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
100 Summer Street, 4th Floor, Boston, MA 02110
(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, 2019
Date of reporting period: October 31, 2018
Item 1. | Reports to Stockholders. |
Copies of the semi-annual reports transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940 are attached.
OCTOBER 31, 2018
2018 SEMI-ANNUAL REPORT (UNAUDITED) |
iShares Trust
iShares Dow Jones U.S. ETF | IYY | NYSE Arca
iShares Transportation Average ETF | IYT | Cboe BZX
iShares U.S. Energy ETF | IYE | NYSE Arca
iShares U.S. Healthcare ETF | IYH | NYSE Arca
iShares U.S. Technology ETF | IYW | NYSE Arca
iShares U.S. Utilities ETF | IDU | NYSE Arca
Page
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11 | ||||
11 | ||||
12 | ||||
Financial Statements | ||||
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38 | ||||
40 | ||||
43 | ||||
49 | ||||
58 | ||||
64 | ||||
65 | ||||
66 |
Fund Summary as of October 31, 2018
| iShares® Dow Jones U.S. ETF |
Investment Objective
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.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||||||
6 Months |
1 Year |
5 Years |
10 Years |
1 Year |
5 Years |
10 Years | ||||||||||||||||||||||||||
Fund NAV | 2.81 | % | 6.61 | % | 10.70 | % | 13.18 | % | 6.61 | % | 66.26 | % | 245.02 | % | ||||||||||||||||||
Fund Market | 2.82 | 6.63 | 10.69 | 13.15 | 6.63 | 66.17 | 244.06 | |||||||||||||||||||||||||
Index | 2.90 | 6.83 | 10.91 | 13.39 | 6.83 | 67.79 | 251.39 |
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 11 for more information.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
|
Beginning |
| | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio | | ||||||
$ 1,000.00 | $ 1,028.10 | $ 1.02 | $ 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. |
Portfolio Information
ALLOCATION BY SECTOR
| ||
Sector | Percent of Total Investments(a) | |
Information Technology | 20.6% | |
Health Care | 14.4 | |
Financials | 13.8 | |
Consumer Discretionary | 10.1 | |
Industrials | 9.7 | |
Communication Services | 9.5 | |
Consumer Staples | 6.8 | |
Energy | 5.5 | |
Real Estate | 3.6 | |
Utilities | 3.1 | |
Materials | 2.9 |
TEN LARGEST HOLDINGS
| ||
Security | Percent of Total Investments(a) | |
Apple Inc. | 3.8% | |
Microsoft Corp. | 3.1 | |
Amazon. com Inc. | 2.5 | |
Berkshire Hathaway Inc., Class B | 1.5 | |
Johnson & Johnson | 1.4 | |
JPMorgan Chase & Co. | 1.4 | |
Facebook Inc., Class A | 1.4 | |
Exxon Mobil Corp. | 1.3 | |
Alphabet Inc., Class C | 1.3 | |
Alphabet Inc., Class A | 1.3 |
(a) | Excludes money market funds. |
F U N D S U M M A R Y | 5 |
Fund Summary as of October 31, 2018
| iShares® Transportation Average ETF |
Investment Objective
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.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||||||
6 Months |
1 Year |
5 Years |
10 Years |
1 Year |
5 Years |
10 Years | ||||||||||||||||||||||||||
Fund NAV | (1.88 | )% | 5.47 | % | 9.14 | % | 11.50 | % | 5.47 | % | 54.82 | % | 196.91 | % | ||||||||||||||||||
Fund Market | (1.89 | ) | 5.43 | 9.12 | 11.47 | 5.43 | 54.72 | 196.20 | ||||||||||||||||||||||||
Index | (1.53 | ) | 5.92 | 9.38 | 11.89 | 5.92 | 56.54 | 207.59 |
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.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
|
Beginning |
| | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio | | ||||||
$ 1,000.00 | $ 981.20 | $ 2.10 | $ 1,000.00 | $ 1,023.10 | $ 2.14 | 0.42% |
(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. |
Portfolio Information
ALLOCATION BY SECTOR
| ||
Sector | Percent of Total Investments(a) | |
Road & Rail | 45.2% | |
Air Freight & Logistics | 29.1 | |
Airlines | 19.0 | |
Marine | 6.7 |
TEN LARGEST HOLDINGS
| ||
Security | Percent of Total Investments(a) | |
FedEx Corp. | 13.5% | |
Norfolk Southern Corp. | 10.4 | |
Union Pacific Corp. | 9.1 | |
JB Hunt Transport Services Inc. | 7.0 | |
United Parcel Service Inc., Class B | 6.7 | |
CSX Corp. | 4.4 | |
Expeditors International of Washington Inc. | 4.4 | |
Kirby Corp. | 4.4 | |
CH Robinson Worldwide Inc. | 4.4 | |
Kansas City Southern | 4.4 |
(a) | Excludes money market funds. |
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Fund Summary as of October 31, 2018
| iShares® U.S. Energy ETF |
Investment Objective
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.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||||||
6 Months |
1 Year | 5 Years | 10 Years | 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||||
Fund NAV | (7.41 | )% | 2.25 | % | (3.13 | )% | 4.07 | % | 2.25 | % | (14.71 | )% | 49.07 | % | ||||||||||||||||||
Fund Market | (7.48 | ) | 2.22 | (3.15 | ) | 4.06 | 2.22 | (14.80 | ) | 48.94 | ||||||||||||||||||||||
Index | (7.23 | ) | 2.68 | (2.75 | ) | 4.51 | 2.68 | (12.99 | ) | 55.43 |
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.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
|
Beginning |
| | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio | | ||||||
$ 1,000.00 | $ 925.90 | $ 2.04 | $ 1,000.00 | $ 1,023.10 | $ 2.14 | 0.42% |
(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. |
Portfolio Information
ALLOCATION BY SECTOR
| ||
Sector | Percent of Total Investments(a) | |
Oil, Gas & Consumable Fuels | 87.4% | |
Energy Equipment & Services | 11.9 | |
Other (each representing less than 1%) | 0.7 |
TEN LARGEST HOLDINGS
| ||
Security | Percent of Total Investments(a) | |
Exxon Mobil Corp. | 23.2% | |
Chevron Corp. | 14.7 | |
ConocoPhillips | 5.6 | |
Schlumberger Ltd. | 4.9 | |
EOG Resources Inc. | 4.2 | |
Occidental Petroleum Corp. | 3.5 | |
Marathon Petroleum Corp. | 3.2 | |
Phillips 66 | 3.0 | |
Valero Energy Corp. | 2.7 | |
Kinder Morgan Inc./DE | 2.2 |
(a) | Excludes money market funds. |
F U N D S U M M A R Y | 7 |
Fund Summary as of October 31, 2018
| iShares® U.S. Healthcare ETF |
Investment Objective
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.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||||||
6 Months | 1 Year | 5 Years | 10 Years | 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||||
Fund NAV | 8.83 | % | 11.54 | % | 12.69 | % | 14.93 | % | 11.54 | % | 81.74 | % | 302.09 | % | ||||||||||||||||||
Fund Market | 8.77 | 11.55 | 12.68 | 14.89 | 11.55 | 81.69 | 300.82 | |||||||||||||||||||||||||
Index | 9.07 | 12.00 | 13.17 | 15.41 | 12.00 | 85.65 | 319.20 |
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.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
| Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio | | ||||||
$ 1,000.00 | $ 1,088.30 | $ 2.21 | $ 1,000.00 | $ 1,023.10 | $ 2.14 | 0.42% |
(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. |
Portfolio Information
ALLOCATION BY SECTOR
Sector | Percent of Total Investments(a) | |
Pharmaceuticals | 31.3% | |
Health Care Providers & Services | 22.0 | |
Health Care Equipment & Supplies | 22.0 | |
Biotechnology | 18.2 | |
Life Sciences Tools & Services | 6.4 | |
Health Care Technology | 0.1 |
TEN LARGEST HOLDINGS
Security | Percent of Total Investments(a) | |
Johnson & Johnson | 10.1% | |
Pfizer Inc. | 6.8 | |
UnitedHealth Group Inc. | 6.8 | |
Merck & Co. Inc. | 5.3 | |
Amgen Inc. | 3.4 | |
Medtronic PLC | 3.3 | |
Abbott Laboratories | 3.3 | |
AbbVie Inc. | 3.2 | |
Eli Lilly & Co. | 2.8 | |
Thermo Fisher Scientific Inc. | 2.5 |
(a) | Excludes money market funds. |
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Fund Summary as of October 31, 2018
| iShares® U.S. Technology ETF |
Investment Objective
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.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||||||
6 Months | 1 Year | 5 Years | 10 Years | 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||||
Fund NAV | 6.18 | % | 10.86 | % | 17.91 | % | 17.32 | % | 10.86 | % | 127.92 | % | 394.06 | % | ||||||||||||||||||
Fund Market | 6.15 | 10.84 | 17.89 | 17.30 | 10.84 | 127.75 | 392.99 | |||||||||||||||||||||||||
Index | 6.46 | 11.41 | 18.47 | 17.78 | 11.41 | 133.34 | 413.89 |
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 11 for more information.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
| Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio | | ||||||
$ 1,000.00 | $ 1,061.80 | $ 2.18 | $ 1,000.00 | $ 1,023.10 | $ 2.14 | 0.42% |
(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. |
Portfolio Information
ALLOCATION BY SECTOR
Sector | Percent of Total Investments(a) | |
Software | 30.5% | |
Technology Hardware, Storage & Peripherals | 20.6 | |
Interactive Media & Services | 17.8 | |
Semiconductors & Semiconductor Equipment | 17.2 | |
Communications Equipment | 5.8 | |
IT Services | 5.3 | |
Other (each representing less than 1%) | 2.8 |
TEN LARGEST HOLDINGS
Security | Percent of Total Investments(a) | |
Apple Inc. | 18.4% | |
Microsoft Corp. | 15.0 | |
Alphabet Inc., Class C | 6.1 | |
Alphabet Inc., Class A | 6.0 | |
Facebook Inc., Class A | 4.4 | |
Intel Corp. | 4.0 | |
Cisco Systems Inc. | 3.9 | |
Oracle Corp. | 2.6 | |
NVIDIA Corp. | 2.4 | |
Adobe Inc. | 2.2 |
(a) | Excludes money market funds. |
F U N D S U M M A R Y | 9 |
Fund Summary as of October 31, 2018
| iShares® U.S. Utilities ETF |
Investment Objective
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.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||||||
6 Months | 1 Year | 5 Years | 10 Years | 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||||
Fund NAV | 5.61 | % | 0.95 | % | 10.34 | % | 10.52 | % | 0.95 | % | 63.58 | % | 172.02 | % | ||||||||||||||||||
Fund Market | 5.63 | 0.97 | 10.34 | 10.50 | 0.97 | 63.59 | 171.35 | |||||||||||||||||||||||||
Index | 5.85 | 1.38 | 10.83 | 10.99 | 1.38 | 67.24 | 183.79 |
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.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
| Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio | | ||||||
$ 1,000.00 | $ 1,056.10 | $ 2.18 | $ 1,000.00 | $ 1,023.10 | $ 2.14 | 0.42% |
(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. |
Portfolio Information
ALLOCATION BY SECTOR
Sector | Percent of Total Investments(a) | |
Electric Utilities | 57.9% | |
Multi-Utilities | 30.5 | |
Gas Utilities | 5.2 | |
Independent Power and Renewable Electricity Producers | 3.7 | |
Water Utilities | 2.7 |
TEN LARGEST HOLDINGS
Security | Percent of Total Investments(a) | |
NextEra Energy Inc. | 10.0% | |
Duke Energy Corp. | 7.3 | |
Dominion Energy Inc. | 5.8 | |
Southern Co. (The) | 5.6 | |
Exelon Corp. | 5.2 | |
American Electric Power Co. Inc. | 4.5 | |
Sempra Energy | 3.7 | |
Public Service Enterprise Group Inc. | 3.3 | |
Xcel Energy Inc. | 3.1 | |
PG&E Corp. | 3.0 |
(a) | Excludes money market funds. |
10 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
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 ask 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. 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 your 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 at the beginning of the period (or from the commencement of operations if less than 6 months) and held through the end of the period, is intended to help you understand your ongoing costs (in dollars and cents) of investing in your 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 under the heading entitled “Expenses Paid During the Period.”
Hypothetical Example for Comparison Purposes – The table also provides information about hypothetical account values and hypothetical expenses based on your 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.
A B O U T F U N D P E R F O R M A N C E / S H A R E H O L D E R E X P E N S E S | 11 |
Schedule of Investments (unaudited)
October 31, 2018 | iShares® Dow Jones U.S. ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks | ||||||||
Aerospace & Defense — 2.5% | ||||||||
Arconic Inc. | 19,109 | $ | 388,486 | |||||
Axon Enterprise Inc.(a)(b) | 2,565 | 158,312 | ||||||
Boeing Co. (The) | 23,441 | 8,318,273 | ||||||
BWX Technologies Inc. | 4,445 | 259,855 | ||||||
Curtiss-Wright Corp. | 1,887 | 206,551 | ||||||
Esterline Technologies Corp.(a) | 1,151 | 135,081 | ||||||
General Dynamics Corp. | 12,187 | 2,103,232 | ||||||
Harris Corp. | 5,168 | 768,533 | ||||||
HEICO Corp.(b) | 1,749 | 146,619 | ||||||
HEICO Corp., Class A | 3,169 | 211,246 | ||||||
Hexcel Corp. | 3,832 | 224,249 | ||||||
Huntington Ingalls Industries Inc. | 1,902 | 415,549 | ||||||
L3 Technologies Inc. | 3,468 | 657,082 | ||||||
Lockheed Martin Corp. | 10,851 | 3,188,566 | ||||||
Moog Inc., Class A | 1,418 | 101,458 | ||||||
Northrop Grumman Corp. | 7,657 | 2,005,751 | ||||||
Raytheon Co. | 12,481 | 2,184,674 | ||||||
Rockwell Collins Inc. | 7,229 | 925,457 | ||||||
Spirit AeroSystems Holdings Inc., Class A | 4,663 | 391,739 | ||||||
Teledyne Technologies Inc.(a) | 1,600 | 354,048 | ||||||
Textron Inc. | 10,926 | 585,961 | ||||||
TransDigm Group Inc.(a) | 2,118 | 699,470 | ||||||
United Technologies Corp. | 32,949 | 4,092,595 | ||||||
|
| |||||||
28,522,787 | ||||||||
Air Freight & Logistics — 0.6% | ||||||||
CH Robinson Worldwide Inc. | 6,035 | 537,296 | ||||||
Expeditors International of Washington Inc. | 7,733 | 519,503 | ||||||
FedEx Corp. | 10,648 | 2,346,180 | ||||||
United Parcel Service Inc., Class B | 30,376 | 3,236,259 | ||||||
XPO Logistics Inc.(a) | 5,579 | 498,651 | ||||||
|
| |||||||
7,137,889 | ||||||||
Airlines — 0.4% | ||||||||
Alaska Air Group Inc. | 5,428 | 333,388 | ||||||
Allegiant Travel Co. | 569 | 64,946 | ||||||
American Airlines Group Inc. | 18,026 | 632,352 | ||||||
Delta Air Lines Inc. | 27,679 | 1,514,872 | ||||||
JetBlue Airways Corp.(a) | 13,432 | 224,717 | ||||||
Southwest Airlines Co. | 22,683 | 1,113,735 | ||||||
Spirit Airlines Inc.(a) | 3,049 | 158,243 | ||||||
United Continental Holdings Inc.(a) | 9,990 | 854,245 | ||||||
|
| |||||||
4,896,498 | ||||||||
Auto Components — 0.3% | ||||||||
Adient PLC | 3,760 | 114,379 | ||||||
Aptiv PLC | 11,633 | 893,414 | ||||||
Autoliv Inc. | 3,875 | 322,943 | ||||||
BorgWarner Inc. | 9,187 | 362,060 | ||||||
Dana Inc. | 6,487 | 101,003 | ||||||
Delphi Technologies PLC | 3,886 | 83,316 | ||||||
Garrett Motion Inc.(a) | 3,253 | 49,348 | ||||||
Gentex Corp. | 12,028 | 253,189 | ||||||
Goodyear Tire & Rubber Co. (The) | 10,522 | 221,593 | ||||||
Lear Corp. | 2,858 | 379,828 | ||||||
Tenneco Inc., Class A | 2,333 | 80,325 | ||||||
Veoneer Inc.(a) | 3,875 | 130,123 | ||||||
Visteon Corp.(a)(b) | 1,311 | 103,621 | ||||||
|
| |||||||
3,095,142 |
Security | Shares | Value | ||||||
Automobiles — 0.5% | ||||||||
Ford Motor Co. | 172,206 | $ | 1,644,567 | |||||
General Motors Co. | 57,712 | 2,111,682 | ||||||
Harley-Davidson Inc. | 7,477 | 285,771 | ||||||
Tesla Inc.(a) | 5,904 | 1,991,537 | ||||||
Thor Industries Inc. | 2,165 | 150,771 | ||||||
|
| |||||||
6,184,328 | ||||||||
Banks — 5.9% | ||||||||
Associated Banc-Corp. | 7,398 | 171,486 | ||||||
BancorpSouth Bank | 3,779 | 108,457 | ||||||
Bank of America Corp. | 407,217 | 11,198,467 | ||||||
Bank of Hawaii Corp. | 1,851 | 145,192 | ||||||
Bank OZK | 5,179 | 141,697 | ||||||
BankUnited Inc. | 4,693 | 155,338 | ||||||
BB&T Corp. | 34,061 | 1,674,439 | ||||||
BOK Financial Corp. | 1,402 | 120,193 | ||||||
Cathay General Bancorp. | 3,282 | 123,633 | ||||||
Chemical Financial Corp. | 3,109 | 145,688 | ||||||
CIT Group Inc. | 5,035 | 238,558 | ||||||
Citigroup Inc. | 110,424 | 7,228,355 | ||||||
Citizens Financial Group Inc. | 20,933 | 781,848 | ||||||
Comerica Inc. | 7,528 | 613,984 | ||||||
Commerce Bancshares Inc. | 4,093 | 260,315 | ||||||
Cullen/Frost Bankers Inc. | 2,811 | 275,253 | ||||||
East West Bancorp. Inc. | 6,277 | 329,166 | ||||||
Fifth Third Bancorp. | 29,308 | 791,023 | ||||||
First Citizens BancShares Inc./NC, Class A | 408 | 174,065 | ||||||
First Financial Bankshares Inc. | 3,035 | 179,035 | ||||||
First Hawaiian Inc. | 3,974 | 98,476 | ||||||
First Horizon National Corp. | 14,183 | 228,914 | ||||||
First Republic Bank/CA | 7,050 | 641,479 | ||||||
FNB Corp. | 13,810 | 163,372 | ||||||
Fulton Financial Corp. | 7,655 | 122,557 | ||||||
Glacier Bancorp. Inc. | 3,695 | 156,668 | ||||||
Hancock Whitney Corp. | 3,810 | 159,868 | ||||||
Home BancShares Inc./AR | 6,887 | 131,128 | ||||||
Huntington Bancshares Inc./OH | 48,551 | 695,736 | ||||||
IBERIABANK Corp. | 2,496 | 185,927 | ||||||
International Bancshares Corp. | 2,280 | 88,236 | ||||||
Investors Bancorp. Inc. | 11,184 | 125,037 | ||||||
JPMorgan Chase & Co. | 147,336 | 16,062,571 | ||||||
KeyCorp | 46,272 | 840,300 | ||||||
M&T Bank Corp. | 6,324 | 1,046,053 | ||||||
MB Financial Inc. | 3,665 | 162,689 | ||||||
PacWest Bancorp. | 5,385 | 218,739 | ||||||
People’s United Financial Inc. | 16,350 | 256,041 | ||||||
Pinnacle Financial Partners Inc. | 3,222 | 168,511 | ||||||
PNC Financial Services Group Inc. (The)(c) | 20,333 | 2,612,587 | ||||||
Popular Inc. | 4,410 | 229,364 | ||||||
Prosperity Bancshares Inc. | 2,918 | 189,758 | ||||||
Regions Financial Corp. | 48,490 | 822,875 | ||||||
Signature Bank/New York NY | 2,421 | 266,068 | ||||||
Sterling Bancorp./DE | 9,748 | 175,269 | ||||||
SunTrust Banks Inc. | 20,264 | 1,269,742 | ||||||
SVB Financial Group(a) | 2,329 | 552,509 | ||||||
Synovus Financial Corp. | 5,053 | 189,791 | ||||||
TCF Financial Corp. | 7,331 | 153,071 | ||||||
Texas Capital Bancshares Inc.(a) | 2,240 | 146,115 | ||||||
Trustmark Corp. | 3,101 | 95,511 | ||||||
U.S. Bancorp. | 67,094 | 3,507,003 | ||||||
UMB Financial Corp. | 1,917 | 122,400 |
12 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Dow Jones U.S. ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Banks (continued) | ||||||||
Umpqua Holdings Corp. | 9,871 | $ | 189,523 | |||||
United Bankshares Inc./WV | 4,552 | 150,990 | ||||||
Valley National Bancorp. | 14,579 | 145,498 | ||||||
Webster Financial Corp. | 4,115 | 242,127 | ||||||
Wells Fargo & Co. | 190,018 | 10,114,658 | ||||||
Western Alliance Bancorp.(a) | 4,317 | 208,252 | ||||||
Wintrust Financial Corp. | 2,413 | 183,726 | ||||||
Zions Bancorp. N.A. | 8,550 | 402,277 | ||||||
|
| |||||||
68,377,608 | ||||||||
Beverages — 1.6% | ||||||||
Brown-Forman Corp., Class B, NVS | 7,413 | 343,518 | ||||||
Coca-Cola Co. (The) | 167,710 | 8,029,955 | ||||||
Constellation Brands Inc., Class A | 7,379 | 1,470,118 | ||||||
Keurig Dr Pepper Inc. | 7,943 | 206,518 | ||||||
Molson Coors Brewing Co., Class B | 8,196 | 524,544 | ||||||
Monster Beverage Corp.(a) | 17,497 | 924,716 | ||||||
National Beverage Corp.(a) | 533 | 49,276 | ||||||
PepsiCo Inc. | 61,973 | 6,964,526 | ||||||
|
| |||||||
18,513,171 | ||||||||
Biotechnology — 2.6% | ||||||||
AbbVie Inc. | 66,332 | 5,163,946 | ||||||
ACADIA Pharmaceuticals Inc.(a) | 4,215 | 82,108 | ||||||
Agios Pharmaceuticals Inc.(a)(b) | 2,213 | 139,552 | ||||||
Alexion Pharmaceuticals Inc.(a) | 9,764 | 1,094,252 | ||||||
Alkermes PLC(a) | 6,836 | 279,114 | ||||||
Alnylam Pharmaceuticals Inc.(a) | 3,941 | 316,975 | ||||||
Amgen Inc. | 28,357 | 5,466,946 | ||||||
Biogen Inc.(a) | 8,824 | 2,684,879 | ||||||
BioMarin Pharmaceutical Inc.(a) | 7,783 | 717,359 | ||||||
Bluebird Bio Inc.(a) | 2,377 | 272,642 | ||||||
Celgene Corp.(a) | 30,787 | 2,204,349 | ||||||
Clovis Oncology Inc.(a)(b) | 2,370 | 27,563 | ||||||
Exact Sciences Corp.(a) | 5,405 | 384,025 | ||||||
Exelixis Inc.(a) | 12,790 | 177,397 | ||||||
FibroGen Inc.(a) | 3,301 | 141,514 | ||||||
Gilead Sciences Inc. | 56,801 | 3,872,692 | ||||||
Immunomedics Inc.(a) | 7,143 | 160,932 | ||||||
Incyte Corp.(a) | 7,670 | 497,169 | ||||||
Intercept Pharmaceuticals Inc.(a) | 984 | 94,474 | ||||||
Intrexon Corp.(a)(b) | 2,908 | 33,617 | ||||||
Ionis Pharmaceuticals Inc.(a)(b) | 6,104 | 302,453 | ||||||
Ligand Pharmaceuticals Inc.(a) | 914 | 150,636 | ||||||
Loxo Oncology Inc.(a) | 1,233 | 188,230 | ||||||
Madrigal Pharmaceuticals Inc.(a)(b) | 365 | 69,664 | ||||||
Myriad Genetics Inc.(a) | 3,343 | 150,535 | ||||||
Neurocrine Biosciences Inc.(a) | 4,003 | 428,921 | ||||||
OPKO Health Inc.(a) | 15,978 | 54,006 | ||||||
Portola Pharmaceuticals Inc.(a) | 3,040 | 59,858 | ||||||
Regeneron Pharmaceuticals Inc.(a) | 3,408 | 1,156,130 | ||||||
Sage Therapeutics Inc.(a) | 2,052 | 264,051 | ||||||
Sarepta Therapeutics Inc.(a) | 2,747 | 367,439 | ||||||
Seattle Genetics Inc.(a)(b) | 4,592 | 257,749 | ||||||
TESARO Inc.(a)(b) | 1,956 | 56,489 | ||||||
Ultragenyx Pharmaceutical Inc.(a) | 2,135 | 103,441 | ||||||
United Therapeutics Corp.(a) | 1,961 | 217,396 | ||||||
Vertex Pharmaceuticals Inc.(a) | 11,230 | 1,903,036 | ||||||
|
| |||||||
29,541,539 | ||||||||
Building Products — 0.3% | ||||||||
Allegion PLC | 4,226 | 362,295 |
Security | Shares | Value | ||||||
Building Products (continued) | ||||||||
AO Smith Corp. | 6,408 | $ | 291,756 | |||||
Armstrong World Industries Inc.(a) | 2,214 | 136,714 | ||||||
Fortune Brands Home & Security Inc. | 6,248 | 280,098 | ||||||
Johnson Controls International PLC | 40,681 | 1,300,572 | ||||||
Lennox International Inc. | 1,595 | 336,369 | ||||||
Masco Corp. | 13,524 | 405,720 | ||||||
Owens Corning | 4,759 | 224,958 | ||||||
Resideo Technologies Inc.(a) | 5,435 | 114,407 | ||||||
Trex Co. Inc.(a) | 2,583 | 158,338 | ||||||
USG Corp. | 3,736 | 157,734 | ||||||
|
| |||||||
3,768,961 | ||||||||
Capital Markets — 2.7% | ||||||||
Affiliated Managers Group Inc. | 2,326 | 264,373 | ||||||
Ameriprise Financial Inc. | 6,240 | 793,978 | ||||||
Bank of New York Mellon Corp. (The) | 40,461 | 1,915,019 | ||||||
BGC Partners Inc., Class A | 12,226 | 129,473 | ||||||
BlackRock Inc.(c) | 5,379 | 2,213,028 | ||||||
Cboe Global Markets Inc. | 4,918 | 554,996 | ||||||
Charles Schwab Corp. (The) | 52,653 | 2,434,675 | ||||||
CME Group Inc. | 14,908 | 2,731,742 | ||||||
E*TRADE Financial Corp. | 11,421 | 564,426 | ||||||
Eaton Vance Corp., NVS | 5,210 | 234,711 | ||||||
Evercore Inc., Class A | 1,839 | 150,228 | ||||||
FactSet Research Systems Inc. | 1,696 | 379,497 | ||||||
Federated Investors Inc., Class B | 3,986 | 98,335 | ||||||
Franklin Resources Inc. | 13,445 | 410,073 | ||||||
Goldman Sachs Group Inc. (The) | 15,384 | 3,467,092 | ||||||
Interactive Brokers Group Inc., Class A | 3,302 | 163,152 | ||||||
Intercontinental Exchange Inc. | 25,221 | 1,943,026 | ||||||
Invesco Ltd. | 18,057 | 392,017 | ||||||
Janus Henderson Group PLC | 7,404 | 181,916 | ||||||
Lazard Ltd., Class A | 5,662 | 225,008 | ||||||
Legg Mason Inc. | 3,564 | 100,576 | ||||||
LPL Financial Holdings Inc. | 3,931 | 242,150 | ||||||
MarketAxess Holdings Inc. | 1,632 | 342,181 | ||||||
Moody’s Corp. | 7,333 | 1,066,805 | ||||||
Morgan Stanley | 58,068 | 2,651,385 | ||||||
Morningstar Inc. | 806 | 100,589 | ||||||
MSCI Inc. | 3,925 | 590,242 | ||||||
Nasdaq Inc. | 5,010 | 434,417 | ||||||
Northern Trust Corp. | 9,821 | 923,862 | ||||||
Raymond James Financial Inc. | 5,718 | 438,513 | ||||||
S&P Global Inc. | 11,066 | 2,017,553 | ||||||
SEI Investments Co. | 5,732 | 306,375 | ||||||
State Street Corp. | 16,688 | 1,147,300 | ||||||
Stifel Financial Corp. | 3,164 | 144,658 | ||||||
T Rowe Price Group Inc. | 10,667 | 1,034,592 | ||||||
TD Ameritrade Holding Corp. | 11,920 | 616,502 | ||||||
|
| |||||||
31,404,465 | ||||||||
Chemicals — 2.0% | ||||||||
Air Products &Chemicals Inc. | 9,644 | 1,488,551 | ||||||
Albemarle Corp. | 4,770 | 473,279 | ||||||
Ashland Global Holdings Inc. | 2,734 | 202,261 | ||||||
Axalta Coating Systems Ltd.(a) | 9,418 | 232,436 | ||||||
Cabot Corp. | 2,769 | 134,795 | ||||||
Celanese Corp. | 5,903 | 572,237 | ||||||
CF Industries Holdings Inc. | 10,220 | 490,867 | ||||||
Chemours Co. (The) | 7,891 | 260,482 | ||||||
DowDuPont Inc. | 101,285 | 5,461,287 |
S C H E D U L E O F I N V E S T M E N T S | 13 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Dow Jones U.S. ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Chemicals (continued) | ||||||||
Eastman Chemical Co. | 6,214 | $ | 486,867 | |||||
Ecolab Inc. | 11,183 | 1,712,676 | ||||||
FMC Corp. | 5,984 | 467,231 | ||||||
GCP Applied Technologies Inc.(a) | 3,231 | 83,909 | ||||||
HB Fuller Co. | 2,231 | 99,190 | ||||||
Huntsman Corp. | 9,227 | 201,887 | ||||||
Ingevity Corp.(a) | 1,814 | 165,219 | ||||||
International Flavors & Fragrances Inc., New | 4,440 | 642,290 | ||||||
Linde PLC | 24,131 | 3,992,957 | ||||||
LyondellBasell Industries NV, Class A | 14,041 | 1,253,440 | ||||||
Minerals Technologies Inc. | 1,573 | 86,122 | ||||||
Mosaic Co. (The) | 15,674 | 484,954 | ||||||
NewMarket Corp. | 398 | 153,612 | ||||||
Olin Corp. | 7,275 | 146,955 | ||||||
Platform Specialty Products Corp.(a)(b) | 10,587 | 114,551 | ||||||
PolyOne Corp. | 3,479 | 112,407 | ||||||
PPG Industries Inc. | 10,645 | 1,118,683 | ||||||
RPM International Inc. | 5,825 | 356,315 | ||||||
Scotts Miracle-Gro Co. (The) | 1,789 | 119,398 | ||||||
Sensient Technologies Corp. | 1,816 | 117,786 | ||||||
Sherwin-Williams Co. (The) | 3,616 | 1,422,788 | ||||||
Trinseo SA | 1,913 | 103,072 | ||||||
Valvoline Inc. | 8,275 | 164,838 | ||||||
Westlake Chemical Corp. | 1,635 | 116,576 | ||||||
WR Grace & Co. | 2,960 | 191,778 | ||||||
|
| |||||||
23,231,696 | ||||||||
Commercial Services & Supplies — 0.5% |
| |||||||
ADT Inc. | 5,324 | 41,208 | ||||||
Brink’s Co. (The) | 2,205 | 146,236 | ||||||
Cintas Corp. | 3,760 | 683,831 | ||||||
Clean Harbors Inc.(a) | 2,324 | 158,125 | ||||||
Copart Inc.(a) | 8,970 | 438,723 | ||||||
Covanta Holding Corp. | 5,120 | 75,213 | ||||||
Deluxe Corp. | 2,086 | 98,480 | ||||||
Healthcare Services Group Inc. | 3,275 | 132,932 | ||||||
Herman Miller Inc. | 2,484 | 81,848 | ||||||
HNI Corp. | 1,914 | 72,521 | ||||||
KAR Auction Services Inc. | 5,935 | 337,939 | ||||||
MSA Safety Inc. | 1,552 | 162,091 | ||||||
Republic Services Inc. | 9,637 | 700,417 | ||||||
Rollins Inc. | 4,242 | 251,126 | ||||||
Stericycle Inc.(a) | 3,678 | 183,790 | ||||||
Tetra Tech Inc. | 2,438 | 161,005 | ||||||
Waste Management Inc. | 17,342 | 1,551,589 | ||||||
|
| |||||||
5,277,074 | ||||||||
Communications Equipment — 1.2% |
| |||||||
Arista Networks Inc.(a) | 2,271 | 523,125 | ||||||
ARRIS International PLC(a) | 7,234 | 179,910 | ||||||
Ciena Corp.(a) | 6,275 | 196,157 | ||||||
Cisco Systems Inc. | 200,537 | 9,174,568 | ||||||
CommScope Holding Co. Inc.(a) | 8,609 | 207,133 | ||||||
EchoStar Corp., Class A(a) | 2,058 | 83,452 | ||||||
F5 Networks Inc.(a) | 2,654 | 465,193 | ||||||
Finisar Corp.(a)(b) | 4,903 | 81,831 | ||||||
InterDigital Inc. | 1,535 | 108,908 | ||||||
Juniper Networks Inc. | 15,147 | 443,353 | ||||||
Lumentum Holdings Inc.(a)(b) | 2,702 | 147,664 | ||||||
Motorola Solutions Inc. | 7,137 | 874,711 | ||||||
NetScout Systems Inc.(a) | 3,188 | 80,529 |
Security | Shares | Value | ||||||
Communications Equipment (continued) |
| |||||||
Palo Alto Networks Inc.(a) | 4,055 | $ | 742,227 | |||||
Plantronics Inc. | 1,521 | 89,693 | ||||||
Ubiquiti Networks Inc.(b) | 880 | 81,919 | ||||||
ViaSat Inc.(a)(b) | 2,553 | 162,779 | ||||||
Viavi Solutions Inc.(a) | 9,810 | 113,109 | ||||||
|
| |||||||
13,756,261 | ||||||||
Construction & Engineering — 0.2% | ||||||||
AECOM(a)(b) | 6,989 | 203,659 | ||||||
Dycom Industries Inc.(a) | 1,420 | 96,390 | ||||||
EMCOR Group Inc. | 2,595 | 184,193 | ||||||
Fluor Corp. | 6,111 | 268,028 | ||||||
Jacobs Engineering Group Inc. | 5,311 | 398,803 | ||||||
KBR Inc. | 6,137 | 121,390 | ||||||
MasTec Inc.(a) | 2,929 | 127,441 | ||||||
Quanta Services Inc.(a) | 6,556 | 204,547 | ||||||
Valmont Industries Inc. | 1,018 | 126,548 | ||||||
|
| |||||||
1,730,999 | ||||||||
Construction Materials — 0.1% | ||||||||
Eagle Materials Inc. | 2,157 | 159,273 | ||||||
Martin Marietta Materials Inc. | 2,786 | 477,186 | ||||||
Summit Materials Inc., Class A(a) | 4,765 | 64,328 | ||||||
Vulcan Materials Co. | 5,867 | 593,388 | ||||||
|
| |||||||
1,294,175 | ||||||||
Consumer Finance — 0.7% | ||||||||
Ally Financial Inc. | 18,564 | 471,711 | ||||||
American Express Co. | 30,932 | 3,177,644 | ||||||
Capital One Financial Corp. | 21,042 | 1,879,051 | ||||||
Credit Acceptance Corp.(a) | 530 | 224,943 | ||||||
Discover Financial Services | 14,995 | 1,044,702 | ||||||
FirstCash Inc. | 1,950 | 156,780 | ||||||
Green Dot Corp., Class A(a) | 2,080 | 157,539 | ||||||
Navient Corp. | 10,359 | 119,957 | ||||||
OneMain Holdings Inc.(a) | 3,285 | 93,688 | ||||||
PRA Group Inc.(a)(b) | 2,076 | 64,024 | ||||||
Santander Consumer USA Holdings Inc. | 5,089 | 95,419 | ||||||
SLM Corp.(a) | 18,841 | 191,048 | ||||||
Synchrony Financial | 29,971 | 865,562 | ||||||
|
| |||||||
8,542,068 | ||||||||
Containers & Packaging — 0.4% | ||||||||
AptarGroup Inc. | 2,775 | 282,939 | ||||||
Avery Dennison Corp. | 3,809 | 345,552 | ||||||
Ball Corp. | 15,126 | 677,645 | ||||||
Bemis Co. Inc. | 4,010 | 183,538 | ||||||
Berry Global Group Inc.(a) | 5,714 | 249,245 | ||||||
Crown Holdings Inc.(a) | 5,854 | 247,566 | ||||||
Graphic Packaging Holding Co. | 13,851 | 152,499 | ||||||
International Paper Co. | 17,984 | 815,754 | ||||||
Owens-Illinois Inc.(a) | 7,349 | 115,159 | ||||||
Packaging Corp. of America | 4,189 | 384,592 | ||||||
Sealed Air Corp. | 7,100 | 229,756 | ||||||
Silgan Holdings Inc. | 3,239 | 77,833 | ||||||
Sonoco Products Co. | 4,367 | 238,351 | ||||||
WestRock Co. | 11,221 | 482,166 | ||||||
|
| |||||||
4,482,595 | ||||||||
Distributors — 0.1% | ||||||||
Genuine Parts Co. | 6,440 | 630,605 | ||||||
LKQ Corp.(a) | 13,927 | 379,789 |
14 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Dow Jones U.S. ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Distributors (continued) |
| |||||||
Pool Corp. | 1,784 | $ | 260,018 | |||||
|
| |||||||
1,270,412 | ||||||||
Diversified Consumer Services — 0.2% |
| |||||||
Adtalem Global Education Inc.(a) | 2,711 | 137,258 | ||||||
Bright Horizons Family Solutions Inc.(a) | 2,628 | 301,984 | ||||||
frontdoor Inc.(a) | 2,989 | 101,775 | ||||||
Graham Holdings Co., Class B | 188 | 109,237 | ||||||
Grand Canyon Education Inc.(a) | 2,162 | 269,601 | ||||||
H&R Block Inc. | 8,940 | 237,268 | ||||||
Service Corp. International/U.S. | 7,894 | 327,364 | ||||||
ServiceMaster Global Holdings Inc.(a) | 5,978 | 256,337 | ||||||
Sotheby’s(a)(b) | 1,631 | 68,502 | ||||||
Weight Watchers International Inc.(a) | 1,700 | 112,370 | ||||||
|
| |||||||
1,921,696 | ||||||||
Diversified Financial Services — 1.6% |
| |||||||
AXA Equitable Holdings Inc.(b) | 5,922 | 120,157 | ||||||
Berkshire Hathaway Inc., Class B(a) | 85,460 | 17,543,229 | ||||||
Jefferies Financial Group Inc. | 12,755 | 273,850 | ||||||
Voya Financial Inc. | 7,147 | 312,753 | ||||||
|
| |||||||
18,249,989 | ||||||||
Diversified Telecommunication Services — 1.8% |
| |||||||
AT&T Inc. | 318,354 | 9,767,101 | ||||||
CenturyLink Inc. | 41,806 | 862,876 | ||||||
Verizon Communications Inc. | 181,137 | 10,341,111 | ||||||
Zayo Group Holdings Inc.(a) | 9,329 | 278,750 | ||||||
|
| |||||||
21,249,838 | ||||||||
Electric Utilities — 1.8% | ||||||||
ALLETE Inc. | 2,326 | 172,124 | ||||||
Alliant Energy Corp. | 10,173 | 437,235 | ||||||
American Electric Power Co. Inc. | 21,681 | 1,590,518 | ||||||
Avangrid Inc. | 2,446 | 114,986 | ||||||
Duke Energy Corp. | 31,308 | 2,586,980 | ||||||
Edison International | 14,330 | 994,359 | ||||||
El Paso Electric Co. | 1,851 | 105,600 | ||||||
Entergy Corp. | 7,999 | 671,516 | ||||||
Evergy Inc. | 11,968 | 670,088 | ||||||
Eversource Energy | 13,862 | 876,910 | ||||||
Exelon Corp. | 42,466 | 1,860,435 | ||||||
FirstEnergy Corp. | 21,377 | 796,935 | ||||||
Hawaiian Electric Industries Inc. | 4,701 | 175,347 | ||||||
IDACORP Inc. | 2,226 | 207,597 | ||||||
NextEra Energy Inc. | 20,660 | 3,563,850 | ||||||
OGE Energy Corp. | 8,911 | 322,133 | ||||||
PG&E Corp. | 22,675 | 1,061,417 | ||||||
Pinnacle West Capital Corp. | 4,866 | 400,228 | ||||||
PNM Resources Inc. | 3,555 | 136,548 | ||||||
Portland General Electric Co. | 3,935 | 177,390 | ||||||
PPL Corp. | 30,611 | 930,574 | ||||||
Southern Co. (The) | 44,563 | 2,006,672 | ||||||
Xcel Energy Inc. | 22,391 | 1,097,383 | ||||||
|
| |||||||
20,956,825 | ||||||||
Electrical Equipment — 0.5% | ||||||||
Acuity Brands Inc. | 1,757 | 220,749 | ||||||
AMETEK Inc. | 10,217 | 685,356 | ||||||
Eaton Corp. PLC | 19,061 | 1,366,102 | ||||||
Emerson Electric Co. | 27,653 | 1,877,086 | ||||||
EnerSys | 1,834 | 145,931 | ||||||
Generac Holdings Inc.(a) | 2,762 | 140,116 | ||||||
GrafTech International Ltd. | 2,684 | 47,990 |
Security | Shares | Value | ||||||
Electrical Equipment (continued) |
| |||||||
Hubbell Inc. | 2,465 | $ | 250,691 | |||||
nVent Electric PLC | 7,331 | 179,023 | ||||||
Regal Beloit Corp. | 1,847 | 132,430 | ||||||
Rockwell Automation Inc. | 5,417 | 892,342 | ||||||
Sensata Technologies Holding PLC(a) | 7,463 | 350,015 | ||||||
|
| |||||||
6,287,831 | ||||||||
Electronic Equipment, Instruments & Components — 0.7% |
| |||||||
Amphenol Corp., Class A | 13,210 | 1,182,295 | ||||||
Anixter International Inc.(a) | 1,266 | 83,163 | ||||||
Arrow Electronics Inc.(a) | 3,901 | 264,137 | ||||||
Avnet Inc. | 5,005 | 200,550 | ||||||
Belden Inc. | 1,849 | 99,938 | ||||||
CDW Corp./DE | 6,629 | 596,676 | ||||||
Cognex Corp. | 7,474 | 320,186 | ||||||
Coherent Inc.(a) | 1,078 | 132,745 | ||||||
Corning Inc. | 35,627 | 1,138,283 | ||||||
Dolby Laboratories Inc., Class A | 2,868 | 197,347 | ||||||
FLIR Systems Inc. | 6,118 | 283,325 | ||||||
IPG Photonics Corp.(a) | 1,584 | 211,543 | ||||||
Itron Inc.(a) | 1,441 | 75,134 | ||||||
Jabil Inc. | 6,742 | 166,730 | ||||||
Keysight Technologies Inc.(a) | 8,220 | 469,198 | ||||||
Littelfuse Inc. | 1,086 | 196,740 | ||||||
National Instruments Corp. | 4,984 | 244,066 | ||||||
SYNNEX Corp. | 1,810 | 140,474 | ||||||
TE Connectivity Ltd. | 15,326 | 1,155,887 | ||||||
Tech Data Corp.(a) | 1,729 | 122,171 | ||||||
Trimble Inc.(a) | 10,923 | 408,302 | ||||||
Vishay Intertechnology Inc. | 6,046 | 110,642 | ||||||
Zebra Technologies Corp., Class A(a) | 2,348 | 390,472 | ||||||
|
| |||||||
8,190,004 | ||||||||
Energy Equipment & Services — 0.6% | ||||||||
Apergy Corp.(a) | 3,397 | 132,449 | ||||||
Baker Hughes a GE Co. | 18,209 | 485,998 | ||||||
Core Laboratories NV | 1,982 | 168,946 | ||||||
Dril-Quip Inc.(a) | 1,700 | 72,352 | ||||||
Ensco PLC, Class A | 19,401 | 138,523 | ||||||
Halliburton Co. | 38,547 | 1,336,810 | ||||||
Helmerich & Payne Inc. | 4,855 | 302,418 | ||||||
KLX Energy Services Holdings Inc.(a)(b) | 912 | 26,348 | ||||||
Nabors Industries Ltd. | 1,733 | 8,613 | ||||||
National Oilwell Varco Inc. | 16,816 | 618,829 | ||||||
Oceaneering International Inc.(a) | 4,241 | 80,325 | ||||||
Patterson-UTI Energy Inc. | 9,861 | 164,087 | ||||||
Rowan Companies PLC, Class A(a) | 5,544 | 88,205 | ||||||
Schlumberger Ltd. | 60,633 | 3,111,079 | ||||||
TechnipFMC PLC | 18,784 | 494,019 | ||||||
Transocean Ltd.(a) | 18,553 | 204,268 | ||||||
Weatherford International PLC(a)(b) | 44,239 | 59,723 | ||||||
|
| |||||||
7,492,992 | ||||||||
Entertainment — 1.9% | ||||||||
Activision Blizzard Inc. | 33,373 | 2,304,406 | ||||||
Cinemark Holdings Inc. | 4,614 | 191,804 | ||||||
Electronic Arts Inc.(a) | 13,407 | 1,219,769 | ||||||
Liberty Media Corp.-Liberty Formula One, Class A(a)(b) | 1,033 | 32,736 | ||||||
Liberty Media Corp.-Liberty Formula One, Class C, NVS(a) | 8,812 | 291,501 | ||||||
Lions Gate Entertainment Corp., Class A | 2,376 | 45,524 | ||||||
Lions Gate Entertainment Corp., Class B, NVS | 4,856 | 86,388 |
S C H E D U L E O F I N V E S T M E N T S | 15 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Dow Jones U.S. ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Entertainment (continued) |
| |||||||
Live Nation Entertainment Inc.(a)(b) | 5,992 | $ | 313,382 | |||||
Madison Square Garden Co. (The), Class A(a) | 766 | 211,891 | ||||||
Netflix Inc.(a) | 19,075 | 5,756,453 | ||||||
Pandora Media Inc.(a)(b) | 12,217 | 103,845 | ||||||
Take-Two Interactive Software Inc.(a) | 4,999 | 644,221 | ||||||
Twenty-First Century Fox Inc., Class A, NVS | 46,341 | 2,109,442 | ||||||
Twenty-First Century Fox Inc., Class B | 21,424 | 967,936 | ||||||
Viacom Inc., Class A | 302 | 10,682 | ||||||
Viacom Inc., Class B, NVS | 15,425 | 493,292 | ||||||
Walt Disney Co. (The) | 65,162 | 7,482,552 | ||||||
|
| |||||||
22,265,824 | ||||||||
Equity Real Estate Investment Trusts (REITs) — 3.5% |
| |||||||
Acadia Realty Trust | 3,545 | 98,693 | ||||||
Alexandria Real Estate Equities Inc. | 4,665 | 570,203 | ||||||
American Campus Communities Inc. | 5,924 | 234,057 | ||||||
American Homes 4 Rent, Class A | 11,561 | 243,590 | ||||||
American Tower Corp. | 19,304 | 3,007,756 | ||||||
Apartment Investment & Management Co., Class A | 6,979 | 300,376 | ||||||
Apple Hospitality REIT Inc. | 9,807 | 158,579 | ||||||
AvalonBay Communities Inc. | 6,058 | 1,062,452 | ||||||
Boston Properties Inc. | 6,792 | 820,202 | ||||||
Brandywine Realty Trust | 8,143 | 114,491 | ||||||
Brixmor Property Group Inc. | 13,325 | 215,865 | ||||||
Camden Property Trust | 4,026 | 363,427 | ||||||
Columbia Property Trust Inc. | 5,147 | 115,550 | ||||||
CoreCivic Inc. | 5,227 | 117,398 | ||||||
CoreSite Realty Corp. | 1,632 | 153,179 | ||||||
Corporate Office Properties Trust | 4,334 | 111,991 | ||||||
Cousins Properties Inc. | 18,143 | 150,768 | ||||||
Crown Castle International Corp. | 18,244 | 1,983,853 | ||||||
CubeSmart(b) | 8,087 | 234,361 | ||||||
CyrusOne Inc. | 4,588 | 244,219 | ||||||
DiamondRock Hospitality Co. | 8,563 | 89,483 | ||||||
Digital Realty Trust Inc.(b) | 9,031 | 932,541 | ||||||
Douglas Emmett Inc. | 7,076 | 256,080 | ||||||
Duke Realty Corp. | 15,874 | 437,646 | ||||||
EastGroup Properties Inc. | 1,521 | 145,697 | ||||||
EPR Properties | 3,270 | 224,780 | ||||||
Equinix Inc. | 3,494 | 1,323,318 | ||||||
Equity Commonwealth | 5,539 | 164,951 | ||||||
Equity LifeStyle Properties Inc. | 3,942 | 373,268 | ||||||
Equity Residential | 16,198 | 1,052,222 | ||||||
Essex Property Trust Inc. | 2,879 | 721,996 | ||||||
Extra Space Storage Inc.(b) | 5,579 | 502,445 | ||||||
Federal Realty Investment Trust | 3,199 | 396,836 | ||||||
First Industrial Realty Trust Inc. | 5,629 | 172,810 | ||||||
Forest City Realty Trust Inc., Class A | 11,654 | 293,215 | ||||||
Gaming and Leisure Properties Inc. | 8,817 | 297,045 | ||||||
GEO Group Inc. (The) | 5,338 | 118,023 | ||||||
HCP Inc. | 20,555 | 566,290 | ||||||
Healthcare Realty Trust Inc. | 5,480 | 152,673 | ||||||
Healthcare Trust of America Inc., Class A | 9,134 | 239,859 | ||||||
Highwoods Properties Inc. | 4,559 | 194,396 | ||||||
Hospitality Properties Trust | 7,024 | 179,955 | ||||||
Host Hotels & Resorts Inc. | 32,296 | 617,177 | ||||||
Hudson Pacific Properties Inc. | 7,050 | 213,615 | ||||||
Invitation Homes Inc.(b) | 13,050 | 285,534 | ||||||
Iron Mountain Inc.(b) | 12,681 | 388,165 | ||||||
JBG SMITH Properties | 4,763 | 178,517 | ||||||
Kilroy Realty Corp. | 4,357 | 300,110 |
Security | Shares | Value | ||||||
Equity Real Estate Investment Trusts (REITs) (continued) |
| |||||||
Kimco Realty Corp. | 18,589 | $ | 299,097 | |||||
Lamar Advertising Co., Class A | 3,773 | 276,636 | ||||||
LaSalle Hotel Properties | 4,961 | 163,763 | ||||||
Lexington Realty Trust | 9,378 | 72,867 | ||||||
Liberty Property Trust | 6,451 | 270,103 | ||||||
Life Storage Inc. | 2,049 | 192,934 | ||||||
Macerich Co. (The)(b) | 4,759 | 245,660 | ||||||
Mack-Cali Realty Corp. | 4,014 | 81,484 | ||||||
Medical Properties Trust Inc. | 16,377 | 243,362 | ||||||
Mid-America Apartment Communities Inc. | 4,960 | 484,642 | ||||||
National Health Investors Inc. | 1,787 | 131,273 | ||||||
National Retail Properties Inc. | 6,899 | 322,528 | ||||||
Omega Healthcare Investors Inc. | 8,956 | 298,683 | ||||||
Outfront Media Inc. | 6,092 | 107,950 | ||||||
Paramount Group Inc. | 8,876 | 126,838 | ||||||
Park Hotels & Resorts Inc.(b) | 8,839 | 256,950 | ||||||
Pebblebrook Hotel Trust(b) | 3,071 | 103,523 | ||||||
Physicians Realty Trust | 7,774 | 128,893 | ||||||
Piedmont Office Realty Trust Inc., Class A | 5,618 | 101,236 | ||||||
PotlatchDeltic Corp. | 2,631 | 95,374 | ||||||
Prologis Inc. | 27,685 | 1,784,852 | ||||||
Public Storage | 6,590 | 1,354,047 | ||||||
Rayonier Inc. | 5,818 | 175,704 | ||||||
Realty Income Corp. | 12,804 | 771,697 | ||||||
Regency Centers Corp. | 7,452 | 472,159 | ||||||
Retail Properties of America Inc., Class A | 10,091 | 123,817 | ||||||
RLJ Lodging Trust | 7,679 | 149,280 | ||||||
Ryman Hospitality Properties Inc.(b) | 2,258 | 175,198 | ||||||
Sabra Health Care REIT Inc. | 7,672 | 166,099 | ||||||
SBA Communications Corp.(a) | 5,010 | 812,472 | ||||||
Senior Housing Properties Trust | 10,697 | 171,901 | ||||||
Simon Property Group Inc. | 13,529 | 2,482,842 | ||||||
SITE Centers Corp. | 6,759 | 84,014 | ||||||
SL Green Realty Corp. | 3,808 | 347,518 | ||||||
Spirit Realty Capital Inc. | 18,205 | 142,363 | ||||||
STORE Capital Corp. | 8,220 | 238,627 | ||||||
Sun Communities Inc. | 3,788 | 380,580 | ||||||
Sunstone Hotel Investors Inc. | 9,883 | 143,007 | ||||||
Tanger Factory Outlet Centers Inc.(b) | 4,228 | 94,115 | ||||||
Taubman Centers Inc. | 2,604 | 143,246 | ||||||
UDR Inc. | 11,821 | 463,265 | ||||||
Uniti Group Inc.(a) | 7,484 | 143,244 | ||||||
Urban Edge Properties | 5,298 | 108,556 | ||||||
Ventas Inc. | 15,732 | 913,085 | ||||||
VEREIT Inc. | 42,488 | 311,437 | ||||||
VICI Properties Inc. | 3,093 | 66,778 | ||||||
Vornado Realty Trust | 7,658 | 521,357 | ||||||
Washington REIT | 3,552 | 98,994 | ||||||
Weingarten Realty Investors | 5,308 | 149,261 | ||||||
Welltower Inc. | 16,363 | 1,081,103 | ||||||
Weyerhaeuser Co. | 33,203 | 884,196 | ||||||
WP Carey Inc. | 4,660 | 307,607 | ||||||
Xenia Hotels & Resorts Inc. | 5,225 | 107,374 | ||||||
|
| |||||||
40,493,248 | ||||||||
Food & Staples Retailing — 1.5% | ||||||||
Casey’s General Stores Inc. | 1,583 | 199,632 | ||||||
Costco Wholesale Corp. | 19,213 | 4,392,668 | ||||||
Kroger Co. (The) | 35,040 | 1,042,790 | ||||||
Performance Food Group Co.(a) | 4,607 | 135,077 | ||||||
Sprouts Farmers Market Inc.(a) | 5,447 | 146,470 |
16 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Dow Jones U.S. ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Food & Staples Retailing (continued) |
| |||||||
Sysco Corp. | 21,032 | $ | 1,500,213 | |||||
U.S. Foods Holding Corp.(a) | 9,545 | 278,428 | ||||||
Walgreens Boots Alliance Inc. | 36,935 | 2,946,305 | ||||||
Walmart Inc. | 62,883 | 6,305,907 | ||||||
|
| |||||||
16,947,490 | ||||||||
Food Products — 1.2% | ||||||||
Archer-Daniels-Midland Co. | 24,611 | 1,162,870 | ||||||
B&G Foods Inc.(b) | 2,950 | 76,818 | ||||||
Bunge Ltd. | 6,189 | 382,480 | ||||||
Campbell Soup Co. | 8,494 | 317,760 | ||||||
Conagra Brands Inc. | 20,493 | 729,551 | ||||||
Darling Ingredients Inc.(a) | 7,495 | 154,847 | ||||||
Flowers Foods Inc. | 7,866 | 151,892 | ||||||
General Mills Inc. | 26,265 | 1,150,407 | ||||||
Hain Celestial Group Inc. (The)(a) | 3,932 | 97,828 | ||||||
Hershey Co. (The) | 6,188 | 663,044 | ||||||
Hormel Foods Corp. | 12,028 | 524,902 | ||||||
Ingredion Inc. | 3,121 | 315,783 | ||||||
JM Smucker Co. (The) | 4,962 | 537,484 | ||||||
Kellogg Co. | 11,193 | 732,918 | ||||||
Kraft Heinz Co. (The) | 27,349 | 1,503,374 | ||||||
Lamb Weston Holdings Inc. | 6,435 | 502,960 | ||||||
Lancaster Colony Corp. | 892 | 152,871 | ||||||
McCormick & Co. Inc./MD, NVS | 5,326 | 766,944 | ||||||
Mondelez International Inc., Class A | 64,210 | 2,695,536 | ||||||
Pilgrim’s Pride Corp.(a)(b) | 2,300 | 40,618 | ||||||
Post Holdings Inc.(a) | 2,932 | 259,247 | ||||||
Seaboard Corp. | 9 | 34,785 | ||||||
TreeHouse Foods Inc.(a) | 2,441 | 111,212 | ||||||
Tyson Foods Inc., Class A | 13,015 | 779,859 | ||||||
|
| |||||||
13,845,990 | ||||||||
Gas Utilities — 0.2% | ||||||||
Atmos Energy Corp. | 4,862 | 452,555 | ||||||
National Fuel Gas Co. | 3,737 | 202,882 | ||||||
New Jersey Resources Corp. | 3,836 | 173,004 | ||||||
ONE Gas Inc. | 2,337 | 184,413 | ||||||
South Jersey Industries Inc. | 3,938 | 116,328 | ||||||
Southwest Gas Holdings Inc. | 2,111 | 163,117 | ||||||
Spire Inc. | 2,286 | 165,918 | ||||||
UGI Corp. | 7,722 | 409,729 | ||||||
|
| |||||||
1,867,946 | ||||||||
Health Care Equipment & Supplies — 3.1% |
