||||
|
| |||||||
5,235,059 | ||||||||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS — 0.24% |
| |||||||
Diebold Nixdorf Inc. | 31,548 | 608,876 | ||||||
|
| |||||||
608,876 | ||||||||
TEXTILES, APPAREL & LUXURY GOODS — 1.06% |
| |||||||
Skechers U.S.A. Inc. Class Aa | 55,807 | 1,781,359 | ||||||
Steven Madden Ltd.a,b | 22,233 | 867,087 | ||||||
|
| |||||||
2,648,446 | ||||||||
THRIFTS & MORTGAGE FINANCE — 0.77% |
| |||||||
BofI Holding Inc.a,b | 23,385 | 629,056 | ||||||
Washington Federal Inc. | 36,987 | 1,287,148 | ||||||
|
| |||||||
1,916,204 | ||||||||
TOBACCO — 0.38% |
| |||||||
Vector Group Ltd. | 45,159 | 938,404 | ||||||
|
| |||||||
938,404 | ||||||||
TRADING COMPANIES & DISTRIBUTORS — 2.78% |
| |||||||
Air Lease Corp. | 40,024 | 1,739,043 | ||||||
Applied Industrial Technologies Inc. | 16,305 | 1,037,813 | ||||||
MRC Global Inc.a | 39,335 | 674,595 | ||||||
MSC Industrial Direct Co. Inc. Class A | 18,800 | 1,558,520 | ||||||
Rush Enterprises Inc. Class Aa | 13,013 | 660,800 | ||||||
Univar Inc.a | 42,651 | 1,268,868 | ||||||
|
| |||||||
6,939,639 | ||||||||
WATER UTILITIES — 0.34% |
| |||||||
California Water Service Group | 19,979 | 839,118 | ||||||
|
| |||||||
839,118 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $213,692,368) | 249,788,766 |
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS — 11.41% |
| |||||||
MONEY MARKET FUNDS — 11.41% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
1.31%c,d,e | 28,364,431 | $ | 28,370,104 | |||||
BlackRock Cash Funds: Treasury, |
| |||||||
1.00%c,d | 153,100 | 153,100 | ||||||
|
| |||||||
28,523,204 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $28,522,598) |
| 28,523,204 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $242,214,966)f |
| 278,311,970 | ||||||
Other Assets, Less Liabilities — (11.34)% |
| (28,335,229 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 249,976,741 | |||||
|
|
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 1. |
c | Affiliated issuer. See Schedule 1. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 1. |
f | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $244,620,579. Net unrealized appreciation was $33,691,391, of which $42,092,634 represented gross unrealized appreciation on investments and $8,401,243 represented gross unrealized depreciation on investments. |
SCHEDULESOF INVESTMENTS | 43 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR SMALL-CAP ETF
October 31, 2017
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 04/30/17 | Shares purchased | Shares sold | Shares held at 10/31/17 | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, | 19,820,010 | 8,544,421 | b | — | 28,364,431 | $ | 28,370,104 | $ | (1,415 | ) | $ | (3,903 | ) | $ | — | c | ||||||||||||||||
BlackRock Cash Funds: Treasury, | 23,943 | 129,157 | b | — | 153,100 | 153,100 | — | — | 1,007 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 28,523,204 | $ | (1,415 | ) | $ | (3,903 | ) | $ | 1,007 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
c | Does not include income earned on investment of securities lending cash collateral which is not direct income of the Fund and is reflected as a component of securities lending income in the statement of operations. |
Schedule 2 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: | ||||||||||||||||
Assets: | ||||||||||||||||
Common stocks | $ | 249,788,766 | $ | — | $ | — | $ | 249,788,766 | ||||||||
Money market funds | 28,523,204 | — | — | 28,523,204 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 278,311,970 | $ | — | $ | — | $ | 278,311,970 | ||||||||
|
|
|
|
|
|
|
| |||||||||
See notes to financial statements.
44 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES® MORNINGSTAR SMALL-CAP GROWTH ETF
October 31, 2017
Security | Shares | Value | ||||||
COMMON STOCKS — 99.96% |
| |||||||
AEROSPACE & DEFENSE — 0.38% |
| |||||||
Mercury Systems Inc.a | 10,396 | $ | 524,686 | |||||
|
| |||||||
524,686 | ||||||||
AIR FREIGHT & LOGISTICS — 0.27% |
| |||||||
Forward Air Corp. | 6,567 | 377,208 | ||||||
|
| |||||||
377,208 | ||||||||
AUTO COMPONENTS — 0.80% |
| |||||||
Dorman Products Inc.a,b | 6,571 | 454,122 | ||||||
LCI Industries | 5,389 | 667,158 | ||||||
|
| |||||||
1,121,280 | ||||||||
BANKS — 3.49% |
| |||||||
Community Bank System Inc. | 10,926 | 604,099 | ||||||
Eagle Bancorp. Inc.a | 6,738 | 449,088 | ||||||
FCB Financial Holdings Inc. Class Aa | 9,390 | 438,513 | ||||||
First Financial Bankshares Inc. | 14,308 | 653,160 | ||||||
LegacyTexas Financial Group Inc. | 9,123 | 363,916 | ||||||
Pinnacle Financial Partners Inc. | 15,931 | 1,054,632 | ||||||
ServisFirst Bancshares Inc.b | 9,751 | 399,889 | ||||||
Texas Capital Bancshares Inc.a | 10,706 | 921,251 | ||||||
|
| |||||||
4,884,548 | ||||||||
BEVERAGES — 0.34% |
| |||||||
Coca-Cola Bottling Co. Consolidated | 1,006 | 226,914 | ||||||
National Beverage Corp. | 2,528 | 247,491 | ||||||
|
| |||||||
474,405 | ||||||||
BIOTECHNOLOGY — 9.36% |
| |||||||
ACADIA Pharmaceuticals Inc.a,b | 20,858 | 726,484 | ||||||
Agios Pharmaceuticals Inc.a,b | 8,961 | 575,924 | ||||||
Bluebird Bio Inc.a,b | 9,853 | 1,370,552 | ||||||
Blueprint Medicines Corp.a | 7,524 | 499,744 | ||||||
Clovis Oncology Inc.a,b | 10,506 | 791,837 | ||||||
Exact Sciences Corp.a,b | 25,730 | 1,414,893 | ||||||
FibroGen Inc.a,b | 15,896 | 887,792 | ||||||
Halozyme Therapeutics Inc.a,b | 28,597 | 507,025 | ||||||
Intercept Pharmaceuticals Inc.a,b | 3,848 | 237,152 | ||||||
Intrexon Corp.a,b | 13,507 | 220,839 | ||||||
Ironwood Pharmaceuticals Inc.a,b | 29,266 | 450,111 | ||||||
Juno Therapeutics Inc.a | 18,349 | 824,054 | ||||||
Lexicon Pharmaceuticals Inc.a,b | 10,261 | 104,560 | ||||||
Ligand Pharmaceuticals Inc.a,b | 4,523 | 657,418 | ||||||
Portola Pharmaceuticals Inc.a | 13,701 | 676,966 | ||||||
Puma Biotechnology Inc.a | 6,502 | 827,705 | ||||||
Radius Health Inc.a,b | 8,584 | 275,632 |
Security | Shares | Value | ||||||
Sage Therapeutics Inc.a | 7,382 | $ | 467,133 | |||||
Sarepta Therapeutics Inc.a | 13,074 | 644,679 | ||||||
Spark Therapeutics Inc.a,b | 6,580 | 532,322 | ||||||
Ultragenyx Pharmaceutical Inc.a,b | 8,556 | 394,346 | ||||||
|
| |||||||
13,087,168 | ||||||||
BUILDING PRODUCTS — 1.60% |
| |||||||
AAON Inc. | 8,785 | 307,475 | ||||||
American Woodmark Corp.a | 3,089 | 298,398 | ||||||
Masonite International Corp.a | 6,402 | 429,574 | ||||||
Simpson Manufacturing Co. Inc. | 9,116 | 508,126 | ||||||
Trex Co. Inc.a,b | 6,356 | 695,664 | ||||||
|
| |||||||
2,239,237 | ||||||||
CAPITAL MARKETS — 1.33% |
| |||||||
Cohen & Steers Inc. | 4,512 | 196,227 | ||||||
Financial Engines Inc. | 13,684 | 493,992 | ||||||
Interactive Brokers Group Inc. Class A | 15,415 | 832,718 | ||||||
Morningstar Inc. | 3,966 | 337,943 | ||||||
|
| |||||||
1,860,880 | ||||||||
CHEMICALS — 0.74% |
| |||||||
Balchem Corp. | 6,908 | 582,275 | ||||||
Quaker Chemical Corp. | 2,884 | 447,943 | ||||||
|
| |||||||
1,030,218 | ||||||||
COMMERCIAL SERVICES & SUPPLIES — 1.17% |
| |||||||
Advanced Disposal Services Inc.a | 8,999 | 224,255 | ||||||
Healthcare Services Group Inc. | 15,791 | 835,186 | ||||||
MSA Safety Inc. | 7,347 | 584,087 | ||||||
|
| |||||||
1,643,528 | ||||||||
COMMUNICATIONS EQUIPMENT — 1.53% |
| |||||||
InterDigital Inc./PA | 7,502 | 550,272 | ||||||
Lumentum Holdings Inc.a,b | 13,258 | 837,243 | ||||||
ViaSat Inc.a,b | 11,636 | 757,503 | ||||||
|
| |||||||
2,145,018 | ||||||||
CONSTRUCTION & ENGINEERING — 0.74% |
| |||||||
EMCOR Group Inc. | 12,773 | 1,028,354 | ||||||
|
| |||||||
1,028,354 | ||||||||
DISTRIBUTORS — 0.24% |
| |||||||
Core-Mark Holding Co. Inc. | 10,045 | 342,133 | ||||||
|
| |||||||
342,133 | ||||||||
DIVERSIFIED CONSUMER SERVICES — 0.96% |
| |||||||
Grand Canyon Education Inc.a | 10,386 | 929,651 | ||||||
Sotheby’sa | 8,105 | 420,001 | ||||||
|
| |||||||
1,349,652 |
SCHEDULESOF INVESTMENTS | 45 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR SMALL-CAP GROWTH ETF
October 31, 2017
Security | Shares | Value | ||||||
DIVERSIFIED TELECOMMUNICATION SERVICES — 0.67% |
| |||||||
Cogent Communications Holdings Inc. | 8,958 | $ | 482,836 | |||||
Globalstar Inc.a,b | 99,838 | 160,739 | ||||||
Straight Path Communications Inc. Class Ba,b | 1,582 | 287,149 | ||||||
|
| |||||||
930,724 | ||||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & |
| |||||||
II-VI Inc.a,b | 12,034 | 543,937 | ||||||
Itron Inc.a | 7,361 | 575,262 | ||||||
Littelfuse Inc. | 4,904 | 1,024,936 | ||||||
Methode Electronics Inc. | 7,981 | 374,309 | ||||||
OSI Systems Inc.a | 3,807 | 336,463 | ||||||
Rogers Corp.a | 3,928 | 597,370 | ||||||
Universal Display Corp.b | 9,043 | 1,324,799 | ||||||
|
| |||||||
4,777,076 | ||||||||
ENERGY EQUIPMENT & SERVICES — 0.32% |
| |||||||
Dril-Quip Inc.a | 8,203 | 345,346 | ||||||
Keane Group Inc.a,b | 6,263 | 96,701 | ||||||
|
| |||||||
442,047 | ||||||||
EQUITY REAL ESTATE INVESTMENT TRUSTS |
| |||||||
Acadia Realty Trustb | 18,066 | 508,558 | ||||||
Alexander & Baldwin Inc. | 10,013 | 452,988 | ||||||
Alexander’s Inc. | 817 | 335,787 | ||||||
CoreSite Realty Corp.b | 7,378 | 817,114 | ||||||
Global Net Lease Inc.b | 14,594 | 315,230 | ||||||
Physicians Realty Trust | 38,458 | 668,400 | ||||||
QTS Realty Trust Inc. Class Ab | 10,522 | 608,698 | ||||||
Retail Opportunity Investments Corp. | 23,776 | 427,492 | ||||||
Rexford Industrial Realty Inc. | 15,411 | 457,553 | ||||||
Starwood Waypoint Homes | 27,706 | 1,006,005 | ||||||
Tanger Factory Outlet Centers Inc.b | 20,575 | 468,081 | ||||||
Terreno Realty Corp. | 11,346 | 416,625 | ||||||
Urban Edge Propertiesb | 22,877 | 536,694 | ||||||
|
| |||||||
7,019,225 | ||||||||
FOOD & STAPLES RETAILING — 0.66% |
| |||||||
PriceSmart Inc. | 4,940 | 413,972 | ||||||
Sprouts Farmers Market Inc.a | 27,320 | 505,147 | ||||||
|
| |||||||
919,119 | ||||||||
FOOD PRODUCTS — 1.52% |
| |||||||
Hain Celestial Group Inc. (The)a,b | 22,381 | 806,164 | ||||||
Hostess Brands Inc.a | 17,359 | 200,149 |
Security | Shares | Value | ||||||
J&J Snack Foods Corp. | 3,248 | $ | 432,536 | |||||
Snyder’s-Lance Inc. | 18,388 | 691,941 | ||||||
|
| |||||||
2,130,790 | ||||||||
HEALTH CARE EQUIPMENT & SUPPLIES — 5.50% |
| |||||||
Cantel Medical Corp. | 7,649 | 750,214 | ||||||
Glaukos Corp.a | 6,722 | 237,354 | ||||||
Globus Medical Inc. Class Aa,b | 15,645 | 498,606 | ||||||
ICU Medical Inc.a | 3,239 | 618,973 | ||||||
Inogen Inc.a | 3,685 | 364,557 | ||||||
Insulet Corp.a | 12,524 | 736,536 | ||||||
Integra LifeSciences Holdings Corp.a | 13,674 | 639,670 | ||||||
Merit Medical Systems Inc.a | 10,862 | 413,299 | ||||||
Neogen Corp.a | 8,259 | 662,372 | ||||||
Nevro Corp.a | 5,981 | 523,816 | ||||||
NuVasive Inc.a | 10,984 | 623,122 | ||||||
NxStage Medical Inc.a | 14,304 | 385,493 | ||||||
Penumbra Inc.a,b | 6,425 | 646,034 | ||||||
Wright Medical Group NVa,b | 22,546 | 590,930 | ||||||
|
| |||||||
7,690,976 | ||||||||
HEALTH CARE PROVIDERS & SERVICES — 1.62% |
| |||||||
Amedisys Inc.a | 6,168 | 296,742 | ||||||
Chemed Corp. | 3,458 | 772,621 | ||||||
HealthEquity Inc.a,b | 11,017 | 553,274 | ||||||
Molina Healthcare Inc.a | 9,508 | 644,928 | ||||||
|
| |||||||
2,267,565 | ||||||||
HEALTH CARE TECHNOLOGY — 2.21% |
| |||||||
athenahealth Inc.a,b | 8,623 | 1,102,709 | ||||||
Cotiviti Holdings Inc.a | 8,170 | 287,257 | ||||||
HMS Holdings Corp.a,b | 18,218 | 350,514 | ||||||
Medidata Solutions Inc.a,b | 12,633 | 950,381 | ||||||
Omnicell Inc.a,b | 8,115 | 404,127 | ||||||
|
| |||||||
3,094,988 | ||||||||
HOTELS, RESTAURANTS & LEISURE — 4.31% |
| |||||||
Buffalo Wild Wings Inc.a,b | 3,347 | 395,615 | ||||||
Cheesecake Factory Inc. (The) | 9,474 | 423,867 | ||||||
Churchill Downs Inc. | 2,797 | 583,314 | ||||||
Dave & Buster’s Entertainment Inc.a | 9,115 | 439,343 | ||||||
Hyatt Hotels Corp. Class Aa | 10,290 | 644,771 | ||||||
Jack in the Box Inc. | 6,362 | 658,531 | ||||||
Marriott Vacations Worldwide Corp. | 5,201 | 684,556 | ||||||
Papa John’s International Inc. | 5,761 | 392,036 | ||||||
Planet Fitness Inc. Class A | 18,559 | 494,412 | ||||||
Texas Roadhouse Inc. | 14,131 | 706,691 | ||||||
Wendy’s Co. (The) | 39,471 | 600,354 | ||||||
|
| |||||||
6,023,490 |
46 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR SMALL-CAP GROWTH ETF
October 31, 2017
Security | Shares | Value | ||||||
HOUSEHOLD DURABLES — 1.18% |
| |||||||
Installed Building Products Inc.a | 4,562 | $ | 317,971 | |||||
iRobot Corp.a,b | 5,996 | 402,871 | ||||||
La-Z-Boy Inc. | 10,418 | 280,765 | ||||||
Tempur Sealy International Inc.a | 9,920 | 648,471 | ||||||
|
| |||||||
1,650,078 | ||||||||
HOUSEHOLD PRODUCTS — 0.24% |
| |||||||
WD-40 Co. | 3,040 | 336,984 | ||||||
|
| |||||||
336,984 | ||||||||
INDEPENDENT POWER AND RENEWABLE ELECTRICITY PRODUCERS — 0.66% |
| |||||||
Ormat Technologies Inc. | 7,678 | 498,532 | ||||||
Pattern Energy Group Inc. | 18,611 | 429,356 | ||||||
|
| |||||||
927,888 | ||||||||
INTERNET & DIRECT MARKETING RETAIL — 1.18% |
| |||||||
Groupon Inc.a | 85,537 | 408,012 | ||||||
Nutrisystem Inc. | 6,511 | 325,224 | ||||||
Shutterfly Inc.a | 7,233 | 308,849 | ||||||
Wayfair Inc. Class Aa,b | 8,761 | 612,394 | ||||||
|
| |||||||
1,654,479 | ||||||||
INTERNET SOFTWARE & SERVICES — 6.96% |
| |||||||
2U Inc.a,b | 11,121 | 707,629 | ||||||
Alarm.com Holdings Inc.a | 5,372 | 250,765 | ||||||
Cimpress NVa,b | 6,318 | 689,547 | ||||||
Cornerstone OnDemand Inc.a,b | 11,353 | 435,501 | ||||||
Coupa Software Inc.a | 5,624 | 195,434 | ||||||
Envestnet Inc.a | 9,471 | 505,751 | ||||||
Etsy Inc.a | 23,320 | 389,444 | ||||||
GoDaddy Inc. Class Aa | 16,927 | 790,491 | ||||||
GrubHub Inc.a,b | 18,652 | 1,138,145 | ||||||
j2 Global Inc. | 10,427 | 773,058 | ||||||
MuleSoft Inc. Class Aa | 3,257 | 76,181 | ||||||
New Relic Inc.a | 9,096 | 466,898 | ||||||
NIC Inc. | 14,384 | 244,528 | ||||||
Pandora Media Inc.a,b | 52,570 | 384,287 | ||||||
Q2 Holdings Inc.a | 7,134 | 303,552 | ||||||
Shutterstock Inc.a,b | 3,967 | 154,673 | ||||||
Stamps.com Inc.a | 3,400 | 762,960 | ||||||
TrueCar Inc.a | 16,591 | 268,442 | ||||||
Twilio Inc. Class Aa,b | 13,737 | 438,897 | ||||||
Yelp Inc.a | 16,273 | 760,275 | ||||||
|
| |||||||
9,736,458 |
Security | Shares | Value | ||||||
IT SERVICES — 4.39% |
| |||||||
Acxiom Corp.a | 17,257 | $ | 434,186 | |||||
Black Knight Inc.a,b | 24,041 | 1,090,260 | ||||||
Cardtronics PLC Class Aa,b | 9,858 | 225,748 | ||||||
EPAM Systems Inc.a | 10,759 | 980,683 | ||||||
ExlService Holdings Inc.a | 7,297 | 455,479 | ||||||
MAXIMUS Inc. | 14,003 | 930,219 | ||||||
Square Inc. Class Aa,b | 54,469 | 2,025,702 | ||||||
|
| |||||||
6,142,277 | ||||||||
LIFE SCIENCES TOOLS & SERVICES — 3.45% |
| |||||||
Bio-Techne Corp. | 8,060 | 1,056,021 | ||||||
Bruker Corp. | 22,257 | 698,870 | ||||||
Cambrex Corp.a | 7,093 | 306,772 | ||||||
Charles River Laboratories International Inc.a | 10,282 | 1,195,694 | ||||||
INC Research Holdings Inc. Class Aa | 12,155 | 694,658 | ||||||
PRA Health Sciences Inc.a | 10,682 | 869,836 | ||||||
|
| |||||||
4,821,851 | ||||||||
MACHINERY — 2.78% |
| |||||||
Albany International Corp. Class A | 6,265 | 378,093 | ||||||
ESCO Technologies Inc. | 5,601 | 324,578 | ||||||
John Bean Technologies Corp. | 6,838 | 730,982 | ||||||
Mueller Water Products Inc. Class A | 34,362 | 410,282 | ||||||
Proto Labs Inc.a | 5,363 | 467,922 | ||||||
RBC Bearings Inc.a | 5,243 | 649,188 | ||||||
Woodward Inc. | 11,913 | 921,232 | ||||||
|
| |||||||
3,882,277 | ||||||||
MEDIA — 0.95% |
| |||||||
AMC Entertainment Holdings Inc. Class Ab | 11,937 | 165,924 | ||||||
Emerald Expositions Events Inc. | 3,250 | 75,693 | ||||||
IMAX Corp.a | 12,080 | 292,940 | ||||||
Madison Square Garden Co. (The)a | 3,567 | 794,335 | ||||||
|
| |||||||
1,328,892 | ||||||||
MULTILINE RETAIL — 0.34% |
| |||||||
Ollie’s Bargain Outlet Holdings Inc.a | 10,645 | 475,299 | ||||||
|
| |||||||
475,299 | ||||||||
OIL, GAS & CONSUMABLE FUELS — 3.16% |
| |||||||
Callon Petroleum Co.a,b | 43,561 | 483,091 | ||||||
Carrizo Oil & Gas Inc.a | 16,788 | 296,980 | ||||||
Centennial Resource Development Inc./DE Class Aa,b | 28,845 | 560,458 | ||||||
Extraction Oil & Gas Inc.a,b | 26,782 | 427,173 | ||||||
Jagged Peak Energy Inc.a,b | 6,871 | 95,438 |
SCHEDULESOF INVESTMENTS | 47 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR SMALL-CAP GROWTH ETF
October 31, 2017
Security | Shares | Value | ||||||
Kosmos Energy Ltd.a,b | 49,778 | $ | 382,295 | |||||
Matador Resources Co.a,b | 20,857 | 553,753 | ||||||
PDC Energy Inc.a,b | 14,245 | 725,498 | ||||||
SM Energy Co.b | 22,181 | 473,121 | ||||||
SRC Energy Inc.a,b | 43,525 | 415,229 | ||||||
|
| |||||||
4,413,036 | ||||||||
PHARMACEUTICALS — 1.44% |
| |||||||
Aerie Pharmaceuticals Inc.a | 7,852 | 484,861 | ||||||
Pacira Pharmaceuticals Inc./DEa,b | 8,749 | 280,405 | ||||||
Prestige Brands Holdings Inc.a,b | 11,454 | 537,193 | ||||||
Supernus Pharmaceuticals Inc.a | 10,985 | 456,976 | ||||||
Theravance Biopharma Inc.a,b | 8,875 | 256,133 | ||||||
|
| |||||||
2,015,568 | ||||||||
PROFESSIONAL SERVICES — 1.52% |
| |||||||
Advisory Board Co. (The)a | 8,816 | 475,403 | ||||||
Exponent Inc. | 5,589 | 412,748 | ||||||
Insperity Inc. | 4,007 | 380,264 | ||||||
TriNet Group Inc.a | 8,880 | 308,313 | ||||||
WageWorks Inc.a | 8,580 | 546,975 | ||||||
|
| |||||||
2,123,703 | ||||||||
REAL ESTATE MANAGEMENT & DEVELOPMENT — 0.40% |
| |||||||
Kennedy-Wilson Holdings Inc. | 29,072 | 565,450 | ||||||
|
| |||||||
565,450 | ||||||||
ROAD & RAIL — 1.62% |
| |||||||
Heartland Express Inc.b | 10,794 | 230,236 | ||||||
Knight-Swift Transportation Holdings Inc.a | 27,569 | 1,142,735 | ||||||
Landstar System Inc. | 9,048 | 893,490 | ||||||
|
| |||||||
2,266,461 | ||||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT — 7.82% |
| |||||||
Advanced Energy Industries Inc.a | 8,616 | 729,948 | ||||||
Ambarella Inc.a,b | 7,273 | 410,488 | ||||||
Brooks Automation Inc. | 15,115 | 519,805 | ||||||
Cabot Microelectronics Corp. | 5,483 | 530,042 | ||||||
Cirrus Logic Inc.a | 13,761 | 770,616 | ||||||
Cree Inc.a,b | 21,123 | 754,091 | ||||||
Entegris Inc. | 30,610 | 1,002,477 | ||||||
Inphi Corp.a,b | 9,166 | 375,623 | ||||||
Integrated Device Technology Inc.a | 28,790 | 894,505 | ||||||
MACOM Technology Solutions Holdings Inc.a,b | 8,910 | 364,241 | ||||||
MaxLinear Inc.a,b | 13,135 | 321,413 |
Security | Shares | Value | ||||||
MKS Instruments Inc. | 11,725 | $ | 1,273,921 | |||||
Monolithic Power Systems Inc. | 8,219 | 1,000,006 | ||||||
Power Integrations Inc. | 6,448 | 518,097 | ||||||
Rambus Inc.a,b | 23,699 | 348,612 | ||||||
Silicon Laboratories Inc.a | 9,179 | 871,087 | ||||||
Xperi Corp. | 10,694 | 245,962 | ||||||
|
| |||||||
10,930,934 | ||||||||
SOFTWARE — 9.56% |
| |||||||
8x8 Inc.a | 19,928 | 266,039 | ||||||
ACI Worldwide Inc.a,b | 25,520 | 614,522 | ||||||
Blackbaud Inc. | 10,376 | 1,051,089 | ||||||
Blackline Inc.a | 3,166 | 112,456 | ||||||
CommVault Systems Inc.a | 9,172 | 477,403 | ||||||
Ebix Inc.b | 4,755 | 323,102 | ||||||
Ellie Mae Inc.a,b | 7,433 | 668,598 | ||||||
Fair Isaac Corp. | 6,613 | 959,943 | ||||||
FireEye Inc.a | 37,415 | 633,062 | ||||||
HubSpot Inc.a,b | 7,444 | 644,278 | ||||||
Imperva Inc.a | 6,823 | 291,342 | ||||||
Manhattan Associates Inc.a | 14,904 | 623,881 | ||||||
MicroStrategy Inc. Class Aa | 2,033 | 268,885 | ||||||
Paycom Software Inc.a,b | 10,541 | 866,470 | ||||||
Paylocity Holding Corp.a | 5,812 | 310,419 | ||||||
Pegasystems Inc. | 7,905 | 460,862 | ||||||
Proofpoint Inc.a,b | 9,589 | 886,119 | ||||||
Qualys Inc.a | 6,832 | 361,413 | ||||||
RealPage Inc.a | 12,684 | 549,217 | ||||||
RingCentral Inc. Class Aa | 13,812 | 582,176 | ||||||
Tableau Software Inc. Class Aa | 13,546 | 1,098,445 | ||||||
Zendesk Inc.a,b | 21,730 | 673,630 | ||||||
Zynga Inc. Class Aa,b | 167,920 | 654,888 | ||||||
|
| |||||||
13,378,239 | ||||||||
SPECIALTY RETAIL — 0.72% |
| |||||||
Five Below Inc.a,b | 11,936 | 659,464 | ||||||
Monro Inc. | 7,092 | 349,990 | ||||||
|
| |||||||
1,009,454 | ||||||||
TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS — 0.44% |
| |||||||
3D Systems Corp.a,b | 24,674 | 305,464 | ||||||
Electronics For Imaging Inc.a,b | 10,069 | 310,729 | ||||||
|
| |||||||
616,193 | ||||||||
TEXTILES, APPAREL & LUXURY GOODS — 0.28% |
| |||||||
Columbia Sportswear Co. | 6,349 | 396,051 | ||||||
|
| |||||||
396,051 |
48 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR SMALL-CAP GROWTH ETF
October 31, 2017
Security | Shares | Value | ||||||
THRIFTS & MORTGAGE FINANCE — 1.30% |
| |||||||
Essent Group Ltd.a | 17,835 | $ | 760,128 | |||||
Kearny Financial Corp./MD | 18,216 | 274,151 | ||||||
LendingTree Inc.a | 1,638 | 439,066 | ||||||
WSFS Financial Corp. | 6,813 | 338,606 | ||||||
|
| |||||||
1,811,951 | ||||||||
TRADING COMPANIES & |
| |||||||
Beacon Roofing Supply Inc.a | 14,388 | 797,239 | ||||||
GMS Inc.a | 5,769 | 196,435 | ||||||
SiteOne Landscape Supply Inc.a,b | 8,579 | 544,852 | ||||||
|
| |||||||
1,538,526 | ||||||||
WIRELESS TELECOMMUNICATION SERVICES — 0.27% |
| |||||||
Shenandoah Telecommunications Co. | 10,007 | 380,266 | ||||||
|
| |||||||
380,266 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | 139,806,630 | |||||||
SHORT-TERM INVESTMENTS — 25.89% |
| |||||||
MONEY MARKET FUNDS — 25.89% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
1.31%c,d,e | 36,143,882 | 36,151,111 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
1.00%c,d | 68,273 | 68,273 | ||||||
|
| |||||||
36,219,384 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS | ||||||||
(Cost: $36,216,829) |
| 36,219,384 | ||||||
|
|
Value | ||||||
TOTAL INVESTMENTS | ||||||
(Cost: $145,082,841)f | $ | 176,026,014 | ||||
Other Assets, Less Liabilities — (25.85)% | (36,157,127 | ) | ||||
|
| |||||
NET ASSETS — 100.00% | $ | 139,868,887 | ||||
|
|
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 1. |
c | Affiliated issuer. See Schedule 1. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 1. |
f | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $146,610,959. Net unrealized appreciation was $29,415,055, of which $35,170,373 represented gross unrealized appreciation on investments and $5,755,318 represented gross unrealized depreciation on investments. |
SCHEDULESOF INVESTMENTS | 49 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR SMALL-CAP GROWTH ETF
October 31, 2017
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 04/30/17 | Shares purchased | Shares sold | Shares held at 10/31/17 | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, | 23,737,327 | 12,406,555 | b | — | 36,143,882 | $ | 36,151,111 | $ | (1,140 | ) | $ | (5,520 | ) | $ | — | c | ||||||||||||||||
BlackRock Cash Funds: Treasury, | 506,942 | — | (438,669 | )b | 68,273 | 68,273 | — | — | 334 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 36,219,384 | $ | (1,140 | ) | $ | (5,520 | ) | $ | 334 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
c | Does not include income earned on investment of securities lending cash collateral which is not direct income of the Fund and is reflected as a component of securities lending income in the statement of operations. |
Schedule 2 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: |
| |||||||||||||||
Assets: |
| |||||||||||||||
Common stocks | $ | 139,806,630 | $ | — | $ | — | $ | 139,806,630 | ||||||||
Money market funds | 36,219,384 | — | — | 36,219,384 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 176,026,014 | $ | — | $ | — | $ | 176,026,014 | ||||||||
|
|
|
|
|
|
|
| |||||||||
See notes to financial statements.