| |||||||
Abbott Laboratories | 76,862 | 5,298,866 | ||||||
ABIOMED Inc.(a) | 1,974 | 673,529 | ||||||
Align Technology Inc.(a) | 3,192 | 706,070 | ||||||
Avanos Medical Inc.(a) | 2,151 | 121,747 | ||||||
Baxter International Inc. | 21,749 | 1,359,530 | ||||||
Becton Dickinson and Co. | 11,720 | 2,701,460 | ||||||
Boston Scientific Corp.(a) | 60,817 | 2,197,926 | ||||||
Cantel Medical Corp. | 1,596 | 126,323 | ||||||
Cooper Companies Inc. (The) | 2,158 | 557,433 | ||||||
Danaher Corp. | 26,969 | 2,680,719 | ||||||
DENTSPLY SIRONA Inc. | 9,708 | 336,188 | ||||||
DexCom Inc.(a) | 3,897 | 517,405 | ||||||
Edwards Lifesciences Corp.(a) | 9,209 | 1,359,248 | ||||||
Globus Medical Inc., Class A(a) | 3,223 | 170,336 | ||||||
Haemonetics Corp.(a) | 2,224 | 232,341 | ||||||
Hill-Rom Holdings Inc. | 2,866 | 240,973 | ||||||
Hologic Inc.(a) | 12,061 | 470,258 |
Security | Shares | Value | ||||||
Health Care Equipment & Supplies (continued) |
| |||||||
ICU Medical Inc.(a) | 729 | $ | 185,698 | |||||
IDEXX Laboratories Inc.(a) | 3,817 | 809,662 | ||||||
Inogen Inc.(a) | 770 | 145,969 | ||||||
Insulet Corp.(a) | 2,595 | 228,905 | ||||||
Integra LifeSciences Holdings Corp.(a) | 3,168 | 169,710 | ||||||
Intuitive Surgical Inc.(a) | 4,981 | 2,595,998 | ||||||
LivaNova PLC(a) | 2,137 | 239,323 | ||||||
Masimo Corp.(a) | 2,089 | 241,488 | ||||||
Medtronic PLC | 59,166 | 5,314,290 | ||||||
Neogen Corp.(a) | 2,280 | 138,442 | ||||||
NuVasive Inc.(a) | 2,249 | 126,326 | ||||||
Penumbra Inc.(a) | 1,361 | 185,096 | ||||||
ResMed Inc. | 6,266 | 663,695 | ||||||
STERIS PLC | 3,697 | 404,119 | ||||||
Stryker Corp. | 13,582 | 2,203,272 | ||||||
Teleflex Inc. | 2,028 | 488,221 | ||||||
Varian Medical Systems Inc.(a) | 4,043 | 482,613 | ||||||
West Pharmaceutical Services Inc. | 3,217 | 340,745 | ||||||
Zimmer Biomet Holdings Inc. | 8,902 | 1,011,178 | ||||||
|
| |||||||
35,725,102 | ||||||||
Health Care Providers & Services — 3.2% |
| |||||||
Acadia Healthcare Co. Inc.(a)(b) | 3,992 | 165,668 | ||||||
Aetna Inc. | 14,325 | 2,842,080 | ||||||
AmerisourceBergen Corp. | 7,042 | 619,696 | ||||||
Anthem Inc. | 11,387 | 3,137,916 | ||||||
Cardinal Health Inc. | 13,583 | 687,300 | ||||||
Centene Corp.(a) | 9,012 | 1,174,444 | ||||||
Chemed Corp. | 720 | 219,118 | ||||||
Cigna Corp. | 10,699 | 2,287,553 | ||||||
CVS Health Corp. | 44,604 | 3,228,884 | ||||||
DaVita Inc.(a) | 5,579 | 375,690 | ||||||
Encompass Health Corp. | 4,337 | 291,880 | ||||||
Express Scripts Holding Co.(a) | 24,719 | 2,397,001 | ||||||
HCA Healthcare Inc. | 11,842 | 1,581,262 | ||||||
HealthEquity Inc.(a) | 2,382 | 218,668 | ||||||
Henry Schein Inc.(a)(b) | 6,734 | 558,922 | ||||||
Humana Inc. | 6,022 | 1,929,509 | ||||||
Laboratory Corp. of America Holdings(a) | 4,482 | 719,585 | ||||||
LifePoint Health Inc.(a) | 1,740 | 112,856 | ||||||
Magellan Health Inc.(a) | 1,115 | 72,542 | ||||||
McKesson Corp. | 8,786 | 1,096,141 | ||||||
MEDNAX Inc.(a) | 4,081 | 168,505 | ||||||
Molina Healthcare Inc.(a) | 2,716 | 344,307 | ||||||
Patterson Companies Inc. | 3,478 | 78,533 | ||||||
Quest Diagnostics Inc. | 6,015 | 566,072 | ||||||
Tenet Healthcare Corp.(a)(b) | 3,743 | 96,307 | ||||||
UnitedHealth Group Inc. | 42,193 | 11,027,141 | ||||||
Universal Health Services Inc., Class B | 3,786 | 460,226 | ||||||
WellCare Health Plans Inc.(a) | 2,191 | 604,694 | ||||||
|
| |||||||
37,062,500 | ||||||||
Health Care Technology — 0.2% | ||||||||
Allscripts Healthcare Solutions Inc.(a) | 7,406 | 88,206 | ||||||
athenahealth Inc.(a) | 1,828 | 233,143 | ||||||
Cerner Corp.(a) | 14,471 | 828,899 | ||||||
Medidata Solutions Inc.(a)(b) | 2,658 | 186,857 | ||||||
Teladoc Health Inc.(a) | 3,059 | 212,111 | ||||||
Veeva Systems Inc., Class A(a) | 5,295 | 483,698 | ||||||
|
| |||||||
2,032,914 |
S C H E D U L E O F I N V E S T M E N T S | 17 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Dow Jones U.S. ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Hotels, Restaurants & Leisure — 2.0% |
| |||||||
Aramark | 10,695 | $ | 384,164 | |||||
Bloomin’ Brands Inc. | 3,953 | 78,862 | ||||||
Boyd Gaming Corp. | 3,555 | 94,421 | ||||||
Brinker International Inc. | 1,917 | 83,102 | ||||||
Caesars Entertainment Corp.(a)(b) | 26,537 | 227,953 | ||||||
Carnival Corp. | 17,737 | 993,981 | ||||||
Cheesecake Factory Inc. (The) | 1,864 | 90,106 | ||||||
Chipotle Mexican Grill Inc.(a) | 1,071 | 493,013 | ||||||
Choice Hotels International Inc. | 1,527 | 112,082 | ||||||
Churchill Downs Inc. | 524 | 130,796 | ||||||
Cracker Barrel Old Country Store Inc.(b) | 1,054 | 167,249 | ||||||
Darden Restaurants Inc. | 5,417 | 577,181 | ||||||
Domino’s Pizza Inc. | 1,830 | 491,886 | ||||||
Dunkin’ Brands Group Inc. | 3,623 | 262,885 | ||||||
Extended Stay America Inc. | 8,404 | 136,817 | ||||||
Hilton Grand Vacations Inc.(a) | 4,352 | 116,938 | ||||||
Hilton Worldwide Holdings Inc. | 13,115 | 933,395 | ||||||
Hyatt Hotels Corp., Class A | 1,970 | 136,324 | ||||||
Jack in the Box Inc. | 1,143 | 90,217 | ||||||
Las Vegas Sands Corp. | 16,298 | 831,687 | ||||||
Marriott International Inc./MD, Class A | 12,673 | 1,481,347 | ||||||
Marriott Vacations Worldwide Corp. | 1,818 | 160,875 | ||||||
McDonald’s Corp. | 33,995 | 6,013,715 | ||||||
MGM Resorts International | 22,691 | 605,396 | ||||||
Norwegian Cruise Line Holdings Ltd.(a) | 8,863 | 390,592 | ||||||
Planet Fitness Inc., Class A(a) | 3,878 | 190,371 | ||||||
Royal Caribbean Cruises Ltd. | 7,516 | 787,151 | ||||||
Scientific Games Corp./DE, Class A(a) | 2,413 | 53,713 | ||||||
Six Flags Entertainment Corp. | 3,060 | 164,812 | ||||||
Starbucks Corp. | 59,107 | 3,444,165 | ||||||
Texas Roadhouse Inc. | 2,900 | 175,334 | ||||||
Vail Resorts Inc. | 1,764 | 443,328 | ||||||
Wendy’s Co. (The) | 8,257 | 142,351 | ||||||
Wyndham Destinations Inc. | 4,346 | 155,934 | ||||||
Wyndham Hotels & Resorts Inc. | 4,346 | 214,214 | ||||||
Wynn Resorts Ltd. | 4,301 | 432,681 | ||||||
Yum! Brands Inc. | 13,958 | 1,261,943 | ||||||
|
| |||||||
22,550,981 | ||||||||
Household Durables — 0.3% | ||||||||
DR Horton Inc. | 14,940 | 537,242 | ||||||
Garmin Ltd. | 5,314 | 351,574 | ||||||
Helen of Troy Ltd.(a)(b) | 1,165 | 144,600 | ||||||
Leggett & Platt Inc. | 5,763 | 209,255 | ||||||
Lennar Corp., Class A | 12,831 | 551,476 | ||||||
Lennar Corp., Class B | 724 | 25,897 | ||||||
Mohawk Industries Inc.(a) | 2,757 | 343,881 | ||||||
Newell Brands Inc. | 19,119 | 303,610 | ||||||
NVR Inc.(a) | 151 | 338,093 | ||||||
PulteGroup Inc. | 11,729 | 288,182 | ||||||
Tempur Sealy International Inc.(a)(b) | 1,963 | 90,710 | ||||||
Toll Brothers Inc. | 5,963 | 200,715 | ||||||
Tupperware Brands Corp. | 2,273 | 79,782 | ||||||
Whirlpool Corp. | 2,862 | 314,133 | ||||||
|
| |||||||
3,779,150 | ||||||||
Household Products — 1.3% | ||||||||
Church & Dwight Co. Inc. | 10,758 | 638,703 | ||||||
Clorox Co. (The) | 5,634 | 836,367 | ||||||
Colgate-Palmolive Co. | 38,157 | 2,272,249 | ||||||
Energizer Holdings Inc. | 2,732 | 160,560 |
Security | Shares | Value | ||||||
Household Products (continued) |
| |||||||
Kimberly-Clark Corp. | 15,289 | $ | 1,594,643 | |||||
Procter & Gamble Co. (The) | 109,200 | 9,683,856 | ||||||
Spectrum Brands Holdings Inc. | 1,997 | 129,705 | ||||||
|
| |||||||
15,316,083 | ||||||||
Independent Power and Renewable Electricity Producers — 0.1% |
| |||||||
AES Corp./VA | 29,369 | 428,200 | ||||||
NRG Energy Inc. | 13,462 | 487,190 | ||||||
Vistra Energy Corp.(a) | 17,792 | 402,633 | ||||||
|
| |||||||
1,318,023 | ||||||||
Industrial Conglomerates — 1.3% | ||||||||
3M Co. | 25,701 | 4,889,872 | ||||||
Carlisle Companies Inc. | 2,617 | 252,776 | ||||||
General Electric Co. | 380,682 | 3,844,888 | ||||||
Honeywell International Inc. | 32,532 | 4,711,284 | ||||||
Roper Technologies Inc. | 4,535 | 1,282,952 | ||||||
|
| |||||||
14,981,772 | ||||||||
Insurance — 2.6% | ||||||||
Aflac Inc. | 33,769 | 1,454,431 | ||||||
Alleghany Corp. | 652 | 391,643 | ||||||
Allstate Corp. (The) | 15,228 | 1,457,624 | ||||||
American Financial Group Inc./OH | 3,114 | 311,493 | ||||||
American International Group Inc. | 39,116 | 1,615,100 | ||||||
AmTrust Financial Services Inc. | 4,564 | 65,448 | ||||||
Aon PLC | 10,649 | 1,663,161 | ||||||
Arch Capital Group Ltd.(a) | 17,640 | 500,447 | ||||||
Arthur J Gallagher & Co. | 8,050 | 595,780 | ||||||
Aspen Insurance Holdings Ltd. | 2,568 | 107,548 | ||||||
Assurant Inc. | 2,363 | 229,707 | ||||||
Assured Guaranty Ltd. | 4,798 | 191,824 | ||||||
Athene Holding Ltd., Class A(a) | 5,535 | 253,060 | ||||||
Axis Capital Holdings Ltd. | 3,668 | 204,638 | ||||||
Brighthouse Financial Inc.(a)(b) | 5,310 | 210,435 | ||||||
Brown & Brown Inc. | 10,201 | 287,464 | ||||||
Chubb Ltd. | 20,283 | 2,533,550 | ||||||
Cincinnati Financial Corp. | 6,581 | 517,530 | ||||||
CNA Financial Corp. | 1,194 | 51,784 | ||||||
CNO Financial Group Inc. | 7,362 | 139,142 | ||||||
Enstar Group Ltd.(a) | 663 | 120,401 | ||||||
Erie Indemnity Co., Class A, NVS | 888 | 115,165 | ||||||
Everest Re Group Ltd. | 1,799 | 391,930 | ||||||
Fidelity National Financial Inc. | 11,973 | 400,497 | ||||||
First American Financial Corp. | 4,893 | 216,907 | ||||||
Hanover Insurance Group Inc. (The) | 1,873 | 208,615 | ||||||
Hartford Financial Services Group Inc. (The) | 15,636 | 710,187 | ||||||
Kemper Corp. | 2,012 | 151,282 | ||||||
Lincoln National Corp. | 9,530 | 573,611 | ||||||
Loews Corp. | 12,230 | 569,429 | ||||||
Markel Corp.(a) | 607 | 663,597 | ||||||
Marsh & McLennan Companies Inc. | 22,210 | 1,882,297 | ||||||
Mercury General Corp. | 1,192 | 70,698 | ||||||
MetLife Inc. | 43,779 | 1,803,257 | ||||||
Old Republic International Corp. | 12,505 | 275,735 | ||||||
Primerica Inc. | 1,894 | 207,848 | ||||||
Principal Financial Group Inc. | 11,647 | 548,224 | ||||||
ProAssurance Corp. | 2,407 | 105,715 | ||||||
Progressive Corp. (The) | 25,643 | 1,787,317 | ||||||
Prudential Financial Inc. | 18,339 | 1,719,831 | ||||||
Reinsurance Group of America Inc. | 2,822 | 401,768 | ||||||
RenaissanceRe Holdings Ltd. | 1,745 | 213,169 |
18 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Dow Jones U.S. ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Insurance (continued) |
| |||||||
RLI Corp. | 1,693 | $ | 125,163 | |||||
Torchmark Corp. | 4,560 | 386,050 | ||||||
Travelers Companies Inc. (The) | 11,773 | 1,473,155 | ||||||
Unum Group | 9,619 | 348,785 | ||||||
White Mountains Insurance Group Ltd.(b) | 134 | 118,814 | ||||||
Willis Towers Watson PLC | 5,752 | 823,456 | ||||||
WR Berkley Corp. | 4,252 | 322,727 | ||||||
|
| |||||||
29,517,439 | ||||||||
Interactive Media & Services — 4.1% | ||||||||
Alphabet Inc., Class A(a) | 13,104 | 14,290,960 | ||||||
Alphabet Inc., Class C, NVS(a) | 13,498 | 14,534,241 | ||||||
Cargurus Inc.(a)(b) | 1,444 | 64,143 | ||||||
Cars.com Inc.(a)(b) | 2,675 | 69,844 | ||||||
Facebook Inc., Class A(a) | 105,724 | 16,047,846 | ||||||
IAC/InterActiveCorp.(a) | 3,397 | 667,816 | ||||||
Snap Inc., Class A, NVS(a)(b) | 30,072 | 198,776 | ||||||
TripAdvisor Inc.(a) | 4,445 | 231,762 | ||||||
Twitter Inc.(a) | 31,666 | 1,100,394 | ||||||
Yelp Inc.(a) | 3,289 | 140,835 | ||||||
Zillow Group Inc., Class A(a) | 2,242 | 90,510 | ||||||
Zillow Group Inc., Class C, NVS(a) | 5,000 | 201,300 | ||||||
|
| |||||||
47,638,427 | ||||||||
Internet & Direct Marketing Retail — 3.1% |
| |||||||
Amazon.com Inc.(a) | 17,961 | 28,701,857 | ||||||
Booking Holdings Inc.(a) | 2,080 | 3,899,126 | ||||||
eBay Inc.(a) | 40,622 | 1,179,257 | ||||||
Etsy Inc.(a) | 5,267 | 223,953 | ||||||
Expedia Group Inc. | 5,229 | 655,873 | ||||||
Groupon Inc.(a)(b) | 2,862 | 9,359 | ||||||
GrubHub Inc.(a) | 4,001 | 371,053 | ||||||
Liberty Expedia Holdings Inc., Class A(a) | 2,388 | 103,687 | ||||||
Qurate Retail Inc.(a) | 19,882 | 436,211 | ||||||
Shutterfly Inc.(a)(b) | 1,505 | 75,250 | ||||||
Stamps.com Inc.(a) | 751 | 151,830 | ||||||
Wayfair Inc., Class A(a) | 2,624 | 289,401 | ||||||
|
| |||||||
36,096,857 | ||||||||
IT Services — 4.8% | ||||||||
Accenture PLC, Class A | 28,072 | 4,424,709 | ||||||
Akamai Technologies Inc.(a) | 7,455 | 538,624 | ||||||
Alliance Data Systems Corp. | 2,078 | 428,442 | ||||||
Amdocs Ltd. | 6,297 | 398,411 | ||||||
Automatic Data Processing Inc. | 19,183 | 2,763,887 | ||||||
Black Knight Inc.(a) | 6,243 | 304,471 | ||||||
Booz Allen Hamilton Holding Corp. | 6,165 | 305,414 | ||||||
Broadridge Financial Solutions Inc. | 5,152 | 602,475 | ||||||
CACI International Inc., Class A(a) | 1,105 | 197,198 | ||||||
Cognizant Technology Solutions Corp., Class A | 25,524 | 1,761,922 | ||||||
Conduent Inc.(a) | 8,125 | 155,187 | ||||||
CoreLogic Inc./U.S.(a) | 3,489 | 141,723 | ||||||
DXC Technology Co. | 12,366 | 900,616 | ||||||
EPAM Systems Inc.(a) | 2,269 | 271,077 | ||||||
Euronet Worldwide Inc.(a) | 2,195 | 244,040 | ||||||
Fidelity National Information Services Inc. | 14,462 | 1,505,494 | ||||||
First Data Corp., Class A(a) | 24,611 | 461,210 | ||||||
Fiserv Inc.(a) | 17,810 | 1,412,333 | ||||||
FleetCor Technologies Inc.(a) | 3,888 | 777,717 | ||||||
Gartner Inc.(a)(b) | 3,976 | 586,539 | ||||||
Genpact Ltd. | 6,099 | 167,174 | ||||||
Global Payments Inc. | 6,993 | 798,810 |
Security | Shares | Value | ||||||
IT Services (continued) |
| |||||||
GoDaddy Inc., Class A(a) | 7,280 | $ | 532,678 | |||||
International Business Machines Corp. | 39,979 | 4,614,776 | ||||||
Jack Henry & Associates Inc. | 3,422 | 512,718 | ||||||
Leidos Holdings Inc. | 6,619 | 428,779 | ||||||
LiveRamp Holdings Inc.(a) | 3,430 | 156,682 | ||||||
Mastercard Inc., Class A | 40,028 | 7,912,335 | ||||||
MAXIMUS Inc. | 2,809 | 182,501 | ||||||
Okta Inc.(a)(b) | 3,521 | 205,486 | ||||||
Paychex Inc. | 14,027 | 918,628 | ||||||
PayPal Holdings Inc.(a) | 51,854 | 4,365,588 | ||||||
Perspecta Inc. | 6,262 | 153,356 | ||||||
Sabre Corp. | 11,207 | 276,253 | ||||||
Science Applications International Corp. | 1,887 | 131,165 | ||||||
Square Inc., Class A(a) | 13,266 | 974,388 | ||||||
Teradata Corp.(a) | 5,169 | 188,152 | ||||||
Total System Services Inc. | 7,341 | 669,132 | ||||||
Twilio Inc., Class A(a) | 3,380 | 254,244 | ||||||
VeriSign Inc.(a) | 4,719 | 672,646 | ||||||
Visa Inc., Class A | 77,886 | 10,736,585 | ||||||
Western Union Co. (The) | 19,671 | 354,865 | ||||||
WEX Inc.(a) | 1,895 | 333,444 | ||||||
Worldpay Inc., Class A(a) | 13,276 | 1,219,268 | ||||||
|
| |||||||
54,941,142 | ||||||||
Leisure Products — 0.1% | ||||||||
Brunswick Corp./DE | 3,917 | 203,645 | ||||||
Hasbro Inc. | 5,149 | 472,215 | ||||||
Mattel Inc.(a) | 15,574 | 211,495 | ||||||
Polaris Industries Inc. | 2,586 | 230,102 | ||||||
|
| |||||||
1,117,457 | ||||||||
Life Sciences Tools & Services — 0.9% |
| |||||||
Agilent Technologies Inc. | 13,989 | 906,347 | ||||||
Bio-Rad Laboratories Inc., Class A(a) | 868 | 236,834 | ||||||
Bio-Techne Corp. | 1,657 | 277,912 | ||||||
Bruker Corp. | 4,432 | 138,855 | ||||||
Charles River Laboratories International Inc.(a) | 2,112 | 257,284 | ||||||
Illumina Inc.(a) | 6,431 | 2,001,006 | ||||||
IQVIA Holdings Inc.(a) | 7,079 | 870,221 | ||||||
Mettler-Toledo International Inc.(a) | 1,109 | 606,423 | ||||||
PerkinElmer Inc. | 4,868 | 420,985 | ||||||
PRA Health Sciences Inc.(a)(b) | 2,564 | 248,375 | ||||||
Syneos Health Inc.(a)(b) | 2,726 | 124,387 | ||||||
Thermo Fisher Scientific Inc. | 17,649 | 4,123,689 | ||||||
Waters Corp.(a) | 3,390 | 643,049 | ||||||
|
| |||||||
10,855,367 | ||||||||
Machinery — 1.7% | ||||||||
Actuant Corp., Class A | 2,587 | 61,700 | ||||||
AGCO Corp. | 2,834 | 158,817 | ||||||
Allison Transmission Holdings Inc. | 5,310 | 234,065 | ||||||
Barnes Group Inc. | 1,987 | 112,464 | ||||||
Caterpillar Inc. | 26,040 | 3,159,173 | ||||||
Colfax Corp.(a)(b) | 4,307 | 120,725 | ||||||
Crane Co. | 2,246 | 195,492 | ||||||
Cummins Inc. | 6,608 | 903,248 | ||||||
Deere & Co. | 14,145 | 1,915,799 | ||||||
Donaldson Co. Inc. | 5,680 | 291,270 | ||||||
Dover Corp. | 6,533 | 541,194 | ||||||
Flowserve Corp. | 5,692 | 261,263 | ||||||
Fortive Corp. | 13,501 | 1,002,449 | ||||||
Gardner Denver Holdings Inc.(a) | 4,729 | 127,967 |
S C H E D U L E O F I N V E S T M E N T S | 19 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Dow Jones U.S. ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Machinery (continued) |
| |||||||
Gates Industrial Corp. PLC(a) | 2,039 | $ | 30,687 | |||||
Graco Inc. | 7,288 | 296,111 | ||||||
Hillenbrand Inc. | 2,820 | 135,078 | ||||||
IDEX Corp. | 3,393 | 430,300 | ||||||
Illinois Tool Works Inc. | 13,541 | 1,727,425 | ||||||
Ingersoll-Rand PLC | 10,726 | 1,029,052 | ||||||
ITT Inc. | 3,856 | 194,728 | ||||||
Kennametal Inc. | 3,560 | 126,202 | ||||||
Lincoln Electric Holdings Inc. | 2,879 | 232,940 | ||||||
Middleby Corp. (The)(a)(b) | 2,503 | 281,087 | ||||||
Mueller Industries Inc. | 2,569 | 62,555 | ||||||
Navistar International Corp.(a) | 2,867 | 96,016 | ||||||
Nordson Corp. | 2,309 | 283,245 | ||||||
Oshkosh Corp. | 3,170 | 177,964 | ||||||
PACCAR Inc. | 15,418 | 882,064 | ||||||
Parker-Hannifin Corp. | 5,822 | 882,790 | ||||||
Pentair PLC | 7,052 | 283,138 | ||||||
Snap-on Inc. | 2,457 | 378,231 | ||||||
Stanley Black & Decker Inc. | 6,730 | 784,180 | ||||||
Terex Corp. | 2,853 | 95,262 | ||||||
Timken Co. (The) | 2,947 | 116,554 | ||||||
Toro Co. (The) | 4,566 | 257,203 | ||||||
Trinity Industries Inc. | 6,526 | 186,317 | ||||||
WABCO Holdings Inc.(a) | 2,327 | 250,036 | ||||||
Wabtec Corp. | 3,747 | 307,329 | ||||||
Welbilt Inc.(a)(b) | 5,546 | 103,821 | ||||||
Woodward Inc. | 2,499 | 184,026 | ||||||
Xylem Inc./NY | 7,878 | 516,639 | ||||||
|
| |||||||
19,416,606 | ||||||||
Marine — 0.0% | ||||||||
Kirby Corp.(a)(b) | 2,340 | 168,340 | ||||||
|
| |||||||
Media — 1.5% | ||||||||
Altice USA Inc., Class A | 5,166 | 84,258 | ||||||
AMC Networks Inc., Class A(a)(b) | 2,039 | 119,445 | ||||||
Cable One Inc. | 219 | 196,167 | ||||||
CBS Corp., Class B, NVS | 14,834 | 850,730 | ||||||
Charter Communications Inc., Class A(a) | 7,812 | 2,502,730 | ||||||
Comcast Corp., Class A | 200,355 | 7,641,540 | ||||||
Discovery Inc., Class A(a)(b) | 6,912 | 223,880 | ||||||
Discovery Inc., Class C, NVS(a) | 15,819 | 463,655 | ||||||
DISH Network Corp., Class A(a) | 9,969 | 306,447 | ||||||
GCI Liberty Inc., Class A(a) | 4,330 | 204,939 | ||||||
Interpublic Group of Companies Inc. (The) | 16,699 | 386,749 | ||||||
John Wiley & Sons Inc., Class A | 1,924 | 104,358 | ||||||
Liberty Broadband Corp., Class A(a) | 1,157 | 95,788 | ||||||
Liberty Broadband Corp., Class C, | 6,690 | 554,802 | ||||||
Liberty Global PLC, Class A(a)(b) | 9,086 | 232,874 | ||||||
Liberty Global PLC, Class C, NVS(a) | 26,004 | 651,140 | ||||||
Liberty Latin America Ltd., Class A(a)(b) | 1,810 | 32,544 | ||||||
Liberty Latin America Ltd., Class C, | 5,011 | 90,248 | ||||||
Liberty Media Corp.-Liberty SiriusXM, Class A(a) | 3,739 | 154,196 | ||||||
Liberty Media Corp.-Liberty SiriusXM, Class C, NVS(a) | 7,194 | 296,896 | ||||||
Meredith Corp. | 1,821 | 93,891 | ||||||
New York Times Co. (The), Class A(b) | 6,190 | 163,416 | ||||||
News Corp., Class A, NVS | 16,618 | 219,191 | ||||||
News Corp., Class B | 5,296 | 70,649 | ||||||
Nexstar Media Group Inc., Class A | 2,018 | 151,128 | ||||||
Omnicom Group Inc. | 9,849 | 731,978 | ||||||
Sinclair Broadcast Group Inc., Class A | 3,569 | 102,216 |
Security | Shares | Value | ||||||
Media (continued) |
| |||||||
Sirius XM Holdings Inc.(b) | 57,246 | $ | 344,621 | |||||
TEGNA Inc. | 9,486 | 109,468 | ||||||
Tribune Media Co., Class A | 3,545 | 134,745 | ||||||
|
| |||||||
17,314,689 | ||||||||
Metals & Mining — 0.4% | ||||||||
Alcoa Corp.(a) | 8,201 | 286,953 | ||||||
Allegheny Technologies Inc.(a)(b) | 5,503 | 142,473 | ||||||
Carpenter Technology Corp. | 2,067 | 90,142 | ||||||
Commercial Metals Co. | 5,161 | 98,369 | ||||||
Compass Minerals International Inc. | 1,411 | 68,448 | ||||||
Freeport-McMoRan Inc. | 63,731 | 742,466 | ||||||
Newmont Mining Corp. | 23,435 | 724,610 | ||||||
Nucor Corp. | 13,914 | 822,596 | ||||||
Reliance Steel & Aluminum Co. | 3,183 | 251,202 | ||||||
Royal Gold Inc. | 2,858 | 219,008 | ||||||
Steel Dynamics Inc. | 10,254 | 406,058 | ||||||
U.S. Steel Corp. | 7,937 | 210,568 | ||||||
Worthington Industries Inc. | 1,736 | 72,704 | ||||||
|
| |||||||
4,135,597 | ||||||||
Mortgage Real Estate Investment — 0.2% |
| |||||||
AGNC Investment Corp. | 20,991 | 374,479 | ||||||
Annaly Capital Management Inc. | 56,663 | 559,264 | ||||||
Blackstone Mortgage Trust Inc., Class A(b) | 5,357 | 180,745 | ||||||
Chimera Investment Corp. | 8,248 | 153,413 | ||||||
Invesco Mortgage Capital Inc. | 4,992 | 75,279 | ||||||
MFA Financial Inc. | 19,942 | 138,198 | ||||||
New Residential Investment Corp. | 15,226 | 272,241 | ||||||
Starwood Property Trust Inc. | 11,579 | 251,496 | ||||||
Two Harbors Investment Corp. | 11,034 | 162,090 | ||||||
|
| |||||||
2,167,205 | ||||||||
Multi-Utilities — 0.9% | ||||||||
Ameren Corp. | 10,733 | 693,137 | ||||||
Avista Corp. | 2,983 | 153,386 | ||||||
Black Hills Corp. | 2,327 | 138,457 | ||||||
CenterPoint Energy Inc. | 21,586 | 583,038 | ||||||
CMS Energy Corp. | 12,535 | 620,733 | ||||||
Consolidated Edison Inc. | 13,683 | 1,039,908 | ||||||
Dominion Energy Inc. | 28,738 | 2,052,468 | ||||||
DTE Energy Co. | 7,981 | 897,065 | ||||||
MDU Resources Group Inc. | 8,671 | 216,428 | ||||||
NiSource Inc. | 15,967 | 404,923 | ||||||
NorthWestern Corp. | 2,186 | 128,449 | ||||||
Public Service Enterprise Group Inc. | 22,226 | 1,187,535 | ||||||
SCANA Corp. | 6,145 | 246,107 | ||||||
Sempra Energy | 12,027 | 1,324,413 | ||||||
Vectren Corp. | 3,679 | 263,159 | ||||||
WEC Energy Group Inc. | 13,914 | 951,718 | ||||||
|
| |||||||
10,900,924 | ||||||||
Multiline Retail — 0.5% | ||||||||
Big Lots Inc. | 1,776 | 73,740 | ||||||
Dillard’s Inc., Class A(b) | 902 | 63,519 | ||||||
Dollar General Corp. | 11,679 | 1,300,807 | ||||||
Dollar Tree Inc.(a) | 10,380 | 875,034 | ||||||
Kohl’s Corp. | 7,333 | 555,328 | ||||||
Macy’s Inc. | 13,567 | 465,212 | ||||||
Nordstrom Inc. | 5,070 | 333,454 | ||||||
Ollie’s Bargain Outlet Holdings Inc.(a) | 2,261 | 210,047 | ||||||
Target Corp. | 23,148 | 1,935,867 | ||||||
|
| |||||||
5,813,008 |
20 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Dow Jones U.S. ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Oil, Gas & Consumable Fuels — 4.8% |
| |||||||
Anadarko Petroleum Corp. | 22,523 | $ | 1,198,224 | |||||
Antero Resources Corp.(a) | 9,992 | 158,773 | ||||||
Apache Corp. | 16,775 | 634,598 | ||||||
Cabot Oil & Gas Corp. | 19,404 | 470,159 | ||||||
Centennial Resource Development Inc./DE, Class A(a) | 8,354 | 160,063 | ||||||
Cheniere Energy Inc.(a) | 9,720 | 587,185 | ||||||
Chesapeake Energy Corp.(a) | 5,971 | 20,958 | ||||||
Chevron Corp. | 84,001 | 9,378,712 | ||||||
Cimarex Energy Co. | 4,260 | 338,542 | ||||||
CNX Resources Corp.(a) | 9,066 | 141,883 | ||||||
Concho Resources Inc.(a) | 8,808 | 1,225,105 | ||||||
ConocoPhillips | 50,917 | 3,559,098 | ||||||
Continental Resources Inc./OK(a) | 3,770 | 198,604 | ||||||
Delek U.S. Holdings Inc. | 3,397 | 124,738 | ||||||
Devon Energy Corp. | 22,378 | 725,047 | ||||||
Diamondback Energy Inc. | 4,286 | 481,575 | ||||||
Energen Corp.(a) | 3,604 | 259,380 | ||||||
EOG Resources Inc. | 25,370 | 2,672,476 | ||||||
EQT Corp. | 11,611 | 394,426 | ||||||
Exxon Mobil Corp. | 185,603 | 14,788,847 | ||||||
Hess Corp. | 11,072 | 635,533 | ||||||
HollyFrontier Corp. | 7,038 | 474,643 | ||||||
Kinder Morgan Inc./DE | 83,474 | 1,420,727 | ||||||
Marathon Oil Corp. | 37,392 | 710,074 | ||||||
Marathon Petroleum Corp. | 29,393 | 2,070,737 | ||||||
Matador Resources Co.(a) | 4,555 | 131,366 | ||||||
Murphy Oil Corp. | 7,335 | 233,693 | ||||||
Newfield Exploration Co.(a) | 8,715 | 176,043 | ||||||
Noble Energy Inc. | 21,350 | 530,547 | ||||||
Oasis Petroleum Inc.(a) | 11,783 | 118,537 | ||||||
Occidental Petroleum Corp. | 33,476 | 2,245,235 | ||||||
ONEOK Inc. | 18,088 | 1,186,573 | ||||||
Parsley Energy Inc., Class A(a) | 11,441 | 267,948 | ||||||
PBF Energy Inc., Class A | 5,257 | 220,005 | ||||||
PDC Energy Inc.(a) | 2,877 | 122,129 | ||||||
Peabody Energy Corp. | 3,640 | 129,038 | ||||||
Phillips 66 | 18,783 | 1,931,268 | ||||||
Pioneer Natural Resources Co. | 7,495 | 1,103,789 | ||||||
QEP Resources Inc.(a) | 10,206 | 90,935 | ||||||
Range Resources Corp.(b) | 107 | 1,696 | ||||||
SemGroup Corp., Class A | 2,886 | 53,362 | ||||||
SM Energy Co. | 4,687 | 114,082 | ||||||
Southwestern Energy Co.(a)(b) | 25,787 | 137,702 | ||||||
Targa Resources Corp. | 9,871 | 510,034 | ||||||
Valero Energy Corp. | 18,798 | 1,712,310 | ||||||
Whiting Petroleum Corp.(a) | 1,316 | 49,087 | ||||||
Williams Companies Inc. (The) | 53,192 | 1,294,161 | ||||||
World Fuel Services Corp. | 2,982 | 95,424 | ||||||
WPX Energy Inc.(a) | 17,597 | 282,256 | ||||||
|
| |||||||
55,567,327 | ||||||||
Paper & Forest Products — 0.0% | ||||||||
Domtar Corp. | 2,780 | 128,742 | ||||||
KapStone Paper and Packaging Corp. | 3,972 | 139,020 | ||||||
Louisiana-Pacific Corp. | 6,308 | 137,325 | ||||||
|
| |||||||
405,087 | ||||||||
Personal Products — 0.2% | ||||||||
Coty Inc., Class A | 19,813 | 209,027 | ||||||
Edgewell Personal Care Co.(a) | 2,486 | 119,278 | ||||||
Estee Lauder Companies Inc. (The), Class A | 9,828 | 1,350,761 |
Security | Shares | Value | ||||||
Personal Products (continued) |
| |||||||
Herbalife Nutrition Ltd.(a)(b) | 4,689 | $ | 249,736 | |||||
Nu Skin Enterprises Inc., Class A | 2,449 | 171,969 | ||||||
|
| |||||||
2,100,771 | ||||||||
Pharmaceuticals — 4.4% | ||||||||
Allergan PLC | 13,966 | 2,206,768 | ||||||
Amneal Pharmaceuticals Inc.(a)(b) | 3,132 | 57,785 | ||||||
Bristol-Myers Squibb Co. | 71,499 | 3,613,559 | ||||||
Catalent Inc.(a) | 6,372 | 257,047 | ||||||
Eli Lilly & Co. | 41,878 | 4,541,250 | ||||||
Endo International PLC(a) | 8,934 | 151,342 | ||||||
Horizon Pharma PLC(a) | 7,621 | 138,778 | ||||||
Jazz Pharmaceuticals PLC(a) | 2,664 | 423,097 | ||||||
Johnson & Johnson | 117,608 | 16,463,944 | ||||||
Mallinckrodt PLC(a)(b) | 3,552 | 89,013 | ||||||
Medicines Co. (The)(a)(b) | 2,790 | 64,895 | ||||||
Merck & Co. Inc. | 116,685 | 8,589,183 | ||||||
Mylan NV(a) | 22,638 | 707,438 | ||||||
Nektar Therapeutics(a) | 7,586 | 293,427 | ||||||
Perrigo Co. PLC | 5,537 | 389,251 | ||||||
Pfizer Inc. | 256,985 | 11,065,774 | ||||||
Prestige Consumer Healthcare Inc.(a) | 2,205 | 79,733 | ||||||
Zoetis Inc. | 21,187 | 1,910,008 | ||||||
|
| |||||||
51,042,292 | ||||||||
Professional Services — 0.4% | ||||||||
ASGN Inc.(a) | 2,303 | 154,485 | ||||||
CoStar Group Inc.(a) | 1,595 | 576,465 | ||||||
Dun & Bradstreet Corp. (The) | 1,607 | 228,644 | ||||||
Equifax Inc. | 5,292 | 536,820 | ||||||
FTI Consulting Inc.(a)(b) | 1,676 | 115,828 | ||||||
IHS Markit Ltd.(a) | 15,645 | 821,832 | ||||||
Insperity Inc. | 1,678 | 184,328 | ||||||
Korn/Ferry International | 2,504 | 113,030 | ||||||
ManpowerGroup Inc. | 2,902 | 221,394 | ||||||
Nielsen Holdings PLC | 15,668 | 407,055 | ||||||
Robert Half International Inc. | 5,320 | 322,020 | ||||||
TransUnion | 8,124 | 534,153 | ||||||
TriNet Group Inc.(a) | 1,924 | 90,409 | ||||||
Verisk Analytics Inc.(a) | 7,244 | 868,121 | ||||||
|
| |||||||
5,174,584 | ||||||||
Real Estate Management & Development — 0.1% |
| |||||||
CBRE Group Inc., Class A(a) | 13,899 | 559,991 | ||||||
Howard Hughes Corp. (The)(a) | 1,703 | 189,919 | ||||||
Jones Lang LaSalle Inc. | 1,967 | 260,155 | ||||||
Realogy Holdings Corp.(b) | 5,518 | 105,228 | ||||||
|
| |||||||
1,115,293 | ||||||||
Road & Rail — 1.0% | ||||||||
AMERCO | 336 | 109,697 | ||||||
Avis Budget Group Inc.(a) | 2,772 | 77,949 | ||||||
CSX Corp. | 35,714 | 2,459,266 | ||||||
Genesee & Wyoming Inc., Class A(a) | 2,656 | 210,435 | ||||||
JB Hunt Transport Services Inc. | 3,898 | 431,158 | ||||||
Kansas City Southern | 4,510 | 459,840 | ||||||
Knight-Swift Transportation Holdings Inc. | 5,640 | 180,480 | ||||||
Landstar System Inc. | 1,795 | 179,661 | ||||||
Norfolk Southern Corp. | 12,316 | 2,066,994 | ||||||
Old Dominion Freight Line Inc. | 2,841 | 370,523 | ||||||
Ryder System Inc. | 2,274 | 125,775 | ||||||
Union Pacific Corp. | 32,399 | 4,737,382 | ||||||
|
| |||||||
11,409,160 |
S C H E D U L E O F I N V E S T M E N T S | 21 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Dow Jones U.S. ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Semiconductors & Semiconductor Equipment — 3.5% |
| |||||||
Advanced Micro Devices Inc.(a) | 37,732 | $ | 687,100 | |||||
Analog Devices Inc. | 16,315 | 1,365,729 | ||||||
Applied Materials Inc. | 43,271 | 1,422,750 | ||||||
Broadcom Inc. | 18,910 | 4,226,196 | ||||||
Cirrus Logic Inc.(a)(b) | 2,804 | 104,982 | ||||||
Cree Inc.(a) | 4,430 | 171,973 | ||||||
Cypress Semiconductor Corp. | 15,636 | 202,330 | ||||||
Entegris Inc. | 6,196 | 164,442 | ||||||
First Solar Inc.(a) | 3,319 | 138,734 | ||||||
Integrated Device Technology Inc.(a) | 5,615 | 262,838 | ||||||
Intel Corp. | 202,274 | 9,482,605 | ||||||
KLA-Tencor Corp. | 6,827 | 624,944 | ||||||
Lam Research Corp. | 6,931 | 982,331 | ||||||
Marvell Technology Group Ltd. | 25,834 | 423,936 | ||||||
Maxim Integrated Products Inc. | 12,135 | 606,993 | ||||||
Microchip Technology Inc. | 10,376 | 682,533 | ||||||
Micron Technology Inc.(a) | 50,730 | 1,913,536 | ||||||
MKS Instruments Inc. | 2,341 | 172,508 | ||||||
Monolithic Power Systems Inc. | 1,749 | 206,592 | ||||||
NVIDIA Corp. | 26,687 | 5,626,420 | ||||||
ON Semiconductor Corp.(a) | 18,523 | 314,891 | ||||||
Qorvo Inc.(a) | 5,469 | 402,026 | ||||||
QUALCOMM Inc. | 61,616 | 3,875,030 | ||||||
Semtech Corp.(a)(b) | 2,848 | 127,989 | ||||||
Silicon Laboratories Inc.(a) | 1,923 | 156,782 | ||||||
Skyworks Solutions Inc. | 7,872 | 682,975 | ||||||
Synaptics Inc.(a)(b) | 1,515 | 56,873 | ||||||
Teradyne Inc. | 8,114 | 279,527 | ||||||
Texas Instruments Inc. | 42,589 | 3,953,537 | ||||||
Universal Display Corp. | 1,827 | 224,739 | ||||||
Versum Materials Inc. | 4,936 | 155,780 | ||||||
Xilinx Inc. | 11,063 | 944,448 | ||||||
|
| |||||||
40,644,069 | ||||||||
Software — 6.2% | ||||||||
2U Inc.(a) | 2,526 | 158,911 | ||||||
ACI Worldwide Inc.(a) | 5,168 | 129,665 | ||||||
Adobe Inc.(a) | 21,454 | 5,272,535 | ||||||
ANSYS Inc.(a) | 3,698 | 553,036 | ||||||
Aspen Technology Inc.(a) | 3,140 | 266,555 | ||||||
Autodesk Inc.(a) | 9,615 | 1,242,739 | ||||||
Blackbaud Inc.(b) | 2,131 | 152,835 | ||||||
CA Inc. | 13,732 | 609,151 | ||||||
Cadence Design Systems Inc.(a) | 12,382 | 551,866 | ||||||
CDK Global Inc. | 5,771 | 330,332 | ||||||
Ceridian HCM Holding Inc.(a)(b) | 969 | 36,793 | ||||||
Citrix Systems Inc.(a) | 5,697 | 583,772 | ||||||
CommVault Systems Inc.(a) | 1,651 | 96,121 | ||||||
Dell Technologies Inc., Class V(a) | 8,731 | 789,195 | ||||||
DocuSign Inc.(a) | 964 | 40,430 | ||||||
Ellie Mae Inc.(a)(b) | 1,504 | 99,685 | ||||||
Fair Isaac Corp.(a) | 1,289 | 248,403 | ||||||
FireEye Inc.(a)(b) | 8,418 | 155,649 | ||||||
Fortinet Inc.(a) | 6,365 | 523,076 | ||||||
Guidewire Software Inc.(a)(b) | 3,496 | 311,039 | ||||||
HubSpot Inc.(a) | 1,587 | 215,277 | ||||||
Intuit Inc. | 11,321 | 2,388,731 | ||||||
j2 Global Inc. | 2,058 | 149,905 | ||||||
LogMeIn Inc. | 2,304 | 198,420 | ||||||
Manhattan Associates Inc.(a) | 2,777 | 132,574 | ||||||
Microsoft Corp. | 336,162 | 35,905,463 |
Security | Shares | Value | ||||||
Software (continued) |
| |||||||
New Relic Inc.(a) | 1,988 | $ | 177,429 | |||||
Nuance Communications Inc.(a) | 12,614 | 219,357 | ||||||
Nutanix Inc., Class A(a) | 3,088 | 128,183 | ||||||
Oracle Corp. | 123,846 | 6,048,639 | ||||||
Paycom Software Inc.(a)(b) | 2,132 | 266,926 | ||||||
Pegasystems Inc. | 1,626 | 87,024 | ||||||
Proofpoint Inc.(a)(b) | 2,301 | 209,276 | ||||||
PTC Inc.(a) | 4,601 | 379,168 | ||||||
RealPage Inc.(a) | 3,219 | 170,607 | ||||||
Red Hat Inc.(a)(b) | 7,795 | 1,337,934 | ||||||
RingCentral Inc., Class A(a) | 2,984 | 231,946 | ||||||
salesforce.com Inc.(a) | 33,150 | 4,549,506 | ||||||
ServiceNow Inc.(a)(b) | 7,839 | 1,419,173 | ||||||
Splunk Inc.(a) | 6,322 | 631,188 | ||||||
SS&C Technologies Holdings Inc. | 9,106 | 465,863 | ||||||
Symantec Corp. | 27,018 | 490,377 | ||||||
Synopsys Inc.(a) | 6,474 | 579,617 | ||||||
Tableau Software Inc., Class A(a) | 3,104 | 331,135 | ||||||
Tyler Technologies Inc.(a) | 1,700 | 359,822 | ||||||
Ultimate Software Group Inc. (The)(a) | 1,372 | 365,816 | ||||||
Verint Systems Inc.(a) | 2,836 | 129,520 | ||||||
VMware Inc., Class A(a) | 3,243 | 458,528 | ||||||
Workday Inc., Class A(a) | 6,442 | 856,915 | ||||||
Zendesk Inc.(a) | 4,660 | 256,160 | ||||||
Zscaler Inc.(a) | 631 | 22,899 | ||||||
|
| |||||||
71,315,166 | ||||||||
Specialty Retail — 2.2% | ||||||||
Aaron’s Inc. | 3,113 | 146,716 | ||||||
Advance Auto Parts Inc.(b) | 3,248 | 518,900 | ||||||
American Eagle Outfitters Inc. | 7,426 | 171,243 | ||||||
AutoNation Inc.(a) | 2,602 | 105,329 | ||||||
AutoZone Inc.(a) | 1,163 | 853,026 | ||||||
Best Buy Co. Inc. | 10,623 | 745,310 | ||||||
Burlington Stores Inc.(a) | 2,981 | 511,212 | ||||||
CarMax Inc.(a) | 7,683 | 521,752 | ||||||
Dick’s Sporting Goods Inc. | 3,456 | 122,239 | ||||||
Five Below Inc.(a) | 2,402 | 273,396 | ||||||
Floor & Decor Holdings Inc., Class A(a)(b) | 2,516 | 64,359 | ||||||
Foot Locker Inc. | 5,223 | 246,212 | ||||||
Gap Inc. (The) | 9,490 | 259,077 | ||||||
Home Depot Inc. (The) | 50,157 | 8,821,613 | ||||||
L Brands Inc. | 10,041 | 325,529 | ||||||
Lithia Motors Inc., Class A | 1,076 | 95,850 | ||||||
Lowe’s Companies Inc. | 35,525 | 3,382,690 | ||||||
Michaels Companies Inc. (The)(a) | 4,296 | 68,092 | ||||||
Murphy USA Inc.(a) | 1,320 | 106,432 | ||||||
National Vision Holdings Inc.(a) | 2,124 | 87,997 | ||||||
O’Reilly Automotive Inc.(a) | 3,525 | 1,130,644 | ||||||
Penske Automotive Group Inc. | 1,605 | 71,230 | ||||||
Ross Stores Inc. | 16,521 | 1,635,579 | ||||||
Sally Beauty Holdings Inc.(a)(b) | 5,052 | 89,976 | ||||||
Signet Jewelers Ltd. | 2,283 | 127,962 | ||||||
Tiffany & Co. | 4,792 | 533,350 | ||||||
TJX Companies Inc. (The) | 27,469 | 3,018,294 | ||||||
Tractor Supply Co. | 5,372 | 493,633 | ||||||
Ulta Salon Cosmetics & Fragrance Inc.(a) | 2,497 | 685,476 | ||||||
Urban Outfitters Inc.(a) | 3,345 | 131,994 | ||||||
Williams-Sonoma Inc. | 3,543 | 210,383 | ||||||
|
| |||||||
25,555,495 |
22 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Dow Jones U.S. ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Technology Hardware, Storage & Peripherals — 4.3% |
| |||||||
Apple Inc. | 201,149 | $ | 44,023,470 | |||||
Hewlett Packard Enterprise Co. | 64,350 | 981,337 | ||||||
HP Inc. | 69,622 | 1,680,675 | ||||||
NCR Corp.(a)(b) | 5,182 | 139,137 | ||||||
NetApp Inc. | 11,403 | 895,021 | ||||||
Pure Storage Inc., Class A(a) | 7,628 | 153,933 | ||||||
Seagate Technology PLC | 11,494 | 462,404 | ||||||
Western Digital Corp. | 12,815 | 551,942 | ||||||
Xerox Corp. | 9,949 | 277,279 | ||||||
|
| |||||||
49,165,198 | ||||||||
Textiles, Apparel & Luxury Goods — 0.8% |
| |||||||
Carter’s Inc. | 2,088 | 200,406 | ||||||
Columbia Sportswear Co. | 1,323 | 119,440 | ||||||
Deckers Outdoor Corp.(a) | 1,321 | 167,992 | ||||||
Hanesbrands Inc. | 15,941 | 273,548 | ||||||
Lululemon Athletica Inc.(a)(b) | 4,762 | 670,156 | ||||||
Michael Kors Holdings Ltd.(a) | 6,538 | 362,271 | ||||||
NIKE Inc., Class B | 56,100 | 4,209,744 | ||||||
PVH Corp. | 3,401 | 410,807 | ||||||
Ralph Lauren Corp. | 2,418 | 313,397 | ||||||
Skechers U.S.A. Inc., Class A(a) | 6,030 | 172,277 | ||||||
Steven Madden Ltd. | 3,487 | 109,039 | ||||||
Tapestry Inc. | 12,608 | 533,444 | ||||||
Under Armour Inc., Class A(a)(b) | 7,908 | 174,846 | ||||||
Under Armour Inc., Class C, NVS(a) | 8,135 | 161,317 | ||||||
VF Corp. | 14,299 | 1,185,101 | ||||||
Wolverine World Wide Inc. | 4,136 | 145,463 | ||||||
|
| |||||||
9,209,248 | ||||||||
Thrifts & Mortgage Finance — 0.1% | ||||||||
Capitol Federal Financial Inc. | 5,776 | 71,680 | ||||||
Essent Group Ltd.(a) | 4,316 | 170,137 | ||||||
MGIC Investment Corp.(a) | 16,140 | 197,069 | ||||||
New York Community Bancorp. Inc. | 21,660 | 207,503 | ||||||
Radian Group Inc. | 9,404 | 180,463 | ||||||
TFS Financial Corp. | 2,343 | 34,465 | ||||||
Washington Federal Inc. | 3,792 | 106,783 | ||||||
|
| |||||||
968,100 | ||||||||
Tobacco — 1.0% | ||||||||
Altria Group Inc. | 82,599 | 5,372,239 | ||||||
Philip Morris International Inc. | 68,121 | 5,999,416 | ||||||
|
| |||||||
11,371,655 | ||||||||
Trading Companies & Distributors — 0.3% |
| |||||||
Air Lease Corp. | 4,308 | 164,135 | ||||||
Applied Industrial Technologies Inc. | 1,791 | 117,722 | ||||||
Beacon Roofing Supply Inc.(a) | 2,919 | 81,469 | ||||||
Fastenal Co. | 12,536 | 644,476 | ||||||
GATX Corp. | 1,738 | 130,228 | ||||||
HD Supply Holdings Inc.(a) | 8,123 | 305,181 |
Security | Shares | Value | ||||||
Trading Companies & Distributors (continued) |
| |||||||
MRC Global Inc.(a) | 4,204 | $ | 66,549 | |||||
MSC Industrial Direct Co. Inc., Class A | 2,041 | 165,444 | ||||||
SiteOne Landscape Supply Inc.(a)(b) | 1,783 | 121,315 | ||||||
United Rentals Inc.(a) | 3,626 | 435,374 | ||||||
Univar Inc.(a) | 4,991 | 122,878 | ||||||
Watsco Inc. | 1,410 | 208,934 | ||||||
WESCO International Inc.(a) | 2,097 | 105,228 | ||||||
WW Grainger Inc. | 2,000 | 567,940 | ||||||
|
| |||||||
3,236,873 | ||||||||
Transportation Infrastructure — 0.0% |
| |||||||
Macquarie Infrastructure Corp. | 3,379 | 124,854 | ||||||
|
| |||||||
Water Utilities — 0.1% | ||||||||
American Water Works Co. Inc. | 7,966 | 705,230 | ||||||
Aqua America Inc. | 7,714 | 250,936 | ||||||
|
| |||||||
956,166 | ||||||||
Wireless Telecommunication Services — 0.1% |
| |||||||
Sprint Corp.(a) | 25,052 | 153,318 | ||||||
Telephone & Data Systems Inc. | 4,166 | 128,438 | ||||||
T-Mobile U.S. Inc.(a) | 13,788 | 945,167 | ||||||
|
| |||||||
1,226,923 | ||||||||
|
| |||||||
Total Common Stocks — 99.9% | 1,154,235,185 | |||||||
|
| |||||||
Short-Term Investments | ||||||||
Money Market Funds — 1.4% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 2.36%(c)(d)(e) | 15,233,657 | 15,236,704 | ||||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 2.11%(c)(d) | 785,394 | 785,394 | ||||||
|
| |||||||
16,022,098 | ||||||||
|
| |||||||
Total Short-Term Investments — 1.4% |
| 16,022,098 | ||||||
|
| |||||||
Total Investments in Securities — 101.3% |
| 1,170,257,283 | ||||||
Other Assets, Less Liabilities — (1.3)% |
| (14,970,781 | ) | |||||
|
| |||||||
Net Assets — 100.0% | $ | 1,155,286,502 | ||||||
|
|
(a) | Non-income producing security. |
(b) | All or a portion of this security is on loan. |
(c) | Affiliate of the Fund. |
(d) | Annualized 7-day yield as of period-end. |
(e) | All or a portion of this security was purchased with cash collateral received from loaned securities. |
S C H E D U L E O F I N V E S T M E N T S | 23 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Dow Jones U.S. ETF |
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:
Affiliated Issuer | Shares Held at 04/30/18 | Shares Purchased | Shares Sold | Shares Held at 10/31/18 | Value at 10/31/18 | Income | Net Realized Gain (Loss)(a) | Change in Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | 12,287,014 | 2,946,643 | (b) | — | 15,233,657 | $ | 15,236,704 | $ | 48,664 | (c) | $ | (437) | $ | 1,162 | ||||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | 709,079 | 76,315 | (b) | — | 785,394 | 785,394 | 15,667 | — | — | |||||||||||||||||||||||
BlackRock Inc. | 5,366 | 94 | (81) | 5,379 | 2,213,028 | 32,444 | (5,430) | (589,627) | ||||||||||||||||||||||||
PNC Financial Services Group Inc. (The) | 20,458 | 349 | (474) | 20,333 | 2,612,587 | 38,968 | (2,663) | (345,888) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 20,847,713 | $ | 135,743 | $ | (8,530) | $ | (934,353) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
(b) | Net of purchases and sales. |
(c) | Includes securities lending income earned from the reinvestment of cash collateral from loaned securities (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities, and less fees paid to BTC as securities lending agent. |
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, refer to the Notes to Financial Statements.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $ | 1,154,235,185 | $ | — | $ | — | $ | 1,154,235,185 | ||||||||
Money Market Funds | 16,022,098 | — | — | 16,022,098 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 1,170,257,283 | $ | — | $ | — | $ | 1,170,257,283 | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
24 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited)
October 31, 2018 | iShares® Transportation Average ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks | ||||||||
Air Freight & Logistics — 29.0% | ||||||||
CH Robinson Worldwide Inc. | 352,642 | $ | 31,395,718 | |||||
Expeditors International of Washington Inc. | 469,278 | 31,526,096 | ||||||
FedEx Corp. | 438,380 | 96,592,649 | ||||||
United Parcel Service Inc., Class B | 449,490 | 47,888,664 | ||||||
|
| |||||||
207,403,127 | ||||||||
Airlines — 19.0% | ||||||||
Alaska Air Group Inc. | 464,723 | 28,543,287 | ||||||
American Airlines Group Inc. | 495,408 | 17,378,913 | ||||||
Delta Air Lines Inc. | 470,203 | 25,734,210 | ||||||
JetBlue Airways Corp.(a)(b) | 565,366 | 9,458,573 | ||||||
Southwest Airlines Co. | 475,433 | 23,343,760 | ||||||
United Continental Holdings Inc.(a) | 362,541 | 31,000,881 | ||||||
|
| |||||||
135,459,624 | ||||||||
Marine — 6.7% | ||||||||
Kirby Corp.(a)(b) | 436,665 | 31,413,680 | ||||||
Matson Inc. | 469,583 | 16,472,972 | ||||||
|
| |||||||
47,886,652 | ||||||||
Road & Rail — 45.2% | ||||||||
Avis Budget Group Inc.(a)(b) | 509,322 | 14,322,135 | ||||||
CSX Corp. | 459,723 | 31,656,526 | ||||||
JB Hunt Transport Services Inc. | 448,962 | 49,659,687 | ||||||
Kansas City Southern | 307,600 | 31,362,896 | ||||||
Landstar System Inc. | 308,740 | 30,901,786 | ||||||
Norfolk Southern Corp. | 441,666 | 74,124,805 | ||||||
Ryder System Inc. | 469,827 | 25,986,131 | ||||||
Union Pacific Corp. | 443,608 | 64,864,362 | ||||||
|
| |||||||
322,878,328 | ||||||||
|
| |||||||
Total Common Stocks — 99.9% | 713,627,731 | |||||||
|
|
Security | Shares | Value | ||||||
Short-Term Investments | ||||||||
Money Market Funds — 3.7% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 2.36%(c)(d)(e) | 25,406,776 | $ | 25,411,857 | |||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 2.11%(c)(d) | 1,026,876 | 1,026,876 | ||||||
|
| |||||||
26,438,733 | ||||||||
|
| |||||||
Total Short-Term Investments — 3.7% |
| 26,438,733 | ||||||
|
| |||||||
Total Investments in Securities — 103.6% |
| 740,066,464 | ||||||
Other Assets, Less Liabilities — (3.6)% |
| (25,408,442 | ) | |||||
|
| |||||||
Net Assets — 100.0% | $ | 714,658,022 | ||||||
|
|
(a) | Non-income producing security. |
(b) | All or a portion of this security is on loan. |
(c) | Affiliate of the Fund. |
(d) | Annualized 7-day yield as of period-end. |
(e) | All or a portion of this security was purchased with cash collateral received from loaned securities. |
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:
Affiliated Issuer | Shares Held at 04/30/18 | Net Activity | Shares Held at 10/31/18 | Value at 10/31/18 | Income | Net Realized Gain (Loss)(a) | Change in (Depreciation) | |||||||||||||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | 4,552,013 | 20,854,763 | 25,406,776 | $ | 25,411,857 | $ | 10,437 | (b) | $ | 981 | $ | (1,441) | ||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | 1,104,321 | (77,445) | 1,026,876 | 1,026,876 | 8,607 | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
$ | 26,438,733 | $ | 19,044 | $ | 981 | $ | (1,441) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
(b) | Includes securities lending income earned from the reinvestment of cash collateral from loaned securities (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities, and less fees paid to BTC as securities lending agent. |
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, refer to the Notes to Financial Statements.
S C H E D U L E O F I N V E S T M E N T S | 25 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Transportation Average ETF |
Fair Value Measurements (continued)
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $ | 713,627,731 | $ | — | $ | — | $ | 713,627,731 | ||||||||
Money Market Funds | 26,438,733 | — | — | 26,438,733 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 740,066,464 | $ | — | $ | — | $ | 740,066,464 | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
26 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited)
October 31, 2018 | iShares® U.S. Energy ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks |
| |||||||
Electric Utilities — 0.5% |
| |||||||
OGE Energy Corp. | 125,273 | $ | 4,528,619 | |||||
|
| |||||||
Energy Equipment & Services — 11.9% |
| |||||||
Apergy Corp.(a)(b) | 48,628 | 1,896,006 | ||||||
Baker Hughes a GE Co. | 261,363 | 6,975,778 | ||||||
Core Laboratories NV | 27,775 | 2,367,541 | ||||||
Dril-Quip Inc.(a)(b) | 23,635 | 1,005,906 | ||||||
Ensco PLC, Class A | 274,762 | 1,961,801 | ||||||
Halliburton Co. | 552,270 | 19,152,724 | ||||||
Helmerich & Payne Inc. | 68,328 | 4,256,151 | ||||||
KLX Energy Services Holdings Inc.(a)(b) | 12,835 | 370,803 | ||||||
Nabors Industries Ltd. | 204,956 | 1,018,631 | ||||||
National Oilwell Varco Inc. | 240,152 | 8,837,594 | ||||||
Oceaneering International Inc.(a) | 61,580 | 1,166,325 | ||||||
Patterson-UTI Energy Inc. | 138,244 | 2,300,380 | ||||||
Rowan Companies PLC, | 79,950 | 1,272,004 | ||||||
Schlumberger Ltd. | 868,748 | 44,575,460 | ||||||
TechnipFMC PLC | 268,153 | 7,052,424 | ||||||
Transocean Ltd.(a)(b) | 269,638 | 2,968,714 | ||||||
U.S. Silica Holdings Inc.(b) | 48,739 | 682,346 | ||||||
Weatherford International PLC(a)(b) | 623,450 | 841,658 | ||||||
|
| |||||||
108,702,246 | ||||||||
Oil, Gas & Consumable Fuels — 87.3% |
| |||||||
Anadarko Petroleum Corp. | 321,406 | 17,098,800 | ||||||
Antero Resources Corp.(a)(b) | 139,445 | 2,215,781 | ||||||
Apache Corp. | 240,069 | 9,081,810 | ||||||
Cabot Oil & Gas Corp. | 277,048 | 6,712,873 | ||||||
Centennial Resource Development Inc./DE, | 119,337 | 2,286,497 | ||||||
Cheniere Energy Inc.(a) | 138,710 | 8,379,471 | ||||||
Chesapeake Energy Corp.(a) | 573,264 | 2,012,157 | ||||||
Chevron Corp. | 1,202,678 | 134,278,999 | ||||||
Cimarex Energy Co. | 59,796 | 4,751,988 | ||||||
CNX Resources Corp.(a) | 133,325 | 2,086,536 | ||||||
Concho Resources Inc.(a)(b) | 125,695 | 17,482,918 | ||||||
ConocoPhillips | 729,395 | 50,984,710 | ||||||
Continental Resources Inc./OK(a) | 54,293 | 2,860,155 | ||||||
Delek U.S. Holdings Inc. | 48,327 | 1,774,567 | ||||||
Devon Energy Corp. | 319,349 | 10,346,908 | ||||||
Diamondback Energy Inc. | 61,893 | 6,954,297 | ||||||
Energen Corp.(a) | 51,405 | 3,699,618 | ||||||
EOG Resources Inc. | 363,538 | 38,295,093 | ||||||
EQT Corp. | 165,549 | 5,623,699 | ||||||
Exxon Mobil Corp. | 2,657,364 | 211,738,763 | ||||||
Gulfport Energy Corp.(a)(b) | 98,438 | 896,770 | ||||||
Hess Corp. | 158,005 | 9,069,487 | ||||||
HollyFrontier Corp. | 101,780 | 6,864,043 | ||||||
Kinder Morgan Inc./DE | 1,191,205 | 20,274,309 | ||||||
Marathon Oil Corp. | 536,108 | 10,180,691 | ||||||
Marathon Petroleum Corp. | 420,831 | 29,647,544 | ||||||
Matador Resources Co.(a) | 65,127 | 1,878,263 |
Security | Shares | Value | ||||||
Oil, Gas & Consumable Fuels (continued) |
| |||||||
Murphy Oil Corp. | 102,098 | $ | 3,252,842 | |||||
Newfield Exploration Co.(a)(b) | 125,508 | 2,535,262 | ||||||
Noble Energy Inc. | 303,232 | 7,535,315 | ||||||
Oasis Petroleum Inc.(a)(b) | 167,157 | 1,681,599 | ||||||
Occidental Petroleum Corp. | 479,981 | 32,192,326 | ||||||
ONEOK Inc. | 258,123 | 16,932,869 | ||||||
Parsley Energy Inc., Class A(a) | 164,878 | 3,861,443 | ||||||
PBF Energy Inc., Class A | 75,224 | 3,148,124 | ||||||
PDC Energy Inc.(a) | 41,556 | 1,764,052 | ||||||
Phillips 66 | 268,085 | 27,564,500 | ||||||
Pioneer Natural Resources Co. | 106,954 | 15,751,116 | ||||||
QEP Resources Inc.(a) | 148,176 | 1,320,248 | ||||||
Range Resources Corp.(b) | 130,140 | 2,062,719 | ||||||
SemGroup Corp., Class A | 41,261 | 762,916 | ||||||
SM Energy Co. | 64,555 | 1,571,269 | ||||||
Southwestern Energy Co.(a)(b) | 368,723 | 1,968,981 | ||||||
Targa Resources Corp. | 141,574 | 7,315,129 | ||||||
Valero Energy Corp. | 268,258 | 24,435,621 | ||||||
Whiting Petroleum Corp.(a) | 57,182 | 2,132,889 | ||||||
Williams Companies Inc. (The) | 759,067 | 18,468,100 | ||||||
World Fuel Services Corp. | 42,751 | 1,368,032 | ||||||
WPX Energy Inc.(a) | 247,592 | 3,971,376 | ||||||
|
| |||||||
799,073,475 | ||||||||
Semiconductors & Semiconductor Equipment — 0.2% |
| |||||||
First Solar Inc.(a) | 47,444 | 1,983,159 | ||||||
|
| |||||||
Total Common Stocks — 99.9% |
| |||||||
(Cost: $1,212,549,807) | 914,287,499 | |||||||
|
| |||||||
Short-Term Investments
|
| |||||||
Money Market Funds — 1.2% |
| |||||||
BlackRock Cash Funds: Institutional, | 10,118,178 | 10,120,201 | ||||||
BlackRock Cash Funds: Treasury, | 458,548 | 458,548 | ||||||
|
| |||||||
10,578,749 | ||||||||
|
| |||||||
Total Short-Term Investments — 1.2% |
| |||||||
(Cost: $10,577,259) | 10,578,749 | |||||||
|
| |||||||
Total Investments in Securities — 101.1% |
| |||||||
(Cost: $1,223,127,066) | 924,866,248 | |||||||
Other Assets, Less Liabilities — (1.1)% |
| (9,807,275 | ) | |||||
|
| |||||||
Net Assets — 100.0% | $ | 915,058,973 | ||||||
|
|
(a) | Non-income producing security. |
(b) | All or a portion of this security is on loan. |
(c) | Affiliate of the Fund. |
(d) | Annualized 7-day yield as of period-end. |
(e) | All or a portion of this security was purchased with cash collateral received from loaned securities. |
S C H E D U L E O F I N V E S T M E N T S | 27 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® U.S. Energy ETF |
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:
Affiliated Issuer | | Shares Held at 04/30/18 | | Net Activity | | Shares Held at 10/31/18 |
| | Value at 10/31/18 | | Income | | Net Realized Gain (Loss) | (a) | | Change in Unrealized Appreciation (Depreciation) |
| |||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | 16,611,186 | (6,493,008 | ) | 10,118,178 | $ | 10,120,201 | $ | 30,586 | (b) | $ | 1,804 | $ | (172 | ) | ||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | 1,597,838 | (1,139,290 | ) | 458,548 | 458,548 | 12,457 | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
$ | 10,578,749 | $ | 43,043 | $ | 1,804 | $ | (172 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
(b) | Includes securities lending income earned from the reinvestment of cash collateral from loaned securities (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities, and less fees paid to BTC as securities lending agent. |
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, refer to the Notes to Financial Statements.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $ | 914,287,499 | $ | — | $ | — | $ | 914,287,499 | ||||||||
Money Market Funds | 10,578,749 | — | — | 10,578,749 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 924,866,248 | $ | — | $ | — | $ | 924,866,248 | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
28 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited)
October 31, 2018 | iShares® U.S. Healthcare ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks |
| |||||||
Biotechnology — 18.1% |
| |||||||
AbbVie Inc. | 954,802 | $ | 74,331,336 | |||||
ACADIA Pharmaceuticals Inc.(a)(b) | 61,514 | 1,198,293 | ||||||
Agios Pharmaceuticals Inc.(a)(b) | 31,825 | 2,006,885 | ||||||
Alexion Pharmaceuticals Inc.(a) | 140,517 | 15,747,740 | ||||||
Alkermes PLC(a) | 97,970 | 4,000,115 | ||||||
Alnylam Pharmaceuticals Inc.(a)(b) | 56,561 | 4,549,201 | ||||||
Amgen Inc. | 408,126 | 78,682,612 | ||||||
Biogen Inc.(a) | 127,015 | 38,646,854 | ||||||
BioMarin Pharmaceutical Inc.(a) | 112,025 | 10,325,344 | ||||||
Bluebird Bio Inc.(a) | 34,164 | 3,918,611 | ||||||
Celgene Corp.(a) | 443,492 | 31,754,027 | ||||||
Clovis Oncology Inc.(a)(b) | 33,210 | 386,232 | ||||||
Exact Sciences Corp.(a)(b) | 77,484 | 5,505,238 | ||||||
Exelixis Inc.(a) | 188,024 | 2,607,893 | ||||||
FibroGen Inc.(a) | 47,349 | 2,029,852 | ||||||
Gilead Sciences Inc. | 817,388 | 55,729,514 | ||||||
Immunomedics Inc.(a)(b) | 102,449 | 2,308,176 | ||||||
Incyte Corp.(a) | 111,322 | 7,215,892 | ||||||
Intercept Pharmaceuticals Inc.(a)(b) | 16,308 | 1,565,731 | ||||||
Intrexon Corp.(a)(b) | 44,532 | 514,790 | ||||||
Ionis Pharmaceuticals Inc.(a)(b) | 86,619 | 4,291,971 | ||||||
Ligand Pharmaceuticals Inc.(a)(b) | 13,307 | 2,193,127 | ||||||
Loxo Oncology Inc.(a)(b) | 17,685 | 2,699,792 | ||||||
Madrigal Pharmaceuticals Inc.(a)(b) | 5,235 | 999,152 | ||||||
Myriad Genetics Inc.(a) | 47,055 | 2,118,887 | ||||||
Neurocrine Biosciences Inc.(a) | 57,094 | 6,117,622 | ||||||
OPKO Health Inc.(a)(b) | 229,420 | 775,440 | ||||||
Portola Pharmaceuticals Inc.(a)(b) | 41,686 | 820,797 | ||||||
Regeneron Pharmaceuticals | 48,856 | 16,573,909 | ||||||
Sage Therapeutics Inc.(a)(b) | 29,436 | 3,787,824 | ||||||
Sarepta Therapeutics Inc.(a)(b) | 39,431 | 5,274,291 | ||||||
Seattle Genetics Inc.(a)(b) | 67,139 | 3,768,512 | ||||||
TESARO Inc.(a)(b) | 27,028 | 780,569 | ||||||
Ultragenyx Pharmaceutical Inc.(a)(b) | 29,713 | 1,439,595 | ||||||
United Therapeutics Corp.(a) | 27,477 | 3,046,100 | ||||||
Vertex Pharmaceuticals Inc.(a) | 161,138 | 27,306,445 | ||||||
|
| |||||||
425,018,369 | ||||||||
Health Care Equipment & Supplies — 21.9% |
| |||||||
Abbott Laboratories | 1,106,152 | 76,258,120 | ||||||
ABIOMED Inc.(a) | 28,316 | 9,661,419 | ||||||
Align Technology Inc.(a) | 46,087 | 10,194,444 | ||||||
Avanos Medical Inc.(a) | 29,833 | 1,688,548 | ||||||
Baxter International Inc. | 313,289 | 19,583,695 | ||||||
Becton Dickinson and Co. | 168,711 | 38,887,886 | ||||||
Boston Scientific Corp.(a) | 871,980 | 31,513,357 | ||||||
Cantel Medical Corp. | 22,894 | 1,812,060 | ||||||
Cooper Companies Inc. (The)(b) | 31,009 | 8,009,935 | ||||||
Danaher Corp. | 388,269 | 38,593,939 | ||||||
DENTSPLY SIRONA Inc. | 140,323 | 4,859,386 | ||||||
DexCom Inc.(a) | 57,541 | 7,639,719 | ||||||
Edwards Lifesciences Corp.(a) | 132,023 | 19,486,595 | ||||||
Globus Medical Inc., Class A(a) | 46,241 | 2,443,837 | ||||||
Haemonetics Corp.(a) | 32,612 | 3,406,976 | ||||||
Hill-Rom Holdings Inc. | 41,890 | 3,522,111 | ||||||
Hologic Inc.(a) | 171,666 | 6,693,257 | ||||||
ICU Medical Inc.(a) | 10,459 | 2,664,221 | ||||||
IDEXX Laboratories Inc.(a)(b) | 54,620 | 11,585,994 | ||||||
Inogen Inc.(a) | 11,039 | 2,092,663 |
Security | Shares | Value | ||||||
Health Care Equipment & Supplies (continued) |
| |||||||
Insulet Corp.(a) | 37,213 | $ | 3,282,559 | |||||
Integra LifeSciences Holdings Corp.(a) | 44,578 | 2,388,043 | ||||||
Intuitive Surgical Inc.(a) | 71,721 | 37,379,551 | ||||||
LivaNova PLC(a) | 30,654 | 3,432,941 | ||||||
Masimo Corp.(a) | 30,286 | 3,501,062 | ||||||
Medtronic PLC | 851,542 | 76,485,502 | ||||||
Neogen Corp.(a)(b) | 32,696 | 1,985,301 | ||||||
NuVasive Inc.(a) | 32,437 | 1,821,986 | ||||||
Penumbra Inc.(a)(b) | 19,514 | 2,653,904 | ||||||
ResMed Inc. | 92,306 | 9,777,052 | ||||||
STERIS PLC | 53,352 | 5,831,907 | ||||||
Stryker Corp. | 195,724 | 31,750,347 | ||||||
Teleflex Inc. | 28,900 | 6,957,386 | ||||||
Varian Medical Systems Inc.(a) | 57,765 | 6,895,408 | ||||||
West Pharmaceutical Services Inc.(b) | 46,401 | 4,914,794 | ||||||
Zimmer Biomet Holdings Inc. | 128,302 | 14,573,824 | ||||||
|
| |||||||
514,229,729 | ||||||||
Health Care Providers & Services — 22.0% |
| |||||||
Acadia Healthcare Co. Inc.(a)(b) | 55,696 | 2,311,384 | ||||||
Aetna Inc. | 206,245 | 40,919,008 | ||||||
Anthem Inc. | 163,907 | 45,167,852 | ||||||
Brookdale Senior Living Inc.(a)(b) | 58,021 | 518,128 | ||||||
Centene Corp.(a) | 129,423 | 16,866,405 | ||||||
Chemed Corp. | 10,154 | 3,090,167 | ||||||
Cigna Corp. | 153,447 | 32,808,503 | ||||||
CVS Health Corp. | 641,922 | 46,468,734 | ||||||
DaVita Inc.(a) | 80,000 | 5,387,200 | ||||||
Encompass Health Corp. | 62,364 | 4,197,097 | ||||||
Express Scripts Holding Co.(a) | 354,506 | 34,376,447 | ||||||
HCA Healthcare Inc. | 170,187 | 22,725,070 | ||||||
HealthEquity Inc.(a) | 34,169 | 3,136,714 | ||||||
Henry Schein Inc.(a) | 96,584 | 8,016,472 | ||||||
Humana Inc. | 86,865 | 27,832,415 | ||||||
Laboratory Corp. of America | 64,286 | 10,321,117 | ||||||
LifePoint Health Inc.(a) | 24,393 | 1,582,130 | ||||||
Magellan Health Inc.(a) | 14,323 | 931,854 | ||||||
McKesson Corp. | 125,963 | 15,715,144 | ||||||
MEDNAX Inc.(a) | 58,970 | 2,434,871 | ||||||
Molina Healthcare Inc.(a) | 38,802 | 4,918,930 | ||||||
Patterson Companies Inc. | 52,060 | 1,175,515 | ||||||
Quest Diagnostics Inc. | 86,225 | 8,114,635 | ||||||
Tenet Healthcare Corp.(a)(b) | 52,324 | 1,346,296 | ||||||
UnitedHealth Group Inc. | 606,869 | 158,605,213 | ||||||
Universal Health Services Inc., Class B | 54,309 | 6,601,802 | ||||||
WellCare Health Plans Inc.(a) | 31,516 | 8,698,101 | ||||||
|
| |||||||
514,267,204 | ||||||||
Health Care Technology — 0.1% |
| |||||||
Teladoc Health Inc.(a)(b) | 43,870 | 3,041,946 | ||||||
|
| |||||||
Life Sciences Tools & Services — 6.4% |
| |||||||
Agilent Technologies Inc. | 201,033 | 13,024,928 | ||||||
Bio-Rad Laboratories Inc., Class A(a) | 12,644 | 3,449,915 | ||||||
Bio-Techne Corp. | 23,810 | 3,993,413 | ||||||
Bruker Corp. | 63,109 | 1,977,205 | ||||||
Charles River Laboratories International Inc.(a) | 30,307 | 3,691,999 | ||||||
Illumina Inc.(a) | 92,686 | 28,839,249 | ||||||
IQVIA Holdings Inc.(a)(b) | 102,230 | 12,567,134 | ||||||
Mettler-Toledo International Inc.(a)(b) | 15,870 | 8,678,033 | ||||||
PRA Health Sciences Inc.(a) | 36,553 | 3,540,889 | ||||||
Syneos Health Inc.(a)(b) | 38,308 | 1,747,994 |
S C H E D U L E O F I N V E S T M E N T S | 29 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® U.S. Healthcare ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Life Sciences Tools & Services (continued) |
| |||||||
Thermo Fisher Scientific Inc. | 253,976 | $ | 59,341,493 | |||||
Waters Corp.(a)(b) | 49,870 | 9,459,840 | ||||||
|
| |||||||
150,312,092 | ||||||||
Pharmaceuticals — 31.3% |
| |||||||
Akorn Inc.(a)(b) | 3,570 | 23,812 | ||||||
Allergan PLC | 201,189 | 31,789,874 | ||||||
Amneal Pharmaceuticals Inc.(a)(b) | 47,047 | 868,017 | ||||||
Bristol-Myers Squibb Co. | 1,028,949 | 52,003,082 | ||||||
Catalent Inc.(a)(b) | 91,398 | 3,686,995 | ||||||
Eli Lilly & Co. | 602,690 | 65,355,704 | ||||||
Endo International PLC(a)(b) | 85,474 | 1,447,930 | ||||||
Horizon Pharma PLC(a) | 104,748 | 1,907,461 | ||||||
Jazz Pharmaceuticals PLC(a) | 38,106 | 6,051,995 | ||||||
Johnson & Johnson | 1,691,561 | 236,801,624 | ||||||
Mallinckrodt PLC(a)(b) | 33,141 | 830,513 | ||||||
Medicines Co. (The)(a)(b) | 41,080 | 955,521 | ||||||
Merck & Co. Inc. | 1,676,920 | 123,438,081 | ||||||
Mylan NV(a) | 324,558 | 10,142,438 | ||||||
Nektar Therapeutics(a) | 108,875 | 4,211,285 | ||||||
Perrigo Co. PLC | 79,428 | 5,583,788 | ||||||
Pfizer Inc. | 3,696,247 | 159,160,396 | ||||||
Prestige Consumer Healthcare Inc.(a) | 32,637 | 1,180,154 | ||||||
Zoetis Inc. | 303,805 | 27,388,021 | ||||||
|
| |||||||
732,826,691 | ||||||||
|
| |||||||
Total Common Stocks — 99.8% |
| |||||||
(Cost: $2,149,491,781) | 2,339,696,031 | |||||||
|
|
Security | Shares | Value | ||||||
Short-Term Investments |
| |||||||
Money Market Funds — 3.0% |
| |||||||
BlackRock Cash Funds: Institutional, | 66,742,542 | $ | 66,755,890 | |||||
BlackRock Cash Funds: Treasury, | 3,224,805 | 3,224,805 | ||||||
|
| |||||||
69,980,695 | ||||||||
|
| |||||||
Total Short-Term Investments — 3.0% |
| |||||||
(Cost: $ 69,976,742) | 69,980,695 | |||||||
|
| |||||||
Total Investments in Securities — 102.8% |
| |||||||
(Cost: $ 2,219,468,523) | 2,409,676,726 | |||||||
Other Assets, Less Liabilities — (2.8)% |
| (65,585,416 | ) | |||||
|
| |||||||
Net Assets — 100.0% | $ | 2,344,091,310 | ||||||
|
|
(a) | Non-income producing security. |
(b) | All or a portion of this security is on loan. |
(c) | Affiliate of the Fund. |
(d) | Annualized 7-day yield as of period-end. |
(e) | All or a portion of this security was purchased with cash collateral received from loaned securities. |
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:
Affiliated Issuer | | Shares Held at 04/30/18 | | Net Activity | | Shares Held at 10/31/18 |
| | Value at 10/31/18 | | Income | | Net Realized Gain (Loss | )(a) | | Change in Unrealized Appreciation (Depreciation) |
| |||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | 28,674,780 | 38,067,762 | 66,742,542 | $ | 66,755,890 | $ | 61,967 | (b) | $ | 4,942 | $ | 1,208 | ||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | 1,934,255 | 1,290,550 | 3,224,805 | 3,224,805 | 20,839 | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
$ | 69,980,695 | $ | 82,806 | $ | 4,942 | $ | 1,208 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
(b) | Includes securities lending income earned from the reinvestment of cash collateral from loaned securities (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities, and less fees paid to BTC as securities lending agent. |
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, refer to the Notes to Financial Statements.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $ | 2,339,696,031 | $ | — | $ | — | $ | 2,339,696,031 | ||||||||
Money Market Funds | 69,980,695 | — | — | 69,980,695 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 2,409,676,726 | $ | — | $ | — | $ | 2,409,676,726 | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
30 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited)
October 31, 2018 | iShares® U.S. Technology ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks |
| |||||||
Communications Equipment — 5.8% |
| |||||||
Arista Networks Inc.(a) | 39,681 | $ | 9,140,518 | |||||
ARRIS International PLC(a) | 124,644 | 3,099,896 | ||||||
Ciena Corp.(a) | 104,661 | 3,271,703 | ||||||
Cisco Systems Inc. | 3,354,321 | 153,460,186 | ||||||
CommScope Holding Co. Inc.(a) | 140,944 | 3,391,113 | �� | |||||
EchoStar Corp., Class A(a) | 36,087 | 1,463,328 | ||||||
F5 Networks Inc.(a) | 44,337 | 7,771,389 | ||||||
Finisar Corp.(a)(b) | 87,913 | 1,467,268 | ||||||
InterDigital Inc. | 25,800 | 1,830,510 | ||||||
Juniper Networks Inc. | 251,432 | 7,359,415 | ||||||
Lumentum Holdings Inc.(a)(b) | 46,211 | 2,525,431 | ||||||
Motorola Solutions Inc. | 117,657 | 14,420,042 | ||||||
NetScout Systems Inc.(a)(b) | 54,186 | 1,368,738 | ||||||
Palo Alto Networks Inc.(a) | 71,972 | 13,173,755 | ||||||
Plantronics Inc. | 24,601 | 1,450,721 | ||||||
Ubiquiti Networks Inc.(b) | 14,948 | 1,391,509 | ||||||
ViaSat Inc.(a)(b) | 40,920 | 2,609,059 | ||||||
Viavi Solutions Inc.(a) | 165,856 | 1,912,320 | ||||||
|
| |||||||
231,106,901 | ||||||||
Diversified Telecommunication Services — 0.5% |
| |||||||
CenturyLink Inc. | 714,262 | 14,742,368 | ||||||
Zayo Group Holdings Inc.(a) | 216,855 | 6,479,627 | ||||||
|
| |||||||
21,221,995 | ||||||||
Electronic Equipment, Instruments & Components — 0.4% |
| |||||||
CDW Corp./DE | 129,592 | 11,664,576 | ||||||
SYNNEX Corp. | 31,681 | 2,458,762 | ||||||
Tech Data Corp.(a)(b) | 28,379 | 2,005,260 | ||||||
|
| |||||||
16,128,598 | ||||||||
Entertainment — 0.0% |
| |||||||
Pandora Media Inc.(a)(b) | 38,877 | 330,454 | ||||||
|
| |||||||
Health Care Technology — 0.9% |
| |||||||
Allscripts Healthcare Solutions Inc.(a) | 129,614 | 1,543,703 | ||||||
athenahealth Inc.(a) | 33,863 | 4,318,887 | ||||||
Cerner Corp.(a) | 272,099 | 15,585,831 | ||||||
Medidata Solutions Inc.(a) | 43,842 | 3,082,093 | ||||||
Veeva Systems Inc., Class A(a)(b) | 97,576 | 8,913,567 | ||||||
|
| |||||||
33,444,081 | ||||||||
Household Durables — 0.2% |
| |||||||
Garmin Ltd. | 93,230 | 6,168,097 | ||||||
|
| |||||||
Interactive Media & Services — 17.7% |
| |||||||
Alphabet Inc., Class A(a) | 218,337 | 238,113,966 | ||||||
Alphabet Inc., Class C, NVS(a)(b) | 224,865 | 242,127,886 | ||||||
Cargurus Inc.(a) | 69,343 | 3,080,216 | ||||||
Cars.com Inc.(a)(b) | 82,748 | 2,160,550 | ||||||
Facebook Inc., Class A(a) | 1,161,663 | 176,328,827 | ||||||
IAC/InterActiveCorp.(a) | 66,129 | 13,000,300 | ||||||
Snap Inc., Class A, NVS(a)(b) | 521,766 | 3,448,873 | ||||||
Twitter Inc.(a) | 578,803 | 20,113,404 | ||||||
Zillow Group Inc., Class A(a) | 54,859 | 2,214,658 | ||||||
Zillow Group Inc., Class C, | 84,158 | 3,388,201 | ||||||
|
| |||||||
703,976,881 | ||||||||
Internet & Direct Marketing Retail — 0.9% |
| |||||||
eBay Inc.(a) | 744,532 | 21,613,764 | ||||||
Etsy Inc.(a) | 109,137 | 4,640,505 | ||||||
GrubHub Inc.(a) | 66,766 | 6,191,879 |
Security | Shares | Value | ||||||
Internet & Direct Marketing Retail (continued) |
| |||||||
Stamps.com Inc.(a) | 22,029 | $ | 4,453,603 | |||||
|
| |||||||
36,899,751 | ||||||||
IT Services — 5.3% |
| |||||||
Akamai Technologies Inc.(a) | 127,471 | 9,209,780 | ||||||
Amdocs Ltd. | 133,442 | 8,442,875 | ||||||
Booz Allen Hamilton Holding Corp. | 104,161 | 5,160,136 | ||||||
CACI International Inc., Class A(a) | 18,135 | 3,236,372 | ||||||
Cognizant Technology Solutions Corp., Class A | 449,437 | 31,024,636 | ||||||
DXC Technology Co. | 224,247 | 16,331,909 | ||||||
EPAM Systems Inc.(a)(b) | 37,381 | 4,465,908 | ||||||
Gartner Inc.(a) | 73,894 | 10,900,843 | ||||||
GoDaddy Inc., Class A(a) | 120,019 | 8,781,790 | ||||||
International Business Machines Corp. | 677,901 | 78,250,113 | ||||||
Leidos Holdings Inc. | 122,073 | 7,907,889 | ||||||
Okta Inc.(a) | 56,717 | 3,310,004 | ||||||
Perspecta Inc. | 122,910 | 3,010,066 | ||||||
Science Applications International Corp. | 31,121 | 2,163,221 | ||||||
Teradata Corp.(a) | 53,111 | 1,933,240 | ||||||
Twilio Inc., Class A(a)(b) | 56,311 | 4,235,713 | ||||||
VeriSign Inc.(a) | 84,714 | 12,075,134 | ||||||
|
| |||||||
210,439,629 | ||||||||
Semiconductors & Semiconductor Equipment — 17.2% |
| |||||||
Advanced Micro Devices Inc.(a)(b) | 622,354 | 11,333,066 | ||||||
Analog Devices Inc. | 278,878 | 23,344,877 | ||||||
Applied Materials Inc. | 766,554 | 25,204,296 | ||||||
Broadcom Inc. | 317,695 | 71,001,656 | ||||||
Cirrus Logic Inc.(a) | 11,898 | 445,461 | ||||||
Cree Inc.(a)(b) | 74,483 | 2,891,430 | ||||||
Cypress Semiconductor Corp. | 265,187 | 3,431,520 | ||||||
Entegris Inc. | 104,202 | 2,765,521 | ||||||
Integrated Device Technology | 94,652 | 4,430,660 | ||||||
Intel Corp. | 3,380,147 | 158,461,291 | ||||||
KLA-Tencor Corp. | 113,245 | 10,366,447 | ||||||
Lam Research Corp. | 116,837 | 16,559,308 | ||||||
Marvell Technology Group Ltd. | 428,869 | 7,037,740 | ||||||
Maxim Integrated Products Inc. | 201,660 | 10,087,033 | ||||||
Microchip Technology Inc. | 186,504 | 12,268,233 | ||||||
Micron Technology Inc.(a) | 857,608 | 32,348,974 | ||||||
MKS Instruments Inc. | 40,270 | 2,967,496 | ||||||
Monolithic Power Systems Inc. | 28,571 | 3,374,807 | ||||||
NVIDIA Corp. | 449,909 | 94,854,314 | ||||||
ON Semiconductor Corp.(a) | 311,592 | 5,297,064 | ||||||
Qorvo Inc.(a)(b) | 91,658 | 6,737,780 | ||||||
QUALCOMM Inc. | 1,022,248 | 64,289,177 | ||||||
Semtech Corp.(a) | 48,847 | 2,195,184 | ||||||
Silicon Laboratories Inc.(a) | 31,924 | 2,602,764 | ||||||
Skyworks Solutions Inc. | 139,643 | 12,115,427 | ||||||
Synaptics Inc.(a)(b) | 3,403 | 127,749 | ||||||
Teradyne Inc. | 136,438 | 4,700,289 | ||||||
Texas Instruments Inc. | 724,997 | 67,301,472 | ||||||
Universal Display Corp.(b) | 31,096 | 3,825,119 | ||||||
Versum Materials Inc. | 105,046 | 3,315,252 | ||||||
Xilinx Inc. | 183,385 | 15,655,577 | ||||||
|
| |||||||
681,336,984 | ||||||||
Software — 30.5% |
| |||||||
2U Inc.(a)(b) | 42,263 | 2,658,765 | ||||||
ACI Worldwide Inc.(a)(b) | 85,248 | 2,138,872 | ||||||
Adobe Inc.(a) | 362,783 | 89,157,550 | ||||||
ANSYS Inc.(a) | 71,922 | 10,755,935 |
S C H E D U L E O F I N V E S T M E N T S | 31 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® U.S. Technology ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Software (continued) | ||||||||
Aspen Technology Inc.(a) | 52,029 | $ | 4,416,742 | |||||
Autodesk Inc.(a) | 158,536 | 20,490,778 | ||||||
Blackbaud Inc. | 39,901 | 2,861,700 | ||||||
CA Inc. | 230,189 | 10,211,184 | ||||||
Cadence Design Systems Inc.(a) | 208,944 | 9,312,634 | ||||||
CDK Global Inc. | 127,803 | 7,315,444 | ||||||
Ceridian HCM Holding Inc.(a)(b) | 17,051 | 647,426 | ||||||
Citrix Systems Inc.(a) | 95,150 | 9,750,020 | ||||||
CommVault Systems Inc.(a) | 28,526 | 1,660,784 | ||||||
Dell Technologies Inc., Class V(a) | 151,045 | 13,652,958 | ||||||
DocuSign Inc.(a) | 16,841 | 706,312 | ||||||
Ellie Mae Inc.(a)(b) | 34,018 | 2,254,713 | ||||||
Fair Isaac Corp.(a) | 21,328 | 4,110,119 | ||||||
FireEye Inc.(a)(b) | 57,982 | 1,072,087 | ||||||
Fortinet Inc.(a) | 104,735 | 8,607,122 | ||||||
Guidewire Software Inc.(a)(b) | 58,646 | 5,217,735 | ||||||
HubSpot Inc.(a) | 26,465 | 3,589,977 | ||||||
Intuit Inc. | 196,922 | 41,550,542 | ||||||
j2 Global Inc. | 50,695 | 3,692,624 | ||||||
LogMeIn Inc. | 42,555 | 3,664,837 | ||||||
Manhattan Associates Inc.(a) | 54,018 | 2,578,819 | ||||||
Microsoft Corp. | 5,572,347 | 595,182,383 | ||||||
New Relic Inc.(a) | 33,248 | 2,967,384 | ||||||
Nuance Communications Inc.(a) | 210,266 | 3,656,526 | ||||||
Nutanix Inc., Class A(a) | 54,204 | 2,250,008 | ||||||
Oracle Corp. | 2,087,153 | 101,936,552 | ||||||
Paycom Software Inc.(a)(b) | 37,383 | 4,680,352 | ||||||
Pegasystems Inc. | 27,540 | 1,473,941 | ||||||
Proofpoint Inc.(a) | 37,569 | 3,416,901 | ||||||
PTC Inc.(a) | 77,333 | 6,373,013 | ||||||
RealPage Inc.(a)(b) | 53,773 | 2,849,969 | ||||||
Red Hat Inc.(a) | 135,910 | 23,327,592 | ||||||
RingCentral Inc., Class A(a) | 49,705 | 3,863,570 | ||||||
salesforce.com Inc.(a) | 562,732 | 77,229,340 | ||||||
ServiceNow Inc.(a)(b) | 136,269 | 24,670,140 | ||||||
Splunk Inc.(a) | 105,177 | 10,500,872 | ||||||
SS&C Technologies Holdings Inc. | 187,251 | 9,579,761 | ||||||
Symantec Corp. | 508,836 | 9,235,373 | ||||||
Synopsys Inc.(a) | 124,233 | 11,122,580 | ||||||
Tableau Software Inc., Class A(a) | 51,190 | 5,460,949 | ||||||
Tyler Technologies Inc.(a) | 37,325 | 7,900,209 | ||||||
Ultimate Software Group Inc. (The)(a) | 25,638 | 6,835,860 | ||||||
Verint Systems Inc.(a)(b) | 47,298 | 2,160,100 |
Security | Shares | Value | ||||||
Software (continued) | ||||||||
VMware Inc., Class A(a) | 67,416 | $ | 9,531,948 | |||||
Workday Inc., Class A(a) | 119,191 | 15,854,787 | ||||||
Zendesk Inc.(a) | 77,518 | 4,261,164 | ||||||
Zscaler Inc.(a)(b) | 11,517 | 417,952 | ||||||
|
| |||||||
1,208,814,905 | ||||||||
Technology Hardware, Storage & Peripherals — 20.5% |
| |||||||
Apple Inc. | 3,332,226 | 729,290,982 | ||||||
Hewlett Packard Enterprise Co. | 1,067,110 | 16,273,428 | ||||||
HP Inc. | 1,183,889 | 28,579,080 | ||||||
NCR Corp.(a) | 87,054 | 2,337,400 | ||||||
NetApp Inc. | 188,003 | 14,756,355 | ||||||
Pure Storage Inc., Class A(a) | 127,554 | 2,574,040 | ||||||
Seagate Technology PLC | 190,424 | 7,660,758 | ||||||
Western Digital Corp. | 220,561 | 9,499,562 | ||||||
Xerox Corp. | 162,457 | 4,527,677 | ||||||
|
| |||||||
815,499,282 | ||||||||
|
| |||||||
Total Common Stocks — 99.9% |
| |||||||
(Cost: $3,211,657,366) | 3,965,367,558 | |||||||
|
| |||||||
Short-Term Investments |
| |||||||
Money Market Funds — 2.3% |
| |||||||
BlackRock Cash Funds: Institutional, SLAgency Shares, 2.36%(c)(d)(e) | 88,160,145 | 88,177,777 | ||||||
BlackRock Cash Funds: Treasury, SLAgency Shares, 2.11%(c)(d) | 3,962,440 | 3,962,440 | ||||||
|
| |||||||
92,140,217 | ||||||||
|
| |||||||
Total Short-Term Investments — 2.3% |
| |||||||
(Cost: $92,136,443) | 92,140,217 | |||||||
|
| |||||||
Total Investments in Securities — 102.2% |
| |||||||
(Cost: $3,303,793,809) | 4,057,507,775 | |||||||
Other Assets, Less Liabilities — (2.2)% |
| (87,391,588 | ) | |||||
|
| |||||||
Net Assets — 100.0% |
$ |
3,970,116,187 |
| |||||
|
|
(a) | Non-income producing security. |
(b) | All or a portion of this security is on loan. |
(c) | Affiliate of the Fund. |
(d) | Annualized 7-day yield as of period-end. |
(e) | All or a portion of this security was purchased with cash collateral received from loaned securities. |
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:
Affiliated Issuer | Shares Held at 04/30/18 | Net Activity | Shares Held at 10/31/18 | Value at 10/31/18 | Income | Net Realized Gain (Loss)(a) | Change in (Depreciation) | |||||||||||||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | 65,394,472 | 22,765,673 | 88,160,145 | $ | 88,177,777 | $ | 137,400 | (b) | $ | 3,090 | $ | (2,766 | ) | |||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | 7,668,848 | (3,706,408 | ) | 3,962,440 | 3,962,440 | 40,464 | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
$ | 92,140,217 | $ | 177,864 | $ | 3,090 | $ | (2,766 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
(b) | Includes securities lending income earned from the reinvestment of cash collateral from loaned securities (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities, and less fees paid to BTC as securities lending agent. |
32 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® U.S. Technology ETF |
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, refer to the Notes to Financial Statements.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $ | 3,965,367,558 | $ | — | $ | — | $ | 3,965,367,558 | ||||||||
Money Market Funds | 92,140,217 | — | — | 92,140,217 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 4,057,507,775 | $ | — | $ | — | $ | 4,057,507,775 | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
S C H E D U L E O F I N V E S T M E N T S | 33 |
Schedule of Investments (unaudited)
October 31, 2018 | iShares® U.S. Utilities ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks | ||||||||
Electric Utilities — 57.8% | ||||||||
ALLETE Inc. | 39,921 | $ | 2,954,154 | |||||
Alliant Energy Corp. | 181,481 | 7,800,053 | ||||||
American Electric Power Co. Inc. | 382,668 | 28,072,524 | ||||||
Avangrid Inc. | 43,233 | 2,032,383 | ||||||
Duke Energy Corp. | 553,008 | 45,695,051 | ||||||
Edison International | 252,929 | 17,550,743 | ||||||
El Paso Electric Co. | 31,630 | 1,804,492 | ||||||
Entergy Corp. | 140,399 | 11,786,496 | ||||||
Evergy Inc. | 210,913 | 11,809,019 | ||||||
Eversource Energy | 246,002 | 15,562,087 | ||||||
Exelon Corp. | 749,841 | 32,850,534 | ||||||
FirstEnergy Corp. | 377,302 | 14,065,819 | ||||||
Hawaiian Electric Industries Inc. | 84,454 | 3,150,134 | ||||||
IDACORP Inc. | 39,109 | 3,647,305 | ||||||
NextEra Energy Inc. | 366,110 | 63,153,974 | ||||||
PG&E Corp. | 401,468 | 18,792,717 | ||||||
Pinnacle West Capital Corp. | 86,926 | 7,149,664 | ||||||
PNM Resources Inc. | 61,914 | 2,378,117 | ||||||
Portland General Electric Co. | 69,226 | 3,120,708 | ||||||
PPL Corp. | 543,082 | 16,509,693 | ||||||
Southern Co. (The) | 787,283 | 35,451,354 | ||||||
Xcel Energy Inc. | 395,208 | 19,369,144 | ||||||
|
| |||||||
364,706,165 | ||||||||
Gas Utilities — 5.2% | ||||||||
Atmos Energy Corp. | 86,327 | 8,035,317 | ||||||
National Fuel Gas Co. | 66,696 | 3,620,926 | ||||||
New Jersey Resources Corp. | 68,479 | 3,088,403 | ||||||
ONE Gas Inc. | 40,744 | 3,215,109 | ||||||
South Jersey Industries Inc. | 66,462 | 1,963,287 | ||||||
Southwest Gas Holdings Inc. | 38,113 | 2,944,992 | ||||||
Spire Inc. | 39,383 | 2,858,418 | ||||||
UGI Corp. | 134,971 | 7,161,561 | ||||||
|
| |||||||
32,888,013 | ||||||||
Independent Power and Renewable Electricity Producers — 3.6% |
| |||||||
AES Corp./VA | 513,671 | 7,489,323 | ||||||
NRG Energy Inc. | 235,554 | 8,524,699 | ||||||
Vistra Energy Corp.(a) | 314,033 | 7,106,567 | ||||||
|
| |||||||
23,120,589 | ||||||||
Multi-Utilities — 30.5% | ||||||||
Ameren Corp. | 189,450 | 12,234,681 |
Security | Shares | Value | ||||||
Multi-Utilities (continued) | ||||||||
Avista Corp. | 51,058 | $ | 2,625,402 | |||||
Black Hills Corp. | 41,658 | 2,478,651 | ||||||
CenterPoint Energy Inc. | 381,716 | 10,310,149 | ||||||
CMS Energy Corp. | 219,896 | 10,889,250 | ||||||
Consolidated Edison Inc. | 241,512 | 18,354,912 | ||||||
Dominion Energy Inc. | 507,524 | 36,247,364 | ||||||
DTE Energy Co. | 141,113 | 15,861,101 | ||||||
MDU Resources Group Inc. | 152,117 | 3,796,840 | ||||||
NiSource Inc. | 281,829 | 7,147,184 | ||||||
NorthWestern Corp. | 39,111 | 2,298,162 | ||||||
Public Service Enterprise Group Inc. | 392,287 | 20,959,895 | ||||||
SCANA Corp. | 110,698 | 4,433,455 | ||||||
Sempra Energy | 212,287 | 23,377,045 | ||||||
Vectren Corp. | 64,488 | 4,612,827 | ||||||
WEC Energy Group Inc. | 244,951 | 16,754,648 | ||||||
|
| |||||||
192,381,566 | ||||||||
Water Utilities — 2.7% | ||||||||
American Water Works Co. Inc. | 140,117 | 12,404,558 | ||||||
Aqua America Inc. | 138,116 | 4,492,914 | ||||||
|
| |||||||
16,897,472 | ||||||||
|
| |||||||
Total Common Stocks — 99.8% |
| |||||||
(Cost: $665,147,492) | 629,993,805 | |||||||
|
| |||||||
Short-Term Investments
|
| |||||||
Money Market Funds — 0.2% |
| |||||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 2.11%(b)(c)
| 924,799 | 924,799 | ||||||
|
| |||||||
Total Short-Term Investments — 0.2% |
| |||||||
(Cost: $924,799) | 924,799 | |||||||
|
| |||||||
Total Investments in Securities — 100.0% |
| |||||||
(Cost: $666,072,291) | 630,918,604 | |||||||
Other Assets, Less Liabilities — 0.0% |
| 47,780 | ||||||
|
| |||||||
Net Assets — 100.0% | $ | 630,966,384 | ||||||
|
|
(a) | Non-income producing security. |
(b) | Affiliate of the Fund. |
(c) | Annualized 7-day yield as of period-end. |
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:
Affiliated Issuer | | Shares Held at 04/30/18 |
| Net Activity | | Shares Held at 10/31/18 | | | Value at 10/31/18 | | Income | | Net Realized Gain (Loss) | (a) | | Change in Unrealized Appreciation (Depreciation) |
| |||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | — | — | — | $ | — | $ | 106 | (b) | $ | — | $ | — | ||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | 1,006,390 | (81,591 | ) | 924,799 | 924,799 | 9,707 | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
$ | 924,799 | $ | 9,813 | $ | — | $ | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
(b) | Includes securities lending income earned from the reinvestment of cash collateral from loaned securities (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities, and less fees paid to BTC as securities lending agent. |
34 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® U.S. Utilities ETF |
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, refer to the Notes to Financial Statements.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $ | 629,993,805 | $ | — | $ | — | $ | 629,993,805 | ||||||||
Money Market Funds | 924,799 | — | — | 924,799 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 630,918,604 | $ | — | $ | — | $ | 630,918,604 | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
S C H E D U L E O F I N V E S T M E N T S | 35 |
Statements of Assets and Liabilities (unaudited)
October 31, 2018
iShares Dow Jones U.S. ETF | iShares Transportation Average ETF | iShares U.S. Energy ETF | iShares U.S. Healthcare ETF | |||||||||||||||||
ASSETS | ||||||||||||||||||||
Investments in securities, at value (including securities on loan)(a): | ||||||||||||||||||||
Unaffiliated(b) | $ | 1,149,409,570 | $ | 713,627,731 | $ | 914,287,499 | $ | 2,339,696,031 | ||||||||||||
Affiliated(c) | 20,847,713 | 26,438,733 | 10,578,749 | 69,980,695 | ||||||||||||||||
Cash | 4,085 | — | — | — | ||||||||||||||||
Receivables: | ||||||||||||||||||||
Investments sold | 1,368,980 | 25,592,056 | — | — | ||||||||||||||||
Securities lending income — Affiliated | 4,772 | 4,553 | 3,739 | 9,518 | ||||||||||||||||
Capital shares sold | — | 10,067 | 7,993 | — | ||||||||||||||||
Dividends | 980,641 | 2,652 | 671,082 | 2,050,269 | ||||||||||||||||
Tax reclaims | 257 | — | — | — | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
Total assets | 1,172,616,018 | 765,675,792 | 925,549,062 | 2,411,736,513 | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
LIABILITIES | ||||||||||||||||||||
Collateral on securities loaned, at value | 15,238,754 | 25,413,449 | 10,121,097 | 66,750,013 | ||||||||||||||||
Payables: | ||||||||||||||||||||
Investments purchased | 1,889,011 | 25,325,137 | — | — | ||||||||||||||||
Capital shares redeemed | — | — | 9,386 | 33,320 | ||||||||||||||||
Investment advisory fees | 201,751 | 279,184 | 359,606 | 861,870 | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
Total liabilities | 17,329,516 | 51,017,770 | 10,490,089 | 67,645,203 | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
NET ASSETS | $ | 1,155,286,502 | $ | 714,658,022 | $ | 915,058,973 | $ | 2,344,091,310 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
NET ASSETS CONSIST OF: | ||||||||||||||||||||
Paid-in capital | $ | 761,893,987 | $ | 837,766,994 | $ | 1,306,657,900 | $ | 2,173,483,515 | ||||||||||||
Accumulated earnings (loss) | 393,392,515 | (123,108,972 | ) | (391,598,927 | ) | 170,607,795 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
NET ASSETS | $ | 1,155,286,502 | $ | 714,658,022 | $ | 915,058,973 | $ | 2,344,091,310 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
Shares outstanding | 8,550,000 | 3,900,000 | 24,700,000 | 12,450,000 | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
Net asset value | $ | 135.12 | $ | 183.25 | $ | 37.05 | $ | 188.28 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
Shares authorized | Unlimited | Unlimited | Unlimited | Unlimited | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
Par value | None | None | None | None | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
(a) Securities loaned, at value | $ | 15,090,052 | $ | 24,893,368 | $ | 9,886,580 | $ | 67,292,536 | ||||||||||||
(b) Investments, at cost — Unaffiliated | $ | 736,084,203 | $ | 827,732,687 | $ | 1,212,549,807 | $ | 2,149,491,781 | ||||||||||||
(c) Investments, at cost — Affiliated | $ | 19,016,227 | $ | 26,439,734 | $ | 10,577,259 | $ | 69,976,742 |
See notes to financial statements.
36 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statements of Assets and Liabilities (unaudited) (continued)
October 31, 2018
iShares U.S. Technology ETF | iShares U.S. Utilities ETF | |||||||||||
ASSETS | ||||||||||||
Investments in securities, at value (including securities on loan)(a): | ||||||||||||
Unaffiliated(b) | $ | 3,965,367,558 | $ | 629,993,805 | ||||||||
Affiliated(c) | 92,140,217 | 924,799 | ||||||||||
Receivables: | ||||||||||||
Investments sold | 89,020,915 | — | ||||||||||
Securities lending income — Affiliated | 21,453 | — | ||||||||||
Capital shares sold | — | 20,837 | ||||||||||
Dividends | 559,381 | 250,633 | ||||||||||
|
|
|
| |||||||||
Total assets | 4,147,109,524 | 631,190,074 | ||||||||||
|
|
|
| |||||||||
LIABILITIES | ||||||||||||
Collateral on securities loaned, at value | 88,186,152 | — | ||||||||||
Payables: | ||||||||||||
Investments purchased | 87,284,698 | — | ||||||||||
Capital shares redeemed | 46,449 | — | ||||||||||
Investment advisory fees | 1,476,038 | 223,690 | ||||||||||
|
|
|
| |||||||||
Total liabilities | 176,993,337 | 223,690 | ||||||||||
|
|
|
| |||||||||
NET ASSETS | $ | 3,970,116,187 | $ | 630,966,384 | ||||||||
|
|
|
| |||||||||
NET ASSETS CONSIST OF: | ||||||||||||
Paid-in capital | $ | 2,936,588,126 | $ | 677,743,523 | ||||||||
Accumulated earnings (loss) | 1,033,528,061 | (46,777,139 | ) | |||||||||
|
|
|
| |||||||||
NET ASSETS | $ | 3,970,116,187 | $ | 630,966,384 | ||||||||
|
|
|
| |||||||||
Shares outstanding | 22,350,000 | 4,650,000 | ||||||||||
|
|
|
| |||||||||
Net asset value | $ | 177.63 | $ | 135.69 | ||||||||
|
|
|
| |||||||||
Shares authorized | Unlimited | Unlimited | ||||||||||
|
|
|
| |||||||||
Par value | None | None | ||||||||||
|
|
|
| |||||||||
(a) Securities loaned, at value | $ | 90,999,003 | $ | — | ||||||||
(b) Investments, at cost — Unaffiliated | $ | 3,211,657,366 | $ | 665,147,492 | ||||||||
(c) Investments, at cost — Affiliated | $ | 92,136,443 | $ | 924,799 |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S | 37 |
Statements of Operations (unaudited)
Six Months Ended October 31, 2018
iShares Dow Jones U.S. ETF | iShares Transportation Average ETF | iShares ETF | iShares U.S. Healthcare | |||||||||||||
INVESTMENT INCOME | ||||||||||||||||
Dividends — Unaffiliated | $ | 11,438,953 | $ | 5,975,752 | $ | 14,419,254 | $ | 16,200,165 | ||||||||
Dividends — Affiliated | 87,079 | 8,607 | 12,457 | 20,839 | ||||||||||||
Securities lending income — Affiliated — net | 48,664 | 10,437 | 30,586 | 61,967 | ||||||||||||
Foreign taxes withheld | (752 | ) | — | (3,445 | ) | — | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total investment income | 11,573,944 | 5,994,796 | 14,458,852 | 16,282,971 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
EXPENSES | ||||||||||||||||
Investment advisory fees | 1,206,506 | 1,771,937 | 2,262,641 | 4,434,242 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total expenses | 1,206,506 | 1,771,937 | 2,262,641 | 4,434,242 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net investment income | 10,367,438 | 4,222,859 | 12,196,211 | 11,848,729 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||
Investments — Unaffiliated | (7,033,830 | ) | (8,339,855 | ) | (14,401,874 | ) | (21,776,981 | ) | ||||||||
Investments — Affiliated | (8,530 | ) | 981 | 1,804 | 4,942 | |||||||||||
In-kind redemptions — Unaffiliated | 5,491,484 | 31,347,382 | 17,554,995 | 30,675,247 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net realized gain (loss) | (1,550,876 | ) | 23,008,508 | 3,154,925 | 8,903,208 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
Investments — Unaffiliated | 24,076,864 | (45,841,503 | ) | (87,209,250 | ) | 127,479,783 | ||||||||||
Investments — Affiliated | (934,353 | ) | (1,441 | ) | (172 | ) | 1,208 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net change in unrealized appreciation (depreciation) | 23,142,511 | (45,842,944 | ) | (87,209,422 | ) | 127,480,991 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net realized and unrealized gain (loss) | 21,591,635 | (22,834,436 | ) | (84,054,497 | ) | 136,384,199 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | 31,959,073 | $ | (18,611,577 | ) | $ | (71,858,286 | ) | $ | 148,232,928 | ||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
38 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statements of Operations (unaudited) (continued)
Six Months Ended October 31, 2018
iShares | iShares ETF | |||||||
INVESTMENT INCOME | ||||||||
Dividends — Unaffiliated | $ | 26,783,139 | $ | 10,214,897 | ||||
Dividends — Affiliated | 40,464 | 9,707 | ||||||
Securities lending income — Affiliated — net | 137,400 | 106 | ||||||
|
|
|
| |||||
Total investment income | 26,961,003 | 10,224,710 | ||||||
|
|
|
| |||||
EXPENSES | ||||||||
Investment advisory fees | 9,019,449 | 1,291,130 | ||||||
|
|
|
| |||||
Total expenses | 9,019,449 | 1,291,130 | ||||||
|
|
|
| |||||
Net investment income | 17,941,554 | 8,933,580 | ||||||
|
|
|
| |||||
REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||
Net realized gain (loss) from: | ||||||||
Investments — Unaffiliated | (29,479,387 | ) | (2,418,647 | ) | ||||
Investments — Affiliated | 3,090 | — | ||||||
In-kind redemptions — Unaffiliated | 357,945,471 | 6,591,756 | ||||||
|
|
|
| |||||
Net realized gain | 328,469,174 | 4,173,109 | ||||||
|
|
|
| |||||
Net change in unrealized appreciation (depreciation) on: | ||||||||
Investments — Unaffiliated | (92,532,672 | ) | 18,737,928 | |||||
Investments — Affiliated | (2,766 | ) | — | |||||
|
|
|
| |||||
Net change in unrealized appreciation (depreciation) | (92,535,438 | ) | 18,737,928 | |||||
|
|
|
| |||||
Net realized and unrealized gain | 235,933,736 | 22,911,037 | ||||||
|
|
|
| |||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 253,875,290 | $ | 31,844,617 | ||||
|
|
|
|
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S | 39 |
Statements of Changes in Net Assets
iShares Dow Jones U.S. ETF | iShares Transportation Average ETF | |||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | |||||||||||||
| ||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS | ||||||||||||||||
Net investment income | $ | 10,367,438 | $ | 19,175,995 | $ | 4,222,859 | $ | 9,493,277 | ||||||||
Net realized gain (loss) | (1,550,876 | ) | 65,460,123 | 23,008,508 | 111,228,985 | |||||||||||
Net change in unrealized appreciation (depreciation) | 23,142,511 | 49,118,732 | (45,842,944 | ) | 388,801 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 31,959,073 | 133,754,850 | (18,611,577 | ) | 121,111,063 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS(a) | ||||||||||||||||
Decrease in net assets resulting from distributions to shareholders | (9,761,261 | ) | (19,044,585 | ) | (4,554,198 | ) | (9,873,738 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS | ||||||||||||||||
Net increase (decrease) in net assets derived from capital share transactions | 6,918,224 | (99,411,786 | ) | (69,525,331 | ) | (270,486,167 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
NET ASSETS(a) | ||||||||||||||||
Total increase (decrease) in net assets | 29,116,036 | 15,298,479 | (92,691,106 | ) | (159,248,842 | ) | ||||||||||
Beginning of period | 1,126,170,466 | 1,110,871,987 | 807,349,128 | 966,597,970 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 1,155,286,502 | $ | 1,126,170,466 | $ | 714,658,022 | $ | 807,349,128 | ||||||||
|
|
|
|
|
|
|
|
(a) | Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 11 for this prior year information. |
See notes to financial statements.
40 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statements of Changes in Net Assets (continued)
iShares U.S. Energy ETF | iShares U.S. Healthcare ETF | |||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | |||||||||||||
| ||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS | ||||||||||||||||
Net investment income | $ | 12,196,211 | $ | 31,513,912 | $ | 11,848,729 | $ | 22,978,181 | ||||||||
Net realized gain (loss) | 3,154,925 | (49,222,345 | ) | 8,903,208 | 120,984,256 | |||||||||||
Net change in unrealized appreciation (depreciation) | (87,209,422 | ) | 126,173,642 | 127,480,991 | 58,781,141 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | (71,858,286 | ) | 108,465,209 | 148,232,928 | 202,743,578 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS(a) | ||||||||||||||||
Decrease in net assets resulting from distributions to shareholders | (11,825,430 | ) | (31,781,233 | ) | (11,478,564 | ) | (22,513,635 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS | ||||||||||||||||
Net increase (decrease) in net assets derived from capital share transactions | (89,997,542 | ) | (147,069,226 | ) | 407,001,020 | (291,280,142 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
NET ASSETS(a) | ||||||||||||||||
Total increase (decrease) in net assets | (173,681,258 | ) | (70,385,250 | ) | 543,755,384 | (111,050,199 | ) | |||||||||
Beginning of period | 1,088,740,231 | 1,159,125,481 | 1,800,335,926 | 1,911,386,125 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 915,058,973 | $ | 1,088,740,231 | $ | 2,344,091,310 | $ | 1,800,335,926 | ||||||||
|
|
|
|
|
|
|
|
(a) | Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 11 for this prior year information. |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S | 41 |
Statements of Changes in Net Assets (continued)
iShares U.S. Technology ETF | iShares U.S. Utilities ETF | |||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | |||||||||||||
| ||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS | ||||||||||||||||
Net investment income | $ | 17,941,554 | $ | 31,015,327 | $ | 8,933,580 | $ | 21,586,046 | ||||||||
Net realized gain | 328,469,174 | 431,737,303 | 4,173,109 | 19,531,434 | ||||||||||||
Net change in unrealized appreciation (depreciation) | (92,535,438 | ) | 296,198,807 | 18,737,928 | (34,065,783 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 253,875,290 | 758,951,437 | 31,844,617 | 7,051,697 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS(a) | ||||||||||||||||
Decrease in net assets resulting from distributions to shareholders | (17,196,965 | ) | (33,204,002 | ) | (8,905,497 | ) | (21,100,758 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS | ||||||||||||||||
Net increase (decrease) in net assets derived from capital share transactions | (297,933,959 | ) | (86,609,508 | ) | 1,540,854 | (181,137,383 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
NET ASSETS(a) | ||||||||||||||||
Total increase (decrease) in net assets | (61,255,634 | ) | 639,137,927 | 24,479,974 | (195,186,444 | ) | ||||||||||
Beginning of period | 4,031,371,821 | 3,392,233,894 | 606,486,410 | 801,672,854 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 3,970,116,187 | $ | 4,031,371,821 | $ | 630,966,384 | $ | 606,486,410 | ||||||||
|
|
|
|
|
|
|
|
(a) | Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 11 for this prior year information. |
See notes to financial statements.
42 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
(For a share outstanding throughout each period)
iShares Dow Jones U.S. ETF | ||||||||||||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Year Ended 04/30/17 | Year Ended 04/30/16 | Year Ended 04/30/15 | Year Ended 04/30/14 | |||||||||||||||||||
| ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 132.49 | $ | 119.45 | $ | 103.06 | $ | 105.32 | $ | 95.10 | $ | 80.50 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income(a) | 1.21 | 2.19 | 2.01 | 1.92 | 1.77 | 1.57 | ||||||||||||||||||
Net realized and unrealized gain (loss)(b) | 2.56 | 13.03 | 16.40 | (2.11 | ) | 10.22 | 14.58 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase (decrease) from investment operations. | 3.77 | 15.22 | 18.41 | (0.19 | ) | 11.99 | 16.15 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Distributions | ||||||||||||||||||||||||
From net investment income | (1.14 | ) | (2.18 | ) | (2.02 | ) | (2.07 | ) | (1.77 | ) | (1.55 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (1.14 | ) | (2.18 | ) | (2.02 | ) | (2.07 | ) | (1.77 | ) | (1.55 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 135.12 | $ | 132.49 | $ | 119.45 | $ | 103.06 | $ | 105.32 | $ | 95.10 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Return | ||||||||||||||||||||||||
Based on net asset value | 2.81 | %(c) | 12.81 | % | 18.04 | % | (0.14 | )% | 12.68 | % | 20.23 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||||||
Total expenses | 0.20 | %(d) | 0.20 | % | 0.20 | % | 0.20 | % | 0.20 | % | 0.20 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income | 1.72 | %(d) | 1.70 | % | 1.82 | % | 1.88 | % | 1.74 | % | 1.78 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 1,155,287 | $ | 1,126,170 | $ | 1,110,872 | $ | 917,234 | $ | 968,917 | $ | 889,168 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Portfolio turnover rate(e) | 3 | %(c) | 4 | % | 4 | % | 4 | % | 4 | % | 5 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(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. |
(e) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
F I N A N C I A L H I G H L I G H T S | 43 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares Transportation Average ETF | ||||||||||||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Year Ended 04/30/17 | Year Ended 04/30/16 | Year Ended 04/30/15 | Year Ended 04/30/14 | |||||||||||||||||||
| ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 187.76 | $ | 163.83 | $ | 141.18 | $ | 153.92 | $ | 137.21 | $ | 110.07 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income(a) | 1.00 | 1.91 | 1.54 | 1.50 | 1.24 | 1.24 | ||||||||||||||||||
Net realized and unrealized gain (loss)(b) | (4.46 | ) | 24.02 | 22.75 | (12.63 | ) | 16.73 | 27.13 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase (decrease) from investment operations | (3.46 | ) | 25.93 | 24.29 | (11.13 | ) | 17.97 | 28.37 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Distributions | ||||||||||||||||||||||||
From net investment income | (1.05 | ) | (2.00 | ) | (1.64 | ) | (1.61 | ) | (1.26 | ) | (1.23 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (1.05 | ) | (2.00 | ) | (1.64 | ) | (1.61 | ) | (1.26 | ) | (1.23 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 183.25 | $ | 187.76 | $ | 163.83 | $ | 141.18 | $ | 153.92 | $ | 137.21 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Return | ||||||||||||||||||||||||
Based on net asset value | (1.88 | )%(c) | 15.88 | % | 17.32 | % | (7.24 | )% | 13.10 | % | 25.91 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||||||
Total expenses | 0.42 | %(d) | 0.43 | % | 0.44 | % | 0.44 | % | 0.43 | % | 0.45 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income | 1.01 | %(d) | 1.07 | % | 0.99 | % | 1.05 | % | 0.80 | % | 1.00 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 714,658 | $ | 807,349 | $ | 966,598 | $ | 564,723 | $ | 1,192,848 | $ | 857,587 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Portfolio turnover rate(e) | 7 | %(c) | 5 | % | 5 | % | 11 | % | 22 | % | 12 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(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. |
(e) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
44 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares U.S. Energy ETF | ||||||||||||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Year Ended 04/30/17 | Year Ended 04/30/16 | Year Ended 04/30/15 | Year Ended 04/30/14 | |||||||||||||||||||
| ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 40.47 | $ | 37.27 | $ | 37.91 | $ | 46.62 | $ | 53.49 | $ | 44.70 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income(a) | 0.47 | 1.07 | 0.84 | 1.06 | 1.02 | 0.77 | ||||||||||||||||||
Net realized and unrealized gain (loss)(b) | (3.42 | ) | 3.25 | (0.62 | ) | (8.66 | ) | (6.87 | ) | 8.77 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase (decrease) from investment operations | (2.95 | ) | 4.32 | 0.22 | (7.60 | ) | (5.85 | ) | 9.54 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Distributions | ||||||||||||||||||||||||
From net investment income | (0.47 | ) | (1.12 | ) | (0.86 | ) | (1.11 | ) | (1.02 | ) | (0.75 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (0.47 | ) | (1.12 | ) | (0.86 | ) | (1.11 | ) | (1.02 | ) | (0.75 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 37.05 | $ | 40.47 | $ | 37.27 | $ | 37.91 | $ | 46.62 | $ | 53.49 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Return | ||||||||||||||||||||||||
Based on net asset value | (7.41 | )%(c) | 11.92 | % | 0.52 | % | (16.20 | )% | (11.03 | )% | 21.57 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||||||
Total expenses | 0.42 | %(d) | 0.43 | % | 0.44 | % | 0.44 | % | 0.43 | % | 0.45 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income | 2.28 | %(d) | 2.87 | % | 2.17 | % | 2.80 | % | 2.04 | % | 1.58 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 915,059 | $ | 1,088,740 | $ | 1,159,125 | $ | 1,249,003 | $ | 2,219,116 | $ | 2,414,897 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Portfolio turnover rate(e) | 3 | %(c) | 6 | % | 18 | % | 15 | % | 7 | % | 6 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(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. |
(e) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
F I N A N C I A L H I G H L I G H T S | 45 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares U.S. Healthcare ETF | ||||||||||||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Year Ended 04/30/17 | Year Ended 04/30/16 | Year Ended 04/30/15 | Year Ended 04/30/14 | |||||||||||||||||||
| ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 173.95 | $ | 158.62 | $ | 144.67 | $ | 151.70 | $ | 122.07 | $ | 99.61 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income(a) | 1.07 | 1.99 | 1.81 | 1.70 | 1.45 | 1.37 | ||||||||||||||||||
Net realized and unrealized gain (loss)(b) | 14.29 | 15.31 | 14.07 | (5.63 | ) | 29.70 | 22.39 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase (decrease) from investment operations | 15.36 | 17.30 | 15.88 | (3.93 | ) | 31.15 | 23.76 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Distributions | ||||||||||||||||||||||||
From net investment income | (1.03 | ) | (1.97 | ) | (1.93 | ) | (3.10 | ) | (1.52 | ) | (1.30 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (1.03 | ) | (1.97 | ) | (1.93 | ) | (3.10 | ) | (1.52 | ) | (1.30 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 188.28 | $ | 173.95 | $ | 158.62 | $ | 144.67 | $ | 151.70 | $ | 122.07 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Return | ||||||||||||||||||||||||
Based on net asset value | 8.83 | %(c) | 10.93 | % | 11.06 | % | (2.64 | )% | 25.64 | % | 23.99 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||||||
Total expenses | 0.42 | %(d) | 0.43 | % | 0.44 | % | 0.44 | % | 0.43 | % | 0.45 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income | 1.13 | %(d) | 1.16 | % | 1.21 | % | 1.13 | % | 1.05 | % | 1.21 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 2,344,091 | $ | 1,800,336 | $ | 1,911,386 | $ | 1,808,437 | $ | 2,358,873 | $ | 2,703,810 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Portfolio turnover rate(e) | 4 | %(c) | 7 | % | 6 | % | 7 | % | 8 | % | 5 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(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. |
(e) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
46 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares U.S. Technology ETF | ||||||||||||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Year Ended 04/30/17 | Year Ended 04/30/16 | Year Ended 04/30/15 | Year Ended 04/30/14 | |||||||||||||||||||
| ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 167.97 | $ | 138.18 | $ | 102.30 | $ | 107.28 | $ | 90.83 | $ | 73.63 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income(a) | 0.78 | 1.26 | 1.33 | 1.30 | 1.20 | 1.01 | ||||||||||||||||||
Net realized and unrealized gain (loss)(b) | 9.64 | 29.88 | 35.87 | (4.97 | ) | 16.47 | 17.18 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase (decrease) from investment operations | 10.42 | 31.14 | 37.20 | (3.67 | ) | 17.67 | 18.19 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Distributions | ||||||||||||||||||||||||
From net investment income | (0.76 | ) | (1.35 | ) | (1.32 | ) | (1.31 | ) | (1.22 | ) | (0.99 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (0.76 | ) | (1.35 | ) | (1.32 | ) | (1.31 | ) | (1.22 | ) | (0.99 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 177.63 | $ | 167.97 | $ | 138.18 | $ | 102.30 | $ | 107.28 | $ | 90.83 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Return | ||||||||||||||||||||||||
Based on net asset value | 6.18 | %(c) | 22.62 | % | 36.57 | % | (3.45 | )% | 19.53 | % | 24.84 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||||||
Total expenses | 0.42 | %(d) | 0.43 | % | 0.44 | % | 0.44 | % | 0.43 | % | 0.45 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income | 0.84 | %(d) | 0.80 | % | 1.11 | % | 1.24 | % | 1.18 | % | 1.21 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 3,970,116 | $ | 4,031,372 | $ | 3,392,234 | $ | 2,393,714 | $ | 2,869,743 | $ | 3,946,472 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Portfolio turnover rate(e) | 10 | %(c) | 15 | % | 4 | % | 8 | % | 8 | % | 9 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(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. |
(e) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
F I N A N C I A L H I G H L I G H T S | 47 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares U.S. Utilities ETF | ||||||||||||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Year Ended 04/30/17 | Year Ended 04/30/16 | Year Ended 04/30/15 | Year Ended 04/30/14 | |||||||||||||||||||
| ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 130.43 | $ | 129.30 | $ | 121.09 | $ | 111.09 | $ | 108.15 | $ | 102.50 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income(a) | 1.96 | 3.79 | 3.69 | 3.37 | 3.31 | 3.28 | ||||||||||||||||||
Net realized and unrealized gain(b) | 5.28 | 0.84 | 8.46 | 11.18 | 3.11 | 5.60 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase from investment operations | 7.24 | 4.63 | 12.15 | 14.55 | 6.42 | 8.88 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Distributions | ||||||||||||||||||||||||
From net investment income | (1.98 | ) | (3.50 | ) | (3.94 | ) | (4.55 | ) | (3.48 | ) | (3.23 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (1.98 | ) | (3.50 | ) | (3.94 | ) | (4.55 | ) | (3.48 | ) | (3.23 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 135.69 | $ | 130.43 | $ | 129.30 | $ | 121.09 | $ | 111.09 | $ | 108.15 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Return | ||||||||||||||||||||||||
Based on net asset value | 5.61 | %(c) | 3.59 | % | 10.16 | % | 13.61 | % | 5.97 | % | 9.08 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||||||
Total expenses | 0.42 | %(d) | 0.43 | % | 0.44 | % | 0.44 | % | 0.43 | % | 0.45 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income | 2.92 | %(d) | 2.86 | % | 2.96 | % | 3.02 | % | 2.96 | % | 3.38 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 630,966 | $ | 606,486 | $ | 801,673 | $ | 1,065,624 | $ | 649,849 | $ | 740,802 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Portfolio turnover rate(e) | 3 | %(c) | 5 | % | 9 | % | 6 | % | 3 | % | 8 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(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. |
(e) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
48 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (unaudited)
1. | ORGANIZATION |
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 is organized as a Delaware statutory trust and is authorized to have multiple series or portfolios.
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 |
2. | 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 increases and decreases in net assets from operations 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.
Investment Transactions and Income Recognition: Investment 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 are reflected in tax reclaims receivable. 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. Upon notification from issuers, some of the dividend income received from a real estate investment trust may be re-designated as a return of capital or capital gain. Non-cash dividends, if any, are recognized on the ex-dividend date and recorded as non-cash dividend income at fair value. Interest income is accrued daily.
In-kind Redemptions: For financial reporting purposes, 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 net asset value per share.
Distributions: 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.
Recent Accounting Standards: In August 2018, the Financial Accounting Standards Board issued Accounting Standards Update 2018-13 “Changes to the Disclosure Requirements for Fair Value Measurement” which modifies disclosure requirements for fair value measurements. The guidance is effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. Management is currently evaluating the impact of this guidance to the Funds.
Indemnifications: In the normal course of business, each Fund enters into contracts that contain a variety of representations that provide general indemnification. The Funds’ maximum exposure under these arrangements is unknown because it involves future potential claims against the Funds, which cannot be predicted with any certainty.
3. | INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS |
Investment Valuation Policies: Each Fund’s investments are valued at fair value (also referred to as “market value” within the financial statements) 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. A fund determines the fair value of its financial instruments using various independent dealers or pricing services under policies approved by the Board of Trustees of the Trust (the “Board”). The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) is the committee formed by management to develop global pricing policies and procedures and to oversee the pricing function for all financial instruments.