50 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES® MORNINGSTAR SMALL-CAP VALUE ETF
October 31, 2017
Security | Shares | Value | ||||||
COMMON STOCKS — 99.82% |
| |||||||
AEROSPACE & DEFENSE — 1.26% |
| |||||||
Esterline Technologies Corp.a | 22,576 | $ | 2,141,334 | |||||
Moog Inc. Class Aa | 27,633 | 2,425,072 | ||||||
Triumph Group Inc. | 42,650 | 1,324,282 | ||||||
|
| |||||||
5,890,688 | ||||||||
AIR FREIGHT & LOGISTICS — 0.28% |
| |||||||
Atlas Air Worldwide Holdings Inc.a | 21,710 | 1,331,909 | ||||||
|
| |||||||
1,331,909 | ||||||||
AIRLINES — 0.45% |
| |||||||
SkyWest Inc. | 44,328 | 2,087,849 | ||||||
|
| |||||||
2,087,849 | ||||||||
AUTO COMPONENTS — 1.71% |
| |||||||
American Axle & Manufacturing Holdings Inc.a | 71,577 | 1,273,355 | ||||||
Cooper Tire & Rubber Co. | 44,772 | 1,468,522 | ||||||
Cooper-Standard Holdings Inc.a | 13,671 | 1,524,043 | ||||||
Dana Inc. | 123,521 | 3,766,155 | ||||||
|
| |||||||
8,032,075 | ||||||||
BANKS — 10.51% |
| |||||||
Associated Banc-Corp. | 129,232 | 3,269,570 | ||||||
BancorpSouth Inc. | 72,342 | 2,286,007 | ||||||
Chemical Financial Corp. | 60,750 | 3,200,917 | ||||||
First Hawaiian Inc. | 45,437 | 1,328,578 | ||||||
First Midwest Bancorp. Inc./IL | 87,849 | 2,028,433 | ||||||
Fulton Financial Corp. | 149,419 | 2,719,426 | ||||||
Hancock Holding Co. | 72,347 | 3,526,916 | ||||||
Hope Bancorp Inc. | 110,066 | 2,030,718 | ||||||
International Bancshares Corp. | 46,326 | 1,880,836 | ||||||
NBT Bancorp. Inc. | 37,376 | 1,425,521 | ||||||
Old National Bancorp./IN | 115,970 | 2,110,654 | ||||||
Park National Corp. | 11,164 | 1,225,695 | ||||||
Popular Inc. | 87,090 | 3,194,461 | ||||||
Simmons First National Corp. Class A | 33,637 | 1,940,855 | ||||||
TCF Financial Corp. | 146,806 | 2,674,805 | ||||||
Trustmark Corp. | 57,931 | 1,908,247 | ||||||
Umpqua Holdings Corp. | 187,982 | 3,846,112 | ||||||
United Bankshares Inc./WV | 89,618 | 3,221,767 | ||||||
Valley National Bancorp. | 225,752 | 2,596,148 | ||||||
WesBanco Inc. | 37,790 | 1,526,716 | ||||||
Westamerica Bancorp. | 22,604 | 1,316,231 | ||||||
|
| |||||||
49,258,613 |
Security | Shares | Value | ||||||
BIOTECHNOLOGY — 0.87% |
| |||||||
Avexis Inc.a,b | 19,655 | $ | 2,054,144 | |||||
Myriad Genetics Inc.a,b | 58,499 | 2,005,346 | ||||||
|
| |||||||
4,059,490 | ||||||||
BUILDING PRODUCTS — 0.26% |
| |||||||
JELD-WEN Holding Inc.a | 32,419 | 1,195,613 | ||||||
|
| |||||||
1,195,613 | ||||||||
CAPITAL MARKETS — 3.46% |
| |||||||
Artisan Partners Asset Management Inc. Class A | 38,447 | 1,322,577 | ||||||
BGC Partners Inc. Class A | 201,883 | 3,062,565 | ||||||
Federated Investors Inc. Class B NVS | 74,774 | 2,323,228 | ||||||
Janus Henderson Group PLC | 153,896 | 5,347,886 | ||||||
Legg Mason Inc. | 74,347 | 2,838,569 | ||||||
Waddell & Reed Financial Inc. Class A | 70,186 | 1,311,776 | ||||||
|
| |||||||
16,206,601 | ||||||||
CHEMICALS — 1.10% |
| |||||||
Kronos Worldwide Inc. | 19,196 | 505,047 | ||||||
Platform Specialty Products Corp.a,b | 184,045 | 1,969,281 | ||||||
Trinseo SA | 37,443 | 2,658,453 | ||||||
|
| |||||||
5,132,781 | ||||||||
COMMERCIAL SERVICES & SUPPLIES — 1.24% |
| |||||||
ACCO Brands Corp.a | 93,381 | 1,218,622 | ||||||
Clean Harbors Inc.a | 44,487 | 2,380,499 | ||||||
Pitney Bowes Inc. | 159,556 | 2,192,300 | ||||||
|
| |||||||
5,791,421 | ||||||||
COMMUNICATIONS EQUIPMENT — 0.42% |
| |||||||
Acacia Communications Inc.a,b | 16,525 | 699,173 | ||||||
NETGEAR Inc.a,b | 27,155 | 1,266,781 | ||||||
|
| |||||||
1,965,954 | ||||||||
CONSTRUCTION & ENGINEERING — 0.96% |
| |||||||
Chicago Bridge & Iron Co. NVb | 86,877 | 1,211,065 | ||||||
KBR Inc. | 119,697 | 2,349,652 | ||||||
Tutor Perini Corp.a,b | 33,773 | 952,399 | ||||||
|
| |||||||
4,513,116 | ||||||||
CONSUMER FINANCE — 0.75% |
| |||||||
Nelnet Inc. Class A | 17,046 | 997,873 | ||||||
OneMain Holdings Inc.a | 45,337 | 1,440,356 | ||||||
PRA Group Inc.a,b | 38,729 | 1,080,539 | ||||||
|
| |||||||
3,518,768 |
SCHEDULESOF INVESTMENTS | 51 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR SMALL-CAP VALUE ETF
October 31, 2017
Security | Shares | Value | ||||||
CONTAINERS & PACKAGING — 0.97% |
| |||||||
Greif Inc. Class A NVS | 22,142 | $ | 1,229,545 | |||||
Owens-Illinois Inc.a | 139,053 | 3,321,976 | ||||||
|
| |||||||
4,551,521 | ||||||||
DIVERSIFIED CONSUMER SERVICES — 1.07% |
| |||||||
Adtalem Global Education Inc. | 53,213 | 1,966,220 | ||||||
Graham Holdings Co. Class B | 3,953 | 2,199,647 | ||||||
Houghton Mifflin Harcourt Co.a | 87,842 | 869,636 | ||||||
|
| |||||||
5,035,503 | ||||||||
DIVERSIFIED TELECOMMUNICATION SERVICES — 0.17% |
| |||||||
Frontier Communications Corp. | 67,716 | 820,041 | ||||||
|
| |||||||
820,041 | ||||||||
ELECTRIC UTILITIES — 3.70% |
| |||||||
ALLETE Inc. | 43,424 | 3,402,270 | ||||||
El Paso Electric Co. | 34,717 | 1,996,228 | ||||||
Hawaiian Electric Industries Inc. | 92,892 | 3,386,842 | ||||||
MGE Energy Inc. | 29,712 | 1,962,478 | ||||||
PNM Resources Inc. | 68,114 | 2,956,148 | ||||||
Portland General Electric Co. | 76,041 | 3,630,197 | ||||||
|
| |||||||
17,334,163 | ||||||||
ELECTRICAL EQUIPMENT — 0.66% |
| |||||||
Regal Beloit Corp. | 38,086 | 3,090,679 | ||||||
|
| |||||||
3,090,679 | ||||||||
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS — 3.15% |
| |||||||
Anixter International Inc.a | 24,742 | 1,699,775 | ||||||
AVX Corp. | 39,289 | 740,205 | ||||||
Benchmark Electronics Inc.a | 42,860 | 1,326,517 | ||||||
Plexus Corp.a | 28,775 | 1,767,648 | ||||||
Sanmina Corp.a | 64,477 | 2,110,010 | ||||||
Tech Data Corp.a | 29,675 | 2,752,950 | ||||||
VeriFone Systems Inc.a,b | 95,644 | 1,824,887 | ||||||
Vishay Intertechnology Inc.b | 114,611 | 2,550,095 | ||||||
|
| |||||||
14,772,087 | ||||||||
ENERGY EQUIPMENT & SERVICES — 3.20% |
| |||||||
Diamond Offshore Drilling Inc.a,b | 55,673 | 931,409 | ||||||
Ensco PLC Class A | 370,085 | 1,994,758 | ||||||
Frank’s International NV | 54,029 | 357,132 | ||||||
McDermott International Inc.a,b | 243,128 | 1,609,507 | ||||||
Nabors Industries Ltd. | 244,311 | 1,375,471 | ||||||
Oceaneering International Inc. | 84,010 | 1,698,682 | ||||||
Oil States International Inc.a,b | 43,831 | 1,010,305 | ||||||
Patterson-UTI Energy Inc. | 182,124 | 3,602,413 |
Security | Shares | Value | ||||||
RPC Inc.b | 52,305 | $ | 1,271,535 | |||||
Superior Energy Services Inc.a | 131,253 | 1,157,651 | ||||||
|
| |||||||
15,008,863 | ||||||||
EQUITY REAL ESTATE INVESTMENT TRUSTS (REITS) — 6.92% |
| |||||||
Brandywine Realty Trust | 150,008 | 2,623,640 | ||||||
CBL & Associates Properties Inc.b | 143,621 | 1,125,989 | ||||||
CoreCivic Inc. | 101,075 | 2,492,509 | ||||||
DiamondRock Hospitality Co. | 171,696 | 1,864,618 | ||||||
Equity Commonwealtha | 105,958 | 3,184,038 | ||||||
Government Properties Income Trustb | 65,037 | 1,181,722 | ||||||
Kite Realty Group Trust | 70,152 | 1,311,141 | ||||||
LaSalle Hotel Propertiesb | 96,699 | 2,727,879 | ||||||
Lexington Realty Trust | 185,233 | 1,874,558 | ||||||
Mack-Cali Realty Corp. | 77,030 | 1,753,973 | ||||||
Outfront Media Inc. | 118,397 | 2,776,410 | ||||||
Potlatch Corp. | 34,764 | 1,800,775 | ||||||
Quality Care Properties Inc.a | 80,637 | 1,276,484 | ||||||
Retail Properties of America Inc. Class A | 197,526 | 2,413,768 | ||||||
Select Income REITb | 55,312 | 1,336,338 | ||||||
Summit Hotel Properties Inc. | 89,495 | 1,414,916 | ||||||
Washington Prime Group Inc.b | 159,540 | 1,249,198 | ||||||
|
| |||||||
32,407,956 | ||||||||
FOOD & STAPLES RETAILING — 0.36% |
| |||||||
United Natural Foods Inc.a,b | 43,337 | 1,680,175 | ||||||
|
| |||||||
1,680,175 | ||||||||
FOOD PRODUCTS — 1.63% |
| |||||||
Dean Foods Co. | 78,391 | 764,313 | ||||||
Flowers Foods Inc. | 157,334 | 2,994,066 | ||||||
Fresh Del Monte Produce Inc. | 29,724 | 1,323,015 | ||||||
Sanderson Farms Inc. | 17,100 | 2,557,647 | ||||||
|
| |||||||
7,639,041 | ||||||||
GAS UTILITIES — 2.56% |
| |||||||
Northwest Natural Gas Co. | 24,610 | 1,632,874 | ||||||
Southwest Gas Holdings Inc. | 40,631 | 3,347,588 | ||||||
Spire Inc. | 41,211 | 3,253,608 | ||||||
WGL Holdings Inc. | 43,725 | 3,747,233 | ||||||
|
| |||||||
11,981,303 | ||||||||
HEALTH CARE EQUIPMENT & SUPPLIES — 0.36% |
| |||||||
Halyard Health Inc.a | 40,000 | 1,686,000 | ||||||
|
| |||||||
1,686,000 | ||||||||
HEALTH CARE PROVIDERS & SERVICES — 1.71% |
| |||||||
Brookdale Senior Living Inc.a | 159,650 | 1,601,290 | ||||||
LifePoint Health Inc.a,b | 34,313 | 1,652,171 |
52 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR SMALL-CAP VALUE ETF
October 31, 2017
Security | Shares | Value | ||||||
Magellan Health Inc.a | 20,274 | $ | 1,729,372 | |||||
Owens & Minor Inc. | 52,544 | 1,291,006 | ||||||
Select Medical Holdings Corp.a | 91,215 | 1,746,767 | ||||||
|
| |||||||
8,020,606 | ||||||||
HOTELS, RESTAURANTS & LEISURE — 2.69% |
| |||||||
Brinker International Inc. | 42,021 | 1,290,885 | ||||||
Caesars Entertainment Corp.a,b | 121,870 | 1,578,216 | ||||||
Extended Stay America Inc. | 164,223 | 3,254,900 | ||||||
La Quinta Holdings Inc.a | 69,469 | 1,224,044 | ||||||
Penn National Gaming Inc.a | 37,798 | 986,150 | ||||||
Red Rock Resorts Inc. Class A | 58,512 | 1,441,150 | ||||||
Scientific Games Corp. Class Aa,b | 45,156 | 2,149,426 | ||||||
SeaWorld Entertainment Inc.b | 58,392 | 670,340 | ||||||
|
| |||||||
12,595,111 | ||||||||
HOUSEHOLD DURABLES — 2.07% |
| |||||||
KB Home | 71,240 | 1,954,113 | ||||||
MDC Holdings Inc. | 35,687 | 1,321,847 | ||||||
Meritage Homes Corp.a,b | 32,549 | 1,585,136 | ||||||
TRI Pointe Group Inc.a | 129,367 | 2,288,502 | ||||||
Tupperware Brands Corp. | 43,514 | 2,556,448 | ||||||
|
| |||||||
9,706,046 | ||||||||
HOUSEHOLD PRODUCTS — 0.93% |
| |||||||
Energizer Holdings Inc. | 52,892 | 2,273,827 | ||||||
HRG Group Inc.a | 128,636 | 2,086,476 | ||||||
|
| |||||||
4,360,303 | ||||||||
INSURANCE — 5.70% |
| |||||||
American Equity Investment Life Holding Co. | 66,228 | 1,954,388 | ||||||
American National Insurance Co. | 7,430 | 904,454 | ||||||
AmTrust Financial Services Inc. | 80,631 | 1,012,725 | ||||||
Argo Group International Holdings Ltd. | 25,871 | 1,628,579 | ||||||
Aspen Insurance Holdings Ltd. | 51,061 | 2,190,517 | ||||||
CNO Financial Group Inc. | 135,410 | 3,245,778 | ||||||
FBL Financial Group Inc. Class A | 8,587 | 664,204 | ||||||
Fidelity & Guaranty Life | 10,359 | 322,165 | ||||||
Genworth Financial Inc. Class Aa | 424,490 | 1,405,062 | ||||||
Hanover Insurance Group Inc. (The) | 36,183 | 3,559,684 | ||||||
Horace Mann Educators Corp. | 34,852 | 1,526,518 | ||||||
Kemper Corp. | 41,672 | 2,671,175 | ||||||
Mercury General Corp. | 31,214 | 1,747,048 | ||||||
Selective Insurance Group Inc. | 49,855 | 2,971,358 | ||||||
Third Point Reinsurance Ltd.a | 54,463 | 909,532 | ||||||
|
| |||||||
26,713,187 |
Security | Shares | Value | ||||||
INTERNET & DIRECT MARKETING RETAIL — 0.22% |
| |||||||
HSN Inc. | 27,499 | $ | 1,036,712 | |||||
|
| |||||||
1,036,712 | ||||||||
IT SERVICES — 2.29% |
| |||||||
Conduent Inc.a | 168,283 | 2,605,021 | ||||||
Convergys Corp. | 79,830 | 2,054,026 | ||||||
Syntel Inc.a | 34,030 | 794,941 | ||||||
Teradata Corp.a,b | 107,567 | 3,598,116 | ||||||
Travelport Worldwide Ltd. | 106,454 | 1,670,263 | ||||||
|
| |||||||
10,722,367 | ||||||||
LEISURE PRODUCTS — 0.12% |
| |||||||
Acushnet Holdings Corp. | 29,562 | 546,010 | ||||||
|
| |||||||
546,010 | ||||||||
LIFE SCIENCES TOOLS & SERVICES — 0.52% |
| |||||||
VWR Corp.a | 73,193 | 2,422,688 | ||||||
|
| |||||||
2,422,688 | ||||||||
MACHINERY — 4.54% |
| |||||||
Actuant Corp. Class Ab | 51,333 | 1,308,991 | ||||||
Kennametal Inc. | 68,907 | 3,007,791 | ||||||
Meritor Inc.a | 75,746 | 1,970,153 | ||||||
Navistar International Corp.a,b | 55,414 | 2,344,566 | ||||||
Rexnord Corp.a,b | 88,692 | 2,263,420 | ||||||
Terex Corp. | 72,514 | 3,416,135 | ||||||
Timken Co. (The) | 58,506 | 2,758,558 | ||||||
Trinity Industries Inc. | 129,150 | 4,199,958 | ||||||
|
| |||||||
21,269,572 | ||||||||
MARINE — 0.69% |
| |||||||
Kirby Corp.a,b | 45,894 | 3,251,590 | ||||||
|
| |||||||
3,251,590 | ||||||||
MEDIA — 2.60% |
| |||||||
AMC Networks Inc. Class Aa,b | 44,544 | 2,266,399 | ||||||
Meredith Corp. | 33,671 | 1,784,563 | ||||||
MSG Networks Inc. Class Aa,b | 52,882 | 917,503 | ||||||
Regal Entertainment Group Class A | 97,239 | 1,589,858 | ||||||
Sinclair Broadcast Group Inc. Class A | 65,916 | 2,089,537 | ||||||
Time Inc. | 85,633 | 993,343 | ||||||
Tribune Media Co. Class A | 61,935 | 2,534,999 | ||||||
|
| |||||||
12,176,202 | ||||||||
METALS & MINING — 2.30% |
| |||||||
AK Steel Holding Corp.a,b | 270,146 | 1,239,970 | ||||||
Allegheny Technologies Inc.a,b | 93,046 | 2,342,898 | ||||||
Cleveland-Cliffs Inc.a,b | 253,406 | 1,510,300 | ||||||
Compass Minerals International Inc. | 28,933 | 1,898,005 | ||||||
U.S. Steel Corp. | 149,087 | 3,774,883 | ||||||
|
| |||||||
10,766,056 |
SCHEDULESOF INVESTMENTS | 53 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR SMALL-CAP VALUE ETF
October 31, 2017
Security | Shares | Value | ||||||
MORTGAGE REAL ESTATE INVESTMENT — 3.29% |
| |||||||
Apollo Commercial Real Estate Finance Inc.b | 82,352 | $ | 1,488,101 | |||||
Blackstone Mortgage Trust Inc. Class Ab | 81,108 | 2,581,667 | ||||||
Chimera Investment Corp.b | 160,360 | 2,934,588 | ||||||
CYS Investments Inc. | 130,112 | 1,040,896 | ||||||
Invesco Mortgage Capital Inc. | 95,728 | 1,648,436 | ||||||
MFA Financial Inc. | 338,480 | 2,789,075 | ||||||
Two Harbors Investment Corp.b | 298,026 | 2,920,655 | ||||||
|
| |||||||
15,403,418 | ||||||||
MULTI-UTILITIES — 1.77% |
| |||||||
Avista Corp. | 54,891 | 2,867,506 | ||||||
Black Hills Corp. | 45,665 | 2,980,098 | ||||||
NorthWestern Corp. | 41,424 | 2,455,614 | ||||||
|
| |||||||
8,303,218 | ||||||||
MULTILINE RETAIL — 0.36% |
| |||||||
Dillard’s Inc. Class Ab | 18,078 | 918,363 | ||||||
JC Penney Co. Inc.a,b | 266,649 | 746,617 | ||||||
|
| |||||||
1,664,980 | ||||||||
OIL, GAS & CONSUMABLE FUELS — 3.96% |
| |||||||
Arch Coal Inc. Class Ab | 20,863 | 1,594,350 | ||||||
CVR Energy Inc. | 13,707 | 376,257 | ||||||
Delek U.S. Holdings Inc.b | 61,931 | 1,613,303 | ||||||
Oasis Petroleum Inc.a,b | 203,589 | 1,923,916 | ||||||
PBF Energy Inc. Class A | 93,814 | 2,717,792 | ||||||
Peabody Energy Corp.a,b | 83,151 | 2,568,534 | ||||||
QEP Resources Inc.a | 205,898 | 1,842,787 | ||||||
Southwestern Energy Co.a,b | 435,462 | 2,416,814 | ||||||
Whiting Petroleum Corp.a,b | 311,192 | 1,870,264 | ||||||
World Fuel Services Corp. | 58,626 | 1,629,803 | ||||||
|
| |||||||
18,553,820 | ||||||||
PAPER & FOREST PRODUCTS — 1.62% |
| |||||||
Domtar Corp. | 53,546 | 2,533,797 | ||||||
KapStone Paper and Packaging Corp. | 74,824 | 1,680,547 | ||||||
Louisiana-Pacific Corp.a | 123,622 | 3,360,046 | ||||||
|
| |||||||
7,574,390 | ||||||||
PERSONAL PRODUCTS — 0.18% |
| |||||||
Avon Products Inc.a | 379,608 | 865,506 | ||||||
|
| |||||||
865,506 | ||||||||
PHARMACEUTICALS — 0.23% |
| |||||||
Endo International PLCa,b | 172,630 | 1,101,379 | ||||||
|
| |||||||
1,101,379 |
Security | Shares | Value | ||||||
PROFESSIONAL SERVICES — 0.31% |
| |||||||
FTI Consulting Inc.a | 33,904 | $ | 1,449,396 | |||||
|
| |||||||
1,449,396 | ||||||||
ROAD & RAIL — 2.00% |
| |||||||
Avis Budget Group Inc.a | 62,222 | 2,566,658 | ||||||
Hertz Global Holdings Inc.a,b | 71,567 | 1,779,871 | ||||||
Ryder System Inc. | 45,229 | 3,667,167 | ||||||
Werner Enterprises Inc. | 38,486 | 1,372,026 | ||||||
|
| |||||||
9,385,722 | ||||||||
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT — 1.04% |
| |||||||
First Solar Inc.a,b | 69,541 | 3,812,238 | ||||||
Synaptics Inc.a,b | 29,013 | 1,076,962 | ||||||
|
| |||||||
4,889,200 | ||||||||
SOFTWARE — 0.89% |
| |||||||
TiVo Corp. | 104,255 | 1,892,228 | ||||||
Verint Systems Inc.a | 53,628 | 2,263,102 | ||||||
|
| |||||||
4,155,330 | ||||||||
SPECIALTY RETAIL — 2.65% |
| |||||||
Chico’s FAS Inc. | 110,167 | 880,234 | ||||||
DSW Inc. Class A | 62,245 | 1,191,992 | ||||||
GameStop Corp. Class A | 86,675 | 1,619,956 | ||||||
Group 1 Automotive Inc. | 16,811 | 1,320,840 | ||||||
Lithia Motors Inc. Class A | 20,550 | 2,325,849 | ||||||
Penske Automotive Group Inc. | 30,951 | 1,442,936 | ||||||
Sally Beauty Holdings Inc.a,b | 112,289 | 1,943,722 | ||||||
Urban Outfitters Inc.a,b | 69,581 | 1,706,126 | ||||||
|
| |||||||
12,431,655 | ||||||||
TEXTILES, APPAREL & LUXURY GOODS — 0.88% |
| |||||||
Deckers Outdoor Corp.a | 27,369 | 1,867,661 | ||||||
Wolverine World Wide Inc. | 82,570 | 2,254,161 | ||||||
|
| |||||||
4,121,822 | ||||||||
THRIFTS & MORTGAGE FINANCE — 3.00% |
| |||||||
Capitol Federal Financial Inc. | 118,313 | 1,631,536 | ||||||
Flagstar Bancorp. Inc.a | 18,310 | 684,245 | ||||||
MGIC Investment Corp.a | 316,296 | 4,523,033 | ||||||
Nationstar Mortgage Holdings Inc.a,b | 24,551 | 478,008 | ||||||
Northwest Bancshares Inc. | 87,799 | 1,481,169 | ||||||
Provident Financial Services Inc. | 51,937 | 1,412,686 | ||||||
Radian Group Inc. | 183,787 | 3,852,176 | ||||||
|
| |||||||
14,062,853 | ||||||||
TOBACCO — 0.27% |
| |||||||
Universal Corp./VA | 21,764 | 1,248,165 | ||||||
|
| |||||||
1,248,165 |
54 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR SMALL-CAP VALUE ETF
October 31, 2017
Security | Shares | Value | ||||||
TRADING COMPANIES & DISTRIBUTORS — 2.03% |
| |||||||
Aircastle Ltd. | 47,275 | $ | 1,099,616 | |||||
BMC Stock Holdings Inc.a | 51,793 | 1,110,960 | ||||||
GATX Corp. | 33,088 | 1,965,758 | ||||||
NOW Inc.a,b | 92,538 | 1,158,576 | ||||||
Triton International Ltd. | 39,715 | 1,584,628 | ||||||
WESCO International Inc.a | 41,038 | 2,591,550 | ||||||
|
| |||||||
9,511,088 | ||||||||
WATER UTILITIES — 0.36% |
| |||||||
American States Water Co. | 31,444 | 1,690,115 | ||||||
|
| |||||||
1,690,115 | ||||||||
WIRELESS TELECOMMUNICATION SERVICES — 0.58% |
| |||||||
Telephone & Data Systems Inc. | 78,404 | 2,285,477 | ||||||
U.S. Cellular Corp.a,b | 12,171 | 445,337 | ||||||
|
| |||||||
2,730,814 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $417,514,807) |
| 467,721,531 | ||||||
SHORT-TERM INVESTMENTS — 11.03% |
| |||||||
MONEY MARKET FUNDS — 11.03% |
| |||||||
BlackRock Cash Funds: Institutional, | ||||||||
1.31%c,d,e | 50,966,529 | 50,976,722 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
1.00%c,d | 723,505 | 723,505 | ||||||
|
| |||||||
51,700,227 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS | ||||||||
(Cost: $51,697,646) |
| 51,700,227 | ||||||
|
|
Value | ||||||
TOTAL INVESTMENTS | ||||||
(Cost: $469,212,453)f | $ | 519,421,758 | ||||
|
| |||||
Other Assets, Less Liabilities — (10.85)% | (50,861,285 | ) | ||||
|
| |||||
NET ASSETS — 100.00% | $ | 468,560,473 | ||||
|
|
NVS — Non-Voting Shares
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 1. |
c | Affiliated issuer. See Schedule 1. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 1. |
f | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $475,969,820. Net unrealized appreciation was $43,451,938, of which $77,623,399 represented gross unrealized appreciation on investments and $34,171,461 represented gross unrealized depreciation on investments. |
SCHEDULESOF INVESTMENTS | 55 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® MORNINGSTAR SMALL-CAP VALUE ETF
October 31, 2017
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 04/30/17 | Shares purchased | Shares sold | Shares held at 10/31/17 | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, | 33,502,189 | 17,464,340 | b | — | 50,966,529 | $ | 50,976,722 | $ | (4,247 | ) | $ | (8,038 | ) | $ | — | c | ||||||||||||||||
BlackRock Cash Funds: Treasury, | 611,204 | 112,301 | b | — | 723,505 | 723,505 | — | — | 2,503 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 51,700,227 | $ | (4,247 | ) | $ | (8,038 | ) | $ | 2,503 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
c | Does not include income earned on investment of securities lending cash collateral which is not direct income of the Fund and is reflected as a component of securities lending income in the statement of operations. |
Schedule 2 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: | ||||||||||||||||
Assets: | ||||||||||||||||
Common stocks | $ | 467,721,531 | $ | — | $ | — | $ | 467,721,531 | ||||||||
Money market funds | 51,700,227 | — | — | 51,700,227 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 519,421,758 | $ | — | $ | — | $ | 519,421,758 | ||||||||
|
|
|
|
|
|
|
| |||||||||
See notes to financial statements.
56 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Assets and Liabilities (Unaudited)
iSHARES® TRUST
October 31, 2017
iShares Morningstar Large-Cap ETF | iShares Morningstar Large-Cap Growth ETF | iShares Morningstar Large-Cap Value ETF | ||||||||||
ASSETS | ||||||||||||
Investments in securities, at cost: | ||||||||||||
Unaffiliated | $ | 786,158,973 | $ | 564,572,849 | $ | 326,694,783 | ||||||
Affiliated (Note 2) | 574,826 | 10,111,264 | 2,568,011 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments in securities | $ | 786,733,799 | $ | 574,684,113 | $ | 329,262,794 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 961,935,758 | $ | 832,409,001 | $ | 374,629,237 | ||||||
Affiliated (Note 2) | 574,826 | 12,515,943 | 4,215,221 | |||||||||
Receivables: | ||||||||||||
Investment securities sold | — | 3,746,900 | — | |||||||||
Dividends and interest | 654,807 | 347,844 | 633,210 | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 963,165,391 | 849,019,688 | 379,477,668 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | — | 3,409,934 | — | |||||||||
Collateral for securities on loan (Note 1) | — | 4,604,799 | — | |||||||||
Investment advisory fees (Note 2) | 160,669 | 173,713 | 82,672 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 160,669 | 8,188,446 | 82,672 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 963,004,722 | $ | 840,831,242 | $ | 379,394,996 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 774,424,885 | $ | 628,050,819 | $ | 354,797,437 | ||||||
Undistributed net investment income | 975,257 | 352,808 | 904,401 | |||||||||
Undistributed net realized gain (accumulated net realized loss) | 11,827,795 | (57,813,216 | ) | (25,888,506 | ) | |||||||
Net unrealized appreciation | 175,776,785 | 270,240,831 | 49,581,664 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 963,004,722 | $ | 840,831,242 | $ | 379,394,996 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingb | 6,250,000 | 5,550,000 | 3,750,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 154.08 | $ | 151.50 | $ | 101.17 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $ —, $4,361,260 and $ —, respectively. See Note 1. |
b | No par value, unlimited number of shares authorized. |
See notes to financial statements.
FINANCIAL STATEMENTS | 57 |
Table of Contents
Statements of Assets and Liabilities (Unaudited) (Continued)
iSHARES® TRUST
October 31, 2017
iShares Morningstar Mid-Cap ETF | iShares Morningstar Mid-Cap Growth ETF | iShares Morningstar Mid-Cap Value ETF | ||||||||||
ASSETS | ||||||||||||
Investments in securities, at cost: |
| |||||||||||
Unaffiliated | $ | 657,940,902 | $ | 179,467,861 | $ | 354,172,234 | ||||||
Affiliated (Note 2) | 22,004,753 | 31,024,414 | 6,108,243 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments in securities | $ | 679,945,655 | $ | 210,492,275 | $ | 360,280,477 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 781,183,160 | $ | 243,655,497 | $ | 401,840,328 | ||||||
Affiliated (Note 2) | 22,006,833 | 31,025,000 | 6,108,564 | |||||||||
Receivables: |
| |||||||||||
Dividends and interest | 340,059 | 57,187 | 360,871 | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 803,530,052 | 274,737,684 | 408,309,763 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: |
| |||||||||||
Collateral for securities on loan (Note 1) | 21,238,874 | 30,760,888 | 5,771,022 | |||||||||
Investment advisory fees (Note 2) | 167,051 | 61,467 | 102,573 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 21,405,925 | 30,822,355 | 5,873,595 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 782,124,127 | $ | 243,915,329 | $ | 402,436,168 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 670,982,902 | $ | 253,722,022 | $ | 362,050,864 | ||||||
Undistributed net investment income | 669,352 | 66,846 | 587,114 | |||||||||
Accumulated net realized loss | (12,772,465 | ) | (74,061,761 | ) | (7,870,225 | ) | ||||||
Net unrealized appreciation | 123,244,338 | 64,188,222 | 47,668,415 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 782,124,127 | $ | 243,915,329 | $ | 402,436,168 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingb | 4,400,000 | 1,250,000 | 2,650,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 177.76 | $ | 195.13 | $ | 151.86 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $20,600,240, $30,061,963 and $5,528,663, respectively. See Note 1. |
b | No par value, unlimited number of shares authorized. |
See notes to financial statements.
58 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Assets and Liabilities (Unaudited) (Continued)
iSHARES® TRUST
October 31, 2017
iShares Morningstar Small-Cap ETF | iShares Morningstar Small-Cap Growth ETF | iShares Morningstar Small-Cap Value ETF | ||||||||||
ASSETS | ||||||||||||
Investments in securities, at cost: | ||||||||||||
Unaffiliated | $ | 213,692,368 | $ | 108,866,012 | $ | 417,514,807 | ||||||
Affiliated (Note 2) | 28,522,598 | 36,216,829 | 51,697,646 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments in securities | $ | 242,214,966 | $ | 145,082,841 | $ | 469,212,453 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 249,788,766 | $ | 139,806,630 | $ | 467,721,531 | ||||||
Affiliated (Note 2) | 28,523,204 | 36,219,384 | 51,700,227 | |||||||||
Cash | — | 1,480 | — | |||||||||
Receivables: | ||||||||||||
Dividends and interest | 86,250 | 24,037 | 235,864 | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 278,398,220 | 176,051,531 | 519,657,622 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Collateral for securities on loan (Note 1) | 28,368,056 | 36,147,540 | 50,977,081 | |||||||||
Investment advisory fees (Note 2) | 53,423 | 35,104 | 120,068 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 28,421,479 | 36,182,644 | 51,097,149 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 249,976,741 | $ | 139,868,887 | $ | 468,560,473 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 224,032,935 | $ | 114,103,105 | $ | 432,896,571 | ||||||
Undistributed (distributions in excess of) net investment income | (195,275 | ) | (14,143 | ) | 310,502 | |||||||
Accumulated net realized loss | (9,957,923 | ) | (5,163,248 | ) | (14,855,905 | ) | ||||||
Net unrealized appreciation | 36,097,004 | 30,943,173 | 50,209,305 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 249,976,741 | $ | 139,868,887 | $ | 468,560,473 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingb | 1,500,000 | 800,000 | 3,200,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 166.65 | $ | 174.84 | $ | 146.43 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $27,771,056, $36,011,136 and $49,641,179, respectively. See Note 1. |
b | No par value, unlimited number of shares authorized. |
See notes to financial statements.
FINANCIAL STATEMENTS | 59 |
Table of Contents
Statements of Operations (Unaudited)
iSHARES® TRUST
Six months ended October 31, 2017
iShares Morningstar Large-Cap ETF | iShares Morningstar Large-Cap Growth ETF | iShares Morningstar Large-Cap Value ETF | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliated | $ | 9,889,573 | $ | 5,382,899 | $ | 5,241,797 | ||||||
Dividends — affiliated (Note 2) | 4,736 | 78,464 | 48,011 | |||||||||
Securities lending income — affiliated — net (Note 2) | 498 | 50,395 | 1,578 | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 9,894,807 | 5,511,758 | 5,291,386 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 890,512 | 987,982 | 471,226 | |||||||||
Proxy fees | 17,807 | 15,851 | 8,206 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 908,319 | 1,003,833 | 479,432 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 8,986,488 | 4,507,925 | 4,811,954 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) |
| |||||||||||
Net realized gain (loss) from: |
| |||||||||||
Investments — unaffiliated | (71,892 | ) | 14,070,246 | 9,551,713 | ||||||||
Investments — affiliated (Note 2) | (148 | ) | 31,585 | (189 | ) | |||||||
In-kind redemptions — unaffiliated | 41,514,568 | 3,440,556 | 7,361,449 | |||||||||
In-kind redemptions — affiliated (Note 2) | — | 29,393 | 179,558 | |||||||||
|
|
|
|
|
| |||||||
Net realized gain | 41,442,528 | 17,571,780 | 17,092,531 | |||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments — unaffiliated | 24,778,053 | 64,668,108 | 6,108,244 | |||||||||
Investments — affiliated (Note 2) | — | 1,233,512 | 342,888 | |||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | 24,778,053 | 65,901,620 | 6,451,132 | |||||||||
|
|
|
|
|
| |||||||
Net realized and unrealized gain | 66,220,581 | 83,473,400 | 23,543,663 | |||||||||
|
|
|
|
|
| |||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 75,207,069 | $ | 87,981,325 | $ | 28,355,617 | ||||||
|
|
|
|
|
|
See notes to financial statements.
60 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Operations (Unaudited) (Continued)
iSHARES® TRUST
Six months ended October 31, 2017
iShares Morningstar Mid-Cap ETF | iShares Morningstar Mid-Cap Growth ETF | iShares Morningstar Mid-Cap Value ETF | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliateda | $ | 6,748,365 | $ | 947,293 | $ | 5,050,632 | ||||||
Dividends — affiliated (Note 2) | 4,207 | 855 | 2,195 | |||||||||
Securities lending income — affiliated — net (Note 2) | 44,025 | 60,513 | 41,816 | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 6,796,597 | 1,008,661 | 5,094,643 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES |
| |||||||||||
Investment advisory fees (Note 2) | 963,660 | 344,153 | 582,066 | |||||||||
Proxy fees | 16,154 | 4,627 | 8,272 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 979,814 | 348,780 | 590,338 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 5,816,783 | 659,881 | �� | 4,504,305 | ||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) |
| |||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | (13,048,109 | ) | 5,233,052 | (7,519,263 | ) | |||||||
Investments — affiliated (Note 2) | (1,304 | ) | (3,724 | ) | (1,820 | ) | ||||||
In-kind redemptions — unaffiliated | 34,600,548 | — | 15,486,601 | |||||||||
|
|
|
|
|
| |||||||
Net realized gain | 21,551,135 | 5,229,328 | 7,965,518 | |||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments — unaffiliated | 21,008,694 | 16,584,713 | 1,906,159 | |||||||||
Investments — affiliated (Note 2) | (1,810 | ) | (3,201 | ) | (232 | ) | ||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | 21,006,884 | 16,581,512 | 1,905,927 | |||||||||
|
|
|
|
|
| |||||||
Net realized and unrealized gain | 42,558,019 | 21,810,840 | 9,871,445 | |||||||||
|
|
|
|
|
| |||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 48,374,802 | $ | 22,470,721 | $ | 14,375,750 | ||||||
|
|
|
|
|
|
a | Net of foreign withholding tax of $ —, $940 and $ —, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 61 |
Table of Contents
Statements of Operations (Unaudited) (Continued)
iSHARES® TRUST
Six months ended October 31, 2017
iShares Morningstar Small-Cap ETF | iShares Morningstar Small-Cap Growth ETF | iShares Morningstar Small-Cap Value ETF | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliateda | $ | 1,548,499 | $ | 370,825 | $ | 4,990,724 | ||||||
Dividends — affiliated (Note 2) | 1,007 | 334 | 2,503 | |||||||||
Securities lending income — affiliated — net (Note 2) | 122,596 | 64,729 | 266,955 | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 1,672,102 | 435,888 | 5,260,182 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES |
| |||||||||||
Investment advisory fees (Note 2) | 304,104 | 192,628 | 685,872 | |||||||||
Proxy fees | 5,223 | 2,517 | 10,357 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 309,327 | 195,145 | 696,229 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 1,362,775 | 240,743 | 4,563,953 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) |
| |||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | (4,993,608 | ) | (2,529,306 | ) | (12,989,331 | ) | ||||||
Investments — affiliated (Note 2) | (1,415 | ) | (1,140 | ) | (4,247 | ) | ||||||
In-kind redemptions — unaffiliated | 12,718,007 | 6,308,692 | 25,170,917 | |||||||||
|
|
|
|
|
| |||||||
Net realized gain | 7,722,984 | 3,778,246 | 12,177,339 | |||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments — unaffiliated | 178,735 | 11,841,715 | (5,320,337 | ) | ||||||||
Investments — affiliated (Note 2) | (3,903 | ) | (5,520 | ) | (8,038 | ) | ||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | 174,832 | 11,836,195 | (5,328,375 | ) | ||||||||
|
|
|
|
|
| |||||||
Net realized and unrealized gain | 7,897,816 | 15,614,441 | 6,848,964 | |||||||||
|
|
|
|
|
| |||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 9,260,591 | $ | 15,855,184 | $ | 11,412,917 | ||||||
|
|
|
|
|
|
a | Net of foreign withholding tax of $ —, $ — and $5,303, respectively. |
See notes to financial statements.
62 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets
iSHARES® TRUST
iShares Morningstar Large-Cap ETF | iShares Morningstar Large-Cap Growth ETF | |||||||||||||||
Six months October 31, 2017 (Unaudited) | Year ended April 30, 2017 | Six months October 31, 2017 | Year ended April 30, 2017 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 8,986,488 | $ | 13,290,659 | $ | 4,507,925 | $ | 6,847,617 | ||||||||
Net realized gain | 41,442,528 | 20,589,442 | 17,571,780 | 83,039,803 | ||||||||||||
Net change in unrealized appreciation/depreciation | 24,778,053 | 95,523,305 | 65,901,620 | 33,323,695 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 75,207,069 | 129,403,406 | 87,981,325 | 123,211,115 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (8,746,955 | ) | (14,027,823 | ) | (4,400,569 | ) | (6,602,273 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (8,746,955 | ) | (14,027,823 | ) | (4,400,569 | ) | (6,602,273 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 214,817,552 | 195,600,016 | 35,653,093 | — | ||||||||||||
Cost of shares redeemed | (132,706,159 | ) | (105,469,241 | ) | (7,428,733 | ) | (178,828,654 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | 82,111,393 | 90,130,775 | 28,224,360 | (178,828,654 | ) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | 148,571,507 | 205,506,358 | 111,805,116 | (62,219,812 | ) | |||||||||||
NET ASSETS | ||||||||||||||||
Beginning of period | 814,433,215 | 608,926,857 | 729,026,126 | 791,245,938 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 963,004,722 | $ | 814,433,215 | $ | 840,831,242 | $ | 729,026,126 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed net investment income included in net assets at end of period | $ | 975,257 | $ | 735,724 | $ | 352,808 | $ | 245,452 | ||||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 1,450,000 | 1,450,000 | 250,000 | — | ||||||||||||
Shares redeemed | (900,000 | ) | (800,000 | ) | (50,000 | ) | (1,450,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | 550,000 | 650,000 | 200,000 | (1,450,000 | ) | |||||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
FINANCIAL STATEMENTS | 63 |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES® TRUST
iShares Morningstar Large-Cap Value ETF | iShares Morningstar Mid-Cap ETF | |||||||||||||||
Six months October 31, 2017 | Year ended April 30, 2017 | Six months October 31, 2017 (Unaudited) | Year ended April 30, 2017 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 4,811,954 | $ | 9,310,684 | $ | 5,816,783 | $ | 8,136,208 | ||||||||
Net realized gain | 17,092,531 | 12,618,005 | 21,551,135 | 18,146,683 | ||||||||||||
Net change in unrealized appreciation/depreciation | 6,451,132 | 23,309,033 | 21,006,884 | 72,413,881 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 28,355,617 | 45,237,722 | 48,374,802 | 98,696,772 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (4,653,440 | ) | (9,262,961 | ) | (5,147,431 | ) | (10,908,517 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (4,653,440 | ) | (9,262,961 | ) | (5,147,431 | ) | (10,908,517 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 14,415,105 | 63,995,622 | 119,231,881 | 194,357,540 | ||||||||||||
Cost of shares redeemed | (38,990,116 | ) | (8,803,920 | ) | (127,942,005 | ) | (74,601,122 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | (24,575,011 | ) | 55,191,702 | (8,710,124 | ) | 119,756,418 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | (872,834 | ) | 91,166,463 | 34,517,247 | 207,544,673 | |||||||||||
NET ASSETS | ||||||||||||||||
Beginning of period | 380,267,830 | 289,101,367 | 747,606,880 | 540,062,207 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 379,394,996 | $ | 380,267,830 | $ | 782,124,127 | $ | 747,606,880 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed net investment income included in net assets at end of period | $ | 904,401 | $ | 745,887 | $ | 669,352 | $ | — | ||||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 150,000 | 700,000 | 700,000 | 1,250,000 | ||||||||||||
Shares redeemed | (400,000 | ) | (100,000 | ) | (750,000 | ) | (500,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | (250,000 | ) | 600,000 | (50,000 | ) | 750,000 | ||||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
64 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES® TRUST
iShares Morningstar Mid-Cap Growth ETF | iShares Morningstar Mid-Cap Value ETF | |||||||||||||||
Six months October 31, 2017 | Year ended April 30, 2017 | Six months October 31, 2017 | Year ended April 30, 2017 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 659,881 | $ | 1,041,595 | $ | 4,504,305 | $ | 5,706,623 | ||||||||
Net realized gain | 5,229,328 | 14,963,559 | 7,965,518 | 15,751,694 | ||||||||||||
Net change in unrealized appreciation/depreciation | 16,581,512 | 14,102,165 | 1,905,927 | 24,847,634 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 22,470,721 | 30,107,319 | 14,375,750 | 46,305,951 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (593,035 | ) | (1,077,603 | ) | (3,917,191 | ) | (5,788,007 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (593,035 | ) | (1,077,603 | ) | (3,917,191 | ) | (5,788,007 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 9,264,790 | 8,674,396 | 59,547,963 | 218,613,528 | ||||||||||||
Cost of shares redeemed | — | (32,286,642 | ) | (52,094,297 | ) | (69,309,929 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | 9,264,790 | (23,612,246 | ) | 7,453,666 | 149,303,599 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE IN NET ASSETS | 31,142,476 | 5,417,470 | 17,912,225 | 189,821,543 | ||||||||||||
NET ASSETS | ||||||||||||||||
Beginning of period | 212,772,853 | 207,355,383 | 384,523,943 | 194,702,400 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 243,915,329 | $ | 212,772,853 | $ | 402,436,168 | $ | 384,523,943 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed net investment income included in net assets at end of period | $ | 66,846 | $ | — | $ | 587,114 | $ | — | ||||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 50,000 | 50,000 | 400,000 | 1,550,000 | ||||||||||||
Shares redeemed | — | (200,000 | ) | (350,000 | ) | (500,000 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | 50,000 | (150,000 | ) | 50,000 | 1,050,000 | |||||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
FINANCIAL STATEMENTS | 65 |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES® TRUST
iShares Morningstar Small-Cap ETF | iShares Morningstar Small-Cap Growth ETF | |||||||||||||||
Six months October 31, 2017 (Unaudited) | Year ended April 30, 2017 | Six months October 31, 2017 (Unaudited) | Year ended April 30, 2017 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 1,362,775 | $ | 2,473,563 | $ | 240,743 | $ | 680,788 | ||||||||
Net realized gain | 7,722,984 | 17,457,369 | 3,778,246 | 4,085,938 | ||||||||||||
Net change in unrealized appreciation/depreciation | 174,832 | 22,636,139 | 11,836,195 | 15,922,063 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 9,260,591 | 42,567,071 | 15,855,184 | 20,688,789 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (1,558,050 | ) | (3,674,180 | ) | (254,886 | ) | (1,467,651 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (1,558,050 | ) | (3,674,180 | ) | (254,886 | ) | (1,467,651 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 48,763,572 | 63,244,557 | 32,082,645 | — | ||||||||||||
Cost of shares redeemed | (48,133,122 | ) | (55,440,700 | ) | (23,939,369 | ) | (14,079,350 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | 630,450 | 7,803,857 | 8,143,276 | (14,079,350 | ) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE IN NET ASSETS | 8,332,991 | 46,696,748 | 23,743,574 | 5,141,788 | ||||||||||||
NET ASSETS | ||||||||||||||||
Beginning of period | 241,643,750 | 194,947,002 | 116,125,313 | 110,983,525 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 249,976,741 | $ | 241,643,750 | $ | 139,868,887 | $ | 116,125,313 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Distributions in excess of net investment income included in net assets at end of period | $ | (195,275 | ) | $ | — | $ | (14,143 | ) | $ | — | ||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 300,000 | 400,000 | 200,000 | — | ||||||||||||
Shares redeemed | (300,000 | ) | (350,000 | ) | (150,000 | ) | (100,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | — | 50,000 | 50,000 | (100,000 | ) | |||||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
66 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES® TRUST
iShares Morningstar Small-Cap Value ETF | ||||||||
Six months October 31, 2017 (Unaudited) | Year ended April 30, 2017 | |||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||
OPERATIONS: | ||||||||
Net investment income | $ | 4,563,953 | $ | 9,651,758 | ||||
Net realized gain | 12,177,339 | 27,960,765 | ||||||
Net change in unrealized appreciation/depreciation | (5,328,375 | ) | 37,241,224 | |||||
|
|
|
| |||||
Net increase in net assets resulting from operations | 11,412,917 | 74,853,747 | ||||||
|
|
|
| |||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||
From net investment income | (4,203,889 | ) | (10,611,019 | ) | ||||
|
|
|
| |||||
Total distributions to shareholders | (4,203,889 | ) | (10,611,019 | ) | ||||
|
|
|
| |||||
CAPITAL SHARE TRANSACTIONS: | ||||||||
Proceeds from shares sold | 92,525,283 | 150,252,156 | ||||||
Cost of shares redeemed | (112,725,147 | ) | (111,943,167 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in net assets from capital share transactions | (20,199,864 | ) | 38,308,989 | |||||
|
|
|
| |||||
INCREASE (DECREASE) IN NET ASSETS | (12,990,836 | ) | 102,551,717 | |||||
NET ASSETS | ||||||||
Beginning of period | 481,551,309 | 378,999,592 | ||||||
|
|
|
| |||||
End of period | $ | 468,560,473 | $ | 481,551,309 | ||||
|
|
|
| |||||
Undistributed (distributions in excess of) net investment income included in net assets at end of period | $ | 310,502 | $ | (49,562 | ) | |||
|
|
|
| |||||
SHARES ISSUED AND REDEEMED | ||||||||
Shares sold | 650,000 | 1,050,000 | ||||||
Shares redeemed | (800,000 | ) | (800,000 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | (150,000 | ) | 250,000 | |||||
|
|
|
|
See notes to financial statements.