Fair Value Inputs and Methodologies: The following methods and inputs are used to establish the fair value of each Fund’s assets and liabilities:
• | Equity investments traded on a recognized securities exchange are valued at that day’s last traded price or 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. |
• | Investments in open-end U.S. mutual funds (including money market funds) are valued at that day’s published net asset value (“NAV”). |
N O T E S T O F I N A N C I A L S T A T E M E N T S | 49 |
Notes to Financial Statements (unaudited) (continued)
If events (e.g., a company announcement, market volatility or a natural disaster) occur that are expected to materially affect the value of an investment, or in the event that application of these methods of valuation results in a price for an investment that is deemed not to be representative of the market 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 as reflecting fair value (“Fair Valued Investments”). The fair valuation approaches that may be used by the Global Valuation Committee include market approach, income approach and the cost approach. 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.
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, regular reviews 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 and large movements in market values, and reviews of any market related activity. The pricing of all Fair Valued Investments is subsequently reported to the Board on a quarterly basis.
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.
Fair Value Hierarchy: Various inputs are used in determining the fair value of financial instruments. 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 price quotations 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, but not limited to, quoted prices for similar assets or liabilities in markets that are active, 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 interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs; and |
• | Level 3 – Unobservable inputs 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 financial instruments). |
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 into or out of an assigned level within the 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 a value determined for financial instruments is based on the pricing transparency of the financial instruments and is not necessarily an indication of the risks associated with investing in those securities.
4. | SECURITIES AND OTHER INVESTMENTS |
Securities Lending: Each Fund may lend its 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 market 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 Fund and any additional required collateral is delivered to the Fund or excess collateral is returned by the Fund, 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.
As of October 31, 2018, 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 BlackRock Fund Advisors (“BFA”), the Funds’ investment adviser, or its affiliates 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, if any, are also disclosed in its schedule of investments. The market value of any securities on loan as of October 31, 2018 and the value of the related cash collateral are disclosed in the statements of assets and liabilities.
Securities lending transactions are entered into by a fund under Master Securities Lending Agreements (each, an “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, the 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 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, absent an event of default, the borrower can resell or re-pledge the loaned securities, and the fund can reinvest cash collateral received in connection with loaned securities.
50 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (unaudited) (continued)
The following table is a summary of the securities lending agreements by counterparty which are subject to offset under an MSLA as of October 31, 2018:
iShares ETF and Counterparty | Market Value of Securities on Loan | Cash Collateral Received(a) | Non-Cash Collateral Received | Net Amount | ||||||||||||
Dow Jones U.S. | ||||||||||||||||
Barclays Bank PLC | $ | 385,015 | $ | 385,015 | $ | — | $ | — | ||||||||
Barclays Capital Inc. | 125,631 | 125,631 | — | — | ||||||||||||
BMO Capital Markets | 93,719 | 93,719 | — | — | ||||||||||||
BNP Paribas New York Branch | 880 | 880 | — | — | ||||||||||||
BNP Paribas Prime Brokerage International Ltd. | 308,924 | 308,924 | — | — | ||||||||||||
BNP Paribas Securities Corp. | 356 | 356 | — | — | ||||||||||||
Citigroup Global Markets Inc. | 2,200,826 | 2,200,826 | — | — | ||||||||||||
Credit Suisse Securities (USA) LLC | 448,846 | 448,846 | — | — | ||||||||||||
Deutsche Bank Securities Inc. | 230,492 | 230,492 | — | — | ||||||||||||
Goldman Sachs & Co. | 602,861 | 602,861 | — | — | ||||||||||||
HSBC Bank PLC | 658,724 | 658,724 | — | — | ||||||||||||
ING Financial Markets LLC | 106,032 | 106,032 | — | — | ||||||||||||
JPMorgan Securities LLC | 2,211,596 | 2,211,596 | — | — | ||||||||||||
Merrill Lynch, Pierce, Fenner & Smith | 2,239,517 | 2,239,517 | — | — | ||||||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 2,387,418 | 2,387,418 | — | — | ||||||||||||
National Financial Services LLC | 415,395 | 415,395 | — | — | ||||||||||||
Nomura Securities International Inc. | 120,639 | 120,639 | — | — | ||||||||||||
RBC Capital Markets LLC | 52,478 | 52,478 | — | — | ||||||||||||
Scotia Capital (USA) Inc. | 47,155 | 47,155 | — | — | ||||||||||||
State Street Bank & Trust Company | 326,736 | 326,736 | — | — | ||||||||||||
TD Prime Services LLC | 115,861 | 115,861 | — | — | ||||||||||||
UBS AG | 440,358 | 440,358 | — | — | ||||||||||||
UBS Securities LLC | 714,070 | 714,070 | — | — | ||||||||||||
Wells Fargo Securities LLC | 856,523 | 856,523 | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 15,090,052 | $ | 15,090,052 | $ | — | $ | — | |||||||||
|
|
|
|
|
|
|
| |||||||||
Transportation Average | ||||||||||||||||
BNP Paribas New York Branch | $ | 1,363,612 | $ | 1,363,612 | $ | — | $ | — | ||||||||
Citigroup Global Markets Inc. | 152,585 | 152,585 | — | — | ||||||||||||
Goldman Sachs & Co. | 2,135,770 | 2,135,770 | — | — | ||||||||||||
Merrill Lynch, Pierce, Fenner & Smith | 20,700,663 | 20,700,663 | — | — | ||||||||||||
State Street Bank & Trust Company | 84,437 | 84,437 | — | — | ||||||||||||
Wells Fargo Bank, National Association | 456,301 | 456,301 | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 24,893,368 | $ | 24,893,368 | $ | — | $ | — | |||||||||
|
|
|
|
|
|
|
| |||||||||
U.S. Energy | ||||||||||||||||
Credit Suisse Securities (USA) LLC | $ | 2,952,820 | $ | 2,952,820 | $ | — | $ | — | ||||||||
Deutsche Bank Securities Inc. | 974 | 974 | — | — | ||||||||||||
Goldman Sachs & Co. | 1,073,132 | 1,073,132 | — | — | ||||||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 3,430,532 | 3,430,532 | — | — | ||||||||||||
National Financial Services LLC | 144,077 | 144,077 | — | — | ||||||||||||
UBS AG | 542,220 | 542,220 | — | — | ||||||||||||
UBS Securities LLC | 405,877 | 405,877 | — | — | ||||||||||||
Wells Fargo Bank, National Association | 1,100,138 | 1,100,138 | — | — | ||||||||||||
Wells Fargo Securities LLC | 236,810 | 236,810 | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 9,886,580 | $ | 9,886,580 | $ | — | $ | — | |||||||||
|
|
|
|
|
|
|
|
N O T E S T O F I N A N C I A L S T A T E M E N T S | 51 |
Notes to Financial Statements (unaudited) (continued)
iShares ETF and Counterparty | Market Value of Securities on Loan | Cash Collateral Received(a) | Non-Cash Collateral Received | Net Amount | ||||||||||||
U.S. Healthcare | ||||||||||||||||
Barclays Bank PLC | $ | 2,002,481 | $ | 2,002,481 | $ | — | $ | — | ||||||||
Barclays Capital Inc. | 12,893,804 | 12,893,804 | — | — | ||||||||||||
BNP Paribas Securities Corp. | 952,470 | 952,470 | — | — | ||||||||||||
Citigroup Global Markets Inc. | 4,550,475 | 4,550,475 | — | — | ||||||||||||
Credit Suisse Securities (USA) LLC | 6,494,433 | 6,494,433 | — | — | ||||||||||||
Deutsche Bank Securities Inc. | 83,258 | 83,258 | — | — | ||||||||||||
Goldman Sachs & Co. | 484,023 | 484,023 | — | — | ||||||||||||
HSBC Bank PLC | 2,337,625 | 2,337,625 | — | — | ||||||||||||
JPMorgan Securities LLC | 4,593,866 | 4,593,866 | — | — | ||||||||||||
Merrill Lynch, Pierce, Fenner & Smith | 9,901,294 | 9,901,294 | — | — | ||||||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 11,956,804 | 11,956,804 | — | — | ||||||||||||
Nomura Securities International Inc. | 890,986 | 890,986 | — | — | ||||||||||||
State Street Bank & Trust Company | 323,945 | 323,945 | — | — | ||||||||||||
TD Prime Services LLC | 7,484,277 | 7,484,277 | — | — | ||||||||||||
UBS AG | 289,194 | 289,194 | — | — | ||||||||||||
UBS Securities LLC | 1,520,612 | 1,520,612 | — | — | ||||||||||||
Wells Fargo Bank, National Association | 199,928 | 199,928 | — | — | ||||||||||||
Wells Fargo Securities LLC | 333,061 | 333,061 | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 67,292,536 | $ | 67,292,536 | $ | — | $ | — | |||||||||
|
|
|
|
|
|
|
| |||||||||
U.S. Technology | ||||||||||||||||
Barclays Bank PLC | $ | 2,533,095 | $ | 2,533,095 | $ | — | $ | — | ||||||||
BNP Paribas Securities Corp. | 567,729 | 567,729 | — | — | ||||||||||||
Citigroup Global Markets Inc. | 3,885,321 | 3,885,321 | — | — | ||||||||||||
Credit Suisse Securities (USA) LLC | 5,413,717 | 5,413,717 | — | — | ||||||||||||
Deutsche Bank Securities Inc. | 134,951 | 134,951 | — | — | ||||||||||||
Goldman Sachs & Co. | 3,408,142 | 3,408,142 | — | — | ||||||||||||
ING Financial Markets LLC | 1,522,185 | 1,522,185 | — | — | ||||||||||||
JPMorgan Securities LLC | 38,952,651 | 38,952,651 | — | — | ||||||||||||
Merrill Lynch, Pierce, Fenner & Smith | 7,695,029 | 7,695,029 | — | — | ||||||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 374,721 | 374,721 | — | — | ||||||||||||
National Financial Services LLC | 786,035 | 786,035 | — | — | ||||||||||||
RBC Capital Markets LLC | 22,179,571 | 22,179,571 | — | — | ||||||||||||
State Street Bank & Trust Company | 324,882 | 324,882 | — | — | ||||||||||||
UBS AG | 108,016 | 108,016 | — | — | ||||||||||||
Wells Fargo Securities LLC | 3,112,958 | 3,112,958 | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 90,999,003 | $ | 90,999,003 | $ | — | $ | — | |||||||||
|
|
|
|
|
|
|
|
(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. |
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, each Fund benefits from a borrower default indemnity provided by BlackRock, Inc. (“BlackRock”). BlackRock’s indemnity allows for full replacement of the 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 market 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. Such losses are borne entirely by each Fund.
5. | INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES |
Investment Advisory Fees: 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.
52 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (unaudited) (continued)
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:
Aggregate Average Daily Net Assets | Investment Advisory Fee | |||
First $10 billion | 0.48 | % | ||
Over $10 billion, up to and including $20 billion | 0.43 | |||
Over $20 billion, up to and including $30 billion | 0.38 | |||
Over $30 billion, up to and including $40 billion | 0.34 | |||
Over $40 billion, up to and including $50 billion | 0.33 | |||
Over $50 billion | 0.31 |
Distributor: 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.
Securities Lending: The U.S. Securities and Exchange Commission (the “SEC”) 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, or its affiliates, 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 (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities. Each Fund retains a portion of securities lending income and remits 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 (which excludes collateral investment fees) 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.
The share of securities lending income earned by each Fund is shown as securities lending income – affiliated – net in its statement of operations. For the six months ended October 31, 2018, the Funds paid BTC the following amounts for securities lending agent services:
iShares ETF | Fees Paid to BTC | |||
Dow Jones U.S. | $ | 21,251 | ||
Transportation Average | 5,205 | |||
U.S. Energy | 15,130 | |||
U.S. Healthcare | 29,994 | |||
U.S. Technology | 65,144 | |||
U.S. Utilities | 53 |
Officers and Trustees: Certain officers and/or trustees of the Trust are officers and/or trustees of BlackRock or its affiliates.
Other Transactions: The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate of BlackRock for 1940 Act purposes.
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, 2018, 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. | $ | 8,854,369 | $ | 5,892,440 | ||||
U.S. Energy | 4,961,291 | 4,365,215 | ||||||
U.S. Healthcare | 26,642,613 | 16,771,393 | ||||||
U.S. Technology | 37,958,330 | 40,947,644 | ||||||
U.S. Utilities | 2,899,231 | 1,752,639 |
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 shown as dividends – affiliated in the statement of operations.
N O T E S T O F I N A N C I A L S T A T E M E N T S | 53 |
Notes to Financial Statements (unaudited) (continued)
A fund, in order to improve its portfolio liquidity and its ability to track its underlying index, may invest in shares of other iShares funds that invest in securities in the fund’s underlying index.
6. | PURCHASES AND SALES |
For the six months ended October 31, 2018, purchases and sales of investments, excluding in-kind transactions and short-term investments, were as follows:
iShares ETF | Purchases | Sales | ||||||
Dow Jones U.S. | $ | 42,981,448 | $ | 33,754,138 | ||||
Transportation Average | 55,615,948 | 56,840,297 | ||||||
U.S. Energy | 35,731,890 | 33,025,501 | ||||||
U.S. Healthcare | 75,429,929 | 76,132,384 | ||||||
U.S. Technology | 423,177,252 | 422,746,779 | ||||||
U.S. Utilities | 18,245,700 | 18,227,626 |
For the six months ended October 31, 2018, in-kind transactions were as follows:
iShares ETF | In-kind Purchases | In-kind Sales | ||||||
Dow Jones U.S. | $ | 14,191,736 | $ | 7,180,301 | ||||
Transportation Average | 728,788,217 | 798,373,482 | ||||||
U.S. Energy | 172,295,015 | 261,910,202 | ||||||
U.S. Healthcare | 534,069,740 | 129,315,937 | ||||||
U.S. Technology | 561,520,221 | 857,990,967 | ||||||
U.S. Utilities | 140,339,137 | 138,794,559 |
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.
Management has analyzed tax laws and regulations and their application to the Funds as of October 31, 2018, inclusive of the open tax return years, and does not believe that there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.
As of April 30, 2018, 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 2019 | Total | |||||||||
Dow Jones U.S. | $ | — | $ | 2,653,096 | $ | 2,653,096 | ||||||
Transportation Average | 23,015,684 | 4,851,034 | 27,866,718 | |||||||||
U.S. Energy | 55,658,360 | 10,785,190 | 66,443,550 | |||||||||
U.S. Healthcare | 11,633,268 | 2,243,166 | 13,876,434 | |||||||||
U.S. Technology | 9,036,658 | 6,381,458 | 15,418,116 | |||||||||
U.S. Utilities | 9,554,854 | 5,497,127 | 15,051,981 |
(a) | Must be utilized prior to losses subject to expiration. |
As of October 31, 2018, gross unrealized appreciation and depreciation based on cost of investments (including short positions and derivatives, if any) for U.S. federal income tax purposes were as follows:
iShares ETF | Tax Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation (Depreciation) | ||||||||||||
Dow Jones U.S. | $ | 774,199,036 | $ | 454,766,615 | $ | (58,708,368) | $ | 396,058,247 | ||||||||
Transportation Average | 857,985,887 | 2,440,925 | (120,360,348) | (117,919,423) | ||||||||||||
U.S. Energy | 1,253,566,404 | 13,840,805 | (342,540,961) | (328,700,156) | ||||||||||||
U.S. Healthcare | 2,235,861,970 | 367,797,060 | (193,982,304) | 173,814,756 | ||||||||||||
U.S. Technology | 3,337,775,361 | 862,415,675 | (142,683,261) | 719,732,414 | ||||||||||||
U.S. Utilities | 667,330,242 | 15,383,705 | (51,795,343) | (36,411,638) |
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Notes to Financial Statements (unaudited) (continued)
8. | 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.
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.
Concentration Risk: 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, regulatory, political and social conditions affecting such sectors may have a significant impact on the fund and could affect the income from, or the value or liquidity of, the fund’s portfolio.
9. | 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 were as follows:
Six Months Ended 10/31/18 | Year Ended 04/30/18 | |||||||||||||||||||
iShares ETF | Shares | Amount | Shares | Amount | ||||||||||||||||
Dow Jones U.S. | ||||||||||||||||||||
Shares sold | 100,000 | $ | 14,265,513 | 150,000 | $ | 20,261,251 | ||||||||||||||
Shares redeemed | (50,000 | ) | (7,347,289 | ) | (950,000 | ) | (119,673,037 | ) | ||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
Net increase (decrease) | 50,000 | $ | 6,918,224 | (800,000 | ) | $ | (99,411,786 | ) | ||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
Transportation Average | ||||||||||||||||||||
Shares sold | 3,700,000 | $ | 729,964,240 | 8,250,000 | $ | 1,488,736,785 | ||||||||||||||
Shares redeemed | (4,100,000 | ) | (799,489,571 | ) | (9,850,000 | ) | (1,759,222,952 | ) | ||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
Net decrease | (400,000 | ) | $ | (69,525,331 | ) | (1,600,000 | ) | $ | (270,486,167 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||||||
U.S. Energy | ||||||||||||||||||||
Shares sold | 4,200,000 | $ | 172,831,276 | 11,550,000 | $ | 442,825,205 | ||||||||||||||
Shares redeemed | (6,400,000 | ) | (262,828,818 | ) | (15,750,000 | ) | (589,894,431 | ) | ||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
Net decrease | (2,200,000 | ) | $ | (89,997,542 | ) | (4,200,000 | ) | $ | (147,069,226 | ) | ||||||||||
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|
|
|
|
|
|
| |||||||||||||
U.S. Healthcare | ||||||||||||||||||||
Shares sold | 2,800,000 | $ | 537,576,500 | 2,650,000 | $ | 458,301,611 | ||||||||||||||
Shares redeemed | (700,000 | ) | (130,575,480 | ) | (4,350,000 | ) | (749,581,753 | ) | ||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
Net increase (decrease) | 2,100,000 | $ | 407,001,020 | (1,700,000 | ) | $ | (291,280,142 | ) | ||||||||||||
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|
|
|
|
|
|
N O T E S T O F I N A N C I A L S T A T E M E N T S | 55 |
Notes to Financial Statements (unaudited) (continued)
Six Months Ended 10/31/18 | Year Ended 04/30/18 | |||||||||||||||||||
iShares ETF | Shares | Amount | Shares | Amount | ||||||||||||||||
U.S. Technology | ||||||||||||||||||||
Shares sold | 3,050,000 | $ | 562,151,158 | 7,150,000 | $ | 1,133,083,249 | ||||||||||||||
Shares redeemed | (4,700,000 | ) | (860,085,117 | ) | (7,700,000 | ) | (1,219,692,757 | ) | ||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
Net decrease | (1,650,000 | ) | $ | (297,933,959 | ) | (550,000 | ) | $ | (86,609,508 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||||||
U.S. Utilities | ||||||||||||||||||||
Shares sold | 1,050,000 | $ | 140,657,770 | 2,900,000 | $ | 400,077,963 | ||||||||||||||
Shares redeemed | (1,050,000 | ) | (139,116,916 | ) | (4,450,000 | ) | (581,215,346 | ) | ||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
Net increase (decrease) | — | $ | 1,540,854 | (1,550,000 | ) | $ | (181,137,383 | ) | ||||||||||||
|
|
|
|
|
|
|
|
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 shares sold in the table above.
10. | LEGAL PROCEEDINGS |
On June 16, 2016, investors 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 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”) in California State Court. 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.
Certain iShares funds (the “Impacted Funds”), along with thousands of other former shareholders of Tribune Company (“Tribune”), were named as defendants in one or more lawsuits (the “Litigation”) arising out of Tribune’s 2007 leveraged buyout transaction (“LBO”). The Litigation seeks to “claw back” from former Tribune shareholders, including the Impacted Funds, proceeds received in connection with the LBO. The iShares Dow Jones U.S. ETF received proceeds of $118,354 in the LBO. The claims that were originally brought against the Impacted Funds were dismissed but are currently subject to appeals in multiple appellate courts. The outcome of these appeals could result in new claims being brought against the Impacted Funds and/or previously dismissed claims being revived and subject to continuing litigation. The Impacted Funds intend to vigorously defend the Litigation.
11. | REGULATION S-X AMENDMENTS |
On August 17, 2018, the SEC adopted amendments to certain disclosure requirements in Securities Act Release No. 33-10532, Disclosure Update and Simplification. The Funds have adopted the amendments pertinent to Regulation S-X in this shareholder report. The amendments impacted certain disclosure presentation on the statement of assets and liabilities, statement of changes in net assets and notes to the financial statements.
Prior year distribution information and undistributed net investment income in the statement of changes in net assets has been modified to conform to the current year presentation in accordance with the Regulation S-X changes.
Distributions for the year ended April 30, 2018 were classified as follows:
iShares ETF | Net Investment Income | |||
Dow Jones U.S. | $ | 19,044,585 | ||
Transportation Average | 9,873,738 | |||
U.S. Energy | 31,781,233 | |||
U.S. Healthcare | 22,513,635 | |||
U.S. Technology | 33,204,002 | |||
U.S. Utilities | 21,100,758 |
56 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (unaudited) (continued)
Undistributed net investment income as of April 30, 2018 are as follows:
iShares ETF | Undistributed net investment income | |||
Dow Jones U.S. | $ | 937,574 | ||
Transportation Average | — | |||
U.S. Energy | 19,073 | |||
U.S. Healthcare | 1,396,100 | |||
U.S. Technology | — | |||
U.S. Utilities | 485,288 |
12. | 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 additional disclosure in the financial statements.
N O T E S T O F I N A N C I A L S T A T E M E N T S | 57 |
Board Review and Approval of Investment Advisory Contract
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. At a meeting on May 11, 2018, a committee composed of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management and reviewed and discussed information provided in response to initial requests of the 15(c) Committee and/or their independent counsel, and requested certain additional information, which management agreed to provide. 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 24, 2018, management presented additional information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its initial meeting. 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 12-14, 2018, 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 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 various factors, including: (i) the expenses and performance of the Fund; (ii) the nature, extent and quality of the services provided by BFA; (iii) the costs of services provided to the Fund and profits realized by BFA and its affiliates; (iv) economies of scale; (v) the fees and services provided for other comparable funds/accounts managed by BFA and its affiliates; and (vi) other benefits to BFA and/or its affiliates. The material factors, no one of which was controlling, and conclusions that formed the basis for the Board, including the Independent Trustees, to approve the Advisory Contract are discussed below.
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, fees and expenses of another fund in which the Fund invests (if applicable), and waivers/reimbursements (if applicable) of the Fund in comparison with the same information for other ETFs (including, where applicable, funds sponsored by an “at cost” service provider), 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, 2017, to that of relevant comparison fund(s) 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 additional detailed information as requested by the Board, 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 expense level 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, portfolio management, product design and quality, compliance and risk management, global public policy 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 support 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 relevant officers and other employees of BFA (and its affiliates) 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 12-14, 2018 meeting and throughout the year, and matters related to BFA’s portfolio compliance policies and procedures.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided 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 its Affiliates: The Board reviewed information about the profitability to BlackRock in managing the Fund, 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
58 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Board Review and Approval of Investment Advisory Contract (continued)
from the Fund’s operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, noting that the 15(c) Committee and the Board had focused on the methodology and profitability presentation during their meetings. The Board further noted that it considered the supplemental information the 15(c) Committee requested, which BlackRock provided, regarding the methodology. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC, a BlackRock 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 and other information 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 and the Board during their meetings and addressed by management. The 15(c) Committee and the Board 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 showed 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 15(c) Committee and the Board reviewed information provided by BFA regarding the sharing of scale benefits with the iShares funds through various means, including, as applicable, through relatively low fee rates established at inception, breakpoints, 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 noted that the Advisory Contract for the Fund did not provide for breakpoints in the Fund’s investment advisory fee rate as the assets of the Fund increase. However, the Board noted that a breakpoint structure for the Fund may be appropriate should material economies of scale exist in the future that are not otherwise shared, 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 of the sharing of scale benefits, as well as the other factors considered at the meeting, the Board concluded that the information concerning the sharing of scale benefits supported the Board’s approval of 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 (collectively, 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 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, particularly those that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged management’s assertion that, for certain iShares funds, and for client segmentation purposes, BlackRock has launched an iShares fund that may provide a similar investment exposure at a lower investment advisory fee rate. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund’s 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 (or its 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 (including associated commissions) 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 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 a review of the factors described above, as well as such other factors as deemed appropriate by the Board, the Board, including all of the Independent Trustees, 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, iShares U.S. Healthcare 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. At a meeting on May 11, 2018, a committee
B O A R D R E V I E W A N D A P P R O V A L O F I N V E S T M E N T A D V I S O R Y C O N T R A C T | 59 |
Board Review and Approval of Investment Advisory Contract (continued)
composed of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management and reviewed and discussed information provided in response to initial requests of the 15(c) Committee and/or their independent counsel, and requested certain additional information, which management agreed to provide. 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 24, 2018, management presented additional information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its initial meeting. 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 12-14, 2018, 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 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 various factors, including: (i) the expenses and performance of each Fund; (ii) the nature, extent and quality of the services provided by BFA; (iii) the costs of services provided to each Fund and profits realized by BFA and its affiliates; (iv) economies of scale; (v) the fees and services provided for other comparable funds/accounts managed by BFA and its affiliates; and (vi) other benefits to BFA and/or its affiliates. The material factors, no one of which was controlling, and conclusions that formed the basis for the Board, including the Independent Trustees, to approve the Advisory Contract are discussed below.
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, fees and expenses of another fund in which each Fund invests (if applicable), and waivers/reimbursements (if applicable) of each Fund in comparison with the same information for other ETFs (including, where applicable, funds sponsored by an “at cost” service provider), 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, 2017, to that of relevant comparison fund(s) 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 additional detailed information as requested by the Board, 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 expense level 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, portfolio management, product design and quality, compliance and risk management, global public policy 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 support 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 relevant officers and other employees of BFA (and its affiliates) 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 12-14, 2018 meeting and throughout the year, and matters related to BFA’s portfolio compliance policies and procedures.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided 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 Fund and Profits Realized by BFA and its Affiliates: The Board reviewed information about the profitability to BlackRock in managing the Funds, 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, noting that the 15(c) Committee and the Board had focused on the methodology and profitability presentation during their meetings. The Board further noted that it considered the supplemental information the 15(c) Committee requested, which BlackRock provided, regarding the methodology. The Board discussed the sources of direct and ancillary revenue with management,
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Board Review and Approval of Investment Advisory Contract (continued)
including the revenues to BTC, a BlackRock affiliate, from securities lending by the Funds. The Board also discussed BFA’s profit margin as reflected in the Funds’ 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 Funds and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors and other information 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 and the Board during their meetings and addressed by management. The 15(c) Committee and the Board 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 showed 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 15(c) Committee and the Board reviewed information provided by BFA regarding the sharing of scale benefits with the iShares funds through various means, including, as applicable, through relatively low fee rates established at inception, breakpoints, 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 noted that the Advisory Contract for the Funds already provided for breakpoints in the Funds’ investment advisory fee rate 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 of the sharing of scale benefits, as well as the other factors considered at the meeting, the Board concluded that the information concerning the sharing of scale benefits supported the Board’s approval of 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 (collectively, 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 indexes as the Funds. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts 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, particularly those that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged management’s assertion that, for certain iShares funds, and for client segmentation purposes, BlackRock has launched an iShares fund that may provide a similar investment exposure at a lower investment advisory fee rate. The Board also considered the “all-inclusive” nature of the Funds’ advisory fee structure, and the Funds’ expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rates under the Advisory Contract for the Funds 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 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 (or its 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 (including associated commissions) 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 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 a review of the factors described above, as well as such other factors as deemed appropriate by the Board, the Board, including all of the Independent Trustees, determined that the Funds’ investment advisory fee rates under the Advisory Contract do not constitute fees that are 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 and iShares U.S. Technology 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. At a meeting on May 11, 2018, a committee composed of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management and reviewed and discussed information provided in response to initial requests of the 15(c) Committee and/or their independent counsel, and requested certain additional information, which management agreed to provide. 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
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Board Review and Approval of Investment Advisory Contract (continued)
information, which management agreed to provide. At a meeting held on May 24, 2018, management presented additional information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its initial meeting. 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 12-14, 2018, 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 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 various factors, including: (i) the expenses and performance of each Fund; (ii) the nature, extent and quality of the services provided by BFA; (iii) the costs of services provided to each Fund and profits realized by BFA and its affiliates; (iv) economies of scale; (v) the fees and services provided for other comparable funds/accounts managed by BFA and its affiliates; and (vi) other benefits to BFA and/or its affiliates. The material factors, no one of which was controlling, and conclusions that formed the basis for the Board, including the Independent Trustees, to approve the Advisory Contract are discussed below.
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, fees and expenses of another fund in which each Fund invests (if applicable), and waivers/reimbursements (if applicable) of each Fund in comparison with the same information for other ETFs (including, where applicable, funds sponsored by an “at cost” service provider), 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, 2017, to that of relevant comparison fund(s) 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 additional detailed information as requested by the Board, 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 expense level 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, portfolio management, product design and quality, compliance and risk management, global public policy 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 support 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 relevant officers and other employees of BFA (and its affiliates) 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 12-14, 2018 meeting and throughout the year, and matters related to BFA’s portfolio compliance policies and procedures.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided 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 Fund and Profits Realized by BFA and its Affiliates: The Board reviewed information about the profitability to BlackRock in managing the Funds, 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, noting that the 15(c) Committee and the Board had focused on the methodology and profitability presentation during their meetings. The Board further noted that it considered the supplemental information the 15(c) Committee requested, which BlackRock provided, regarding the methodology. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC, a BlackRock affiliate, from securities lending by the Funds. The Board also discussed BFA’s profit margin as reflected in the Funds’ 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 Funds and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors and other information considered.
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Board Review and Approval of Investment Advisory Contract (continued)
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 and the Board during their meetings and addressed by management. The 15(c) Committee and the Board 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 showed 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 15(c) Committee and the Board reviewed information provided by BFA regarding the sharing of scale benefits with the iShares funds through various means, including, as applicable, through relatively low fee rates established at inception, breakpoints, 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 noted that the Advisory Contract for the Funds already provided for breakpoints in the Funds’ investment advisory fee rate 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 of the sharing of scale benefits, as well as the other factors considered at the meeting, the Board concluded that the information concerning the sharing of scale benefits supported the Board’s approval of 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 (collectively, 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 indexes as the Funds. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts 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, particularly those that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged management’s assertion that, for certain iShares funds, and for client segmentation purposes, BlackRock has launched an iShares fund that may provide a similar investment exposure at a lower investment advisory fee rate. The Board also considered the “all-inclusive” nature of the Funds’ advisory fee structure, and the Funds’ expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rates under the Advisory Contract for the Funds 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 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 (or its 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 (including associated commissions) 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 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 a review of the factors described above, as well as such other factors as deemed appropriate by the Board, the Board, including all of the Independent Trustees, determined that the Funds’ investment advisory fee rates under the Advisory Contract do not constitute fees that are 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)
Section 19(a) Notices
The amounts and sources of distributions reported in this notice are for financial reporting purposes and are not being provided for tax reporting purposes. The actual amounts and character of the distributions for tax reporting purposes will be reported to shareholders on Form 1099-DIV which is sent to shareholders shortly after calendar year-end.
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.(a) | $ | 1.123287 | $ | — | $ | 0.018381 | $ | 1.141668 | 98 | % | — | % | 2 | % | 100 | % |
(a) | The Fund estimates that it has distributed more than the amount of earned income and net realized gains; therefore, a portion of the distribution may be a return of capital. A return of capital may occur, for example, when some or all of the shareholder’s investment in the Fund is returned to the shareholder. A return of capital does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income”. When distributions exceed total return performance, the difference will incrementally reduce the Fund’s net asset value per share. |
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Electronic Delivery
Shareholders can sign up for email notifications announcing that the shareholder report or prospectus has been posted on the iShares website at www.iShares.com. Once you have enrolled, you will no longer receive prospectuses and shareholder reports in the mail.
To enroll in electronic delivery:
• | Go to www.icsdelivery.com. |
• | If your brokerage firm is not listed, electronic delivery may not be available. Please contact your broker-dealer or financial advisor. |
Householding
Householding is an option available to certain fund investors. Householding is a method of delivery, based on the preference of the individual investor, in which a single copy of certain shareholder documents can be delivered to investors who share the same address, even if their accounts are registered under different names. Please contact your broker-dealer if you are interested in enrolling in householding and receiving a single copy of prospectuses and other shareholder documents, or if you are currently enrolled in householding and wish to change your householding status.
Availability of Quarterly Schedule of Investments
The iShares Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The iShares Funds’ Forms N-Q are available on the SEC’s website at www.sec.gov. The iShares Funds also disclose their complete schedule of portfolio holdings on a daily basis on the iShares website at www.iShares.com.
Availability of Proxy Voting Policies and Proxy Voting Records
A description of the policies and procedures that the iShares Funds use to determine how to vote proxies relating to portfolio securities and information about how the iShares Funds voted proxies relating to portfolio securities during the most recent twelve-month period ending June 30 is available without charge, upon request (1) by calling toll-free 1-800-474-2737; (2) on the iShares website at www.iShares.com; and (3) on the SEC website at www.sec.gov.
G E N E R A L I N F O R M A T I O N | 65 |
Glossary of Terms Used in this Report
Portfolio Abbreviations - Equity
NVS Non-Voting Shares
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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, 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. | ||||
©2018 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. | ||||
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OCTOBER 31, 2018
2018 SEMI-ANNUAL REPORT (UNAUDITED) |
iShares Trust
iShares U.S. Basic Materials ETF | IYM | NYSE Arca
iShares U.S. Consumer Goods ETF | IYK | NYSE Arca
iShares U.S. Consumer Services ETF | IYC | NYSE Arca
iShares U.S. Financial Services ETF | IYG | NYSE Arca
iShares U.S. Financials ETF | IYF | NYSE Arca
iShares U.S. Industrials ETF | IYJ | Cboe BZX
iShares MSCI KLD 400 Social ETF | DSI | NYSE Arca
iShares MSCI USA ESG Select ETF | SUSA | NYSE Arca
Table of Contents
Page | ||||
5 | ||||
13 | ||||
13 | ||||
14 | ||||
Financial Statements | ||||
40 | ||||
42 | ||||
44 | ||||
48 | ||||
56 | ||||
65 | ||||
73 | ||||
74 | ||||
75 |
Fund Summary as of October 31, 2018
| iShares® U.S. Basic Materials ETF |
Investment Objective
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.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||||||
6 Months | 1 Year | 5 Years | 10 Years | 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||||
Fund NAV | (8.29 | )% | (9.57 | )% | 4.55 | % | 9.59 | % | (9.57 | )% | 24.90 | % | 149.78 | % | ||||||||||||||||||
Fund Market | (8.32 | ) | (9.60 | ) | 4.54 | 9.59 | (9.60 | ) | 24.84 | 149.93 | ||||||||||||||||||||||
Index | (8.13 | ) | (9.21 | ) | 4.95 | 10.05 | (9.21 | ) | 27.34 | 160.45 |
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.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
| Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio | | ||||||
$ 1,000.00 | $ 917.10 | $ 2.03 | $ 1,000.00 | $ 1,023.10 | $ 2.14 | 0.42 | % |
(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. |
Portfolio Information
ALLOCATION BY SECTOR | ||
Sector | Percent of Total Investments(a) | |
Chemicals | 82.8% | |
Metals & Mining | 15.7 | |
Paper & Forest Products | 1.0 | |
Oil, Gas & Consumable Fuels | 0.5 |
TEN LARGEST HOLDINGS | ||
Security | Percent of Total Investments(a) | |
DowDuPont Inc. | 20.8% | |
Linde PLC | 15.2 | |
Ecolab Inc. | 6.5 | |
Air Products & Chemicals Inc. | 5.7 | |
LyondellBasell Industries NV, Class A | 4.8 | |
PPG Industries Inc. | 4.2 | |
Nucor Corp. | 3.1 | |
Freeport-McMoRan Inc. | 2.8 | |
Newmont Mining Corp. | 2.8 | |
International Flavors & Fragrances Inc. | 2.4 |
(a) | Excludes money market funds. |
F U N D S U M M A R Y | 5 |
Fund Summary as of October 31, 2018
| iShares® U.S. Consumer Goods ETF |
Investment Objective
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.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||||||
6 Months | 1 Year | 5 Years | 10 Years | 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||||
Fund NAV | 3.68 | % | (1.02 | )% | 6.83 | % | 11.59 | % | (1.02 | )% | 39.13 | % | 199.50 | % | ||||||||||||||||||
Fund Market | 3.71 | (1.02 | ) | 6.83 | 11.58 | (1.02 | ) | 39.12 | 199.11 | |||||||||||||||||||||||
Index | 3.91 | (0.62 | ) | 7.27 | 12.09 | (0.62 | ) | 42.05 | 213.00 |
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.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
| Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio | | ||||||
$ 1,000.00 | $ 1,036.80 | $ 2.16 | $ 1,000.00 | $ 1,023.10 | $ 2.14 | 0.42 | % |
(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. |
Portfolio Information
ALLOCATION BY SECTOR | ||
Sector | Percent of Total Investments(a) | |
Food, Beverage & Tobacco | 48.0% | |
Household & Personal Products | 19.1 | |
Consumer Durables & Apparel | 15.1 | |
Automobiles & Components | 10.2 | |
Media & Entertainment | 4.6 | |
Capital Goods | 1.1 | |
Retailing | 1.0 | |
Other (each representing less than 1%) | 0.9 |
TEN LARGEST HOLDINGS | ||
Security | Percent of Total Investments(a) | |
Procter & Gamble Co. (The) | 10.6% | |
Coca-Cola Co. (The) | 8.8 | |
PepsiCo Inc. | 7.7 | |
Philip Morris International Inc. | 6.6 | |
Altria Group Inc. | 5.9 | |
NIKE Inc., Class B | 4.6 | |
Mondalez International Inc., Class A | 3.0 | |
Activision Blizzard Inc. | 2.5 | |
Colgate-Palmolive Co. | 2.5 | |
General Motors Co. | 2.3 |
(a) | Excludes money market funds. |
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Fund Summary as of October 31, 2018
| iShares® U.S. Consumer Services ETF |
Investment Objective
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.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||||||
6 Months | 1 Year | 5 Years | 10 Years | 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||||
Fund NAV | 5.44 | % | 18.89 | % | 12.13 | % | 17.26 | % | 18.89 | % | 77.24 | % | 391.59 | % | ||||||||||||||||||
Fund Market | 5.48 | 18.92 | 12.12 | 17.25 | 18.92 | 77.20 | 390.97 | |||||||||||||||||||||||||
Index | 5.47 | 19.09 | 12.54 | 17.74 | 19.09 | 80.50 | 411.91 |
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.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
| Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio | | ||||||
$ 1,000.00 | $ 1,054.40 | $ 2.17 | $ 1,000.00 | $ 1,023.10 | $ 2.14 | 0.42 | % |
(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. |
Portfolio Information
ALLOCATION BY SECTOR | ||
Sector | Percent of Total Investments(a) | |
Retailing | 43.5% | |
Media & Entertainment | 23.2 | |
Consumer Services | 16.4 | |
Food & Staples Retailing | 11.2 | |
Transportation | 3.3 | |
Commercial & Professional Services | 1.4 | |
Other (each representing less than 1%) | 1.0 |
TEN LARGEST HOLDINGS | ||
Security | Percent of Total Investments(a) | |
Amazon. com Inc. | 18.9% | |
Comcast Corp., Class A | 5.0 | |
Walt Disney Co. (The) | 4.6 | |
Home Depot Inc. (The) | 4.6 | |
Walmart Inc. | 4.2 | |
McDonald’s Corp. | 4.1 | |
Netflix Inc. | 3.8 | |
Costco Wholesale Corp. | 2.9 | |
Booking Holdings Inc. | 2.6 | |
Starbucks Corp. | 2.3 |
(a) | Excludes money market funds. |
F U N D S U M M A R Y | 7 |
Fund Summary as of October 31, 2018
| iShares® U.S. Financial Services ETF |
Investment Objective
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.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||||||
6 Months | 1 Year | 5 Years | 10 Years | 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||||
Fund NAV | (3.26 | )% | 3.24 | % | 11.95 | % | 9.14 | % | 3.24 | % | 75.81 | % | 139.78 | % | ||||||||||||||||||
Fund Market | (3.25 | ) | 3.24 | 11.94 | 9.16 | 3.24 | 75.72 | 140.27 | ||||||||||||||||||||||||
Index | (3.06 | ) | 3.70 | 12.42 | 9.56 | 3.70 | 79.55 | 149.19 |
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.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
| Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio | | ||||||
$ 1,000.00 | $ 967.40 | $ 2.08 | $ 1,000.00 | $ 1,023.10 | $ 2.14 | 0.42 | % |
(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. |
Portfolio Information
ALLOCATION BY SECTOR | ||
Sector | Percent of Total Investments(a) | |
Banks | 54.0% | |
Diversified Financials | 31.2 | |
Software & Services | 14.5 | |
Insurance | 0.3 |
TEN LARGEST HOLDINGS | ||
Security | Percent of Total Investments(a) | |
JPMorgan Chase & Co. | 12.5% | |
Bank of America Corp. | 8.7 | |
Visa Inc., Class A | 8.4 | |
Wells Fargo & Co. | 7.9 | |
Mastercard Inc., Class A | 6.2 | |
Citigroup Inc. | 5.6 | |
U. S. Bancorp. | 2.7 | |
Goldman Sachs Group Inc. (The) | 2.7 | |
American Express Co. | 2.5 | |
CME Group Inc. | 2.1 |
(a) | Excludes money market funds. |
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Fund Summary as of October 31, 2018
| iShares® U.S. Financials ETF |
Investment Objective
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.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||||||
6 Months | 1 Year | 5 Years | 10 Years | 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||||
Fund NAV | (1.19 | )% | 2.21 | % | 10.53 | % | 9.74 | % | 2.21 | % | 64.96 | % | 153.30 | % | ||||||||||||||||||
Fund Market | (1.18 | ) | 2.24 | 10.52 | 9.75 | 2.24 | 64.86 | 153.60 | ||||||||||||||||||||||||
Index | (1.00 | ) | 2.57 | 10.98 | 10.16 | 2.57 | 68.35 | 163.25 |
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 13 for more information.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
| Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio | | ||||||
$ 1,000.00 | $ 988.10 | $ 2.10 | $ 1,000.00 | $ 1,023.10 | $ 2.14 | 0.42% |
(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. |
Portfolio Information
ALLOCATION BY SECTOR | ||
Sector | Percent of Total Investments(a) | |
Banks | 31.7% | |
Diversified Financials | 27.3 | |
Real Estate | 19.0 | |
Insurance | 13.6 | |
Software & Services | 8.1 | |
Commercial & Professional Services | 0.3 |
TEN LARGEST HOLDINGS | ||
Security | Percent of Total Investments(a) | |
Berkshire Hathaway Inc., Class B | 8.0% | |
JPMorgan Chase & Co. | 7.3 | |
Bank of America Corp. | 5.1 | |
Wells Fargo & Co. | 4.6 | |
Visa Inc., Class A | 4.5 | |
Mastercard Inc., Class A | 3.6 | |
Citigroup Inc. | 3.3 | |
U. S. Bancorp. | 1.6 | |
Goldman Sachs Group Inc. (The) | 1.6 | |
American Express Co. | 1.4 |
(a) | Excludes money market funds. |
F U N D S U M M A R Y | 9 |
Fund Summary as of October 31, 2018
| iShares® U.S. Industrials ETF |
Investment Objective
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.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||||||
6 Months | 1 Year | 5 Years | 10 Years | 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||||
Fund NAV | (0.85 | )% | (0.14 | )% | 9.70 | % | 13.59 | % | (0.14 | )% | 58.88 | % | 257.59 | % | ||||||||||||||||||
Fund Market | (0.87 | ) | (0.16 | ) | 9.69 | 13.56 | (0.16 | ) | 58.81 | 256.80 | ||||||||||||||||||||||
Index | (0.65 | ) | 0.27 | 10.18 | 14.09 | 0.27 | 62.39 | 273.56 |
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.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
| Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio | | ||||||
$ 1,000.00 | $ 991.50 | $ 2.11 | $ 1,000.00 | $ 1,023.10 | $ 2.14 | 0.42 | % |
(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. |
Portfolio Information
ALLOCATION BY SECTOR | ||
Sector | Percent of Total Investments(a) | |
Capital Goods | 54.0% | |
Software & Services | 16.9 | |
Transportation | 13.1 | |
Commercial & Professional Services | 5.4 | |
Technology Hardware & Equipment | 5.2 | |
Materials | 5.1 | |
Pharmaceuticals, Biotechnology & Life Sciences | 0.3 |
TEN LARGEST HOLDINGS | ||
Security | Percent of Total Investments(a) | |
Boeing Co. (The) | 5.9% | |
3M Co. | 3.4 | |
Union Pacific Corp. | 3.3 | |
Honeywell International Inc. | 3.3 | |
Accenture PLC, Class A | 3.1 | |
PayPal Holdings Inc. | 3.1 | |
United Technologies Corp. | 2.9 | |
General Electric Co. | 2.7 | |
United Parcel Service Inc., Class B | 2.3 | |
Lockheed Martin Corp. | 2.2 |
(a) | Excludes money market funds. |
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Fund Summary as of October 31, 2018
| iShares® MSCI KLD 400 Social ETF |
Investment Objective
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 index excludes companies involved in tobacco, alcohol, gambling, controversial weapons, civilian firearms, nuclear weapons, conventional weapons, nuclear power, adult entertainment and genetically modified organisms (GMOs). 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.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||||||
6 Months | 1 Year | 5 Years | 10 Years | 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||||
Fund NAV | 1.21 | % | 5.07 | % | 9.95 | % | 12.30 | % | 5.07 | % | 60.71 | % | 219.07 | % | ||||||||||||||||||
Fund Market | 1.19 | 5.05 | 9.94 | 12.35 | 5.05 | 60.60 | 220.52 | |||||||||||||||||||||||||
Index | 1.32 | 5.45 | 10.48 | 12.86 | 5.45 | 64.60 | 235.23 |
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.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
| Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio | | ||||||
$ 1,000.00 | $ 1,012.10 | $ 1.27 | $ 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 13 for more information. |
Portfolio Information
ALLOCATION BY SECTOR | ||
Sector | Percent of Total Investments(a) | |
Information Technology | 23.8% | |
Communication Services | 14.8 | |
Health Care | 12.3 | |
Industrials | 10.4 | |
Financials | 9.8 | |
Consumer Discretionary | 8.4 | |
Consumer Staples | 7.4 | |
Energy | 4.4 | |
Real Estate | 3.9 | |
Materials | 3.2 | |
Utilities | 1.6 |
(a) | Excludes money market funds. |
TEN LARGEST HOLDINGS | ||
Security | Percent of Total Investments(a) | |
Microsoft Corp. | 7.0% | |
Facebook Inc., Class A | 3.3 | |
Alphabet Inc., Class C | 3.0 | |
Alphabet Inc., Class A | 2.9 | |
Verizon Communications Inc. | 2.1 | |
Procter & Gamble Co. (The) | 2.0 | |
Intel Corp. | 2.0 | |
Cisco Systems Inc. | 1.9 | |
Merck & Co. Inc. | 1.8 | |
Coca-Cola Co. (The) | 1.7 |
F U N D S U M M A R Y | 11 |
Fund Summary as of October 31, 2018
| iShares® MSCI USA ESG Select ETF |
Investment Objective
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 Extended ESG Select Index (the “Index”). The index further excludes companies whose primary revenue is derived from alcohol, gambling, nuclear power, conventional and controversial weapons and civilian firearms. 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.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||||||
6 Months | 1 Year | 5 Years | 10 Years | 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||||
Fund NAV | 0.81 | % | 4.40 | % | 10.15 | % | 11.96 | % | 4.40 | % | 62.13 | % | 209.44 | % | ||||||||||||||||||
Fund Market | 0.85 | 4.47 | 10.13 | 11.93 | 4.47 | 62.03 | 208.55 | |||||||||||||||||||||||||
Index(a) | 0.93 | 4.78 | 10.68 | 12.51 | 4.78 | 66.06 | 224.99 | |||||||||||||||||||||||||
MSCI USA ESG Select Index | 0.93 | 4.78 | 10.68 | 12.51 | 4.78 | 66.06 | 224.99 | |||||||||||||||||||||||||
MSCI USA Extended ESG Select Index(b) | 0.93 | N/A | N/A | N/A | N/A | N/A | N/A |
(a) | Index performance through May 31, 2018 reflects the performance of the MSCI USA ESG Select Index. Index performance beginning on June 1, 2018 reflects the performance of the MSCI USA Extended ESG Select Index, which, effective as of June 1, 2018, replaced the MSCI USA ESG Select Index as the underlying index of the Fund. |
(b) | The inception date of the MSCI USA Extended ESG Select Index was March 27, 2018. The cumulative total return of this index for the period March 27, 2018 through October 31, 2018 was 2.5%. |
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.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
| Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio | | ||||||
$ 1,000.00 | $ 1,008.10 | $ 1.27 | $ 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 13 for more information. |
Portfolio Information
ALLOCATION BY SECTOR | ||
Sector | Percent of Total Investments(a) | |
Information Technology | 26.4% | |
Health Care | 11.8 | |
Industrials | 11.7 | |
Financials | 10.8 | |
Consumer Staples | 8.7 | |
Consumer Discretionary | 8.4 | |
Materials | 6.2 | |
Real Estate | 5.0 | |
Communication Services | 4.5 | |
Energy | 3.5 | |
Utilities | 3.0 |
(a) | Excludes money market funds. |
TEN LARGEST HOLDINGS | ||
Security | Percent of Total Investments(a) | |
Microsoft Corp. | 5.4% | |
Ecolab Inc. | 5.2 | |
Apple Inc. | 4.9 | |
3M Co. | 3.6 | |
Accenture PLC, Class A | 3.5 | |
Alphabet Inc., Class A | 2.5 | |
Rockwell Collins Inc. | 2.3 | |
BlackRock Inc. | 2.0 | |
Northern Trust Corp. | 1.9 | |
Agilent Technologies Inc. | 1.8 |
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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 ask 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. 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 your 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 at the beginning of the period (or from the commencement of operations if less than 6 months) and held through the end of the period, is intended to help you understand your ongoing costs (in dollars and cents) of investing in your 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 under the heading entitled “Expenses Paid During the Period.”
Hypothetical Example for Comparison Purposes – The table also provides information about hypothetical account values and hypothetical expenses based on your 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.
A B O U T F U N D P E R F O R M A N C E / S H A R E H O L D E R E X P E N S E S | 13 |
Schedule of Investments (unaudited)
October 31, 2018 | iShares® U.S. Basic Materials ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks | ||||||||
Chemicals — 82.6% | ||||||||
Air Products & Chemicals Inc. | 165,081 | $ | 25,480,251 | |||||
Albemarle Corp. | 81,399 | 8,076,409 | ||||||
Ashland Global Holdings Inc. | 46,854 | 3,466,259 | ||||||
Axalta Coating Systems Ltd.(a) | 160,717 | 3,966,496 | ||||||
Cabot Corp. | 46,204 | 2,249,211 | ||||||
Celanese Corp. | 101,298 | 9,819,828 | ||||||
CF Industries Holdings Inc. | 175,234 | 8,416,489 | ||||||
Chemours Co. (The) | 132,732 | 4,381,483 | ||||||
DowDuPont Inc. | 1,737,131 | 93,666,104 | ||||||
Eastman Chemical Co. | 106,039 | 8,308,156 | ||||||
Ecolab Inc. | 191,404 | 29,313,523 | ||||||
FMC Corp. | 101,048 | 7,889,828 | ||||||
GCP Applied Technologies Inc.(a) | 54,158 | 1,406,483 | ||||||
HB Fuller Co. | 37,987 | 1,688,902 | ||||||
Huntsman Corp. | 161,357 | 3,530,491 | ||||||
Ingevity Corp.(a) | 31,558 | 2,874,303 | ||||||
International Flavors & Fragrances Inc., New | 75,970 | 10,989,820 | ||||||
Linde PLC | 413,488 | 68,419,859 | ||||||
LyondellBasell Industries NV, Class A | 240,347 | 21,455,777 | ||||||
Minerals Technologies Inc. | 26,499 | 1,450,820 | ||||||
Mosaic Co. (The) | 266,164 | 8,235,114 | ||||||
NewMarket Corp. | 6,706 | 2,588,248 | ||||||
Olin Corp. | 125,345 | 2,531,969 | ||||||
Platform Specialty Products Corp.(a) | 175,232 | 1,896,010 | ||||||
PolyOne Corp. | 60,001 | 1,938,632 | ||||||
PPG Industries Inc. | 182,206 | 19,148,029 | ||||||
RPM International Inc. | 100,157 | 6,126,604 | ||||||
Scotts Miracle-Gro Co. (The) | 29,542 | 1,971,633 | ||||||
Sensient Technologies Corp. | 31,732 | 2,058,137 | ||||||
Trinseo SA | 31,974 | 1,722,759 | ||||||
Valvoline Inc. | 143,168 | 2,851,907 | ||||||
Westlake Chemical Corp. | 27,248 | 1,942,782 | ||||||
WR Grace & Co. | 50,467 | 3,269,757 | ||||||
|
| |||||||
373,132,073 | ||||||||
Metals & Mining — 15.6% | ||||||||
Alcoa Corp.(a) | 139,947 | 4,896,746 | ||||||
Allegheny Technologies Inc.(a) | 94,335 | 2,442,333 | ||||||
Carpenter Technology Corp. | 35,472 | 1,546,934 |
Security | Shares | Value | ||||||
Metals & Mining (continued) | ||||||||
Commercial Metals Co. | 87,825 | $ | 1,673,945 | |||||
Compass Minerals International Inc. | 25,408 | 1,232,542 | ||||||
Freeport-McMoRan Inc. | 1,089,471 | 12,692,337 | ||||||
Newmont Mining Corp. | 401,574 | 12,416,668 | ||||||
Nucor Corp. | 238,162 | 14,080,137 | ||||||
Reliance Steel & Aluminum Co. | 54,303 | 4,285,593 | ||||||
Royal Gold Inc. | 49,164 | 3,767,437 | ||||||
Steel Dynamics Inc. | 176,222 | 6,978,391 | ||||||
U.S. Steel Corp. | 133,016 | 3,528,914 | ||||||
Worthington Industries Inc. | 30,320 | 1,269,802 | ||||||
|
| |||||||
70,811,779 | ||||||||
Oil, Gas & Consumable Fuels — 0.5% |
| |||||||
Peabody Energy Corp. | 62,113 | 2,201,906 | ||||||
|
| |||||||
Paper & Forest Products — 1.0% | ||||||||
Domtar Corp. | 47,206 | 2,186,110 | ||||||
KapStone Paper and Packaging Corp. | 66,825 | 2,338,875 | ||||||
|
| |||||||
4,524,985 | ||||||||
|
| |||||||
Total Common Stocks — 99.7% | 450,670,743 | |||||||
|
| |||||||
Short-Term Investments | ||||||||
Money Market Funds — 0.1% | ||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 2.11%(b)(c) | 376,637 | 376,637 | ||||||
|
| |||||||
Total Short-Term Investments — 0.1% |
| 376,637 | ||||||
|
| |||||||
Total Investments in Securities — 99.8% |
| 451,047,380 | ||||||
Other Assets, Less Liabilities — 0.2% |
| 774,838 | ||||||
|
| |||||||
Net Assets — 100.0% | $ | 451,822,218 | ||||||
|
|
(a) | Non-income producing security. |
(b) | Affiliate of the Fund. |
(c) | Annualized 7-day yield as of period-end. |
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:
Affiliated Issuer | | Shares Held at 04/30/18 | | Net Activity | | Shares Held at 10/31/18 | | | Value at 10/31/18 | | Income | | Net Realized Gain (Loss) | (a) | | Change in Unrealized Appreciation (Depreciation) |
| |||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | 313,636 | (313,636 | ) | — | $ | — | $ | 2,514 | (b) | $ | (494 | ) | $ | (23 | ) | |||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | 740,030 | (363,393 | ) | 376,637 | 376,637 | 6,598 | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
$ | 376,637 | $ | 9,112 | $ | (494 | ) | $ | (23 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
(b) | Includes securities lending income earned from the reinvestment of cash collateral from loaned securities (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities, and less fees paid to BTC as securities lending agent. |
As of October 31, 2018, the fair values of derivative financial instruments located in the Statement of Assets and Liabilities were as follows:
14 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® U.S. Basic Materials ETF |
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, refer to the Notes to Financial Statements.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $ | 450,670,743 | $ | — | $ | — | $ | 450,670,743 | ||||||||
Money Market Funds | 376,637 | — | — | 376,637 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 451,047,380 | $ | — | $ | — | $ | 451,047,380 | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
S C H E D U L E O F I N V E S T M E N T S | 15 |
Schedule of Investments (unaudited)
October 31, 2018 | iShares® U.S. Consumer Goods ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks | ||||||||
Auto Components — 3.4% | ||||||||
Adient PLC | 19,865 | $ | 604,293 | |||||
Aptiv PLC | 60,883 | 4,675,814 | ||||||
Autoliv Inc. | 20,039 | 1,670,050 | ||||||
BorgWarner Inc. | 48,033 | 1,892,981 | ||||||
Dana Inc. | 33,066 | 514,838 | ||||||
Delphi Technologies PLC | 20,414 | 437,676 | ||||||
Garrett Motion Inc.(a) | 17,006 | 257,981 | ||||||
Gentex Corp. | 61,754 | 1,299,922 | ||||||
Goodyear Tire & Rubber Co. (The) | 54,438 | 1,146,464 | ||||||
Lear Corp. | 15,066 | 2,002,271 | ||||||
Tenneco Inc., Class A | 12,802 | 440,773 | ||||||
Veoneer Inc.(a) | 20,022 | 672,339 | ||||||
Visteon Corp.(a)(b) | 6,717 | 530,912 | ||||||
|
| |||||||
16,146,314 | ||||||||
Automobiles — 6.8% | ||||||||
Ford Motor Co. | 900,313 | 8,597,989 | ||||||
General Motors Co. | 301,752 | 11,041,106 | ||||||
Harley-Davidson Inc. | 38,215 | 1,460,577 | ||||||
Tesla Inc.(a)(b) | 30,993 | 10,454,559 | ||||||
Thor Industries Inc. | 11,517 | 802,044 | ||||||
|
| |||||||
32,356,275 | ||||||||
Beverages — 20.3% | ||||||||
Brown-Forman Corp., Class B, NVS | 38,759 | 1,796,092 | ||||||
Coca-Cola Co. (The) | 880,248 | 42,146,274 | ||||||
Constellation Brands Inc., Class A | 38,604 | 7,691,075 | ||||||
Keurig Dr Pepper Inc. | 41,518 | 1,079,468 | ||||||
Molson Coors Brewing Co., Class B | 43,045 | 2,754,880 | ||||||
Monster Beverage Corp.(a) | 91,486 | 4,835,035 | ||||||
National Beverage Corp.(a) | 2,792 | 258,120 | ||||||
PepsiCo Inc. | 325,254 | 36,552,045 | ||||||
|
| |||||||
97,112,989 | ||||||||
Commercial Services & Supplies — 0.2% |
| |||||||
Herman Miller Inc. | 13,707 | 451,646 | ||||||
HNI Corp. | 9,982 | 378,218 | ||||||
|
| |||||||
829,864 | ||||||||
Distributors — 1.0% | ||||||||
Genuine Parts Co. | 33,749 | 3,304,702 | ||||||
Pool Corp. | 9,267 | 1,350,665 | ||||||
|
| |||||||
4,655,367 | ||||||||
Diversified Financial Services — 0.3% |
| |||||||
Jefferies Financial Group Inc. | 66,545 | 1,428,721 | ||||||
|
| |||||||
Entertainment — 4.6% | ||||||||
Activision Blizzard Inc. | 175,333 | 12,106,743 | ||||||
Electronic Arts Inc.(a) | 70,100 | 6,377,698 | ||||||
Take-Two Interactive Software Inc.(a) | 26,178 | 3,373,559 | ||||||
|
| |||||||
21,858,000 | ||||||||
Food & Staples Retailing — 0.4% | ||||||||
Performance Food Group Co.(a) | 23,959 | 702,478 | ||||||
U.S. Foods Holding Corp.(a) | 49,803 | 1,452,753 | ||||||
|
| |||||||
2,155,231 | ||||||||
Food Products — 15.1% | ||||||||
Archer-Daniels-Midland Co. | 128,724 | 6,082,209 | ||||||
B&G Foods Inc. | 15,081 | 392,709 | ||||||
Bunge Ltd. | 32,441 | 2,004,854 | ||||||
Campbell Soup Co.(b) | 44,259 | 1,655,729 | ||||||
Conagra Brands Inc. | 108,691 | 3,869,400 |
Security | Shares | Value | ||||||
Food Products (continued) | ||||||||
Darling Ingredients Inc.(a) | 37,845 | $ | 781,878 | |||||
Flowers Foods Inc. | 42,203 | 814,940 | ||||||
General Mills Inc. | 137,057 | 6,003,096 | ||||||
Hain Celestial Group Inc. (The)(a)(b) | 20,412 | 507,850 | ||||||
Hershey Co. (The) | 32,144 | 3,444,230 | ||||||
Hormel Foods Corp. | 62,527 | 2,728,678 | ||||||
Ingredion Inc. | 16,293 | 1,648,526 | ||||||
JM Smucker Co. (The) | 26,157 | 2,833,326 | ||||||
Kellogg Co. | 58,199 | 3,810,870 | ||||||
Kraft Heinz Co. (The) | 143,000 | 7,860,710 | ||||||
Lamb Weston Holdings Inc. | 33,673 | 2,631,882 | ||||||
Lancaster Colony Corp. | 4,486 | 768,811 | ||||||
McCormick & Co. Inc./MD, NVS | 27,891 | 4,016,304 | ||||||
Mondelez International Inc., Class A | 337,268 | 14,158,511 | ||||||
Pilgrim’s Pride Corp.(a)(b) | 12,042 | 212,662 | ||||||
Post Holdings Inc.(a) | 15,293 | 1,352,207 | ||||||
Seaboard Corp. | 62 | 239,630 | ||||||
TreeHouse Foods Inc.(a) | 12,949 | 589,956 | ||||||
Tyson Foods Inc., Class A | 68,053 | 4,077,736 | ||||||
|
| |||||||
72,486,704 | ||||||||
Household Durables — 3.7% | ||||||||
DR Horton Inc. | 78,911 | 2,837,640 | ||||||
Helen of Troy Ltd.(a)(b) | 6,028 | 748,195 | ||||||
Leggett & Platt Inc. | 29,889 | 1,085,270 | ||||||
Lennar Corp., Class A | 67,089 | 2,883,485 | ||||||
Lennar Corp., Class B | 3,677 | 131,526 | ||||||
Mohawk Industries Inc.(a) | 14,583 | 1,818,938 | ||||||
Newell Brands Inc. | 99,969 | 1,587,508 | ||||||
NVR Inc.(a) | 784 | 1,755,399 | ||||||
PulteGroup Inc. | 59,967 | 1,473,389 | ||||||
Tempur Sealy International Inc.(a)(b) | 10,443 | 482,571 | ||||||
Toll Brothers Inc. | 31,164 | 1,048,980 | ||||||
Tupperware Brands Corp. | 11,522 | 404,422 | ||||||
Whirlpool Corp. | 14,856 | 1,630,595 | ||||||
|
| |||||||
17,887,918 | ||||||||
Household Products — 16.8% | ||||||||
Church & Dwight Co. Inc. | 56,437 | 3,350,665 | ||||||
Clorox Co. (The) | 29,456 | 4,372,743 | ||||||
Colgate-Palmolive Co. | 199,555 | 11,883,500 | ||||||
Energizer Holdings Inc. | 13,717 | 806,148 | ||||||
Kimberly-Clark Corp. | 79,953 | 8,339,098 | ||||||
Procter & Gamble Co. (The) | 572,437 | 50,763,713 | ||||||
Spectrum Brands Holdings Inc. | 10,382 | 674,311 | ||||||
|
| |||||||
80,190,178 | ||||||||
Leisure Products — 1.2% | ||||||||
Brunswick Corp./DE | 19,916 | 1,035,433 | ||||||
Hasbro Inc. | 26,857 | 2,463,055 | ||||||
Mattel Inc.(a) | 79,056 | 1,073,581 | ||||||
Polaris Industries Inc. | 13,433 | 1,195,268 | ||||||
|
| |||||||
5,767,337 | ||||||||
Machinery — 1.1% | ||||||||
Stanley Black & Decker Inc. | 35,188 | 4,100,106 | ||||||
WABCO Holdings Inc.(a) | 12,145 | 1,304,980 | ||||||
|
| |||||||
5,405,086 | ||||||||
Personal Products — 2.3% | ||||||||
Coty Inc., Class A | 103,448 | 1,091,376 | ||||||
Edgewell Personal Care Co.(a) | 12,410 | 595,432 | ||||||
Estee Lauder Companies Inc. (The), Class A | 51,546 | 7,084,482 | ||||||
Herbalife Nutrition Ltd.(a)(b) | 24,180 | 1,287,827 |
16 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® U.S. Consumer Goods ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Personal Products (continued) | ||||||||
Nu Skin Enterprises Inc., Class A | 12,771 | $ | 896,780 | |||||
|
| |||||||
10,955,897 | ||||||||
Textiles, Apparel & Luxury Goods — 10.1% |
| |||||||
Carter’s Inc. | 10,681 | 1,025,162 | ||||||
Columbia Sportswear Co. | 6,928 | 625,460 | ||||||
Deckers Outdoor Corp.(a) | 6,924 | 880,525 | ||||||
Hanesbrands Inc. | 82,736 | 1,419,750 | ||||||
Lululemon Athletica Inc.(a) | 24,900 | 3,504,177 | ||||||
Michael Kors Holdings Ltd.(a) | 34,340 | 1,902,779 | ||||||
NIKE Inc., Class B | 294,477 | 22,097,554 | ||||||
PVH Corp. | 17,642 | 2,130,977 | ||||||
Ralph Lauren Corp. | 12,711 | 1,647,473 | ||||||
Skechers U.S.A. Inc., Class A(a) | 31,081 | 887,984 | ||||||
Steven Madden Ltd. | 18,255 | 570,834 | ||||||
Tapestry Inc. | 66,241 | 2,802,657 | ||||||
Under Armour Inc., Class A(a) | 42,740 | 944,981 | ||||||
Under Armour Inc., Class C, NVS(a) | 43,917 | 870,874 | ||||||
VF Corp. | 74,763 | 6,196,358 | ||||||
Wolverine World Wide Inc. | 21,891 | 769,907 | ||||||
|
| |||||||
48,277,452 | ||||||||
Tobacco — 12.5% | ||||||||
Altria Group Inc. | 433,538 | 28,197,312 | ||||||
Philip Morris International Inc. | 357,493 | 31,484,408 | ||||||
|
| |||||||
59,681,720 | ||||||||
|
| |||||||
Total Common Stocks — 99.8% | 477,195,053 | |||||||
|
|
Security | Shares | Value | ||||||
Short-Term Investments | ||||||||
Money Market Funds — 2.8% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 2.36%(c)(d)(e) | 13,265,791 | $ | 13,268,445 | |||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 2.11%(c)(d) | 224,274 | 224,274 | ||||||
|
| |||||||
13,492,719 | ||||||||
|
| |||||||
Total Short-Term Investments — 2.8% |
| 13,492,719 | ||||||
|
| |||||||
Total Investments in Securities — 102.6% |
| 490,687,772 | ||||||
Other Assets, Less Liabilities — (2.6)% |
| (12,589,329 | ) | |||||
|
| |||||||
Net Assets — 100.0% | $ | 478,098,443 | ||||||
|
|
(a) | Non-income producing security. |
(b) | All or a portion of this security is on loan. |
(c) | Affiliate of the Fund. |
(d) | Annualized 7-day yield as of period-end. |
(e) | All or a portion of this security was purchased with cash collateral received from loaned securities. |
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:
Affiliated Issuer | | Shares Held at 04/30/18 | | Net Activity | | Shares Held at 10/31/18 | | | Value at 10/31/18 | |
| Income |
| | Net Realized Gain (Loss) | (a) | | Change in Unrealized Appreciation (Depreciation) |
| |||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | 13,355,401 | (89,610 | ) | 13,265,791 | $ | 13,268,445 | $ | 75,723 | (b) | $ | 1,725 | $ | (420 | ) | ||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | 328,781 | (104,507 | ) | 224,274 | 224,274 | 6,984 | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
$ | 13,492,719 | $ | 82,707 | $ | 1,725 | $ | (420 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
(b) | Includes securities lending income earned from the reinvestment of cash collateral from loaned securities (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities, and less fees paid to BTC as securities lending agent. |
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, refer to the Notes to Financial Statements.
S C H E D U L E O F I N V E S T M E N T S | 17 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® U.S. Consumer Goods ETF
|
Fair Value Measurements (continued)
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $ | 477,195,053 | $ | — | $ | — | $ | 477,195,053 | ||||||||
Money Market Funds | 13,492,719 | — | — | 13,492,719 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 490,687,772 | $ | — | $ | — | $ | 490,687,772 | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
18 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited)
October 31, 2018 | iShares® U.S. Consumer Services ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks | ||||||||
Airlines — 3.2% | ||||||||
Alaska Air Group Inc. | 32,500 | $ | 1,996,150 | |||||
Allegiant Travel Co. | 3,369 | 384,538 | ||||||
American Airlines Group Inc. | 108,215 | 3,796,182 | ||||||
Delta Air Lines Inc. | 173,929 | 9,519,134 | ||||||
JetBlue Airways Corp.(a) | 71,043 | 1,188,549 | ||||||
Southwest Airlines Co. | 144,742 | 7,106,832 | ||||||
Spirit Airlines Inc.(a)(b) | 7,543 | 391,482 | ||||||
United Continental Holdings Inc.(a) | 60,446 | 5,168,738 | ||||||
|
| |||||||
29,551,605 | ||||||||
Commercial Services & Supplies — 0.7% |
| |||||||
Copart Inc.(a)(b) | 53,703 | 2,626,614 | ||||||
KAR Auction Services Inc. | 38,542 | 2,194,581 | ||||||
Rollins Inc. | 28,269 | 1,673,525 | ||||||
|
| |||||||
6,494,720 | ||||||||
Distributors — 0.3% | ||||||||
LKQ Corp.(a) | 86,957 | 2,371,317 | ||||||
|
| |||||||
Diversified Consumer Services — 1.3% |
| |||||||
Adtalem Global Education Inc.(a) | 11,728 | 593,789 | ||||||
Bright Horizons Family Solutions | 16,982 | 1,951,402 | ||||||
frontdoor Inc.(a) | 19,230 | 654,781 | ||||||
Graham Holdings Co., Class B | 671 | 389,884 | ||||||
Grand Canyon Education Inc.(a) | 11,563 | 1,441,906 | ||||||
H&R Block Inc. | 61,877 | 1,642,215 | ||||||
Service Corp. International/U.S. | 52,793 | 2,189,326 | ||||||
ServiceMaster Global Holdings Inc.(a) | 38,460 | 1,649,165 | ||||||
Sotheby’s(a) | 7,692 | 323,064 | ||||||
Weight Watchers International Inc.(a) | 10,200 | 674,220 | ||||||
|
| |||||||
11,509,752 | ||||||||
Entertainment — 11.5% | ||||||||
Cinemark Holdings Inc. | 29,283 | 1,217,294 | ||||||
Liberty Media Corp.-Liberty Formula One, Class A(a) | 10,534 | 333,822 | ||||||
Liberty Media Corp.-Liberty Formula One, Class C, NVS(a) | 53,536 | 1,770,971 | ||||||
Lions Gate Entertainment Corp., Class A | 16,037 | 307,269 | ||||||
Lions Gate Entertainment Corp., Class B, NVS(b) | 15,203 | 270,461 | ||||||
Live Nation Entertainment Inc.(a) | 38,765 | 2,027,410 | ||||||
Madison Square Garden Co. (The), Class A(a) | 4,544 | 1,256,961 | ||||||
Netflix Inc.(a) | 115,481 | 34,849,856 | ||||||
Twenty-First Century Fox Inc., Class A, NVS | 283,103 | 12,886,849 | ||||||
Twenty-First Century Fox Inc., Class B | 120,721 | 5,454,175 | ||||||
Viacom Inc., Class A | 5,581 | 197,400 | ||||||
Viacom Inc., Class B, NVS | 86,498 | 2,766,206 | ||||||
Walt Disney Co. (The) | 365,953 | 42,022,383 | ||||||
|
| |||||||
105,361,057 | ||||||||
Food & Staples Retailing — 11.1% | ||||||||
Casey’s General Stores Inc. | 10,661 | 1,344,459 | ||||||
Costco Wholesale Corp. | 117,316 | 26,821,957 | ||||||
Kroger Co. (The) | 213,353 | 6,349,385 | ||||||
Rite Aid Corp.(a)(b) | 281,509 | 337,811 | ||||||
Sprouts Farmers Market Inc.(a) | 32,698 | 879,249 | ||||||
Sysco Corp. | 129,811 | 9,259,419 | ||||||
Walgreens Boots Alliance Inc. | 229,133 | 18,277,939 | ||||||
Walmart Inc. | 386,719 | 38,780,181 | ||||||
|
| |||||||
102,050,400 | ||||||||
Health Care Providers & Services — 0.9% |
| |||||||
AmerisourceBergen Corp. | 44,350 | 3,902,800 |
Security | Shares | Value | ||||||
Health Care Providers & Services (continued) |
| |||||||
Cardinal Health Inc. | 83,278 | $ | 4,213,867 | |||||
|
| |||||||
8,116,667 | ||||||||
Hotels, Restaurants & Leisure — 15.1% |
| |||||||
Aramark | 67,587 | 2,427,725 | ||||||
Bloomin’ Brands Inc. | 19,966 | 398,322 | ||||||
Boyd Gaming Corp. | 8,459 | 224,671 | ||||||
Brinker International Inc. | 10,404 | 451,013 | ||||||
Caesars Entertainment Corp.(a) | 148,902 | 1,279,068 | ||||||
Carnival Corp. | 110,257 | 6,178,802 | ||||||
Cheesecake Factory Inc. (The) | 7,679 | 371,203 | ||||||
Chipotle Mexican Grill Inc.(a) | 6,459 | 2,973,271 | ||||||
Choice Hotels International Inc. | 11,566 | 848,944 | ||||||
Churchill Downs Inc. | 2,425 | 605,304 | ||||||
Cracker Barrel Old Country Store Inc. | 5,017 | 796,098 | ||||||
Darden Restaurants Inc. | 32,861 | 3,501,340 | ||||||
Domino’s Pizza Inc. | 11,718 | 3,149,681 | ||||||
Dunkin’ Brands Group Inc. | 24,178 | 1,754,356 | ||||||
Extended Stay America Inc. | 51,607 | 840,162 | ||||||
Hilton Grand Vacations Inc.(a) | 27,011 | 725,786 | ||||||
Hilton Worldwide Holdings Inc. | 77,202 | 5,494,466 | ||||||
Hyatt Hotels Corp., Class A | 8,983 | 621,624 | ||||||
Jack in the Box Inc. | 8,047 | 635,150 | ||||||
Las Vegas Sands Corp. | 102,025 | 5,206,336 | ||||||
Marriott International Inc./MD, Class A | 80,127 | 9,366,045 | ||||||
Marriott Vacations Worldwide Corp. | 10,813 | 956,842 | ||||||
McDonald’s Corp. | 209,720 | 37,099,468 | ||||||
MGM Resorts International | 138,454 | 3,693,953 | ||||||
Norwegian Cruise Line Holdings Ltd.(a) | 53,845 | 2,372,949 | ||||||
Planet Fitness Inc., Class A(a) | 16,405 | 805,321 | ||||||
Royal Caribbean Cruises Ltd. | 46,282 | 4,847,114 | ||||||
Scientific Games Corp./DE, | 14,476 | 322,236 | ||||||
Six Flags Entertainment Corp. | 22,736 | 1,224,561 | ||||||
Starbucks Corp. | 368,094 | 21,448,837 | ||||||
Texas Roadhouse Inc. | 15,573 | 941,544 | ||||||
Vail Resorts Inc. | 11,208 | 2,816,795 | ||||||
Wendy’s Co. (The) | 48,489 | 835,950 | ||||||
Wyndham Destinations Inc. | 29,797 | 1,069,116 | ||||||
Wyndham Hotels & Resorts Inc. | 26,686 | 1,315,353 | ||||||
Wynn Resorts Ltd. | 24,613 | 2,476,068 | ||||||
Yum! Brands Inc. | 87,770 | 7,935,286 | ||||||
|
| |||||||
138,010,760 | ||||||||
Interactive Media & Services — 0.2% |
| |||||||
TripAdvisor Inc.(a) | 25,046 | 1,305,898 | ||||||
Yelp Inc.(a)(b) | 19,797 | 847,708 | ||||||
|
| |||||||
2,153,606 | ||||||||
Internet & Direct Marketing Retail — 22.6% |
| |||||||
Amazon.com Inc.(a) | 108,370 | 173,176,344 | ||||||
Booking Holdings Inc.(a) | 12,800 | 23,994,624 | ||||||
Expedia Group Inc. | 31,843 | 3,994,067 | ||||||
Groupon Inc.(a) | 77,822 | 254,478 | ||||||
Liberty Expedia Holdings Inc., | 11,816 | 513,051 | ||||||
Qurate Retail Inc.(a) | 117,607 | 2,580,297 | ||||||
Shutterfly Inc.(a) | 10,099 | 504,950 | ||||||
Wayfair Inc., Class A(a) | 14,669 | 1,617,844 | ||||||
|
| |||||||
206,635,655 | ||||||||
IT Services — 0.1% | ||||||||
LiveRamp Holdings Inc.(a) | 20,439 | 933,654 | ||||||
|
|
S C H E D U L E O F I N V E S T M E N T S | 19 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® U.S. Consumer Services ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Media — 11.5% | ||||||||
Altice USA Inc., Class A | 22,869 | $ | 372,993 | |||||
AMC Networks Inc., Class A(a)(b) | 11,903 | 697,279 | ||||||
Cable One Inc. | 1,445 | 1,294,344 | ||||||
CBS Corp., Class B, NVS | 93,319 | 5,351,845 | ||||||
Charter Communications Inc., Class A(a)(b) | 48,302 | 15,474,512 | ||||||
Comcast Corp., Class A | 1,208,881 | 46,106,721 | ||||||
Discovery Inc., Class A(a) | 46,803 | 1,515,949 | ||||||
Discovery Inc., Class C, NVS(a) | 88,931 | 2,606,568 | ||||||
DISH Network Corp., Class A(a) | 54,286 | 1,668,752 | ||||||
GCI Liberty Inc., Class A(a) | 28,010 | 1,325,713 | ||||||
Interpublic Group of Companies Inc. (The) | 101,465 | 2,349,929 | ||||||
John Wiley & Sons Inc., Class A | 10,267 | 556,882 | ||||||
Liberty Broadband Corp., Class A(a) | 8,919 | 738,404 | ||||||
Liberty Broadband Corp., Class C, NVS(a) | 34,846 | 2,889,779 | ||||||
Liberty Global PLC, Class A(a) | 57,103 | 1,463,550 | ||||||
Liberty Global PLC, Class C, NVS(a) | 163,278 | 4,088,481 | ||||||
Liberty Latin America Ltd., | 11,383 | 204,666 | ||||||
Liberty Latin America Ltd., Class C, NVS(a) | 32,213 | 580,156 | ||||||
Liberty Media Corp.-Liberty SiriusXM, Class A(a) | 25,531 | 1,052,899 | ||||||
Liberty Media Corp.-Liberty SiriusXM, Class C, NVS(a) | 46,516 | 1,919,715 | ||||||
Meredith Corp. | 10,367 | 534,523 | ||||||
New York Times Co. (The), | 31,410 | 829,224 | ||||||
News Corp., Class A, NVS | 99,225 | 1,308,778 | ||||||
News Corp., Class B | 34,571 | 461,177 | ||||||
Nexstar Media Group Inc., Class A | 9,569 | 716,622 | ||||||
Omnicom Group Inc. | 62,268 | 4,627,758 | ||||||
Sinclair Broadcast Group Inc., Class A | 15,353 | 439,710 | ||||||
Sirius XM Holdings Inc.(b) | 402,114 | 2,420,726 | ||||||
TEGNA Inc. | 44,707 | 515,919 | ||||||
Tribune Media Co., Class A | 21,272 | 808,549 | ||||||
|
| |||||||
104,922,123 | ||||||||
Multiline Retail — 4.1% | ||||||||
Big Lots Inc.(b) | 14,719 | 611,133 | ||||||
Dillard’s Inc., Class A(b) | 5,939 | 418,224 | ||||||
Dollar General Corp. | 77,513 | 8,633,398 | ||||||
Dollar Tree Inc.(a) | 64,856 | 5,467,361 | ||||||
Kohl’s Corp. | 46,536 | 3,524,171 | ||||||
Macy’s Inc. | 85,468 | 2,930,698 | ||||||
Nordstrom Inc. | 34,107 | 2,243,217 | ||||||
Ollie’s Bargain Outlet Holdings Inc.(a) | 15,393 | 1,430,010 | ||||||
Target Corp. | 147,939 | 12,372,139 | ||||||
|
| |||||||
37,630,351 | ||||||||
Professional Services — 0.7% | ||||||||
Dun & Bradstreet Corp. (The) | 10,793 | 1,535,628 | ||||||
IHS Markit Ltd.(a) | 97,420 | 5,117,473 | ||||||
|
| |||||||
6,653,101 | ||||||||
Road & Rail — 0.1% | ||||||||
AMERCO | 1,154 | 376,758 | ||||||
Avis Budget Group Inc.(a) | 15,725 | 442,187 | ||||||
|
| |||||||
818,945 | ||||||||
Specialty Retail — 16.5% | ||||||||
Aaron’s Inc. | 19,729 | 929,828 | ||||||
Advance Auto Parts Inc. | 20,639 | 3,297,287 | ||||||
American Eagle Outfitters Inc. | 50,698 | 1,169,095 | ||||||
AutoNation Inc.(a) | 18,685 | 756,369 | ||||||
AutoZone Inc.(a) | 8,025 | 5,886,097 |
Security | Shares | Value | ||||||
Specialty Retail (continued) | ||||||||
Bed Bath & Beyond Inc. | 44,705 | $ | 614,247 | |||||
Best Buy Co. Inc. | 67,028 | 4,702,684 | ||||||
Burlington Stores Inc.(a) | 20,923 | 3,588,085 | ||||||
CarMax Inc.(a) | 52,426 | 3,560,250 | ||||||
Dick’s Sporting Goods Inc. | 24,844 | 878,732 | ||||||
Five Below Inc.(a) | 16,278 | 1,852,762 | ||||||
Floor & Decor Holdings Inc., | 8,790 | 224,848 | ||||||
Foot Locker Inc. | 33,049 | 1,557,930 | ||||||
Gap Inc. (The) | 62,293 | 1,700,599 | ||||||
Home Depot Inc. (The) | 237,318 | 41,739,490 | ||||||
L Brands Inc. | 67,355 | 2,183,649 | ||||||
Lithia Motors Inc., Class A | 7,882 | 702,128 | ||||||
Lowe’s Companies Inc. . | 222,779 | 21,213,016 | ||||||
Michaels Companies Inc. (The)(a) | 31,611 | 501,034 | ||||||
Murphy USA Inc.(a)(b) | 10,168 | 819,846 | ||||||
National Vision Holdings Inc.(a)(b) | 8,940 | 370,384 | ||||||
O’Reilly Automotive Inc.(a) | 22,842 | 7,326,571 | ||||||
Penske Automotive Group Inc. | 14,569 | 646,572 | ||||||
Ross Stores Inc. | 114,189 | 11,304,711 | ||||||
Sally Beauty Holdings Inc.(a)(b) | 41,962 | 747,343 | ||||||
Signet Jewelers Ltd. | 14,632 | 820,124 | ||||||
Tiffany & Co. | 29,759 | 3,312,177 | ||||||
TJX Companies Inc. (The) | 165,550 | 18,190,634 | ||||||
Tractor Supply Co. | 36,002 | 3,308,224 | ||||||
Ulta Salon Cosmetics & Fragrance | 15,884 | 4,360,476 | ||||||
Urban Outfitters Inc.(a) | 24,607 | 970,992 | ||||||
Williams-Sonoma Inc. | 22,723 | 1,349,292 | ||||||
|
| |||||||
150,585,476 | ||||||||
Trading Companies & Distributors — 0.0% |
| |||||||
Beacon Roofing Supply Inc.(a)(b) | 14,298 | 399,057 | ||||||
|
| |||||||
Total Common Stocks — 99.9% | 914,198,246 | |||||||
|
| |||||||
Short-Term Investments | ||||||||
Money Market Funds — 0.8% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 2.36%(c)(d)(e) | 6,197,927 | 6,199,167 | ||||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 2.11%(c)(d) | 1,052,944 | 1,052,944 | ||||||
|
| |||||||
7,252,111 | ||||||||
|
| |||||||
Total Short-Term Investments — 0.8% |
| 7,252,111 | ||||||
|
| |||||||
Total Investments in Securities — 100.7% |
| 921,450,357 | ||||||
Other Assets, Less Liabilities — (0.7)% |
| (6,364,909 | ) | |||||
|
| |||||||
Net Assets — 100.0% | $ | 915,085,448 | ||||||
|
|
(a) | Non-income producing security. |
(b) | All or a portion of this security is on loan. |
(c) | Affiliate of the Fund. |
(d) | Annualized 7-day yield as of period-end. |
(e) | All or a portion of this security was purchased with cash collateral received from loaned securities. |
20 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® U.S. Consumer Services ETF
|
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:
Affiliated Issuer | | Shares Held at 04/30/18 | | Net Activity | | Shares Held at 10/31/18 | | | Value at 10/31/18 | | Income | | Net Realized Gain (Loss) | (a) | | Change in Unrealized Appreciation (Depreciation) |
| |||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | 15,166,393 | (8,968,466 | ) | 6,197,927 | $ | 6,199,167 | $ | 45,841 | (b) | $ | 2,394 | $ | 1 | |||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | 593,674 | 459,270 | 1,052,944 | 1,052,944 | 10,979 | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
$ | 7,252,111 | $ | 56,820 | $ | 2,394 | $ | 1 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
(b) | Includes securities lending income earned from the reinvestment of cash collateral from loaned securities (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities, and less fees paid to BTC as securities lending agent. |
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, refer to the Notes to Financial Statements.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $ | 914,198,246 | $ | — | $ | — | $ | 914,198,246 | ||||||||
Money Market Funds | 7,252,111 | — | — | 7,252,111 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 921,450,357 | $ | — | $ | — | $ | 921,450,357 | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
S C H E D U L E O F I N V E S T M E N T S | 21 |
Schedule of Investments (unaudited)
October 31, 2018 | iShares® U.S. Financial Services ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks | ||||||||
Banks — 53.2% | ||||||||
Associated Banc-Corp. | 91,335 | $ | 2,117,145 | |||||
BancorpSouth Bank | 47,624 | 1,366,809 | ||||||
Bank of America Corp. | 4,921,674 | 135,346,035 | ||||||
Bank of Hawaii Corp. | 22,176 | 1,739,485 | ||||||
Bank OZK | 63,896 | 1,748,195 | ||||||
BankUnited Inc. | 55,691 | 1,843,372 | ||||||
BB&T Corp. | 410,331 | 20,171,872 | ||||||
BOK Financial Corp. | 16,905 | 1,449,266 | ||||||
Cathay General Bancorp. | 40,972 | 1,543,415 | ||||||
Chemical Financial Corp. | 37,679 | 1,765,638 | ||||||
CIT Group Inc. | 59,838 | 2,835,124 | ||||||
Citigroup Inc. | 1,333,387 | 87,283,513 | ||||||
Citizens Financial Group Inc. | 252,178 | 9,418,848 | ||||||
Comerica Inc. | 90,853 | 7,409,971 | ||||||
Commerce Bancshares Inc. | 50,358 | 3,202,769 | ||||||
Cullen/Frost Bankers Inc. | 33,887 | 3,318,215 | ||||||
East West Bancorp. Inc. | 76,650 | 4,019,526 | ||||||
Fifth Third Bancorp. | 353,053 | 9,528,900 | ||||||
First Citizens BancShares Inc./NC, Class A | 4,846 | 2,067,449 | ||||||
First Financial Bankshares Inc. | 35,920 | 2,118,921 | ||||||
First Hawaiian Inc. | 48,031 | 1,190,208 | ||||||
First Horizon National Corp. | 171,900 | 2,774,466 | ||||||
First Republic Bank/CA | 85,745 | 7,801,938 | ||||||
FNB Corp. | 171,358 | 2,027,165 | ||||||
Fulton Financial Corp. | 93,288 | 1,493,541 | ||||||
Glacier Bancorp. Inc. | 44,983 | 1,907,279 | ||||||
Hancock Whitney Corp. | 45,131 | 1,893,697 | ||||||
Home BancShares Inc./AR | 85,279 | 1,623,712 | ||||||
Huntington Bancshares Inc./OH | 585,206 | 8,386,002 | ||||||
IBERIABANK Corp. | 29,748 | 2,215,929 | ||||||
International Bancshares Corp. | 29,134 | 1,127,486 | ||||||
Investors Bancorp. Inc. | 129,699 | 1,450,035 | ||||||
JPMorgan Chase & Co. | 1,780,715 | 194,133,549 | ||||||
KeyCorp | 557,405 | 10,122,475 | ||||||
M&T Bank Corp. | 76,186 | 12,601,926 | ||||||
MB Financial Inc. | 44,560 | 1,978,018 | ||||||
PacWest Bancorp. | 64,663 | 2,626,611 | ||||||
People’s United Financial Inc. | 197,092 | 3,086,461 | ||||||
Pinnacle Financial Partners Inc. | 38,864 | 2,032,587 | ||||||
PNC Financial Services Group Inc. (The)(a) | 246,004 | 31,609,054 | ||||||
Popular Inc. | 54,221 | 2,820,034 | ||||||
Prosperity Bancshares Inc. | 35,240 | 2,291,657 | ||||||
Regions Financial Corp. | 584,127 | 9,912,635 | ||||||
Signature Bank/New York NY | 29,373 | 3,228,093 | ||||||
Sterling Bancorp./DE | 119,384 | 2,146,524 | ||||||
SunTrust Banks Inc. | 244,111 | 15,295,995 | ||||||
SVB Financial Group(b) | 28,216 | 6,693,682 | ||||||
Synovus Financial Corp. | 62,301 | 2,340,026 | ||||||
TCF Financial Corp. | 88,745 | 1,852,996 | ||||||
Texas Capital Bancshares Inc.(b) | 26,624 | 1,736,684 | ||||||
Trustmark Corp. | 35,608 | 1,096,726 | ||||||
U.S. Bancorp. | 811,338 | 42,408,637 | ||||||
UMB Financial Corp. | 23,926 | 1,527,675 | ||||||
Umpqua Holdings Corp. | 116,315 | 2,233,248 | ||||||
United Bankshares Inc./WV | 55,120 | 1,828,330 | ||||||
Valley National Bancorp. | 175,531 | 1,751,799 | ||||||
Webster Financial Corp. | 48,738 | 2,867,744 | ||||||
Wells Fargo & Co. | 2,296,583 | 122,247,113 |
Security | Shares | Value | ||||||
Banks (continued) | ||||||||
Western Alliance Bancorp.(b) | 51,545 | $ | 2,486,531 | |||||
Wintrust Financial Corp. | 29,841 | 2,272,094 | ||||||
Zions Bancorp. N.A | 103,155 | 4,853,443 | ||||||
|
| |||||||
826,268,273 | ||||||||
Capital Markets — 24.4% | ||||||||
Affiliated Managers Group Inc. | 28,246 | 3,210,440 | ||||||
Ameriprise Financial Inc. | 75,165 | 9,563,995 | ||||||
Bank of New York Mellon Corp. (The) | 487,422 | 23,069,683 | ||||||
BGC Partners Inc., Class A | 142,585 | 1,509,974 | ||||||
BlackRock Inc.(a) | 65,105 | 26,785,499 | ||||||
Cboe Global Markets Inc. | 59,286 | 6,690,425 | ||||||
Charles Schwab Corp. (The) | 637,098 | 29,459,412 | ||||||
CME Group Inc. | 180,458 | 33,067,124 | ||||||
E*TRADE Financial Corp. | 137,679 | 6,804,096 | ||||||
Eaton Vance Corp., NVS | 62,433 | 2,812,607 | ||||||
Evercore Inc., Class A | 21,739 | 1,775,859 | ||||||
FactSet Research Systems Inc. | 20,291 | 4,540,314 | ||||||
Federated Investors Inc., Class B | 50,625 | 1,248,919 | ||||||
Franklin Resources Inc. | 161,699 | 4,931,820 | ||||||
Goldman Sachs Group Inc. (The) | 186,039 | 41,927,609 | ||||||
Interactive Brokers Group Inc., Class A | 39,788 | 1,965,925 | ||||||
Intercontinental Exchange Inc. | 303,827 | 23,406,832 | ||||||
Invesco Ltd. | 217,322 | 4,718,061 | ||||||
Janus Henderson Group PLC | 89,463 | 2,198,106 | ||||||
Lazard Ltd., Class A | 68,640 | 2,727,754 | ||||||
Legg Mason Inc. | 45,234 | 1,276,503 | ||||||
LPL Financial Holdings Inc. | 46,776 | 2,881,402 | ||||||
MarketAxess Holdings Inc. | 19,872 | 4,166,562 | ||||||
Moody’s Corp. | 88,456 | 12,868,579 | ||||||
Morgan Stanley | 702,582 | 32,079,894 | ||||||
Morningstar Inc. | 9,734 | 1,214,803 | ||||||
MSCI Inc. | 47,094 | 7,081,996 | ||||||
Nasdaq Inc. | 61,094 | 5,297,461 | ||||||
Northern Trust Corp. | 118,303 | 11,128,763 | ||||||
Raymond James Financial Inc. | 69,661 | 5,342,302 | ||||||
S&P Global Inc. | 133,253 | 24,294,687 | ||||||
SEI Investments Co. | 69,929 | 3,737,705 | ||||||
State Street Corp. | 201,026 | 13,820,537 | ||||||
Stifel Financial Corp. | 37,757 | 1,726,250 | ||||||
T Rowe Price Group Inc. | 128,850 | 12,497,161 | ||||||
TD Ameritrade Holding Corp. | 144,428 | 7,469,816 | ||||||
|
| |||||||
379,298,875 | ||||||||
Consumer Finance — 6.6% | ||||||||
Ally Financial Inc. | 223,887 | 5,688,969 | ||||||
American Express Co. | 374,097 | 38,430,985 | ||||||
Capital One Financial Corp. | 253,485 | 22,636,211 | ||||||
Credit Acceptance Corp.(b) | 6,558 | 2,783,346 | ||||||
Discover Financial Services | 181,552 | 12,648,728 | ||||||
FirstCash Inc. | 23,489 | 1,888,516 | ||||||
Green Dot Corp., Class A(b) | 25,472 | 1,929,249 | ||||||
Navient Corp. | 125,204 | 1,449,862 | ||||||
OneMain Holdings Inc.(b) | 39,721 | 1,132,843 | ||||||
PRA Group Inc.(b)(c) | 24,180 | 745,711 | ||||||
Santander Consumer USA Holdings Inc. | 61,547 | 1,154,006 | ||||||
SLM Corp.(b) | 230,286 | 2,335,100 | ||||||
Synchrony Financial | 361,047 | 10,427,037 | ||||||
|
| |||||||
103,250,563 | ||||||||
Diversified Financial Services — 0.1% |
| |||||||
AXA Equitable Holdings Inc. | 71,382 | 1,448,341 | ||||||
|
|
22 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® U.S. Financial Services ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Insurance — 0.3% | ||||||||
Fidelity National Financial Inc. | 145,412 | $ | 4,864,032 | |||||
|
| |||||||
IT Services — 14.5% | ||||||||
Mastercard Inc., Class A | 483,367 | 95,547,155 | ||||||
Visa Inc., Class A | 941,335 | 129,763,030 | ||||||
|
| |||||||
225,310,185 | ||||||||
Thrifts & Mortgage Finance — 0.8% |
| |||||||
Capitol Federal Financial Inc. | 73,813 | 916,020 | ||||||
Essent Group Ltd.(b) | 51,990 | 2,049,446 | ||||||
MGIC Investment Corp.(b) | 192,301 | 2,347,995 | ||||||
New York Community Bancorp. Inc. | 259,566 | 2,486,642 | ||||||
Radian Group Inc. | 112,591 | 2,160,621 | ||||||
TFS Financial Corp. | 27,941 | 411,012 | ||||||
Washington Federal Inc. | 44,177 | 1,244,024 | ||||||
|
| |||||||
11,615,760 | ||||||||
|
| |||||||
Total Common Stocks — 99.9% |
| 1,552,056,029 | ||||||
|
| |||||||
Short-Term Investments | ||||||||
Money Market Funds — 0.1% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 2.36%(a)(d)(e) | 730,431 | 730,578 |
Security | Shares | Value | ||||||
Money Market Funds (continued) | ||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 2.11%(a)(d) | 640,688 | $ | 640,688 | |||||
|
| |||||||
1,371,266 | ||||||||
|
| |||||||
Total Short-Term Investments — 0.1% |
| 1,371,266 | ||||||
|
| |||||||
Total Investments in Securities — 100.0% |
| 1,553,427,295 | ||||||
Other Assets, Less Liabilities — (0.0)% |
| (235,168 | ) | |||||
|
| |||||||
Net Assets — 100.0% |
| $ | 1,553,192,127 | |||||
|
|
(a) | Affiliate of the Fund. |
(b) | Non-income producing security. |
(c) | All or a portion of this security is on loan. |
(d) | Annualized 7-day yield as of period-end. |
(e) | All or a portion of this security was purchased with cash collateral received from loaned securities. |
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:
| Shares Held at | | Shares | Shares | | Shares Held at | | Value at | | Net Realized |
| | Change in Unrealized Appreciation | | ||||||||||||||||||
Affiliated Issuer | 04/30/18 | Purchased | Sold | 10/31/18 | 10/31/18 | Income | Gain (Loss) | (a) | (Depreciation) | |||||||||||||||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | 4,169,217 | — | (3,438,786 | )(b) | 730,431 | $ | 730,578 | $ | 22,085 | (c) | $ | 5,824 | $ | (105 | ) | |||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | 790,407 | — | (149,719 | )(b) | 640,688 | 640,688 | 18,897 | — | — | |||||||||||||||||||||||
BlackRock Inc. | 66,052 | 12,728 | (13,675 | ) | 65,105 | 26,785,499 | 418,418 | 1,718,072 | (9,088,688 | ) | ||||||||||||||||||||||
PNC Financial Services Group Inc. (The) | 251,710 | 48,153 | (53,859 | ) | 246,004 | 31,609,054 | 473,306 | 2,096,510 | (6,617,147 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 59,765,819 | $ | 932,706 | $ | 3,820,406 | $ | (15,705,940 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
(b) | Net of purchases and sales. |
(c) | Includes securities lending income earned from the reinvestment of cash collateral from loaned securities (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities, and less fees paid to BTC as securities lending agent. |
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, refer to the Notes to Financial Statements.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $ | 1,552,056,029 | $ | — | $ | — | $ | 1,552,056,029 | ||||||||
Money Market Funds | 1,371,266 | — | — | 1,371,266 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 1,553,427,295 | $ | — | $ | — | $ | 1,553,427,295 | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
S C H E D U L E O F I N V E S T M E N T S | 23 |
Schedule of Investments (unaudited)
October 31, 2018 | iShares® U.S. Financials ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks | ||||||||
Banks — 31.2% | ||||||||
Associated Banc-Corp. | 62,105 | $ | 1,439,594 | |||||
BancorpSouth Bank | 33,282 | 955,193 | ||||||
Bank of America Corp. | 3,234,361 | 88,944,928 | ||||||
Bank of Hawaii Corp. | 15,314 | 1,201,230 | ||||||
Bank OZK | 43,772 | 1,197,602 | ||||||
BankUnited Inc. | 38,278 | 1,267,002 | ||||||
BB&T Corp. | 270,472 | 13,296,404 | ||||||
BOK Financial Corp. | 11,740 | 1,006,470 | ||||||
Cathay General Bancorp. | 28,385 | 1,069,263 | ||||||
Chemical Financial Corp. | 26,018 | 1,219,203 | ||||||
CIT Group Inc. | 40,514 | 1,919,553 | ||||||
Citigroup Inc. | 876,493 | 57,375,232 | ||||||
Citizens Financial Group Inc. | 167,091 | 6,240,849 | ||||||
Comerica Inc. | 60,276 | 4,916,111 | ||||||
Commerce Bancshares Inc. | 33,920 | 2,157,312 | ||||||
Cullen/Frost Bankers Inc. | 22,810 | 2,233,555 | ||||||
East West Bancorp. Inc. | 51,478 | 2,699,506 | ||||||
Fifth Third Bancorp. | 233,835 | 6,311,207 | ||||||
First Citizens BancShares Inc./NC, Class A | 3,302 | 1,408,732 | ||||||
First Financial Bankshares Inc. | 23,566 | 1,390,158 | ||||||
First Hawaiian Inc. | 33,684 | 834,690 | ||||||
First Horizon National Corp. | 116,521 | 1,880,649 | ||||||
First Republic Bank/CA | 56,834 | 5,171,326 | ||||||
FNB Corp. | 117,473 | 1,389,706 | ||||||
Fulton Financial Corp. | 64,725 | 1,036,247 | ||||||
Glacier Bancorp. Inc. | 29,778 | 1,262,587 | ||||||
Hancock Whitney Corp. | 31,026 | 1,301,851 | ||||||
Home BancShares Inc./AR | 58,758 | 1,118,752 | ||||||
Huntington Bancshares Inc./OH | 387,628 | 5,554,709 | ||||||
IBERIABANK Corp. | 20,210 | 1,505,443 | ||||||
International Bancshares Corp. | 20,562 | 795,749 | ||||||
Investors Bancorp. Inc. | 89,681 | 1,002,634 | ||||||
JPMorgan Chase & Co. | 1,170,044 | 127,558,197 | ||||||
KeyCorp | 368,844 | 6,698,207 | ||||||
M&T Bank Corp. | 50,328 | 8,324,755 | ||||||
MB Financial Inc. | 30,505 | 1,354,117 | ||||||
PacWest Bancorp. | 43,880 | 1,782,406 | ||||||
People’s United Financial Inc. | 133,222 | 2,086,257 | ||||||
Pinnacle Financial Partners Inc. | 26,465 | 1,384,120 | ||||||
PNC Financial Services Group Inc. (The)(a) | 161,581 | 20,761,543 | ||||||
Popular Inc. | 36,739 | 1,910,795 | ||||||
Prosperity Bancshares Inc. | 23,915 | 1,555,192 | ||||||
Regions Financial Corp. | 386,630 | 6,561,111 | ||||||
Signature Bank/New York NY | 19,750 | 2,170,525 | ||||||
Sterling Bancorp./DE | 81,200 | 1,459,976 | ||||||
SunTrust Banks Inc. | 161,134 | 10,096,656 | ||||||
SVB Financial Group(b) | 18,719 | 4,440,708 | ||||||
Synovus Financial Corp. | 42,167 | 1,583,793 | ||||||
TCF Financial Corp. | 60,858 | 1,270,715 | ||||||
Texas Capital Bancshares Inc.(b) | 18,327 | 1,195,470 | ||||||
Trustmark Corp. | 23,780 | 732,424 | ||||||
U.S. Bancorp. | 533,737 | 27,898,433 | ||||||
UMB Financial Corp. | 16,512 | 1,054,291 | ||||||
Umpqua Holdings Corp. | 79,481 | 1,526,035 | ||||||
United Bankshares Inc./WV | 37,721 | 1,251,206 | ||||||
Valley National Bancorp. | 120,592 | 1,203,508 | ||||||
Webster Financial Corp. | 33,002 | 1,941,838 | ||||||
Wells Fargo &Co. | 1,509,321 | 80,341,157 |
Security | Shares | Value | ||||||
Banks (continued) | ||||||||
Western Alliance Bancorp.(b)(c) | 34,914 | $ | 1,684,251 | |||||
Wintrust Financial Corp. | 20,339 | 1,548,611 | ||||||
Zions Bancorp. N.A. | 68,827 | 3,238,310 | ||||||
|
| |||||||
545,718,054 | ||||||||
Capital Markets — 14.2% | ||||||||
Affiliated Managers Group Inc. | 11,608 | 1,319,365 | ||||||
Ameriprise Financial Inc. | 49,754 | 6,330,699 | ||||||
Bank of New York Mellon Corp. (The) | 321,200 | 15,202,396 | ||||||
BGC Partners Inc., Class A | 98,471 | 1,042,808 | ||||||
BlackRock Inc.(a) | 42,723 | 17,577,097 | ||||||
Cboe Global Markets Inc. | 39,397 | 4,445,951 | ||||||
Charles Schwab Corp. (The) | 419,472 | 19,396,385 | ||||||
CME Group Inc. | 118,767 | 21,762,865 | ||||||
E*TRADE Financial Corp. | 91,416 | 4,517,779 | ||||||
Eaton Vance Corp., NVS | 42,277 | 1,904,579 | ||||||
Evercore Inc., Class A | 14,913 | 1,218,243 | ||||||
FactSet Research Systems Inc. | 13,606 | 3,044,479 | ||||||
Federated Investors Inc., Class B | 35,147 | 867,076 | ||||||
Franklin Resources Inc. | 76,653 | 2,337,917 | ||||||
Goldman Sachs Group Inc. (The) | 122,399 | 27,585,063 | ||||||
Interactive Brokers Group Inc., Class A | 27,279 | 1,347,855 | ||||||
Intercontinental Exchange Inc. | 200,157 | 15,420,095 | ||||||
Invesco Ltd. | 102,195 | 2,218,653 | ||||||
Janus Henderson Group PLC | 60,806 | 1,494,003 | ||||||
Lazard Ltd., Class A | 46,508 | 1,848,228 | ||||||
Legg Mason Inc. | 29,845 | 842,226 | ||||||
LPL Financial Holdings Inc. | 31,588 | 1,945,821 | ||||||
MarketAxess Holdings Inc. | 13,336 | 2,796,159 | ||||||
Moody’s Corp. | 58,428 | 8,500,105 | ||||||
Morgan Stanley | 462,451 | 21,115,513 | ||||||
Morningstar Inc. | 6,716 | 838,157 | ||||||
MSCI Inc. | 31,248 | 4,699,074 | ||||||
Nasdaq Inc. | 40,758 | 3,534,126 | ||||||
Northern Trust Corp. | 78,217 | 7,357,873 | ||||||
Raymond James Financial Inc. | 46,313 | 3,551,744 | ||||||
S&P Global Inc. | 87,793 | 16,006,420 | ||||||
SEI Investments Co. | 46,788 | 2,500,819 | ||||||
State Street Corp. | 132,694 | 9,122,713 | ||||||
Stifel Financial Corp. | 25,912 | 1,184,697 | ||||||
T Rowe Price Group Inc. | 85,093 | 8,253,170 | ||||||
TD Ameritrade Holding Corp. | 95,820 | 4,955,810 | ||||||
|
| |||||||
248,085,963 | ||||||||
Consumer Finance — 3.9% | ||||||||
Ally Financial Inc. | 148,876 | 3,782,939 | ||||||
American Express Co. | 246,161 | 25,288,119 | ||||||
Capital One Financial Corp. | 166,990 | 14,912,207 | ||||||
Credit Acceptance Corp.(b) | 4,430 | 1,880,181 | ||||||
Discover Financial Services | 119,940 | 8,356,220 | ||||||
FirstCash Inc. | 16,174 | 1,300,390 | ||||||
Green Dot Corp., Class A(b) | 16,754 | 1,268,948 | ||||||
Navient Corp. | 86,712 | 1,004,125 | ||||||
OneMain Holdings Inc.(b) | 27,877 | 795,052 | ||||||
PRA Group Inc.(b)(c) | 17,525 | 540,471 | ||||||
Santander Consumer USA Holdings Inc. | 43,242 | 810,787 | ||||||
SLM Corp.(b) | 156,858 | 1,590,540 | ||||||
Synchrony Financial | 238,820 | 6,897,122 | ||||||
|
| |||||||
68,427,101 | ||||||||
Diversified Financial Services — 8.2% | ||||||||
AXA Equitable Holdings Inc.(c) | 49,601 | 1,006,404 |
24 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® U.S. Financials ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Diversified Financial Services (continued) |
| |||||||
Berkshire Hathaway Inc., Class B(b) | 678,642 | $ | 139,311,630 | |||||
Voya Financial Inc. | 57,082 | 2,497,908 | ||||||
|
| |||||||
142,815,942 | ||||||||
Equity Real Estate Investment Trusts (REITs) — 18.5% |
| |||||||
Acadia Realty Trust(c) | 30,393 | 846,141 | ||||||
Alexandria Real Estate Equities Inc. | 37,225 | 4,550,012 | ||||||
American Campus Communities Inc. | 49,107 | 1,940,218 | ||||||
American Homes 4 Rent, Class A | 92,026 | 1,938,988 | ||||||
American Tower Corp. | 153,700 | 23,947,997 | ||||||
Apartment Investment & Management Co., Class A | 56,003 | 2,410,369 | ||||||
Apple Hospitality REIT Inc. | 78,867 | 1,275,279 | ||||||
AvalonBay Communities Inc. | 48,355 | 8,480,500 | ||||||
Boston Properties Inc. | 54,178 | 6,542,535 | ||||||
Brandywine Realty Trust | 66,213 | 930,955 | ||||||
Brixmor Property Group Inc. | 38,274 | 620,039 | ||||||
Camden Property Trust | 32,847 | 2,965,099 | ||||||
Colony Capital Inc. | 179,627 | 1,054,410 | ||||||
Columbia Property Trust Inc. | 43,733 | 981,806 | ||||||
CoreCivic Inc.(c) | 43,072 | 967,397 | ||||||
CoreSite Realty Corp. | 13,312 | 1,249,464 | ||||||
Corporate Office Properties Trust | 36,397 | 940,498 | ||||||
Cousins Properties Inc. | 144,816 | 1,203,421 | ||||||
Crown Castle International Corp. | 144,779 | 15,743,268 | ||||||
CubeSmart | 66,625 | 1,930,793 | ||||||
CyrusOne Inc. | 37,182 | 1,979,198 | ||||||
DiamondRock Hospitality Co. | 73,606 | 769,183 | ||||||
Digital Realty Trust Inc.(c) | 72,155 | 7,450,725 | ||||||
Douglas Emmett Inc. | 57,150 | 2,068,259 | ||||||
Duke Realty Corp. | 126,277 | 3,481,457 | ||||||
EastGroup Properties Inc. | 12,657 | 1,212,414 | ||||||
EPR Properties | 26,688 | 1,834,533 | ||||||
Equinix Inc. | 27,789 | 10,524,806 | ||||||
Equity Commonwealth | 44,186 | 1,315,859 | ||||||
Equity LifeStyle Properties Inc. | 31,562 | 2,988,606 | ||||||
Equity Residential | 128,871 | 8,371,460 | ||||||
Essex Property Trust Inc. | 23,180 | 5,813,080 | ||||||
Extra Space Storage Inc. | 44,635 | 4,019,828 | ||||||
Federal Realty Investment Trust | 25,996 | 3,224,804 | ||||||
First Industrial Realty Trust Inc. | 45,726 | 1,403,788 | ||||||
Forest City Realty Trust Inc., Class A | 95,142 | 2,393,773 | ||||||
Gaming and Leisure Properties Inc. | 71,439 | 2,406,780 | ||||||
GEO Group Inc. (The) | 44,746 | 989,334 | ||||||
HCP Inc. | 165,497 | 4,559,442 | ||||||
Healthcare Realty Trust Inc. | 43,358 | 1,207,954 | ||||||
Healthcare Trust of America Inc., Class A | 74,306 | 1,951,276 | ||||||
Highwoods Properties Inc. | 37,261 | 1,588,809 | ||||||
Hospitality Properties Trust | 59,320 | 1,519,778 | ||||||
Host Hotels & Resorts Inc.(c) | 260,704 | 4,982,053 | ||||||
Hudson Pacific Properties Inc.(c) | 56,339 | 1,707,072 | ||||||
Invitation Homes Inc. | 105,818 | 2,315,298 | ||||||
Iron Mountain Inc.(c) | 101,165 | 3,096,661 | ||||||
JBG SMITH Properties | 39,173 | 1,468,204 | ||||||
Kilroy Realty Corp. | 35,821 | 2,467,350 | ||||||
Kimco Realty Corp. | 89,074 | 1,433,201 | ||||||
Lamar Advertising Co., Class A | 30,150 | 2,210,598 | ||||||
LaSalle Hotel Properties | 40,218 | 1,327,596 | ||||||
Lexington Realty Trust | 81,124 | 630,333 | ||||||
Liberty Property Trust | 52,727 | 2,207,680 | ||||||
Life Storage Inc. | 16,787 | 1,580,664 | ||||||
Macerich Co. (The) | 37,862 | 1,954,436 |
Security | Shares | Value | ||||||
Equity Real Estate Investment Trusts (REITs) (continued) |
| |||||||
Mack-Cali Realty Corp.(c) | 34,268 | $ | 695,640 | |||||
Medical Properties Trust Inc. | 130,660 | 1,941,608 | ||||||
Mid-America Apartment Communities Inc. | 40,130 | 3,921,102 | ||||||
National Health Investors Inc. | 15,463 | 1,135,912 | ||||||
National Retail Properties Inc.(c) | 55,833 | 2,610,193 | ||||||
Omega Healthcare Investors Inc.(c) | 71,422 | 2,381,924 | ||||||
Outfront Media Inc. | 51,504 | 912,651 | ||||||
Paramount Group Inc. | 76,005 | 1,086,111 | ||||||
Park Hotels & Resorts Inc.(c) | 71,896 | 2,090,017 | ||||||
Pebblebrook Hotel Trust(c) | 25,723 | 867,122 | ||||||
Physicians Realty Trust | 66,526 | 1,103,001 | ||||||
Piedmont Office Realty Trust Inc., Class A | 47,887 | 862,924 | ||||||
PotlatchDeltic Corp. | 21,985 | 796,956 | ||||||
Prologis Inc. | 219,777 | 14,169,023 | ||||||
Public Storage | 52,362 | 10,758,820 | ||||||
Rayonier Inc. | 46,854 | 1,414,991 | ||||||
Realty Income Corp.(c) | 101,740 | 6,131,870 | ||||||
Regency Centers Corp. | 59,788 | 3,788,168 | ||||||
Retail Properties of America Inc., Class A | 81,342 | 998,066 | ||||||
RLJ Lodging Trust | 63,977 | 1,243,713 | ||||||
Ryman Hospitality Properties Inc. | 18,553 | 1,439,527 | ||||||
Sabra Health Care REIT Inc. | 64,706 | 1,400,885 | ||||||
SBA Communications Corp.(b) | 40,276 | 6,531,559 | ||||||
Senior Housing Properties Trust | 86,039 | 1,382,647 | ||||||
Simon Property Group Inc. | 107,860 | 19,794,467 | ||||||
SITE Centers Corp. | 51,276 | 637,361 | ||||||
SL Green Realty Corp. | 30,723 | 2,803,781 | ||||||
Spirit Realty Capital Inc. | 156,492 | 1,223,767 | ||||||
STORE Capital Corp. | 65,584 | 1,903,904 | ||||||
Sun Communities Inc. | 30,593 | 3,073,679 | ||||||
Sunstone Hotel Investors Inc.(c) | 83,145 | 1,203,108 | ||||||
Tanger Factory Outlet Centers Inc.(c) | 33,978 | 756,350 | ||||||
Taubman Centers Inc. | 22,225 | 1,222,597 | ||||||
UDR Inc. | 94,506 | 3,703,690 | ||||||
Uniti Group Inc.(b)(c) | 63,873 | 1,222,529 | ||||||
Urban Edge Properties | 42,287 | 866,461 | ||||||
Ventas Inc. | 124,938 | 7,251,402 | ||||||
VEREIT Inc. | 217,521 | 1,594,429 | ||||||
VICI Properties Inc. | 27,008 | 583,103 | ||||||
Vornado Realty Trust | 61,010 | 4,153,561 | ||||||
Washington REIT | 29,300 | 816,591 | ||||||
Weingarten Realty Investors | 43,460 | 1,222,095 | ||||||
Welltower Inc. | 130,181 | 8,601,059 | ||||||
Weyerhaeuser Co. | 265,410 | 7,067,868 | ||||||
WP Carey Inc.(c) | 37,969 | 2,506,334 | ||||||
Xenia Hotels & Resorts Inc. | 41,457 | 851,941 | ||||||
|
| |||||||
323,699,988 | ||||||||
Insurance — 13.6% | ||||||||
Aflac Inc. | 268,283 | 11,554,949 | ||||||
Alleghany Corp. | 5,284 | 3,173,993 | ||||||
Allstate Corp. (The) | 120,991 | 11,581,258 | ||||||
American Financial Group Inc./OH | 24,865 | 2,487,246 | ||||||
American International Group Inc. | 310,298 | 12,812,204 | ||||||
Aon PLC | 84,747 | 13,235,786 | ||||||
Arch Capital Group Ltd.(b) | 142,890 | 4,053,789 | ||||||
Arthur J Gallagher & Co. | 63,781 | 4,720,432 | ||||||
Aspen Insurance Holdings Ltd. | 22,121 | 926,427 | ||||||
Assurant Inc. | 18,900 | 1,837,269 | ||||||
Assured Guaranty Ltd. | 39,053 | 1,561,339 | ||||||
Athene Holding Ltd., Class A(b) | 45,277 | 2,070,064 |
S C H E D U L E O F I N V E S T M E N T S | 25 |
Schedule of Investments (unaudited)
October 31, 2018 | iShares® U.S. Financials ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Insurance (continued) | ||||||||
Axis Capital Holdings Ltd. | 30,035 | $ | 1,675,653 | |||||
Brighthouse Financial Inc.(b)(c) | 41,931 | 1,661,726 | ||||||
Brown & Brown Inc. | 82,605 | 2,327,809 | ||||||
Chubb Ltd. | 161,568 | 20,181,459 | ||||||
Cincinnati Financial Corp. | 53,309 | 4,192,220 | ||||||
CNA Financial Corp. | 10,683 | 463,322 | ||||||
CNO Financial Group Inc. | 60,014 | 1,134,265 | ||||||
Enstar Group Ltd.(b) | 5,552 | 1,008,243 | ||||||
Erie Indemnity Co., Class A, NVS | 7,338 | 951,665 | ||||||
Everest Re Group Ltd. | 14,477 | 3,153,959 | ||||||
Fidelity National Financial Inc. | 97,215 | 3,251,842 | ||||||
First American Financial Corp. | 39,543 | 1,752,941 | ||||||
Genworth Financial Inc., Class A(b) | 188,431 | 806,485 | ||||||
Hanover Insurance Group Inc. (The) | 15,293 | 1,703,334 | ||||||
Hartford Financial Services Group Inc. (The) | 125,737 | 5,710,975 | ||||||
Kemper Corp. | 21,553 | 1,620,570 | ||||||
Lincoln National Corp. | 76,237 | 4,588,705 | ||||||
Loews Corp. | 97,850 | 4,555,896 | ||||||
Markel Corp.(b) | 4,876 | 5,330,638 | ||||||
Marsh & McLennan Companies Inc. | 176,285 | 14,940,154 | ||||||
Mercury General Corp. | 10,592 | 628,211 | ||||||
MetLife Inc. | 347,394 | 14,309,159 | ||||||
Old Republic International Corp. | 101,581 | 2,239,861 | ||||||
Primerica Inc. | 15,273 | 1,676,059 | ||||||
Principal Financial Group Inc. | 93,105 | 4,382,452 | ||||||
ProAssurance Corp. | 18,758 | 823,851 | ||||||
Progressive Corp. (The) | 203,559 | 14,188,062 | ||||||
Prudential Financial Inc. | 145,593 | 13,653,712 | ||||||
Reinsurance Group of America Inc. | 22,178 | 3,157,482 | ||||||
RenaissanceRe Holdings Ltd. | 14,442 | 1,764,235 | ||||||
RLI Corp. | 13,489 | 997,242 | ||||||
Torchmark Corp. | 36,741 | 3,110,493 | ||||||
Travelers Companies Inc. (The) | 93,534 | 11,703,909 | ||||||
Unum Group | 77,630 | 2,814,864 | ||||||
White Mountains Insurance Group Ltd. | 1,168 | 1,035,631 | ||||||
Willis Towers Watson PLC | 45,880 | 6,568,181 | ||||||
WR Berkley Corp. | 34,222 | 2,597,450 | ||||||
|
| |||||||
236,677,471 | ||||||||
IT Services — 8.1% | ||||||||
Mastercard Inc., Class A | 317,714 | 62,802,526 | ||||||
Visa Inc., Class A | 576,760 | 79,506,366 | ||||||
|
| |||||||
142,308,892 | ||||||||
Mortgage Real Estate Investment — 1.0% |
| |||||||
AGNC Investment Corp. | 169,385 | 3,021,829 | ||||||
Annaly Capital Management Inc. | 454,476 | 4,485,678 | ||||||
Blackstone Mortgage Trust Inc., Class A(c) | 42,815 | 1,444,578 | ||||||
Chimera Investment Corp. | 68,375 | 1,271,775 | ||||||
Invesco Mortgage Capital Inc. | 39,754 | 599,490 |
Security | Shares | Value | ||||||
Mortgage Real Estate Investment (continued) |
| |||||||
MFA Financial Inc. | 163,955 | $ | 1,136,208 | |||||
New Residential Investment Corp. | 121,169 | 2,166,502 | ||||||
Starwood Property Trust Inc. | 95,476 | 2,073,739 | ||||||
Two Harbors Investment Corp. | 90,009 | 1,322,232 | ||||||
|
| |||||||
17,522,031 | ||||||||
Professional Services — 0.3% | ||||||||
CoStar Group Inc.(b) | 12,806 | 4,628,345 | ||||||
|
| |||||||
Real Estate Management & Development — 0.5% |
| |||||||
CBRE Group Inc., Class A(b) | 111,278 | 4,483,391 | ||||||
Howard Hughes Corp. (The)(b) | 14,114 | 1,573,993 | ||||||
Jones Lang LaSalle Inc. | 16,238 | 2,147,638 | ||||||
|
| |||||||
8,205,022 | ||||||||
Thrifts & Mortgage Finance — 0.4% |
| |||||||
Capitol Federal Financial Inc. | 52,871 | 656,129 | ||||||
Essent Group Ltd.(b) | 35,519 | 1,400,159 | ||||||
MGIC Investment Corp.(b) | 130,427 | 1,592,514 | ||||||
New York Community Bancorp. Inc. | 82,902 | 794,201 | ||||||
Radian Group Inc. | 77,099 | 1,479,530 | ||||||
TFS Financial Corp. | 21,419 | 315,073 | ||||||
Washington Federal Inc. | 29,239 | 823,370 | ||||||
|
| |||||||
7,060,976 | ||||||||
|
| |||||||
Total Common Stocks — 99.9% | 1,745,149,785 | |||||||
|
| |||||||
Short-Term Investments | ||||||||
Money Market Funds — 1.6% | ||||||||
BlackRock Cash Funds: Institutional, | 26,266,779 | 26,272,033 | ||||||
BlackRock Cash Funds: Treasury, | 1,683,878 | 1,683,878 | ||||||
|
| |||||||
27,955,911 | ||||||||
|
| |||||||
Total Short-Term Investments — 1.6% |
| 27,955,911 | ||||||
|
| |||||||
Total Investments in Securities — 101.5% |
| 1,773,105,696 | ||||||
Other Assets, Less Liabilities — (1.5)% |
| (26,396,522 | ) | |||||
|
| |||||||
Net Assets — 100.0% | $ | 1,746,709,174 | ||||||
|
|
(a) | Affiliate of the Fund. |
(b) | Non-income producing security. |
(c) | All or a portion of this security is on loan. |
(d) | Annualized 7-day yield as of period-end. |
(e) | All or a portion of this security was purchased with cash collateral received from loaned securities. |
26 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® U.S. Financials ETF
|
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:
Shares Held at | Shares | Shares | Shares Held at | Value at | Net Realized | Change in Unrealized Appreciation | ||||||||||||||||||||||||||
Affiliated Issuer | 04/30/18 | Purchased | Sold | 10/31/18 | 10/31/18 | Income | Gain (Loss) | (a) | (Depreciation) | |||||||||||||||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | 15,648,781 | 10,617,998 | (b) | — | 26,266,779 | $ | 26,272,033 | $ | 30,921 | (c) | $ | 4,130 | $ | (218 | ) | |||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | 3,177,697 | — | (1,493,819 | )(b) | 1,683,878 | 1,683,878 | 24,278 | — | — | |||||||||||||||||||||||
BlackRock Inc. | 54,820 | 4,502 | (16,599 | ) | 42,723 | 17,577,097 | 284,536 | 2,014,543 | (6,786,792 | ) | ||||||||||||||||||||||
PNC Financial Services Group Inc. (The) | 208,888 | 17,218 | (64,525 | ) | 161,581 | 20,761,543 | 323,911 | 2,154,142 | (5,001,845 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 66,294,551 | $ | 663,646 | $ | 4,172,815 | $ | (11,788,855 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
(b) | Net of purchases and sales. |
(c) | Includes securities lending income earned from the reinvestment of cash collateral from loaned securities (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities, and less fees paid to BTC as securities lending agent. |
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, refer to the Notes to Financial Statements.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $ | 1,745,149,785 | $ | — | $ | — | $ | 1,745,149,785 | ||||||||
Money Market Funds | 27,955,911 | — | — | 27,955,911 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 1,773,105,696 | $ | — | $ | — | $ | 1,773,105,696 | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
S C H E D U L E O F I N V E S T M E N T S | 27 |
Schedule of Investments (unaudited)
October 31, 2018 | iShares® U.S. Industrials ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks | ||||||||
Aerospace & Defense — 20.0% | ||||||||
Arconic Inc. | 120,287 | $ | 2,445,435 | |||||
Axon Enterprise Inc.(a)(b) | 16,364 | 1,009,986 | ||||||
Boeing Co. (The) | 149,380 | 53,008,988 | ||||||
BWX Technologies Inc. | 27,913 | 1,631,794 | ||||||
Curtiss-Wright Corp. | 12,312 | 1,347,671 | ||||||
Esterline Technologies Corp.(a) | 7,427 | 871,633 | ||||||
General Dynamics Corp. | 77,865 | 13,437,942 | ||||||
Harris Corp. | 32,861 | 4,886,759 | ||||||
HEICO Corp.(b) | 11,481 | 962,452 | ||||||
HEICO Corp., Class A | 19,944 | 1,329,467 | ||||||
Hexcel Corp. | 24,504 | 1,433,974 | ||||||
Huntington Ingalls Industries Inc. | 12,089 | 2,641,205 | ||||||
L3 Technologies Inc. | 21,910 | 4,151,288 | ||||||
Lockheed Martin Corp. | 69,268 | 20,354,402 | ||||||
Moog Inc., Class A | 9,039 | 646,740 | ||||||
Northrop Grumman Corp. | 48,684 | 12,752,774 | ||||||
Raytheon Co. | 79,755 | 13,960,315 | ||||||
Rockwell Collins Inc. | 45,954 | 5,883,031 | ||||||
Spirit AeroSystems Holdings Inc., Class A | 29,817 | 2,504,926 | ||||||
Teledyne Technologies Inc.(a) | 10,026 | 2,218,553 | ||||||
Textron Inc. | 69,485 | 3,726,481 | ||||||
TransDigm Group Inc.(a) | 13,547 | 4,473,897 | ||||||
United Technologies Corp. | 210,274 | 26,118,133 | ||||||
|
| |||||||
181,797,846 | ||||||||
Air Freight & Logistics — 5.0% | ||||||||
CH Robinson Worldwide Inc. | 38,674 | 3,443,146 | ||||||
Expeditors International of Washington Inc. | 48,668 | 3,269,516 | ||||||
FedEx Corp. | 68,020 | 14,987,527 | ||||||
United Parcel Service Inc., Class B | 193,861 | 20,653,951 | ||||||
XPO Logistics Inc.(a) | 35,468 | 3,170,130 | ||||||
|
| |||||||
45,524,270 | ||||||||
Building Products — 2.7% | ||||||||
Allegion PLC | 26,595 | 2,279,989 | ||||||
AO Smith Corp. | 40,291 | 1,834,449 | ||||||
Armstrong World Industries Inc.(a) | 14,463 | 893,090 | ||||||
Fortune Brands Home & Security Inc. | 39,885 | 1,788,045 | ||||||
Johnson Controls International PLC | 258,594 | 8,267,250 | ||||||
Lennox International Inc. | 10,145 | 2,139,479 | ||||||
Masco Corp. | 85,818 | 2,574,540 | ||||||
Owens Corning | 31,040 | 1,467,261 | ||||||
Resideo Technologies Inc.(a) | 35,390 | 744,960 | ||||||
Trex Co. Inc.(a) | 16,457 | 1,008,814 | ||||||
USG Corp. | 23,829 | 1,006,060 | ||||||
|
| |||||||
24,003,937 | ||||||||
Chemicals — 1.0% | ||||||||
Sherwin-Williams Co. (The) | 22,973 | 9,039,186 | ||||||
|
| |||||||
Commercial Services & Supplies — 2.9% |
| |||||||
ADT Inc. | 33,633 | 260,319 | ||||||
Brink’s Co. (The) | 14,230 | 943,734 | ||||||
Cintas Corp. | 24,087 | 4,380,703 | ||||||
Clean Harbors Inc.(a) | 14,219 | 967,461 | ||||||
Covanta Holding Corp. | 32,625 | 479,261 | ||||||
Deluxe Corp. | 13,331 | 629,356 | ||||||
Healthcare Services Group Inc. | 20,703 | 840,335 | ||||||
MSA Safety Inc. | 9,791 | 1,022,572 | ||||||
Republic Services Inc. | 60,995 | 4,433,116 | ||||||
Stericycle Inc.(a) | 24,044 | 1,201,479 |
Security | Shares | Value | ||||||
Commercial Services & Supplies (continued) |
| |||||||
Tetra Tech Inc. | 15,493 | $ | 1,023,158 | |||||
Waste Management Inc. | 110,275 | 9,866,304 | ||||||
|
| |||||||
26,047,798 | ||||||||
Construction & Engineering — 1.2% | ||||||||
AECOM(a)(b) | 44,870 | 1,307,512 | ||||||
Dycom Industries Inc.(a) | 8,743 | 593,475 | ||||||
EMCOR Group Inc. | 16,289 | 1,156,193 | ||||||
Fluor Corp. | 39,367 | 1,726,637 | ||||||
Jacobs Engineering Group Inc. | 33,370 | 2,505,753 | ||||||
KBR Inc. | 39,221 | 775,791 | ||||||
MasTec Inc.(a) | 18,127 | 788,706 | ||||||
Quanta Services Inc.(a) | 41,663 | 1,299,885 | ||||||
Valmont Industries Inc. | 6,261 | 778,305 | ||||||
|
| |||||||
10,932,257 | ||||||||
Construction Materials — 0.9% | ||||||||
Eagle Materials Inc. | 13,378 | 987,832 | ||||||
Martin Marietta Materials Inc. | 17,589 | 3,012,644 | ||||||
Summit Materials Inc., Class A(a) | 31,424 | 424,224 | ||||||
Vulcan Materials Co. | 36,924 | 3,734,493 | ||||||
|
| |||||||
8,159,193 | ||||||||
Containers & Packaging — 3.1% | ||||||||
AptarGroup Inc. | 17,409 | 1,775,022 | ||||||
Avery Dennison Corp. | 24,380 | 2,211,754 | ||||||
Ball Corp. | 96,228 | 4,311,014 | ||||||
Bemis Co. Inc. | 25,437 | 1,164,251 | ||||||
Berry Global Group Inc.(a) | 36,898 | 1,609,491 | ||||||
Crown Holdings Inc.(a)(b) | 37,740 | 1,596,025 | ||||||
Graphic Packaging Holding Co. | 86,888 | 956,637 | ||||||
International Paper Co. | 114,354 | 5,187,097 | ||||||
Owens-Illinois Inc.(a) | 44,587 | 698,678 | ||||||
Packaging Corp. of America | 26,367 | 2,420,754 | ||||||
Sealed Air Corp. | 44,466 | 1,438,920 | ||||||
Silgan Holdings Inc. | 21,671 | 520,754 | ||||||
Sonoco Products Co. | 27,884 | 1,521,909 | ||||||
WestRock Co. | 71,216 | 3,060,152 | ||||||
|
| |||||||
28,472,458 | ||||||||
Electrical Equipment — 4.4% | ||||||||
Acuity Brands Inc. | 11,188 | 1,405,660 | ||||||
AMETEK Inc. | 64,866 | 4,351,211 | ||||||
Eaton Corp. PLC | 121,142 | 8,682,247 | ||||||
Emerson Electric Co. | 175,705 | 11,926,855 | ||||||
EnerSys | 11,707 | 931,526 | ||||||
Generac Holdings Inc.(a) | 17,354 | 880,368 | ||||||
GrafTech International Ltd.(b) | 16,954 | 303,138 | ||||||
Hubbell Inc. | 15,337 | 1,559,773 | ||||||
nVent Electric PLC | 45,394 | 1,108,522 | ||||||
Regal Beloit Corp. | 12,164 | 872,159 | ||||||
Rockwell Automation Inc. | 34,435 | 5,672,478 | ||||||
Sensata Technologies Holding PLC(a)(b) | 47,521 | 2,228,735 | ||||||
|
| |||||||
39,922,672 | ||||||||
Electronic Equipment, Instruments & Components — 5.1% |
| |||||||
Amphenol Corp., Class A | 83,973 | 7,515,583 | ||||||
Anixter International Inc.(a) | 8,057 | 529,264 | ||||||
Arrow Electronics Inc.(a) | 24,468 | 1,656,728 | ||||||
Avnet Inc. | 32,415 | 1,298,869 | ||||||
Belden Inc.(b) | 11,310 | 611,306 | ||||||
Cognex Corp. | 47,993 | 2,056,020 | ||||||
Coherent Inc.(a)(b) | 6,805 | 837,968 | ||||||
Corning Inc. | 226,467 | 7,235,621 |
28 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® U.S. Industrials ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Electronic Equipment, Instruments & Components (continued) |
| |||||||
Dolby Laboratories Inc., Class A | 18,013 | $ | 1,239,475 | |||||
FLIR Systems Inc. | 38,653 | 1,790,020 | ||||||
IPG Photonics Corp.(a) | 10,086 | 1,346,985 | ||||||
Itron Inc.(a)(b) | 9,354 | 487,718 | ||||||
Jabil Inc. | 42,953 | 1,062,228 | ||||||
Keysight Technologies Inc.(a) | 52,315 | 2,986,140 | ||||||
Littelfuse Inc. | 6,986 | 1,265,584 | ||||||
National Instruments Corp. | 31,450 | 1,540,106 | ||||||
TE Connectivity Ltd. | 97,426 | 7,347,869 | ||||||
Trimble Inc.(a) | 69,968 | 2,615,404 | ||||||
Vishay Intertechnology Inc. | 36,766 | 672,818 | ||||||
Zebra Technologies Corp., | 14,988 | 2,492,504 | ||||||
|
| |||||||
46,588,210 | ||||||||
Industrial Conglomerates — 10.5% |
| |||||||
3M Co. | 164,004 | 31,203,401 | ||||||
Carlisle Companies Inc. | 16,728 | 1,615,758 | ||||||
General Electric Co. | 2,429,880 | 24,541,788 | ||||||
Honeywell International Inc. | 207,731 | 30,083,603 | ||||||
Roper Technologies Inc. | 28,896 | 8,174,678 | ||||||
|
| |||||||
95,619,228 | ||||||||
IT Services — 16.9% | ||||||||
Accenture PLC, Class A | 179,142 | 28,236,362 | ||||||
Alliance Data Systems Corp. | 13,191 | 2,719,720 | ||||||
Automatic Data Processing Inc. | 122,482 | 17,647,207 | ||||||
Black Knight Inc.(a) | 39,686 | 1,935,486 | ||||||
Broadridge Financial Solutions Inc. | 32,472 | 3,797,276 | ||||||
Conduent Inc.(a)(b) | 51,464 | 982,962 | ||||||
CoreLogic Inc./U.S.(a) | 22,663 | 920,571 | ||||||
Euronet Worldwide Inc.(a)(b) | 14,284 | 1,588,095 | ||||||