FINANCIAL STATEMENTS | 67 |
Table of Contents
iSHARES® TRUST
(For a share outstanding throughout each period)
iShares Morningstar Large-Cap ETF | ||||||||||||||||||||||||
Six months ended Oct. 31, 2017 (Unaudited) | Year ended Apr. 30, 2017 | Year ended Apr. 30, 2016 | Year ended Apr. 30, 2015 | Year ended Apr. 30, 2014 | Year ended Apr. 30, 2013 | |||||||||||||||||||
Net asset value, beginning of period | $ | 142.88 | $ | 120.58 | $ | 122.54 | $ | 110.41 | $ | 94.86 | $ | 79.37 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment incomea | 1.51 | 2.57 | 2.27 | 2.33 | 2.17 | 1.88 | ||||||||||||||||||
Net realized and unrealized gain (loss)b | 11.16 | 22.44 | (1.27 | ) | 12.05 | 15.49 | 15.49 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 12.67 | 25.01 | 1.00 | 14.38 | 17.66 | 17.37 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Less distributions from: |
| |||||||||||||||||||||||
Net investment income | (1.47 | ) | (2.71 | ) | (2.96 | ) | (2.25 | ) | (2.11 | ) | (1.88 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (1.47 | ) | (2.71 | ) | (2.96 | ) | (2.25 | ) | (2.11 | ) | (1.88 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 154.08 | $ | 142.88 | $ | 120.58 | $ | 122.54 | $ | 110.41 | $ | 94.86 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 8.91 | %c | 20.97 | % | 0.87 | % | 13.09 | % | 18.80 | % | 22.23 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 963,005 | $ | 814,433 | $ | 608,927 | $ | 667,832 | $ | 469,247 | $ | 336,736 | ||||||||||||
Ratio of expenses to average net assetsd | 0.20 | % | 0.20 | % | 0.20 | % | 0.20 | % | 0.20 | % | 0.20 | % | ||||||||||||
Ratio of net investment income to average net assetsd | 2.02 | % | 1.96 | % | 1.91 | % | 1.96 | % | 2.13 | % | 2.27 | % | ||||||||||||
Portfolio turnover ratee | 22 | %c | 45 | % | 39 | % | 27 | % | 35 | % | 63 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
68 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES® TRUST
(For a share outstanding throughout each period)
iShares Morningstar Large-Cap Growth ETF | ||||||||||||||||||||||||
Six months ended Oct. 31, 2017 (Unaudited) | Year ended Apr. 30, 2017 | Year ended Apr. 30, 2016 | Year ended Apr. 30, 2015 | Year ended Apr. 30, 2014 | Year ended Apr. 30, 2013 | |||||||||||||||||||
Net asset value, beginning of period | $ | 136.27 | $ | 116.36 | $ | 118.09 | $ | 100.37 | $ | 83.14 | $ | 77.06 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment incomea | 0.82 | 1.12 | 1.13 | 1.11 | 0.93 | 1.06 | ||||||||||||||||||
Net realized and unrealized gain (loss)b | 15.21 | 19.88 | (1.64 | ) | 17.67 | 17.26 | 6.08 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 16.03 | 21.00 | (0.51 | ) | 18.78 | 18.19 | 7.14 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Less distributions from: |
| |||||||||||||||||||||||
Net investment income | (0.80 | ) | (1.09 | ) | (1.22 | ) | (1.06 | ) | (0.96 | ) | (1.06 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (0.80 | ) | (1.09 | ) | (1.22 | ) | (1.06 | ) | (0.96 | ) | (1.06 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 151.50 | $ | 136.27 | $ | 116.36 | $ | 118.09 | $ | 100.37 | $ | 83.14 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 11.81 | %c | 18.15 | % | (0.44 | )% | 18.77 | % | 21.98 | % | 9.36 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 840,831 | $ | 729,026 | $ | 791,246 | $ | 726,248 | $ | 521,926 | $ | 448,978 | ||||||||||||
Ratio of expenses to average net assetsd | 0.25 | % | 0.25 | % | 0.25 | % | 0.25 | % | 0.25 | % | 0.25 | % | ||||||||||||
Ratio of net investment income to average net assetsd | 1.14 | % | 0.91 | % | 0.96 | % | 0.99 | % | 1.00 | % | 1.37 | % | ||||||||||||
Portfolio turnover ratee | 19 | %c | 31 | % | 22 | % | 21 | % | 23 | % | 42 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 69 |
Table of Contents
Financial Highlights (Continued)
iSHARES® TRUST
(For a share outstanding throughout each period)
iShares Morningstar Large-Cap Value ETF | ||||||||||||||||||||||||
Six months ended Oct. 31, 2017 (Unaudited) | Year ended Apr. 30, 2017 | Year ended Apr. 30, 2016 | Year ended Apr. 30, 2015 | Year ended Apr. 30, 2014 | Year ended Apr. 30, 2013 | |||||||||||||||||||
Net asset value, beginning of period | $ | 95.07 | $ | 85.03 | $ | 86.04 | $ | 82.96 | $ | 72.21 | $ | 62.95 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment incomea | 1.25 | 2.53 | 2.56 | 2.21 | 2.05 | 1.84 | ||||||||||||||||||
Net realized and unrealized gain (loss)b | 6.07 | 10.03 | (1.03 | ) | 3.07 | 10.75 | 9.28 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 7.32 | 12.56 | 1.53 | 5.28 | 12.80 | 11.12 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Less distributions from: |
| |||||||||||||||||||||||
Net investment income | (1.22 | ) | (2.52 | ) | (2.54 | ) | (2.20 | ) | (2.05 | ) | (1.86 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (1.22 | ) | (2.52 | ) | (2.54 | ) | (2.20 | ) | (2.05 | ) | (1.86 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 101.17 | $ | 95.07 | $ | 85.03 | $ | 86.04 | $ | 82.96 | $ | 72.21 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 7.76 | %c | 14.95 | % | 1.92 | % | 6.42 | % | 17.98 | % | 18.02 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 379,395 | $ | 380,268 | $ | 289,101 | $ | 305,434 | $ | 298,657 | $ | 259,965 | ||||||||||||
Ratio of expenses to average net assetsd | 0.25 | % | 0.25 | % | 0.25 | % | 0.25 | % | 0.25 | % | 0.25 | % | ||||||||||||
Ratio of net investment income to average net assetsd | 2.55 | % | 2.78 | % | 3.10 | % | 2.60 | % | 2.67 | % | 2.83 | % | ||||||||||||
Portfolio turnover ratee | 12 | %c | 31 | % | 27 | % | 14 | % | 26 | % | 45 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
70 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES® TRUST
(For a share outstanding throughout each period)
iShares Morningstar Mid-Cap ETF | ||||||||||||||||||||||||
Six months ended Oct. 31, 2017 (Unaudited) | Year ended Apr. 30, 2017 | Year ended Apr. 30, 2016 | Year ended Apr. 30, 2015 | Year ended Apr. 30, 2014 | Year ended Apr. 30, 2013 | |||||||||||||||||||
Net asset value, beginning of period | $ | 168.00 | $ | 145.96 | $ | 151.49 | $ | 133.53 | $ | 111.77 | $ | 96.32 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment incomea | 1.30 | 2.01 | 2.30 | 2.01 | 1.55 | 1.46 | ||||||||||||||||||
Net realized and unrealized gain (loss)b | 9.62 | 22.68 | (5.42 | ) | 18.03 | 21.81 | 15.35 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 10.92 | 24.69 | (3.12 | ) | 20.04 | 23.36 | 16.81 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Less distributions from: |
| |||||||||||||||||||||||
Net investment income | (1.16 | ) | (2.65 | ) | (2.41 | ) | (2.08 | ) | (1.60 | ) | (1.36 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (1.16 | ) | (2.65 | ) | (2.41 | ) | (2.08 | ) | (1.60 | ) | (1.36 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 177.76 | $ | 168.00 | $ | 145.96 | $ | 151.49 | $ | 133.53 | $ | 111.77 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 6.53 | %c | 17.06 | % | (2.03 | )% | 15.09 | % | 21.04 | % | 17.65 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 782,124 | $ | 747,607 | $ | 540,062 | $ | 515,075 | $ | 280,415 | $ | 195,605 | ||||||||||||
Ratio of expenses to average net assetsd | 0.25 | % | 0.25 | % | 0.25 | % | 0.25 | % | 0.25 | % | 0.25 | % | ||||||||||||
Ratio of net investment income to average net assetsd | 1.51 | % | 1.28 | % | 1.59 | % | 1.39 | % | 1.26 | % | 1.48 | % | ||||||||||||
Portfolio turnover ratee | 24 | %c | 56 | % | 51 | % | 55 | % | 50 | % | 90 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 71 |
Table of Contents
Financial Highlights (Continued)
iSHARES® TRUST
(For a share outstanding throughout each period)
iShares Morningstar Mid-Cap Growth ETF | ||||||||||||||||||||||||
Six months ended Oct. 31, 2017 (Unaudited) | Year ended Apr. 30, 2017 | Year ended Apr. 30, 2016 | Year ended Apr. 30, 2015 | Year ended Apr. 30, 2014 | Year ended Apr. 30, 2013 | |||||||||||||||||||
Net asset value, beginning of period | $ | 177.31 | $ | 153.60 | $ | 165.11 | $ | 142.18 | $ | 119.51 | $ | 106.71 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment incomea | 0.54 | 0.84 | 0.60 | 0.60 | 0.55 | 0.72 | ||||||||||||||||||
Net realized and unrealized gain (loss)b | 17.76 | 23.76 | (11.46 | ) | 23.19 | 22.75 | 12.93 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 18.30 | 24.60 | (10.86 | ) | 23.79 | 23.30 | 13.65 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.48 | ) | (0.89 | ) | (0.65 | ) | (0.86 | ) | (0.63 | ) | (0.85 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (0.48 | ) | (0.89 | ) | (0.65 | ) | (0.86 | ) | (0.63 | ) | (0.85 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 195.13 | $ | 177.31 | $ | 153.60 | $ | 165.11 | $ | 142.18 | $ | 119.51 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 10.33 | %c | 16.06 | % | (6.58 | )% | 16.78 | % | 19.52 | % | 12.89 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 243,915 | $ | 212,773 | $ | 207,355 | $ | 231,160 | $ | 199,052 | $ | 167,313 | ||||||||||||
Ratio of expenses to average net assetsd | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | ||||||||||||
Ratio of net investment income to average net assetsd | 0.58 | % | 0.52 | % | 0.39 | % | 0.39 | % | 0.41 | % | 0.67 | % | ||||||||||||
Portfolio turnover ratee | �� | 22 | %c | 47 | % | 44 | % | 50 | % | 41 | % | 73 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
72 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES® TRUST
(For a share outstanding throughout each period)
iShares Morningstar Mid-Cap Value ETF | ||||||||||||||||||||||||
Six months ended Oct. 31, 2017 (Unaudited) | Year ended Apr. 30, 2017 | Year ended Apr. 30, 2016 | Year ended Apr. 30, 2015 | Year ended Apr. 30, 2014 | Year ended Apr. 30, 2013 | |||||||||||||||||||
Net asset value, beginning of period | $ | 147.89 | $ | 125.61 | $ | 125.84 | $ | 118.75 | $ | 96.24 | $ | 79.43 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment incomea | 1.74 | 2.87 | 2.86 | 2.38 | 2.28 | 2.02 | ||||||||||||||||||
Net realized and unrealized gain (loss)b | 3.74 | 22.21 | (0.12 | ) | 7.22 | 22.46 | 16.75 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 5.48 | 25.08 | 2.74 | 9.60 | 24.74 | 18.77 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (1.51 | ) | (2.80 | ) | (2.97 | ) | (2.51 | ) | (2.23 | ) | (1.96 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (1.51 | ) | (2.80 | ) | (2.97 | ) | (2.51 | ) | (2.23 | ) | (1.96 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 151.86 | $ | 147.89 | $ | 125.61 | $ | 125.84 | $ | 118.75 | $ | 96.24 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 3.72 | %c | 20.15 | % | 2.29 | % | 8.13 | % | 25.94 | % | 24.06 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 402,436 | $ | 384,524 | $ | 194,702 | $ | 226,507 | $ | 189,994 | $ | 120,302 | ||||||||||||
Ratio of expenses to average net assetsd | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | ||||||||||||
Ratio of net investment income to average net assetsd | 2.32 | % | 2.06 | % | 2.37 | % | 1.93 | % | 2.11 | % | 2.46 | % | ||||||||||||
Portfolio turnover ratee | 19 | %c | 38 | % | 38 | % | 33 | % | 39 | % | 66 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 73 |
Table of Contents
Financial Highlights (Continued)
iSHARES® TRUST
(For a share outstanding throughout each period)
iShares Morningstar Small-Cap ETF | ||||||||||||||||||||||||
Six months ended Oct. 31, 2017 (Unaudited) | Year ended Apr. 30, 2017 | Year ended Apr. 30, 2016 | Year ended Apr. 30, 2015 | Year ended Apr. 30, 2014 | Year ended Apr. 30, 2013 | |||||||||||||||||||
Net asset value, beginning of period | $ | 161.10 | $ | 134.45 | $ | 140.33 | $ | 130.00 | $ | 107.69 | $ | 93.85 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment incomea | 0.91 | 1.67 | 2.05 | 1.61 | 1.21 | 1.55 | ||||||||||||||||||
Net realized and unrealized gain (loss)b | 5.70 | 27.48 | (5.99 | ) | 10.40 | 22.28 | 14.04 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 6.61 | 29.15 | (3.94 | ) | 12.01 | 23.49 | 15.59 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (1.06 | ) | (2.50 | ) | (1.94 | ) | (1.68 | ) | (1.18 | ) | (1.75 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (1.06 | ) | (2.50 | ) | (1.94 | ) | (1.68 | ) | (1.18 | ) | (1.75 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 166.65 | $ | 161.10 | $ | 134.45 | $ | 140.33 | $ | 130.00 | $ | 107.69 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 4.12 | %c | 21.86 | % | (2.78 | )% | 9.27 | % | 21.89 | % | 16.88 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 249,977 | $ | 241,644 | $ | 194,947 | $ | 224,533 | $ | 214,500 | $ | 161,536 | ||||||||||||
Ratio of expenses to average net assetsd | 0.25 | % | 0.25 | % | 0.25 | % | 0.25 | % | 0.25 | % | 0.25 | % | ||||||||||||
Ratio of net investment income to average net assetsd | 1.12 | % | 1.13 | % | 1.53 | % | 1.19 | % | 0.99 | % | 1.63 | % | ||||||||||||
Portfolio turnover ratee | 31 | %c | 66 | % | 65 | % | 61 | % | 68 | % | 98 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
74 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES® TRUST
(For a share outstanding throughout each period)
iShares Morningstar Small-Cap Growth ETF | ||||||||||||||||||||||||
Six months ended Oct. 31, 2017 (Unaudited) | Year ended Apr. 30, 2017 | Year ended Apr. 30, 2016 | Year ended Apr. 30, 2015 | Year ended Apr. 30, 2014 | Year ended Apr. 30, 2013 | |||||||||||||||||||
Net asset value, beginning of period | $ | 154.83 | $ | 130.57 | $ | 139.32 | $ | 125.88 | $ | 103.68 | $ | 92.49 | ||||||||||||
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Income from investment operations: | ||||||||||||||||||||||||
Net investment incomea | 0.31 | 0.86 | 0.83 | 0.77 | 0.67 | 0.87 | ||||||||||||||||||
Net realized and unrealized gain (loss)b | 20.03 | 25.25 | (8.79 | ) | 13.49 | 22.29 | 11.56 | |||||||||||||||||
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Total from investment operations | 20.34 | 26.11 | (7.96 | ) | 14.26 | 22.96 | 12.43 | |||||||||||||||||
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Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.33 | ) | (1.85 | ) | (0.79 | ) | (0.82 | ) | (0.76 | ) | (1.24 | ) | ||||||||||||
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Total distributions | (0.33 | ) | (1.85 | ) | (0.79 | ) | (0.82 | ) | (0.76 | ) | (1.24 | ) | ||||||||||||
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Net asset value, end of period | $ | 174.84 | $ | 154.83 | $ | 130.57 | $ | 139.32 | $ | 125.88 | $ | 103.68 | ||||||||||||
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Total return | 13.15 | %c | 20.10 | % | (5.73 | )% | 11.35 | % | 22.16 | % | 13.59 | % | ||||||||||||
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Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 139,869 | $ | 116,125 | $ | 110,984 | $ | 118,423 | $ | 132,177 | $ | 93,315 | ||||||||||||
Ratio of expenses to average net assetsd | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | ||||||||||||
Ratio of net investment income to average net assetsd | 0.37 | % | 0.60 | % | 0.62 | % | 0.58 | % | 0.55 | % | 0.93 | % | ||||||||||||
Portfolio turnover ratee | 27 | %c | 63 | % | 59 | % | 61 | % | 62 | % | 81 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 75 |
Table of Contents
Financial Highlights (Continued)
iSHARES® TRUST
(For a share outstanding throughout each period)
iShares Morningstar Small-Cap Value ETF | ||||||||||||||||||||||||
Six months ended Oct. 31, 2017 (Unaudited) | Year ended Apr. 30, 2017 | Year ended Apr. 30, 2016 | Year ended Apr. 30, 2015 | Year ended Apr. 30, 2014 | Year ended Apr. 30, 2013 | |||||||||||||||||||
Net asset value, beginning of period | $ | 143.75 | $ | 122.26 | $ | 128.47 | $ | 122.17 | $ | 103.19 | $ | 86.62 | ||||||||||||
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Income from investment operations: | ||||||||||||||||||||||||
Net investment incomea | 1.43 | 3.08 | 3.04 | 3.11 | 2.10 | 2.44 | ||||||||||||||||||
Net realized and unrealized gain (loss)b | 2.58 | 21.83 | (6.28 | ) | 6.40 | 19.15 | 16.53 | |||||||||||||||||
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Total from investment operations | 4.01 | 24.91 | (3.24 | ) | 9.51 | 21.25 | 18.97 | |||||||||||||||||
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Less distributions from: | ||||||||||||||||||||||||
Net investment income | (1.33 | ) | (3.42 | ) | (2.97 | ) | (3.21 | ) | (2.27 | ) | (2.40 | ) | ||||||||||||
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Total distributions | (1.33 | ) | (3.42 | ) | (2.97 | ) | (3.21 | ) | (2.27 | ) | (2.40 | ) | ||||||||||||
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Net asset value, end of period | $ | 146.43 | $ | 143.75 | $ | 122.26 | $ | 128.47 | $ | 122.17 | $ | 103.19 | ||||||||||||
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Total return | 2.82 | %c | 20.58 | % | (2.42 | )% | 7.83 | % | 20.78 | % | 22.32 | % | ||||||||||||
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Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 468,560 | $ | 481,551 | $ | 379,000 | $ | 430,379 | $ | 366,517 | $ | 278,624 | ||||||||||||
Ratio of expenses to average net assetsd | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | ||||||||||||
Ratio of net investment income to average net assetsd | 2.00 | % | 2.29 | % | 2.56 | % | 2.47 | % | 1.85 | % | 2.67 | % | ||||||||||||
Portfolio turnover ratee | 23 | %c | 48 | % | 51 | % | 40 | % | 52 | % | 69 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
76 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Unaudited)
iSHARES® TRUST
iShares Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust was established as a Delaware statutory trust pursuant to an Agreement and Declaration of Trust dated December 16, 1999.
These financial statements relate only to the following funds (each, a “Fund,” and collectively, the “Funds”):
iShares ETF | Diversification Classification | |
Morningstar Large-Cap | Diversified | |
Morningstar Large-Cap Growth | Diversified | |
Morningstar Large-Cap Value | Diversified | |
Morningstar Mid-Cap | Diversified | |
Morningstar Mid-Cap Growth | Diversified |
iShares ETF | Diversification Classification | |
Morningstar Mid-Cap Value | Diversified | |
Morningstar Small-Cap | Diversified | |
Morningstar Small-Cap Growth | Diversified | |
Morningstar Small-Cap Value | Diversified |
The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index. The investment adviser uses a “passive” or index approach to try to achieve each Fund’s investment objective.
Pursuant to the Trust’s organizational documents, the Funds’ officers and trustees are indemnified against certain liabilities that may arise out of the performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred.
1. | SIGNIFICANT ACCOUNTING POLICIES |
The following significant accounting policies are consistently followed by each Fund in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies.
SECURITY VALUATION
Each Fund’s investments are valued at fair value each day that the Fund’s listing exchange is open and, for financial reporting purposes, as of the report date should the reporting period end on a day that the Fund’s listing exchange is not open. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) provides oversight of the valuation of investments for the Funds. The investments of each Fund are valued pursuant to policies and procedures developed by the Global Valuation Committee and approved by the Board of Trustees of the Trust (the “Board”).
• | Equity investments traded on a recognized securities exchange are valued at that day’s last reported trade price or the official closing price, as applicable, on the exchange where the stock is primarily traded. Equity investments traded on a recognized exchange for which there were no sales on that day are valued at the last traded price. |
• | Open-end U.S. mutual funds (including money market funds) are valued at that day’s published net asset value (“NAV”). |
NOTESTO FINANCIAL STATEMENTS | 77 |
Table of Contents
Notes to Financial Statements (Unaudited) (Continued)
iSHARES® TRUST
In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the fair value of such investment or if a price is not available, the investment will be valued by the Global Valuation Committee, in accordance with policies approved by the Board. The fair valuation approaches that may be utilized by the Global Valuation Committee to determine fair value include market approach, income approach and the cost approach. The valuation techniques used under these approaches take into consideration inputs that include but are not limited to (i) attributes specific to the investment; (ii) the principal market for the investment; (iii) the customary participants in the principal market for the investment; (iv) data assumptions by market participants for the investment, if reasonably available; (v) quoted prices for similar investments in active markets; and (vi) other inputs, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and/or default rates. Valuations based on such inputs are reported to the Board on a quarterly basis.
The Global Valuation Committee employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the Trust’s pricing vendors, a regular review of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices, reviews of large movements in market values, and reviews of market related activity.
Fair value pricing could result in a difference between the prices used to calculate a Fund’s NAV and the prices used by the Fund’s underlying index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s underlying index.
Various inputs are used in determining the fair value of financial instruments. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs to valuation techniques are categorized into a fair value hierarchy consisting of three broad levels for financial reporting purposes as follows:
• | Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities; |
• | Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability (such as exchange rates, financing terms, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs; and |
• | Level 3 — Unobservable inputs for the asset or liability based on the best information available in the circumstances, to the extent observable inputs are not available, including the Global Valuation Committee’s assumptions used in determining the fair value of investments. |
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgement exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The fair value hierarchy for each Fund’s investments is included in its schedule of investments.
Changes in valuation techniques may result in transfers in or out of an assigned level within the fair value hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of values determined for financial instruments are based on the pricing transparency of the financial instruments and are not necessarily an indication of the risks associated with investing in those securities.
78 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Unaudited) (Continued)
iSHARES® TRUST
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are accounted for on trade date. Realized gains and losses on investment transactions are determined using the specific identification method. Dividend income and capital gain distributions, if any, are recognized on the ex-dividend date, net of any foreign taxes withheld at source. Any taxes withheld that are reclaimable from foreign tax authorities as of October 31, 2017 are reflected in tax reclaims receivable. Upon notification from issuers, some of the dividend income received from a real estate investment trust may be re-designated as a reduction of cost of the related investment and/or realized gain. Non-cash dividends, if any, are recognized on the ex-dividend date and recorded as non-cash dividend income at fair value. Distributions received by the Funds may include a return of capital that is estimated by management. Such amounts are recorded as a reduction of the cost of investments or reclassified to capital gains. Interest income is accrued daily.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends and distributions paid by each Fund are recorded on the ex-dividend dates. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds.
LOANS OF PORTFOLIO SECURITIES
Each Fund may lend its investment securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by an approved bank, or securities issued or guaranteed by the U.S. government. The initial collateral received by each Fund is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Funds. Any additional required collateral is delivered to the Funds and any excess collateral is returned by the Funds on the next business day. During the term of the loan, each Fund is entitled to all distributions made on or in respect of the loaned securities but does not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.
Cash received as collateral for securities on loan may be reinvested in certain short-term instruments either directly on behalf of a fund or through one or more joint accounts or money market funds, including those managed by BlackRock Fund Advisors (“BFA”), the Funds’ investment adviser, or its affiliates. As of October 31, 2017, any securities on loan were collateralized by cash and/or U.S. government obligations. Cash collateral received was invested in money market funds managed by BFA and is disclosed in the schedules of investments. Any non-cash collateral received cannot be sold, re-invested or pledged by the Fund, except in the event of borrower default. The securities on loan for each Fund are also disclosed in its schedule of investments. The total value of any securities on loan as of October 31, 2017 and the total value of the related cash collateral are disclosed in the statements of assets and liabilities. Income earned by the Funds from securities lending is disclosed in the statements of operations.
The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Funds benefit from a borrower default indemnity provided by BlackRock, Inc. (“BlackRock”). BlackRock’s indemnity allows for full replacement of securities loaned if the collateral received does not cover the value of the securities loaned in the event of borrower default. Each Fund could incur a loss if the value of an investment purchased with cash collateral falls below the value of the loaned securities or if the value of an investment purchased with cash collateral falls below the value of the original cash collateral received.
NOTESTO FINANCIAL STATEMENTS | 79 |
Table of Contents
Notes to Financial Statements (Unaudited) (Continued)
iSHARES® TRUST
Securities lending transactions are entered into by the Funds under Master Securities Lending Agreements (“MSLA”) which provide the right, in the event of default (including bankruptcy or insolvency) for the non-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, a Fund, as lender, would offset the market value of the collateral received against the market value of the securities loaned. The value of the collateral is typically greater than that of the market value of the securities loaned, leaving the lender with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, the borrower can resell or re-pledge the loaned securities, and a Fund can reinvest cash collateral, or, upon an event of default, resell or re-pledge the collateral.
The following table is a summary of securities lending agreements which are subject to offset under an MSLA as of October 31, 2017:
iShares ETF and Counterparty | Market Value of Securities on Loan | Cash Collateral Received a | Net Amount b | |||||||||
Morningstar Large-Cap Growth | ||||||||||||
Citigroup Global Markets Inc. | $ | 55,239 | $ | 55,239 | $ | — | ||||||
Jefferies LLC | 9,819 | 9,819 | — | |||||||||
JPMorgan Securities LLC | 1,012,085 | 1,012,085 | — | |||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 340,978 | 340,978 | — | |||||||||
Scotia Capital (USA) Inc. | 58,061 | 58,061 | — | |||||||||
UBS Securities LLC | 2,690,632 | 2,690,632 | — | |||||||||
Wells Fargo Securities LLC | 194,446 | 194,446 | — | |||||||||
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$ | 4,361,260 | $ | 4,361,260 | $ | — | |||||||
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Morningstar Mid-Cap | ||||||||||||
BNP Paribas Prime Brokerage Inc. | $ | 2,286,568 | $ | 2,286,568 | $ | — | ||||||
Goldman Sachs & Co. | 1,185,931 | 1,185,931 | — | |||||||||
HSBC Bank PLC | 55,845 | 51,751 | (4,094 | ) | ||||||||
JPMorgan Securities LLC | 4,827,494 | 4,827,494 | — | |||||||||
Merrill Lynch, Pierce, Fenner & Smith | 5,829,814 | 5,829,814 | — | |||||||||
Mizuho Securities USA Inc. | 647,867 | 647,867 | — | |||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 5,334,762 | 5,334,762 | — | |||||||||
Nomura Securities International Inc. | 6,630 | 6,630 | — | |||||||||
State Street Bank & Trust Company | 16,634 | 16,634 | — | |||||||||
UBS Securities LLC | 22,345 | 22,345 | — | |||||||||
Wells Fargo Bank, National Association | 386,350 | 386,350 | — | |||||||||
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$ | 20,600,240 | $ | 20,596,146 | $ | (4,094 | ) | ||||||
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80 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Unaudited) (Continued)
iSHARES® TRUST
iShares ETF and Counterparty | Market Value of Securities on Loan | Cash Collateral Received a | Net Amount b | |||||||||
Morningstar Mid-Cap Growth | ||||||||||||
BNP Paribas New York Branch | $ | 64,838 | $ | 64,838 | $ | — | ||||||
BNP Paribas Prime Brokerage Inc. | 2,586 | 2,586 | — | |||||||||
BNP Paribas Prime Brokerage International Ltd. | 1,556,204 | 1,556,204 | — | |||||||||
Citigroup Global Markets Inc. | 2,557,535 | 2,557,535 | — | |||||||||
Credit Suisse Securities (USA) LLC | 511,819 | 511,819 | — | |||||||||
Deutsche Bank Securities Inc. | 1,196,607 | 1,196,607 | — | |||||||||
Goldman Sachs & Co. | 4,601,714 | 4,601,714 | — | |||||||||
HSBC Bank PLC | 4,619,895 | 4,619,895 | — | |||||||||
Jefferies LLC | 52,464 | 52,464 | — | |||||||||
JPMorgan Securities LLC | 4,865,574 | 4,865,574 | — | |||||||||
Merrill Lynch, Pierce, Fenner & Smith | 1,312,102 | 1,299,021 | (13,081 | ) | ||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 3,899,271 | 3,899,271 | — | |||||||||
National Financial Services LLC | 1,032,589 | 1,032,589 | — | |||||||||
Nomura Securities International Inc. | 32,260 | 32,260 | — | |||||||||
Scotia Capital (USA) Inc. | 372,189 | 372,189 | — | |||||||||
State Street Bank & Trust Company | 2,715,504 | 2,715,504 | — | |||||||||
UBS AG | 4,125 | 4,125 | — | |||||||||
UBS Securities LLC | 664,687 | 664,687 | — | |||||||||
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$ | 30,061,963 | $ | 30,048,882 | $ | (13,081 | ) | ||||||
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Morningstar Mid-Cap Value | ||||||||||||
Barclays Capital Inc. | $ | 431,801 | $ | 431,801 | $ | — | ||||||
BNP Paribas Prime Brokerage Inc. | 129,632 | 129,632 | — | |||||||||
Credit Suisse Securities (USA) LLC | 171,712 | 171,712 | — | |||||||||
Deutsche Bank Securities Inc. | 674,401 | 674,401 | — | |||||||||
Goldman Sachs & Co. | 1,489,958 | 1,489,958 | — | |||||||||
HSBC Bank PLC | 8,469 | 8,469 | — | |||||||||
JPMorgan Securities LLC | 86,365 | 86,365 | — | |||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 188,629 | 188,629 | — | |||||||||
Scotia Capital (USA) Inc. | 571,724 | 571,724 | — | |||||||||
UBS AG | 1,068,240 | 1,068,240 | — | |||||||||
Wells Fargo Securities LLC | 707,732 | 707,732 | — | |||||||||
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$ | 5,528,663 | $ | 5,528,663 | $ | — | |||||||
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NOTESTO FINANCIAL STATEMENTS | 81 |
Table of Contents
Notes to Financial Statements (Unaudited) (Continued)
iSHARES® TRUST
iShares ETF and Counterparty | Market Value of Securities on Loan | Cash Collateral Received a | Net Amount b | |||||||||
Morningstar Small-Cap | ||||||||||||
Barclays Capital Inc. | $ | 481,350 | $ | 480,374 | $ | (976 | ) | |||||
BNP Paribas New York Branch | 1,144,908 | 1,144,908 | — | |||||||||
Citigroup Global Markets Inc. | 4,143,115 | 4,143,115 | — | |||||||||
Credit Suisse Securities (USA) LLC | 1,625,422 | 1,625,422 | — | |||||||||
Deutsche Bank Securities Inc. | 718,754 | 718,754 | — | |||||||||
Goldman Sachs & Co. | 5,800,100 | 5,800,100 | — | |||||||||
HSBC Bank PLC | 1,000,282 | 1,000,282 | — | |||||||||
Jefferies LLC | 130,281 | 130,281 | — | |||||||||
JPMorgan Securities LLC | 2,395,278 | 2,395,278 | — | |||||||||
Merrill Lynch, Pierce, Fenner & Smith | 2,793,671 | 2,793,671 | — | |||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 3,376,137 | 3,376,137 | — | |||||||||
National Financial Services LLC | 203,917 | 203,917 | — | |||||||||
Nomura Securities International Inc. | 394,153 | 394,153 | — | |||||||||
State Street Bank & Trust Company | 1,302,720 | 1,302,720 | — | |||||||||
UBS AG | 16,950 | 16,950 | — | |||||||||
UBS Securities LLC | 1,976,504 | 1,976,504 | — | |||||||||
Wells Fargo Securities LLC | 267,514 | 267,514 | — | |||||||||
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$ | 27,771,056 | $ | 27,770,080 | $ | (976 | ) | ||||||
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Morningstar Small-Cap Growth | ||||||||||||
Barclays Capital Inc. | $ | 141,534 | $ | 141,534 | $ | — | ||||||
BNP Paribas New York Branch | 1,824,627 | 1,824,627 | — | |||||||||
BNP Paribas Prime Brokerage Inc. | 357,997 | 357,997 | — | |||||||||
BNP Paribas Prime Brokerage International Ltd. | 67,829 | 67,829 | — | |||||||||
Citigroup Global Markets Inc. | 2,833,943 | 2,833,943 | — | |||||||||
Credit Suisse Securities (USA) LLC | 3,187,266 | 3,187,266 | — | |||||||||
Deutsche Bank Securities Inc. | 2,822,614 | 2,768,749 | (53,865 | ) | ||||||||
Goldman Sachs & Co. | 5,602,834 | 5,485,884 | (116,950 | ) | ||||||||
HSBC Bank PLC | 1,764,007 | 1,743,867 | (20,140 | ) | ||||||||
JPMorgan Securities LLC | 5,945,179 | 5,945,179 | — | |||||||||
Merrill Lynch, Pierce, Fenner & Smith | 3,788,843 | 3,788,843 | — | |||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 3,532,885 | 3,532,885 | — | |||||||||
National Financial Services LLC | 180,194 | 180,194 | — | |||||||||
Nomura Securities International Inc. | 475,105 | 475,105 | — | |||||||||
Scotia Capital (USA) Inc. | 380,920 | 380,920 | — | |||||||||
State Street Bank & Trust Company | 1,587,671 | 1,587,671 | — | |||||||||
Timber Hill LLC | 173,324 | 173,324 | — | |||||||||
UBS AG | 510,501 | 510,501 | — | |||||||||
UBS Securities LLC | 496,917 | 496,917 | — | |||||||||
Wells Fargo Securities LLC | 336,946 | 336,946 | — | |||||||||
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$ | 36,011,136 | $ | 35,820,181 | $ | (190,955 | ) | ||||||
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iShares ETF and Counterparty | Market Value of Securities on Loan | Cash Collateral Received a | Net Amount b | |||||||||
Morningstar Small-Cap Value | ||||||||||||
Barclays Capital Inc. | $ | 24,812 | $ | 24,812 | $ | — | ||||||
BNP Paribas New York Branch | 2,431,533 | 2,431,533 | — | |||||||||
BNP Paribas Prime Brokerage Inc. | 104,125 | 104,125 | — | |||||||||
Citigroup Global Markets Inc. | 3,714,452 | 3,678,273 | (36,179 | ) | ||||||||
Credit Suisse Securities (USA) LLC | 3,746,848 | 3,746,848 | — | |||||||||
Deutsche Bank Securities Inc. | 2,817,777 | 2,817,777 | — | |||||||||
Goldman Sachs & Co. | 5,873,308 | 5,873,308 | — | |||||||||
HSBC Bank PLC | 2,082,082 | 2,082,082 | — | |||||||||
Jefferies LLC | 67,069 | 67,069 | — | |||||||||
JPMorgan Securities LLC | 7,781,487 | 7,781,487 | — | |||||||||
Merrill Lynch, Pierce, Fenner & Smith | 635,938 | 635,938 | — | |||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 9,358,017 | 9,358,017 | — | |||||||||
National Financial Services LLC | 1,869,768 | 1,869,768 | — | |||||||||
Nomura Securities International Inc. | 329,685 | 329,685 | — | |||||||||
State Street Bank & Trust Company | 2,034,581 | 2,034,581 | — | |||||||||
UBS AG | 2,278,864 | 2,278,864 | — | |||||||||
UBS Securities LLC | 334,112 | 334,112 | — | |||||||||
Wells Fargo Securities LLC | 4,156,721 | 4,156,721 | — | |||||||||
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$ | 49,641,179 | $ | 49,605,000 | $ | (36,179 | ) | ||||||
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a | Collateral received in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by each Fund is disclosed in the Fund’s statement of assets and liabilities. |
b | Additional collateral is delivered to the Funds on the next business day in accordance with the MSLA. The net amount would be subject to the borrower default indemnity in the event of default by a counterparty. |
2. | INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES |
Pursuant to an Investment Advisory Agreement with the Trust, BFA manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock. Under the Investment Advisory Agreement, BFA is responsible for substantially all expenses of the Funds, except (i) interest and taxes; (ii) brokerage commissions and other expenses connected with the execution of portfolio transactions; (iii) distribution fees; (iv) the advisory fee payable to BFA; and (v) litigation expenses and any extraordinary expenses (in each case as determined by a majority of the independent trustees).
For its investment advisory services to each Fund, BFA is entitled to an annual investment advisory fee, accrued daily and paid monthly by the Funds, based on the average daily net assets of each Fund as follows:
iShares ETF | Investment Advisory Fee | |||
Morningstar Large-Cap | 0.20 | % | ||
Morningstar Large-Cap Growth | 0.25 | |||
Morningstar Large-Cap Value | 0.25 | |||
Morningstar Mid-Cap | 0.25 | |||
Morningstar Mid-Cap Growth | 0.30 |
iShares ETF | Investment Advisory Fee | |||
Morningstar Mid-Cap Value | 0.30 | % | ||
Morningstar Small-Cap | 0.25 | |||
Morningstar Small-Cap Growth | 0.30 | |||
Morningstar Small-Cap Value | 0.30 |
NOTESTO FINANCIAL STATEMENTS | 83 |
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iSHARES® TRUST
The U.S. Securities and Exchange Commission has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (“BTC”), an affiliate of BFA, to serve as securities lending agent for the Funds, subject to applicable conditions. As securities lending agent, BTC bears all operational costs directly related to securities lending. Each Fund is responsible for fees in connection with the investment of cash collateral received for securities on loan in a money market fund managed by BFA, however, BTC has agreed to reduce the amount of securities lending income it receives in order to effectively limit the collateral investment fees each Fund bears to an annual rate of 0.04% (the “collateral investment fees”). Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment fees. The Funds retain a portion of securities lending income and remit the remaining portion to BTC as compensation for its services as securities lending agent.
Pursuant to a securities lending agreement, each Fund retains 71.5% of securities lending income and the amount retained can never be less than 65% of the total of securities lending income plus the collateral investment fees. In addition, commencing the business day following the date that the aggregate securities lending income plus the collateral investment fees generated across all 1940 Act iShares exchange-traded funds (the “iShares ETF Complex”) in a given calendar year exceeds the aggregate securities lending income generated across the iShares ETF Complex in the calendar year 2013, each Fund, pursuant to a securities lending agreement, will retain for the remainder of that calendar year 75% of securities lending income and the amount retained can never be less than 65% of the total of securities lending income plus the collateral investment fees.
For the six months ended October 31, 2017, the total of securities lending agent services and collateral investment fees paid were as follows:
iShares ETF | Fees Paid to BTC | |||
Morningstar Large-Cap | $ | 266 | ||
Morningstar Large-Cap Growth | 21,609 | |||
Morningstar Large-Cap Value | 820 | |||
Morningstar Mid-Cap | 21,870 | |||
Morningstar Mid-Cap Growth | 28,685 |
iShares ETF | Fees Paid to BTC | |||
Morningstar Mid-Cap Value | $ | 17,730 | ||
Morningstar Small-Cap | 52,285 | |||
Morningstar Small-Cap Growth | 30,527 | |||
Morningstar Small-Cap Value | 109,660 |
BlackRock Investments, LLC, an affiliate of BFA, is the distributor for each Fund. Pursuant to the distribution agreement, BFA is responsible for any fees or expenses for distribution services provided to the Funds.