Fidelity National Information Services Inc. | 91,934 | 9,570,330 | ||||||
First Data Corp., Class A(a)(b) | 157,481 | 2,951,194 | ||||||
Fiserv Inc.(a) | 113,209 | 8,977,474 | ||||||
FleetCor Technologies Inc.(a) | 24,724 | 4,945,542 | ||||||
Genpact Ltd. | 38,844 | 1,064,714 | ||||||
Global Payments Inc. | 44,249 | 5,054,563 | ||||||
Jack Henry & Associates Inc. | 21,541 | 3,227,488 | ||||||
MAXIMUS Inc. | 17,987 | 1,168,615 | ||||||
Paychex Inc. | 89,505 | 5,861,683 | ||||||
PayPal Holdings Inc.(a) | 330,932 | 27,861,165 | ||||||
Sabre Corp. | 70,099 | 1,727,940 | ||||||
Square Inc., Class A(a) | 84,323 | 6,193,524 | ||||||
Total System Services Inc. | 46,957 | 4,280,131 | ||||||
Western Union Co. (The) | 124,699 | 2,249,570 | ||||||
WEX Inc.(a) | 12,057 | 2,121,550 | ||||||
Worldpay Inc., Class A(a)(b) | 84,368 | 7,748,357 | ||||||
|
| |||||||
152,831,519 | ||||||||
Life Sciences Tools & Services — 0.3% |
| |||||||
PerkinElmer Inc. | 30,893 | 2,671,627 | ||||||
|
| |||||||
Machinery — 12.9% | ||||||||
Actuant Corp., Class A | 17,149 | 409,004 | ||||||
AGCO Corp. | 18,595 | 1,042,064 | ||||||
Allison Transmission Holdings Inc. | 33,610 | 1,481,529 | ||||||
Barnes Group Inc. | 13,190 | 746,554 | ||||||
Caterpillar Inc. | 166,164 | 20,159,016 | ||||||
Colfax Corp.(a) | 26,975 | 756,109 | ||||||
Crane Co. | 14,166 | 1,233,009 | ||||||
Cummins Inc. | 42,012 | 5,742,620 | ||||||
Deere & Co. | 89,933 | 12,180,526 |
Security | Shares | Value | ||||||
Machinery (continued) | ||||||||
Donaldson Co. Inc. | 36,112 | $ | 1,851,823 | |||||
Dover Corp. | 41,234 | 3,415,825 | ||||||
Flowserve Corp. | 36,633 | 1,681,455 | ||||||
Fortive Corp. | 85,995 | 6,385,129 | ||||||
Gardner Denver Holdings Inc.(a) | 29,876 | 808,445 | ||||||
Gates Industrial Corp. PLC(a)(b) | 12,882 | 193,874 | ||||||
Graco Inc. | 46,810 | 1,901,890 | ||||||
Hillenbrand Inc. | 17,417 | 834,274 | ||||||
IDEX Corp. | 21,399 | 2,713,821 | ||||||
Illinois Tool Works Inc. | 86,254 | 11,003,423 | ||||||
Ingersoll-Rand PLC | 68,581 | 6,579,661 | ||||||
ITT Inc. | 24,523 | 1,238,412 | ||||||
Kennametal Inc. | 22,818 | 808,898 | ||||||
Lincoln Electric Holdings Inc. | 18,239 | 1,475,717 | ||||||
Middleby Corp. (The)(a)(b) | 15,603 | 1,752,217 | ||||||
Mueller Industries Inc. | 16,068 | 391,256 | ||||||
Navistar International Corp.(a) | 18,115 | 606,671 | ||||||
Nordson Corp. | 14,651 | 1,797,238 | ||||||
Oshkosh Corp. | 20,469 | 1,149,130 | ||||||
PACCAR Inc. | 98,007 | 5,606,980 | ||||||
Parker-Hannifin Corp. | 37,003 | 5,610,765 | ||||||
Pentair PLC | 45,182 | 1,814,057 | ||||||
Snap-on Inc. | 15,736 | 2,422,400 | ||||||
Terex Corp. | 18,171 | 606,730 | ||||||
Timken Co. (The) | 19,366 | 765,925 | ||||||
Toro Co. (The) | 29,450 | 1,658,918 | ||||||
Trinity Industries Inc. | 41,358 | 1,180,771 | ||||||
Wabtec Corp. | 24,016 | 1,969,792 | ||||||
Welbilt Inc.(a) | 36,500 | 683,280 | ||||||
Woodward Inc. | 15,534 | 1,143,924 | ||||||
Xylem Inc./NY | 50,141 | 3,288,247 | ||||||
|
| |||||||
117,091,379 | ||||||||
Marine — 0.1% | ||||||||
Kirby Corp.(a)(b) | 15,001 | 1,079,172 | ||||||
|
| |||||||
Paper & Forest Products — 0.1% | ||||||||
Louisiana-Pacific Corp. | 39,961 | 869,951 | ||||||
|
| |||||||
Professional Services — 2.5% | ||||||||
ASGN Inc.(a) | 14,689 | 985,338 | ||||||
Equifax Inc. | 33,696 | 3,418,122 | ||||||
FTI Consulting Inc.(a)(b) | 10,643 | 735,538 | ||||||
Insperity Inc. | 10,695 | 1,174,846 | ||||||
Korn/Ferry International | 15,820 | 714,115 | ||||||
ManpowerGroup Inc. | 18,169 | 1,386,113 | ||||||
Nielsen Holdings PLC | 99,684 | 2,589,790 | ||||||
Robert Half International Inc. | 34,287 | 2,075,392 | ||||||
TransUnion | 51,642 | 3,395,462 | ||||||
TriNet Group Inc.(a)(b) | 12,154 | 571,116 | ||||||
Verisk Analytics Inc.(a) | 46,069 | 5,520,909 | ||||||
|
| |||||||
22,566,741 | ||||||||
Road & Rail — 7.9% | ||||||||
CSX Corp. | 228,100 | 15,706,966 | ||||||
Genesee & Wyoming Inc., Class A(a)(b) | 16,640 | 1,318,387 | ||||||
JB Hunt Transport Services Inc. | 24,488 | 2,708,618 | ||||||
Kansas City Southern | 28,515 | 2,907,389 | ||||||
Knight-Swift Transportation Holdings Inc. | 35,945 | 1,150,240 | ||||||
Landstar System Inc. | 11,505 | 1,151,535 | ||||||
Norfolk Southern Corp. | 78,294 | 13,140,082 | ||||||
Old Dominion Freight Line Inc. | 18,304 | 2,387,208 |
S C H E D U L E O F I N V E S T M E N T S | 29 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® U.S. Industrials ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Road & Rail (continued) | ||||||||
Ryder System Inc. | 14,797 | $ | 818,422 | |||||
Union Pacific Corp. | 206,753 | 30,231,424 | ||||||
|
| |||||||
71,520,271 | ||||||||
Trading Companies & Distributors — 2.2% |
| |||||||
Air Lease Corp. | 27,033 | 1,029,957 | ||||||
Applied Industrial Technologies Inc. | 10,816 | 710,936 | ||||||
Fastenal Co. | 80,279 | 4,127,143 | ||||||
GATX Corp. | 10,485 | 785,641 | ||||||
HD Supply Holdings Inc.(a) | 51,439 | 1,932,563 | ||||||
MRC Global Inc.(a) | 25,261 | 399,882 | ||||||
MSC Industrial Direct Co. Inc., Class A | 12,810 | 1,038,379 | ||||||
SiteOne Landscape Supply Inc.(a)(b) | 11,260 | 766,131 | ||||||
United Rentals Inc.(a) | 23,098 | 2,773,377 | ||||||
Univar Inc.(a) | 31,911 | 785,649 | ||||||
Watsco Inc. | 8,974 | 1,329,767 | ||||||
WESCO International Inc.(a) | 13,146 | 659,666 | ||||||
WW Grainger Inc. | 12,722 | 3,612,666 | ||||||
|
| |||||||
19,951,757 | ||||||||
Transportation Infrastructure — 0.1% |
| |||||||
Macquarie Infrastructure Corp. | 21,515 | 794,979 | ||||||
|
| |||||||
Total Common Stocks — 99.8% | 905,484,451 | |||||||
|
|
Security | Shares | Value | ||||||
Short-Term Investments | �� | |||||||
Money Market Funds — 1.4% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 2.36%(c)(d)(e) | 11,723,048 | $ | 11,725,392 | |||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 2.11%(c)(d) | 1,037,097 | 1,037,097 | ||||||
|
| |||||||
12,762,489 | ||||||||
|
| |||||||
Total Short-Term Investments — 1.4% |
| 12,762,489 | ||||||
|
| |||||||
Total Investments in Securities — 101.2% |
| 918,246,940 | ||||||
Other Assets, Less Liabilities — (1.2)% |
| (11,316,720 | ) | |||||
|
| |||||||
Net Assets — 100.0% | $ | 906,930,220 | ||||||
|
|
(a) | Non-income producing security. |
(b) | All or a portion of this security is on loan. |
(c) | Affiliate of the Fund. |
(d) | Annualized 7-day yield as of period-end. |
(e) | All or a portion of this security was purchased with cash collateral received from loaned securities. |
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:
Affiliated Issuer | | Shares Held at 04/30/18 | | Net Activity | | Shares Held at 10/31/18 | | | Value at 10/31/18 | | Income | | Net Realized Gain (Loss | )(a) | | Change in Unrealized Appreciation (Depreciation | ) | |||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | 14,591,338 | (2,868,290 | ) | 11,723,048 | $ | 11,725,392 | $ | 65,466 | (b) | $ | 485 | $ | (116 | ) | ||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | 926,903 | 110,194 | 1,037,097 | 1,037,097 | 11,101 | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
$ | 12,762,489 | $ | 76,567 | $ | 485 | $ | (116 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
(b) | Includes securities lending income earned from the reinvestment of cash collateral from loaned securities (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities, and less fees paid to BTC as securities lending agent. |
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, refer to the Notes to Financial Statements.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $ | 905,484,451 | $ | — | $ | — | $ | 905,484,451 | ||||||||
Money Market Funds | 12,762,489 | — | — | 12,762,489 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 918,246,940 | $ | — | $ | — | $ | 918,246,940 | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
30 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited)
October 31, 2018 | iShares® MSCI KLD 400 Social ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks | ||||||||
Aerospace & Defense — 0.1% | ||||||||
Spirit AeroSystems Holdings Inc., Class A | 12,002 | $ | 1,008,288 | |||||
Wesco Aircraft Holdings Inc.(a)(b) | 6,374 | 64,887 | ||||||
|
| |||||||
1,073,175 | ||||||||
Air Freight & Logistics — 0.9% | ||||||||
CH Robinson Worldwide Inc. | 14,655 | 1,304,735 | ||||||
Echo Global Logistics Inc.(a) | 2,843 | 73,093 | ||||||
Expeditors International of Washington Inc. | 18,426 | 1,237,859 | ||||||
United Parcel Service Inc., Class B | 72,349 | 7,708,062 | ||||||
|
| |||||||
10,323,749 | ||||||||
Airlines — 0.1% | ||||||||
Delta Air Lines Inc. | 18,581 | 1,016,938 | ||||||
Southwest Airlines Co. | 15,291 | 750,788 | ||||||
|
| |||||||
1,767,726 | ||||||||
Auto Components — 0.3% | ||||||||
Aptiv PLC | 27,767 | 2,132,506 | ||||||
Autoliv Inc. | 9,275 | 772,978 | ||||||
BorgWarner Inc. | 22,166 | 873,562 | ||||||
|
| |||||||
3,779,046 | ||||||||
Automobiles — 0.4% | ||||||||
Harley-Davidson Inc. | 17,562 | 671,220 | ||||||
Tesla Inc.(a) | 13,355 | 4,504,908 | ||||||
|
| |||||||
5,176,128 | ||||||||
Banks — 2.3% | ||||||||
Bank of Hawaii Corp. | 4,486 | 351,882 | ||||||
BB&T Corp. | 81,855 | 4,023,992 | ||||||
Cathay General Bancorp. | 8,094 | 304,901 | ||||||
CIT Group Inc. | 12,218 | 578,889 | ||||||
Citizens Financial Group Inc. | 51,143 | 1,910,191 | ||||||
Comerica Inc. | 18,138 | 1,479,335 | ||||||
First Republic Bank/CA | 17,027 | 1,549,287 | ||||||
Heartland Financial USA Inc.(b) | 2,945 | 156,497 | ||||||
International Bancshares Corp. | 5,930 | 229,491 | ||||||
KeyCorp | 112,016 | 2,034,211 | ||||||
M&T Bank Corp. | 14,469 | 2,393,317 | ||||||
Old National Bancorp./IN | 14,381 | 256,701 | ||||||
People’s United Financial Inc. | 40,150 | 628,749 | ||||||
PNC Financial Services Group Inc. (The)(c) | 49,237 | 6,326,462 | ||||||
Regions Financial Corp. | 118,501 | 2,010,962 | ||||||
Signature Bank/New York NY | 5,906 | 649,069 | ||||||
SVB Financial Group(a)(b) | 5,570 | 1,321,371 | ||||||
Umpqua Holdings Corp. | 23,223 | 445,882 | ||||||
|
| |||||||
26,651,189 | ||||||||
Beverages — 1.7% | ||||||||
Coca-Cola Co. (The) | 424,018 | 20,301,982 | ||||||
|
| |||||||
Biotechnology — 4.6% | ||||||||
AbbVie Inc. | 159,090 | 12,385,157 | ||||||
Amgen Inc. | 69,413 | 13,382,132 | ||||||
Biogen Inc.(a) | 22,141 | 6,736,842 | ||||||
BioMarin Pharmaceutical Inc.(a) | 18,573 | 1,711,873 | ||||||
Celgene Corp.(a) | 76,064 | 5,446,182 | ||||||
Gilead Sciences Inc. | 136,414 | 9,300,707 | ||||||
TESARO Inc.(a)(b) | 4,348 | 125,570 | ||||||
Vertex Pharmaceuticals Inc.(a) | 26,724 | 4,528,649 | ||||||
|
| |||||||
53,617,112 | ||||||||
Building Products — 0.7% | ||||||||
Allegion PLC | 10,018 | 858,843 |
Security | Shares | Value | ||||||
Building Products (continued) | ||||||||
AO Smith Corp. | 15,214 | $ | 692,694 | |||||
Builders FirstSource Inc.(a)(b) | 12,262 | 151,804 | ||||||
Fortune Brands Home & Security Inc. | 15,398 | 690,292 | ||||||
Johnson Controls International PLC | 97,253 | 3,109,178 | ||||||
Lennox International Inc. | 3,892 | 820,784 | ||||||
Masco Corp. | 32,762 | 982,860 | ||||||
Owens Corning | 11,679 | 552,066 | ||||||
|
| |||||||
7,858,521 | ||||||||
Capital Markets — 3.7% | ||||||||
Ameriprise Financial Inc. | 15,257 | 1,941,301 | ||||||
Bank of New York Mellon Corp. (The) | 106,074 | 5,020,482 | ||||||
BlackRock Inc.(c) | 12,598 | 5,183,069 | ||||||
Charles Schwab Corp. (The) | 127,429 | 5,892,317 | ||||||
CME Group Inc. | 35,730 | 6,547,165 | ||||||
FactSet Research Systems Inc. | 4,125 | 923,010 | ||||||
Franklin Resources Inc. | 34,200 | 1,043,100 | ||||||
Invesco Ltd. | 43,400 | 942,214 | ||||||
Legg Mason Inc. | 8,900 | 251,158 | ||||||
Moody’s Corp. | 18,137 | 2,638,571 | ||||||
Northern Trust Corp. | 22,415 | 2,108,579 | ||||||
S&P Global Inc. | 26,375 | 4,808,690 | ||||||
State Street Corp. | 38,376 | 2,638,350 | ||||||
T Rowe Price Group Inc. | 25,393 | 2,462,867 | ||||||
TD Ameritrade Holding Corp. | 29,858 | 1,544,256 | ||||||
|
| |||||||
43,945,129 | ||||||||
Chemicals — 2.4% | ||||||||
Air Products & Chemicals Inc. | 23,012 | 3,551,902 | ||||||
Albemarle Corp. | 11,657 | 1,156,608 | ||||||
Axalta Coating Systems Ltd.(a) | 23,509 | 580,202 | ||||||
Ecolab Inc. | 27,258 | 4,174,563 | ||||||
HB Fuller Co. | 5,317 | 236,394 | ||||||
International Flavors & Fragrances Inc., New | 8,937 | 1,292,826 | ||||||
Linde PLC | 57,512 | 9,516,511 | ||||||
Minerals Technologies Inc. | 3,727 | 204,053 | ||||||
Mosaic Co. (The) | 38,534 | 1,192,242 | ||||||
PPG Industries Inc. | 26,186 | 2,751,887 | ||||||
Sherwin-Williams Co. (The) | 8,839 | 3,477,881 | ||||||
|
| |||||||
28,135,069 | ||||||||
Commercial Services & Supplies — 0.2% |
| |||||||
ACCO Brands Corp. | 11,383 | 91,861 | ||||||
Copart Inc.(a) | 22,095 | 1,080,666 | ||||||
Deluxe Corp. | 5,086 | 240,110 | ||||||
Essendant Inc. | 4,092 | 52,132 | ||||||
HNI Corp. | 4,629 | 175,393 | ||||||
Interface Inc. | 6,659 | 108,475 | ||||||
Knoll Inc. | 5,590 | 110,961 | ||||||
RR Donnelley & Sons Co. | 9,911 | 58,178 | ||||||
Steelcase Inc., Class A | 9,246 | 153,484 | ||||||
Team Inc.(a) | 3,171 | 63,103 | ||||||
Tetra Tech Inc. | 5,929 | 391,551 | ||||||
|
| |||||||
2,525,914 | ||||||||
Communications Equipment — 2.3% |
| |||||||
Cisco Systems Inc. | 493,277 | 22,567,423 | ||||||
CommScope Holding Co. Inc.(a) | 20,446 | 491,931 | ||||||
F5 Networks Inc.(a) | 6,475 | 1,134,938 | ||||||
Motorola Solutions Inc. | 17,036 | 2,087,932 | ||||||
Plantronics Inc. | 3,551 | 209,402 | ||||||
|
| |||||||
26,491,626 |
S C H E D U L E O F I N V E S T M E N T S | 31 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® MSCI KLD 400 Social ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Construction & Engineering — 0.1% |
| |||||||
EMCOR Group Inc. | 6,236 | $ | 442,631 | |||||
Granite Construction Inc. | 4,805 | 219,685 | ||||||
Quanta Services Inc.(a)(b) | 15,840 | 494,208 | ||||||
|
| |||||||
1,156,524 | ||||||||
Consumer Finance — 0.8% | ||||||||
Ally Financial Inc. | 45,374 | 1,152,953 | ||||||
American Express Co. | 76,729 | 7,882,370 | ||||||
|
| |||||||
9,035,323 | ||||||||
Containers & Packaging — 0.4% | ||||||||
Avery Dennison Corp. | 9,320 | 845,510 | ||||||
Ball Corp. | 34,917 | 1,564,282 | ||||||
Sealed Air Corp. | 17,000 | 550,120 | ||||||
Sonoco Products Co. | 10,478 | 571,889 | ||||||
WestRock Co. | 26,894 | 1,155,635 | ||||||
|
| |||||||
4,687,436 | ||||||||
Distributors — 0.1% | ||||||||
LKQ Corp.(a) | 32,479 | 885,702 | ||||||
Pool Corp. | 4,244 | 618,563 | ||||||
|
| |||||||
1,504,265 | ||||||||
Diversified Financial Services — 0.1% |
| |||||||
Voya Financial Inc. | 17,812 | 779,453 | ||||||
|
| |||||||
Diversified Telecommunication Services — 2.3% |
| |||||||
CenturyLink Inc. | 101,825 | 2,101,668 | ||||||
Cincinnati Bell Inc.(a)(b) | 3,807 | 54,021 | ||||||
Verizon Communications Inc. | 433,377 | 24,741,493 | ||||||
|
| |||||||
26,897,182 | ||||||||
Electric Utilities — 0.3% | ||||||||
Alliant Energy Corp. | 24,275 | 1,043,340 | ||||||
Eversource Energy | 33,232 | 2,102,256 | ||||||
|
| |||||||
3,145,596 | ||||||||
Electrical Equipment — 0.6% | ||||||||
Acuity Brands Inc. | 4,324 | 543,267 | ||||||
Eaton Corp. PLC | 45,914 | 3,290,657 | ||||||
Rockwell Automation Inc. | 13,169 | 2,169,329 | ||||||
Sensata Technologies Holding | 18,055 | 846,780 | ||||||
|
| |||||||
6,850,033 | ||||||||
Electronic Equipment, Instruments & Components — 0.7% |
| |||||||
Cognex Corp. | 18,250 | 781,830 | ||||||
Corning Inc. | 87,204 | 2,786,168 | ||||||
Flex Ltd.(a)(b) | 55,337 | 434,949 | ||||||
Itron Inc.(a) | 3,852 | 200,843 | ||||||
TE Connectivity Ltd. | 36,770 | 2,773,193 | ||||||
Trimble Inc.(a) | 26,136 | 976,964 | ||||||
|
| |||||||
7,953,947 | ||||||||
Energy Equipment & Services — 1.0% |
| |||||||
Baker Hughes a GE Co. | 43,938 | 1,172,705 | ||||||
Core Laboratories NV | 4,649 | 396,281 | ||||||
National Oilwell Varco Inc. | 40,062 | 1,474,281 | ||||||
Schlumberger Ltd. | 145,331 | 7,456,934 | ||||||
TechnipFMC PLC | 46,276 | 1,217,059 | ||||||
|
| |||||||
11,717,260 | ||||||||
Entertainment — 2.7% | ||||||||
Netflix Inc.(a) | 45,587 | 13,757,245 | ||||||
Walt Disney Co. (The) | 155,949 | 17,907,624 | ||||||
|
| |||||||
31,664,869 | ||||||||
Equity Real Estate Investment Trusts (REITs) — 3.8% |
| |||||||
American Tower Corp. | 46,342 | 7,220,547 |
Security | Shares | Value | ||||||
Equity Real Estate Investment Trusts (REITs) (continued) |
| |||||||
AvalonBay Communities Inc. | 14,515 | $ | 2,545,641 | |||||
Boston Properties Inc. | 16,283 | 1,966,335 | ||||||
Corporate Office Properties Trust | 10,643 | 275,015 | ||||||
Digital Realty Trust Inc.(b) | 21,631 | 2,233,617 | ||||||
Duke Realty Corp. | 37,441 | 1,032,248 | ||||||
Equinix Inc. | 8,333 | 3,156,040 | ||||||
Equity Residential | 38,672 | 2,512,133 | ||||||
Federal Realty Investment Trust | 7,721 | 957,790 | ||||||
Forest City Realty Trust Inc., Class A | 23,817 | 599,236 | ||||||
HCP Inc. | 49,442 | 1,362,127 | ||||||
Host Hotels & Resorts Inc. | 77,952 | 1,489,663 | ||||||
Iron Mountain Inc. | 28,655 | 877,130 | ||||||
Liberty Property Trust | 15,498 | 648,901 | ||||||
Macerich Co. (The) | 11,124 | 574,221 | ||||||
PotlatchDeltic Corp. | 5,866 | 212,643 | ||||||
Prologis Inc. | 66,002 | 4,255,149 | ||||||
SBA Communications Corp.(a) | 12,152 | 1,970,690 | ||||||
Simon Property Group Inc.(b) | 32,477 | 5,960,179 | ||||||
UDR Inc. | 28,236 | 1,106,569 | ||||||
Vornado Realty Trust | 17,948 | 1,221,900 | ||||||
Weyerhaeuser Co. | 79,388 | 2,114,102 | ||||||
|
| |||||||
44,291,876 | ||||||||
Food & Staples Retailing — 0.3% | ||||||||
Sysco Corp. | 51,957 | �� | 3,706,093 | |||||
|
| |||||||
Food Products — 2.1% | ||||||||
Archer-Daniels-Midland Co. | 58,721 | 2,774,567 | ||||||
Bunge Ltd. | 14,776 | 913,157 | ||||||
Campbell Soup Co. | 18,916 | 707,647 | ||||||
Darling Ingredients Inc.(a) | 17,377 | 359,009 | ||||||
General Mills Inc. | 62,262 | 2,727,076 | ||||||
Hain Celestial Group Inc. (The)(a) | 10,439 | 259,722 | ||||||
Hormel Foods Corp. | 30,651 | 1,337,610 | ||||||
Ingredion Inc. | 7,677 | 776,759 | ||||||
JM Smucker Co. (The) | 11,955 | 1,294,966 | ||||||
Kellogg Co. | 27,334 | 1,789,830 | ||||||
Kraft Heinz Co. (The) | 63,996 | 3,517,860 | ||||||
McCormick & Co. Inc./MD, NVS | 12,765 | 1,838,160 | ||||||
Mondelez International Inc., Class A | 154,782 | 6,497,748 | ||||||
|
| |||||||
24,794,111 | ||||||||
Gas Utilities — 0.0% | ||||||||
New Jersey Resources Corp. | 9,410 | 424,391 | ||||||
Northwest Natural Holding Co. | 2,891 | 187,308 | ||||||
|
| |||||||
611,699 | ||||||||
Health Care Equipment & Supplies — 1.8% |
| |||||||
ABIOMED Inc.(a) | 4,432 | 1,512,198 | ||||||
Align Technology Inc.(a) | 7,998 | 1,769,158 | ||||||
Becton Dickinson and Co. | 28,022 | 6,459,071 | ||||||
Cooper Companies Inc. (The) | 5,160 | 1,332,880 | ||||||
DENTSPLY SIRONA Inc. | 23,998 | 831,051 | ||||||
Edwards Lifesciences Corp.(a) | 22,131 | 3,266,536 | ||||||
Hologic Inc.(a) | 28,804 | 1,123,068 | ||||||
IDEXX Laboratories Inc.(a) | 9,109 | 1,932,201 | ||||||
ResMed Inc. | 15,058 | 1,594,943 | ||||||
Varian Medical Systems Inc.(a) | 9,663 | 1,153,472 | ||||||
|
| |||||||
20,974,578 | ||||||||
Health Care Providers & Services — 2.1% |
| |||||||
AmerisourceBergen Corp. | 17,392 | 1,530,496 | ||||||
Cardinal Health Inc. | 32,782 | 1,658,769 |
32 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® MSCI KLD 400 Social ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Health Care Providers & Services (continued) |
| |||||||
Centene Corp.(a) | 21,548 | $ | 2,808,135 | |||||
Cigna Corp.(b) | 25,530 | 5,458,569 | ||||||
HCA Healthcare Inc. | 29,305 | 3,913,097 | ||||||
Henry Schein Inc.(a)(b) | 16,200 | 1,344,600 | ||||||
Humana Inc. | 14,440 | 4,626,721 | ||||||
Laboratory Corp. of America Holdings(a) | 10,728 | 1,722,381 | ||||||
MEDNAX Inc.(a) | 10,124 | 418,020 | ||||||
Patterson Companies Inc. | 9,088 | 205,207 | ||||||
Quest Diagnostics Inc. | 14,284 | 1,344,267 | ||||||
Select Medical Holdings Corp.(a) | 11,931 | 197,816 | ||||||
|
| |||||||
25,228,078 | ||||||||
Health Care Technology — 0.2% | ||||||||
Cerner Corp.(a) | 31,318 | 1,793,895 | ||||||
|
| |||||||
Hotels, Restaurants & Leisure — 3.0% |
| |||||||
Aramark | 25,820 | 927,454 | ||||||
Choice Hotels International Inc. | 4,021 | 295,141 | ||||||
Darden Restaurants Inc. | 13,062 | 1,391,756 | ||||||
Domino’s Pizza Inc. | 4,257 | 1,144,239 | ||||||
Hilton Worldwide Holdings Inc. | 29,930 | 2,130,118 | ||||||
Jack in the Box Inc. | 3,103 | 244,920 | ||||||
Marriott International Inc./MD, Class A | 31,532 | 3,685,776 | ||||||
McDonald’s Corp. | 82,362 | 14,569,838 | ||||||
Royal Caribbean Cruises Ltd. | 17,765 | 1,860,529 | ||||||
Starbucks Corp. | 144,785 | 8,436,622 | ||||||
Vail Resorts Inc. | 4,279 | 1,075,398 | ||||||
|
| |||||||
35,761,791 | ||||||||
Household Durables — 0.2% | ||||||||
Ethan Allen Interiors Inc. | 2,867 | 54,874 | ||||||
Garmin Ltd. | 11,904 | 787,569 | ||||||
La-Z-Boy Inc. | 5,076 | 141,113 | ||||||
Meritage Homes Corp.(a) | 4,139 | 154,178 | ||||||
Mohawk Industries Inc.(a) | 6,720 | 838,186 | ||||||
Tupperware Brands Corp. | 5,645 | 198,139 | ||||||
Whirlpool Corp. | 6,873 | 754,380 | ||||||
|
| |||||||
2,928,439 | ||||||||
Household Products — 2.9% | ||||||||
Clorox Co. (The) | 13,581 | 2,016,099 | ||||||
Colgate-Palmolive Co. | 86,965 | 5,178,766 | ||||||
Kimberly-Clark Corp. | 36,670 | 3,824,681 | ||||||
Procter & Gamble Co. (The) | 263,747 | 23,389,084 | ||||||
|
| |||||||
34,408,630 | ||||||||
Independent Power and Renewable Electricity Producers — 0.1% |
| |||||||
AES Corp./VA | 69,605 | 1,014,841 | ||||||
Ormat Technologies Inc.(b) | 4,160 | 212,867 | ||||||
|
| |||||||
1,227,708 | ||||||||
Industrial Conglomerates — 1.3% | ||||||||
3M Co. | 62,282 | 11,849,773 | ||||||
Roper Technologies Inc. | 10,833 | 3,064,656 | ||||||
|
| |||||||
14,914,429 | ||||||||
Insurance — 2.9% | ||||||||
Allstate Corp. (The) | 36,902 | 3,532,259 | ||||||
Arthur J Gallagher & Co. | 19,072 | 1,411,519 | ||||||
Chubb Ltd. | 48,878 | 6,105,351 | ||||||
Hartford Financial Services Group Inc. (The) | 37,642 | 1,709,700 | ||||||
Loews Corp. | 28,635 | 1,333,246 | ||||||
Marsh & McLennan Companies Inc. | 53,259 | 4,513,700 | ||||||
Principal Financial Group Inc. | 30,216 | 1,422,267 | ||||||
Progressive Corp. (The) | 61,130 | 4,260,761 |
Security | Shares | Value | ||||||
Insurance (continued) | ||||||||
Prudential Financial Inc. | 44,087 | $ | 4,134,479 | |||||
Travelers Companies Inc. (The) | 28,373 | 3,550,313 | ||||||
Willis Towers Watson PLC | 13,906 | 1,990,783 | ||||||
|
| |||||||
33,964,378 | ||||||||
Interactive Media & Services — 9.2% | ||||||||
Alphabet Inc., Class A(a) | 31,324 | 34,161,327 | ||||||
Alphabet Inc., Class C, NVS(a) | 32,935 | 35,463,420 | ||||||
Facebook Inc., Class A(a) | 251,567 | 38,185,355 | ||||||
|
| |||||||
107,810,102 | ||||||||
Internet & Direct Marketing Retail — 0.8% |
| |||||||
Booking Holdings Inc.(a) | 5,052 | 9,470,378 | ||||||
Nutrisystem Inc. | 3,142 | 111,730 | ||||||
Shutterfly Inc.(a)(b) | 3,489 | 174,450 | ||||||
|
| |||||||
9,756,558 | ||||||||
IT Services — 3.1% | ||||||||
Accenture PLC, Class A | 67,465 | 10,633,833 | ||||||
Automatic Data Processing Inc. | 46,225 | 6,660,098 | ||||||
Cognizant Technology Solutions Corp., Class A | 61,497 | 4,245,138 | ||||||
FleetCor Technologies Inc.(a) | 9,399 | 1,880,082 | ||||||
International Business Machines Corp. | 96,267 | 11,112,100 | ||||||
Teradata Corp.(a)(b) | 12,746 | 463,955 | ||||||
Western Union Co. (The) | 48,934 | 882,769 | ||||||
|
| |||||||
35,877,975 | ||||||||
Leisure Products — 0.2% | ||||||||
Callaway Golf Co. | 10,042 | 214,899 | ||||||
Hasbro Inc. | 12,569 | 1,152,703 | ||||||
Mattel Inc.(a) | 36,219 | 491,854 | ||||||
|
| |||||||
1,859,456 | ||||||||
Life Sciences Tools & Services — 0.7% |
| |||||||
Agilent Technologies Inc. | 33,553 | 2,173,899 | ||||||
Bio-Techne Corp. | 3,941 | 660,985 | ||||||
IQVIA Holdings Inc.(a) | 16,866 | 2,073,337 | ||||||
Mettler-Toledo International Inc.(a) | 2,672 | 1,461,103 | ||||||
Waters Corp.(a) | 8,268 | 1,568,357 | ||||||
|
| |||||||
7,937,681 | ||||||||
Machinery — 3.2% | ||||||||
AGCO Corp. | 6,707 | 375,860 | ||||||
Caterpillar Inc. | 62,737 | 7,611,253 | ||||||
Cummins Inc. | 16,416 | 2,243,903 | ||||||
Deere & Co. | 32,308 | 4,375,795 | ||||||
Dover Corp. | 16,277 | 1,348,387 | ||||||
Flowserve Corp. | 13,790 | 632,961 | ||||||
Fortive Corp. | 31,456 | 2,335,608 | ||||||
Graco Inc. | 17,681 | 718,379 | ||||||
Illinois Tool Works Inc. | 32,005 | 4,082,878 | ||||||
Ingersoll-Rand PLC | 26,004 | 2,494,824 | ||||||
Lincoln Electric Holdings Inc. | 6,570 | 531,579 | ||||||
Meritor Inc.(a) | 8,867 | 150,650 | ||||||
Middleby Corp. (The)(a)(b) | 5,914 | 664,142 | ||||||
PACCAR Inc. | 36,894 | 2,110,706 | ||||||
Parker-Hannifin Corp. | 13,944 | 2,114,329 | ||||||
Snap-on Inc. | 5,970 | 919,022 | ||||||
Stanley Black & Decker Inc. | 16,277 | 1,896,596 | ||||||
Tennant Co. | 1,883 | 115,089 | ||||||
Timken Co. (The) | 7,391 | 292,314 | ||||||
WABCO Holdings Inc.(a) | 5,657 | 607,844 | ||||||
Wabtec Corp. | 9,119 | 747,940 |
S C H E D U L E O F I N V E S T M E N T S | 33 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® MSCI KLD 400 Social ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Machinery (continued) | ||||||||
Xylem Inc./NY | 18,936 | $ | 1,241,823 | |||||
|
| |||||||
37,611,882 | ||||||||
Media — 0.5% | ||||||||
Discovery Inc., Class A(a) | 16,638 | 538,905 | ||||||
Discovery Inc., Class C, NVS(a) | 32,053 | 939,473 | ||||||
John Wiley & Sons Inc., Class A | 5,013 | 271,905 | ||||||
Liberty Global PLC, Class A(a)(b) | 20,479 | 524,877 | ||||||
Liberty Global PLC, Class C, | 57,146 | 1,430,936 | ||||||
New York Times Co. (The), | 14,098 | 372,187 | ||||||
Omnicom Group Inc. | 23,983 | 1,782,417 | ||||||
Scholastic Corp., NVS | 3,379 | 146,581 | ||||||
|
| |||||||
6,007,281 | ||||||||
Metals & Mining — 0.3% | ||||||||
Compass Minerals International Inc. | 3,570 | 173,181 | ||||||
Newmont Mining Corp. | 56,145 | 1,736,003 | ||||||
Nucor Corp. | 33,561 | 1,984,126 | ||||||
Schnitzer Steel Industries Inc., Class A | 2,952 | 79,409 | ||||||
|
| |||||||
3,972,719 | ||||||||
Multi-Utilities — 1.0% | ||||||||
Avista Corp. | 7,012 | 360,557 | ||||||
CenterPoint Energy Inc. | 51,599 | 1,393,689 | ||||||
CMS Energy Corp. | 29,734 | 1,472,428 | ||||||
Consolidated Edison Inc. | 32,634 | 2,480,184 | ||||||
MDU Resources Group Inc. | 19,570 | 488,467 | ||||||
NiSource Inc. | 38,275 | 970,654 | ||||||
Sempra Energy | 26,348 | 2,901,442 | ||||||
WEC Energy Group Inc. | 33,090 | 2,263,356 | ||||||
|
| |||||||
12,330,777 | ||||||||
Multiline Retail — 0.2% | ||||||||
Kohl’s Corp. | 17,704 | 1,340,724 | ||||||
Nordstrom Inc. | 12,318 | 810,155 | ||||||
|
| |||||||
2,150,879 | ||||||||
Oil, Gas & Consumable Fuels — 3.4% |
| |||||||
Apache Corp. | 40,218 | 1,521,447 | ||||||
ConocoPhillips | 122,763 | 8,581,134 | ||||||
Denbury Resources Inc.(a) | 46,487 | 160,380 | ||||||
Devon Energy Corp. | 55,222 | 1,789,193 | ||||||
Energen Corp.(a) | 9,248 | 665,579 | ||||||
EQT Corp. | 28,100 | 954,557 | ||||||
Hess Corp. | 29,252 | 1,679,065 | ||||||
Marathon Oil Corp. | 89,682 | 1,703,061 | ||||||
Marathon Petroleum Corp. | 72,502 | 5,107,766 | ||||||
Newfield Exploration Co.(a) | 21,018 | 424,564 | ||||||
Noble Energy Inc. | 51,114 | 1,270,183 | ||||||
Occidental Petroleum Corp. | 80,363 | 5,389,946 | ||||||
ONEOK Inc. | 43,169 | 2,831,886 | ||||||
Phillips 66 | 46,498 | 4,780,924 | ||||||
Pioneer Natural Resources Co. | 17,873 | 2,632,157 | ||||||
Southwestern Energy Co.(a) | 61,781 | 329,910 | ||||||
|
| |||||||
39,821,752 | ||||||||
Paper & Forest Products — 0.0% | ||||||||
Domtar Corp. | 6,621 | 306,619 | ||||||
|
| |||||||
Personal Products — 0.3% | ||||||||
Avon Products Inc.(a) | 51,688 | 101,309 | ||||||
Estee Lauder Companies Inc. (The), Class A | 23,521 | 3,232,726 | ||||||
|
| |||||||
3,334,035 |
Security | Shares | Value | ||||||
Pharmaceuticals — 3.0% | ||||||||
Bristol-Myers Squibb Co. | 171,492 | $ | 8,667,206 | |||||
Jazz Pharmaceuticals PLC(a) | 6,354 | 1,009,142 | ||||||
Merck & Co. Inc. | 282,186 | 20,771,711 | ||||||
Zoetis Inc. | 50,786 | 4,578,358 | ||||||
|
| |||||||
35,026,417 | ||||||||
Professional Services — 0.6% | ||||||||
ASGN Inc.(a) | 5,673 | 380,545 | ||||||
Dun & Bradstreet Corp. (The) | 3,909 | 556,173 | ||||||
Exponent Inc. | 5,636 | 284,393 | ||||||
Heidrick & Struggles International Inc. | 1,993 | 68,778 | ||||||
ICF International Inc. | 2,070 | 152,435 | ||||||
IHS Markit Ltd.(a) | 41,038 | 2,155,726 | ||||||
Kelly Services Inc., Class A, NVS | 3,656 | 85,879 | ||||||
ManpowerGroup Inc. | 7,028 | 536,166 | ||||||
Navigant Consulting Inc. | 4,810 | 103,896 | ||||||
Resources Connection Inc. | 3,175 | 51,816 | ||||||
Robert Half International Inc. | 13,038 | 789,190 | ||||||
TransUnion | 19,417 | 1,276,668 | ||||||
TrueBlue Inc.(a) | 4,512 | 105,265 | ||||||
|
| |||||||
6,546,930 | ||||||||
Real Estate Management & Development — 0.2% |
| |||||||
CBRE Group Inc., Class A(a) | 33,968 | 1,368,571 | ||||||
Jones Lang LaSalle Inc. | 4,771 | 631,012 | ||||||
|
| |||||||
1,999,583 | ||||||||
Road & Rail — 2.2% | ||||||||
AMERCO | 932 | 304,279 | ||||||
ArcBest Corp. | 3,018 | 112,028 | ||||||
Avis Budget Group Inc.(a)(b) | 7,642 | 214,893 | ||||||
CSX Corp. | 87,267 | 6,009,206 | ||||||
Genesee & Wyoming Inc., | 6,349 | 503,031 | ||||||
Hertz Global Holdings Inc.(a) | 6,104 | 83,930 | ||||||
Kansas City Southern | 10,821 | 1,103,309 | ||||||
Norfolk Southern Corp. | 29,630 | 4,972,803 | ||||||
Ryder System Inc. | 5,568 | 307,966 | ||||||
Union Pacific Corp. | 81,362 | 11,896,752 | ||||||
|
| |||||||
25,508,197 | ||||||||
Semiconductors & Semiconductor Equipment — 5.1% |
| |||||||
Advanced Micro Devices Inc.(a) | 96,738 | 1,761,599 | ||||||
Analog Devices Inc. | 38,945 | 3,260,086 | ||||||
Applied Materials Inc. | 105,834 | 3,479,822 | ||||||
Intel Corp. | 488,783 | 22,914,147 | ||||||
Lam Research Corp. | 17,203 | 2,438,181 | ||||||
Microchip Technology Inc.(b) | 24,736 | 1,627,134 | ||||||
NVIDIA Corp. | 60,492 | 12,753,528 | ||||||
Skyworks Solutions Inc. | 19,212 | 1,666,833 | ||||||
Texas Instruments Inc. | 102,701 | 9,533,734 | ||||||
|
| |||||||
59,435,064 | ||||||||
Software — 12.1% | ||||||||
Adobe Inc.(a) | 51,661 | 12,696,207 | ||||||
ANSYS Inc.(a) | 8,811 | 1,317,685 | ||||||
Autodesk Inc.(a) | 23,008 | 2,973,784 | ||||||
CA Inc. | 32,971 | 1,462,593 | ||||||
Cadence Design Systems Inc.(a) | 29,563 | 1,317,623 | ||||||
Citrix Systems Inc.(a) | 14,213 | 1,456,406 | ||||||
Dell Technologies Inc., Class V(a) | 21,030 | 1,900,902 | ||||||
Fortinet Inc.(a) | 15,072 | 1,238,617 | ||||||
Intuit Inc. | 25,563 | 5,393,793 | ||||||
Microsoft Corp. | 765,485 | 81,761,453 | ||||||
Oracle Corp. | 321,164 | 15,685,650 |
34 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® MSCI KLD 400 Social ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Software (continued) | ||||||||
salesforce.com Inc.(a) | 73,936 | $ | 10,146,977 | |||||
Symantec Corp. | 65,412 | 1,187,228 | ||||||
VMware Inc., Class A(a) | 7,808 | 1,103,973 | ||||||
Workday Inc., Class A(a) | 15,331 | 2,039,329 | ||||||
|
| |||||||
141,682,220 | ||||||||
Specialty Retail — 1.5% | ||||||||
AutoNation Inc.(a)(b) | 6,281 | 254,255 | ||||||
Best Buy Co. Inc. | 26,765 | 1,877,832 | ||||||
Buckle Inc. (The) | 3,502 | 71,441 | ||||||
Caleres Inc. | 4,535 | 155,097 | ||||||
CarMax Inc.(a)(b) | 18,788 | 1,275,893 | ||||||
Foot Locker Inc. | 12,459 | 587,317 | ||||||
GameStop Corp., Class A | 1,080 | 15,768 | ||||||
Gap Inc. (The) | 24,822 | 677,641 | ||||||
Lowe’s Companies Inc. | 86,242 | 8,211,963 | ||||||
Signet Jewelers Ltd. | 6,262 | 350,985 | ||||||
Tiffany & Co. | 11,766 | 1,309,556 | ||||||
Tractor Supply Co. | 12,876 | 1,183,176 | ||||||
Ulta Salon Cosmetics & Fragrance Inc.(a) | 6,042 | 1,658,650 | ||||||
|
| |||||||
17,629,574 | ||||||||
Technology Hardware, Storage & Peripherals — 0.6% |
| |||||||
Hewlett Packard Enterprise Co. | 160,136 | 2,442,074 | ||||||
HP Inc. | 172,295 | 4,159,201 | ||||||
Xerox Corp. | 24,170 | 673,618 | ||||||
|
| |||||||
7,274,893 | ||||||||
Textiles, Apparel & Luxury Goods — 1.5% |
| |||||||
Columbia Sportswear Co. | 3,322 | 299,910 | ||||||
Deckers Outdoor Corp.(a) | 2,890 | 367,521 | ||||||
Hanesbrands Inc. | 38,389 | 658,755 | ||||||
Michael Kors Holdings Ltd.(a) | 15,811 | 876,088 | ||||||
NIKE Inc., Class B | 134,569 | 10,098,058 | ||||||
PVH Corp. | 8,167 | 986,492 | ||||||
Under Armour Inc., Class A(a)(b) | 19,503 | 431,211 | ||||||
Under Armour Inc., Class C, NVS(a)(b) | 20,541 | 407,328 | ||||||
VF Corp. | 35,211 | 2,918,288 | ||||||
Wolverine World Wide Inc. | 10,204 | 358,875 | ||||||
|
| |||||||
17,402,526 | ||||||||
Thrifts & Mortgage Finance — 0.0% | ||||||||
New York Community Bancorp. Inc. | 51,427 | 492,671 | ||||||
|
|
Security | Shares | Value | ||||||
Trading Companies & Distributors — 0.5% |
| |||||||
Air Lease Corp. | 10,612 | $ | 404,317 | |||||
Applied Industrial Technologies Inc. | 4,108 | 270,019 | ||||||
Fastenal Co. | 30,353 | 1,560,448 | ||||||
H&E Equipment Services Inc. | 3,656 | 88,073 | ||||||
HD Supply Holdings Inc.(a) | 18,596 | 698,652 | ||||||
United Rentals Inc.(a)(b) | 8,820 | 1,059,017 | ||||||
WW Grainger Inc. | 5,023 | 1,426,381 | ||||||
|
| |||||||
5,506,907 | ||||||||
Water Utilities — 0.1% | ||||||||
American Water Works Co. Inc. | 18,786 | 1,663,124 | ||||||
|
| |||||||
Wireless Telecommunication Services — 0.0% |
| |||||||
Sprint Corp.(a)(b) | 84,137 | 514,918 | ||||||
|
| |||||||
Total Common Stocks — 99.8% |
| 1,171,104,699 | ||||||
|
| |||||||
Short-Term Investments | ||||||||
Money Market Funds — 1.0% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 2.36%(c)(d)(e) | 11,099,362 | 11,101,583 | ||||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 2.11%(c)(d) | 585,177 | 585,177 | ||||||
|
| |||||||
11,686,760 | ||||||||
|
| |||||||
Total Short-Term Investments — 1.0% |
| 11,686,760 | ||||||
|
| |||||||
Total Investments in Securities — 100.8% |
| 1,182,791,459 | ||||||
Other Assets, Less Liabilities — (0.8)% |
| (9,890,218 | ) | |||||
|
| |||||||
Net Assets — 100.0% | $ | 1,172,901,241 | ||||||
|
|
(a) | Non-income producing security. |
(b) | All or a portion of this security is on loan. |
(c) | Affiliate of the Fund. |
(d) | Annualized 7-day yield as of period-end. |
(e) | All or a portion of this security was purchased with cash collateral received from loaned securities. |
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:
Affiliated Issuer | | Shares Held at 04/30/18 | | | Shares Purchased | | | Shares Sold | | | Shares Held at 10/31/18 | | | Value at 10/31/18 | | Income | | Net Realized Gain (Loss | )(a) | | Change in Unrealized Appreciation (Depreciation | ) | ||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | 12,779,164 | — | (1,679,802 | )(b) | 11,099,362 | $ | 11,101,583 | $ | 56,379 | (c) | $ | 1,936 | $ | 336 | ||||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | 1,025,471 | — | (440,294 | )(b) | 585,177 | 585,177 | 14,752 | — | — | |||||||||||||||||||||||
BlackRock Inc. | 11,196 | 1,911 | (509 | ) | 12,598 | 5,183,069 | 71,831 | 47,061 | (1,410,247 | ) | ||||||||||||||||||||||
PNC Financial Services Group Inc. (The) | 44,303 | 7,425 | (2,491 | ) | 49,237 | 6,326,462 | 90,442 | 45,402 | (883,808 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 23,196,291 | $ | 233,404 | $ | 94,399 | $ | (2,293,719 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
(b) | Net of purchases and sales. |
(c) | Includes securities lending income earned from the reinvestment of cash collateral from loaned securities (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities, and less fees paid to BTC as securities lending agent. |
S C H E D U L E O F I N V E S T M E N T S | 35 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® MSCI KLD 400 Social ETF
|
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, refer to the Notes to Financial Statements.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $ | 1,171,104,699 | $ | — | $ | — | $ | 1,171,104,699 | ||||||||
Money Market Funds | 11,686,760 | — | — | 11,686,760 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 1,182,791,459 | $ | — | $ | — | $ | 1,182,791,459 | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
36 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited)
October 31, 2018 | iShares® MSCI USA ESG Select ETF (Percentages shown are based on Net Assets)
|
Security | Shares | Value | ||||||
Common Stocks | ||||||||
Aerospace & Defense — 2.3% | ||||||||
Rockwell Collins Inc. | 134,259 | $ | 17,187,837 | |||||
|
| |||||||
Air Freight & Logistics — 0.7% | ||||||||
Expeditors International of Washington Inc. | 57,952 | 3,893,215 | ||||||
United Parcel Service Inc., Class B | 10,490 | 1,117,605 | ||||||
|
| |||||||
5,010,820 | ||||||||
Automobiles — 0.8% | ||||||||
Tesla Inc.(a)(b) | 18,662 | 6,295,066 | ||||||
|
| |||||||
Banks — 2.1% | ||||||||
Comerica Inc. | 66,493 | 5,423,169 | ||||||
KeyCorp | 88,708 | 1,610,938 | ||||||
People’s United Financial Inc. | 332,459 | 5,206,308 | ||||||
PNC Financial Services Group Inc. (The)(c) | 12,423 | 1,596,231 | ||||||
SVB Financial Group(a) | 7,787 | 1,847,310 | ||||||
|
| |||||||
15,683,956 | ||||||||
Beverages — 2.6% | ||||||||
Coca-Cola Co. (The) | 160,069 | 7,664,104 | ||||||
PepsiCo Inc. | 104,466 | 11,739,889 | ||||||
|
| |||||||
19,403,993 | ||||||||
Biotechnology — 2.1% | ||||||||
AbbVie Inc. | 43,080 | 3,353,779 | ||||||
Biogen Inc.(a) | 10,327 | 3,142,196 | ||||||
Gilead Sciences Inc. | 65,877 | 4,491,494 | ||||||
Vertex Pharmaceuticals Inc.(a) | 30,457 | 5,161,243 | ||||||
|
| |||||||
16,148,712 | ||||||||
Building Products — 1.2% | ||||||||
Johnson Controls International PLC | 250,136 | 7,996,848 | ||||||
Owens Corning | 16,702 | 789,503 | ||||||
|
| |||||||
8,786,351 | ||||||||
Capital Markets — 5.5% | ||||||||
Bank of New York Mellon Corp. (The) | 60,555 | 2,866,068 | ||||||
BlackRock Inc.(c) | 37,297 | 15,344,732 | ||||||
Franklin Resources Inc. | 68,078 | 2,076,379 | ||||||
Northern Trust Corp. | 151,669 | 14,267,503 | ||||||
State Street Corp. | 105,140 | 7,228,375 | ||||||
|
| |||||||
41,783,057 | ||||||||
Chemicals — 6.2% | ||||||||
Axalta Coating Systems Ltd.(a) | 37,149 | 916,837 | ||||||
Ecolab Inc. | 255,113 | 39,070,556 | ||||||
International Flavors & Fragrances Inc., New | 33,840 | 4,895,295 | ||||||
Mosaic Co. (The) | 47,048 | 1,455,665 | ||||||
|
| |||||||
46,338,353 | ||||||||
Communications Equipment — 2.0% | ||||||||
Cisco Systems Inc. | 263,766 | 12,067,294 | ||||||
Motorola Solutions Inc. | 24,541 | 3,007,745 | ||||||
|
| |||||||
15,075,039 | ||||||||
Consumer Finance — 1.3% | ||||||||
American Express Co. | 98,227 | 10,090,860 | ||||||
|
| |||||||
Electric Utilities — 1.9% | ||||||||
Edison International | 19,217 | 1,333,467 | ||||||
Eversource Energy | 103,726 | 6,561,707 | ||||||
Xcel Energy Inc. | 124,314 | 6,092,629 | ||||||
|
| |||||||
13,987,803 | ||||||||
Electronic Equipment, Instruments & Components — 0.7% |
| |||||||
Corning Inc. | 58,769 | 1,877,670 |
Security | Shares | Value | ||||||
Electronic Equipment, Instruments & Components (continued) |
| |||||||
Keysight Technologies Inc.(a) | 14,284 | $ | 815,331 | |||||
TE Connectivity Ltd. | 34,546 | 2,605,459 | ||||||
|
| |||||||
5,298,460 | ||||||||
Energy Equipment & Services — 1.3% | ||||||||
Baker Hughes a GE Co. | 149,489 | 3,989,861 | ||||||
National Oilwell Varco Inc. | 23,222 | 854,570 | ||||||
TechnipFMC PLC | 197,045 | 5,182,283 | ||||||
|
| |||||||
10,026,714 | ||||||||
Entertainment — 1.0% | ||||||||
Netflix Inc.(a) | 8,939 | 2,697,612 | ||||||
Walt Disney Co. (The) | 39,845 | 4,575,401 | ||||||
|
| |||||||
7,273,013 | ||||||||
Equity Real Estate Investment Trusts (REITs) — 4.1% |
| |||||||
American Tower Corp. | 28,168 | 4,388,856 | ||||||
Equinix Inc. | 9,905 | 3,751,420 | ||||||
Iron Mountain Inc. | 77,583 | 2,374,816 | ||||||
Liberty Property Trust | 172,451 | 7,220,523 | ||||||
Prologis Inc. | 204,730 | 13,198,943 | ||||||
|
| |||||||
30,934,558 | ||||||||
Food Products — 3.4% |
| |||||||
Bunge Ltd. | 95,719 | 5,915,434 | ||||||
Campbell Soup Co. | 89,202 | 3,337,047 | ||||||
General Mills Inc. | 125,267 | 5,486,695 | ||||||
Kellogg Co. | 167,503 | 10,968,096 | ||||||
|
| |||||||
25,707,272 | ||||||||
Health Care Equipment & Supplies — 0.3% |
| |||||||
Align Technology Inc.(a) | 4,640 | 1,026,368 | ||||||
Edwards Lifesciences Corp.(a) | 9,600 | 1,416,960 | ||||||
|
| |||||||
2,443,328 | ||||||||
Health Care Providers & Services — 3.5% |
| |||||||
Cardinal Health Inc. | 155,700 | 7,878,420 | ||||||
HCA Healthcare Inc. | 22,112 | 2,952,615 | ||||||
Henry Schein Inc.(a)(b) | 144,809 | 12,019,147 | ||||||
Quest Diagnostics Inc. | 34,568 | 3,253,195 | ||||||
|
| |||||||
26,103,377 | ||||||||
Hotels, Restaurants & Leisure — 1.3% |
| |||||||
Hilton Worldwide Holdings Inc. | 37,168 | 2,645,246 | ||||||
Marriott International Inc./MD, Class A | 51,774 | 6,051,863 | ||||||
Vail Resorts Inc. | 5,725 | 1,438,807 | ||||||
|
| |||||||
10,135,916 | ||||||||
Household Durables — 0.2% | ||||||||
Mohawk Industries Inc.(a) | 4,135 | 515,759 | ||||||
Newell Brands Inc. | 82,540 | 1,310,735 | ||||||
|
| |||||||
1,826,494 | ||||||||
Household Products — 2.7% | ||||||||
Clorox Co. (The) | 50,673 | 7,522,407 | ||||||
Kimberly-Clark Corp. | 31,691 | 3,305,371 | ||||||
Procter & Gamble Co. (The) | 110,316 | 9,782,823 | ||||||
|
| |||||||
20,610,601 | ||||||||
Industrial Conglomerates — 3.6% | ||||||||
3M Co. | 140,819 | 26,792,223 | ||||||
|
| |||||||
Insurance — 1.8% | ||||||||
Marsh & McLennan Companies Inc. | 141,542 | 11,995,685 | ||||||
Travelers Companies Inc. (The) | 10,339 | 1,293,719 | ||||||
|
| |||||||
13,289,404 |
S C H E D U L E O F I N V E S T M E N T S | 37 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® MSCI USA ESG Select ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Interactive Media & Services — 3.2% | ||||||||
Alphabet Inc., Class A(a) | 17,366 | $ | 18,939,012 | |||||
Alphabet Inc., Class C, NVS(a) | 2,541 | 2,736,073 | ||||||
Facebook Inc., Class A(a) | 17,037 | 2,586,046 | ||||||
|
| |||||||
24,261,131 | ||||||||
Internet & Direct Marketing Retail — 0.1% |
| |||||||
Booking Holdings Inc.(a) | 421 | 789,198 | ||||||
|
| |||||||
IT Services — 4.3% | ||||||||
Accenture PLC, Class A | 166,322 | 26,215,674 | ||||||
International Business Machines Corp. | 52,451 | 6,054,419 | ||||||
|
| |||||||
32,270,093 | ||||||||
Leisure Products — 0.4% | ||||||||
Hasbro Inc. | 19,944 | 1,829,064 | ||||||
Mattel Inc.(a) | 62,985 | 855,337 | ||||||
|
| |||||||
2,684,401 | ||||||||
Life Sciences Tools & Services — 3.4% |
| |||||||
Agilent Technologies Inc. | 212,064 | 13,739,627 | ||||||
Mettler-Toledo International Inc.(a) | 8,688 | 4,750,772 | ||||||
Waters Corp.(a) | 38,308 | 7,266,644 | ||||||
|
| |||||||
25,757,043 | ||||||||
Machinery — 3.5% | ||||||||
Caterpillar Inc. | 78,359 | 9,506,514 | ||||||
Cummins Inc. | 73,342 | 10,025,118 | ||||||
Ingersoll-Rand PLC | 37,330 | 3,581,440 | ||||||
Xylem Inc./NY | 49,451 | 3,242,997 | ||||||
|
| |||||||
26,356,069 | ||||||||
Media — 0.3% | ||||||||
Liberty Global PLC, Class A(a)(b) | 29,182 | 747,935 | ||||||
Liberty Global PLC, Class C, NVS(a) | 74,074 | 1,854,813 | ||||||
|
| |||||||
2,602,748 | ||||||||
Multi-Utilities — 1.1% | ||||||||
Sempra Energy | 76,491 | 8,423,189 | ||||||
|
| |||||||
Multiline Retail — 0.2% | ||||||||
Nordstrom Inc. | 17,776 | 1,169,127 | ||||||
|
| |||||||
Oil, Gas & Consumable Fuels — 2.1% | ||||||||
ConocoPhillips | 109,701 | 7,668,100 | ||||||
Hess Corp. | 78,667 | 4,515,486 | ||||||
Marathon Oil Corp. | 66,528 | 1,263,367 | ||||||
Noble Energy Inc. | 27,889 | 693,041 | ||||||
ONEOK Inc. | 30,713 | 2,014,773 | ||||||
|
| |||||||
16,154,767 | ||||||||
Pharmaceuticals — 2.5% | ||||||||
Merck & Co. Inc. | 132,453 | 9,749,865 | ||||||
Zoetis Inc. | 96,768 | 8,723,635 | ||||||
|
| |||||||
18,473,500 | ||||||||
Real Estate Management & Development — 0.9% |
| |||||||
CBRE Group Inc., Class A(a) | 168,170 | 6,775,569 | ||||||
|
| |||||||
Road & Rail — 0.3% | ||||||||
CSX Corp. | 10,713 | 737,697 | ||||||
Norfolk Southern Corp. | 9,612 | 1,613,182 | ||||||
|
| |||||||
2,350,879 | ||||||||
Semiconductors & Semiconductor Equipment — 3.7% |
| |||||||
Applied Materials Inc. | 101,051 | 3,322,557 | ||||||
Intel Corp. | 261,746 | 12,270,653 | ||||||
NVIDIA Corp. | 29,922 | 6,308,455 |
Security | Shares | Value | ||||||
Semiconductors & Semiconductor Equipment (continued) |
| |||||||
Texas Instruments Inc. | 63,186 | $ | 5,865,556 | |||||
|
| |||||||
27,767,221 | ||||||||
Software — 9.7% | ||||||||
Adobe Inc.(a) | 8,709 | 2,140,324 | ||||||
Autodesk Inc.(a) | 37,917 | 4,900,772 | ||||||
CA Inc. | 18,311 | 812,276 | ||||||
Cadence Design Systems Inc.(a) | 40,837 | 1,820,105 | ||||||
Intuit Inc. | 10,807 | 2,280,277 | ||||||
Microsoft Corp. | 376,944 | 40,261,389 | ||||||
Oracle Corp. | 172,240 | 8,412,201 | ||||||
salesforce.com Inc.(a) | 83,347 | 11,438,542 | ||||||
Symantec Corp. | 40,925 | 742,789 | ||||||
|
| |||||||
72,808,675 | ||||||||
Specialty Retail — 3.0% | ||||||||
Best Buy Co. Inc. | 130,641 | 9,165,773 | ||||||
Gap Inc. (The) | 80,007 | 2,184,191 | ||||||
Tiffany & Co. | 104,178 | 11,595,011 | ||||||
|
| |||||||
22,944,975 | ||||||||
Technology Hardware, Storage & Peripherals — 6.0% |
| |||||||
Apple Inc. | 167,797 | 36,724,051 | ||||||
Hewlett Packard Enterprise Co. | 226,126 | 3,448,422 | ||||||
HP Inc. | 223,693 | 5,399,949 | ||||||
|
| |||||||
45,572,422 | ||||||||
Textiles, Apparel & Luxury Goods — 2.3% |
| |||||||
Hanesbrands Inc. | 44,358 | 761,183 | ||||||
NIKE Inc., Class B | 162,767 | 12,214,036 | ||||||
PVH Corp. | 19,807 | 2,392,487 | ||||||
VF Corp. | 24,494 | 2,030,063 | ||||||
|
| |||||||
17,397,769 | ||||||||
Trading Companies & Distributors — 0.2% |
| |||||||
WW Grainger Inc. | 4,397 | 1,248,616 | ||||||
|
| |||||||
Total Common Stocks — 99.8% | 752,040,599 | |||||||
|
| |||||||
Short-Term Investments | ||||||||
Money Market Funds — 1.7% | ||||||||
BlackRock Cash Funds: Institutional, | 12,284,683 | 12,287,140 | ||||||
BlackRock Cash Funds: Treasury, | 750,945 | 750,945 | ||||||
|
| |||||||
13,038,085 | ||||||||
|
| |||||||
Total Short-Term Investments — 1.7% |
| 13,038,085 | ||||||
|
| |||||||
Total Investments in Securities — 101.5% |
| 765,078,684 | ||||||
Other Assets, Less Liabilities — (1.5)% |
| (11,606,616 | ) | |||||
|
| |||||||
Net Assets — 100.0% | $ | 753,472,068 | ||||||
|
|
(a) | Non-income producing security. |
(b) | All or a portion of this security is on loan. |
(c) | Affiliate of the Fund. |
(d) | Annualized 7-day yield as of period-end. |
(e) | All or a portion of this security was purchased with cash collateral received from loaned securities. |
38 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® MSCI USA ESG Select ETF
|
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:
Shares Held at | Shares | Shares | Shares Held at | Value at | Net Realized | Change in Unrealized Appreciation | ||||||||||||||||||||||||||
Affiliated Issuer | 04/30/18 | Purchased | Sold | 10/31/18 | 10/31/18 | Income | Gain (Loss) | (a) | (Depreciation) | |||||||||||||||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | 28,508,206 | — | (16,223,523 | )(b) | 12,284,683 | $ | 12,287,140 | $ | 57,760 | (c) | $ | 4,027 | $ | (2,109 | ) | |||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | 557,555 | 193,390 | (b) | — | 750,945 | 750,945 | 10,183 | — | — | |||||||||||||||||||||||
BlackRock Inc. | 33,598 | 5,531 | (1,832 | ) | 37,297 | 15,344,732 | 211,098 | 17,455 | (3,962,957 | ) | ||||||||||||||||||||||
PNC Financial Services Group Inc. (The) | 6,723 | 5,995 | (295 | ) | 12,423 | 1,596,231 | 18,241 | 4,299 | (199,976 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 29,979,048 | $ | 297,282 | $ | 25,781 | $ | (4,165,042 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
(b) | Net of purchases and sales. |
(c) | Includes securities lending income earned from the reinvestment of cash collateral from loaned securities (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities, and less fees paid to BTC as securities lending agent. |
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, refer to the Notes to Financial Statements.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $ | 752,040,599 | $ | — | $ | — | $ | 752,040,599 | ||||||||
Money Market Funds | 13,038,085 | — | — | 13,038,085 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 765,078,684 | $ | — | $ | — | $ | 765,078,684 | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
S C H E D U L E O F I N V E S T M E N T S | 39 |
Statements of Assets and Liabilities (unaudited)
October 31, 2018
iShares U.S. Basic Materials ETF | iShares U.S. Consumer Goods ETF | iShares U.S. Consumer Services ETF | iShares U.S. Financial Services ETF | |||||||||||||
ASSETS | ||||||||||||||||
Investments in securities, at value (including securities on loan)(a): | ||||||||||||||||
Unaffiliated(b) | $ | 450,670,743 | $ | 477,195,053 | $ | 914,198,246 | $ | 1,493,661,476 | ||||||||
Affiliated(c) | 376,637 | 13,492,719 | 7,252,111 | 59,765,819 | ||||||||||||
Receivables: | ||||||||||||||||
Investments sold | 30,429,402 | — | — | 367,388 | ||||||||||||
Securities lending income — Affiliated | 47 | 8,028 | 4,470 | 156 | ||||||||||||
Capital shares sold | 688,567 | — | — | — | ||||||||||||
Dividends | 545,858 | 850,120 | 165,041 | 1,085,673 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total assets | 482,711,254 | 491,545,920 | 921,619,868 | 1,554,880,512 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
LIABILITIES | ||||||||||||||||
Collateral on securities loaned, at value | — | 13,266,200 | 6,200,015 | 726,377 | ||||||||||||
Payables: | ||||||||||||||||
Investments purchased | 30,668,446 | — | — | — | ||||||||||||
Capital shares redeemed | 14,803 | — | — | 386,930 | ||||||||||||
Investment advisory fees | 205,787 | 181,277 | 334,405 | 575,078 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total liabilities | 30,889,036 | 13,447,477 | 6,534,420 | 1,688,385 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
NET ASSETS | $ | 451,822,218 | $ | 478,098,443 | $ | 915,085,448 | $ | 1,553,192,127 | ||||||||
|
|
|
|
|
|
|
| |||||||||
NET ASSETS CONSIST OF: | ||||||||||||||||
Paid-in capital | $ | 677,631,277 | $ | 527,204,619 | $ | 864,400,975 | $ | 1,402,837,752 | ||||||||
Accumulated earnings (loss) | (225,809,059 | ) | (49,106,176 | ) | 50,684,473 | 150,354,375 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
NET ASSETS | $ | 451,822,218 | $ | 478,098,443 | $ | 915,085,448 | $ | 1,553,192,127 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Shares outstanding | 5,100,000 | 4,100,000 | 4,700,000 | 12,350,000 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net asset value | $ | 88.59 | $ | 116.61 | $ | 194.70 | $ | 125.76 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Shares authorized | Unlimited | Unlimited | Unlimited | Unlimited | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Par value | None | None | None | None | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
(a) Securities loaned, at value | $ | — | $ | 13,253,667 | $ | 6,183,445 | $ | 712,613 | ||||||||
(b) Investments, at cost — Unaffiliated | $ | 548,914,688 | $ | 524,359,982 | $ | 829,059,096 | $ | 1,401,895,572 | ||||||||
(c) Investments, at cost — Affiliated | $ | 376,637 | $ | 13,492,040 | $ | 7,251,067 | $ | 61,865,153 |
See notes to financial statements.
40 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statements of Assets and Liabilities (unaudited) (continued)
October 31, 2018
iShares U.S. Financials ETF | iShares U.S. Industrials ETF | iShares MSCI KLD 400 Social ETF | iShares MSCI USA ESG Select ETF | |||||||||||||
ASSETS | ||||||||||||||||
Investments in securities, at value (including securities on loan)(a): | ||||||||||||||||
Unaffiliated(b) | $ | 1,706,811,145 | $ | 905,484,451 | $ | 1,159,595,168 | $ | 735,099,636 | ||||||||
Affiliated(c) | 66,294,551 | 12,762,489 | 23,196,291 | 29,979,048 | ||||||||||||
Cash | 33,248 | — | — | — | ||||||||||||
Receivables: | ||||||||||||||||
Investments sold | 996,747 | 451,506 | — | — | ||||||||||||
Securities lending income — Affiliated | 4,348 | 3,340 | 3,472 | 5,582 | ||||||||||||
Capital shares sold | — | — | 57,839 | 19,535 | ||||||||||||
Dividends | 1,216,601 | 793,997 | 1,404,077 | 823,708 | ||||||||||||
Tax reclaims | — | 1,662 | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total assets | 1,775,356,640 | 919,497,445 | 1,184,256,847 | 765,927,509 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
LIABILITIES | ||||||||||||||||
Collateral on securities loaned, at value | 26,273,077 | 11,729,856 | 11,100,849 | 12,284,091 | ||||||||||||
Payables: | ||||||||||||||||
Capital shares redeemed | 1,731,318 | 477,104 | — | 10,040 | ||||||||||||
Investment advisory fees | 643,071 | 360,265 | 254,757 | 161,310 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total liabilities | 28,647,466 | 12,567,225 | 11,355,606 | 12,455,441 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
NET ASSETS | $ | 1,746,709,174 | $ | 906,930,220 | $ | 1,172,901,241 | $ | 753,472,068 | ||||||||
|
|
|
|
|
|
|
| |||||||||
NET ASSETS CONSIST OF: | ||||||||||||||||
Paid-in capital | $ | 1,662,289,707 | $ | 899,320,176 | $ | 1,007,989,809 | $ | 622,064,205 | ||||||||
Accumulated earnings | 84,419,467 | 7,610,044 | 164,911,432 | 131,407,863 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
NET ASSETS | $ | 1,746,709,174 | $ | 906,930,220 | $ | 1,172,901,241 | $ | 753,472,068 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Shares outstanding | 15,150,000 | 6,500,000 | 11,900,000 | 6,800,000 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net asset value | $ | 115.29 | $ | 139.53 | $ | 98.56 | $ | 110.80 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Shares authorized | Unlimited | Unlimited | Unlimited | Unlimited | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Par value | None | None | None | None | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
(a) Securities loaned, at value | $ | 25,601,167 | $ | 11,627,522 | $ | 10,995,823 | $ | 12,278,663 | ||||||||
(b) Investments, at cost — Unaffiliated | $ | 1,718,586,029 | $ | 926,956,750 | $ | 991,610,802 | $ | 610,585,432 | ||||||||
(c) Investments, at cost — Affiliated | $ | 70,141,382 | $ | 12,761,410 | $ | 21,615,263 | $ | 29,246,061 |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S | 41 |
Statements of Operations (unaudited)
Six Months Ended October 31, 2018
iShares U.S. Basic Materials ETF | iShares U.S. Consumer Goods ETF | iShares U.S. Consumer Services ETF | iShares U.S. Financial Services ETF | |||||||||||||
INVESTMENT INCOME | ||||||||||||||||
Dividends — Unaffiliated | $ | 5,989,530 | $ | 7,902,725 | $ | 5,235,398 | $ | 15,359,022 | ||||||||
Dividends — Affiliated | 6,598 | 6,984 | 10,979 | 910,621 | ||||||||||||
Securities lending income — Affiliated — net | 2,514 | 75,723 | 45,841 | 22,085 | ||||||||||||
Foreign taxes withheld | — | — | (1,092 | ) | (2,883 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total investment income | 5,998,642 | 7,985,432 | 5,291,126 | 16,288,845 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
EXPENSES | ||||||||||||||||
Investment advisory fees | 1,330,397 | 1,059,384 | 1,860,071 | 3,636,566 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total expenses | 1,330,397 | 1,059,384 | 1,860,071 | 3,636,566 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net investment income | 4,668,245 | 6,926,048 | 3,431,055 | 12,652,279 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||
Investments — Unaffiliated | (16,440,865 | ) | (5,957,048 | ) | (7,042,543 | ) | (3,986,858 | ) | ||||||||
Investments — Affiliated | (494 | ) | 1,725 | 2,394 | (108,781 | ) | ||||||||||
In-kind redemptions — Unaffiliated | (4,854,956 | ) | 7,527,337 | 9,453,299 | 84,051,242 | |||||||||||
In-kind redemptions — Affiliated | — | — | — | 3,929,187 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net realized gain (loss) | (21,296,315 | ) | 1,572,014 | 2,413,150 | 83,884,790 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
Investments — Unaffiliated | (37,736,735 | ) | 6,791,632 | 33,099,675 | (137,001,750 | ) | ||||||||||
Investments — Affiliated | (23 | ) | (420 | ) | 1 | (15,705,940 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net change in unrealized appreciation (depreciation) | (37,736,758 | ) | 6,791,212 | 33,099,676 | (152,707,690 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net realized and unrealized gain (loss) | (59,033,073 | ) | 8,363,226 | 35,512,826 | (68,822,900 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | (54,364,828 | ) | $ | 15,289,274 | $ | 38,943,881 | $ | (56,170,621 | ) | ||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
42 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statements of Operations (unaudited) (continued)
Six Months Ended October 31, 2018
iShares U.S. Financials ETF | iShares U.S. Industrials ETF | iShares MSCI KLD 400 Social ETF | iShares MSCI USA ESG Select ETF | |||||||||||||
INVESTMENT INCOME | ||||||||||||||||
Dividends — Unaffiliated | $ | 22,095,765 | $ | 8,946,675 | $ | 10,257,562 | $ | 6,943,125 | ||||||||
Dividends — Affiliated | 632,725 | 11,101 | 177,025 | 239,522 | ||||||||||||
Securities lending income — Affiliated — net | 30,921 | 65,466 | 56,379 | 57,760 | ||||||||||||
Foreign taxes withheld | (1,977 | ) | — | (735 | ) | — | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total investment income | 22,757,434 | 9,023,242 | 10,490,231 | 7,240,407 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
EXPENSES | ||||||||||||||||
Investment advisory fees | 4,258,082 | 2,212,088 | 1,876,779 | 1,205,447 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total expenses | 4,258,082 | 2,212,088 | 1,876,779 | 1,205,447 | ||||||||||||
Less: | ||||||||||||||||
Investment advisory fees waived | — | — | (417,136 | ) | (270,318 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total expenses after fees waived | 4,258,082 | 2,212,088 | 1,459,643 | 935,129 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net investment income | 18,499,352 | 6,811,154 | 9,030,588 | 6,305,278 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||
Investments — Unaffiliated | (19,168,893 | ) | (2,833,826 | ) | (2,945,972 | ) | (5,392,004 | ) | ||||||||
Investments — Affiliated | (114,386 | ) | 485 | (45,860 | ) | (66,512 | ) | |||||||||
In-kind redemptions — Unaffiliated | 121,010,442 | 46,371,766 | 11,101,154 | 16,400,066 | ||||||||||||
In-kind redemptions — Affiliated | 4,287,201 | — | 140,259 | 92,293 | ||||||||||||
Litigation proceeds | 243,516 | (a) | — | — | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net realized gain | 106,257,880 | 43,538,425 | 8,249,581 | 11,033,843 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
Investments — Unaffiliated | (120,529,164 | ) | (59,512,165 | ) | (9,273,206 | ) | (9,218,865 | ) | ||||||||
Investments — Affiliated | (11,788,855 | ) | (116 | ) | (2,293,719 | ) | (4,165,042 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net change in unrealized appreciation (depreciation) | (132,318,019 | ) | (59,512,281 | ) | (11,566,925 | ) | (13,383,907 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net realized and unrealized loss | (26,060,139 | ) | (15,973,856 | ) | (3,317,344 | ) | (2,350,064 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | (7,560,787 | ) | $ | (9,162,702 | ) | $ | 5,713,244 | $ | 3,955,214 | ||||||
|
|
|
|
|
|
|
|
(a) | Represents proceeds received from settlement of class action litigation where the Fund was able to recover a portion of investment losses previously realized. |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S | 43 |
Statements of Changes in Net Assets
|
|
iShares U.S. Basic Materials ETF | iShares U.S. Consumer Goods ETF | |||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS | ||||||||||||||||
Net investment income | $ | 4,668,245 | $ | 12,001,371 | $ | 6,926,048 | $ | 11,981,932 | ||||||||
Net realized gain (loss) | (21,296,315 | ) | 81,531,468 | 1,572,014 | 43,436,270 | |||||||||||
Net change in unrealized appreciation (depreciation) | (37,736,758 | ) | (34,040,711 | ) | 6,791,212 | (62,598,536 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | (54,364,828 | ) | 59,492,128 | 15,289,274 | (7,180,334 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS(a) | ||||||||||||||||
Decrease in net assets resulting from distributions to shareholders | (5,172,634 | ) | (12,542,658 | ) | (7,071,988 | ) | (10,581,746 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS | ||||||||||||||||
Net increase (decrease) in net assets derived from capital share transactions | (121,574,529 | ) | (374,762,202 | ) | 36,381,728 | (268,922,450 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
NET ASSETS(a) | ||||||||||||||||
Total increase (decrease) in net assets | (181,111,991 | ) | (327,812,732 | ) | 44,599,014 | (286,684,530 | ) | |||||||||
Beginning of period | 632,934,209 | 960,746,941 | 433,499,429 | 720,183,959 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 451,822,218 | $ | 632,934,209 | $ | 478,098,443 | $ | 433,499,429 | ||||||||
|
|
|
|
|
|
|
|
(a) | Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 11 for this prior year information. |
See notes to financial statements.
44 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statements of Changes in Net Assets (continued)
|
iShares U.S. Consumer Services ETF | iShares U.S. Financial Services ETF | |||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS | ||||||||||||||||
Net investment income | $ | 3,431,055 | $ | 7,901,397 | $ | 12,652,279 | $ | 20,888,989 | ||||||||
Net realized gain | 2,413,150 | 67,252,992 | 83,884,790 | 116,710,542 | ||||||||||||
Net change in unrealized appreciation (depreciation) | 33,099,676 | 9,447,083 | (152,707,690 | ) | 147,442,051 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 38,943,881 | 84,601,472 | (56,170,621 | ) | 285,041,582 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS(a) | ||||||||||||||||
Decrease in net assets resulting from distributions to shareholders | (3,706,142 | ) | (8,008,005 | ) | (12,460,219 | ) | (20,493,638 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS | ||||||||||||||||
Net increase (decrease) in net assets derived from capital share transactions | 138,166,057 | (4,130,169 | ) | (21,956,941 | ) | (51,414,294 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
NET ASSETS(a) | ||||||||||||||||
Total increase (decrease) in net assets | 173,403,796 | 72,463,298 | (90,587,781 | ) | 213,133,650 | |||||||||||
Beginning of period | 741,681,652 | 669,218,354 | 1,643,779,908 | 1,430,646,258 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 915,085,448 | $ | 741,681,652 | $ | 1,553,192,127 | $ | 1,643,779,908 | ||||||||
|
|
|
|
|
|
|
|
(a) | Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 11 for this prior year information. |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S | 45 |
Statements of Changes in Net Assets (continued)
|
iShares U.S. Financials ETF | iShares U.S. Industrials ETF | |||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS | ||||||||||||||||
Net investment income | $ | 18,499,352 | $ | 31,708,814 | $ | 6,811,154 | $ | 14,092,457 | ||||||||
Net realized gain | 106,257,880 | 163,219,876 | 43,538,425 | 106,477,039 | ||||||||||||
Net change in unrealized appreciation (depreciation) | (132,318,019 | ) | 63,614,564 | (59,512,281 | ) | (7,921,185 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | (7,560,787 | ) | 258,543,254 | (9,162,702 | ) | 112,648,311 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS(a) | ||||||||||||||||
Decrease in net assets resulting from distributions to shareholders | (17,311,247 | ) | (31,064,309 | ) | (6,503,716 | ) | (14,040,796 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS | ||||||||||||||||
Net increase (decrease) in net assets derived from capital share transactions | (523,734,015 | ) | 386,512,214 | (111,056,996 | ) | (48,773,886 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
NET ASSETS(a) | ||||||||||||||||
Total increase (decrease) in net assets | (548,606,049 | ) | 613,991,159 | (126,723,414 | ) | 49,833,629 | ||||||||||
Beginning of period | 2,295,315,223 | 1,681,324,064 | 1,033,653,634 | 983,820,005 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 1,746,709,174 | $ | 2,295,315,223 | $ | 906,930,220 | $ | 1,033,653,634 | ||||||||
|
|
|
|
|
|
|
|
(a) | Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 11 for this prior year information. |
See notes to financial statements.
46 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statements of Changes in Net Assets (continued)
|
iShares MSCI KLD 400 Social ETF | iShares MSCI USA ESG Select ETF | |||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS | ||||||||||||||||
Net investment income | $ | 9,030,588 | $ | 13,372,345 | $ | 6,305,278 | $ | 9,793,674 | ||||||||
Net realized gain | 8,249,581 | 74,670,248 | 11,033,843 | 23,130,820 | ||||||||||||
Net change in unrealized appreciation (depreciation) | (11,566,925 | ) | 25,462,985 | (13,383,907 | ) | 39,557,357 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 5,713,244 | 113,505,578 | 3,955,214 | 72,481,851 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS(a) | ||||||||||||||||
Decrease in net assets resulting from distributions to shareholders | (9,151,472 | ) | (12,424,302 | ) | (6,284,038 | ) | (8,966,610 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS | ||||||||||||||||
Net increase in net assets derived from capital share transactions | 140,916,516 | 111,396,224 | 74,194,006 | 89,583,121 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
NET ASSETS(a) | ||||||||||||||||
Total increase in net assets | 137,478,288 | 212,477,500 | 71,865,182 | 153,098,362 | ||||||||||||
Beginning of period | 1,035,422,953 | 822,945,453 | 681,606,886 | 528,508,524 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 1,172,901,241 | $ | 1,035,422,953 | $ | 753,472,068 | $ | 681,606,886 | ||||||||
|
|
|
|
|
|
|
|
(a) | Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 11 for this prior year information. |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S | 47 |
(For a share outstanding throughout each period)
iShares U.S. Basic Materials ETF | ||||||||||||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Year Ended 04/30/17 | Year Ended 04/30/16 | Year Ended 04/30/15 | Year Ended 04/30/14 | |||||||||||||||||||
| ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 97.37 | $ | 89.37 | $ | 77.65 | $ | 84.59 | $ | 83.92 | $ | 69.93 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income(a) | 0.74 | 1.39 | 1.34 | 1.39 | 1.34 | 1.49 | ||||||||||||||||||
Net realized and unrealized gain (loss)(b) | (8.73 | ) | 8.16 | 11.62 | (6.93 | ) | 0.82 | 13.89 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase (decrease) from investment operations | (7.99 | ) | 9.55 | 12.96 | (5.54 | ) | 2.16 | 15.38 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Distributions | ||||||||||||||||||||||||
From net investment income | (0.79 | ) | (1.55 | ) | (1.24 | ) | (1.40 | ) | (1.49 | ) | (1.39 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (0.79 | ) | (1.55 | ) | (1.24 | ) | (1.40 | ) | (1.49 | ) | (1.39 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 88.59 | $ | 97.37 | $ | 89.37 | $ | 77.65 | $ | 84.59 | $ | 83.92 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Return | ||||||||||||||||||||||||
Based on net asset value | (8.29 | )%(c) | 10.74 | % | 16.88 | % | (6.42 | )% | 2.58 | % | 22.27 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||||||
Total expenses | 0.42 | %(d) | 0.43 | % | 0.44 | % | 0.44 | % | 0.43 | % | 0.45 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income | 1.48 | %(d) | 1.44 | % | 1.62 | % | 1.88 | % | 1.57 | % | 1.94 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 451,822 | $ | 632,934 | $ | 960,747 | $ | 551,283 | $ | 494,880 | $ | 939,881 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Portfolio turnover rate(e) | 19 | %(c) | 6 | % | 13 | % | 13 | % | 7 | % | 16 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(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. |
(e) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
48 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares U.S. Consumer Goods ETF | ||||||||||||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Year Ended 04/30/17 | Year Ended 04/30/16 | Year Ended 04/30/15 | Year Ended 04/30/14 | |||||||||||||||||||
| ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 114.08 | $ | 119.04 | $ | 111.98 | $ | 105.19 | $ | 96.90 | $ | 87.54 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income(a) | 1.64 | 2.50 | 2.32 | 2.31 | 2.03 | 1.81 | ||||||||||||||||||
Net realized and unrealized gain (loss)(b) | 2.58 | (5.24 | ) | 7.66 | 6.90 | 8.23 | 9.37 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase (decrease) from investment operations | 4.22 | (2.74 | ) | 9.98 | 9.21 | 10.26 | 11.18 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Distributions | ||||||||||||||||||||||||
From net investment income | (1.69 | ) | (2.22 | ) | (2.92 | ) | (2.42 | ) | (1.97 | ) | (1.82 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (1.69 | ) | (2.22 | ) | (2.92 | ) | (2.42 | ) | (1.97 | ) | (1.82 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 116.61 | $ | 114.08 | $ | 119.04 | $ | 111.98 | $ | 105.19 | $ | 96.90 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Return | ||||||||||||||||||||||||
Based on net asset value | 3.68 | %(c) | (2.41 | )% | 9.04 | % | 8.88 | % | 10.66 | % | 12.92 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||||||
Total expenses | 0.42 | %(d) | 0.43 | % | 0.44 | % | 0.44 | % | 0.43 | % | 0.45 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income | 2.76 | %(d) | 2.05 | % | 2.03 | % | 2.15 | % | 1.98 | % | 1.97 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 478,098 | $ | 433,499 | $ | 720,184 | $ | 951,869 | $ | 778,411 | $ | 460,252 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Portfolio turnover rate(e) | 3 | %(c) | 7 | % | 7 | % | 4 | % | 4 | % | 9 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(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. |
(e) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
F I N A N C I A L H I G H L I G H T S | 49 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares U.S. Consumer Services ETF | ||||||||||||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Year Ended 04/30/17 | Year Ended 04/30/16 | Year Ended 04/30/15 | Year Ended 04/30/14 | |||||||||||||||||||
| ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 185.42 | $ | 165.24 | $ | 144.34 | $ | 142.60 | $ | 118.79 | $ | 99.99 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income(a) | 0.78 | 1.81 | 1.52 | 1.42 | 1.44 | 1.08 | ||||||||||||||||||
Net realized and unrealized gain(b) | 9.34 | 20.10 | 20.99 | 1.74 | 23.64 | 18.72 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase from investment operations | 10.12 | 21.91 | 22.51 | 3.16 | 25.08 | 19.80 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Distributions | ||||||||||||||||||||||||
From net investment income | (0.84 | ) | (1.73 | ) | (1.61 | ) | (1.42 | ) | (1.27 | ) | (1.00 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (0.84 | ) | (1.73 | ) | (1.61 | ) | (1.42 | ) | (1.27 | ) | (1.00 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 194.70 | $ | 185.42 | $ | 165.24 | $ | 144.34 | $ | 142.60 | $ | 118.79 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Return | ||||||||||||||||||||||||
Based on net asset value | 5.44 | %(c) | 13.35 | % | 15.71 | % | 2.23 | % | 21.19 | % | 19.85 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||||||
Total expenses | 0.42 | %(d) | 0.43 | % | 0.44 | % | 0.44 | % | 0.43 | % | 0.45 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income | 0.78 | %(d) | 1.04 | % | 1.01 | % | 0.99 | % | 1.08 | % | 0.96 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 915,085 | $ | 741,682 | $ | 669,218 | $ | 959,877 | $ | 1,055,273 | $ | 421,694 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Portfolio turnover rate(e) | 7 | %(c) | 10 | % | 8 | % | 9 | % | 8 | % | 5 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(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. |
(e) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
50 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares U.S. Financial Services ETF | ||||||||||||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Year Ended 04/30/17 | Year Ended 04/30/16 | Year Ended 04/30/15 | Year Ended 04/30/14 | |||||||||||||||||||
| ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 130.98 | $ | 108.38 | $ | 85.36 | $ | 91.03 | $ | 81.22 | $ | 66.98 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income(a) | 0.99 | 1.73 | 1.47 | 1.28 | 1.15 | 0.94 | ||||||||||||||||||
Net realized and unrealized gain (loss)(b) | (5.21 | ) | 22.56 | 22.88 | (5.66 | ) | 9.77 | 14.22 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase (decrease) from investment operations | (4.22 | ) | 24.29 | 24.35 | (4.38 | ) | 10.92 | 15.16 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Distributions | ||||||||||||||||||||||||
From net investment income | (1.00 | ) | (1.69 | ) | (1.33 | ) | (1.29 | ) | (1.11 | ) | (0.92 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (1.00 | ) | (1.69 | ) | (1.33 | ) | (1.29 | ) | (1.11 | ) | (0.92 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 125.76 | $ | 130.98 | $ | 108.38 | $ | 85.36 | $ | 91.03 | $ | 81.22 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Return | ||||||||||||||||||||||||
Based on net asset value | (3.26 | )%(c) | 22.53 | % | 28.74 | % | (4.85 | )% | 13.50 | % | 22.68 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||||||
Total expenses | 0.42 | %(d) | 0.43 | % | 0.44 | % | 0.44 | % | 0.43 | % | 0.45 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income | 1.47 | %(d) | 1.40 | % | 1.49 | % | 1.44 | % | 1.32 | % | 1.20 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 1,553,192 | $ | 1,643,780 | $ | 1,430,646 | $ | 567,660 | $ | 564,372 | $ | 592,917 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Portfolio turnover rate(e) | 2 | %(c) | 4 | % | 4 | % | 5 | % | 3 | % | 4 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(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. |
(e) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
F I N A N C I A L H I G H L I G H T S | 51 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares U.S. Financials ETF | ||||||||||||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Year Ended 04/30/17 | Year Ended 04/30/16 | Year Ended 04/30/15 | Year Ended 04/30/14 | |||||||||||||||||||
| ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 117.71 | $ | 103.79 | $ | 86.91 | $ | 88.81 | $ | 80.39 | $ | 69.55 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income(a) | 1.12 | 1.82 | 1.64 | 1.44 | 1.27 | 1.15 | ||||||||||||||||||
Net realized and unrealized gain (loss)(b) | (2.49 | ) | 13.89 | 16.91 | (1.81 | ) | 8.46 | 10.84 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase (decrease) from investment operations | (1.37 | ) | 15.71 | 18.55 | (0.37 | ) | 9.73 | 11.99 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Distributions | ||||||||||||||||||||||||
From net investment income | (1.05 | ) | (1.79 | ) | (1.67 | ) | (1.53 | ) | (1.31 | ) | (1.15 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (1.05 | ) | (1.79 | ) | (1.67 | ) | (1.53 | ) | (1.31 | ) | (1.15 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 115.29 | $ | 117.71 | $ | 103.79 | $ | 86.91 | $ | 88.81 | $ | 80.39 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Return | ||||||||||||||||||||||||
Based on net asset value | (1.19 | )%(c)(d) | 15.21 | % | 21.52 | % | (0.41 | )% | 12.15 | % | 17.32 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||||||
Total expenses | 0.42 | %(e) | 0.43 | % | 0.44 | % | 0.44 | % | 0.43 | % | 0.45 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income | 1.84 | %(e) | 1.59 | % | 1.70 | % | 1.64 | % | 1.48 | % | 1.50 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 1,746,709 | $ | 2,295,315 | $ | 1,681,324 | $ | 1,173,295 | $ | 1,163,414 | $ | 1,559,644 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Portfolio turnover rate(f) | 4 | %(c) | 6 | % | 6 | % | 6 | % | 6 | % | 6 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(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) | Includes proceeds received from a class action litigation, which impacted the Fund’s total return. Not including these proceeds, the Fund’s total return would have been (1.20)% for the six months ended October 31, 2018. |
(e) | Annualized. |
(f) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
52 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares U.S. Industrials ETF | ||||||||||||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Year Ended 04/30/17 | Year Ended 04/30/16 | Year Ended 04/30/15 | Year Ended 04/30/14 | |||||||||||||||||||
| ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 141.60 | $ | 128.60 | $ | 108.65 | $ | 107.35 | $ | 101.19 | $ | 81.15 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income(a) | 0.98 | 1.78 | 1.82 | 1.59 | 1.43 | 1.28 | ||||||||||||||||||
Net realized and unrealized gain (loss)(b) | (2.11 | ) | 13.06 | 19.89 | 1.35 | 6.17 | 20.14 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase (decrease) from investment operations | (1.13 | ) | 14.84 | 21.71 | 2.94 | 7.60 | 21.42 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Distributions | ||||||||||||||||||||||||
From net investment income | (0.94 | ) | (1.84 | ) | (1.76 | ) | (1.64 | ) | (1.44 | ) | (1.38 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (0.94 | ) | (1.84 | ) | (1.76 | ) | (1.64 | ) | (1.44 | ) | (1.38 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 139.53 | $ | 141.60 | $ | 128.60 | $ | 108.65 | $ | 107.35 | $ | 101.19 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Return | ||||||||||||||||||||||||
Based on net asset value | (0.85 | )%(c) | 11.57 | % | 20.13 | % | 2.83 | % | 7.54 | % | 26.53 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||||||
Total expenses | 0.42 | %(d) | 0.43 | % | 0.44 | % | 0.44 | % | 0.43 | % | 0.45 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income | 1.30 | %(d) | 1.27 | % | 1.55 | % | 1.54 | % | 1.37 | % | 1.37 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 906,930 | $ | 1,033,654 | $ | 983,820 | $ | 733,417 | $ | 917,854 | $ | 895,493 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Portfolio turnover rate(e) | 3 | %(c) | 7 | % | 10 | % | 7 | % | 6 | % | 6 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(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. |
(e) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
F I N A N C I A L H I G H L I G H T S | 53 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares MSCI KLD 400 Social ETF | ||||||||||||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Year Ended 04/30/17 | Year Ended 04/30/16 | Year Ended 04/30/15 | Year Ended 04/30/14 | |||||||||||||||||||
| ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 98.14 | $ | 88.02 | $ | 76.44 | $ | 77.09 | $ | 70.16 | $ | 59.39 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income(a) | 0.81 | 1.36 | 1.22 | 1.17 | 1.04 | 0.95 | ||||||||||||||||||
Net realized and unrealized gain (loss)(b) | 0.42 | 10.01 | 11.54 | (0.62 | ) | 6.89 | 10.72 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase from investment operations | 1.23 | 11.37 | 12.76 | 0.55 | 7.93 | 11.67 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Distributions | ||||||||||||||||||||||||
From net investment income | (0.81 | ) | (1.25 | ) | (1.18 | ) | (1.20 | ) | (1.00 | ) | (0.90 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (0.81 | ) | (1.25 | ) | (1.18 | ) | (1.20 | ) | (1.00 | ) | (0.90 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 98.56 | $ | 98.14 | $ | 88.02 | $ | 76.44 | $ | 77.09 | $ | 70.16 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Return | ||||||||||||||||||||||||
Based on net asset value | 1.21 | %(c) | 12.99 | % | 16.83 | % | 0.75 | % | 11.34 | % | 19.76 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||||||
Total expenses | 0.32 | %(d) | 0.50 | % | 0.50 | % | 0.50 | % | 0.50 | % | 0.50 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total expenses after fees waived | 0.25 | %(d) | 0.48 | % | 0.50 | % | 0.50 | % | 0.50 | % | 0.50 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income | 1.55 | %(d) | 1.43 | % | 1.49 | % | 1.55 | % | 1.39 | % | 1.45 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 1,172,901 | $ | 1,035,423 | $ | 822,945 | $ | 500,677 | $ | 431,703 | $ | 350,800 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Portfolio turnover rate(e) | 4 | %(c) | 11 | % | 10 | % | 16 | % | 14 | % | 13 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(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. |
(e) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
54 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares MSCI USA ESG Select ETF | ||||||||||||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Year Ended 04/30/17 | Year Ended 04/30/16 | Year Ended 04/30/15 | Year Ended 04/30/14 | |||||||||||||||||||
| ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 110.83 | $ | 99.72 | $ | 85.12 | $ | 86.39 | $ | 78.49 | $ | 67.40 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income(a) | 0.98 | 1.68 | 1.41 | 1.32 | 1.08 | 1.01 | ||||||||||||||||||
Net realized and unrealized gain (loss)(b) | (0.04 | ) | 10.98 | 14.57 | (1.29 | ) | 7.89 | 11.12 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase from investment operations | 0.94 | 12.66 | 15.98 | 0.03 | 8.97 | 12.13 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Distributions | ||||||||||||||||||||||||
From net investment income | (0.97 | ) | (1.55 | ) | (1.38 | ) | (1.30 | ) | (1.07 | ) | (1.04 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (0.97 | ) | (1.55 | ) | (1.38 | ) | (1.30 | ) | (1.07 | ) | (1.04 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 110.80 | $ | 110.83 | $ | 99.72 | $ | 85.12 | $ | 86.39 | $ | 78.49 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Return | ||||||||||||||||||||||||
Based on net asset value | 0.81 | %(c) | 12.76 | % | 18.92 | % | 0.07 | % | 11.46 | % | 18.12 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||||||
Total expenses | 0.32 | %(d) | 0.50 | % | 0.50 | % | 0.50 | % | 0.50 | % | 0.50 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total expenses after fees waived | 0.25 | %(d) | 0.48 | % | 0.50 | % | 0.50 | % | 0.50 | % | 0.50 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income | 1.69 | %(d) | 1.56 | % | 1.53 | % | 1.58 | % | 1.29 | % | 1.38 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 753,472 | $ | 681,607 | $ | 528,509 | $ | 357,511 | $ | 328,277 | $ | 255,081 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Portfolio turnover rate(e) | 9 | %(c) | 13 | % | 19 | % | 20 | % | 19 | % | 20 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(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. |
(e) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
F I N A N C I A L H I G H L I G H T S | 55 |
Notes to Financial Statements (unaudited)
1. | ORGANIZATION |
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 is organized as a Delaware statutory trust and is authorized to have multiple series or portfolios.
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 | |||
U.S. Financials | Diversified | |||
U.S. Industrials | Diversified | |||
MSCI KLD 400 Social | Diversified | |||
MSCI USA ESG Select | Diversified |
2. | 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 increases and decreases in net assets from operations 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.
Investment Transactions and Income Recognition: Investment 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 are reflected in tax reclaims receivable. 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. Upon notification from issuers, some of the dividend income received from a real estate investment trust may be re-designated as a return of capital or capital gain. Non-cash dividends, if any, are recognized on the ex-dividend date and recorded as non-cash dividend income at fair value. Interest income is accrued daily.
In-kind Redemptions: For financial reporting purposes, 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 net asset value per share.
Distributions: 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.
Recent Accounting Standards: In August 2018, the Financial Accounting Standards Board issued Accounting Standards Update 2018-13 “Changes to the Disclosure Requirements for Fair Value Measurement” which modifies disclosure requirements for fair value measurements. The guidance is effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. Management is currently evaluating the impact of this guidance to the Funds.
Indemnifications: In the normal course of business, each Fund enters into contracts that contain a variety of representations that provide general indemnification. The Funds’ maximum exposure under these arrangements is unknown because it involves future potential claims against the Funds, which cannot be predicted with any certainty.
3. | INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS |
Investment Valuation Policies: Each Fund’s investments are valued at fair value (also referred to as “market value” within the financial statements) 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. A fund determines the fair value of its financial instruments using various independent dealers or pricing services under policies approved by the Board of Trustees of the Trust (the “Board”). The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) is the committee formed by management to develop global pricing policies and procedures and to oversee the pricing function for all financial instruments.
Fair Value Inputs and Methodologies: The following methods and inputs are used to establish the fair value of each Fund’s assets and liabilities:
• | Equity investments traded on a recognized securities exchange are valued at that day’s last traded price or 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. |
• | Investments in open-end U.S. mutual funds (including money market funds) are valued at that day’s published net asset value (“NAV”). |
56 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (unaudited) (continued)
If events (e.g., a company announcement, market volatility or a natural disaster) occur that are expected to materially affect the value of an investment, or in the event that application of these methods of valuation results in a price for an investment that is deemed not to be representative of the market 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 as reflecting fair value (“Fair Valued Investments”). The fair valuation approaches that may be used by the Global Valuation Committee include market approach, income approach and the cost approach. 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.
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, regular reviews 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 and large movements in market values, and reviews of any market related activity. The pricing of all Fair Valued Investments is subsequently reported to the Board on a quarterly basis.
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.
Fair Value Hierarchy: Various inputs are used in determining the fair value of financial instruments. 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 price quotations 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, but not limited to, quoted prices for similar assets or liabilities in markets that are active, 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 interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs; and |
• | Level 3 – Unobservable inputs 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 financial instruments). |
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 into or out of an assigned level within the 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 a value determined for financial instruments is based on the pricing transparency of the financial instruments and is not necessarily an indication of the risks associated with investing in those securities.
4. | SECURITIES AND OTHER INVESTMENTS |
Securities Lending: Each Fund may lend its 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 market 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 Fund and any additional required collateral is delivered to the Fund or excess collateral is returned by the Fund, 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.
As of October 31, 2018, 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 BlackRock Fund Advisors (“BFA”), the Funds’ investment adviser, or its affiliates 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, if any, are also disclosed in its schedule of investments. The market value of any securities on loan as of October 31, 2018 and the value of the related cash collateral are disclosed in the statements of assets and liabilities.
Securities lending transactions are entered into by a fund under Master Securities Lending Agreements (each, an “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, the 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 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, absent an event of default, the borrower can resell or re-pledge the loaned securities, and the fund can reinvest cash collateral received in connection with loaned securities.
N O T E S T O F I N A N C I A L S T A T E M E N T S | 57 |
Notes to Financial Statements (unaudited) (continued)
The following table is a summary of the securities lending agreements by counterparty which are subject to offset under an MSLA as of October 31, 2018:
iShares ETF and Counterparty | Market Value of Securities on Loan | Cash Collateral Received(a) | Non-Cash Collateral Received | Net Amount | ||||||||||||
U.S. Consumer Goods | ||||||||||||||||
Barclays Bank PLC | $ | 755,677 | $ | 755,677 | $ | — | $ | — | ||||||||
Credit Suisse Securities (USA) LLC | 52,973 | 52,973 | — | — | ||||||||||||
Goldman Sachs & Co. | 1,279,850 | 1,279,850 | — | — | ||||||||||||
HSBC Bank PLC | 425,405 | 425,405 | — | — | ||||||||||||
JPMorgan Securities LLC | 8,658,076 | 8,658,076 | — | — | ||||||||||||
Merrill Lynch, Pierce, Fenner & Smith | 130,331 | 130,331 | — | — | ||||||||||||
Nomura Securities International Inc. | 267,671 | 267,671 | — | — | ||||||||||||
UBS AG | 1,672,286 | 1,672,286 | — | — | ||||||||||||
Wells Fargo Securities LLC | 11,398 | 11,398 | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 13,253,667 | $ | 13,253,667 | $ | — | $ | — | |||||||||
|
|
|
|
|
|
|
| |||||||||
U.S. Consumer Services | ||||||||||||||||
Citigroup Global Markets Inc. | $ | 197,596 | $ | 197,596 | $ | — | $ | — | ||||||||
Credit Suisse Securities (USA) LLC | 318,533 | 318,533 | — | — | ||||||||||||
Deutsche Bank Securities Inc. | 142,532 | 142,532 | — | — | ||||||||||||
Goldman Sachs & Co. | 2,140,836 | 2,140,836 | — | — | ||||||||||||
HSBC Bank PLC | 761,168 | 761,168 | — | — | ||||||||||||
JPMorgan Securities LLC | 25,155 | 25,155 | — | — | ||||||||||||
Merrill Lynch, Pierce, Fenner & Smith | 527,924 | 527,924 | — | — | ||||||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 1,387,185 | 1,387,185 | — | — | ||||||||||||
Nomura Securities International Inc. | 400,434 | 400,434 | — | — | ||||||||||||
State Street Bank & Trust Company | 282,082 | 282,082 | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 6,183,445 | $ | 6,183,445 | $ | — | $ | — | |||||||||
|
|
|
|
|
|
|
| |||||||||
U.S. Financial Services | ||||||||||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | $ | 712,613 | $ | 712,613 | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
| |||||||||
U.S. Financials | ||||||||||||||||
Barclays Bank PLC | $ | 4,955,038 | $ | 4,955,038 | $ | — | $ | — | ||||||||
Citigroup Global Markets Inc. | 7,529,489 | 7,529,489 | — | — | ||||||||||||
Credit Suisse Securities (USA) LLC | 965,163 | 965,163 | — | — | ||||||||||||
Goldman Sachs & Co. | 1,774,567 | 1,774,567 | — | — | ||||||||||||
HSBC Bank PLC | 33,338 | 33,338 | — | — | ||||||||||||
Jefferies LLC | 58,455 | 58,455 | — | — | ||||||||||||
JPMorgan Securities LLC | 3,936,359 | 3,936,359 | — | — | ||||||||||||
Merrill Lynch, Pierce, Fenner & Smith | 977,071 | 977,071 | — | — | ||||||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 2,707,452 | 2,707,452 | — | — | ||||||||||||
UBS Securities LLC | 59,920 | 59,920 | — | — | ||||||||||||
Wells Fargo Bank, National Association | 1,626,004 | 1,626,004 | — | — | ||||||||||||
Wells Fargo Securities LLC | 978,311 | 978,311 | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 25,601,167 | $ | 25,601,167 | $ | — | $ | — | |||||||||
|
|
|
|
|
|
|
| |||||||||
U.S. Industrials | ||||||||||||||||
BNP Paribas New York Branch | $ | 20,416 | $ | 20,416 | $ | — | $ | — | ||||||||
BNP Paribas Prime Brokerage International Ltd. | 174,120 | 174,120 | — | — | ||||||||||||
Citigroup Global Markets Inc. | 1,592,044 | 1,592,044 | — | — | ||||||||||||
Credit Suisse Securities (USA) LLC | 1,272,266 | 1,272,266 | — | — | ||||||||||||
Goldman Sachs & Co. | 688,357 | 688,357 | — | — | ||||||||||||
HSBC Bank PLC | 113,423 | 113,423 | — | — | ||||||||||||
Merrill Lynch, Pierce, Fenner & Smith | 5,329,702 | 5,329,702 | — | — | ||||||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 773,792 | 773,792 | — | — | ||||||||||||
National Financial Services LLC | 1,406,714 | 1,406,714 | — | — | ||||||||||||
State Street Bank & Trust Company | 131,923 | 131,923 | — | — | ||||||||||||
Wells Fargo Securities LLC | 124,765 | 124,765 | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 11,627,522 | $ | 11,627,522 | $ | — | $ | — | |||||||||
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|
|
|
58 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (unaudited) (continued)
iShares ETF and Counterparty | Market Value of Securities on Loan | Cash Collateral Received(a) | Non-Cash Collateral Received | Net Amount | ||||||||||||
MSCI KLD 400 Social | ||||||||||||||||
Barclays Bank PLC | $ | 237,543 | $ | 237,543 | $ | — | $ | — | ||||||||
BNP Paribas Securities Corp. | 374,336 | 374,336 | — | — | ||||||||||||
Citigroup Global Markets Inc. | 2,982,439 | 2,982,439 | — | — | ||||||||||||
Credit Suisse Securities (USA) LLC | 1,720,682 | 1,720,682 | — | — | ||||||||||||
Deutsche Bank Securities Inc. | 532,216 | 532,216 | — | — | ||||||||||||
Goldman Sachs & Co. | 452,515 | 452,515 | — | — | ||||||||||||
HSBC Bank PLC | 2,272,662 | 2,272,662 | — | — | ||||||||||||
JPMorgan Securities LLC | 1,372,386 | 1,372,386 | — | — | ||||||||||||
Merrill Lynch, Pierce, Fenner & Smith | 519,671 | 519,671 | — | — | ||||||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 281,306 | 281,306 | — | — | ||||||||||||
State Street Bank & Trust Company | 179,016 | 179,016 | — | — | ||||||||||||
Wells Fargo Securities LLC | 71,051 | 71,051 | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 10,995,823 | $ | 10,995,823 | $ | — | $ | — | |||||||||
|
|
|
|
|
|
|
| |||||||||
MSCI USA ESG Select | ||||||||||||||||
Citigroup Global Markets Inc. | $ | 6,161,096 | $ | 6,161,096 | $ | — | $ | — | ||||||||
JPMorgan Securities LLC | 5,367,719 | 5,367,719 | — | — | ||||||||||||
Merrill Lynch, Pierce, Fenner & Smith | 749,848 | 749,848 | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 12,278,663 | $ | 12,278,663 | $ | — | $ | — | |||||||||
|
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|
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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. |
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, each Fund benefits from a borrower default indemnity provided by BlackRock, Inc. (“BlackRock”). BlackRock’s indemnity allows for full replacement of the 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 market 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. Such losses are borne entirely by each Fund.
5. | INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES |
Investment Advisory Fees: 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 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:
Aggregate Average Daily Net Assets | Investment Advisory Fee | |||
First $10 billion | 0.48 | % | ||
Over $10 billion, up to and including $20 billion | 0.43 | |||
Over $20 billion, up to and including $30 billion | 0.38 | |||
Over $30 billion, up to and including $40 billion | 0.34 | |||
Over $40 billion, up to and including $50 billion | 0.33 | |||
Over $50 billion | 0.31 |
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 | 0.25 | % | ||
MSCI USA ESG Select | 0.25 |
Prior to June 26, 2018, for its investment advisory services to each of the iShares MSCI KLD 400 Social ETF and iShares MSCI USA ESG Select ETF, BFA was entitled to an annual investment advisory fee of 0.50%, accrued daily and paid monthly by the Funds, based on the average daily net assets of each Fund.
Expense Waivers: The total of the investment advisory fee and any other fund expenses are a fund’s total annual operating expenses. Effective April 5, 2018, for each of the iShares MSCI KLD 400 Social ETF and iShares MSCI USA ESG Select ETF, BFA contractually agreed to waive a portion of its investment advisory fee for each Fund
N O T E S T O F I N A N C I A L S T A T E M E N T S | 59 |
Notes to Financial Statements (unaudited) (continued)
through April 5, 2020 in order to limit each Fund’s total annual operating expenses after fee waiver to 0.25% of average daily net assets. The contractual waiver for each Fund was terminated effective June 26, 2018, pursuant to a written agreement between the Trust and BFA and in conjunction with permanent annual advisory fee reductions for the Funds from 0.50% to 0.25%.
Distributor: 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.
Securities Lending: The U.S. Securities and Exchange Commission (the “SEC”) 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, or its affiliates, 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 (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities. Each Fund retains a portion of securities lending income and remits 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 (which excludes collateral investment fees) 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.
The share of securities lending income earned by each Fund is shown as securities lending income – affiliated – net in its statement of operations. For the six months ended October 31, 2018, the Funds paid BTC the following amounts for securities lending agent services:
iShares ETF | Fees Paid to BTC | |||
U.S. Basic Materials | $ | 1,252 | ||
U.S. Consumer Goods | 31,166 | |||
U.S. Consumer Services | 19,773 | |||
U.S. Financial Services | 11,630 | |||
U.S. Financials | 15,245 | |||
U.S. Industrials | 24,897 | |||
MSCI KLD 400 Social | 23,863 | |||
MSCI USA ESG Select | 24,817 |
Officers and Trustees: Certain officers and/or trustees of the Trust are officers and/or trustees of BlackRock or its affiliates.
Other Transactions: The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate of BlackRock for 1940 Act purposes.
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, 2018, 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 | $ | 7,343,632 | $ | 4,047,310 | ||||
U.S. Consumer Goods | 2,866,440 | 1,715,294 | ||||||
U.S. Consumer Services | 6,049,002 | 12,299,098 | ||||||
U.S. Financial Services | 9,459,637 | 2,273,333 | ||||||
U.S. Financials | 9,247,480 | 6,364,449 | ||||||
U.S. Industrials | 8,928,627 | 7,066,408 | ||||||
MSCI KLD 400 Social | 7,107,536 | 5,730,000 | ||||||
MSCI USA ESG Select | 18,789,383 | 5,238,979 |
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 shown as dividends – affiliated in the statement of operations.
A fund, in order to improve its portfolio liquidity and its ability to track its underlying index, may invest in shares of other iShares funds that invest in securities in the fund’s underlying index.
60 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (unaudited) (continued)
6. | PURCHASES AND SALES |
For the six months ended October 31, 2018, purchases and sales of investments, excluding in-kind transactions and short-term investments, were as follows:
iShares ETF | Purchases | Sales | ||||||
U.S. Basic Materials | $ | 117,381,822 | $ | 117,786,122 | ||||
U.S. Consumer Goods | 18,022,408 | 14,153,810 | ||||||
U.S. Consumer Services | 69,331,373 | 60,103,700 | ||||||
U.S. Financial Services | 34,396,683 | 41,905,468 | ||||||
U.S. Financials | 75,346,671 | 79,589,440 | ||||||
U.S. Industrials | 35,248,128 | 35,678,511 | ||||||
MSCI KLD 400 Social | 49,454,293 | 44,903,836 | ||||||
MSCI USA ESG Select | 65,467,529 | 63,802,385 |
For the six months ended October 31, 2018, in-kind transactions were as follows:
iShares ETF | In-kind Purchases | In-kind Sales | ||||||
U.S. Basic Materials | $ | 160,870,290 | $ | 283,020,892 | ||||
U.S. Consumer Goods | 124,021,098 | 87,494,092 | ||||||
U.S. Consumer Services | 167,651,800 | 29,858,186 | ||||||
U.S. Financial Services | 310,604,078 | 323,334,790 | ||||||
U.S. Financials | 157,627,285 | 672,614,791 | ||||||
U.S. Industrials | 135,819,874 | 246,331,956 | ||||||
MSCI KLD 400 Social | 171,012,799 | 30,454,864 | ||||||
MSCI USA ESG Select | 108,239,358 | 33,982,702 |
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.
Management has analyzed tax laws and regulations and their application to the Funds as of October 31, 2018, inclusive of the open tax return years, and does not believe that there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.
As of April 30, 2018, 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 2019 | Total | |||||||||
U.S. Basic Materials | $ | 103,289,877 | $ | 64,751 | $ | 103,354,628 | ||||||
U.S. Consumer Goods | 3,551,012 | — | 3,551,012 | |||||||||
U.S. Consumer Services | 32,623,807 | 1,146,492 | 33,770,299 | |||||||||
U.S. Financial Services | 11,433,067 | 6,373,191 | 17,806,258 | |||||||||
U.S. Industrials | 9,896,058 | — | 9,896,058 | |||||||||
MSCI KLD 400 Social | 1,662,749 | 374,960 | 2,037,709 | |||||||||
MSCI USA ESG Select | — | 74,125 | 74,125 |
(a) | Must be utilized prior to losses subject to expiration. |
N O T E S T O F I N A N C I A L S T A T E M E N T S | 61 |
Notes to Financial Statements (unaudited) (continued)
As of October 31, 2018, gross unrealized appreciation and depreciation based on cost of investments (including short positions and derivatives, if any) for U.S. federal income tax purposes were as follows:
iShares ETF | Tax Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation (Depreciation) | ||||||||||||
U.S. Basic Materials | $ | 552,693,045 | $ | 5,449,525 | $ | (107,095,190 | ) | $ | (101,645,665) | |||||||
U.S. Consumer Goods | 539,069,195 | 15,982,357 | (64,363,780 | ) | (48,381,423) | |||||||||||
U.S. Consumer Services | 839,563,387 | 124,541,408 | (42,654,438 | ) | 81,886,970 | |||||||||||
U.S. Financial Services | 1,471,604,845 | 136,948,347 | (55,125,897 | ) | 81,822,450 | |||||||||||
U.S. Financials | 1,796,823,890 | 97,705,658 | (121,423,852 | ) | (23,718,194) | |||||||||||
U.S. Industrials | 944,905,853 | 86,317,496 | (112,976,409 | ) | (26,658,913) | |||||||||||
MSCI KLD 400 Social | 1,025,780,042 | 211,587,477 | (54,576,060 | ) | 157,011,417 | |||||||||||
MSCI USA ESG Select | 645,062,346 | 149,243,613 | (29,227,275 | ) | 120,016,338 |
8. | 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.
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.
Concentration Risk: 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, regulatory, political and social conditions affecting such sectors may have a significant impact on the fund and could affect the income from, or the value or liquidity of, the fund’s portfolio.