Cross trading is the buying or selling of portfolio securities between funds to which BFA (or an affiliate) serves as investment adviser. At its regularly scheduled quarterly meetings, the Board reviews such transactions as of the most recent calendar quarter for compliance with the requirements and restrictions set forth by Rule 17a-7.
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iSHARES® TRUST
For the six months ended October 31, 2017, transactions executed by the Funds pursuant to Rule 17a-7 under the 1940 Act were as follows:
iShares ETF | Purchases | Sales | ||||||
Morningstar Large-Cap | $ | 135,630,521 | $ | 95,558,568 | ||||
Morningstar Large-Cap Growth | 56,067,288 | 78,554,708 | ||||||
Morningstar Large-Cap Value | 25,032,425 | 35,126,661 | ||||||
Morningstar Mid-Cap | 64,105,894 | 80,908,927 | ||||||
Morningstar Mid-Cap Growth | 23,423,889 | 31,514,396 | ||||||
Morningstar Mid-Cap Value | 46,580,418 | 37,685,767 | ||||||
Morningstar Small-Cap | 27,258,832 | 34,786,865 | ||||||
Morningstar Small-Cap Growth | 9,552,518 | 10,953,077 | ||||||
Morningstar Small-Cap Value | 28,302,473 | 38,479,533 |
Each Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is included in “Dividends – affiliated” in the statements of operations.
The PNC Financial Services Group, Inc. is the largest stockholder of BlackRock and is considered to be an affiliate of the Funds for 1940 Act purposes.
Certain trustees and officers of the Trust are also officers of BTC and/or BFA.
3. | INVESTMENT PORTFOLIO TRANSACTIONS |
Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the six months ended October 31, 2017 were as follows:
iShares ETF | Purchases | Sales | ||||||
Morningstar Large-Cap | $ | 196,793,147 | $ | 196,844,775 | ||||
Morningstar Large-Cap Growth | 152,207,637 | 149,507,680 | ||||||
Morningstar Large-Cap Value | 46,216,183 | 46,688,832 | ||||||
Morningstar Mid-Cap | 184,337,757 | 181,547,396 | ||||||
Morningstar Mid-Cap Growth | 51,376,818 | 51,072,108 | ||||||
Morningstar Mid-Cap Value | 75,699,833 | 74,666,613 | ||||||
Morningstar Small-Cap | 73,752,490 | 73,744,397 | ||||||
Morningstar Small-Cap Growth | 33,820,877 | 34,139,592 | ||||||
Morningstar Small-Cap Value | 107,990,077 | 105,685,092 |
NOTESTO FINANCIAL STATEMENTS | 85 |
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Notes to Financial Statements (Unaudited) (Continued)
iSHARES® TRUST
In-kind transactions (see Note 4) for the six months ended October 31, 2017 were as follows:
iShares ETF | In-kind Purchases | In-kind Sales | ||||||
Morningstar Large-Cap | $ | 214,369,452 | $ | 132,171,946 | ||||
Morningstar Large-Cap Growth | 35,601,016 | 7,421,050 | ||||||
Morningstar Large-Cap Value | 14,375,738 | 38,612,850 | ||||||
Morningstar Mid-Cap | 116,897,273 | 127,746,526 | ||||||
Morningstar Mid-Cap Growth | 9,229,728 | — | ||||||
Morningstar Mid-Cap Value | 58,741,576 | 51,479,254 | ||||||
Morningstar Small-Cap | 48,154,078 | 47,447,760 | ||||||
Morningstar Small-Cap Growth | 31,719,609 | 23,721,415 | ||||||
Morningstar Small-Cap Value | 89,218,401 | 111,433,087 |
4. | CAPITAL SHARE TRANSACTIONS |
Capital shares are issued and redeemed by each Fund only in aggregations of a specified number of shares or multiples thereof (“Creation Units”) at NAV. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the statements of changes in net assets.
The consideration for the purchase of Creation Units of a fund in the Trust generally consists of the in-kind deposit of a designated portfolio of securities and a specified amount of cash. Certain funds in the Trust may be offered in Creation Units solely or partially for cash in U.S. dollars. Investors purchasing and redeeming Creation Units may pay a purchase transaction fee and a redemption transaction fee directly to State Street Bank and Trust Company, the Trust’s administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash. Investors transacting in Creation Units for cash may also pay an additional variable charge to compensate the relevant fund for certain transaction costs (i.e., stamp taxes, taxes on currency or other financial transactions, and brokerage costs) and market impact expenses relating to investing in portfolio securities. Such variable charges, if any, are included in “Proceeds from shares sold” in the statements of changes in net assets.
5. | PRINCIPAL RISKS |
In the normal course of business, each Fund invests in securities or other instruments and may enter into certain transactions, and such activities subject the Fund to various risks, including, among others, fluctuations in the market (market risk) or failure of an issuer to meet all of its obligations. The value of securities or other instruments may also be affected by various factors, including, without limitation: (i) the general economy; (ii) the overall market as well as local, regional or global political and/or social instability; (iii) regulation, taxation or international tax treaties between various countries; or (iv) currency, interest rate or price fluctuations. Each Fund’s prospectus provides details of the risks to which the Fund is subject.
BFA uses a “passive” or index approach to try to achieve each Fund’s investment objective following the securities included in its underlying index during upturns as well as downturns. BFA does not take steps to reduce market exposure or to lessen the effects of a declining market. Divergence from the underlying index and the composition of the portfolio is monitored by BFA.
MARKET RISK
Market risk arises mainly from uncertainty about future values of financial instruments influenced by price, currency and interest rate movements. It represents the potential loss a fund may suffer through holding market positions in the face of market
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Notes to Financial Statements (Unaudited) (Continued)
iSHARES® TRUST
movements. A fund is exposed to market risk by its investment in equity, fixed income and/or financial derivative instruments or by its investment in underlying funds. The fair value of securities held by a fund may decline due to general market conditions, economic trends or events that are not specifically related to the issuers of the securities including local, regional or global political, social or economic instability or to factors that affect a particular industry or group of industries. The extent of a fund’s exposure to market risk is the market value of the investments held as shown in the fund’s schedule of investments.
A diversified portfolio, where this is appropriate and consistent with a fund’s objectives, minimizes the risk that a price change of a particular investment will have a material impact on the NAV of a fund. The investment concentrations within each Fund’s portfolio are disclosed in its schedule of investments.
CREDIT RISK
Credit risk is the risk that an issuer or guarantor of debt instruments or the counterparty to a financial transaction, including derivatives contracts, repurchase agreements or loans of portfolio securities, is unable or unwilling to make timely interest and/or principal payments or to otherwise honor its obligations. BFA and its affiliates manage counterparty credit risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose a fund to issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of a fund’s exposure to credit and counterparty risks with respect to those financial assets is approximated by their value recorded in its statement of assets and liabilities.
6. | INCOME TAX INFORMATION |
Each Fund is treated as an entity separate from the Trust’s other funds for federal income tax purposes. It is the policy of each Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its ordinary income and any net capital gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes is required.
For purposes of U.S. GAAP, in-kind redemptions are treated as sales of securities resulting in realized capital gains or losses to the Funds. Because such gains or losses are not taxable to the Funds and are not distributed to existing Fund shareholders, the gains or losses are reclassified from accumulated net realized gain (loss) to paid-in capital at the end of the Funds’ tax year. These reclassifications have no effect on net assets or NAV per share.
The tax character of current year distributions will be determined at the end of the current fiscal year.
NOTESTO FINANCIAL STATEMENTS | 87 |
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iSHARES® TRUST
As of April 30, 2017, the Funds’ fiscal year-end, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:
iShares ETF | Non- Expiring a | Expiring 2018 | Expiring 2019 | Total | ||||||||||||
Morningstar Large-Cap | $ | 15,343,320 | $ | 10,657,565 | $ | — | $ | 26,000,885 | ||||||||
Morningstar Large-Cap Growth | 5,598,724 | 66,358,290 | 982,680 | 72,939,694 | ||||||||||||
Morningstar Large-Cap Value | — | 34,918,156 | 5,511,604 | 40,429,760 | ||||||||||||
Morningstar Mid-Cap | 12,931,978 | 13,624,906 | — | 26,556,884 | ||||||||||||
Morningstar Mid-Cap Growth | — | 74,231,212 | 3,999,375 | 78,230,587 | ||||||||||||
Morningstar Mid-Cap Value | 1,993,220 | 7,062,145 | — | 9,055,365 | ||||||||||||
Morningstar Small-Cap | 9,489,900 | 6,154,821 | — | 15,644,721 | ||||||||||||
Morningstar Small-Cap Growth | — | 7,413,376 | — | 7,413,376 | ||||||||||||
Morningstar Small-Cap Value | 11,242,751 | 9,082,688 | — | 20,325,439 |
a | Must be utilized prior to loses subject to expiration. |
The Funds may own shares in certain foreign investment entities, referred to, under U.S. tax law, as “passive foreign investment companies.” The Funds may elect to mark-to-market annually the shares of each passive foreign investment company and would be required to distribute to shareholders any such marked-to-market gains.
Management has analyzed tax laws and regulations and their application to the Funds as of October 31, 2017, inclusive of the open tax return years, and does not believe there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.
7. | LEGAL PROCEEDINGS |
On June 16, 2016, investors (the “Plaintiffs”) in certain iShares funds (iShares Core S&P Small-Cap ETF, iShares Russell 1000 Growth ETF, iShares Core S&P 500 ETF, iShares Russell Mid-Cap Growth ETF, iShares Russell Mid-Cap ETF, iShares Russell Mid-Cap Value ETF, iShares Select Dividend ETF, iShares Morningstar Mid-Cap ETF, iShares Morningstar Large-Cap ETF, iShares U.S. Aerospace & Defense ETF and iShares U.S. Preferred Stock ETF) filed a putative class action lawsuit against iShares Trust, BlackRock, Inc. and certain of its advisory affiliates, and certain directors/trustees and officers of the Funds (collectively, “Defendants”). The lawsuit alleges the Defendants violated federal securities laws by failing to adequately disclose in the prospectuses issued by the funds noted above the risks of using stop-loss orders in the event of a ‘flash crash’, such as the one that occurred on May 6, 2010. On September 18, 2017, the Court issued a Statement of Decision holding that the Plaintiffs lack standing to assert their claims. On October 11, 2017, the Court entered final judgment dismissing all of the Plaintiffs’ claims with prejudice. Plaintiffs have appealed the Court’s decision.
8. | SUBSEQUENT EVENTS |
Management has evaluated the impact of all subsequent events on the Funds through the date the financial statements were available to be issued and has determined that there were no subsequent events requiring adjustment or disclosure in the financial statements.
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Board Review and Approval of Investment Advisory
Contract
iSHARES® TRUST
I. iShares Morningstar Large-Cap ETF, iShares Morningstar Large-Cap Value ETF, iShares Morningstar Mid-Cap Growth ETF, iShares Morningstar Mid-Cap Value ETF, iShares Morningstar Small-Cap ETF, iShares Morningstar Small-Cap Growth ETF and iShares Morningstar Small-Cap Value ETF
Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required annually to consider and approve the Investment Advisory Contract between the Trust and BFA (the “Advisory Contract”) on behalf of the Funds. The Independent Trustees requested, and BFA provided, such information as the Independent Trustees, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management on May 5, 2017 and May 12, 2017. At these meetings, the 15(c) Committee reviewed and discussed information provided in response to the 15(c) Committee’s initial requests, and requested certain additional information, which management agreed to provide. At a meeting held on May 18, 2017, management presented information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its meetings. The Board, including the Independent Trustees, reviewed and discussed such information at length. The Independent Trustees requested from management certain additional information, which management agreed to provide. At a meeting held on June 19-21, 2017, the Board, including the Independent Trustees, reviewed the additional information provided by management in response to these requests. After extensive discussions, the Board, including all of the Independent Trustees, approved the continuance of the Advisory Contract for the Funds, based on a review of qualitative and quantitative information provided by BFA. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Board also noted that the Board and BFA agreed to discuss potential further enhancements to the 15(c) process for the coming year. The Independent Trustees were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Contract for the Funds, the Board, including the Independent Trustees, considered the following factors, no one of which was controlling, and reached the following conclusions:
Expenses and Performance of the Funds — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of each Fund in comparison with the same information for other exchange traded funds (“ETFs”) (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising such Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of the proprietary ETF methodology used by Broadridge to determine the applicable Peer Groups. The Board further noted that due to the limitations in providing comparable funds in the various Peer Groups, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Funds in all instances.
The Board also noted that the investment advisory fee rates and overall expenses (net of waivers and reimbursements) for the Funds were lower than the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in their respective Peer Group, excluding iShares funds.
In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as any particular Fund, Broadridge also provided, and the Board reviewed, a comparison of such Fund’s performance for the one-, three-, five-, ten-year, and since inception periods, as applicable, and for the quarter ended December 31, 2016, to that of relevant comparison funds for the same periods.
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 89 |
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Board Review and Approval of Investment Advisory
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The Board noted that each Fund seeks to track its specified underlying index and that, during the year, the Board received periodic reports on each Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative performance information, including any additional detailed information requested by the Boards, was also considered. The Board noted that each Fund generally performed in line with its underlying index over the relevant periods.
Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and the historical performance of each Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, including information about recent and proposed enhancements to the iShares business, including with respect to capital markets support and analysis, technology, product design, compliance and risk management, and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the iShares funds and their shareholders. The Board also considered BFA’s compliance program and its compliance record with respect to the Funds. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Funds, as well as the resources available to them in managing the Funds. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the June 19-21, 2017 meeting and throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that each Fund had met its investment objective consistently since its respective inception date.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Funds under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Costs of Services Provided to Funds and Profits Realized by BFA and Affiliates — The Board reviewed information about the profitability of the Funds to BlackRock, on a Fund-by-Fund basis and in the aggregate, based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and other sources of revenue and expense to BFA and its affiliates from the Funds’ operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, including supplemental information that was responsive to requests of the 15(c) Committee. The Board noted that the 15(c) Committee had focused on the methodology and profitability presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC, a BFA affiliate, from securities lending by the Funds. The Board also discussed BFA’s profit margin as reflected in the Funds’ profitability analyses and reviewed information regarding potential economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Funds and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.
Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Funds’ assets, noting that the issue of economies of scale had been focused on by the 15(c) Committee during its meetings and addressed by management, including through supplemental information. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through relatively
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Board Review and Approval of Investment Advisory
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iSHARES® TRUST
low fee rates established at inception, breakpoints and waivers or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BlackRock’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished, among other things, between fixed and variable costs, and explained how the level of fixed and variable costs, as well as the nature of such costs, may impact the existence or size of scale benefits. The Board noted that the Advisory Contract for the Funds did not provide for any breakpoints in the Funds’ investment advisory fee rates as the assets of the Funds increase. However, the Board noted that should material economies of scale be identified in the future that are not otherwise shared, a breakpoint structure for the Funds may be appropriate, and that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding breakpoints in the future.
Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider the Advisory Contract at least annually, determined to approve the continuance of the Advisory Contract for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same investment objectives and strategies as the Funds and that track the same index as the Funds. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Funds, including in terms of the different and generally more extensive services provided to the Funds, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Funds, as publicly traded ETFs, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged BFA’s expressed business purpose for launching a suite of iShares “Core” ETFs that generally are subject to lower investment advisory fees than iShares non-Core ETFs that may provide a similar investment exposure. The Board also considered the “all-inclusive” nature of the Funds’ advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rates under the Advisory Contract for the Funds were generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.
Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Funds by BFA, such as payment of revenue to BTC, the Funds’ securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Funds in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board also noted the revenue received by BFA and/or its affiliates pursuant to an agreement that permits a service provider to use certain portions of BlackRock’s technology platform to service accounts managed by BFA and/or its affiliates, including the iShares funds. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Funds. The Board further noted that any portfolio transactions on behalf of the Funds placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board
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pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Funds’ shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.
Conclusion — Based on the considerations described above, the Board determined that each Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded to approve the continuance of the Advisory Contract for the coming year.
II. iShares Morningstar Large-Cap Growth ETF and iShares Morningstar Mid-Cap ETF
Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required annually to consider and approve the Investment Advisory Contract between the Trust and BFA (the “Advisory Contract”) on behalf of the Funds. The Independent Trustees requested, and BFA provided, such information as the Independent Trustees, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management on May 5, 2017 and May 12, 2017. At these meetings, the 15(c) Committee reviewed and discussed information provided in response to the 15(c) Committee’s initial requests, and requested certain additional information, which management agreed to provide. At a meeting held on May 18, 2017, management presented information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its meetings. The Board, including the Independent Trustees, reviewed and discussed such information at length. The Independent Trustees requested from management certain additional information, which management agreed to provide. At a meeting held on June 19-21, 2017, the Board, including the Independent Trustees, reviewed the additional information provided by management in response to these requests. After extensive discussions, the Board, including all of the Independent Trustees, approved the continuance of the Advisory Contract for the Funds, based on a review of qualitative and quantitative information provided by BFA. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Board also noted that the Board and BFA agreed to discuss potential further enhancements to the 15(c) process for the coming year. The Independent Trustees were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Contract for the Funds, the Board, including the Independent Trustees, considered the following factors, no one of which was controlling, and reached the following conclusions:
Expenses and Performance of the Funds — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of each Fund in comparison with the same information for other exchange traded funds (“ETFs”) (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising such Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of the proprietary ETF methodology used by Broadridge to determine the applicable Peer Groups. The Board further noted that due to the limitations in providing comparable funds in the various Peer Groups, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Funds in all instances.
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The Board also noted that the investment advisory fee rates and overall expenses (net of waivers and reimbursements) for the Funds were within range of the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in their respective Peer Group, excluding iShares funds.
In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as any particular Fund, Broadridge also provided, and the Board reviewed, a comparison of such Fund’s performance for the one-, three-, five-, ten-year, and since inception periods, as applicable, and for the quarter ended December 31, 2016, to that of relevant comparison funds for the same periods.
The Board noted that each Fund seeks to track its specified underlying index and that, during the year, the Board received periodic reports on each Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative performance information, including any additional detailed information requested by the Boards, was also considered. The Board noted that each Fund generally performed in line with its underlying index over the relevant periods.
Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and the historical performance of each Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, including information about recent and proposed enhancements to the iShares business, including with respect to capital markets support and analysis, technology, product design, compliance and risk management, and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the iShares funds and their shareholders. The Board also considered BFA’s compliance program and its compliance record with respect to the Funds. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Funds, as well as the resources available to them in managing the Funds. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the June 19-21, 2017 meeting and throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that each Fund had met its investment objective consistently since its respective inception date.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Funds under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Costs of Services Provided to Funds and Profits Realized by BFA and Affiliates — The Board reviewed information about the profitability of the Funds to BlackRock, on a Fund-by-Fund basis and in the aggregate, based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and other sources of revenue and expense to BFA and its affiliates from the Funds’ operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, including supplemental information that was responsive to requests of the 15(c) Committee. The Board noted that the 15(c) Committee had focused on the methodology and profitability presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC, a BFA affiliate, from securities lending by the
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Funds. The Board also discussed BFA’s profit margin as reflected in the Funds’ profitability analyses and reviewed information regarding potential economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Funds and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.
Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Funds’ assets, noting that the issue of economies of scale had been focused on by the 15(c) Committee during its meetings and addressed by management, including through supplemental information. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through relatively low fee rates established at inception, breakpoints and waivers or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BlackRock’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished, among other things, between fixed and variable costs, and explained how the level of fixed and variable costs, as well as the nature of such costs, may impact the existence or size of scale benefits. The Board noted that the Advisory Contract for the Funds did not provide for any breakpoints in the Funds’ investment advisory fee rates as the assets of the Funds increase. However, the Board noted that should material economies of scale be identified in the future that are not otherwise shared, a breakpoint structure for the Funds may be appropriate, and that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding breakpoints in the future.
Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider the Advisory Contract at least annually, determined to approve the continuance of the Advisory Contract for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same investment objectives and strategies as the Funds and that track the same index as the Funds. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Funds, including in terms of the different and generally more extensive services provided to the Funds, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Funds, as publicly traded ETFs, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged BFA’s expressed business purpose for launching a suite of iShares “Core” ETFs that generally are subject to lower investment advisory fees than iShares non-Core ETFs that may provide a similar investment exposure. The Board also considered the “all-inclusive” nature of the Funds’ advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rates under the Advisory Contract for the Funds were generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.
Other Benefits to BFA and/or its Affiliates — The Board reviewed the ��fallout” benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Funds by BFA, such as payment of revenue to BTC, the Funds’
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iSHARES® TRUST
securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Funds in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board also noted the revenue received by BFA and/or its affiliates pursuant to an agreement that permits a service provider to use certain portions of BlackRock’s technology platform to service accounts managed by BFA and/or its affiliates, including the iShares funds. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Funds. The Board further noted that any portfolio transactions on behalf of the Funds placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Funds’ shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.
Conclusion — Based on the considerations described above, the Board determined that each Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded to approve the continuance of the Advisory Contract for the coming year.
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Supplemental Information (Unaudited)
iSHARES® TRUST
Proxy Results
A special meeting of the shareholders of each series of iShares Trust (the “Trust”) was held on June 19, 2017, to elect five Trustees to the Board of Trustees of the Trust. The five nominees were Jane D. Carlin, Richard L. Fagnani, Drew E. Lawton, Madhav V. Rajan and Mark Wiedman, all of whom were elected as Trustees at the special meeting. The other Trustees whose terms of office as Trustees continued after the special meeting are Cecilia H. Herbert, Charles A. Hurty, John E. Kerrigan, John E. Martinez and Robert S. Kapito.
Trustee | Votes For | Votes Withheld | ||||||
Jane D. Carlin | 8,669,874,031 | 59,322,838 | ||||||
Richard L. Fagnani | 8,672,718,914 | 56,477,955 | ||||||
Drew E. Lawton | 8,670,713,236 | 58,483,633 | ||||||
Madhav V. Rajan | 8,653,682,870 | 75,513,999 | ||||||
Mark Wiedman | 8,664,674,816 | 64,522,053 |
Section 19(a) Notices
The amounts and sources of distributions reported are estimates and are provided pursuant to regulatory requirements and are not being provided for tax reporting purposes. The actual amounts and sources for tax reporting purposes will depend upon each Fund’s investment experience during the year and may be subject to changes based on the tax regulations. Shareholders will receive a Form 1099-DIV each calendar year that will inform them how to report these distributions for federal income tax purposes.
Total Cumulative Distributions for the Fiscal Year-to-Date | % Breakdown of the Total Cumulative Distributions for the Fiscal Year-to-Date | |||||||||||||||||||||||||||||||
iShares ETF | Net Investment Income | Net Realized Capital Gains | Return of Capital | Total Per Share | Net Investment Income | Net Realized Capital Gains | Return of Capital | Total Per Share | ||||||||||||||||||||||||
Morningstar Large-Cap | $ | 1.460387 | $ | — | $ | 0.009111 | $ | 1.469498 | 99 | % | — | % | 1 | % | 100 | % | ||||||||||||||||
Morningstar Large-Cap Growth | 0.780756 | — | 0.022491 | 0.803247 | 97 | — | 3 | 100 | ||||||||||||||||||||||||
Morningstar Mid-Cap | 1.052562 | — | 0.104164 | 1.156726 | 91 | — | 9 | 100 | ||||||||||||||||||||||||
Morningstar Mid-Cap Growth | 0.426227 | — | 0.055454 | 0.481681 | 88 | — | 12 | 100 | ||||||||||||||||||||||||
Morningstar Mid-Cap Value | 1.427818 | — | 0.078794 | 1.506612 | 95 | — | 5 | 100 | ||||||||||||||||||||||||
Morningstar Small-Cap | 0.873442 | — | 0.184000 | 1.057442 | 83 | — | 17 | 100 | ||||||||||||||||||||||||
Morningstar Small-Cap Growth | 0.247323 | — | 0.084287 | 0.331610 | 75 | — | 25 | 100 | ||||||||||||||||||||||||
Morningstar Small-Cap Value | 1.089402 | — | 0.245166 | 1.334568 | 82 | — | 18 | 100 |
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Notes:
NOTES | 97 |
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Notes:
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Table of Contents
For more information visit www.iShares.com or call 1-800-iShares (1-800-474-2737)
This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.
Investing involves risk, including possible loss of principal.
The iShares Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by Morningstar, Inc., nor does this company make any representation regarding the advisability of investing in the iShares Funds. BlackRock is not affiliated with the company listed above.
A description of the policies that the Funds use to determine how to vote proxies relating to portfolio securities and information about how the Funds voted proxies relating to portfolio securities during the most recent twelve-month period ending June 30 is available without charge, upon request, by calling toll-free 1-800-474-2737; on the Funds’ website at www.iShares.com; and on the U.S. Securities and Exchange Commission (SEC) website at www.sec.gov.
The Funds file their complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website or may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Funds also disclose their complete schedules of portfolio holdings on a daily basis on the Funds’ website.
©2017 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc. or its subsidiaries. All other marks are the property of their respective owners.
iS-SAR-404-1017
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OCTOBER 31, 2017
2017 SEMI-ANNUAL REPORT (UNAUDITED) |
iShares Trust
Ø | iShares Cohen & Steers REIT ETF | ICF | Cboe BZX |
Ø | iShares Core U.S. REIT ETF | USRT | NYSE Arca |
Ø | iShares Europe Developed Real Estate ETF | IFEU | NASDAQ |
Ø | iShares Global REIT ETF | REET | NYSE Arca |
Ø | iShares International Developed Real Estate ETF | IFGL | NASDAQ |
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iSHARES® COHEN & STEERS REIT ETF
Performance as of October 31, 2017
The iShares Cohen & Steers REIT ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. real estate investment trusts (REITs), as represented by the Cohen & Steers Realty Majors Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month reporting period ended October 31, 2017, the total return for the Fund was 1.57%, net of fees, while the total return for the Index was 1.74%.
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 4.95% | 4.79% | 5.31% | 4.95% | 4.79% | 5.31% | ||||||||||||||||||||||
5 Years | 9.01% | 9.00% | 9.41% | 53.93% | 53.84% | 56.76% | ||||||||||||||||||||||
10 Years | 4.44% | 4.44% | 4.70% | 54.48% | 54.47% | 58.35% |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 10 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,015.70 | $ | 1.73 | $ | 1,000.00 | $ | 1,023.50 | $ | 1.73 | 0.34% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 10 for more information. |
ALLOCATION BY SECTOR
As of 10/31/17
Sector | Percentage of Total Investments* |
Specialized REITs | 21.40 | % | ||
Retail REITs | 19.87 | |||
Residential REITs | 19.07 | |||
Office REITs | 14.87 | |||
Health Care REITs | 12.40 | |||
Industrial REITs | 9.34 | |||
Hotel & Resort REITs | 3.05 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 10/31/17
Security | Percentage of Total Investments* |
Equinix Inc. | 7.60 | % | ||
Simon Property Group Inc. | 7.60 | |||
Prologis Inc. | 7.21 | |||
Public Storage | 6.53 | |||
AvalonBay Communities Inc. | 5.26 | |||
Equity Residential | 5.20 | |||
Welltower Inc. | 5.16 | |||
Digital Realty Trust Inc. | 5.10 | |||
Ventas Inc. | 4.69 | |||
Boston Properties Inc. | 3.93 | |||
|
| |||
TOTAL | 58.28 | % | ||
|
|
* | Excludes money market funds. |
FUND PERFORMANCE OVERVIEWS | 5 |
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Fund Performance Overview
iSHARES® CORE U.S. REIT ETF
Performance as of October 31, 2017
The iShares Core U.S. REIT ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. real estate equities, as represented by the FTSE NAREIT Equity REITs Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month reporting period ended October 31, 2017, the total return for the Fund was 1.39%, net of fees, while the total return for the Index was 1.36%.
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 5.78% | 5.80% | 5.76% | 5.78% | 5.80% | 5.76% | ||||||||||||||||||||||
5 Years | 8.30% | 8.31% | 8.69% | 49.01% | 49.03% | 51.65% | ||||||||||||||||||||||
10 Years | 4.98% | 4.95% | 5.35% | 62.57% | 62.17% | 68.46% |
Index performance through November 2, 2016 reflects the performance of the FTSE NAREIT Real Estate 50 Index. Index performance beginning on November 3, 2016 reflects the performance of the FTSE NAREIT Equity REITs Index.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 10 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,013.90 | $ | 0.41 | $ | 1,000.00 | $ | 1,024.80 | $ | 0.41 | 0.08% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 10 for more information. |
ALLOCATION BY SECTOR As of 10/31/17
Sector | Percentage of Total Investments* | |||
Specialized REITs | 19.38 | % | ||
Retail REITs | 17.92 | |||
Residential REITs | 16.81 | |||
Office REITs | 12.77 | |||
Health Care REITs | 11.79 | |||
Industrial REITs | 7.65 | |||
Diversified REITs | 7.64 | |||
Hotel & Resort REITs | 6.04 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 10/31/17
Security | Percentage of Total Investments* | |||
Simon Property Group Inc. | 5.76 | % | ||
Equinix Inc. | 4.29 | |||
Prologis Inc. | 4.06 | |||
Public Storage | 3.66 | |||
AvalonBay Communities Inc. | 2.98 | |||
Welltower Inc. | 2.93 | |||
Digital Realty Trust Inc. | 2.89 | |||
Equity Residential | 2.86 | |||
Ventas Inc. | 2.66 | |||
Boston Properties Inc. | 2.23 | |||
|
| |||
TOTAL | 34.32 | % | ||
|
|
* | Excludes money market funds. |
6 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Fund Performance Overview
iSHARES® EUROPE DEVELOPED REAL ESTATE ETF
Performance as of October 31, 2017
The iShares Europe Developed Real Estate ETF (the “Fund”) seeks to track the investment results of an index composed of real estate equities in developed European markets, as represented by the FTSE EPRA/NAREIT Developed Europe Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month reporting period ended October 31, 2017, the total return for the Fund was 9.29%, net of fees, while the total return for the Index was 9.32%.
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 18.50% | 18.82% | 18.60% | 18.50% | 18.82% | 18.60% | ||||||||||||||||||||||
5 Years | 8.69% | 8.70% | 8.81% | 51.69% | 51.77% | 52.50% | ||||||||||||||||||||||
Since Inception | 1.49% | 1.50% | 1.46% | 15.87% | 16.03% | 15.51% |
The inception date of the Fund was 11/12/07. The first day of secondary market trading was 11/16/07.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 10 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,092.90 | $ | 2.53 | $ | 1,000.00 | $ | 1,022.80 | $ | 2.45 | 0.48% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 10 for more information. |
ALLOCATION BY SECTOR
As of 10/31/17
Sector/Investment Type | Percentage of Total Investments* |
Real Estate Operating Companies | 39.16 | % | ||
Retail REITs | 24.40 | |||
Diversified REITs | 15.70 | |||
Office REITs | 6.54 | |||
Industrial REITs | 5.31 | |||
Diversified Real Estate Activities | 2.29 | |||
Residential REITs | 1.86 | |||
Health Care REITs | 1.79 | |||
Real Estate Development | 1.37 | |||
Specialized REITs | 1.09 | |||
Hotels, Resorts & Cruise Lines | 0.49 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST COUNTRIES
As of 10/31/17
Country | Percentage of Total Investments* |
United Kingdom | 28.46 | % | ||
Germany | 22.85 | |||
France | 19.74 | |||
Sweden | 8.57 | |||
Switzerland | 5.41 | |||
Spain | 4.20 | |||
Belgium | 3.61 | |||
Netherlands | 2.12 | |||
Austria | 2.05 | |||
Ireland | 1.21 | |||
|
| |||
TOTAL | 98.22 | % | ||
|
|
* | Excludes money market funds. |
FUND PERFORMANCE OVERVIEWS | 7 |
Table of Contents
Fund Performance Overview
iSHARES® GLOBAL REIT ETF
Performance as of October 31, 2017
The iShares Global REIT ETF (the “Fund”) seeks to track the investment results of an index composed of global real estate equities in developed and emerging markets, as represented by the FTSE EPRA/NAREIT Global REIT Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month reporting period ended October 31, 2017, the total return for the Fund was 1.22%, net of fees, while the total return for the Index was 0.79%.
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 4.36% | 4.27% | 3.50% | 4.36% | 4.27% | 3.50% | ||||||||||||||||||||||
Since Inception | 4.57% | 4.59% | 3.85% | 15.98% | 16.07% | 13.33% |
The inception date of the Fund was 7/8/14. The first day of secondary market trading was 7/10/14.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 10 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,012.20 | $ | 0.71 | $ | 1,000.00 | $ | 1,024.50 | $ | 0.71 | 0.14% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 10 for more information. |
ALLOCATION BY SECTOR
As of 10/31/17
Sector | Percentage of Total Investments* |
Retail REITs | 25.86 | % | ||
Diversified REITs | 15.05 | |||
Office REITs | 14.30 | |||
Residential REITs | 13.33 | |||
Industrial REITs | 9.56 | |||
Health Care REITs | 8.83 | |||
Specialized REITs | 7.99 | |||
Hotel & Resort REITs | 4.83 | |||
Real Estate Operating Companies | 0.25 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST COUNTRIES
As of 10/31/17
Country | Percentage of Total Investments* |
United States | 64.40 | % | ||
Australia | 6.98 | |||
Japan | 6.42 | |||
United Kingdom | 5.39 | |||
France | 4.17 | |||
Canada | 3.05 | |||
Singapore | 2.58 | |||
Hong Kong | 1.74 | |||
South Africa | 1.44 | |||
Spain | 0.89 | |||
|
| |||
TOTAL | 97.06 | % | ||
|
|
* | Excludes money market funds. |
8 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Fund Performance Overview
iSHARES® INTERNATIONAL DEVELOPED REAL ESTATE ETF
Performance as of October 31, 2017
The iShares International Developed Real Estate ETF (the “Fund”) seeks to track the investment results of an index composed of real estate equities in developed non-U.S. markets, as represented by the FTSE EPRA/NAREIT Developed ex-U.S. Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the six-month reporting period ended October 31, 2017, the total return for the Fund was 5.54%, net of fees, while the total return for the Index was 5.60%.
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 10.44% | 10.51% | 10.59% | 10.44% | 10.51% | 10.59% | ||||||||||||||||||||||
5 Years | 4.69% | 4.71% | 5.01% | 25.78% | 25.90% | 27.66% | ||||||||||||||||||||||
Since Inception | 0.56% | 0.57% | 0.76% | 5.76% | 5.82% | 7.85% |
The inception date of the Fund was 11/12/07. The first day of secondary market trading was 11/16/07.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 10 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,055.40 | $ | 2.49 | $ | 1,000.00 | $ | 1,022.80 | $ | 2.45 | 0.48% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 10 for more information. |
ALLOCATION BY SECTOR
As of 10/31/17
Sector/Investment Type | Percentage of Total Investments* |
Retail REITs | 21.52 | % | ||
Diversified Real Estate Activities | 20.53 | |||
Real Estate Operating Companies | 18.18 | |||
Diversified REITs | 14.74 | |||
Office REITs | 9.02 | |||
Industrial REITs | 6.65 | |||
Real Estate Development | 4.54 | |||
Residential REITs | 2.49 | |||
Other** | 2.33 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST COUNTRIES
As of 10/31/17
Country | Percentage of Total Investments* |
Japan | 21.57 | % | ||
Hong Kong | 17.29 | |||
Australia | 12.15 | |||
United Kingdom | 10.47 | |||
Germany | 8.41 | |||
France | 7.26 | |||
Canada | 5.95 | |||
Singapore | 5.80 | |||
Sweden | 3.15 | |||
Switzerland | 1.99 | |||
|
| |||
TOTAL | 94.04 | % | ||
|
|
* | Excludes money market funds. |
** | Other includes sector and/or investment types which individually represent less than 1% of total investments. |
FUND PERFORMANCE OVERVIEWS | 9 |
Table of Contents
Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.ishares.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are redeemed or sold in the market. Performance for certain funds may reflect a waiver of a portion of investment advisory fees. Without such a waiver, performance would have been lower.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Certain funds may have a NAV which is determined prior to the opening of regular trading on its listed exchange and their market returns are calculated using the midpoint of the bid/ask spread as of the opening of regular trading on the exchange. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower.
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of fund shares and (2) ongoing costs, including management fees and other fund expenses. The expense example, which is based on an investment of $1,000 invested on May 1, 2017 and held through October 31, 2017, is intended to help you understand your ongoing costs (in dollars and cents) of investing in a Fund and to compare these costs with the ongoing costs of investing in other funds.
Actual Expenses — The table provides information about actual account values and actual expenses. Annualized expense ratios reflect contractual and voluntary fee waivers, if any. To estimate the expenses that you paid on your account over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number corresponding to your Fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Example for Comparison Purposes — The table also provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of fund shares. Therefore, the hypothetical examples are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
10 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES® COHEN & STEERS REIT ETF
October 31, 2017
Security | Shares | Value | ||||||
COMMON STOCKS — 99.81% |
| |||||||
HEALTH CARE REITS — 12.38% |
| |||||||
HCP Inc. | 3,089,524 | $ | 79,833,300 | |||||
Ventas Inc.a | 2,339,858 | 146,826,090 | ||||||
Welltower Inc.a | 2,414,320 | 161,662,867 | ||||||
|
| |||||||
388,322,257 | ||||||||
HOTEL & RESORT REITS — 3.04% |
| |||||||
Host Hotels & Resorts Inc.a | 4,877,503 | 95,403,959 | ||||||
|
| |||||||
95,403,959 | ||||||||
INDUSTRIAL REITS — 9.33% |
| |||||||
Duke Realty Corp.a | 2,344,596 | 66,774,094 | ||||||
Prologis Inc. | 3,496,626 | 225,812,107 | ||||||
|
| |||||||
292,586,201 | ||||||||
OFFICE REITS — 14.84% |
| |||||||
Alexandria Real Estate Equities Inc. | 600,487 | 74,436,369 | ||||||
Boston Properties Inc. | 1,014,454 | 122,931,536 | ||||||
Douglas Emmett Inc.a | 968,294 | 38,528,418 | ||||||
Highwoods Properties Inc. | 672,670 | 34,339,803 | ||||||
Kilroy Realty Corp.a | 648,029 | 46,159,106 | ||||||
SL Green Realty Corp.a | 671,430 | 64,242,422 | ||||||
Vornado Realty Trusta | 1,135,765 | 85,023,368 | ||||||
|
| |||||||
465,661,022 | ||||||||
RESIDENTIAL REITS — 19.03% |
| |||||||
American Campus Communities Inc.a | 884,018 | 36,757,469 | ||||||
AvalonBay Communities Inc. | 908,492 | 164,736,854 | ||||||
Equity LifeStyle Properties Inc.a | 573,667 | 50,758,056 | ||||||
Equity Residentiala | 2,420,831 | 162,825,093 | ||||||
Essex Property Trust Inc.a | 432,525 | 113,507,536 | ||||||
UDR Inc.a | 1,763,046 | 68,388,554 | ||||||
|
| |||||||
596,973,562 | ||||||||
RETAIL REITS — 19.83% |
| |||||||
Federal Realty Investment Trusta | 476,295 | 57,403,073 | ||||||
GGP Inc.a | 4,128,991 | 80,350,165 | ||||||
Kimco Realty Corp.a | 2,806,551 | 50,966,966 | ||||||
National Retail Properties Inc.a | 983,348 | 39,510,923 | ||||||
Realty Income Corp.a | 1,800,413 | 96,628,166 | ||||||
Regency Centers Corp.a | 964,412 | 59,359,559 | ||||||
Simon Property Group Inc.a | 1,531,229 | 237,845,800 | ||||||
|
| |||||||
622,064,652 |
Security | Shares | Value | ||||||
SPECIALIZED REITS — 21.36% |
| |||||||
Digital Realty Trust Inc.a | 1,349,133 | $ | 159,791,313 | |||||
Equinix Inc. | 513,711 | 238,105,048 | ||||||
Extra Space Storage Inc.a | 830,199 | 67,735,936 | ||||||
Public Storagea | 985,778 | 204,302,490 | ||||||
|
| |||||||
669,934,787 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS | ||||||||
(Cost: $2,911,822,782) | 3,130,946,440 | |||||||
SHORT-TERM INVESTMENTS — 8.05% |
| |||||||
MONEY MARKET FUNDS — 8.05% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
1.31%b,c,d | 246,764,267 | 246,813,621 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
1.00%b,c | 5,826,028 | 5,826,028 | ||||||
|
| |||||||
252,639,649 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $252,615,170) | 252,639,649 | |||||||
|
| |||||||
TOTAL INVESTMENTS |
| 3,383,586,089 | ||||||
Other Assets, Less Liabilities — (7.86)% |
| (246,569,355 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 3,137,016,734 | |||||
|
|
a | All or a portion of this security represents a security on loan. See Note 1. |
b | Affiliated issuer. See Schedule 1. |
c | The rate quoted is the annualized seven-day yield of the fund at period end. |
d | All or a portion of this security represents an investment of securities lending collateral. See Note 1. |
e | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $3,257,720,971. Net unrealized appreciation was $125,879,796, of which $364,773,614 represented gross unrealized appreciation on investments and $238,893,818 represented gross unrealized depreciation on investments. |
SCHEDULESOF INVESTMENTS | 11 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® COHEN & STEERS REIT ETF
October 31, 2017
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 04/30/17 | Shares purchased | Shares sold | Shares held at 10/31/17 | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, |
| |||||||||||||||||||||||||||||||
SL Agency Shares | 293,336,971 | — | (46,572,704 | )b | 246,764,267 | $ | 246,813,621 | $ | 8,328 | $ | (45,318 | ) | $ | —c | ||||||||||||||||||
BlackRock Cash Funds: Treasury, |
| |||||||||||||||||||||||||||||||
SL Agency Shares | 3,451,206 | 2,374,822 | b | — | 5,826,028 | 5,826,028 | — | — | 15,546 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 252,639,649 | $ | 8,328 | $ | (45,318 | ) | $ | 15,546 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
c | Does not include income earned on investment of securities lending cash collateral which is not direct income of the Fund and is reflected as a component of securities lending income in the statement of operations. |
Schedule 2 — Futures Contracts (Note 5)
Futures contracts outstanding as of October 31, 2017 were as follows:
Description | Number of contracts | Expiration date | Notional amount (000) | Value/ unrealized appreciation (depreciation) | ||||||||||||
Long Contracts: | ||||||||||||||||
DJ U.S. Real Estate | 179 | Dec 2017 | $ | 5,656 | $ | 14,678 | ||||||||||
|
| |||||||||||||||
Schedule 3 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: | ||||||||||||||||
Assets: | ||||||||||||||||
Common stocks | $ | 3,130,946,440 | $ | — | $ | — | $ | 3,130,946,440 | ||||||||
Money market funds | 252,639,649 | — | — | 252,639,649 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 3,383,586,089 | $ | — | $ | — | $ | 3,383,586,089 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Derivative financial instrumentsa: | ||||||||||||||||
Assets: | ||||||||||||||||
Futures contracts | $ | 14,678 | $ | — | $ | — | $ | 14,678 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 14,678 | $ | — | $ | — | $ | 14,678 | ||||||||
|
|
|
|
|
|
|
| |||||||||
a | Shown at the unrealized appreciation (depreciation) on the contracts. |
See notes to financial statements.
12 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited)
October 31, 2017
Security | Shares | Value | ||||||
COMMON STOCKS — 99.82% |
| |||||||
DIVERSIFIED REITS — 7.63% |
| |||||||
American Assets Trust Inc. | 9,612 | $ | 372,849 | |||||
Armada Hoffler Properties Inc.a | 11,392 | 162,564 | ||||||
Colony NorthStar Inc. Class A | 127,557 | 1,566,400 | ||||||
Empire State Realty Trust Inc. Class A | 30,295 | 607,415 | ||||||
Forest City Realty Trust Inc. Class A | 57,480 | 1,415,732 | ||||||
Gladstone Commercial Corp. | 7,022 | 152,097 | ||||||
Global Net Lease Inc.a | 15,953 | 344,585 | ||||||
Gramercy Property Trust | 35,691 | 1,060,023 | ||||||
Investors Real Estate Trusta | 30,210 | 176,729 | ||||||
Lexington Realty Trust | 55,670 | 563,380 | ||||||
Liberty Property Trust | 34,797 | 1,492,095 | ||||||
One Liberty Properties Inc. | 3,742 | 90,669 | ||||||
PS Business Parks Inc. | 4,678 | 619,040 | ||||||
Select Income REITa | 15,065 | 363,970 | ||||||
Spirit Realty Capital Inc. | 114,633 | 952,600 | ||||||
STORE Capital Corp. | 40,351 | 996,266 | ||||||
VEREIT Inc. | 230,907 | 1,821,856 | ||||||
Washington REIT | 18,248 | 587,403 | ||||||
WP Carey Inc. | 24,947 | 1,700,138 | ||||||
|
| |||||||
15,045,811 | ||||||||
HEALTH CARE REITS — 11.76% |
| |||||||
CareTrust REIT Inc. | 18,162 | 343,262 | ||||||
Community Healthcare Trust Inc. | 4,531 | 124,285 | ||||||
Global Medical REIT Inc. | 5,485 | 46,403 | ||||||
HCP Inc. | 110,708 | 2,860,695 | ||||||
Healthcare Realty Trust Inc.a | 29,012 | 935,347 | ||||||
Healthcare Trust of America Inc. Class A | 46,952 | 1,410,908 | ||||||
LTC Properties Inc. | 9,328 | 433,845 | ||||||
MedEquities Realty Trust Inc. | 7,295 | 84,768 | ||||||
Medical Properties Trust Inc.a | 85,557 | 1,131,919 | ||||||
National Health Investors Inc.a | 9,381 | 714,738 | ||||||
New Senior Investment Group Inc. | 19,107 | 170,817 | ||||||
Omega Healthcare Investors Inc.a | 46,053 | 1,329,090 | ||||||
Physicians Realty Trust | 42,516 | 738,928 | ||||||
Quality Care Properties Inc.b | 22,500 | 356,175 | ||||||
Sabra Health Care REIT Inc. | 41,234 | 821,381 | ||||||
Senior Housing Properties Trust | 25,827 | 475,217 | ||||||
Universal Health Realty Income Trust | 3,132 | 229,294 | ||||||
Ventas Inc. | 83,362 | 5,230,965 |
Security | Shares | Value | ||||||
Welltower Inc. | 86,167 | $ | 5,769,742 | |||||
|
| |||||||
23,207,779 | ||||||||
HOTEL & RESORT REITS — 6.03% |
| |||||||
Apple Hospitality REIT Inc. | 49,709 | 941,489 | ||||||
Ashford Hospitality Prime Inc. | 6,945 | 67,505 | ||||||
Ashford Hospitality Trust Inc. | 19,103 | 134,294 | ||||||
Chatham Lodging Trust | 9,507 | 206,777 | ||||||
Chesapeake Lodging Trust | 12,300 | 343,170 | ||||||
DiamondRock Hospitality Co. | 47,305 | 513,732 | ||||||
Hersha Hospitality Trust | 9,788 | 173,150 | ||||||
Hospitality Properties Trust | 15,909 | 454,679 | ||||||
Host Hotels & Resorts Inc. | 171,570 | 3,355,909 | ||||||
LaSalle Hotel Properties | 26,819 | 756,564 | ||||||
Park Hotels & Resorts Inc. | 34,158 | 983,409 | ||||||
Pebblebrook Hotel Trusta | 16,297 | 581,151 | ||||||
RLJ Lodging Trust | 39,994 | 866,270 | ||||||
Ryman Hospitality Properties Inc. | 10,437 | 690,199 | ||||||
Summit Hotel Properties Inc. | 24,854 | 392,942 | ||||||
Sunstone Hotel Investors Inc. | 53,384 | 871,227 | ||||||
Xenia Hotels & Resorts Inc. | 25,494 | 554,750 | ||||||
|
| |||||||
11,887,217 | ||||||||
INDUSTRIAL REITS — 7.64% |
| |||||||
DCT Industrial Trust Inc. | 21,757 | 1,262,341 | ||||||
Duke Realty Corp. | 83,622 | 2,381,555 | ||||||
EastGroup Properties Inc. | 7,945 | 719,738 | ||||||
First Industrial Realty Trust Inc. | 28,140 | 868,963 | ||||||
Monmouth Real Estate Investment Corp. | 16,849 | 287,107 | ||||||
Prologis Inc. | 123,830 | 7,996,941 | ||||||
Rexford Industrial Realty Inc. | 16,796 | 498,673 | ||||||
STAG Industrial Inc. | 22,020 | 601,146 | ||||||
Terreno Realty Corp. | 12,246 | 449,673 | ||||||
|
| |||||||
15,066,137 | ||||||||
OFFICE REITS — 12.75% |
| |||||||
Alexandria Real Estate Equities Inc. | 21,820 | 2,704,807 | ||||||
Boston Properties Inc. | 36,218 | 4,388,897 | ||||||
Brandywine Realty Trust | 40,979 | 716,723 | ||||||
Columbia Property Trust Inc. | 29,083 | 642,153 | ||||||
Corporate Office Properties Trust | 23,586 | 753,101 | ||||||
Cousins Properties Inc. | 98,483 | 888,317 | ||||||
Douglas Emmett Inc. | 34,371 | 1,367,622 | ||||||
Easterly Government Properties Inc. | 9,313 | 187,378 | ||||||
Equity Commonwealthb | 28,512 | 856,786 |
SCHEDULESOF INVESTMENTS | 13 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® CORE U.S. REIT ETF
October 31, 2017
Security | Shares | Value | ||||||
Franklin Street Properties Corp. | 25,697 | $ | 256,970 | |||||
Government Properties Income Trust | 7,189 | 130,624 | ||||||
Highwoods Properties Inc. | 24,068 | 1,228,671 | ||||||
Hudson Pacific Properties Inc. | 37,021 | 1,252,050 | ||||||
JBG SMITH Propertiesb | 20,416 | 637,183 | ||||||
Kilroy Realty Corp. | 22,812 | 1,624,899 | ||||||
Mack-Cali Realty Corp. | 21,559 | 490,898 | ||||||
NorthStar Realty Europe Corp. | 13,296 | 179,097 | ||||||
Paramount Group Inc.a | 47,045 | 748,956 | ||||||
Piedmont Office Realty Trust Inc. Class Aa | 34,355 | 664,426 | ||||||
SL Green Realty Corp. | 22,683 | 2,170,309 | ||||||
Tier REIT Inc. | 11,678 | 228,539 | ||||||
Vornado Realty Trust | 40,545 | 3,035,199 | ||||||
|
| |||||||
25,153,605 | ||||||||
RESIDENTIAL REITS — 16.77% |
| |||||||
Altisource Residential Corp.a | 12,391 | 132,212 | ||||||
American Campus Communities Inc. | 31,695 | 1,317,878 | ||||||
American Homes 4 Rent Class A | 56,825 | 1,209,236 | ||||||
Apartment Investment & Management Co. Class A | 36,782 | 1,617,672 | ||||||
AvalonBay Communities Inc. | 32,359 | 5,867,657 | ||||||
Bluerock Residential Growth REIT Inc. | 6,072 | 68,553 | ||||||
Camden Property Trust | 21,464 | 1,958,375 | ||||||
Clipper Realty Inc. | 4,391 | 47,730 | ||||||
Education Realty Trust Inc. | 17,340 | 605,166 | ||||||
Equity LifeStyle Properties Inc. | 19,226 | 1,701,117 | ||||||
Equity Residential | 83,792 | 5,635,850 | ||||||
Essex Property Trust Inc. | 15,370 | 4,033,549 | ||||||
Independence Realty Trust Inc. | 17,407 | 176,681 | ||||||
Invitation Homes Inc.a | 20,984 | 473,609 | ||||||
Mid-America Apartment Communities Inc. | 26,633 | 2,725,888 | ||||||
NexPoint Residential Trust Inc.a | 4,443 | 105,521 | ||||||
Preferred Apartment Communities Inc. Class A | 8,150 | 161,778 | ||||||
Starwood Waypoint Homes | 30,053 | 1,091,224 | ||||||
Sun Communities Inc. | 17,906 | 1,616,196 | ||||||
UDR Inc. | 62,605 | 2,428,448 | ||||||
UMH Properties Inc. | 7,727 | 115,441 | ||||||
|
| |||||||
33,089,781 |
Security | Shares | Value | ||||||
RETAIL REITS — 17.89% |
| |||||||
Acadia Realty Trusta | 14,975 | $ | 421,546 | |||||
Agree Realty Corp. | 6,455 | 305,257 | ||||||
Alexander’s Inc. | 530 | 217,830 | ||||||
Brixmor Property Group Inc. | 72,067 | 1,259,010 | ||||||
CBL & Associates Properties Inc. | 33,687 | 264,106 | ||||||
Cedar Realty Trust Inc. | 20,655 | 112,363 | ||||||
DDR Corp. | 73,449 | 563,354 | ||||||
Federal Realty Investment Trusta | 16,930 | 2,040,404 | ||||||
Getty Realty Corp. | 7,704 | 218,871 | ||||||
GGP Inc.a | 144,815 | 2,818,100 | ||||||
Kimco Realty Corp. | 97,605 | 1,772,507 | ||||||
Kite Realty Group Trust | 14,532 | 271,603 | ||||||
Macerich Co. (The) | 32,214 | 1,758,884 | ||||||
National Retail Properties Inc. | 35,054 | 1,408,470 | ||||||
Pennsylvania REITa | 16,841 | 163,695 | ||||||
Ramco-Gershenson Properties Trust | 19,368 | 244,618 | ||||||
Realty Income Corp.a | 64,155 | 3,443,199 | ||||||
Regency Centers Corp. | 35,082 | 2,159,297 | ||||||
Retail Opportunity Investments Corp. | 25,931 | 466,239 | ||||||
Retail Properties of America Inc. Class A | 54,902 | 670,902 | ||||||
Saul Centers Inc.a | 2,728 | 166,735 | ||||||
Simon Property Group Inc. | 73,016 | 11,341,575 | ||||||
Tanger Factory Outlet Centers Inc.a | 22,008 | 500,682 | ||||||
Taubman Centers Inc. | 13,985 | 660,372 | ||||||
Urban Edge Propertiesa | 23,107 | 542,090 | ||||||
Urstadt Biddle Properties Inc. Class A | 7,498 | 162,932 | ||||||
Washington Prime Group Inc. | 44,373 | 347,441 | ||||||
Weingarten Realty Investors | 28,409 | 865,054 | ||||||
Whitestone REITa | 9,539 | 127,441 | ||||||
|
| |||||||
35,294,577 | ||||||||
SPECIALIZED REITS — 19.35% |
| |||||||
CoreCivic Inc. | 27,923 | 688,581 | ||||||
CoreSite Realty Corp.a | 8,026 | 888,879 | ||||||
CubeSmarta | 42,736 | 1,163,274 | ||||||
CyrusOne Inc. | 20,543 | 1,261,135 | ||||||
Digital Realty Trust Inc.a | 47,993 | 5,684,291 | ||||||
EPR Properties | 14,833 | 1,026,147 | ||||||
Equinix Inc. | 18,252 | 8,459,802 | ||||||
Extra Space Storage Inc.a | 28,722 | 2,343,428 |
14 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® CORE U.S. REIT ETF
October 31, 2017
Security | Shares | Value | ||||||
Farmland Partners Inc.a | 9,079 | $ | 75,810 | |||||
Four Corners Property Trust Inc. | 14,954 | 369,065 | ||||||
Gaming and Leisure Properties Inc. | 47,307 | 1,728,598 | ||||||
GEO Group Inc. (The) | 28,829 | 748,112 | ||||||
Gladstone Land Corp. | 2,831 | 37,454 | ||||||
Iron Mountain Inc. | 61,896 | 2,475,840 | ||||||
Lamar Advertising Co. Class Aa | 19,618 | 1,381,892 | ||||||
Life Storage Inc.a | 10,853 | 877,139 | ||||||
National Storage Affiliates Trusta | 10,668 | 264,460 | ||||||
Outfront Media Inc. | 32,827 | 769,793 | ||||||
Public Storage | 34,765 | 7,205,046 | ||||||
QTS Realty Trust Inc. Class A | 11,394 | 659,143 | ||||||
Safety Income and Growth Inc.a | 3,214 | 57,756 | ||||||
|
| |||||||
38,165,645 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| 196,910,552 | ||||||
SHORT-TERM INVESTMENTS — 7.89% |
| |||||||
MONEY MARKET FUNDS — 7.89% |
| |||||||
BlackRock Cash Funds: Institutional, | ||||||||
1.31%c,d,e | 15,333,941 | 15,337,007 | ||||||
BlackRock Cash Funds: Treasury, | ||||||||
1.00%c,d | 225,696 | 225,696 | ||||||
|
| |||||||
15,562,703 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| 15,562,703 | ||||||
|
|
Value | ||||||
TOTAL INVESTMENTS | $ | 212,473,255 | ||||
Other Assets, Less Liabilities — (7.71)% | (15,206,511 | ) | ||||
|
| |||||
NET ASSETS — 100.00% | $ | 197,266,744 | ||||
|
|
a | All or a portion of this security represents a security on loan. See Note 1. |
b | Non-income earning security. |
c | Affiliated issuer. See Schedule 1. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | All or a portion of this security represents an investment of securities lending collateral. See Note 1. |
f | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $204,923,343. Net unrealized appreciation was $7,547,204, of which $13,612,533 represented gross unrealized appreciation on investments and $6,065,329 represented gross unrealized depreciation on investments. |
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 04/30/17 | Shares purchased | Shares sold | Shares held at 10/31/17 | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, | 9,053,353 | 6,280,588 | b | — | 15,333,941 | $ | 15,337,007 | $ | (918 | ) | $ | (422 | ) | $ | — | c | ||||||||||||||||
BlackRock Cash Funds: Treasury, | 158,729 | 66,967 | b | — | 225,696 | 225,696 | — | — | 938 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 15,562,703 | $ | (918 | ) | $ | (422 | ) | $ | 938 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
c | Does not include income earned on investment of securities lending cash collateral which is not direct income of the Fund and is reflected as a component of securities lending income in the statement of operations. |
SCHEDULESOF INVESTMENTS | 15 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® CORE U.S. REIT ETF
October 31, 2017
Schedule 2 — Futures Contracts (Note 5)
Futures contracts outstanding as of October 31, 2017 were as follows:
Description | Number of contracts | Expiration date | Notional amount (000) | Value/ unrealized appreciation (depreciation) | ||||||||||||
Long Contracts: | ||||||||||||||||
DJ U.S. Real Estate | 10 | Dec 2017 | $ | 316 | $ | (2,708 | ) | |||||||||
|
| |||||||||||||||
Schedule 3 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: | ||||||||||||||||
Assets: | ||||||||||||||||
Common stocks | $ | 196,910,552 | $ | — | $ | — | $ | 196,910,552 | ||||||||
Money market funds | 15,562,703 | — | — | 15,562,703 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 212,473,255 | $ | — | $ | — | $ | 212,473,255 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Derivative financial instrumentsa: | ||||||||||||||||
Liabilities: | ||||||||||||||||
Futures contracts | $ | (2,708 | ) | $ | — | $ | — | $ | (2,708 | ) | ||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | (2,708 | ) | $ | — | $ | — | $ | (2,708 | ) | ||||||
|
|
|
|
|
|
|
| |||||||||
a | Shown at the unrealized appreciation (depreciation) on the contracts. |
See notes to financial statements.
16 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES® EUROPE DEVELOPED REAL ESTATE ETF
October 31, 2017
Security | Shares | Value | ||||||
COMMON STOCKS — 99.61% |
| |||||||
AUSTRIA — 2.04% |
| |||||||
BUWOG AG | 16,672 | $ | 480,890 | |||||
CA Immobilien Anlagen AG | 10,773 | 307,475 | ||||||
|
| |||||||
788,365 | ||||||||
BELGIUM — 3.60% |
| |||||||
Aedifica SA | 2,802 | 267,011 | ||||||
Befimmo SA | 3,013 | 187,223 | ||||||
Cofinimmo SA | 3,215 | 408,052 | ||||||
Intervest Offices & Warehouses NV | 2,470 | 62,987 | ||||||
Leasinvest Real Estate SCA | 315 | 35,177 | ||||||
Retail Estates NV | 841 | 67,415 | ||||||
Warehouses De Pauw CVA | 2,601 | 281,278 | ||||||
Wereldhave Belgium NV | 333 | 35,301 | ||||||
Xior Student Housing NV | 961 | 44,780 | ||||||
|
| |||||||
1,389,224 | ||||||||
FINLAND — 0.63% |
| |||||||
Citycon OYJ | 60,013 | 146,536 | ||||||
Technopolis OYJ | 21,804 | 98,300 | ||||||
|
| |||||||
244,836 | ||||||||
FRANCE — 19.67% |
| |||||||
ANF Immobilier | 1,034 | 26,681 | ||||||
Carmila SA | 3,335 | 92,369 | ||||||
Fonciere des Regions | 6,089 | 620,174 | ||||||
Gecina SA | 6,926 | 1,123,934 | ||||||
ICADE | 5,485 | 479,231 | ||||||
Klepierre SA | 31,987 | 1,272,354 | ||||||
Mercialys SA | 6,352 | 123,761 | ||||||
Unibail-Rodamco SE | 15,423 | 3,860,215 | ||||||
|
| |||||||
7,598,719 | ||||||||
GERMANY — 22.76% |
| |||||||
ADLER Real Estate AGa,b | 4,697 | 72,419 | ||||||
ADO Properties SAc | 4,537 | 223,096 | ||||||
alstria office REIT AG | 20,638 | 292,233 | ||||||
Deutsche Euroshop AG | 7,528 | 274,274 | ||||||
Deutsche Wohnen SE Bearer | 55,255 | 2,353,664 | ||||||
DIC Asset AG | 6,712 | 78,582 | ||||||
Grand City Properties SA | 16,952 | 363,367 | ||||||
Hamborner REIT AG | 11,824 | 125,154 | ||||||
LEG Immobilien AG | 9,846 | 1,000,192 | ||||||
TAG Immobilien AG | 22,831 | 392,704 | ||||||
TLG Immobilien AG | 12,153 | 281,312 | ||||||
Vonovia SE | 75,575 | 3,324,432 | ||||||
WCM Beteiligungs & Grundbesitz-AG | 2,895 | 12,364 | ||||||
|
| |||||||
8,793,793 |
Security | Shares | Value | ||||||
IRELAND — 1.21% |
| |||||||
Green REIT PLC | 106,953 | $ | 188,138 | |||||
Hibernia REIT PLC | 107,286 | 184,350 | ||||||
Irish Residential Properties REIT PLC | 54,434 | 93,534 | ||||||
|
| |||||||
466,022 | ||||||||
ITALY — 0.53% |
| |||||||
Beni Stabili SpA SIIQ | 157,783 | 139,695 | ||||||
Immobiliare Grande Distribuzione SIIQ SpA | 55,866 | 64,593 | ||||||
|
| |||||||
204,288 | ||||||||
NETHERLANDS — 2.11% |
| |||||||
Eurocommercial Properties NV | 7,335 | 305,480 | ||||||
NSI NV | 2,692 | 102,094 | ||||||
VastNed Retail NV | 2,808 | 122,931 | ||||||
Wereldhave NV | 6,285 | 285,657 | ||||||
|
| |||||||
816,162 | ||||||||
NORWAY — 0.61% |
| |||||||
Entra ASAc | 17,043 | 234,339 | ||||||
|
| |||||||
234,339 | ||||||||
SPAIN — 4.18% |
| |||||||
Axiare Patrimonio SOCIMI SA | 9,752 | 182,905 | ||||||
Hispania Activos Inmobiliarios SOCIMI SA | 13,764 | 237,389 | ||||||
Inmobiliaria Colonial SOCIMI SA | 39,008 | 371,219 | ||||||
Lar Espana Real Estate SOCIMI SA | 13,878 | 136,192 | ||||||
Merlin Properties SOCIMI SA | 52,190 | 688,850 | ||||||
|
| |||||||
1,616,555 | ||||||||
SWEDEN — 8.54% |
| |||||||
Castellum AB | 41,950 | 672,960 | ||||||
Catena AB | 2,364 | 42,074 | ||||||
D. Carnegie & Co. ABa,b | 5,597 | 77,385 | ||||||
Dios Fastigheter AB | 12,972 | 85,222 | ||||||
Fabege AB | 20,534 | 433,648 | ||||||
Fastighets AB Balder Class Ba | 15,090 | 392,941 | ||||||
Hemfosa Fastigheter AB | 23,364 | 283,824 | ||||||
Hufvudstaden AB Class A | 17,049 | 280,627 | ||||||
Klovern AB Class B | 87,973 | 118,428 | ||||||
Kungsleden AB | 29,385 | 209,722 | ||||||
Pandox AB | 10,416 | 189,861 | ||||||
Wallenstam AB Class B | 28,753 | 268,578 | ||||||
Wihlborgs Fastigheter AB | 10,325 | 245,182 | ||||||
|
| |||||||
3,300,452 | ||||||||
SWITZERLAND — 5.39% |
| |||||||
Allreal Holding AG Registered | 2,190 | 366,465 | ||||||
Mobimo Holding AG Registered | 950 | 240,168 |
SCHEDULESOF INVESTMENTS | 17 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® EUROPE DEVELOPED REAL ESTATE ETF
October 31, 2017
Security | Shares | Value | ||||||
PSP Swiss Property AG Registered | 6,108 | $ | 538,004 | |||||
Swiss Prime Site AG Registered | 10,996 | 939,315 | ||||||
|
| |||||||
2,083,952 | ||||||||
UNITED KINGDOM — 28.34% |
| |||||||
Assura PLC | 278,792 | 223,614 | ||||||
Big Yellow Group PLC | 22,566 | 232,990 | ||||||
British Land Co. PLC (The) | 159,893 | 1,276,103 | ||||||
Capital & Counties Properties PLC | 113,713 | 401,523 | ||||||
Capital & Regional PLC | 83,032 | 60,093 | ||||||
Custodian Reit PLC | 50,167 | 77,945 | ||||||
Daejan Holdings PLC | 708 | 58,245 | ||||||
Derwent London PLC | 15,571 | 553,330 | ||||||
Empiric Student Property PLC | 91,051 | 117,586 | ||||||
F&C Commercial Property Trust Ltd. | 82,126 | 155,409 | ||||||
F&C UK REIT | 37,777 | 53,176 | ||||||
GCP Student Living PLC | 59,776 | 115,100 | ||||||
Grainger PLC | 63,704 | 235,515 | ||||||
Great Portland Estates PLC | 50,727 | 418,661 | ||||||
Hammerson PLC | 123,409 | 858,737 | ||||||
Hansteen Holdings PLC | 124,964 | 227,346 | ||||||
Helical PLC | 15,321 | 62,461 | ||||||
Intu Properties PLC | 137,846 | 395,394 | ||||||
Land Securities Group PLC | 110,861 | 1,422,125 | ||||||
LondonMetric Property PLC | 99,311 | 232,637 | ||||||
Medicx Fund Ltd. | 65,816 | 78,879 | ||||||
NewRiver REIT PLC | 46,348 | 206,124 | ||||||
Phoenix Spree Deutschland Ltd. | 12,173 | 51,971 | ||||||
Picton Property Income Ltd. (The) | 83,483 | 95,341 | ||||||
Primary Health Properties PLC | 88,457 | 139,198 | ||||||
Redefine International PLC/Isle of Man | 186,623 | 92,216 | ||||||
Regional REIT Ltd.c | 38,708 | 53,715 | ||||||
Safestore Holdings PLC | 31,659 | 187,169 | ||||||
Schroder REIT Ltd. | 81,055 | 64,313 | ||||||
Segro PLC | 155,126 | 1,118,578 | ||||||
Shaftesbury PLC | 34,839 | 458,018 | ||||||
Standard Life Investment Property Income Trust Ltd. | 60,124 | 73,255 | ||||||
Target Healthcare REIT Ltd. | 37,154 | 57,850 | ||||||
Tritax Big Box REIT PLC | 211,912 | 414,515 | ||||||
UK Commercial Property Trust Ltd. | 101,765 | 118,314 | ||||||
UNITE Group PLC (The) | 36,974 | 345,171 | ||||||
Workspace Group PLC | 18,707 | 219,851 | ||||||
|
| |||||||
10,952,468 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| 38,489,175 |
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS — 0.78% |
| |||||||
MONEY MARKET FUNDS — 0.78% |
| |||||||
BlackRock Cash Funds: Institutional, | ||||||||
1.31%d,e,f | 293,978 | $ | 294,037 | |||||
BlackRock Cash Funds: Treasury, | ||||||||
1.00%d,e | 8,024 | 8,024 | ||||||
|
| |||||||
302,061 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| 302,061 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| 38,791,236 | ||||||
Other Assets, Less Liabilities — (0.39)% |
| (149,441 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 38,641,795 | |||||
|
|
a | Non-income earning security. |
b | All or a portion of this security represents a security on loan. See Note 1. |
c | This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933. |
d | Affiliated issuer. See Schedule 1. |
e | The rate quoted is the annualized seven-day yield of the fund at period end. |
f | All or a portion of this security represents an investment of securities lending collateral. See Note 1. |
g | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $40,316,266. Net unrealized depreciation was $1,525,030, of which $3,701,251 represented gross unrealized appreciation on investments and $5,226,281 represented gross unrealized depreciation on investments. |
18 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® EUROPE DEVELOPED REAL ESTATE ETF
October 31, 2017
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 04/30/17 | Shares purchased | Shares sold | Shares held at 10/31/17 | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, | 318,995 | — | (25,017 | )b | 293,978 | $ | 294,037 | $ | (110 | ) | $ | (48 | ) | $ | — | c | ||||||||||||||||
BlackRock Cash Funds: Treasury, | 27,687 | — | (19,663 | )b | 8,024 | 8,024 | — | — | 79 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 302,061 | $ | (110 | ) | $ | (48 | ) | $ | 79 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
c | Does not include income earned on investment of securities lending cash collateral which is not direct income of the Fund and is reflected as a component of securities lending income in the statement of operations. |
Schedule 2 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: |
| |||||||||||||||
Assets: |
| |||||||||||||||
Common stocks | $ | 38,489,175 | $ | — | $ | — | $ | 38,489,175 | ||||||||
Money market funds | 302,061 | — | — | 302,061 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 38,791,236 | $ | — | $ | — | $ | 38,791,236 | ||||||||
|
|
|
|
|
|
|
| |||||||||
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 19 |
Table of Contents
Schedule of Investments (Unaudited)
October 31, 2017
Security | Shares | Value | ||||||
COMMON STOCKS — 99.76% |
| |||||||
AUSTRALIA — 6.97% |
| |||||||
BWP Trust | 201,404 | $ | 477,178 | |||||
Charter Hall Retail REIT | 142,709 | 444,254 | ||||||
Cromwell Property Group | 627,224 | 480,924 | ||||||
Dexus | 405,167 | 3,035,166 | ||||||
Goodman Group | 700,165 | 4,488,079 | ||||||
GPT Group (The) | 720,691 | 2,812,682 | ||||||
Investa Office Fund | 224,387 | 770,779 | ||||||
Mirvac Group | 1,480,409 | 2,735,600 | ||||||
Scentre Group | 2,049,164 | 6,316,210 | ||||||
Shopping Centres Australasia Property Group | 303,753 | 547,321 | ||||||
Stockland | 969,526 | 3,360,096 | ||||||
Vicinity Centres | 1,320,085 | 2,682,264 | ||||||
Westfield Corp. | 767,772 | 4,574,115 | ||||||
|
| |||||||
32,724,668 | ||||||||
BELGIUM — 0.76% |
| |||||||
Aedifica SA | 6,913 | 658,760 | ||||||
Befimmo SA | 7,812 | 485,425 | ||||||
Cofinimmo SA | 8,189 | 1,039,359 | ||||||
Intervest Offices & Warehouses NV | 8,097 | 206,480 | ||||||
Leasinvest Real Estate SCA | 1,247 | 139,255 | ||||||
Retail Estates NV | 1,961 | 157,194 | ||||||
Warehouses De Pauw CVA | 6,374 | 689,299 | ||||||
Wereldhave Belgium NV | 1,240 | 131,453 | ||||||
Xior Student Housing NV | 1,863 | 86,812 | ||||||
|
| |||||||
3,594,037 | ||||||||
CANADA — 3.05% |
| |||||||
Allied Properties REIT | 34,128 | 1,094,447 | ||||||
Artis REIT | 61,526 | 663,895 | ||||||
Boardwalk REITa | 15,684 | 484,353 | ||||||
Canadian Apartment Properties REIT | 54,321 | 1,435,666 | ||||||
Canadian REIT | 29,774 | 1,076,308 | ||||||
Cominar REIT | 74,676 | 801,734 | ||||||
Crombie REIT | 34,867 | 361,896 | ||||||
Dream Global REIT | 52,888 | 457,452 | ||||||
Dream Office REIT | 32,163 | 545,656 | ||||||
Granite REIT | 18,824 | 727,785 | ||||||
H&R REIT | 116,121 | 1,929,495 | ||||||
Killam Apartment REIT | 25,501 | 261,320 | ||||||
Northview Apartment Real Estate Investment Trust | 20,691 | 373,661 |
Security | Shares | Value | ||||||
Pure Industrial Real Estate Trust | 107,648 | $ | 556,152 | |||||
RioCan REIT | 131,226 | 2,490,963 | ||||||
SmartCentres Real Estate Investment Trust | 46,678 | 1,049,359 | ||||||
|
| |||||||
14,310,142 | ||||||||
CHINA — 0.13% |
| |||||||
Spring REITa | 536,000 | 235,648 | ||||||
Yuexiu REIT | 623,000 | 392,879 | ||||||
|
| |||||||
628,527 | ||||||||
FRANCE — 4.16% |
| |||||||
ANF Immobilier | 3,774 | 97,383 | ||||||
Carmila SA | 8,603 | 238,275 | ||||||
Fonciere des Regions | 15,270 | 1,555,273 | ||||||
Gecina SA | 17,950 | 2,912,882 | ||||||
ICADE | 13,857 | 1,210,703 | ||||||
Klepierre SA | 82,463 | 3,280,148 | ||||||
Mercialys SA | 17,386 | 338,745 | ||||||
Unibail-Rodamco SE | 39,589 | 9,908,711 | ||||||
|
| |||||||
19,542,120 | ||||||||
GERMANY — 0.24% |
| |||||||
alstria office REIT AGa | 53,312 | 754,896 | ||||||
Hamborner REIT AGa | 33,379 | 353,308 | ||||||
|
| |||||||
1,108,204 | ||||||||
GREECE — 0.00% |
| |||||||
Grivalia Properties REIC AE | 1,008 | 10,510 | ||||||
|
| |||||||
10,510 | ||||||||
HONG KONG — 1.73% |
| |||||||
Champion REIT | 877,000 | 632,868 | ||||||
Link REIT | 893,500 | 7,507,104 | ||||||
|
| |||||||
8,139,972 | ||||||||
IRELAND — 0.27% |
| |||||||
Green REIT PLC | 292,430 | 514,406 | ||||||
Hibernia REIT PLC | 294,546 | 506,119 | ||||||
Irish Residential Properties REIT PLC | 156,733 | �� | 269,314 | |||||
|
| |||||||
1,289,839 | ||||||||
ITALY — 0.11% |
| |||||||
Beni Stabili SpA SIIQ | 403,788 | 357,498 | ||||||
Immobiliare Grande Distribuzione SIIQ SpA | 148,148 | 171,291 | ||||||
|
| |||||||
528,789 | ||||||||
JAPAN — 6.41% |
| |||||||
Activia Properties Inc. | 244 | 955,558 |
20 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® GLOBAL REIT ETF
October 31, 2017
Security | Shares | Value | ||||||
Advance Residence Investment Corp. | 511 | $ | 1,202,062 | |||||
AEON REIT Investment Corp.a | 568 | 571,849 | ||||||
Daiwa House REIT Investment Corp. | 606 | 1,413,271 | ||||||
Frontier Real Estate Investment Corp. | 181 | 709,632 | ||||||
Fukuoka REIT Corp. | 348 | 493,993 | ||||||
GLP J-REIT | 1,054 | 1,058,360 | ||||||
Hulic Reit Inc. | 398 | 555,161 | ||||||
Industrial & Infrastructure Fund Investment Corp. | 146 | 595,538 | ||||||
Invincible Investment Corp. | 1,616 | 655,616 | ||||||
Japan Excellent Inc. | 514 | 603,881 | ||||||
Japan Hotel REIT Investment Corp. | 1,647 | 1,088,530 | ||||||
Japan Logistics Fund Inc. | 334 | 599,630 | ||||||
Japan Prime Realty Investment Corp. | 345 | 1,109,720 | ||||||
Japan Real Estate Investment Corp. | 495 | 2,317,522 | ||||||
Japan Rental Housing Investments Inc. | 650 | 449,617 | ||||||
Japan Retail Fund Investment Corp. | 1,087 | 1,926,620 | ||||||
Kenedix Office Investment Corp. | 145 | 778,404 | ||||||
Mori Hills REIT Investment Corp. | 600 | 700,167 | ||||||
Mori Trust Sogo REIT Inc. | 431 | 614,847 | ||||||
Nippon Accommodations Fund Inc. | 181 | 698,482 | ||||||
Nippon Building Fund Inc. | 512 | 2,469,207 | ||||||
Nippon Prologis REIT Inc. | 714 | 1,500,512 | ||||||
Nomura Real Estate Master Fund Inc. | 1,618 | 2,023,390 | ||||||
Orix JREIT Inc. | 1,054 | 1,447,940 | ||||||
Premier Investment Corp. | 553 | 488,127 | ||||||
Sekisui House Reit Inc. | 386 | 427,681 | ||||||
Sekisui House Residential Investment Corp. | 469 | 458,558 | ||||||
TOKYU REIT Inc. | 397 | 466,072 | ||||||
United Urban Investment Corp. | 1,195 | 1,717,359 | ||||||
|
| |||||||
30,097,306 | ||||||||
MEXICO — 0.68% |
| |||||||
Fibra Uno Administracion SA de CV | 1,269,782 | 2,002,552 | ||||||
Macquarie Mexico Real Estate Management SA de CV | 380,600 | 457,589 |
Security | Shares | Value | ||||||
PLA Administradora Industrial S. de RL de CV | 276,453 | $ | 426,452 | |||||
Prologis Property Mexico SA de CV | 169,212 | 331,874 | ||||||
|
| |||||||
3,218,467 | ||||||||
NETHERLANDS — 0.46% |
| |||||||
Eurocommercial Properties NV | 19,000 | 791,292 | ||||||
NSI NV | 7,456 | 282,769 | ||||||
VastNed Retail NV | 7,831 | 342,832 | ||||||
Wereldhave NV | 16,051 | 729,526 | ||||||
|
| |||||||
2,146,419 | ||||||||
NEW ZEALAND — 0.12% |
| |||||||
Kiwi Property Group Ltd.a | 614,248 | 557,548 | ||||||
|
| |||||||
557,548 | ||||||||
SINGAPORE — 2.57% |
| |||||||
Ascendas REIT | 951,550 | 1,913,716 | ||||||
Ascott Residence Trust | 526,232 | 461,573 | ||||||
CapitaLand Commercial Trust | 933,764 | 1,189,137 | ||||||
CapitaLand Mall Trust | 939,600 | 1,393,124 | ||||||
CapitaLand Retail China Trust | 265,800 | 323,861 | ||||||
CDL Hospitality Trusts | 318,300 | 381,988 | ||||||
First REITa | 308,100 | 313,211 | ||||||
Fortune REIT | 523,000 | 633,489 | ||||||
Keppel REIT | 836,500 | 721,438 | ||||||
Lippo Malls Indonesia Retail Trust | 973,500 | 310,828 | ||||||
Mapletree Commercial Trusta | 795,292 | 907,721 | ||||||
Mapletree Greater China Commercial Trust | 771,400 | 665,293 | ||||||
Mapletree Industrial Trusta | 512,500 | 729,778 | ||||||
Mapletree Logistics Trust | 704,440 | 656,664 | ||||||
Suntec REIT | 1,025,300 | 1,467,510 | ||||||
|
| |||||||
12,069,331 | ||||||||
SOUTH AFRICA — 1.44% |
| |||||||
Arrowhead Properties Ltd. Class A | 401,763 | 225,865 | ||||||
Delta Property Fund Ltd. | 239,096 | 125,117 | ||||||
Emira Property Fund Ltd. | 188,393 | 174,654 | ||||||
Growthpoint Properties Ltd. | 1,103,276 | 1,912,228 | ||||||
Hyprop Investments Ltd. | 101,017 | 759,704 | ||||||
Rebosis Property Fund Ltd. | 200,911 | 152,020 | ||||||
Redefine Properties Ltd. | 2,018,148 | 1,514,191 | ||||||
Resilient REIT Ltd. | 119,004 | 1,185,222 | ||||||
SA Corporate Real Estate Ltd. | 1,002,433 | 339,549 | ||||||
Vukile Property Fund Ltd. | 270,986 | 377,507 | ||||||
|
| |||||||
6,766,057 |
SCHEDULESOF INVESTMENTS | 21 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® GLOBAL REIT ETF
October 31, 2017
Security | Shares | Value | ||||||
SPAIN — 0.89% |
| |||||||
Axiare Patrimonio SOCIMI SA | 25,449 | $ | 477,314 | |||||
Hispania Activos Inmobiliarios SOCIMI SA | 35,544 | 613,030 | ||||||
Inmobiliaria Colonial SOCIMI SA | 99,817 | 949,906 | ||||||
Lar Espana Real Estate SOCIMI SA | 33,280 | 326,594 | ||||||
Merlin Properties SOCIMI SA | 136,667 | 1,803,852 | ||||||
|
| |||||||
4,170,696 | ||||||||
TURKEY — 0.15% |
| |||||||
Dogus Gayrimenkul Yatirim Ortakligi ASa,b | 44,659 | 37,054 | ||||||
Emlak Konut Gayrimenkul Yatirim Ortakligi ASb | 757,664 | 526,855 | ||||||
Is Gayrimenkul Yatirim Ortakligi AS | 220,703 | 77,316 | ||||||
Torunlar Gayrimenkul Yatirim Ortakligi AS | 35,364 | 61,478 | ||||||
|
| |||||||
702,703 | ||||||||
UNITED KINGDOM — 5.37% |
| |||||||
Assura PLC | 656,439 | 526,518 | ||||||
Big Yellow Group PLC | 58,868 | 607,801 | ||||||
British Land Co. PLC (The) | 412,073 | 3,288,748 | ||||||
Capital & Regional PLC | 249,269 | 180,404 | ||||||
Custodian Reit PLC | 129,684 | 201,490 | ||||||
Derwent London PLC | 40,312 | 1,432,526 | ||||||
Empiric Student Property PLC | 233,616 | 301,699 | ||||||
F&C UK REIT | 123,748 | 174,191 | ||||||
GCP Student Living PLC | 115,829 | 223,032 | ||||||
Great Portland Estates PLC | 132,941 | 1,097,191 | ||||||
Hammerson PLC | 321,059 | 2,234,077 | ||||||
Hansteen Holdings PLC | 326,672 | 594,312 | ||||||
Intu Properties PLC | 364,358 | 1,045,115 | ||||||
Land Securities Group PLC | 285,413 | 3,661,279 | ||||||
LondonMetric Property PLC | 269,066 | 630,289 | ||||||
NewRiver REIT PLC | 110,125 | 489,760 | ||||||
Primary Health Properties PLCa | 261,341 | 411,252 | ||||||
Redefine International PLC/Isle of Man | 565,502 | 279,432 | ||||||
Regional REIT Ltd.c | 131,558 | 182,564 | ||||||
Safestore Holdings PLC | 82,964 | 490,486 | ||||||
Schroder REIT Ltd. | 248,301 | 197,015 | ||||||
Segro PLC | 398,462 | 2,873,219 | ||||||
Shaftesbury PLC | 91,376 | 1,201,294 | ||||||
Standard Life Investment Property Income Trust Ltd. | 188,773 | 230,000 |
Security | Shares | Value | ||||||
Target Healthcare REIT Ltd. | 125,913 | $ | 196,049 | |||||
Tritax Big Box REIT PLC | 554,122 | 1,083,902 | ||||||
UNITE Group PLC (The) | 88,751 | 828,534 | ||||||
Workspace Group PLC | 48,836 | 573,938 | ||||||
|
| |||||||
25,236,117 | ||||||||
UNITED STATES — 64.25% |
| |||||||
Acadia Realty Trust | 27,210 | 765,962 | ||||||
Agree Realty Corp. | 11,053 | 522,696 | ||||||
Alexander’s Inc. | 1,036 | 425,796 | ||||||
Alexandria Real Estate Equities Inc. | 36,907 | 4,574,992 | ||||||
American Assets Trust Inc. | 16,031 | 621,842 | ||||||
American Campus Communities Inc. | 53,957 | 2,243,532 | ||||||
American Homes 4 Rent Class A | 95,672 | 2,035,900 | ||||||
Apartment Investment & Management Co. Class A | 62,674 | 2,756,403 | ||||||
Apple Hospitality REIT Inc. | 87,238 | 1,652,288 | ||||||
Ashford Hospitality Trust Inc. | 34,877 | 245,185 | ||||||
AvalonBay Communities Inc. | 54,949 | 9,963,902 | ||||||
Boston Properties Inc. | 61,810 | 7,490,136 | ||||||
Brandywine Realty Trust | 72,071 | 1,260,522 | ||||||
Brixmor Property Group Inc. | 123,583 | 2,158,995 | ||||||
Camden Property Trust | 36,286 | 3,310,735 | ||||||
CareTrust REIT Inc. | 29,402 | 555,698 | ||||||
CBL & Associates Properties Inc.a | 55,178 | 432,596 | ||||||
Cedar Realty Trust Inc. | 33,920 | 184,525 | ||||||
Chatham Lodging Trust | 15,879 | 345,368 | ||||||
Chesapeake Lodging Trust | 25,130 | 701,127 | ||||||
Columbia Property Trust Inc. | 51,394 | 1,134,780 | ||||||
Corporate Office Properties Trust | 39,611 | 1,264,779 | ||||||
Cousins Properties Inc. | 164,653 | 1,485,170 | ||||||
CubeSmart | 73,132 | 1,990,653 | ||||||
DCT Industrial Trust Inc. | 37,049 | 2,149,583 | ||||||
DDR Corp. | 126,863 | 973,039 | ||||||
DiamondRock Hospitality Co. | 81,849 | 888,880 | ||||||
Digital Realty Trust Inc. | 81,521 | 9,655,347 | ||||||
Douglas Emmett Inc. | 58,537 | 2,329,187 | ||||||
Duke Realty Corp. | 142,278 | 4,052,077 | ||||||
EastGroup Properties Inc. | 13,263 | 1,201,495 | ||||||
Education Realty Trust Inc.a | 30,524 | 1,065,288 | ||||||
Empire State Realty Trust Inc. Class Aa | 50,744 | 1,017,417 | ||||||
EPR Properties | 25,913 | 1,792,661 | ||||||
Equity Commonwealthb | 49,550 | 1,488,978 |
22 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® GLOBAL REIT ETF
October 31, 2017
Security | Shares | Value | ||||||
Equity LifeStyle Properties Inc. | 32,347 | $ | 2,862,063 | |||||
Equity Residential | 142,664 | 9,595,581 | ||||||
Essex Property Trust Inc. | 26,230 | 6,883,539 | ||||||
Extra Space Storage Inc. | 48,885 | 3,988,527 | ||||||
Federal Realty Investment Trust | 28,790 | 3,469,771 | ||||||
First Industrial Realty Trust Inc. | 48,094 | 1,485,143 | ||||||
Forest City Realty Trust Inc. Class A | 96,881 | 2,386,179 | ||||||
Four Corners Property Trust Inc. | 23,861 | 588,889 | ||||||
Franklin Street Properties Corp. | 44,727 | 447,270 | ||||||
Gaming and Leisure Properties Inc. | 81,717 | 2,985,939 | ||||||
Getty Realty Corp. | 13,478 | 382,910 | ||||||
GGP Inc. | 247,676 | 4,819,775 | ||||||
Global Net Lease Inc.a | 28,272 | 610,675 | ||||||
Government Properties Income Trust | 1,741 | 31,634 | ||||||
Gramercy Property Trust | 60,797 | 1,805,671 | ||||||
HCP Inc. | 188,626 | 4,874,096 | ||||||
Healthcare Realty Trust Inc. | 49,270 | 1,588,465 | ||||||
Healthcare Trust of America Inc. Class A | 79,601 | 2,392,010 | ||||||
Hersha Hospitality Trust | 16,398 | 290,081 | ||||||
Highwoods Properties Inc. | 41,436 | 2,115,308 | ||||||
Hospitality Properties Trust | 32,018 | 915,074 | ||||||
Host Hotels & Resorts Inc. | 292,418 | 5,719,696 | ||||||
Hudson Pacific Properties Inc. | 62,993 | 2,130,423 | ||||||
Investors Real Estate Trust | 53,972 | 315,736 | ||||||
Invitation Homes Inc. | 35,088 | 791,936 | ||||||
JBG SMITH Propertiesb | 34,720 | 1,083,611 | ||||||
Kilroy Realty Corp. | 38,864 | 2,768,283 | ||||||
Kimco Realty Corp. | 166,020 | 3,014,923 | ||||||
Kite Realty Group Trust | 26,169 | 489,099 | ||||||
LaSalle Hotel Properties | 46,340 | 1,307,251 | ||||||
Lexington Realty Trust | 99,393 | 1,005,857 | ||||||
Liberty Property Trust | 59,584 | 2,554,962 | ||||||
Life Storage Inc.a | 18,837 | 1,522,406 | ||||||
LTC Properties Inc. | 16,290 | 757,648 | ||||||
Macerich Co. (The) | 55,151 | 3,011,245 | ||||||
Mack-Cali Realty Corp. | 37,421 | 852,076 | ||||||
Medical Properties Trust Inc.a | 146,034 | 1,932,030 | ||||||
Mid-America Apartment Communities Inc. | 45,227 | 4,628,983 | ||||||
Monmouth Real Estate Investment Corp. | 29,242 | 498,284 | ||||||
National Health Investors Inc. | 15,992 | 1,218,430 |
Security | Shares | Value | ||||||
National Retail Properties Inc.a | 60,039 | $ | 2,412,367 | |||||
National Storage Affiliates Trust | 17,484 | 433,428 | ||||||
New Senior Investment Group Inc.a | 31,077 | 277,828 | ||||||
Omega Healthcare Investors Inc.a | 78,504 | 2,265,625 | ||||||
Paramount Group Inc. | 80,572 | 1,282,706 | ||||||
Park Hotels & Resorts Inc. | 58,646 | 1,688,418 | ||||||
Pebblebrook Hotel Trusta | 27,678 | 986,997 | ||||||
Pennsylvania REITa | 29,417 | 285,933 | ||||||
Physicians Realty Trust | 72,851 | 1,266,150 | ||||||
Piedmont Office Realty Trust Inc. Class A | 60,356 | 1,167,285 | ||||||
Prologis Inc. | 210,627 | 13,602,292 | ||||||
PS Business Parks Inc. | 8,186 | 1,083,253 | ||||||
Public Storage | 59,303 | 12,290,547 | ||||||
QTS Realty Trust Inc. Class A | 19,022 | 1,100,423 | ||||||
Quality Care Properties Inc.b | 37,794 | 598,279 | ||||||
Ramco-Gershenson Properties Trust | 34,033 | 429,837 | ||||||
Realty Income Corp.a | 109,625 | 5,883,574 | ||||||
Regency Centers Corp.a | 60,123 | 3,700,571 | ||||||
Retail Opportunity Investments Corp. | 44,507 | 800,236 | ||||||
Retail Properties of America Inc. Class A | 96,473 | 1,178,900 | ||||||
Rexford Industrial Realty Inc. | 27,373 | 812,704 | ||||||
RLJ Lodging Trust | 68,619 | 1,486,288 | ||||||
Ryman Hospitality Properties Inc. | 17,861 | 1,181,148 | ||||||
Sabra Health Care REIT Inc. | 70,342 | 1,401,213 | ||||||
Saul Centers Inc. | 5,222 | 319,169 | ||||||
Select Income REIT | 28,470 | 687,835 | ||||||
Senior Housing Properties Trust | 52,476 | 965,558 | ||||||
Seritage Growth Properties Class Aa | 10,105 | 415,619 | ||||||
Simon Property Group Inc. | 124,313 | 19,309,538 | ||||||
SL Green Realty Corp. | 38,829 | 3,715,159 | ||||||
Spirit Realty Capital Inc.a | 195,212 | 1,622,212 | ||||||
STAG Industrial Inc.a | 36,942 | 1,008,517 | ||||||
Starwood Waypoint Homes | 51,058 | 1,853,916 | ||||||
STORE Capital Corp. | 68,141 | 1,682,401 | ||||||
Summit Hotel Properties Inc. | 41,497 | 656,068 | ||||||
Sun Communities Inc. | 30,308 | 2,735,600 | ||||||
Sunstone Hotel Investors Inc. | 89,568 | 1,461,750 | ||||||
Tanger Factory Outlet Centers Inc.a | 38,116 | 867,139 | ||||||
Taubman Centers Inc. | 24,254 | 1,145,274 |
SCHEDULESOF INVESTMENTS | 23 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® GLOBAL REIT ETF
October 31, 2017
Security | Shares | Value | ||||||
Terreno Realty Corp. | 19,590 | $ | 719,345 | |||||
Tier REIT Inc. | 20,383 | 398,895 | ||||||
UDR Inc. | 106,557 | 4,133,346 | ||||||
Universal Health Realty Income Trusta | 5,492 | 402,069 | ||||||
Urban Edge Properties | 38,884 | 912,219 | ||||||
Urstadt Biddle Properties Inc. Class A | 12,510 | 271,842 | ||||||
Ventas Inc. | 142,258 | 8,926,690 | ||||||
VEREIT Inc. | 395,870 | 3,123,414 | ||||||
Vornado Realty Trust | 69,068 | 5,170,430 | ||||||
Washington Prime Group Inc.a | 76,307 | 597,484 | ||||||
Washington REIT | 31,372 | 1,009,865 | ||||||
Weingarten Realty Investors | 48,519 | 1,477,404 | ||||||
Welltower Inc. | 147,043 | 9,845,999 | ||||||
WP Carey Inc.a | 42,596 | 2,902,917 | ||||||
Xenia Hotels & Resorts Inc. | 44,692 | 972,498 | ||||||
|
| |||||||
301,785,187 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| 468,626,639 |
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS — 4.01% |
| |||||||
MONEY MARKET FUNDS — 4.01% |
| |||||||
BlackRock Cash Funds: Institutional, | ||||||||
1.31%d,e,f | 18,540,039 | $ | 18,543,747 | |||||
BlackRock Cash Funds: Treasury, | ||||||||
1.00%d,e | 271,416 | 271,416 | ||||||
|
| |||||||
18,815,163 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| 18,815,163 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| 487,441,802 | ||||||
Other Assets, Less Liabilities — (3.77)% |
| (17,703,864 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 469,737,938 | |||||
|
|
a | All or a portion of this security represents a security on loan. See Note 1. |
b | Non-income earning security. |
c | This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933. |
d | Affiliated issuer. See Schedule 1. |
e | The rate quoted is the annualized seven-day yield of the fund at period end. |
f | All or a portion of this security represents an investment of securities lending collateral. See Note 1. |
g | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $494,732,809. Net unrealized depreciation was $7,291,007, of which $23,955,596 represented gross unrealized appreciation on investments and $31,246,603 represented gross unrealized depreciation on investments. |
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 04/30/17 | Shares purchased | Shares sold | Shares held at 10/31/17 | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, | 16,058,407 | 2,481,632 | b | — | 18,540,039 | $ | 18,543,747 | $ | (5,129 | ) | $ | (1,418 | ) | $ | — | c | ||||||||||||||||
BlackRock Cash Funds: Treasury, | 367,526 | — | (96,110 | )b | 271,416 | 271,416 | — | — | 2,386 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 18,815,163 | $ | (5,129 | ) | $ | (1,418 | ) | $ | 2,386 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
c | Does not include income earned on investment of securities lending cash collateral which is not direct income of the Fund and is reflected as a component of securities lending income in the statement of operations. |
24 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® GLOBAL REIT ETF
October 31, 2017
Schedule 2 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: |
| |||||||||||||||
Assets: |
| |||||||||||||||
Common stocks | $ | 468,626,639 | $ | — | $ | — | $ | 468,626,639 | ||||||||
Money market funds | 18,815,163 | — | — | 18,815,163 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 487,441,802 | $ | — | $ | — | $ | 487,441,802 | ||||||||
|
|
|
|
|
|
|
| |||||||||
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 25 |
Table of Contents
Schedule of Investments (Unaudited)
iSHARES® INTERNATIONAL DEVELOPED REAL ESTATE ETF
October 31, 2017
Security | Shares | Value | ||||||
COMMON STOCKS — 99.48% |
| |||||||
AUSTRALIA — 12.09% |
| |||||||
BGP Holdings PLCa,b | 6,603,392 | $ | 77 | |||||
BWP Trust | 433,780 | 1,027,737 | ||||||
Charter Hall Retail REIT | 302,785 | 942,571 | ||||||
Cromwell Property Group | 1,319,790 | 1,011,949 | ||||||
Dexus | 901,874 | 6,756,071 | ||||||
Goodman Group | 1,555,950 | 9,973,687 | ||||||
GPT Group (The) | 1,594,900 | 6,224,508 | ||||||
Investa Office Fund | 493,845 | 1,696,377 | ||||||
Mirvac Group | 3,281,230 | 6,063,279 | ||||||
Scentre Group | 4,532,140 | 13,969,574 | ||||||
Shopping Centres Australasia Property Group | 654,442 | 1,179,215 | ||||||
Stockland | 2,146,555 | 7,439,338 | ||||||
Vicinity Centres | 2,903,920 | 5,900,439 | ||||||
Westfield Corp. | 1,696,170 | 10,105,183 | ||||||
|
| |||||||
72,290,005 | ||||||||
AUSTRIA — 0.75% |
| |||||||
BUWOG AG | 94,589 | 2,728,340 | ||||||
CA Immobilien Anlagen AG | 61,295 | 1,749,438 | ||||||
|
| |||||||
4,477,778 | ||||||||
BELGIUM — 1.33% |
| |||||||
Aedifica SA | 15,990 | 1,523,734 | ||||||
Befimmo SA | 17,426 | 1,082,824 | ||||||
Cofinimmo SA | 18,450 | 2,341,698 | ||||||
Intervest Offices & | 13,940 | 355,481 | ||||||
Leasinvest Real Estate SCA | 1,845 | 206,035 | ||||||
Retail Estates NV | 4,920 | 394,388 | ||||||
Warehouses De Pauw CVA | 14,668 | 1,586,231 | ||||||
Wereldhave Belgium NV | 2,053 | 217,639 | ||||||
Xior Student Housing NV | 5,357 | 249,626 | ||||||
|
| |||||||
7,957,656 | ||||||||
CANADA — 5.92% |
| |||||||
Allied Properties REIT | 74,631 | 2,393,333 | ||||||
Artis REIT | 134,480 | 1,451,103 | ||||||
Boardwalk REITc | 33,415 | 1,031,922 | ||||||
Canadian Apartment | 119,515 | 3,158,697 | ||||||
Canadian REIT | 65,190 | 2,356,570 | ||||||
Chartwell Retirement Residences | 168,753 | 2,009,432 | ||||||
Cominar REIT | 161,130 | 1,729,919 | ||||||
Crombie REIT | 77,490 | 804,295 | ||||||
Dream Global REIT | 120,950 | 1,046,150 |
Security | Shares | Value | ||||||
Dream Office REIT | 67,240 | $ | 1,140,748 | |||||
First Capital Realty Inc. | 130,191 | 2,066,331 | ||||||
Granite REIT | 41,616 | 1,608,984 | ||||||
H&R REIT | 252,765 | 4,200,005 | ||||||
Killam Apartment REIT | 65,190 | 668,032 | ||||||
Northview Apartment Real Estate Investment Trust | 44,704 | 807,315 | ||||||
Pure Industrial Real Estate Trust | 232,889 | 1,203,197 | ||||||
RioCan REIT | 286,795 | 5,444,010 | ||||||
SmartCentres Real Estate Investment Trust | 102,910 | 2,313,499 | ||||||
|
| |||||||
35,433,542 | ||||||||
FINLAND — 0.23% | ||||||||
Citycon OYJ | 343,785 | 839,432 | ||||||
Technopolis OYJ | 119,925 | 540,665 | ||||||
|
| |||||||
1,380,097 | ||||||||
FRANCE — 7.22% | ||||||||
ANF Immobilier | 6,970 | 179,851 | ||||||
Carmila SA | 18,953 | 524,935 | ||||||
Fonciere des Regions | 34,440 | 3,507,768 | ||||||
Gecina SA | 39,395 | 6,392,923 | ||||||
ICADE | 31,365 | 2,740,399 | ||||||
Klepierre SA | 182,040 | 7,241,044 | ||||||
Mercialys SA | 36,900 | 718,952 | ||||||
Unibail-Rodamco SE | 87,535 | 21,909,091 | ||||||
|
| |||||||
43,214,963 | ||||||||
GERMANY — 8.36% | ||||||||
ADLER Real Estate AGb,c | 25,387 | 391,420 | ||||||
ADO Properties SAd | 25,889 | 1,273,028 | ||||||
alstria office REIT AG | 117,260 | 1,660,398 | ||||||
Deutsche Euroshop AG | 43,050 | 1,568,475 | ||||||
Deutsche Wohnen SE Bearer | 314,470 | 13,395,288 | ||||||
DIC Asset AG | 38,335 | 448,816 | ||||||
Grand City Properties SA | 96,145 | 2,060,876 | ||||||
Hamborner REIT AG | 68,061 | 720,408 | ||||||
LEG Immobilien AG | 55,760 | 5,664,303 | ||||||
TAG Immobilien AG | 130,403 | 2,242,995 | ||||||
TLG Immobilien AG | 72,220 | 1,671,716 | ||||||
Vonovia SE | 430,138 | 18,921,129 | ||||||
|
| |||||||
50,018,852 | ||||||||
HONG KONG — 17.20% | ||||||||
Champion REIT | 1,845,000 | 1,331,404 | ||||||
CK Asset Holdings Ltd. | 2,384,500 | 19,606,460 | ||||||
Hang Lung Properties Ltd. | 1,845,000 | 4,237,791 | ||||||
Henderson Land Development Co. Ltd. | 948,035 | 6,179,033 |
26 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® INTERNATIONAL DEVELOPED REAL ESTATE ETF
October 31, 2017
Security | Shares | Value | ||||||
Hongkong Land Holdings Ltd. | 1,045,500 | $ | 7,579,875 | |||||
Hysan Development Co. Ltd. | 509,000 | 2,459,599 | ||||||
Link REIT | 1,953,500 | 16,413,126 | ||||||
New World Development Co. Ltd. | 4,920,333 | 7,328,343 | ||||||
Sino Land Co. Ltd. | 2,560,800 | 4,411,437 | ||||||
Sun Hung Kai Properties Ltd. | 1,254,000 | 20,509,421 | ||||||
Swire Properties Ltd. | 943,000 | 3,184,913 | ||||||
Wharf Holdings Ltd. (The) | 1,060,900 | 9,647,883 | ||||||
|
| |||||||
102,889,285 | ||||||||
IRELAND — 0.45% | ||||||||
Green REIT PLC | 609,554 | 1,072,251 | ||||||
Hibernia REIT PLC | 618,895 | 1,063,448 | ||||||
Irish Residential Properties | 332,715 | 571,704 | ||||||
|
| |||||||
2,707,403 | ||||||||
ISRAEL — 0.25% | ||||||||
Azrieli Group Ltd. | 26,127 | 1,474,630 | ||||||
|
| |||||||
1,474,630 | ||||||||
ITALY — 0.19% | ||||||||
Beni Stabili SpA SIIQ | 894,620 | 792,062 | ||||||
Immobiliare Grande Distribuzione SIIQ SpA | 300,530 | 347,477 | ||||||
|
| |||||||
1,139,539 | ||||||||
JAPAN — 21.46% | ||||||||
Activia Properties Inc. | 478 | 1,871,953 | ||||||
Advance Residence | 1,107 | 2,604,075 | ||||||
Aeon Mall Co. Ltd. | 102,500 | 1,817,632 | ||||||
AEON REIT Investment Corp.c | 1,230 | 1,238,335 | ||||||
Daiwa House REIT | 1,308 | 3,050,427 | ||||||
Daiwa Office Investment Corp. | 223 | 1,083,305 | ||||||
Frontier Real Estate Investment Corp. | 410 | 1,607,454 | ||||||
Fukuoka REIT Corp. | 615 | 873,004 | ||||||
GLP J-REIT | 2,050 | 2,058,479 | ||||||
Hulic Co. Ltd. | 307,500 | 3,152,667 | ||||||
Hulic Reit Inc. | 820 | 1,143,800 | ||||||
Industrial & Infrastructure Fund Investment Corp. | 282 | 1,150,286 | ||||||
Invincible Investment Corp. | 3,280 | 1,330,705 | ||||||
Japan Excellent Inc. | 1,025 | 1,204,237 | ||||||
Japan Hotel REIT | 3,485 | 2,303,296 | ||||||
Japan Logistics Fund Inc. | 820 | 1,472,146 |
Security | Shares | Value | ||||||
Japan Prime Realty | 713 | $ | 2,293,422 | |||||
Japan Real Estate | 1,073 | 5,023,638 | ||||||
Japan Rental Housing Investments Inc. | 1,230 | 850,814 | ||||||
Japan Retail Fund | 2,460 | 4,360,151 | ||||||
Kenedix Office Investment Corp. | 299 | 1,605,122 | ||||||
Kenedix Retail REIT Corp. | 410 | 809,681 | ||||||
Mitsubishi Estate Co. Ltd. | 1,045,500 | 18,820,472 | ||||||
Mitsui Fudosan Co. Ltd. | 840,500 | 19,424,034 | ||||||
Mori Hills REIT Investment Corp. | 1,230 | 1,435,343 | ||||||
Mori Trust Sogo REIT Inc. | 880 | 1,255,373 | ||||||
Nippon Accommodations | 410 | 1,582,197 | ||||||
Nippon Building Fund Inc. | 1,115 | 5,377,277 | ||||||
Nippon Prologis REIT Inc. | 1,562 | 3,282,633 | ||||||
Nomura Real Estate Holdings Inc. | 102,500 | 2,242,498 | ||||||
Nomura Real Estate Master | 3,485 | 4,358,167 | ||||||
NTT Urban Development Corp. | 82,000 | 843,598 | ||||||
Orix JREIT Inc. | 2,255 | 3,097,822 | ||||||
Premier Investment Corp. | 1,025 | 904,757 | ||||||
Sekisui House Reit Inc. | 820 | 908,545 | ||||||
Sekisui House Residential Investment Corp. | 1,025 | 1,002,178 | ||||||
Sumitomo Realty & Development Co. Ltd. | 410,000 | 13,584,881 | ||||||
Tokyo Tatemono Co. Ltd. | 184,500 | 2,567,055 | ||||||
TOKYU REIT Inc. | 820 | 962,668 | ||||||
United Urban Investment Corp. | 2,665 | 3,829,926 | ||||||
|
| |||||||
128,384,053 | ||||||||
NETHERLANDS — 0.78% | ||||||||
Eurocommercial Properties NV | 41,410 | 1,724,601 | ||||||
NSI NV | 15,510 | 588,216 | ||||||
VastNed Retail NV | 16,400 | 717,973 | ||||||
Wereldhave NV | 35,875 | 1,630,537 | ||||||
|
| |||||||
4,661,327 | ||||||||
NEW ZEALAND — 0.19% | ||||||||
Kiwi Property Group Ltd. | 1,258,849 | 1,142,647 | ||||||
|
| |||||||
1,142,647 | ||||||||
NORWAY — 0.23% | ||||||||
Entra ASAd | 98,195 | 1,350,168 | ||||||
|
| |||||||
1,350,168 |
SCHEDULESOF INVESTMENTS | 27 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® INTERNATIONAL DEVELOPED REAL ESTATE ETF
October 31, 2017
Security | Shares | Value | ||||||
SINGAPORE — 5.77% | ||||||||
Ascendas REIT | 2,111,595 | $ | 4,246,749 | |||||
CapitaLand Commercial Trust | 2,094,267 | 2,667,024 | ||||||
CapitaLand Ltd. | 2,214,000 | 5,964,019 | ||||||
CapitaLand Mall Trust | 2,050,000 | 3,039,489 | ||||||
CDL Hospitality Trusts | 711,700 | 854,103 | ||||||
City Developments Ltd. | 410,000 | 3,894,157 | ||||||
Fortune REIT | 1,230,000 | 1,489,848 | ||||||
Keppel REITc | 1,742,500 | 1,502,817 | ||||||
Mapletree Commercial Trust | 1,722,055 | 1,965,499 | ||||||
Mapletree Industrial Trust | 1,127,500 | 1,605,512 | ||||||
Mapletree Logistics Trust | 1,459,161 | 1,360,199 | ||||||
Suntec REIT | 2,234,500 | 3,198,235 | ||||||
UOL Group Ltd. | 410,000 | 2,720,493 | ||||||
|
| |||||||
34,508,144 | ||||||||
SPAIN — 1.53% | ||||||||
Axiare Patrimonio SOCIMI SA | 55,145 | 1,034,283 | ||||||
Hispania Activos Inmobiliarios SOCIMI SA | 77,520 | 1,336,994 | ||||||
Inmobiliaria Colonial SOCIMI SA | 219,145 | 2,085,488 | ||||||
Lar Espana Real Estate | 79,229 | 777,517 | ||||||
Merlin Properties SOCIMI SA | 296,921 | 3,919,025 | ||||||
|
| |||||||
9,153,307 | ||||||||
SWEDEN — 3.13% | ||||||||
Castellum AB | 238,877 | 3,832,053 | ||||||
Catena AB | 13,549 | 241,143 | ||||||
D. Carnegie & Co. ABb,c | 31,571 | 436,506 | ||||||
Dios Fastigheter AB | 73,124 | 480,401 | ||||||
Fabege AB | 116,850 | 2,467,699 | ||||||
Fastighets AB Balder Class Bb,c | 85,280 | 2,220,674 | ||||||
Hemfosa Fastigheter AB | 132,043 | 1,604,048 | ||||||
Hufvudstaden AB Class A | 96,760 | 1,592,672 | ||||||
Klovern AB Class B | 500,017 | 673,116 | ||||||
Kungsleden AB | 166,375 | 1,187,427 | ||||||
Pandox AB | 58,835 | 1,072,436 | ||||||
Wallenstam AB Class B | 165,077 | 1,541,965 | ||||||
Wihlborgs Fastigheter AB | 58,015 | 1,377,647 | ||||||
|
| |||||||
18,727,787 | ||||||||
SWITZERLAND — 1.98% | ||||||||
Allreal Holding AG Registered | 12,505 | 2,092,530 | ||||||
Mobimo Holding AG Registered | 5,535 | 1,399,298 | ||||||
PSP Swiss Property AG Registered | 34,850 | 3,069,653 | ||||||
Swiss Prime Site AG Registered | 61,717 | 5,272,073 | ||||||
|
| |||||||
11,833,554 |
Security | Shares | Value | ||||||
UNITED KINGDOM — 10.42% | ||||||||
Assura PLC | 1,572,555 | $ | 1,261,318 | |||||
Big Yellow Group PLC | 129,150 | 1,333,450 | ||||||
British Land Co. PLC (The) | 909,176 | 7,256,119 | ||||||
Capital & Counties | 643,905 | 2,273,642 | ||||||
Capital & Regional PLC | 500,405 | 362,160 | ||||||
Custodian Reit PLC | 276,135 | 429,032 | ||||||
Daejan Holdings PLC | 4,100 | 337,293 | ||||||
Derwent London PLC | 88,765 | 3,154,350 | ||||||
Empiric Student Property PLC | 515,165 | 665,301 | ||||||
F&C Commercial Property | 466,375 | 882,535 | ||||||
F&C UK REIT | 197,210 | 277,598 | ||||||
GCP Student Living PLC | 340,069 | 654,813 | ||||||
Grainger PLC | 355,675 | 1,314,936 | ||||||
Great Portland Estates PLC | 290,156 | 2,394,719 | ||||||
Hammerson PLC | 700,690 | 4,875,725 | ||||||
Hansteen Holdings PLC | 703,765 | 1,280,354 | ||||||
Helical PLC | 91,635 | 373,578 | ||||||
Intu Properties PLC | 780,230 | 2,237,991 | ||||||
Land Securities Group PLC | 630,281 | 8,085,247 | ||||||
LondonMetric Property PLC | 567,648 | 1,329,718 | ||||||
Medicx Fund Ltd. | 356,085 | 426,759 | ||||||
NewRiver REIT PLC | 263,473 | 1,171,745 | ||||||
Phoenix Spree Deutschland Ltd. | 65,395 | 279,195 | ||||||
Picton Property Income Ltd. (The) | 480,344 | 548,571 | ||||||
Primary Health Properties PLC | 512,591 | 806,624 | ||||||
Redefine International PLC/Isle of Man | 1,066,529 | 527,004 | ||||||
Regional REIT Ltd.d | 236,365 | 328,006 | ||||||
Safestore Holdings PLC | 179,904 | 1,063,599 | ||||||
Schroder REIT Ltd. | 473,962 | 376,065 | ||||||
Segro PLC | 879,450 | 6,341,514 | ||||||
Shaftesbury PLC | 199,690 | 2,625,267 | ||||||
Standard Life Investment Property Income Trust Ltd. | 353,010 | 430,106 | ||||||
Target Healthcare REIT Ltd. | 222,015 | 345,682 | ||||||
Tritax Big Box REIT PLC | 1,214,966 | 2,376,560 | ||||||
UK Commercial Property | 588,760 | 684,505 | ||||||
UNITE Group PLC (The) | 208,385 | 1,945,377 | ||||||
Workspace Group PLC | 106,600 | 1,252,802 | ||||||
|
| |||||||
62,309,260 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS |
| |||||||
(Cost: $598,789,898) | 595,053,997 |
28 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® INTERNATIONAL DEVELOPED REAL ESTATE ETF
October 31, 2017
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS — 1.43% |
| |||||||
MONEY MARKET FUNDS — 1.43% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
1.31%e,f,g | 8,090,879 | $ | 8,092,497 | |||||
BlackRock Cash Funds: Treasury, |
| |||||||
1.00%e,f | 480,922 | 480,922 | ||||||
|
| |||||||
8,573,419 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $8,573,200) | 8,573,419 | |||||||
|
|
Value | ||||||
TOTAL INVESTMENTS | $ | 603,627,416 | ||||
Other Assets, Less Liabilities — (0.91)% | (5,444,380 | ) | ||||
|
| |||||
NET ASSETS — 100.00% | $ | 598,183,036 | ||||
|
|
a | Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. |
b | Non-income earning security. |
c | All or a portion of this security represents a security on loan. See Note 1. |
d | This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933. |
e | Affiliated issuer. See Schedule 1. |
f | The rate quoted is the annualized seven-day yield of the fund at period end. |
g | All or a portion of this security represents an investment of securities lending collateral. See Note 1. |
h | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $625,478,564. Net unrealized depreciation was $21,807,674, of which $44,124,146 represented gross unrealized appreciation on investments and $65,931,820 represented gross unrealized depreciation on investments. |
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 04/30/17 | Shares purchased | Shares sold | Shares held at 10/31/17 | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, | 6,245,151 | 1,845,728 | b | — | 8,090,879 | $ | 8,092,497 | $ | 117 | $ | (1,001 | ) | $ | — | c | |||||||||||||||||
BlackRock Cash Funds: Treasury, | 511,831 | — | (30,909 | )b | 480,922 | 480,922 | — | — | 1,757 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 8,573,419 | $ | 117 | $ | (1,001 | ) | $ | 1,757 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
c | Does not include income earned on investment of securities lending cash collateral which is not direct income of the Fund and is reflected as a component of securities lending income in the statement of operations. |
Schedule 2 — Futures Contracts (Note 5)
Futures contracts outstanding as of October 31, 2017 were as follows:
Description | Number of contracts | Expiration date | Notional amount (000) | Value/ unrealized appreciation (depreciation) | ||||||||||||
Long Contracts: | ||||||||||||||||
MSCI EAFE E-Mini | 30 | Dec 2017 | $ | 3,011 | $ | 43,474 | ||||||||||
|
| |||||||||||||||
SCHEDULESOF INVESTMENTS | 29 |
Table of Contents
Schedule of Investments (Unaudited) (Continued)
iSHARES® INTERNATIONAL DEVELOPED REAL ESTATE ETF
October 31, 2017
Schedule 3 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: | ||||||||||||||||
Assets: | ||||||||||||||||
Common stocks | $ | 595,053,920 | $ | — | $ | 77 | $ | 595,053,997 | ||||||||
Money market funds | 8,573,419 | — | — | 8,573,419 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 603,627,339 | $ | — | $ | 77 | $ | 603,627,416 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Derivative financial instrumentsa: | ||||||||||||||||
Assets: | ||||||||||||||||
Futures contracts | $ | 43,474 | $ | — | $ | — | $ | 43,474 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 43,474 | $ | — | $ | — | $ | 43,474 | ||||||||
|
|
|
|
|
|
|
| |||||||||
a | Shown at the unrealized appreciation (depreciation) on the contracts. |
See notes to financial statements.
30 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Assets and Liabilities (Unaudited)
iSHARES® TRUST
October 31, 2017
iShares Cohen & Steers REIT ETF | iShares Core U.S. REIT ETF | iShares Europe Developed Real Estate ETF | ||||||||||
ASSETS | ||||||||||||
Investments in securities, at cost: | ||||||||||||
Unaffiliated | $ | 2,911,822,782 | $ | 188,362,728 | $ | 39,424,481 | ||||||
Affiliated (Note 2) | 252,615,170 | 15,562,438 | 302,029 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments in securities | $ | 3,164,437,952 | $ | 203,925,166 | $ | 39,726,510 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 3,130,946,440 | $ | 196,910,551 | $ | 38,489,175 | ||||||
Affiliated (Note 2) | 252,639,649 | 15,562,704 | 302,061 | |||||||||
Foreign currency, at valueb | — | — | 64,708 | |||||||||
Cash pledged to broker for futures contracts | 161,000 | 10,000 | — | |||||||||
Receivables: | ||||||||||||
Dividends and interest | 894,980 | 132,367 | 39,212 | |||||||||
Capital shares sold | 19,369 | — | — | |||||||||
Futures variation margin | 10,497 | 500 | — | |||||||||
Tax reclaims | — | — | 56,147 | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 3,384,671,935 | 212,616,122 | 38,951,303 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Collateral for securities on loan (Note 1) | 246,726,257 | 15,337,205 | 293,797 | |||||||||
Capital shares redeemed | 9,080 | — | — | |||||||||
Investment advisory fees (Note 2) | 919,864 | 12,173 | 15,711 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 247,655,201 | 15,349,378 | 309,508 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 3,137,016,734 | $ | 197,266,744 | $ | 38,641,795 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 3,089,457,288 | $ | 191,204,795 | $ | 43,078,090 | ||||||
Distributions in excess of net investment income | (17,346,628 | ) | (823,673 | ) | (26,572 | ) | ||||||
Accumulated net realized loss | (154,256,741 | ) | (1,659,759 | ) | (3,475,211 | ) | ||||||
Net unrealized appreciation (depreciation) | 219,162,815 | 8,545,381 | (934,512 | ) | ||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 3,137,016,734 | $ | 197,266,744 | $ | 38,641,795 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingc | 31,450,000 | 4,050,000 | 1,000,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 99.75 | $ | 48.71 | $ | 38.64 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $240,711,330, $14,827,039 and $170,330, respectively. See Note 1. |
b | Cost of foreign currency: $ —, $ — and $64,807, respectively. |
c | No par value, unlimited number of shares authorized. |
See notes to financial statements.
FINANCIAL STATEMENTS | 31 |
Table of Contents
Statements of Assets and Liabilities (Unaudited) (Continued)
iSHARES® TRUST
October 31, 2017
iShares Global REIT ETF | iShares International Developed Real Estate ETF | |||||||
ASSETS | ||||||||
Investments in securities, at cost: | ||||||||
Unaffiliated | $ | 471,546,065 | $ | 598,789,898 | ||||
Affiliated (Note 2) | 18,814,433 | 8,573,200 | ||||||
|
|
|
| |||||
Total cost of investments in securities | $ | 490,360,498 | $ | 607,363,098 | ||||
|
|
|
| |||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||
Unaffiliated | $ | 468,626,639 | $ | 595,053,997 | ||||
Affiliated (Note 2) | 18,815,163 | 8,573,419 | ||||||
Foreign currency, at valueb | 831,482 | 1,003,407 | ||||||
Cash pledged to broker for futures contracts | — | 119,000 | ||||||
Receivables: | ||||||||
Investment securities sold | 81 | — | ||||||
Due from custodian (Note 4) | — | 14,000 | ||||||
Dividends and interest | 706,624 | 1,446,423 | ||||||
Futures variation margin | — | 11,250 | ||||||
Tax reclaims | 53,653 | 215,579 | ||||||
Foreign withholding tax claims (Note 8) | — | 100,356 | ||||||
|
|
|
| |||||
Total Assets | 489,033,642 | 606,537,431 | ||||||
|
|
|
| |||||
LIABILITIES | ||||||||
Payables: | ||||||||
Investment securities purchased | 695,364 | 14,000 | ||||||
Collateral for securities on loan (Note 1) | 18,544,346 | 8,090,056 | ||||||
Due to custodian | — | 8,000 | ||||||
Professional fees (Note 8) | — | 1,004 | ||||||
Investment advisory fees (Note 2) | 55,994 | 241,335 | ||||||
|
|
|
| |||||
Total Liabilities | 19,295,704 | 8,354,395 | ||||||
|
|
|
| |||||
NET ASSETS | $ | 469,737,938 | $ | 598,183,036 | ||||
|
|
|
| |||||
Net assets consist of: | ||||||||
Paid-in capital | $ | 478,569,108 | $ | 684,430,435 | ||||
Distributions in excess of net investment income | (3,395,191 | ) | (1,239,908 | ) | ||||
Accumulated net realized loss | (2,497,945 | ) | (81,306,429 | ) | ||||
Net unrealized depreciation | (2,938,034 | ) | (3,701,062 | ) | ||||
|
|
|
| |||||
NET ASSETS | $ | 469,737,938 | $ | 598,183,036 | ||||
|
|
|
| |||||
Shares outstandingc | 18,600,000 | 20,500,000 | ||||||
|
|
|
| |||||
Net asset value per share | $ | 25.25 | $ | 29.18 | ||||
|
|
|
|
a | Securities on loan with values of $17,780,866 and $7,034,382, respectively. See Note 1. |
b | Cost of foreign currency: $844,797 and $1,003,802, respectively. |
c | No par value, unlimited number of shares authorized. |
See notes to financial statements.
32 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statement of Operations (Unaudited)
iSHARES® TRUST
Six months ended October 31, 2017
iShares Cohen & Steers REIT ETF | iShares Core U.S. REIT ETF | iShares Europe Developed Real Estate ETF | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliateda | $ | 36,646,807 | $ | 2,052,303 | $ | 854,429 | ||||||
Dividends — affiliated (Note 2) | 15,546 | 938 | 79 | |||||||||
Interest — unaffiliated | 110 | — | — | |||||||||
Securities lending income — affiliated — net (Note 2) | 253,794 | 12,665 | 6,072 | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 36,916,257 | 2,065,906 | 860,580 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 5,554,370 | 60,699 | 96,368 | |||||||||
Proxy fees | 70,416 | 2,707 | 906 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 5,624,786 | 63,406 | 97,274 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 31,291,471 | 2,002,500 | 763,306 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | (21,475,032 | ) | (504,391 | ) | (226,722 | ) | ||||||
Investments — affiliated (Note 2) | 8,328 | (918 | ) | (110 | ) | |||||||
In-kind redemptions — unaffiliated | 60,138,965 | 2,516,292 | 35,523 | |||||||||
Futures contracts | (160,817 | ) | (3,050 | ) | — | |||||||
Foreign currency transactions | — | — | 13,698 | |||||||||
|
|
|
|
|
| |||||||
Net realized gain (loss) | 38,511,444 | 2,007,933 | (177,611 | ) | ||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investments — unaffiliated | (17,202,309 | ) | (2,092,417 | ) | 3,025,348 | |||||||
Investments — affiliated (Note 2) | (45,318 | ) | (422 | ) | (48 | ) | ||||||
Futures contracts | 14,678 | (2,708 | ) | — | ||||||||
Translation of assets and liabilities in foreign currencies | — | — | 635 | |||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | (17,232,949 | ) | (2,095,547 | ) | 3,025,935 | |||||||
|
|
|
|
|
| |||||||
Net realized and unrealized gain (loss) | 21,278,495 | (87,614 | ) | 2,848,324 | ||||||||
|
|
|
|
|
| |||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 52,569,966 | $ | 1,914,886 | $ | 3,611,630 | ||||||
|
|
|
|
|
|
a | Net of foreign withholding tax of $ —, $ — and $81,842, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 33 |
Table of Contents
Statements of Operations (Unaudited) (Continued)
iSHARES® TRUST
Six months ended October 31, 2017
iShares Global REIT ETF | iShares International Developed Real Estate ETF | |||||||
NET INVESTMENT INCOME | ||||||||
Dividends — unaffiliateda | $ | 6,911,427 | $ | 10,049,272 | ||||
Dividends — affiliated (Note 2) | 2,386 | 1,757 | ||||||
Securities lending income — affiliated — net (Note 2) | 47,312 | 44,620 | ||||||
|
|
|
| |||||
Total investment income | 6,961,125 | 10,095,649 | ||||||
|
|
|
| |||||
EXPENSES | ||||||||
Investment advisory fees (Note 2) | 286,948 | 1,324,402 | ||||||
Proxy fees | 7,627 | 11,352 | ||||||
|
|
|
| |||||
Total expenses | 294,575 | 1,335,754 | ||||||
|
|
|
| |||||
Net investment income | 6,666,550 | 8,759,895 | ||||||
|
|
|
| |||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||
Net realized gain (loss) from: | ||||||||
Investments — unaffiliated | (1,429,304 | ) | (1,606,020 | ) | ||||
Investments — affiliated (Note 2) | (5,129 | ) | 117 | |||||
In-kind redemptions — unaffiliated | — | 1,707,918 | ||||||
Futures contracts | — | 9,722 | ||||||
Foreign currency transactions | 33,500 | 100,238 | ||||||
|
|
|
| |||||
Net realized gain (loss) | (1,400,933 | ) | 211,975 | |||||
|
|
|
| |||||
Net change in unrealized appreciation/depreciation on: | ||||||||
Investments — unaffiliated | (1,531,344 | ) | 19,590,051 | |||||
Investments — affiliated (Note 2) | (1,418 | ) | (1,001 | ) | ||||
Futures contracts | — | 43,474 | ||||||
Translation of assets and liabilities in foreign currencies | (22,588 | ) | (8,540 | ) | ||||
|
|
|
| |||||
Net change in unrealized appreciation/depreciation | (1,555,350 | ) | 19,623,984 | |||||
|
|
|
| |||||
Net realized and unrealized gain (loss) | (2,956,283 | ) | 19,835,959 | |||||
|
|
|
| |||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 3,710,267 | $ | 28,595,854 | ||||
|
|
|
|
a | Net of foreign withholding tax of $377,049 and $890,719, respectively. |
See notes to financial statements.
34 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets
iSHARES® TRUST
iShares Cohen & Steers REIT ETF | iShares Core U.S. REIT ETF | |||||||||||||||
Six months October 31, 2017 (Unaudited) | Year ended April 30, 2017 | Six months October 31, 2017 (Unaudited) | Year ended April 30, 2017 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 31,291,471 | $ | 88,533,750 | $ | 2,002,500 | $ | 2,047,168 | ||||||||
Net realized gain | 38,511,444 | 262,911,675 | 2,007,933 | 4,138,699 | ||||||||||||
Net change in unrealized appreciation/depreciation | (17,232,949 | ) | (239,218,059 | ) | (2,095,547 | ) | (2,249,143 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 52,569,966 | 112,227,366 | 1,914,886 | 3,936,724 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (48,638,099 | ) | (139,614,589 | ) | (2,826,173 | ) | (2,995,924 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (48,638,099 | ) | (139,614,589 | ) | (2,826,173 | ) | (2,995,924 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 191,690,254 | 711,492,672 | 85,632,389 | 68,418,181 | ||||||||||||
Cost of shares redeemed | (298,353,392 | ) | (1,124,603,633 | ) | (12,219,657 | ) | (18,916,999 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital | (106,663,138 | ) | (413,110,961 | ) | 73,412,732 | 49,501,182 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | (102,731,271 | ) | (440,498,184 | ) | 72,501,445 | 50,441,982 | ||||||||||
NET ASSETS | ||||||||||||||||
Beginning of period | 3,239,748,005 | 3,680,246,189 | 124,765,299 | 74,323,317 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 3,137,016,734 | $ | 3,239,748,005 | $ | 197,266,744 | $ | 124,765,299 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Distributions in excess of net investment income included in net assets at end of period | $ | (17,346,628 | ) | $ | — | $ | (823,673 | ) | $ | — | ||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 1,900,000 | 6,950,000 | 1,750,000 | 1,400,000 | ||||||||||||
Shares redeemed | (2,950,000 | ) | (11,250,000 | ) | (250,000 | ) | (400,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | (1,050,000 | ) | (4,300,000 | ) | 1,500,000 | 1,000,000 | ||||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
FINANCIAL STATEMENTS | 35 |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES® TRUST
iShares Europe Developed Real Estate ETF | iShares Global REIT ETF | |||||||||||||||
Six months October 31, 2017 (Unaudited) | Year ended April 30, 2017 | Six months October 31, 2017 (Unaudited) | Year ended April 30, 2017 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 763,306 | $ | 1,628,797 | $ | 6,666,550 | $ | 8,038,720 | ||||||||
Net realized gain (loss) | (177,611 | ) | (2,283,525 | ) | (1,400,933 | ) | 11,405,931 | |||||||||
Net change in unrealized appreciation/depreciation | 3,025,935 | (3,553,283 | ) | (1,555,350 | ) | (12,686,698 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting | 3,611,630 | (4,208,011 | ) | 3,710,267 | 6,757,953 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (836,733 | ) | (1,664,667 | ) | (7,730,089 | ) | (11,961,771 | ) | ||||||||
From net realized gain | — | — | — | (308,465 | ) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (836,733 | ) | (1,664,667 | ) | (7,730,089 | ) | (12,270,236 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | — | 1,683,040 | 122,938,852 | 282,082,713 | ||||||||||||
Cost of shares redeemed | (5,636,737 | ) | (32,422,164 | ) | — | (70,661,906 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital | (5,636,737 | ) | (30,739,124 | ) | 122,938,852 | 211,420,807 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | (2,861,840 | ) | (36,611,802 | ) | 118,919,030 | 205,908,524 | ||||||||||
NET ASSETS | ||||||||||||||||
Beginning of period | 41,503,635 | 78,115,437 | 350,818,908 | 144,910,384 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 38,641,795 | $ | 41,503,635 | $ | 469,737,938 | $ | 350,818,908 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed (distributions in excess of) net investment income included in net assets at end of period | $ | (26,572 | ) | $ | 46,855 | $ | (3,395,191 | ) | $ | (2,331,652 | ) | |||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | — | 50,000 | 4,800,000 | 11,000,000 | ||||||||||||
Shares redeemed | (150,000 | ) | (950,000 | ) | — | (2,700,000 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | (150,000 | ) | (900,000 | ) | 4,800,000 | 8,300,000 | ||||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
36 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES® TRUST
iShares International Developed Real Estate ETF | ||||||||
Six months October 31, 2017 (Unaudited) | Year ended April 30, 2017 | |||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||
OPERATIONS: | ||||||||
Net investment income | $ | 8,759,895 | $ | 17,817,870 | ||||
Net realized gain (loss) | 211,975 | (6,091,729 | ) | |||||
Net change in unrealized appreciation/depreciation | 19,623,984 | (27,766,061 | ) | |||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | 28,595,854 | (16,039,920 | ) | |||||
|
|
|
| |||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||
From net investment income | (8,946,392 | ) | (34,765,645 | ) | ||||
|
|
|
| |||||
Total distributions to shareholders | (8,946,392 | ) | (34,765,645 | ) | ||||
|
|
|
| |||||
CAPITAL SHARE TRANSACTIONS: | ||||||||
Proceeds from shares sold | 72,773,477 | 241,248,345 | ||||||
Cost of shares redeemed | (14,211,013 | ) | (370,950,015 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in net assets from capital share transactions | 58,562,464 | (129,701,670 | ) | |||||
|
|
|
| |||||
INCREASE (DECREASE) IN NET ASSETS | 78,211,926 | (180,507,235 | ) | |||||
NET ASSETS | ||||||||
Beginning of period | 519,971,110 | 700,478,345 | ||||||
|
|
|
| |||||
End of period | $ | 598,183,036 | $ | 519,971,110 | ||||
|
|
|
| |||||
Distributions in excess of net investment income included in net assets at end of period | $ | (1,239,908 | ) | $ | (1,053,411 | ) | ||
|
|
|
| |||||
SHARES ISSUED AND REDEEMED | ||||||||
Shares sold | 2,500,000 | 8,600,000 | ||||||
Shares redeemed | (500,000 | ) | (13,400,000 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in shares outstanding | 2,000,000 | (4,800,000 | ) | |||||
|
|
|
|
See notes to financial statements.
FINANCIAL STATEMENTS | 37 |
Table of Contents
iSHARES® TRUST
(For a share outstanding throughout each period)
iShares Cohen & Steers REIT ETF | ||||||||||||||||||||||||
Six months ended Oct. 31, 2017 (Unaudited) | Year ended Apr. 30, 2017 | Year ended Apr. 30, 2016 | Year ended Apr. 30, 2015 | Year ended Apr. 30, 2014 | Year ended Apr. 30, 2013 | |||||||||||||||||||
Net asset value, beginning of period | $ | 99.68 | $ | 100.01 | $ | 95.12 | $ | 85.53 | $ | 88.36 | $ | 78.78 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment incomea | 0.98 | 2.42 | 2.23 | 2.41 | 2.07 | 1.91 | ||||||||||||||||||
Net realized and unrealized gain (loss)b | 0.61 | 1.15 | 6.33 | 10.13 | (2.30 | ) | 10.03 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 1.59 | 3.57 | 8.56 | 12.54 | (0.23 | ) | 11.94 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (1.52 | ) | (3.90 | ) | (3.67 | ) | (2.95 | ) | (2.60 | ) | (2.36 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (1.52 | ) | (3.90 | ) | (3.67 | ) | (2.95 | ) | (2.60 | ) | (2.36 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 99.75 | $ | 99.68 | $ | 100.01 | $ | 95.12 | $ | 85.53 | $ | 88.36 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 1.57 | %c | 3.58 | % | 9.22 | % | 14.80 | % | 0.05 | % | 15.58 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 3,137,017 | $ | 3,239,748 | $ | 3,680,246 | $ | 3,410,150 | $ | 2,715,666 | $ | 3,189,852 | ||||||||||||
Ratio of expenses to average net assetsd | 0.34 | % | 0.34 | % | 0.35 | % | 0.35 | % | 0.35 | % | 0.35 | % | ||||||||||||
Ratio of net investment income to average net assetsd | 1.91 | % | 2.37 | % | 2.33 | % | 2.57 | % | 2.58 | % | 2.40 | % | ||||||||||||
Portfolio turnover ratee | 7 | %c | 8 | % | 14 | % | 8 | % | 13 | % | 11 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
38 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES® TRUST
(For a share outstanding throughout each period)
iShares Core U.S. REIT ETF | ||||||||||||||||||||||||
Six months ended Oct. 31, 2017 (Unaudited) | Year ended Apr. 30, 2017 | Year ended Apr. 30, 2016 | Year ended Apr. 30, 2015 | Year ended Apr. 30, 2014 | Year ended Apr. 30, 2013 | |||||||||||||||||||
Net asset value, beginning of period | $ | 48.93 | $ | 47.95 | $ | 46.04 | $ | 42.38 | $ | 45.04 | $ | 39.29 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment incomea | 0.66 | 1.27 | 1.02 | 1.04 | 1.17 | 1.14 | ||||||||||||||||||
Net realized and unrealized gain (loss)b | 0.03 | 1.60 | 2.77 | 4.19 | (2.30 | ) | 6.01 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 0.69 | 2.87 | 3.79 | 5.23 | (1.13 | ) | 7.15 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.91 | ) | (1.89 | ) | (1.88 | ) | (1.57 | ) | (1.53 | ) | (1.40 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (0.91 | ) | (1.89 | ) | (1.88 | ) | (1.57 | ) | (1.53 | ) | (1.40 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 48.71 | $ | 48.93 | $ | 47.95 | $ | 46.04 | $ | 42.38 | $ | 45.04 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 1.39 | %c | 6.02 | % | 8.48 | % | 12.44 | % | (2.21 | )% | 18.73 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 197,267 | $ | 124,765 | $ | 74,323 | $ | 85,180 | $ | 80,527 | $ | 103,598 | ||||||||||||
Ratio of expenses to average net assetsd | 0.08 | % | 0.28 | % | 0.48 | % | 0.48 | % | 0.48 | % | 0.48 | % | ||||||||||||
Ratio of net investment income to average net assetsd | 2.64 | % | 2.57 | % | 2.22 | % | 2.26 | % | 2.89 | % | 2.81 | % | ||||||||||||
Portfolio turnover ratee | 6 | %c | 30 | % | 11 | % | 10 | % | 19 | % | 13 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL STATEMENTS | 39 |
Table of Contents
Financial Highlights (Continued)
iSHARES® TRUST
(For a share outstanding throughout each period)
iShares Europe Developed Real Estate ETF | ||||||||||||||||||||||||
Six months ended Oct. 31, 2017 (Unaudited) | Year ended Apr. 30, 2017 | Year ended Apr. 30, 2016 | Year ended Apr. 30, 2015 | Year ended Apr. 30, 2014 | Year ended Apr. 30, 2013 | |||||||||||||||||||
Net asset value, beginning of period | $ | 36.09 | $ | 38.11 | $ | 39.39 | $ | 37.33 | $ | 32.37 | $ | 27.68 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment incomea | 0.73 | 0.97 | 0.93 | 1.18 | 0.96 | 1.09 | ||||||||||||||||||
Net realized and unrealized gain (loss)b | 2.60 | (2.09 | ) | (0.91 | ) | 1.90 | 5.13 | 4.91 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 3.33 | (1.12 | ) | 0.02 | 3.08 | 6.09 | 6.00 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.78 | ) | (0.90 | ) | (1.30 | ) | (1.02 | ) | (1.13 | ) | (1.31 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (0.78 | ) | (0.90 | ) | (1.30 | ) | (1.02 | ) | (1.13 | ) | (1.31 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 38.64 | $ | 36.09 | $ | 38.11 | $ | 39.39 | $ | 37.33 | $ | 32.37 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 9.29 | %c | (2.97 | )% | 0.16 | % | 8.39 | % | 19.62 | % | 22.66 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 38,642 | $ | 41,504 | $ | 78,115 | $ | 80,746 | $ | 37,332 | $ | 16,184 | ||||||||||||
Ratio of expenses to average net assetsd | 0.48 | % | 0.48 | % | 0.48 | % | 0.48 | % | 0.48 | % | 0.48 | % | ||||||||||||
Ratio of net investment income to average net assetsd | 3.80 | % | 2.75 | % | 2.47 | % | 3.15 | % | 2.82 | % | 3.78 | % | ||||||||||||
Portfolio turnover ratee | 6 | %c | 9 | % | 14 | % | 15 | % | 9 | % | 14 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Not annualized. |
d | Annualized for periods of less than one year. |
e | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
40 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES® TRUST
(For a share outstanding throughout each period)
iShares Global REIT ETF | ||||||||||||||||
Six months ended Oct. 31, 2017 (Unaudited) | Year ended Apr. 30, 2017 | Year ended Apr. 30, 2016 | Period from to | |||||||||||||
Net asset value, beginning of period | $ | 25.42 | $ | 26.35 | $ | 25.81 | $ | 24.90 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Income from investment operations: | ||||||||||||||||
Net investment incomeb | 0.42 | 0.86 | 0.87 | 0.69 | ||||||||||||
Net realized and unrealized gain (loss)c | (0.11 | ) | (0.47 | ) | 0.64 | 0.87 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total from investment operations | 0.31 | 0.39 | 1.51 | 1.56 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Less distributions from: | ||||||||||||||||
Net investment income | (0.48 | ) | (1.29 | ) | (0.97 | ) | (0.65 | ) | ||||||||
Net realized gain | — | (0.03 | ) | — | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions | (0.48 | ) | (1.32 | ) | (0.97 | ) | (0.65 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net asset value, end of period | $ | 25.25 | $ | 25.42 | $ | 26.35 | $ | 25.81 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total return | 1.22 | %d | 1.53 | % | 6.17 | % | 6.30 | %d | ||||||||
|
|
|
|
|
|
|
| |||||||||
Ratios/Supplemental data: | ||||||||||||||||
Net assets, end of period (000s) | $ | 469,738 | $ | 350,819 | $ | 144,910 | $ | 23,226 | ||||||||
Ratio of expenses to average net assetse | 0.14 | % | 0.14 | % | 0.14 | % | 0.14 | % | ||||||||
Ratio of net investment income to average net assetse | 3.25 | % | 3.31 | % | 3.47 | % | 3.23 | % | ||||||||
Portfolio turnover ratef | 3 | %d | 5 | % | 9 | % | 12 | %d |
a | Commencement of operations. |
b | Based on average shares outstanding throughout each period. |
c | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
d | Not annualized. |
e | Annualized for periods of less than one year. |
f | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL STATEMENTS | 41 |
Table of Contents
Financial Highlights (Continued)
iSHARES® TRUST
(For a share outstanding throughout each period)
iShares International Developed Real Estate ETF | ||||||||||||||||||||||||
Six months ended Oct. 31, 2017 (Unaudited) | Year ended Apr. 30, 2017 | Year ended Apr. 30, 2016 | Year ended Apr. 30, 2015 | Year ended Apr. 30, 2014 | Year ended Apr. 30, 2013 | |||||||||||||||||||
Net asset value, beginning of period | $ | 28.11 | $ | 30.06 | $ | 32.17 | $ | 30.79 | $ | 36.55 | $ | 29.21 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment incomea | 0.46 | 0.82 | 0.75 | 1.16 | 0.93 | 0.95 | ||||||||||||||||||
Net realized and unrealized gain (loss)b | 1.09 | (0.76 | ) | (1.79 | ) | 1.27 | (3.08 | ) | 8.27 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 1.55 | 0.06 | (1.04 | ) | 2.43 | (2.15 | ) | 9.22 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.48 | ) | (2.01 | ) | (1.07 | ) | (1.05 | ) | (3.61 | ) | (1.88 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (0.48 | ) | (2.01 | ) | (1.07 | ) | (1.05 | ) | (3.61 | ) | (1.88 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 29.18 | $ | 28.11 | $ | 30.06 | $ | 32.17 | $ | 30.79 | $ | 36.55 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 5.54 | %c | 0.63 | %d | (3.11 | )% | 8.06 | % | (5.27 | )% | 32.89 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||||||
Net assets, end of period (000s) | $ | 598,183 | $ | 519,971 | $ | 700,478 | $ | 1,000,337 | $ | 775,820 | $ | 1,977,536 | ||||||||||||
Ratio of expenses to average net assetse | 0.48 | % | 0.48 | % | 0.48 | % | 0.48 | % | 0.48 | % | 0.48 | % | ||||||||||||
Ratio of expenses to average net assets excluding professional fees for foreign withholding tax claimse (Note 8) | n/a | 0.48 | % | n/a | n/a | n/a | n/a | |||||||||||||||||
Ratio of net investment income to average net assetse | 3.17 | % | 2.85 | %d | 2.56 | % | 3.71 | % | 2.86 | % | 2.99 | % | ||||||||||||
Portfolio turnover ratef | 3 | %c | 7 | % | 12 | % | 11 | % | 9 | % | 16 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Not annualized. |
d | Reflects the one-time, positive effect of foreign withholding tax claims, net of the associated professional fees (See Note 8), which resulted in the following increases: |
• | Total return by 0.04%. |
• | Ratio of net investment income to average net assets by 0.01%. |
e | Annualized for periods of less than one year. |
f | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
42 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Unaudited)
iSHARES® TRUST
iShares Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust was established as a Delaware statutory trust pursuant to an Agreement and Declaration of Trust dated December 16, 1999.
These financial statements relate only to the following funds (each, a “Fund,” and collectively, the “Funds”):
iShares ETF | Diversification Classification | |
Cohen & Steers REIT | Non-diversified | |
Core U.S. REIT | Diversified | |
Europe Developed Real Estate | Non-diversified | |
Global REIT | Diversified | |
International Developed Real Estate | Diversified |
The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index. The investment adviser uses a “passive” or index approach to try to achieve each Fund’s investment objective.
Pursuant to the Trust’s organizational documents, the Funds’ officers and trustees are indemnified against certain liabilities that may arise out of the performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred.
1. | SIGNIFICANT ACCOUNTING POLICIES |
The following significant accounting policies are consistently followed by each Fund in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies.
SECURITY VALUATION
Each Fund’s investments are valued at fair value each day that the Fund’s listing exchange is open and, for financial reporting purposes, as of the report date should the reporting period end on a day that the Fund’s listing exchange is not open. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) provides oversight of the valuation of investments for the Funds. The investments of each Fund are valued pursuant to policies and procedures developed by the Global Valuation Committee and approved by the Board of Trustees of the Trust (the “Board”).
• | Equity investments traded on a recognized securities exchange are valued at that day’s last reported trade price or the official closing price, as applicable, on the exchange where the stock is primarily traded. Equity investments traded on a recognized exchange for which there were no sales on that day are valued at the last traded price. |
• | Open-end U.S. mutual funds (including money market funds) are valued at that day’s published net asset value (“NAV”). |
NOTESTO FINANCIAL STATEMENTS | 43 |
Table of Contents
Notes to Financial Statements (Unaudited) (Continued)
iSHARES® TRUST
• | Futures contract notional values are determined based on that day’s last reported settlement price on the exchange where the contract is traded. |
In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the fair value of such investment or if a price is not available, the investment will be valued by the Global Valuation Committee, in accordance with policies approved by the Board. The fair valuation approaches that may be utilized by the Global Valuation Committee to determine fair value include market approach, income approach and the cost approach. The valuation techniques used under these approaches take into consideration inputs that include but are not limited to (i) attributes specific to the investment; (ii) the principal market for the investment; (iii) the customary participants in the principal market for the investment; (iv) data assumptions by market participants for the investment, if reasonably available; (v) quoted prices for similar investments in active markets; and (vi) other inputs, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and/or default rates. Valuations based on such inputs are reported to the Board on a quarterly basis.
The Global Valuation Committee employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the Trust’s pricing vendors, a regular review of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices, reviews of large movements in market values, and reviews of market related activity.
Fair value pricing could result in a difference between the prices used to calculate a Fund’s NAV and the prices used by the Fund’s underlying index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s underlying index.
Various inputs are used in determining the fair value of financial instruments. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs to valuation techniques are categorized into a fair value hierarchy consisting of three broad levels for financial reporting purposes as follows:
• | Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities; |
• | Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability (such as exchange rates, financing terms, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs; and |
• | Level 3 — Unobservable inputs for the asset or liability based on the best information available in the circumstances, to the extent observable inputs are not available, including the Global Valuation Committee’s assumptions used in determining the fair value of investments. |
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgement exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The fair value hierarchy for each Fund’s investments is included in its schedule of investments.
Changes in valuation techniques may result in transfers in or out of an assigned level within the fair value hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as
44 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Unaudited) (Continued)
iSHARES® TRUST
of the beginning of the reporting period. The categorization of values determined for financial instruments are based on the pricing transparency of the financial instruments and are not necessarily an indication of the risks associated with investing in those securities.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are accounted for on trade date. Realized gains and losses on investment transactions are determined using the specific identification method. Dividend income and capital gain distributions, if any, are recognized on the ex-dividend date, net of any foreign taxes withheld at source. Any taxes withheld that are reclaimable from foreign tax authorities as of October 31, 2017 are reflected in tax reclaims receivable. Upon notification from issuers, some of the dividend income received from a real estate investment trust may be re-designated as a reduction of cost of the related investment and/or realized gain. Non-cash dividends, if any, are recognized on the ex-dividend date and recorded as non-cash dividend income at fair value. Distributions received by the Funds may include a return of capital that is estimated by management. Such amounts are recorded as a reduction of the cost of investments or reclassified to capital gains. Interest income is accrued daily.
FOREIGN CURRENCY TRANSLATION
The accounting records of the Funds are maintained in U.S. dollars. Foreign currencies, as well as investment securities and other assets and liabilities denominated in foreign currencies, are translated into U.S. dollars using exchange rates deemed appropriate by the investment adviser. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars on the respective dates of such transactions.
Each Fund does not isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of securities. Such fluctuations are reflected by the Funds as a component of realized and unrealized gains and losses from investments for financial reporting purposes. Each Fund reports realized currency gains (losses) on foreign currency related transactions as components of net realized gain (loss) for financial reporting purposes, whereas such components are generally treated as ordinary income for U.S. federal income tax purposes.
FOREIGN TAXES
The Funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, capital gains on investments, or certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the Funds invest. These foreign taxes, if any, are paid by the Funds and are reflected in their statements of operations as follows: foreign taxes withheld at source are presented as a reduction of income, foreign taxes on securities lending income are presented as a reduction of securities lending income, foreign taxes on stock dividends are presented as “other foreign taxes”, and foreign taxes on capital gains from sales of investments and foreign taxes on foreign currency transactions are included in their respective net realized gain (loss) categories. Foreign taxes payable or deferred as of October 31, 2017, if any, are disclosed in the Funds’ statements of assets and liabilities.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends and distributions paid by each Fund are recorded on the ex-dividend dates. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds.
NOTESTO FINANCIAL STATEMENTS | 45 |
Table of Contents
Notes to Financial Statements (Unaudited) (Continued)
iSHARES® TRUST
LOANS OF PORTFOLIO SECURITIES
Each Fund may lend its investment securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by an approved bank, or securities issued or guaranteed by the U.S. government. The initial collateral received by each Fund is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Funds. Any additional required collateral is delivered to the Funds and any excess collateral is returned by the Funds on the next business day. During the term of the loan, each Fund is entitled to all distributions made on or in respect of the loaned securities but does not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.
Cash received as collateral for securities on loan may be reinvested in certain short-term instruments either directly on behalf of a fund or through one or more joint accounts or money market funds, including those managed by BlackRock Fund Advisors (“BFA”), the Funds’ investment adviser, or its affiliates. As of October 31, 2017, any securities on loan were collateralized by cash and/or U.S. government obligations. Cash collateral received was invested in money market funds managed by BFA and is disclosed in the schedules of investments. Any non-cash collateral received cannot be sold, re-invested or pledged by the Fund, except in the event of borrower default. The securities on loan for each Fund are also disclosed in its schedule of investments. The total value of any securities on loan as of October 31, 2017 and the total value of the related cash collateral are disclosed in the statements of assets and liabilities. Income earned by the Funds from securities lending is disclosed in the statements of operations.
The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Funds benefit from a borrower default indemnity provided by BlackRock, Inc. (“BlackRock”). BlackRock’s indemnity allows for full replacement of securities loaned if the collateral received does not cover the value of the securities loaned in the event of borrower default. Each Fund could incur a loss if the value of an investment purchased with cash collateral falls below the value of the loaned securities or if the value of an investment purchased with cash collateral falls below the value of the original cash collateral received.
Securities lending transactions are entered into by the Funds under Master Securities Lending Agreements (“MSLA”) which provide the right, in the event of default (including bankruptcy or insolvency) for the non-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, a Fund, as lender, would offset the market value of the collateral received against the market value of the securities loaned. The value of the collateral is typically greater than that of the market value of the securities loaned, leaving the lender with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, the borrower can resell or re-pledge the loaned securities, and a Fund can reinvest cash collateral, or, upon an event of default, resell or re-pledge the collateral.
46 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
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Notes to Financial Statements (Unaudited) (Continued)
iSHARES® TRUST
The following table is a summary of securities lending agreements which are subject to offset under an MSLA as of October 31, 2017:
iShares ETF and Counterparty | Market Value of Securities on Loan | Cash Collateral Received a | Net Amount b | |||||||||
Cohen & Steers REIT | ||||||||||||
BNP Paribas New York Branch | $ | 4,700,536 | $ | 4,654,848 | $ | (45,688 | ) | |||||
Citigroup Global Markets Inc. | 8,236,230 | 8,236,230 | — | |||||||||
Credit Suisse Securities (USA) LLC | 4,687,177 | 4,687,177 | — | |||||||||
Goldman Sachs & Co. | 17,792,241 | 17,792,241 | — | |||||||||
HSBC Bank PLC | 246,816 | 246,816 | — | |||||||||
Jefferies LLC | 1,674,000 | 1,674,000 | — | |||||||||
JPMorgan Securities LLC | 30,721,122 | 30,721,122 | — | |||||||||
Merrill Lynch, Pierce, Fenner & Smith | 53,858,079 | 53,721,991 | (136,088 | ) | ||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 64,808,621 | 64,808,621 | — | |||||||||
Nomura Securities International Inc. | 990,081 | 990,081 | — | |||||||||
State Street Bank & Trust Company | 20,607,134 | 20,607,134 | — | |||||||||
UBS AG | 1,871,352 | 1,871,352 | — | |||||||||
UBS Securities LLC | 30,480,917 | 30,480,917 | — | |||||||||
Wells Fargo Securities LLC | 37,024 | 37,024 | — | |||||||||
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$ | 240,711,330 | $ | 240,529,554 | $ | (181,776 | ) | ||||||
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Core U.S. REIT | ||||||||||||
Barclays Capital Inc. | $ | 153,586 | $ | 153,586 | $ | — | ||||||
Citigroup Global Markets Inc. | 557,554 | 557,554 | — | |||||||||
Credit Suisse Securities (USA) LLC | 1,239,888 | 1,239,888 | — | |||||||||
Goldman Sachs & Co. | 1,188,194 | 1,188,194 | — | |||||||||
HSBC Bank PLC | 7,462 | 7,462 | — | |||||||||
JPMorgan Securities LLC | 4,024,457 | 4,024,457 | — | |||||||||
Merrill Lynch, Pierce, Fenner & Smith | 314,539 | 314,539 | — | |||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 5,090,528 | 5,090,528 | — | |||||||||
Nomura Securities International Inc. | 1,216,121 | 1,216,121 | — | |||||||||
SG Americas Securities LLC | 797,431 | 797,431 | — | |||||||||
State Street Bank & Trust Company | 1,073 | 1,073 | — | |||||||||
UBS AG | 145,308 | 145,308 | — | |||||||||
UBS Securities LLC | 90,898 | 90,898 | — | |||||||||
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$ | 14,827,039 | $ | 14,827,039 | $ | — | |||||||
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Europe Developed Real Estate | ||||||||||||
Jefferies LLC | $ | 112,265 | $ | 112,265 | $ | — | ||||||
Merrill Lynch, Pierce, Fenner & Smith | 57,664 | 57,664 | — | |||||||||
Morgan Stanley & Co. LLC | 401 | 401 | — | |||||||||
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$ | 170,330 | $ | 170,330 | $ | — | |||||||
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NOTESTO FINANCIAL STATEMENTS | 47 |
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Notes to Financial Statements (Unaudited) (Continued)
iSHARES® TRUST
iShares ETF and Counterparty | Market Value of Securities on Loan | Cash Collateral Received a | Net Amount b | |||||||||
Global REIT | ||||||||||||
Citigroup Global Markets Inc. | $ | 700,625 | $ | 700,625 | $ | — | ||||||
Credit Suisse Securities (USA) LLC | 1,308,340 | 1,308,340 | — | |||||||||
Deutsche Bank Securities Inc. | 738,665 | 738,665 | — | |||||||||
Goldman Sachs & Co. | 2,835,768 | 2,835,768 | — | |||||||||
HSBC Bank PLC | 86,913 | 86,913 | — | |||||||||
Jefferies LLC | 180,098 | 180,098 | — | |||||||||
JPMorgan Securities LLC | 3,489,389 | 3,489,389 | — | |||||||||
Merrill Lynch, Pierce, Fenner & Smith | 1,109,329 | 1,109,329 | — | |||||||||
State Street Bank & Trust Company | 7,331,739 | 7,331,739 | — | |||||||||
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$ | 17,780,866 | $ | 17,780,866 | $ | — | |||||||
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International Developed Real Estate | ||||||||||||
Goldman Sachs & Co. | $ | 1,158,928 | $ | 1,158,928 | $ | — | ||||||
Jefferies LLC | 594,334 | 594,334 | — | |||||||||
JPMorgan Securities LLC | 4,151,587 | 4,151,587 | — | |||||||||
Merrill Lynch, Pierce, Fenner & Smith | 549,249 | 549,249 | — | |||||||||
Morgan Stanley & Co. LLC | 214,610 | 214,610 | — | |||||||||
State Street Bank & Trust Company | 365,674 | 365,674 | — | |||||||||
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$ | 7,034,382 | $ | 7,034,382 | $ | — | |||||||
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a | Collateral received in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by each Fund is disclosed in the Fund’s statement of assets and liabilities. |
b | Additional collateral is delivered to the Funds on the next business day in accordance with the MSLA. The net amount would be subject to the borrower default indemnity in the event of default by a counterparty. |
2. | INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES |
Pursuant to an Investment Advisory Agreement with the Trust, BFA manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock. Under the Investment Advisory Agreement, BFA is responsible for substantially all expenses of the Funds, except (i) interest and taxes; (ii) brokerage commissions and other expenses connected with the execution of portfolio transactions; (iii) distribution fees; (iv) the advisory fee payable to BFA; and (v) litigation expenses and any extraordinary expenses (in each case as determined by a majority of the independent trustees).
For its investment advisory services to the iShares Cohen & Steers REIT ETF, BFA is entitled to an annual investment advisory fee, accrued daily and paid monthly by the Fund, based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds, as follows:
Investment Advisory Fee | Aggregate Average Daily Net Assets | ||||
0.3500 | % | First $121 billion | |||
0.3325 | a | Over $121 billion, up to and including $181 billion | |||
0.3159 | a | Over $181 billion, up to and including $231 billion | |||
0.3001 | a | Over $231 billion, up to and including $281 billion | |||
0.2851 | a | Over $281 billion |
a | Investment advisory fee level reflects a 5% reduction (rounded to the fourth decimal place) from the investment advisory fee at the prior aggregate average daily net asset level. |
48 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
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For its investment advisory services to each of the following Funds, BFA is entitled to an annual investment advisory fee, accrued daily and paid monthly by the Funds, based on the average daily net assets of each Fund as follows:
iShares ETF | Investment Advisory Fee | |||
Core U.S. REIT | 0.08 | % | ||
Europe Developed Real Estate | 0.48 | |||
Global REIT | 0.14 | |||
International Developed Real Estate | 0.48 |
The U.S. Securities and Exchange Commission has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (“BTC”), an affiliate of BFA, to serve as securities lending agent for the Funds, subject to applicable conditions. As securities lending agent, BTC bears all operational costs directly related to securities lending. Each Fund is responsible for fees in connection with the investment of cash collateral received for securities on loan in a money market fund managed by BFA, however, BTC has agreed to reduce the amount of securities lending income it receives in order to effectively limit the collateral investment fees each Fund bears to an annual rate of 0.04% (the “collateral investment fees”). Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment fees. The Funds retain a portion of securities lending income and remit the remaining portion to BTC as compensation for its services as securities lending agent.
Pursuant to a securities lending agreement, the iShares Cohen & Steers REIT ETF and iShares Core U.S. REIT ETF (the “Group 1 Funds”), retain 71.5% of securities lending income and the amount retained can never be less than 65% of the total of securities lending income plus the collateral investment fees.
Pursuant to a securities lending agreement, the iShares Europe Developed Real Estate ETF, iShares Global REIT ETF and iShares International Developed Real Estate ETF (the “Group 2 Funds”), retain 80% of securities lending income and the amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees.
In addition, commencing the business day following the date that the aggregate securities lending income plus the collateral investment fees generated across all 1940 Act iShares exchange-traded funds (the “iShares ETF Complex”) in a given calendar year exceeds the aggregate securities lending income generated across the iShares ETF Complex in the calendar year 2013, each Group 1 Fund, pursuant to a securities lending agreement, will retain for the remainder of that calendar year 75% of securities lending income and the amount retained can never be less than 65% of the total of securities lending income plus the collateral investment fees. Each Group 2 Fund will receive for the remainder of that calendar year 85% of securities lending income and the amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees.
For the six months ended October 31, 2017, the total of securities lending agent services and collateral investment fees paid were as follows:
iShares ETF | Fees Paid to BTC | |||
Cohen & Steers REIT | $ | 134,540 | ||
Core U.S. REIT | 6,531 | |||
Europe Developed Real Estate | 1,516 | |||
Global REIT | 14,928 | |||
International Developed Real Estate | 11,271 |
NOTESTO FINANCIAL STATEMENTS | 49 |
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Notes to Financial Statements (Unaudited) (Continued)
iSHARES® TRUST
BlackRock Investments, LLC, an affiliate of BFA, is the distributor for each Fund. Pursuant to the distribution agreement, BFA is responsible for any fees or expenses for distribution services provided to the Funds.
Cross trading is the buying or selling of portfolio securities between funds to which BFA (or an affiliate) serves as investment adviser. At its regularly scheduled quarterly meetings, the Board reviews such transactions as of the most recent calendar quarter for compliance with the requirements and restrictions set forth by Rule 17a-7.
For the six months ended October 31, 2017, transactions executed by the Funds pursuant to Rule 17a-7 under the 1940 Act were as follows:
iShares ETF | Purchases | Sales | ||||||
Cohen & Steers REIT | $ | 16,922,222 | $ | 45,186,307 | ||||
Core U.S. REIT | 1,796,430 | 2,440,203 | ||||||
Europe Developed Real Estate | 87,719 | 87,190 | ||||||
International Developed Real Estate | 960,173 | 51,362 |
Each Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is included in “Dividends – affiliated” in the statements of operations.
The PNC Financial Services Group, Inc. is the largest stockholder of BlackRock and is considered to be an affiliate of the Funds for 1940 Act purposes.
Certain trustees and officers of the Trust are also officers of BTC and/or BFA.
3. | INVESTMENT PORTFOLIO TRANSACTIONS |
Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the six months ended October 31, 2017 were as follows:
iShares ETF | Purchases | Sales | ||||||
Cohen & Steers REIT | $ | 221,799,707 | $ | 222,182,366 | ||||
Core U.S. REIT | 10,059,934 | 8,565,583 | ||||||
Europe Developed Real Estate | 2,383,619 | 2,447,729 | ||||||
Global REIT | 25,178,867 | 12,285,320 | ||||||
International Developed Real Estate | 19,798,893 | 18,621,852 |
In-kind transactions (see Note 4) for the six months ended October 31, 2017 were as follows:
iShares ETF | In-kind Purchases | In-kind Sales | ||||||
Cohen & Steers REIT | $ | 190,863,756 | $ | 297,591,914 | ||||
Core U.S. REIT | 83,744,632 | 11,894,578 | ||||||
Europe Developed Real Estate | — | 5,484,701 | ||||||
Global REIT | 110,992,058 | — | ||||||
International Developed Real Estate | 71,076,633 | 14,010,425 |
50 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
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Notes to Financial Statements (Unaudited) (Continued)
iSHARES® TRUST
4. | CAPITAL SHARE TRANSACTIONS |
Capital shares are issued and redeemed by each Fund only in aggregations of a specified number of shares or multiples thereof (“Creation Units”) at NAV. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the statements of changes in net assets.
The consideration for the purchase of Creation Units of a fund in the Trust generally consists of the in-kind deposit of a designated portfolio of securities and a specified amount of cash. Certain funds in the Trust may be offered in Creation Units solely or partially for cash in U.S. dollars. Investors purchasing and redeeming Creation Units may pay a purchase transaction fee and a redemption transaction fee directly to State Street Bank and Trust Company, the Trust’s administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash. Investors transacting in Creation Units for cash may also pay an additional variable charge to compensate the relevant fund for certain transaction costs (i.e., stamp taxes, taxes on currency or other financial transactions, and brokerage costs) and market impact expenses relating to investing in portfolio securities. Such variable charges, if any, are included in “Proceeds from shares sold” in the statements of changes in net assets.
From time to time, settlement of securities related to in-kind contributions or in-kind redemptions may be delayed. In such cases, securities related to in-kind contributions are reflected as “Due from custodian” and securities related to in-kind redemptions are reflected as “Securities related to in-kind transactions” in the statements of assets and liabilities.
5. | FUTURES CONTRACTS |
Each Fund’s use of futures contracts is generally limited to cash equitization. This involves the use of available cash to invest in index futures contracts in order to gain exposure to the equity markets represented in or by the Fund’s underlying index and is intended to allow the Fund to better track its underlying index. Futures contracts are standardized, exchange-traded agreements to buy or sell a financial instrument at a set price on a future date. Upon entering into a futures contract, a fund is required to pledge to the executing broker which holds segregated from its own assets, an amount of cash, U.S. government securities or other high-quality debt and equity securities equal to the minimum initial margin requirements of the exchange on which the contract is traded.
Pursuant to the contract, the fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in notional value of the contract. Such receipts or payments are known as margin variation and are recorded by the fund as unrealized appreciation or depreciation. When the contract is closed, the fund records a realized gain or loss equal to the difference between the notional value of the contract at the time it was opened and the notional value at the time it was closed. Losses may arise if the notional value of a futures contract decreases due to an unfavorable change in the market rates or values of the underlying instrument during the term of the contract or if the counterparty does not perform under the contract. The use of futures contracts also involves the risk of an imperfect correlation in the movements in the price of futures contracts and the assets underlying such contracts.
NOTESTO FINANCIAL STATEMENTS | 51 |
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Notes to Financial Statements (Unaudited) (Continued)
iSHARES® TRUST
The following table shows the value of futures contracts held as of October 31, 2017 and the related locations in the statements of assets and liabilities, presented by risk exposure category:
Assets | ||||||||
iShares Cohen & Steers REIT ETF | iShares International Developed Real Estate ETF | |||||||
Equity contracts: |
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Variation margin / Net assets consist of – net unrealized appreciation (depreciation)a | $ | 14,678 | $ | 43,474 | ||||
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a | Represents cumulative appreciation of futures contracts as reported in the schedules of investments. Only current day’s variation margin is reported separately within the statements of assets and liabilities. |
Liabilities | ||||
iShares Core U.S. REIT ETF | ||||
Equity contracts: |
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Variation margin / Net assets consist of – net unrealized appreciation (depreciation)b | $ | 2,708 | ||
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b | Represents cumulative depreciation of futures contracts as reported in the schedules of investments. Only current day’s variation margin is reported separately within the statements of assets and liabilities. |
The following table shows the realized and unrealized gains (losses) on futures contracts held during the six months ended October 31, 2017 and the related locations in the statements of operations, presented by risk exposure category:
Net Realized Gain (Loss) | ||||||||||||
iShares REIT ETF | iShares Core U.S. | iShares International | ||||||||||
Equity contracts: |
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Futures contracts | $ | (160,817 | ) | $ | (3,050 | ) | $ | 9,722 | ||||
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Net Change in Unrealized Appreciation/Depreciation | ||||||||||||
iShares Cohen & Steers REIT ETF | iShares Core U.S. REIT ETF | iShares International Developed Real Estate ETF | ||||||||||
Equity contracts: |
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Futures contracts | $ | 14,678 | $ | (2,708 | ) | $ | 43,474 | |||||
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52 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
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Notes to Financial Statements (Unaudited) (Continued)
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The following table shows the average quarter-end balances of open futures contracts for the six months ended October 31, 2017:
iShares Cohen & Steers REIT ETF | iShares Core U.S. REIT ETF | iShares International Developed Real Estate ETF | ||||||||||
Average notional value of contracts purchased | $ | 1,885,467 | $ | 105,333 | $ | 1,003,700 | ||||||
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6. | PRINCIPAL RISKS |
In the normal course of business, each Fund invests in securities or other instruments and may enter into certain transactions, and such activities subject the Fund to various risks, including, among others, fluctuations in the market (market risk) or failure of an issuer to meet all of its obligations. The value of securities or other instruments may also be affected by various factors, including, without limitation: (i) the general economy; (ii) the overall market as well as local, regional or global political and/or social instability; (iii) regulation, taxation or international tax treaties between various countries; or (iv) currency, interest rate or price fluctuations. Each Fund’s prospectus provides details of the risks to which the Fund is subject.
BFA uses a “passive” or index approach to try to achieve each Fund’s investment objective following the securities included in its underlying index during upturns as well as downturns. BFA does not take steps to reduce market exposure or to lessen the effects of a declining market. Divergence from the underlying index and the composition of the portfolio is monitored by BFA.
MARKET RISK
Market risk arises mainly from uncertainty about future values of financial instruments influenced by price, currency and interest rate movements. It represents the potential loss a fund may suffer through holding market positions in the face of market movements. A fund is exposed to market risk by its investment in equity, fixed income and/or financial derivative instruments or by its investment in underlying funds. The fair value of securities held by a fund may decline due to general market conditions, economic trends or events that are not specifically related to the issuers of the securities including local, regional or global political, social or economic instability or to factors that affect a particular industry or group of industries. The extent of a fund’s exposure to market risk is the market value of the investments held as shown in the fund’s schedule of investments.
A diversified portfolio, where this is appropriate and consistent with a fund’s objectives, minimizes the risk that a price change of a particular investment will have a material impact on the NAV of a fund. The investment concentrations within each Fund’s portfolio are disclosed in its schedule of investments.
Investing in the securities of non-U.S. issuers involves certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: differences in accounting, auditing and financial reporting standards; more substantial governmental involvement in the economy; higher inflation rates, greater social, economic and political uncertainties; possible nationalization or expropriation of assets; less availability of public information about issuers; imposition of withholding or other taxes; higher transaction and custody costs and delays in settlement procedures; and lower level of regulation of the securities markets and issuers. Non-U.S. securities may be less liquid, more difficult to value, and have greater price volatility due to exchange rate fluctuations. These and other risks are heightened for investments in issuers from countries with less developed capital markets.
The economies and markets of European countries are often closely connected and interdependent, and events in one country in Europe can have an adverse impact on other European countries. The European financial markets have experienced volatility
NOTESTO FINANCIAL STATEMENTS | 53 |
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Notes to Financial Statements (Unaudited) (Continued)
iSHARES® TRUST
and adverse trends in recent years due to concerns about economic downturns or rising government debt levels in several European countries. These events have adversely affected the exchange rate of the euro and may continue to significantly affect European countries. The occurrence of terrorist incidents throughout Europe also could impact financial markets. In addition, the United Kingdom has voted to withdraw from the European Union. The referendum may introduce significant new uncertainties and instability in the financial markets as the United Kingdom negotiates its exit from the European Union.
When a Fund concentrates its investments in securities within a single or limited number of market sectors, it assumes the risk that economic, political and social conditions affecting those market sectors may have a significant impact on its investment performance.
CREDIT RISK
Credit risk is the risk that an issuer or guarantor of debt instruments or the counterparty to a financial transaction, including derivatives contracts, repurchase agreements or loans of portfolio securities, is unable or unwilling to make timely interest and/or principal payments or to otherwise honor its obligations. BFA and its affiliates manage counterparty credit risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose a fund to issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of a fund’s exposure to credit and counterparty risks with respect to those financial assets is approximated by their value recorded in its statement of assets and liabilities.
7. | INCOME TAX INFORMATION |
Each Fund is treated as an entity separate from the Trust’s other funds for federal income tax purposes. It is the policy of each Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its ordinary income and any net capital gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes is required.
For purposes of U.S. GAAP, in-kind redemptions are treated as sales of securities resulting in realized capital gains or losses to the Funds. Because such gains or losses are not taxable to the Funds and are not distributed to existing Fund shareholders, the gains or losses are reclassified from accumulated net realized gain (loss) to paid-in capital at the end of the Funds’ tax year. These reclassifications have no effect on net assets or NAV per share.
The tax character of current year distributions will be determined at the end of the current fiscal year.
As of April 30, 2017, the Funds’ fiscal year-end, the following Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:
iShares ETF | Non- Expiring a | Expiring 2018 | Expiring 2019 | Total | ||||||||||||
Cohen & Steers REIT | $ | — | $ | 96,413,332 | $ | — | $ | 96,413,332 | ||||||||
Core U.S. REIT | 819,000 | 1,850,515 | — | 2,669,515 | ||||||||||||
Europe Developed Real Estate | 1,813,353 | 616,993 | 495,537 | 2,925,883 | ||||||||||||
International Developed Real Estate | 53,410,043 | 9,938,969 | 6,772,206 | 70,121,218 |
a | Must be utilized prior to losses subject to expiration. |
54 | 2017 iSHARES SEMI-ANNUAL REPORTTO SHAREHOLDERS |
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Notes to Financial Statements (Unaudited) (Continued)
iSHARES® TRUST
The Funds may own shares in certain foreign investment entities, referred to, under U.S. tax law, as “passive foreign investment companies.” The Funds may elect to mark-to-market annually the shares of each passive foreign investment company and would be required to distribute to shareholders any such marked-to-market gains.
Management has analyzed tax laws and regulations and their application to the Funds as of October 31, 2017, inclusive of the open tax return years, and does not believe there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.
8. | FOREIGN WITHHOLDING TAX CLAIMS |
The iShares International Developed Real Estate ETF has filed claims to recover taxes withheld by Finland on dividend income on the basis that Finland had purportedly violated certain provisions in the Treaty on the Functioning of the European Union. The Fund has recorded a receivable for all recoverable taxes withheld by Finland based upon recent favorable determinations issued by the Finnish Tax Authority. Withholding tax claims may be for the current year and potentially for a limited number of prior calendar years, depending upon the member state’s statute of limitation on taxes. The Fund continues to evaluate developments in Finland for potential impacts to the receivables and payables recorded. Such foreign withholding tax claims are disclosed in the statement of assets and liabilities and statement of operations. Professional fees associated with the filing of these claims that result in the recovery of foreign withholding taxes have been approved by the Board as appropriate expenses of the Fund.
The Internal Revenue Service has issued guidance to address U.S. income tax liabilities attributable to fund shareholders resulting from the recovery of foreign taxes withheld in prior calendar years. These withheld foreign taxes were passed through to shareholders in the form of foreign tax credits in the year the taxes were withheld. Assuming there are sufficient foreign taxes paid which the Fund is able to pass through to its shareholders as a foreign tax credits in the current year, the Fund will be able to offset the prior years’ withholding taxes recovered against the foreign taxes paid in the current year. Accordingly, no federal income tax liability is recorded by the Fund.
9. | LEGAL PROCEEDINGS |
On June 16, 2016, investors (the “Plaintiffs”) in certain iShares funds (iShares Core S&P Small-Cap ETF, iShares Russell 1000 Growth ETF, iShares Core S&P 500 ETF, iShares Russell Mid-Cap Growth ETF, iShares Russell Mid-Cap ETF, iShares Russell Mid-Cap Value ETF, iShares Select Dividend ETF, iShares Morningstar Mid-Cap ETF, iShares Morningstar Large-Cap ETF, iShares U.S. Aerospace & Defense ETF and iShares U.S. Preferred Stock ETF) filed a putative class action lawsuit against iShares Trust, BlackRock, Inc. and certain of its advisory affiliates, and certain directors/trustees and officers of the Funds (collectively, “Defendants”). The lawsuit alleges the Defendants violated federal securities laws by failing to adequately disclose in the prospectuses issued by the funds noted above the risks of using stop-loss orders in the event of a ‘flash crash’, such as the one that occurred on May 6, 2010. On September 18, 2017, the Court issued a Statement of Decision holding that the Plaintiffs lack standing to assert their claims. On October 11, 2017, the Court entered final judgment dismissing all of the Plaintiffs’ claims with prejudice. Plaintiffs have appealed the Court’s decision.
10. | SUBSEQUENT EVENTS |
Management has evaluated the impact of all subsequent events on the Funds through the date the financial statements were available to be issued and has determined that there were no subsequent events requiring adjustment or disclosure in the financial statements.
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I. iShares Cohen & Steers REIT ETF
Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required annually to consider and approve the Investment Advisory Contract between the Trust and BFA (the “Advisory Contract”) on behalf of the Fund. The Independent Trustees requested, and BFA provided, such information as the Independent Trustees, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management on May 5, 2017 and May 12, 2017. At these meetings, the 15(c) Committee reviewed and discussed information provided in response to the 15(c) Committee’s initial requests, and requested certain additional information, which management agreed to provide. At a meeting held on May 18, 2017, management presented information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its meetings. The Board, including the Independent Trustees, reviewed and discussed such information at length. The Independent Trustees requested from management certain additional information, which management agreed to provide. At a meeting held on June 19-21, 2017, the Board, including the Independent Trustees, reviewed the additional information provided by management in response to these requests. After extensive discussions, the Board, including all of the Independent Trustees, approved the continuance of the Advisory Contract for the Fund, based on a review of qualitative and quantitative information provided by BFA. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Board also noted that the Board and BFA agreed to discuss potential further enhancements to the 15(c) process for the coming year. The Independent Trustees were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Contract for the Fund, the Board, including the Independent Trustees, considered the following factors, no one of which was controlling, and reached the following conclusions:
Expenses and Performance of the Fund — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of the Fund in comparison with the same information for other exchange traded funds (“ETFs”) (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising the Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of the proprietary ETF methodology used by Broadridge to determine the Fund’s Peer Group. The Board further noted that due to the limitations in providing comparable funds in the Peer Group, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Fund in all instances.
The Board also noted that the investment advisory fee rate and overall expenses (net of waivers and reimbursements) for the Fund were within range of the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in its Peer Group, excluding iShares funds.
In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as the Fund, Broadridge also provided, and the Board reviewed, a comparison of the Fund’s performance for the one-, three-, five-, ten-year, and since inception periods, as applicable, and for the quarter ended December 31, 2016, to that of relevant comparison funds for the same periods.
The Board noted that the Fund seeks to track its specified underlying index and that, during the year, the Board received periodic reports on the Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative
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performance information, including any additional detailed information requested by the Boards, was also considered. The Board noted that the Fund generally performed in line with its underlying index over the relevant periods.
Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and the historical performance of the Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, including information about recent and proposed enhancements to the iShares business, including with respect to capital markets support and analysis, technology, product design, compliance and risk management, and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the iShares funds and their shareholders. The Board also considered BFA’s compliance program and its compliance record with respect to the Fund. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Fund, as well as the resources available to them in managing the Fund. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the June 19-21, 2017 meeting and throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that the Fund had met its investment objective consistently since its inception date.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Fund under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Costs of Services Provided to Fund and Profits Realized by BFA and Affiliates — The Board reviewed information about the profitability of the Fund to BlackRock, based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and other sources of revenue and expense to BFA and its affiliates from the Fund’s operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, including supplemental information that was responsive to requests of the 15(c) Committee. The Board noted that the 15(c) Committee had focused on the methodology and profitability presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC, a BFA affiliate, from securities lending by the Fund. The Board also discussed BFA’s profit margin as reflected in the Fund’s profitability analysis and reviewed information regarding potential economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Fund and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.
Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Fund’s assets, noting that the issue of economies of scale had been focused on by the 15(c) Committee during its meetings and addressed by management, including through supplemental information. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through relatively low fee rates established at inception, breakpoints and waivers or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their
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shareholders. The Board and the 15(c) Committee received information regarding BlackRock’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished, among other things, between fixed and variable costs, and explained how the level of fixed and variable costs, as well as the nature of such costs, may impact the existence or size of scale benefits. The Board noted that the Advisory Contract for the Fund already provided for breakpoints in the Fund’s investment advisory fee rate as the assets of the Fund, on an aggregated basis with the assets of certain other iShares funds, increase. The Board noted that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding new or revised breakpoints in the future.
Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider the Advisory Contract at least annually, determined to approve the continuance of the Advisory Contract for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same investment objective and strategy as the Fund and that track the same index as the Fund. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Fund, including in terms of the different and generally more extensive services provided to the Fund, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Fund, as a publicly traded ETF, as compared to the Other Accounts that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged BFA’s expressed business purpose for launching a suite of iShares “Core” ETFs that generally are subject to lower investment advisory fees than iShares non-Core ETFs that may provide a similar investment exposure. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rate under the Advisory Contract for the Fund was generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.
Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Fund by BFA, such as payment of revenue to BTC, the Fund’s securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Fund in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board also noted the revenue received by BFA and/or its affiliates pursuant to an agreement that permits a service provider to use certain portions of BlackRock’s technology platform to service accounts managed by BFA and/or its affiliates, including the iShares funds. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Fund. The Board further noted that any portfolio transactions on behalf of the Fund placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Fund’s shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.
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Conclusion — Based on the considerations described above, the Board determined that the Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded to approve the continuance of the Advisory Contract for the coming year.
II. iShares Core U.S. REIT ETF
Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required annually to consider and approve the Investment Advisory Contract between the Trust and BFA (the “Advisory Contract”) on behalf of the Fund. The Independent Trustees requested, and BFA provided, such information as the Independent Trustees, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management on May 5, 2017 and May 12, 2017. At these meetings, the 15(c) Committee reviewed and discussed information provided in response to the 15(c) Committee’s initial requests, and requested certain additional information, which management agreed to provide. At a meeting held on May 18, 2017, management presented information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its meetings. The Board, including the Independent Trustees, reviewed and discussed such information at length. The Independent Trustees requested from management certain additional information, which management agreed to provide. At a meeting held on June 19-21, 2017, the Board, including the Independent Trustees, reviewed the additional information provided by management in response to these requests. After extensive discussions, the Board, including all of the Independent Trustees, approved the continuance of the Advisory Contract for the Fund, based on a review of qualitative and quantitative information provided by BFA. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Board also noted that the Board and BFA agreed to discuss potential further enhancements to the 15(c) process for the coming year. The Independent Trustees were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Contract for the Fund, the Board, including the Independent Trustees, considered the following factors, no one of which was controlling, and reached the following conclusions:
Expenses and Performance of the Fund — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of the Fund in comparison with the same information for other exchange traded funds (“ETFs”) (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising the Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of the proprietary ETF methodology used by Broadridge to determine the Fund’s Peer Group. The Board further noted that due to the limitations in providing comparable funds in the Peer Group, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Fund in all instances.
The Board also noted that the investment advisory fee rate and overall expenses (net of waivers and reimbursements) for the Fund were higher than the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in its Peer Group, excluding iShares funds. The Board further noted that it had previously approved a revised Advisory Contracts for the Fund which lowered the investment advisory fee rate from 48 basis points to 8 basis points, which was not fully reflected in the Broadridge data.
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In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as the Fund, Broadridge also provided, and the Board reviewed, a comparison of the Fund’s performance for the one-, three-, five-, ten-year, and since inception periods, as applicable, and for the quarter ended December 31, 2016, to that of relevant comparison funds for the same periods.
The Board noted that the Fund seeks to track its specified underlying index and that, during the year, the Board received periodic reports on the Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative performance information, including any additional detailed information requested by the Boards, was also considered. The Board noted that the Fund generally performed in line with its underlying index over the relevant periods.
Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and the historical performance of the Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, including information about recent and proposed enhancements to the iShares business, including with respect to capital markets support and analysis, technology, product design, compliance and risk management, and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the iShares funds and their shareholders. The Board also considered BFA’s compliance program and its compliance record with respect to the Fund. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Fund, as well as the resources available to them in managing the Fund. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the June 19-21, 2017 meeting and throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that the Fund had met its investment objective consistently since its inception date.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Fund under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Costs of Services Provided to Fund and Profits Realized by BFA and Affiliates — The Board reviewed information about the profitability of the Fund to BlackRock, based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and other sources of revenue and expense to BFA and its affiliates from the Fund’s operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, including supplemental information that was responsive to requests of the 15(c) Committee. The Board noted that the 15(c) Committee had focused on the methodology and profitability presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC, a BFA affiliate, from securities lending by the Fund. The Board also discussed BFA’s profit margin as reflected in the Fund’s profitability analysis and reviewed information regarding potential economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Fund and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.
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Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Fund’s assets, noting that the issue of economies of scale had been focused on by the 15(c) Committee during its meetings and addressed by management, including through supplemental information. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through relatively low fee rates established at inception, breakpoints and waivers or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BlackRock’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished, among other things, between fixed and variable costs, and explained how the level of fixed and variable costs, as well as the nature of such costs, may impact the existence or size of scale benefits. The Board noted that the Advisory Contract for the Fund did not provide for any breakpoints in the Fund’s investment advisory fee rate as the assets of the Fund increase. However, the Board noted that should material economies of scale be identified in the future that are not otherwise shared, a breakpoint structure for the Fund may be appropriate, and that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding breakpoints in the future.
Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider the Advisory Contract at least annually, determined to approve the continuance of the Advisory Contract for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same investment objective and strategy as the Fund and that track the same index as the Fund. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Fund, including in terms of the different and generally more extensive services provided to the Fund, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Fund, as a publicly traded ETF, as compared to the Other Accounts that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged BFA’s expressed business purpose for launching a suite of iShares “Core” ETFs that generally are subject to lower investment advisory fees than iShares non-Core ETFs that may provide a similar investment exposure. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rate under the Advisory Contract for the Fund was generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.
Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Fund by BFA, such as payment of revenue to BTC, the Fund’s securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Fund in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board also noted the revenue received by BFA and/or its affiliates pursuant to an agreement that permits a service provider to use certain portions of BlackRock’s technology platform to service accounts managed by BFA and/or its affiliates, including the iShares funds. The Board noted that BFA generally does not use soft dollars or consider the
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value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Fund. The Board further noted that any portfolio transactions on behalf of the Fund placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Fund’s shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.
Conclusion — Based on the considerations described above, the Board determined that the Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded to approve the continuance of the Advisory Contract for the coming year.
III. iShares Europe Developed Real Estate ETF and iShares Global REIT ETF
Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required annually to consider and approve the Investment Advisory Contract between the Trust and BFA (the “Advisory Contract”) on behalf of the Funds. The Independent Trustees requested, and BFA provided, such information as the Independent Trustees, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management on May 5, 2017 and May 12, 2017. At these meetings, the 15(c) Committee reviewed and discussed information provided in response to the 15(c) Committee’s initial requests, and requested certain additional information, which management agreed to provide. At a meeting held on May 18, 2017, management presented information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its meetings. The Board, including the Independent Trustees, reviewed and discussed such information at length. The Independent Trustees requested from management certain additional information, which management agreed to provide. At a meeting held on June 19-21, 2017, the Board, including the Independent Trustees, reviewed the additional information provided by management in response to these requests. After extensive discussions, the Board, including all of the Independent Trustees, approved the continuance of the Advisory Contract for the Funds, based on a review of qualitative and quantitative information provided by BFA. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Board also noted that the Board and BFA agreed to discuss potential further enhancements to the 15(c) process for the coming year. The Independent Trustees were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Contract for the Funds, the Board, including the Independent Trustees, considered the following factors, no one of which was controlling, and reached the following conclusions:
Expenses and Performance of the Funds — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of each Fund in comparison with the same information for other exchange traded funds (“ETFs”) (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising such Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of the proprietary ETF methodology used by Broadridge to determine the applicable Peer Groups. The Board further noted that due to the limitations in providing comparable funds in the
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various Peer Groups, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Funds in all instances.
The Board also noted that the investment advisory fee rates and overall expenses (net of waivers and reimbursements) for the Funds were lower than the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in their respective Peer Group, excluding iShares funds.
In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as any particular Fund, Broadridge also provided, and the Board reviewed, a comparison of such Fund’s performance for the one-, three-, five-, ten-year, and since inception periods, as applicable, and for the quarter ended December 31, 2016, to that of relevant comparison funds for the same periods.
The Board noted that each Fund seeks to track its specified underlying index and that, during the year, the Board received periodic reports on each Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative performance information, including any additional detailed information requested by the Boards, was also considered. The Board noted that each Fund generally performed in line with its underlying index over the relevant periods.
Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and the historical performance of each Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, including information about recent and proposed enhancements to the iShares business, including with respect to capital markets support and analysis, technology, product design, compliance and risk management, and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the iShares funds and their shareholders. The Board also considered BFA’s compliance program and its compliance record with respect to the Funds. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Funds, as well as the resources available to them in managing the Funds. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the June 19-21, 2017 meeting and throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that each Fund had met its investment objective consistently since its respective inception date.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Funds under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Costs of Services Provided to Funds and Profits Realized by BFA and Affiliates — The Board reviewed information about the profitability of the Funds to BlackRock, on a Fund-by-Fund basis and in the aggregate, based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and other sources of revenue and expense to BFA and its affiliates from the Funds’ operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds,
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including supplemental information that was responsive to requests of the 15(c) Committee. The Board noted that the 15(c) Committee had focused on the methodology and profitability presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC, a BFA affiliate, from securities lending by the Funds. The Board also discussed BFA’s profit margin as reflected in the Funds’ profitability analyses and reviewed information regarding potential economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Funds and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.
Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Funds’ assets, noting that the issue of economies of scale had been focused on by the 15(c) Committee during its meetings and addressed by management, including through supplemental information. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through relatively low fee rates established at inception, breakpoints and waivers or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BlackRock’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished, among other things, between fixed and variable costs, and explained how the level of fixed and variable costs, as well as the nature of such costs, may impact the existence or size of scale benefits. The Board noted that the Advisory Contract for the Funds did not provide for any breakpoints in the Funds’ investment advisory fee rates as the assets of the Funds increase. However, the Board noted that should material economies of scale be identified in the future that are not otherwise shared, a breakpoint structure for the Funds may be appropriate, and that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding breakpoints in the future.
Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider the Advisory Contract at least annually, determined to approve the continuance of the Advisory Contract for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same investment objectives and strategies as the Funds and that track the same index as the Funds. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Funds, including in terms of the different and generally more extensive services provided to the Funds, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Funds, as publicly traded ETFs, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged BFA’s expressed business purpose for launching a suite of iShares “Core” ETFs that generally are subject to lower investment advisory fees than iShares non-Core ETFs that may provide a similar investment exposure. The Board also considered the “all-inclusive” nature of the Funds’ advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rates under the Advisory Contract for the Funds were generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.
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Board Review and Approval of Investment Advisory
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Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Funds by BFA, such as payment of revenue to BTC, the Funds’ securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Funds in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board also noted the revenue received by BFA and/or its affiliates pursuant to an agreement that permits a service provider to use certain portions of BlackRock’s technology platform to service accounts managed by BFA and/or its affiliates, including the iShares funds. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Funds. The Board further noted that any portfolio transactions on behalf of the Funds placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Funds’ shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.
Conclusion — Based on the considerations described above, the Board determined that each Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded to approve the continuance of the Advisory Contract for the coming year.
IV. iShares International Developed Real Estate ETF
Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Trustees who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Trustees”), is required annually to consider and approve the Investment Advisory Contract between the Trust and BFA (the “Advisory Contract”) on behalf of the Fund. The Independent Trustees requested, and BFA provided, such information as the Independent Trustees, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management on May 5, 2017 and May 12, 2017. At these meetings, the 15(c) Committee reviewed and discussed information provided in response to the 15(c) Committee’s initial requests, and requested certain additional information, which management agreed to provide. At a meeting held on May 18, 2017, management presented information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its meetings. The Board, including the Independent Trustees, reviewed and discussed such information at length. The Independent Trustees requested from management certain additional information, which management agreed to provide. At a meeting held on June 19-21, 2017, the Board, including the Independent Trustees, reviewed the additional information provided by management in response to these requests. After extensive discussions, the Board, including all of the Independent Trustees, approved the continuance of the Advisory Contract for the Fund, based on a review of qualitative and quantitative information provided by BFA. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Board also noted that the Board and BFA agreed to discuss potential further enhancements to the 15(c) process for the coming year. The Independent Trustees were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Contract for the Fund, the Board, including the Independent Trustees, considered the following factors, no one of which was controlling, and reached the following conclusions:
Expenses and Performance of the Fund — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components,
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including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of the Fund in comparison with the same information for other exchange traded funds (“ETFs”) (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising the Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of the proprietary ETF methodology used by Broadridge to determine the Fund’s Peer Group. The Board further noted that due to the limitations in providing comparable funds in the Peer Group, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Fund in all instances.
The Board also noted that the investment advisory fee rate and overall expenses (net of waivers and reimbursements) for the Fund were lower than the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in its Peer Group, excluding iShares funds.
In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as the Fund, Broadridge also provided, and the Board reviewed, a comparison of the Fund’s performance for the one-, three-, five-, ten-year, and since inception periods, as applicable, and for the quarter ended December 31, 2016, to that of relevant comparison funds for the same periods.
The Board noted that the Fund seeks to track its specified underlying index and that, during the year, the Board received periodic reports on the Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative performance information, including any additional detailed information requested by the Boards, was also considered. The Board noted that the Fund generally performed in line with its underlying index over the relevant periods.
Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and the historical performance of the Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, including information about recent and proposed enhancements to the iShares business, including with respect to capital markets support and analysis, technology, product design, compliance and risk management, and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the iShares funds and their shareholders. The Board also considered BFA’s compliance program and its compliance record with respect to the Fund. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Fund, as well as the resources available to them in managing the Fund. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the June 19-21, 2017 meeting and throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that the Fund had met its investment objective consistently since its inception date.
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Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Fund under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Costs of Services Provided to Fund and Profits Realized by BFA and Affiliates — The Board reviewed information about the profitability of the Fund to BlackRock, based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and other sources of revenue and expense to BFA and its affiliates from the Fund’s operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, including supplemental information that was responsive to requests of the 15(c) Committee. The Board noted that the 15(c) Committee had focused on the methodology and profitability presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC, a BFA affiliate, from securities lending by the Fund. The Board also discussed BFA’s profit margin as reflected in the Fund’s profitability analysis and reviewed information regarding potential economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Fund and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.
Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Fund’s assets, noting that the issue of economies of scale had been focused on by the 15(c) Committee during its meetings and addressed by management, including through supplemental information. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through relatively low fee rates established at inception, breakpoints and waivers or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BlackRock’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished, among other things, between fixed and variable costs, and explained how the level of fixed and variable costs, as well as the nature of such costs, may impact the existence or size of scale benefits. The Board noted that the Advisory Contract for the Fund did not provide for any breakpoints in the Fund’s investment advisory fee rate as the assets of the Fund increase. However, the Board noted that should material economies of scale be identified in the future that are not otherwise shared, a breakpoint structure for the Fund may be appropriate, and that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding breakpoints in the future.
Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider the Advisory Contract at least annually, determined to approve the continuance of the Advisory Contract for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do manage Other Accounts with substantially the same investment objective and strategy as the Fund and that track the same index as the Fund. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Fund, including in terms of the different and generally more extensive services provided to the Fund, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and
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Board Review and Approval of Investment Advisory
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inherent risks and challenges of managing and providing other services to the Fund, as a publicly traded ETF, as compared to the Other Accounts that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged BFA’s expressed business purpose for launching a suite of iShares “Core” ETFs that generally are subject to lower investment advisory fees than iShares non-Core ETFs that may provide a similar investment exposure. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rate under the Advisory Contract for the Fund was generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.
Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Fund by BFA, such as payment of revenue to BTC, the Fund’s securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Fund in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board also noted the revenue received by BFA and/or its affiliates pursuant to an agreement that permits a service provider to use certain portions of BlackRock’s technology platform to service accounts managed by BFA and/or its affiliates, including the iShares funds. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Fund. The Board further noted that any portfolio transactions on behalf of the Fund placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Fund’s shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.
Conclusion — Based on the considerations described above, the Board determined that the Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded to approve the continuance of the Advisory Contract for the coming year.
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Supplemental Information (Unaudited)
iSHARES® TRUST
Proxy Results
A special meeting of the shareholders of each series of iShares Trust (the “Trust”) was held on June 19, 2017, to elect five Trustees to the Board of Trustees of the Trust. The five nominees were Jane D. Carlin, Richard L. Fagnani, Drew E. Lawton, Madhav V. Rajan and Mark Wiedman, all of whom were elected as Trustees at the special meeting. The other Trustees whose terms of office as Trustees continued after the special meeting are Cecilia H. Herbert, Charles A. Hurty, John E. Kerrigan, John E. Martinez and Robert S. Kapito.
Trustee | Votes For | Votes Withheld | ||||||
Jane D. Carlin | 8,669,874,031 | �� | 59,322,838 | |||||
Richard L. Fagnani | 8,672,718,914 | 56,477,955 | ||||||
Drew E. Lawton | 8,670,713,236 | 58,483,633 | ||||||
Madhav V. Rajan | 8,653,682,870 | 75,513,999 | ||||||
Mark Wiedman | 8,664,674,816 | 64,522,053 |
Section 19(a) Notices
The amounts and sources of distributions reported are estimates and are provided pursuant to regulatory requirements and are not being provided for tax reporting purposes. The actual amounts and sources for tax reporting purposes will depend upon each Fund’s investment experience during the year and may be subject to changes based on the tax regulations. Shareholders will receive a Form 1099-DIV each calendar year that will inform them how to report these distributions for federal income tax purposes.
Total Cumulative Distributions for the Fiscal Year-to-Date | % Breakdown of the Total Cumulative Distributions for the Fiscal Year-to-Date | |||||||||||||||||||||||||||||||
iShares ETF | Net Investment | Net Realized Gains | Return of | Total Per Share | Net Investment | Net Realized | Return Capital | Total Per Share | ||||||||||||||||||||||||
Cohen & Steers REIT | $1.508684 | $ | — | $ | 0.012109 | $ | 1.520793 | 99 | % | — | % | 1 | % | 100 | % | |||||||||||||||||
Core U.S. REIT | 0.860520 | — | 0.459300 | 0.906450 | 95 | — | 5 | 100 | ||||||||||||||||||||||||
Global REIT | 0.472979 | — | 0.011916 | 0.484895 | 98 | — | 2 | 100 |
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Notes:
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For more information visit www.iShares.com or call 1-800-iShares (1-800-474-2737)
This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.
Investing involves risk, including possible loss of principal.
The iShares Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by Cohen & Steers Capital Management, Inc., European Public Real Estate Association (“EPRA®”), FTSE International Limited (“FTSE”), or National Association of Real Estate Investment Trusts (“NAREIT”), nor do these companies make any representation regarding the advisability of investing in the iShares Funds. BlackRock is not affiliated with the companies listed above.
A description of the policies that the Funds use to determine how to vote proxies relating to portfolio securities and information about how the Funds voted proxies relating to portfolio securities during the most recent twelve-month period ending June 30 is available without charge, upon request, by calling toll-free 1-800-474-2737; on the Funds’ website at www.iShares.com; and on the U.S. Securities and Exchange Commission (SEC) website at www.sec.gov.
The Funds file their complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website or may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Funds also disclose their complete schedules of portfolio holdings on a daily basis on the Funds’ website.
©2017 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc. or its subsidiaries. All other marks are the property of their respective owners.
iS-SAR-405-1017
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Item 2. | Code of Ethics. |
Not applicable to this semi-annual report.
Item 3. | Audit Committee Financial Expert. |
Not applicable to this semi-annual report.
Item 4. | Principal Accountant Fees and Services. |
Not applicable to this semi-annual report.
Item 5. | Audit Committee of Listed Registrants. |
Not applicable to this semi-annual report.
Item 6. | Investments. |
(a) | Schedules of investments are included as part of the reports to shareholders filed under Item 1 of this Form. |
(b) | Not applicable. |
Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
Not applicable to the registrant.
Item 8. | Portfolio Managers of Closed-End Management Investment Companies. |
Not applicable to the registrant.
Item 9. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. |
Not applicable to the registrant.
Item 10. | Submission of Matters to a Vote of Security Holders. |
There were no material changes to the procedures by which shareholders may recommend nominees to the registrant’s Board of Trustees.
Item 11. | Controls and Procedures. |
(a) | The President (the registrant’s Principal Executive Officer) and Treasurer and Chief Financial Officer (the registrant’s Principal Financial Officer) have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are effective as of a date within 90 days of the filing date of this report, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the Investment Company Act of 1940 and Rules 13a-15(b) or 15d-15(b) under the Exchange Act of 1934. |
(b) | There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
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Item 12. | Disclosure of Securities Lending Activities for Closed-End Management Investment Companies. |
Not applicable to the registrant.
Item 13. | Exhibits. |
(a) (1) Not applicable to this semi-annual report.
(a) (2) Section 302 Certifications are attached.
(a) (3) Not applicable.
(a) (4) Not applicable.
(b) Section 906 Certifications are attached.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
iShares Trust | ||
By: | /s/ Martin Small | |
Martin Small, President (Principal Executive Officer) |
Date: December 29, 2017
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Martin Small | |
Martin Small, President (Principal Executive Officer) |
Date: December 29, 2017
By: | /s/ Jack Gee | |
Jack Gee, Treasurer and Chief Financial Officer (Principal Financial Officer) |
Date: December 29, 2017