9. | 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 were as follows:
Six Months Ended 10/31/18 | Year Ended 04/30/18 | |||||||||||||||
iShares ETF | Shares | Amount | Shares | Amount | ||||||||||||
| ||||||||||||||||
U.S. Basic Materials | ||||||||||||||||
Shares sold | 1,600,000 | $ | 161,852,303 | 8,650,000 | $ | 843,360,588 | ||||||||||
Shares redeemed | (3,000,000 | ) | (283,426,832 | ) | (12,900,000 | ) | (1,218,122,790 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease | (1,400,000 | ) | $ | (121,574,529 | ) | (4,250,000 | ) | $ | (374,762,202 | ) | ||||||
|
|
|
|
|
|
|
|
62 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (unaudited) (continued)
Six Months Ended 10/31/18 | Year Ended 04/30/18 | |||||||||||||||
iShares ETF | Shares | Amount | Shares | Amount | ||||||||||||
U.S. Consumer Goods | ||||||||||||||||
Shares sold | 1,050,000 | $ | 124,299,125 | 1,800,000 | $ | 220,964,701 | ||||||||||
Shares redeemed | (750,000 | ) | (87,917,397 | ) | (4,050,000 | ) | (489,887,151 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) | 300,000 | $ | 36,381,728 | (2,250,000 | ) | $ | (268,922,450 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
U.S. Consumer Services | ||||||||||||||||
Shares sold | 850,000 | $ | 168,130,929 | 2,600,000 | $ | 441,623,614 | ||||||||||
Shares redeemed | (150,000 | ) | (29,964,872 | ) | (2,650,000 | ) | (445,753,783 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) | 700,000 | $ | 138,166,057 | (50,000 | ) | $ | (4,130,169 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
U.S. Financial Services | ||||||||||||||||
Shares sold | 2,300,000 | $ | 311,353,583 | 3,950,000 | $ | 493,882,212 | ||||||||||
Shares redeemed | (2,500,000 | ) | (333,310,524 | ) | (4,600,000 | ) | (545,296,506 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease | (200,000 | ) | $ | (21,956,941 | ) | (650,000 | ) | $ | (51,414,294 | ) | ||||||
|
|
|
|
|
|
|
| |||||||||
U.S. Financials | ||||||||||||||||
Shares sold | 1,350,000 | $ | 159,359,133 | 11,600,000 | $ | 1,330,154,609 | ||||||||||
Shares redeemed | (5,700,000 | ) | (683,093,148 | ) | (8,300,000 | ) | (943,642,395 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) | (4,350,000 | ) | $ | (523,734,015 | ) | 3,300,000 | $ | 386,512,214 | ||||||||
|
|
|
|
|
|
|
| |||||||||
U.S. Industrials | ||||||||||||||||
Shares sold | 900,000 | $ | 136,921,966 | 4,150,000 | $ | 575,928,694 | ||||||||||
Shares redeemed | (1,700,000 | ) | (247,978,962 | ) | (4,500,000 | ) | (624,702,580 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease | (800,000 | ) | $ | (111,056,996 | ) | (350,000 | ) | $ | (48,773,886 | ) | ||||||
|
|
|
|
|
|
|
| |||||||||
MSCI KLD 400 Social | ||||||||||||||||
Shares sold | 1,650,000 | $ | 171,484,768 | 3,150,000 | $ | 298,112,752 | ||||||||||
Shares redeemed | (300,000 | ) | (30,568,252 | ) | (1,950,000 | ) | (186,716,528 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase | 1,350,000 | $ | 140,916,516 | 1,200,000 | $ | 111,396,224 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
MSCI USA ESG Select | ||||||||||||||||
Shares sold | 950,000 | $ | 108,477,890 | 1,400,000 | $ | 148,245,639 | ||||||||||
Shares redeemed | (300,000 | ) | (34,283,884 | ) | (550,000 | ) | (58,662,518 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase | 650,000 | $ | 74,194,006 | 850,000 | $ | 89,583,121 | ||||||||||
|
|
|
|
|
|
|
|
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 shares sold in the table above.
10. | LEGAL PROCEEDINGS |
On June 16, 2016, investors 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 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”) in California State Court. 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.
Certain iShares funds (the “Impacted Funds”), along with thousands of other former shareholders of Tribune Company (“Tribune”), were named as defendants in one or more lawsuits (the “Litigation”) arising out of Tribune’s 2007 leveraged buyout transaction (“LBO”). The Litigation seeks to “claw back” from former Tribune shareholders, including the Impacted Funds, proceeds received in connection with the LBO. The iShares U.S. Consumer Services ETF and iShares MSCI KLD 400 Social ETF received proceeds of $336,974 and $23,018, respectively, in the LBO. The claims that were originally brought against the Impacted Funds were dismissed but are currently subject to appeals in multiple appellate courts. The outcome of these appeals could result in new claims being brought against the Impacted Funds and/or previously dismissed claims being revived and subject to continuing litigation. The Impacted Funds intend to vigorously defend the Litigation.
N O T E S T O F I N A N C I A L S T A T E M E N T S | 63 |
Notes to Financial Statements (unaudited) (continued)
11. | REGULATION S-X AMENDMENTS |
On August 17, 2018, the SEC adopted amendments to certain disclosure requirements in Securities Act Release No. 33-10532, Disclosure Update and Simplification. The Funds have adopted the amendments pertinent to Regulation S-X in this shareholder report. The amendments impacted certain disclosure presentation on the statement of assets and liabilities, statement of changes in net assets and notes to the financial statements.
Prior year distribution information and undistributed net investment income in the statement of changes in net assets has been modified to conform to the current year presentation in accordance with the Regulation S-X changes.
Distributions for the year ended April 30, 2018 were classified as follows:
iShares ETF | Net Investment Income | |||
U.S. Basic Materials | $ | 12,542,658 | ||
U.S. Consumer Goods | 10,581,746 | |||
U.S. Consumer Services | 8,008,005 | |||
U.S. Financial Services | 20,493,638 | |||
U.S. Financials | 31,064,309 | |||
U.S. Industrials | 14,040,796 | |||
MSCI KLD 400 Social | 12,424,302 | |||
MSCI USA ESG Select | 8,966,610 |
Undistributed net investment income as of April 30, 2018 are as follows:
iShares ETF | Undistributed net investment income | |||
U.S. Basic Materials | $ | 991,938 | ||
U.S. Consumer Goods | 1,400,186 | |||
U.S. Consumer Services | 429,739 | |||
U.S. Financial Services | 2,325,460 | |||
U.S. Financials | 739,875 | |||
U.S. Industrials | 319,152 | |||
MSCI KLD 400 Social | 1,809,027 | |||
MSCI USA ESG Select | 1,077,953 |
12. | 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 additional disclosure in the financial statements.
64 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Board Review and Approval of Investment Advisory Contract
I. iShares U.S. Basic Materials ETF, iShares U.S. Consumer Goods ETF, iShares U.S. Consumer Services 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. At a meeting on May 11, 2018, a committee composed of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management and reviewed and discussed information provided in response to initial requests of the 15(c) Committee and/or their independent counsel, and requested certain additional information, which management agreed to provide. 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 24, 2018, management presented additional information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its initial meeting. 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 12-14, 2018, 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 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 various factors, including: (i) the expenses and performance of each Fund; (ii) the nature, extent and quality of the services provided by BFA; (iii) the costs of services provided to each Fund and profits realized by BFA and its affiliates; (iv) economies of scale; (v) the fees and services provided for other comparable funds/accounts managed by BFA and its affiliates; and (vi) other benefits to BFA and/or its affiliates. The material factors, no one of which was controlling, and conclusions that formed the basis for the Board, including the Independent Trustees, to approve the Advisory Contract are discussed below.
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, fees and expenses of another fund in which each Fund invests (if applicable), and waivers/reimbursements (if applicable) of each Fund in comparison with the same information for other ETFs (including, where applicable, funds sponsored by an “at cost” service provider), 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, 2017, to that of relevant comparison fund(s) 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 additional detailed information as requested by the Board, 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 expense level 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, portfolio management, product design and quality, compliance and risk management, global public policy 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 support 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 relevant officers and other employees of BFA (and its affiliates) 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 12-14, 2018 meeting and throughout the year, and matters related to BFA’s portfolio compliance policies and procedures.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided to the Funds under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
B O A R D R E V I E W A N D A P P R O V A L O F I N V E S T M E N T A D V I S O R Y C O N T R A C T | 65 |
Board Review and Approval of Investment Advisory Contract (continued)
Costs of Services Provided to Fund and Profits Realized by BFA and its Affiliates: The Board reviewed information about the profitability to BlackRock in managing the Funds, 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, noting that the 15(c) Committee and the Board had focused on the methodology and profitability presentation during their meetings. The Board further noted that it considered the supplemental information the 15(c) Committee requested, which BlackRock provided, regarding the methodology. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC, a BlackRock affiliate, from securities lending by the Funds. The Board also discussed BFA’s profit margin as reflected in the Funds’ 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 Funds and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors and other information 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 and the Board during their meetings and addressed by management. The 15(c) Committee and the Board 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 showed 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 15(c) Committee and the Board reviewed information provided by BFA regarding the sharing of scale benefits with the iShares funds through various means, including, as applicable, through relatively low fee rates established at inception, breakpoints, 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 noted that the Advisory Contract for the Funds already provided for breakpoints in the Funds’ investment advisory fee rate 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 of the sharing of scale benefits, as well as the other factors considered at the meeting, the Board concluded that the information concerning the sharing of scale benefits supported the Board’s approval of 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 (collectively, 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 indexes as the Funds. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts 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, particularly those that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged management’s assertion that, for certain iShares funds, and for client segmentation purposes, BlackRock has launched an iShares fund that may provide a similar investment exposure at a lower investment advisory fee rate. The Board also considered the “all-inclusive” nature of the Funds’ advisory fee structure, and the Funds’ expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rates under the Advisory Contract for the Funds 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 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 (or its 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 (including associated commissions) 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 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 a review of the factors described above, as well as such other factors as deemed appropriate by the Board, the Board, including all of the Independent Trustees, determined that the Funds’ investment advisory fee rates under the Advisory Contract do not constitute fees that are 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. 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
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Board Review and Approval of Investment Advisory Contract (continued)
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. At a meeting on May 11, 2018, a committee composed of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management and reviewed and discussed information provided in response to initial requests of the 15(c) Committee and/or their independent counsel, and requested certain additional information, which management agreed to provide. 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 24, 2018, management presented additional information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its initial meeting. 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 12-14, 2018, 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 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 various factors, including: (i) the expenses and performance of the Fund; (ii) the nature, extent and quality of the services provided by BFA; (iii) the costs of services provided to the Fund and profits realized by BFA and its affiliates; (iv) economies of scale; (v) the fees and services provided for other comparable funds/accounts managed by BFA and its affiliates; and (vi) other benefits to BFA and/or its affiliates. The material factors, no one of which was controlling, and conclusions that formed the basis for the Board, including the Independent Trustees, to approve the Advisory Contract are discussed below.
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, fees and expenses of another fund in which the Fund invests (if applicable), and waivers/reimbursements (if applicable) of the Fund in comparison with the same information for other ETFs (including, where applicable, funds sponsored by an “at cost” service provider), 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, 2017, to that of relevant comparison fund(s) 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 additional detailed information as requested by the Board, 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 expense level 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, portfolio management, product design and quality, compliance and risk management, global public policy 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 support 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 relevant officers and other employees of BFA (and its affiliates) 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 12-14, 2018 meeting and throughout the year, and matters related to BFA’s portfolio compliance policies and procedures.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided 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 its Affiliates: The Board reviewed information about the profitability to BlackRock in managing the Fund, 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, noting that the 15(c) Committee and the Board had focused on the methodology and profitability presentation during their meetings. The Board further noted that it considered the supplemental information the 15(c) Committee requested, which BlackRock provided, regarding the methodology. The Board discussed the sources of direct and ancillary revenue with management,
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Board Review and Approval of Investment Advisory Contract (continued)
including the revenues to BTC, a BlackRock 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 and other information 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 and the Board during their meetings and addressed by management. The 15(c) Committee and the Board 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 showed 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 15(c) Committee and the Board reviewed information provided by BFA regarding the sharing of scale benefits with the iShares funds through various means, including, as applicable, through relatively low fee rates established at inception, breakpoints, 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 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 of the sharing of scale benefits, as well as the other factors considered at the meeting, the Board concluded that the information concerning the sharing of scale benefits supported the Board’s approval of 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 (collectively, 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 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, particularly those that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged management’s assertion that, for certain iShares funds, and for client segmentation purposes, BlackRock has launched an iShares fund that may provide a similar investment exposure at a lower investment advisory fee rate. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund’s 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 (or its 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 (including associated commissions) 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 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 a review of the factors described above, as well as such other factors as deemed appropriate by the Board, the Board, including all of the Independent Trustees, 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 MSCI KLD 400 Social 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. At a meeting on May 11, 2018, a committee composed of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management and reviewed and discussed information provided in response to initial requests of the 15(c) Committee and/or their independent counsel, and requested certain additional information, which management agreed to provide. 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
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Board Review and Approval of Investment Advisory Contract (continued)
information, which management agreed to provide. At a meeting held on May 24, 2018, management presented additional information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its initial meeting. 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 12-14, 2018, 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 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 various factors, including: (i) the expenses and performance of the Fund; (ii) the nature, extent and quality of the services provided by BFA; (iii) the costs of services provided to the Fund and profits realized by BFA and its affiliates; (iv) economies of scale; (v) the fees and services provided for other comparable funds/accounts managed by BFA and its affiliates; and (vi) other benefits to BFA and/or its affiliates. The material factors, no one of which was controlling, and conclusions that formed the basis for the Board, including the Independent Trustees, to approve the Advisory Contract are discussed below.
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, fees and expenses of another fund in which the Fund invests (if applicable), and waivers/reimbursements (if applicable) of the Fund in comparison with the same information for other ETFs (including, where applicable, funds sponsored by an “at cost” service provider), 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.
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, 2017, to that of relevant comparison fund(s) 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 additional detailed information as requested by the Board, 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 expense level 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, portfolio management, product design and quality, compliance and risk management, global public policy 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 support 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 relevant officers and other employees of BFA (and its affiliates) 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 12-14, 2018 meeting and throughout the year, and matters related to BFA’s portfolio compliance policies and procedures.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided 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 its Affiliates: The Board reviewed information about the profitability to BlackRock in managing the Fund, 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, noting that the 15(c) Committee and the Board had focused on the methodology and profitability presentation during their meetings. The Board further noted that it considered the supplemental information the 15(c) Committee requested, which BlackRock provided, regarding the methodology. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC, a BlackRock 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 and other information 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 and the Board during their meetings and addressed by management. The 15(c) Committee and the Board 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 showed 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 15(c) Committee and the Board reviewed information provided by BFA regarding the sharing of scale benefits with the iShares funds through various means, including, as applicable, through relatively low fee rates established at inception, breakpoints, 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 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 during the June 12-14, 2018 meeting, the Board approved a permanent reduction to the advisory fee rate charged to the Fund. In addition, the Board noted that, should additional material economies of scale exist 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 of the sharing of scale benefits, as well as the other factors considered at the meeting, the Board concluded that the information concerning the sharing of scale benefits supported the Board’s approval of 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 (collectively, 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 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, particularly those that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged management’s assertion that, for certain iShares funds, and for client segmentation purposes, BlackRock has launched an iShares fund that may provide a similar investment exposure at a lower investment advisory fee rate. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund’s 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 (or its 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 (including associated commissions) 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 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 a review of the factors described above, as well as such other factors as deemed appropriate by the Board, the Board, including all of the Independent Trustees, 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.
IV. 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 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. At a meeting on May 11, 2018, a committee composed of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management and reviewed and discussed information provided in response to initial requests of the 15(c) Committee and/or their independent counsel, and requested certain additional information, which management agreed to provide. 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 24, 2018, management presented additional information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its initial meeting. 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 12-14, 2018, the Board, including the Independent Trustees, reviewed the additional information provided by management in response
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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 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 various factors, including: (i) the expenses and performance of the Fund; (ii) the nature, extent and quality of the services provided by BFA; (iii) the costs of services provided to the Fund and profits realized by BFA and its affiliates; (iv) economies of scale; (v) the fees and services provided for other comparable funds/accounts managed by BFA and its affiliates; and (vi) other benefits to BFA and/or its affiliates. The material factors, no one of which was controlling, and conclusions that formed the basis for the Board, including the Independent Trustees, to approve the Advisory Contract are discussed below.
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, fees and expenses of another fund in which the Fund invests (if applicable), and waivers/reimbursements (if applicable) of the Fund in comparison with the same information for other ETFs (including, where applicable, funds sponsored by an “at cost” service provider), 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.
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, 2017, to that of relevant comparison fund(s) 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 additional detailed information as requested by the Board, 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 expense level 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, portfolio management, product design and quality, compliance and risk management, global public policy 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 support 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 relevant officers and other employees of BFA (and its affiliates) 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 12-14, 2018 meeting and throughout the year, and matters related to BFA’s portfolio compliance policies and procedures.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided 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 its Affiliates: The Board reviewed information about the profitability to BlackRock in managing the Fund, 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, noting that the 15(c) Committee and the Board had focused on the methodology and profitability presentation during their meetings. The Board further noted that it considered the supplemental information the 15(c) Committee requested, which BlackRock provided, regarding the methodology. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC, a BlackRock 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 and other information 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 and the Board during their meetings and addressed by management. The 15(c) Committee and the Board 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 showed how the level of fixed and variable costs, as well as the nature of such costs,
B O A R D R E V I E W A N D A P P R O V A L O F I N V E S T M E N T A D V I S O R Y C O N T R A C T | 71 |
Board Review and Approval of Investment Advisory Contract (continued)
may impact the existence or size of scale benefits. The 15(c) Committee and the Board reviewed information provided by BFA regarding the sharing of scale benefits with the iShares funds through various means, including, as applicable, through relatively low fee rates established at inception, breakpoints, 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 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 during the June 12-14, 2018 meeting, the Board approved a permanent reduction to the advisory fee rate charged to the Fund. In addition, the Board noted that, should additional material economies of scale exist 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 of the sharing of scale benefits, as well as the other factors considered at the meeting, the Board concluded that the information concerning the sharing of scale benefits supported the Board’s approval of 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 (collectively, 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 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, particularly those that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged management’s assertion that, for certain iShares funds, and for client segmentation purposes, BlackRock has launched an iShares fund that may provide a similar investment exposure at a lower investment advisory fee rate. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund’s 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 (or its 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 (including associated commissions) 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 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 a review of the factors described above, as well as such other factors as deemed appropriate by the Board, the Board, including all of the Independent Trustees, 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.
72 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Supplemental Information (unaudited)
|
Section 19(a) Notices
The amounts and sources of distributions reported in this notice are for financial reporting purposes and are not being provided for tax reporting purposes. The actual amounts and character of the distributions for tax reporting purposes will be reported to shareholders on Form 1099-DIV which is sent to shareholders shortly after calendar year-end.
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 | |||||||||||||||||||||||||||
U.S. Consumer Services(a) | $ | 0.841110 | $ | — | $ | 0.000253 | $ | 0.841363 | 100 | % | — | % | 0 | %(b) | 100 | % | ||||||||||||||||||||
U.S. Financials(a) | 0.875428 | — | 0.177116 | 1.052544 | 83 | — | 17 | 100 | ||||||||||||||||||||||||||||
MSCI KLD 400 Social(a) | 0.796206 | — | 0.009671 | 0.805877 | 99 | — | 1 | 100 | ||||||||||||||||||||||||||||
MSCI USA ESG Select(a) | 0.960399 | — | 0.010878 | 0.971277 | 99 | — | 1 | 100 |
(a) | The Fund estimates that it has distributed more than the amount of earned income and net realized gains; therefore, a portion of the distribution may be a return of capital. A return of capital may occur, for example, when some or all of the shareholder’s investment in the Fund is returned to the shareholder. A return of capital does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income”. When distributions exceed total return performance, the difference will incrementally reduce the Fund’s net asset value per share. |
(b) | Rounds to less than 1%. |
S U P P L E M E N T A L I N F O R M A T I O N | 73 |
|
Electronic Delivery
Shareholders can sign up for email notifications announcing that the shareholder report or prospectus has been posted on the iShares website at www.iShares.com. Once you have enrolled, you will no longer receive prospectuses and shareholder reports in the mail.
To enroll in electronic delivery:
• | Go to www.icsdelivery.com. |
• | If your brokerage firm is not listed, electronic delivery may not be available. Please contact your broker-dealer or financial advisor. |
Householding
Householding is an option available to certain fund investors. Householding is a method of delivery, based on the preference of the individual investor, in which a single copy of certain shareholder documents can be delivered to investors who share the same address, even if their accounts are registered under different names. Please contact your broker-dealer if you are interested in enrolling in householding and receiving a single copy of prospectuses and other shareholder documents, or if you are currently enrolled in householding and wish to change your householding status.
Availability of Quarterly Schedule of Investments
The iShares Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The iShares Funds’ Forms N-Q are available on the SEC’s website at www.sec.gov. The iShares Funds also disclose their complete schedule of portfolio holdings on a daily basis on the iShares website at www.iShares.com.
Availability of Proxy Voting Policies and Proxy Voting Records
A description of the policies and procedures that the iShares Funds use to determine how to vote proxies relating to portfolio securities and information about how the iShares Funds voted proxies relating to portfolio securities during the most recent twelve-month period ending June 30 is available without charge, upon request (1) by calling toll-free 1-800-474-2737; (2) on the iShares website at www.iShares.com; and (3) on the SEC website at www.sec.gov.
74 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Glossary of Terms Used in this Report
|
Portfolio Abbreviations - Equity
NVS | Non-Voting Shares |
G L O S S A R Y O F T E R M S U S E D I N T H I S R E P O R T | 75 |
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 MSCI Inc. or S&P Dow Jones Indices LLC, 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. | ||||
©2018 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. | ||||
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OCTOBER 31, 2018
2018 SEMI-ANNUAL REPORT (UNAUDITED) |
iShares Trust
iShares Core Dividend Growth ETF | DGRO | NYSE Arca
iShares Core High Dividend ETF | HDV | NYSE Arca
iShares International Select Dividend ETF | IDV | BATS
iShares Select Dividend ETF | DVY | NASDAQ
iShares U.S. Dividend and Buyback ETF | DIVB | Cboe BZX
Page
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| 5 | |||
10 | ||||
10 | ||||
11 | ||||
Financial Statements | ||||
32 | ||||
34 | ||||
36 | ||||
39 | ||||
44 | ||||
52 | ||||
58 | ||||
59 | ||||
60 |
Fund Summary as of October 31, 2018
| iShares® Core Dividend Growth ETF |
Investment Objective
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.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||
6 Months | 1 Year | Since Inception | 1 Year | Since Inception | ||||||||||||||||||||
Fund NAV | 4.73 | % | 8.18 | % | 10.48 | % | 8.18 | % | 54.93 | % | ||||||||||||||
Fund Market | 4.73 | 8.18 | 10.48 | 8.18 | 54.97 | |||||||||||||||||||
Index | 4.80 | 8.30 | 10.54 | 8.30 | 55.26 |
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 10 for more information.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
| Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio | | ||||||
$ 1,000.00 | $ | 1,047.30 | $ 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. |
Portfolio Information
ALLOCATION BY SECTOR | ||||
Sector | | Percent of Total Investments(a) |
| |
Financials | 18.8% | |||
Health Care | 17.5 | |||
Information Technology | 16.3 | |||
Industrials | 13.4 | |||
Consumer Staples | 12.9 | |||
Consumer Discretionary | 7.5 | |||
Utilities | 5.2 | |||
Materials | 4.2 | |||
Communication Services | 3.1 | |||
Energy | 1.1 | |||
Real Estate | 0.0 |
TEN LARGEST HOLDINGS | ||||
Security | | Percent of Total Investments(a) | | |
Apple Inc. | 3.1% | |||
Johnson & Johnson | 3.1 | |||
Pfizer Inc. | 3.0 | |||
Microsoft Corp. | 3.0 | |||
Procter & Gamble Co. (The) | 2.8 | |||
JPMorgan Chase & Co. | 2.7 | |||
Wells Fargo & Co. | 2.7 | |||
Coca-Cola Co. (The) | 2.3 | |||
Cisco Systems Inc. | 2.2 | |||
Merck & Co. Inc. | 2.0 |
(a) | Excludes money market funds. |
F U N D S U M M A R Y | 5 |
Fund Summary as of October 31, 2018
| iShares® Core Dividend Growth ETF |
Investment Objective
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.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||||||
6 Months | 1 Year | 5 Years | Since Inception | 1 Year | 5 Years | Since Inception | ||||||||||||||||||||||||||
Fund NAV | 6.76 | % | 7.11 | % | 8.64 | % | 11.36 | % | 7.11 | % | 51.36 | % | 126.43 | % | ||||||||||||||||||
Fund Market | 6.75 | 7.12 | 8.64 | 11.36 | 7.12 | 51.32 | 126.42 | |||||||||||||||||||||||||
Index | 6.83 | 7.22 | 8.79 | 11.64 | 7.22 | 52.35 | 130.57 |
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 10 for more information.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
| Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio | | ||||||
$ 1,000.00 | $ 1,067.60 | $ 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 10 for more information. |
Portfolio Information
ALLOCATION BY SECTOR
Sector | Percent of Total Investments(a) | |||
Energy | 21.9% | |||
Consumer Staples | 21.3 | |||
Health Care | 21.1 | |||
Utilities | 8.1 | |||
Communication Services | 7.8 | |||
Industrials | 6.6 | |||
Information Technology | 5.3 | |||
Consumer Discretionary | 4.7 | |||
Financials | 2.3 | |||
Materials | 0.9 |
TEN LARGEST HOLDINGS
Security | Percent of Total Investments(a) | |||
Exxon Mobil Corp. | 9.8% | |||
Verizon Communications Inc. | 7.8 | |||
Johnson & Johnson | 7.4 | |||
Chevron Corp. | 6.3 | |||
Pfizer Inc. | 6.2 | |||
Procter & Gamble Co. (The) | 5.8 | |||
Coca-Cola Co. (The) | 4.7 | |||
Cisco Systems Inc. | 4.5 | |||
Altria Group Inc. | 4.2 | |||
Merck & Co. Inc. | 4.1 |
(a) | Excludes money market funds. |
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Fund Summary as of October 31, 2018
| iShares® International Select Dividend ETF |
Investment Objective
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.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||||||
6 Months | 1 Year | 5 Years | 10 Years | 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||||
Fund NAV | (6.96 | )% | (3.06 | )% | 0.59 | % | 9.36 | % | (3.06 | )% | 2.98 | % | 144.65 | % | ||||||||||||||||||
Fund Market | (6.97 | ) | (3.55 | ) | 0.51 | 9.02 | (3.55 | ) | 2.56 | 137.16 | ||||||||||||||||||||||
Index | (6.88 | ) | (2.91 | ) | 0.75 | 9.45 | (2.91 | ) | 3.78 | 146.67 |
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.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
| Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio | | ||||||
$ 1,000.00 | $ 930.40 | $ 2.38 | $ 1,000.00 | $ | 1,022.70 | $ | 2.50 | 0.49 | % |
(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. |
Portfolio Information
ALLOCATION BY SECTOR
Sector | Percent of Total Investments(a) | |||
Financials | 31.0% | |||
Utilities | 11.8 | |||
Communication Services | 11.8 | |||
Energy | 10.6 | |||
Consumer Staples | 8.3 | |||
Health Care | 7.9 | |||
Consumer Discretionary | 7.6 | |||
Industrials | 6.6 | |||
Information Technology | 2.4 | |||
Materials | 1.5 | |||
Real Estate | 0.5 |
TEN LARGEST COUNTRIES
Country | Percent of Total Investments(a) | |||
United Kingdom | 24.6% | |||
Australia | 16.2 | |||
France | 8.9 | |||
Canada | 6.4 | |||
Spain | 6.0 | |||
Sweden | 6.0 | |||
Italy | 5.6 | |||
Norway | 4.8 | |||
Finland | 4.7 | |||
Switzerland | 3.5 |
(a) | Excludes money market funds. |
F U N D S U M M A R Y | 7 |
Fund Summary as of October 31, 2018
| iShares® Select Dividend ETF |
Investment Objective
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.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||||||
6 Months | 1 Year | 5 Years | 10 Years | 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||||
Fund NAV | 1.25 | % | 4.59 | % | 10.06 | % | 11.27 | % | 4.59 | % | 61.46 | % | 190.80 | % | ||||||||||||||||||
Fund Market | 1.26 | 4.61 | 10.05 | 11.25 | 4.61 | 61.43 | 190.37 | |||||||||||||||||||||||||
Index | 1.44 | 5.00 | 10.50 | 11.77 | 5.00 | 64.73 | 204.33 |
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.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
| Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio | | ||||||
$ 1,000.00 | $ 1,012.50 | $ 1.93 | $ 1,000.00 | $ | 1,023.30 | $ | 1.94 | 0.38 | % |
(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. |
Portfolio Information
ALLOCATION BY SECTOR
Sector | Percent of Total Investments(a) | |||
Utilities | 31.0% | |||
Consumer Discretionary | 13.5 | |||
Energy | 11.2 | |||
Financials | 8.9 | |||
Consumer Staples | 7.7 | |||
Materials | 6.2 | |||
Communication Services | 6.2 | |||
Industrials | 5.5 | |||
Information Technology | 5.2 | |||
Health Care | 4.6 |
TEN LARGEST HOLDINGS
Security | Percent of Total Investments(a) | |||
CenturyLink Inc. | 2.6% | |||
ONEOK Inc. | 2.2 | |||
PPL Corp. | 2.2 | |||
FirstEnergy Corp. | 1.8 | |||
Entergy Corp. | 1.8 | |||
Ford Motor Co. | 1.7 | |||
Occidental Petroleum Corp. | 1.7 | |||
Merck & Co. Inc. | 1.6 | |||
Edison International | 1.6 | |||
AT & T Inc. | 1.6 |
(a) | Excludes money market funds. |
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Fund Summary as of October 31, 2018
| iShares® U.S. Dividend and Buyback ETF |
Investment Objective
The iShares U.S. Dividend and Buyback ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. stocks with a history of dividend payments and/or share buybacks, as represented by the Morningstar® US Dividend and Buyback 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.
Performance
Cumulative Total Returns | ||||||||
6 Months | Since Inception | |||||||
Fund NAV | 3.68 | % | 5.92 | % | ||||
Fund Market | 3.60 | 5.88 | ||||||
Index | 3.80 | 6.21 |
The inception date of the Fund was 11/7/17. The first day of secondary market trading was 11/9/17.
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 10 for more information.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
| Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio | | ||||||
$ 1,000.00 | $ 1,036.80 | $ 1.28 | $ 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 10 for more information. |
Portfolio Information
ALLOCATION BY SECTOR
Sector | Percent of Total Investments(a) | |||
Information Technology | 19.9% | |||
Financials | 18.1 | |||
Health Care | 14.7 | |||
Industrials | 10.4 | |||
Consumer Staples | 10.1 | |||
Consumer Discretionary | 9.8 | |||
Communication Services | 7.2 | |||
Energy | 4.7 | |||
Real Estate | 2.0 | |||
Materials | 1.6 | |||
Utilities | 1.5 |
TEN LARGEST HOLDINGS
Security | Percent of Total Investments(a) | |||
Apple Inc. | 5.1% | |||
Microsoft Corp. | 2.6 | |||
JPMorgan Chase & Co. | 2.5 | |||
Johnson & Johnson | 1.9 | |||
Cisco Systems Inc. | 1.8 | |||
Citigroup Inc. | 1.8 | |||
AT&T Inc. | 1.7 | |||
Bank of America Corp. | 1.7 | |||
Pfizer Inc. | 1.6 | |||
Exxon Mobil Corp. | 1.6 |
(a) | Excludes money market funds. |
F U N D S U M M A R Y | 9 |
|
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 ask 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. Since shares of a fund may not trade in the secondary market until after the fund’s inception, for the period from inception to the first day of secondary market trading in shares of the fund, the NAV of the fund is used as a proxy for the Market Price to calculate market returns. 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 your 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 at the beginning of the period (or from the commencement of operations if less than 6 months) and held through the end of the period, is intended to help you understand your ongoing costs (in dollars and cents) of investing in your 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 under the heading entitled “Expenses Paid During the Period.”
Hypothetical Example for Comparison Purposes – The table also provides information about hypothetical account values and hypothetical expenses based on your 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 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited)
October 31, 2018 | iShares® Core Dividend Growth ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks | ||||||||
Aerospace & Defense — 3.9% | ||||||||
Boeing Co. (The) | 175,088 | $ | 62,131,728 | |||||
BWX Technologies Inc. | 17,689 | 1,034,099 | ||||||
General Dynamics Corp. | 89,358 | 15,421,404 | ||||||
Harris Corp. | 28,191 | 4,192,283 | ||||||
HEICO Corp. | 1,065 | 89,279 | ||||||
HEICO Corp., Class A | 2,221 | 148,052 | ||||||
Huntington Ingalls Industries Inc. | 8,549 | 1,867,785 | ||||||
L3 Technologies Inc. | 20,360 | 3,857,609 | ||||||
Lockheed Martin Corp. | 103,220 | 30,331,197 | ||||||
Northrop Grumman Corp. | 46,684 | 12,228,874 | ||||||
Raytheon Co. | 84,644 | 14,816,086 | ||||||
United Technologies Corp. | 266,470 | 33,098,239 | ||||||
|
| |||||||
179,216,635 | ||||||||
Air Freight & Logistics — 1.1% | ||||||||
CH Robinson Worldwide Inc. | 43,759 | 3,895,864 | ||||||
Expeditors International of Washington Inc. | 35,564 | 2,389,190 | ||||||
FedEx Corp. | 42,375 | 9,336,907 | ||||||
United Parcel Service Inc., Class B | 346,828 | 36,951,055 | ||||||
|
| |||||||
52,573,016 | ||||||||
Airlines — 0.5% | ||||||||
Alaska Air Group Inc. | 39,483 | 2,425,045 | ||||||
Delta Air Lines Inc. | 260,099 | 14,235,218 | ||||||
Southwest Airlines Co. | 91,340 | 4,484,794 | ||||||
|
| |||||||
21,145,057 | ||||||||
Auto Components — 0.3% | ||||||||
Autoliv Inc. | 43,178 | 3,598,455 | ||||||
BorgWarner Inc. | 55,136 | 2,172,910 | ||||||
Garrett Motion Inc.(a) | 25,536 | 387,381 | ||||||
Gentex Corp. | 86,784 | 1,826,803 | ||||||
Goodyear Tire & Rubber Co. (The) | 98,201 | 2,068,113 | ||||||
Lear Corp. | 19,827 | 2,635,008 | ||||||
|
| |||||||
12,688,670 | ||||||||
Automobiles — 0.1% | ||||||||
Harley-Davidson Inc. | 94,120 | 3,597,267 | ||||||
Thor Industries Inc. | 13,249 | 922,660 | ||||||
|
| |||||||
4,519,927 | ||||||||
Banks — 10.4% | ||||||||
Associated Banc-Corp. | 64,122 | 1,486,348 | ||||||
BancFirst Corp. | 4,248 | 243,750 | ||||||
BancorpSouth Bank | 24,981 | 716,955 | ||||||
Bank of America Corp. | 2,481,778 | 68,248,895 | ||||||
Bank OZK | 41,650 | 1,139,544 | ||||||
Banner Corp. | 9,819 | 567,735 | ||||||
BB&T Corp. | 419,237 | 20,609,691 | ||||||
BOK Financial Corp. | 8,396 | 719,789 | ||||||
Cathay General Bancorp. | 30,090 | 1,133,490 | ||||||
Chemical Financial Corp. | 24,567 | 1,151,210 | ||||||
Columbia Banking System Inc. | 31,523 | 1,169,188 | ||||||
Comerica Inc. | 41,699 | 3,400,970 | ||||||
Commerce Bancshares Inc. | 22,426 | 1,426,294 | ||||||
Community Bank System Inc. | 17,615 | 1,028,540 | ||||||
Cullen/Frost Bankers Inc. | 26,960 | 2,639,923 | ||||||
CVB Financial Corp. | 41,355 | 903,607 | ||||||
First Financial Bankshares Inc. | 15,276 | 901,131 | ||||||
First Horizon National Corp. | 146,811 | 2,369,530 | ||||||
First Merchants Corp. | 15,639 | 650,739 | ||||||
First Midwest Bancorp. Inc. | 29,045 | 666,873 |
Security | Shares | Value | ||||||
Banks (continued) | ||||||||
First Republic Bank/CA | 19,367 | $ | 1,762,203 | |||||
Glacier Bancorp. Inc. | 28,918 | 1,226,123 | ||||||
Home BancShares Inc./AR | 56,974 | 1,084,785 | ||||||
Hope Bancorp Inc. | 68,600 | 993,328 | ||||||
Huntington Bancshares Inc./OH | 518,721 | 7,433,272 | ||||||
Independent Bank Corp./Rockland MA | 7,667 | 601,476 | ||||||
Independent Bank Group Inc. | 4,127 | 238,995 | ||||||
Investors Bancorp. Inc. | 117,252 | 1,310,877 | ||||||
JPMorgan Chase & Co. | 1,127,245 | 122,892,250 | ||||||
KeyCorp. | 585,577 | 10,634,078 | ||||||
LegacyTexas Financial Group Inc. | 10,612 | 408,880 | ||||||
MB Financial Inc. | 28,661 | 1,272,262 | ||||||
NBT Bancorp. Inc. | 18,106 | 660,688 | ||||||
PNC Financial Services Group Inc. (The)(b) | 211,286 | 27,148,138 | ||||||
Prosperity Bancshares Inc. | 22,297 | 1,449,974 | ||||||
Regions Financial Corp. | 352,116 | 5,975,409 | ||||||
Simmons First National Corp., Class A | 29,660 | 794,295 | ||||||
South State Corp. | 10,860 | 734,896 | ||||||
SunTrust Banks Inc. | 218,776 | 13,708,504 | ||||||
TowneBank/Portsmouth VA | 22,449 | 631,490 | ||||||
U.S. Bancorp. | 581,763 | 30,408,752 | ||||||
UMB Financial Corp. | 12,102 | 772,713 | ||||||
Umpqua Holdings Corp. | 139,793 | 2,684,026 | ||||||
Union Bankshares Corp. | 23,136 | 789,863 | ||||||
Webster Financial Corp. | 32,713 | 1,924,833 | ||||||
Wells Fargo & Co. | 2,256,837 | 120,131,433 | ||||||
WesBanco Inc. | 23,043 | 924,024 | ||||||
Westamerica Bancorp. | 11,511 | 670,055 | ||||||
Zions Bancorp. N.A | 75,803 | 3,566,531 | ||||||
|
| |||||||
474,008,355 | ||||||||
Beverages — 4.4% | ||||||||
Brown-Forman Corp., Class A | 13,234 | 613,660 | ||||||
Brown-Forman Corp., Class B, NVS | 35,805 | 1,659,204 | ||||||
Coca-Cola Co. (The) | 2,186,860 | 104,706,857 | ||||||
Keurig Dr Pepper Inc. | 296,175 | 7,700,550 | ||||||
PepsiCo Inc. | 780,560 | 87,719,333 | ||||||
|
| |||||||
202,399,604 | ||||||||
Biotechnology — 3.0% | ||||||||
AbbVie Inc. | 1,056,133 | 82,219,954 | ||||||
Amgen Inc. | 290,235 | 55,954,406 | ||||||
|
| |||||||
138,174,360 | ||||||||
Building Products — 0.4% | ||||||||
AAON Inc. | 6,777 | 233,739 | ||||||
AO Smith Corp. | 30,086 | 1,369,816 | ||||||
Apogee Enterprises Inc. | 7,295 | 263,349 | ||||||
Fortune Brands Home & Security Inc. | 34,806 | 1,560,353 | ||||||
Johnson Controls International PLC | 433,925 | 13,872,582 | ||||||
Lennox International Inc. | 7,004 | 1,477,073 | ||||||
Resideo Technologies Inc.(a) | 37,987 | 799,626 | ||||||
Universal Forest Products Inc. | 9,380 | 265,173 | ||||||
|
| |||||||
19,841,711 | ||||||||
Capital Markets — 3.2% | ||||||||
Ameriprise Financial Inc. | 61,355 | 7,806,810 | ||||||
Bank of New York Mellon Corp. (The) | 335,604 | 15,884,137 | ||||||
BlackRock Inc.(b) | 50,982 | 20,975,014 | ||||||
Cboe Global Markets Inc. | 22,823 | 2,575,576 | ||||||
CME Group Inc. | 94,095 | 17,241,968 | ||||||
Cohen & Steers Inc. | 12,587 | 483,215 | ||||||
Eaton Vance Corp., NVS | 47,592 | 2,144,020 |
S C H E D U L E O F I N V E S T M E N T S | 11 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Core Dividend Growth ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Capital Markets (continued) | ||||||||
Evercore Inc., Class A | 13,489 | $ | 1,101,916 | |||||
FactSet Research Systems Inc. | 7,233 | 1,618,456 | ||||||
Franklin Resources Inc. | 152,602 | 4,654,361 | ||||||
Goldman Sachs Group Inc. (The) | 83,396 | 18,794,957 | ||||||
Invesco Ltd. | 10,775 | 233,925 | ||||||
Janus Henderson Group PLC | 146,678 | 3,603,878 | ||||||
Legg Mason Inc. | 65,783 | 1,856,396 | ||||||
MarketAxess Holdings Inc. | 6,003 | 1,258,649 | ||||||
Moody’s Corp. | 27,976 | 4,069,948 | ||||||
Morningstar Inc. | 2,562 | 319,738 | ||||||
Nasdaq Inc. | 37,510 | 3,252,492 | ||||||
Northern Trust Corp. | 60,444 | 5,685,967 | ||||||
Raymond James Financial Inc. | 29,161 | 2,236,357 | ||||||
S&P Global Inc. | 40,802 | 7,439,021 | ||||||
SEI Investments Co. | 21,246 | 1,135,599 | ||||||
State Street Corp. | 124,974 | 8,591,963 | ||||||
T Rowe Price Group Inc. | 104,825 | 10,166,977 | ||||||
TD Ameritrade Holding Corp. | 71,018 | 3,673,051 | ||||||
|
| |||||||
146,804,391 | ||||||||
Chemicals — 3.1% | ||||||||
Air Products & Chemicals Inc. | 98,379 | 15,184,799 | ||||||
Albemarle Corp. | 24,941 | 2,474,646 | ||||||
Ashland Global Holdings Inc. | 12,969 | 959,447 | ||||||
Balchem Corp. | 2,421 | 226,727 | ||||||
Cabot Corp. | 22,379 | 1,089,410 | ||||||
Celanese Corp. | 44,058 | 4,270,982 | ||||||
DowDuPont Inc. | 858,175 | 46,272,796 | ||||||
Eastman Chemical Co. | 56,116 | 4,396,689 | ||||||
Ecolab Inc. | 45,389 | 6,951,325 | ||||||
HB Fuller Co. | 9,731 | 432,640 | ||||||
Innospec Inc. | 5,237 | 350,460 | ||||||
International Flavors & Fragrances Inc., New | 28,301 | 4,094,023 | ||||||
Linde PLC | 102,254 | 16,919,969 | ||||||
LyondellBasell Industries NV, Class A | 203,734 | 18,187,334 | ||||||
NewMarket Corp. | 2,750 | 1,061,390 | ||||||
PolyOne Corp. | 22,599 | 730,174 | ||||||
PPG Industries Inc. | 70,482 | 7,406,953 | ||||||
Quaker Chemical Corp. | 1,994 | 358,721 | ||||||
RPM International Inc. | 43,365 | 2,652,637 | ||||||
Scotts Miracle-Gro Co. (The) | 18,809 | 1,255,313 | ||||||
Sensient Technologies Corp. | 12,903 | 836,888 | ||||||
Sherwin-Williams Co. (The) | 10,276 | 4,043,298 | ||||||
Stepan Co. | 3,562 | 294,185 | ||||||
Valvoline Inc. | 43,615 | 868,811 | ||||||
Westlake Chemical Corp. | 7,233 | 515,713 | ||||||
|
| |||||||
141,835,330 | ||||||||
Commercial Services & Supplies — 0.6% |
| |||||||
ABM Industries Inc. | 22,656 | 696,672 | ||||||
Brady Corp., Class A, NVS | 16,398 | 660,675 | ||||||
Cintas Corp. | 11,065 | 2,012,392 | ||||||
Healthcare Services Group Inc. | 24,106 | 978,463 | ||||||
Herman Miller Inc. | 22,634 | 745,790 | ||||||
HNI Corp. | 20,584 | 779,928 | ||||||
KAR Auction Services Inc. | 50,379 | 2,868,580 | ||||||
Matthews International Corp., Class A | 8,279 | 344,572 | ||||||
MSA Safety Inc. | 8,805 | 919,594 | ||||||
Republic Services Inc. | 68,536 | 4,981,196 | ||||||
Rollins Inc. | 15,244 | 902,445 |
Security | Shares | Value | ||||||
Commercial Services & Supplies (continued) |
| |||||||
Waste Management Inc. | 135,602 | $ | 12,132,311 | |||||
|
| |||||||
28,022,618 | ||||||||
Communications Equipment — 2.3% |
| |||||||
Cisco Systems Inc. | 2,179,249 | 99,700,642 | ||||||
Motorola Solutions Inc. | 45,434 | 5,568,391 | ||||||
|
| |||||||
105,269,033 | ||||||||
Construction & Engineering — 0.0% |
| |||||||
Comfort Systems USA Inc. | 3,790 | 202,689 | ||||||
|
| |||||||
Consumer Finance — 0.5% |
| |||||||
American Express Co. | 155,315 | 15,955,510 | ||||||
Discover Financial Services | 120,005 | 8,360,748 | ||||||
|
| |||||||
24,316,258 | ||||||||
Containers & Packaging — 0.7% |
| |||||||
AptarGroup Inc. | 13,399 | 1,366,162 | ||||||
Avery Dennison Corp. | 29,142 | 2,643,762 | ||||||
Bemis Co. Inc. | 38,620 | 1,767,637 | ||||||
International Paper Co. | 251,600 | 11,412,576 | ||||||
Packaging Corp. of America | 44,880 | 4,120,433 | ||||||
Silgan Holdings Inc. | 19,816 | 476,179 | ||||||
Sonoco Products Co. | 48,322 | 2,637,415 | ||||||
WestRock Co. | 135,394 | 5,817,880 | ||||||
|
| |||||||
30,242,044 | ||||||||
Distributors — 0.2% | ||||||||
Core-Mark Holding Co. Inc. | 10,197 | 391,667 | ||||||
Genuine Parts Co. | 70,601 | 6,913,250 | ||||||
Pool Corp. | 7,399 | 1,078,404 | ||||||
|
| |||||||
8,383,321 | ||||||||
Diversified Consumer Services — 0.0% |
| |||||||
Service Corp. International/U.S. | 49,618 | 2,057,658 | ||||||
|
| |||||||
Electric Utilities — 2.7% | ||||||||
ALLETE Inc. | 26,206 | 1,939,244 | ||||||
Alliant Energy Corp. | 122,154 | 5,250,179 | ||||||
American Electric Power Co. Inc. | 285,564 | 20,948,975 | ||||||
Edison International | 197,278 | 13,689,120 | ||||||
El Paso Electric Co. | 16,766 | 956,500 | ||||||
Evergy Inc. | 146,053 | 8,177,508 | ||||||
Eversource Energy | 171,863 | 10,872,053 | ||||||
IDACORP Inc. | 20,324 | 1,895,416 | ||||||
MGE Energy Inc. | 12,149 | 759,070 | ||||||
NextEra Energy Inc. | 205,737 | 35,489,633 | ||||||
Pinnacle West Capital Corp. | 66,198 | 5,444,786 | ||||||
PNM Resources Inc. | 36,252 | 1,392,439 | ||||||
Portland General Electric Co. | 46,997 | 2,118,625 | ||||||
Xcel Energy Inc. | 270,039 | 13,234,611 | ||||||
|
| |||||||
122,168,159 | ||||||||
Electrical Equipment — 1.0% | ||||||||
Eaton Corp. PLC | 225,416 | 16,155,565 | ||||||
Emerson Electric Co. | 267,759 | 18,175,481 | ||||||
Hubbell Inc. | 21,722 | 2,209,127 | ||||||
Regal Beloit Corp. | 10,106 | 724,600 | ||||||
Rockwell Automation Inc. | 41,568 | 6,847,497 | ||||||
|
| |||||||
44,112,270 | ||||||||
Electronic Equipment, Instruments & Components — 0.6% |
| |||||||
Amphenol Corp., Class A | 49,121 | 4,396,330 | ||||||
AVX Corp. | 21,729 | 362,440 | ||||||
CDW Corp./DE | 24,597 | 2,213,976 | ||||||
Corning Inc. | 291,024 | 9,298,217 |
12 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Core Dividend Growth ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Electronic Equipment, Instruments & Components (continued) |
| |||||||
FLIR Systems Inc. | 23,913 | $ | 1,107,411 | |||||
Littelfuse Inc. | 3,508 | 635,509 | ||||||
TE Connectivity Ltd. | 114,739 | 8,653,615 | ||||||
|
| |||||||
26,667,498 | ||||||||
Entertainment — 1.3% | ||||||||
Activision Blizzard Inc. | 54,700 | 3,777,035 | ||||||
Twenty-First Century Fox Inc., Class A, NVS | 144,481 | 6,576,775 | ||||||
Twenty-First Century Fox Inc., Class B | 67,795 | 3,062,978 | ||||||
Walt Disney Co. (The) | 386,861 | 44,423,249 | ||||||
|
| |||||||
57,840,037 | ||||||||
Food & Staples Retailing — 2.6% |
| |||||||
Casey’s General Stores Inc. | 5,948 | 750,102 | ||||||
Costco Wholesale Corp. | 69,911 | 15,983,752 | ||||||
Kroger Co. (The) | 238,989 | 7,112,313 | ||||||
Sysco Corp. | 156,784 | 11,183,403 | ||||||
Walgreens Boots Alliance Inc. | 357,770 | 28,539,313 | ||||||
Walmart Inc. | 527,015 | 52,849,064 | ||||||
|
| |||||||
116,417,947 | ||||||||
Food Products — 1.7% | ||||||||
Archer-Daniels-Midland Co. | 254,956 | 12,046,671 | ||||||
Bunge Ltd. | 75,331 | 4,655,456 | ||||||
Flowers Foods Inc. | 108,507 | 2,095,270 | ||||||
General Mills Inc. | 416,452 | 18,240,598 | ||||||
Hershey Co. (The) | 64,735 | 6,936,355 | ||||||
Hormel Foods Corp. | 82,531 | 3,601,653 | ||||||
Ingredion Inc. | 28,144 | 2,847,610 | ||||||
J&J Snack Foods Corp. | 3,162 | 493,778 | ||||||
JM Smucker Co. (The) | 59,679 | 6,464,429 | ||||||
Kellogg Co. | 129,331 | 8,468,594 | ||||||
Lancaster Colony Corp. | 5,135 | 880,036 | ||||||
McCormick &Co. Inc./MD, NVS | 32,787 | 4,721,328 | ||||||
Sanderson Farms Inc. | 4,570 | 449,642 | ||||||
Tyson Foods Inc., Class A | 94,599 | 5,668,372 | ||||||
|
| |||||||
77,569,792 | ||||||||
Gas Utilities — 0.3% | ||||||||
Atmos Energy Corp. | 39,150 | 3,644,082 | ||||||
National Fuel Gas Co. | 44,212 | 2,400,270 | ||||||
New Jersey Resources Corp. | 34,602 | 1,560,550 | ||||||
South Jersey Industries Inc. | 47,656 | 1,407,758 | ||||||
Southwest Gas Holdings Inc. | 21,111 | 1,631,247 | ||||||
Spire Inc. | 25,773 | 1,870,604 | ||||||
UGI Corp. | 56,327 | 2,988,711 | ||||||
|
| |||||||
15,503,222 | ||||||||
Health Care Equipment &Supplies — 2.5% |
| |||||||
Abbott Laboratories | 497,261 | 34,281,173 | ||||||
Baxter International Inc. | 84,272 | 5,267,843 | ||||||
Becton Dickinson and Co. | 52,617 | 12,128,219 | ||||||
Cantel Medical Corp. | 1,552 | 122,841 | ||||||
DENTSPLY SIRONA Inc. | 34,094 | 1,180,675 | ||||||
Hill-Rom Holdings Inc. | 9,580 | 805,486 | ||||||
Medtronic PLC | 475,554 | 42,714,260 | ||||||
ResMed Inc. | 32,063 | 3,396,113 | ||||||
STERIS PLC | 17,328 | 1,894,124 | ||||||
Stryker Corp. | 57,181 | 9,275,902 | ||||||
West Pharmaceutical Services Inc. | 6,040 | 639,757 | ||||||
Zimmer Biomet Holdings Inc. | 26,280 | 2,985,145 | ||||||
|
| |||||||
114,691,538 |
Security | Shares | Value | ||||||
Health Care Providers &Services — 3.0% |
| |||||||
AmerisourceBergen Corp. | 48,613 | $ | 4,277,944 | |||||
Anthem Inc. | 49,463 | 13,630,519 | ||||||
Cardinal Health Inc. | 188,707 | 9,548,574 | ||||||
Chemed Corp. | 985 | 299,765 | ||||||
CVS Health Corp. | 446,382 | 32,313,593 | ||||||
Encompass Health Corp. | 20,949 | 1,409,868 | ||||||
Humana Inc. | 14,020 | 4,492,148 | ||||||
McKesson Corp. | 40,714 | 5,079,479 | ||||||
Patterson Companies Inc. | 59,231 | 1,337,436 | ||||||
Quest Diagnostics Inc. | 43,142 | 4,060,094 | ||||||
UnitedHealth Group Inc. | 223,487 | 58,408,327 | ||||||
|
| |||||||
134,857,747 | ||||||||
Hotels, Restaurants & Leisure — 2.9% |
| |||||||
Cheesecake Factory Inc. (The) | 17,725 | 856,827 | ||||||
Cracker Barrel Old Country Store Inc. | 13,311 | 2,112,189 | ||||||
Darden Restaurants Inc. | 53,182 | 5,666,542 | ||||||
Domino’s Pizza Inc. | 5,461 | 1,467,862 | ||||||
Dunkin’ Brands Group Inc. | 25,976 | 1,884,819 | ||||||
Marriott International Inc./MD, Class A | 62,891 | 7,351,329 | ||||||
McDonald’s Corp. | 322,354 | 57,024,423 | ||||||
Papa John’s International Inc. | 8,119 | 442,810 | ||||||
Royal Caribbean Cruises Ltd. | 56,588 | 5,926,461 | ||||||
Starbucks Corp. | 599,024 | 34,905,128 | ||||||
Texas Roadhouse Inc. | 16,193 | 979,029 | ||||||
Vail Resorts Inc. | 13,684 | 3,439,063 | ||||||
Wendy’s Co. (The) | 63,197 | 1,089,516 | ||||||
Wyndham Destinations Inc. | 68,002 | 2,439,912 | ||||||
Yum! Brands Inc. | 87,976 | 7,953,910 | ||||||
|
| |||||||
133,539,820 | ||||||||
Household Durables — 0.2% | ||||||||
Leggett & Platt Inc. | 73,334 | 2,662,758 | ||||||
Whirlpool Corp. | 40,620 | 4,458,451 | ||||||
|
| |||||||
7,121,209 | ||||||||
Household Products — 4.0% | ||||||||
Church & Dwight Co. Inc. | 60,949 | 3,618,542 | ||||||
Clorox Co. (The) | 55,354 | 8,217,301 | ||||||
Colgate-Palmolive Co. | 363,786 | 21,663,456 | ||||||
Kimberly-Clark Corp. | 202,459 | 21,116,474 | ||||||
Procter &Gamble Co. (The) | 1,454,884 | 129,019,113 | ||||||
WD-40 Co. | 2,987 | 499,068 | ||||||
|
| |||||||
184,133,954 | ||||||||
Industrial Conglomerates — 1.9% |
| |||||||
3M Co. | 261,573 | 49,766,879 | ||||||
Carlisle Companies Inc. | 12,744 | 1,230,943 | ||||||
Honeywell International Inc. | 228,543 | 33,097,597 | ||||||
Roper Technologies Inc. | 9,600 | 2,715,840 | ||||||
|
| |||||||
86,811,259 | ||||||||
Insurance — 4.5% | ||||||||
Aflac Inc. | 292,232 | 12,586,432 | ||||||
Allstate Corp. (The) | 110,805 | 10,606,255 | ||||||
American Equity Investment Life Holding Co. | 10,617 | 331,463 | ||||||
American Financial Group Inc./OH | 15,255 | 1,525,958 | ||||||
American International Group Inc. | 368,199 | 15,202,937 | ||||||
Aon PLC | 43,722 | 6,828,502 | ||||||
Argo Group International Holdings Ltd. | 10,308 | 635,076 | ||||||
Arthur J Gallagher & Co. | 68,201 | 5,047,556 | ||||||
Aspen Insurance Holdings Ltd. | 23,715 | 993,184 | ||||||
Assurant Inc. | 20,050 | 1,949,060 | ||||||
Assured Guaranty Ltd. | 29,264 | 1,169,975 |
S C H E D U L E O F I N V E S T M E N T S | 13 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Core Dividend Growth ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Insurance (continued) | ||||||||
Axis Capital Holdings Ltd. | 39,706 | $ | 2,215,198 | |||||
Brown & Brown Inc. | 39,225 | 1,105,360 | ||||||
Chubb Ltd. | 170,464 | 21,292,658 | ||||||
Cincinnati Financial Corp. | 71,773 | 5,644,229 | ||||||
CNO Financial Group Inc. | 53,946 | 1,019,579 | ||||||
FBL Financial Group Inc., Class A | 4,220 | 291,096 | ||||||
Fidelity National Financial Inc. | 140,451 | 4,698,086 | ||||||
First American Financial Corp. | 45,598 | 2,021,359 | ||||||
Hanover Insurance Group Inc. (The) | 13,373 | 1,489,485 | ||||||
Hartford Financial Services Group Inc. (The) | 149,201 | 6,776,709 | ||||||
Horace Mann Educators Corp. | 15,730 | 617,874 | ||||||
Lincoln National Corp. | 75,687 | 4,555,601 | ||||||
Marsh & McLennan Companies Inc. | 165,811 | 14,052,482 | ||||||
MetLife Inc. | 630,986 | 25,990,313 | ||||||
Primerica Inc. | 3,916 | 429,742 | ||||||
Principal Financial Group Inc. | 171,482 | 8,071,658 | ||||||
Prudential Financial Inc. | 263,003 | 24,664,421 | ||||||
Reinsurance Group of America Inc. | 18,286 | 2,603,378 | ||||||
RenaissanceRe Holdings Ltd. | 7,201 | 879,674 | ||||||
RLI Corp. | 7,496 | 554,179 | ||||||
Torchmark Corp. | 13,338 | 1,129,195 | ||||||
Travelers Companies Inc. (The) | 110,062 | 13,772,058 | ||||||
Unum Group | 109,836 | 3,982,653 | ||||||
WR Berkley Corp. | 12,535 | 951,407 | ||||||
|
| |||||||
205,684,792 | ||||||||
Internet & Direct Marketing Retail — 0.1% |
| |||||||
Expedia Group Inc. | 20,047 | 2,514,495 | ||||||
|
| |||||||
IT Services — 2.1% | ||||||||
Accenture PLC, Class A | 169,594 | 26,731,406 | ||||||
Automatic Data Processing Inc. | 139,491 | 20,097,863 | ||||||
Booz Allen Hamilton Holding Corp. | 35,603 | 1,763,773 | ||||||
Broadridge Financial Solutions Inc. | 21,069 | 2,463,809 | ||||||
Fidelity National Information Services Inc. | 65,306 | 6,798,355 | ||||||
Jack Henry & Associates Inc. | 12,113 | 1,814,891 | ||||||
Mastercard Inc., Class A | 72,280 | 14,287,587 | ||||||
Visa Inc., Class A | 172,600 | 23,792,910 | ||||||
|
| |||||||
97,750,594 | ||||||||
Leisure Products — 0.2% | ||||||||
Brunswick Corp./DE | 16,472 | 856,379 | ||||||
Hasbro Inc. | 48,688 | 4,465,177 | ||||||
Polaris Industries Inc. | 22,395 | 1,992,707 | ||||||
|
| |||||||
7,314,263 | ||||||||
Machinery — 2.2% | ||||||||
AGCO Corp. | 12,238 | 685,818 | ||||||
Barnes Group Inc. | 7,522 | 425,745 | ||||||
Caterpillar Inc. | 240,097 | 29,128,568 | ||||||
Cummins Inc. | 81,692 | 11,166,479 | ||||||
Donaldson Co. Inc. | 29,744 | 1,525,272 | ||||||
Dover Corp. | 54,884 | 4,546,591 | ||||||
Flowserve Corp. | 31,689 | 1,454,525 | ||||||
Franklin Electric Co. Inc. | 7,263 | 308,096 | ||||||
Graco Inc. | 32,266 | 1,310,968 | ||||||
Hillenbrand Inc. | 18,098 | 866,894 | ||||||
IDEX Corp. | 14,903 | 1,889,998 | ||||||
Illinois Tool Works Inc. | 115,068 | 14,679,225 | ||||||
Ingersoll-Rand PLC | 72,952 | 6,999,015 | ||||||
ITT Inc. | 14,124 | 713,262 | ||||||
Lincoln Electric Holdings Inc. | 18,524 | 1,498,777 |
Security | Shares | Value | ||||||
Machinery (continued) | ||||||||
Nordson Corp. | 8,907 | $ | 1,092,622 | |||||
Oshkosh Corp. | 16,636 | 933,945 | ||||||
PACCAR Inc. | 95,862 | 5,484,265 | ||||||
Pentair PLC | 44,748 | 1,796,632 | ||||||
Snap-on Inc. | 16,749 | 2,578,341 | ||||||
Stanley Black & Decker Inc. | 44,872 | 5,228,485 | ||||||
Toro Co. (The) | 22,747 | 1,281,339 | ||||||
Trinity Industries Inc. | 37,150 | 1,060,632 | ||||||
Wabtec Corp. | 6,684 | 548,222 | ||||||
Watts Water Technologies Inc., Class A | 5,498 | 385,135 | ||||||
Xylem Inc./NY | 31,965 | 2,096,265 | ||||||
|
| |||||||
99,685,116 | ||||||||
Media — 1.8% | ||||||||
CBS Corp., Class B, NVS | 75,147 | 4,309,681 | ||||||
Comcast Corp., Class A | 1,631,231 | 62,215,150 | ||||||
John Wiley & Sons Inc., Class A | 18,172 | 985,649 | ||||||
Meredith Corp. | 28,321 | 1,460,231 | ||||||
Nexstar Media Group Inc., Class A | 14,472 | 1,083,808 | ||||||
Omnicom Group Inc. | 132,559 | 9,851,785 | ||||||
Sinclair Broadcast Group Inc., Class A | 33,877 | 970,237 | ||||||
|
| |||||||
80,876,541 | ||||||||
Metals & Mining — 0.3% | ||||||||
Kaiser Aluminum Corp. | 6,048 | 576,798 | ||||||
Nucor Corp. | 128,435 | 7,593,077 | ||||||
Reliance Steel & Aluminum Co. | 28,497 | 2,248,983 | ||||||
Royal Gold Inc. | 14,993 | 1,148,914 | ||||||
Steel Dynamics Inc. | 63,455 | 2,512,818 | ||||||
Worthington Industries Inc. | 13,532 | 566,720 | ||||||
|
| |||||||
14,647,310 | ||||||||
Multi-Utilities — 2.0% | ||||||||
Avista Corp. | 32,665 | 1,679,634 | ||||||
Black Hills Corp. | 29,153 | 1,734,604 | ||||||
CMS Energy Corp. | 136,872 | 6,777,901 | ||||||
Consolidated Edison Inc. | 188,102 | 14,295,752 | ||||||
DTE Energy Co. | 96,354 | 10,830,190 | ||||||
MDU Resources Group Inc. | 97,174 | 2,425,463 | ||||||
NiSource Inc. | 172,459 | 4,373,560 | ||||||
NorthWestern Corp. | 31,450 | 1,848,002 | ||||||
Public Service Enterprise Group Inc. | 289,093 | 15,446,239 | ||||||
Sempra Energy | 140,817 | 15,506,768 | ||||||
Vectren Corp. | 35,983 | 2,573,864 | ||||||
WEC Energy Group Inc. | 172,165 | 11,776,086 | ||||||
|
| |||||||
89,268,063 | ||||||||
Oil, Gas & Consumable Fuels — 1.1% |
| |||||||
Marathon Petroleum Corp. | 167,026 | 11,766,982 | ||||||
Phillips 66 | 206,608 | 21,243,434 | ||||||
Valero Energy Corp. | 199,166 | 18,142,031 | ||||||
|
| |||||||
51,152,447 | ||||||||
Paper & Forest Products — 0.0% | ||||||||
Domtar Corp. | 35,787 | 1,657,296 | ||||||
Neenah Inc. | 4,910 | 395,059 | ||||||
|
| |||||||
2,052,355 | ||||||||
Personal Products — 0.1% | ||||||||
Estee Lauder Companies Inc. (The), Class A | 41,465 | 5,698,949 | ||||||
Nu Skin Enterprises Inc., Class A | 16,785 | 1,178,643 | ||||||
|
| |||||||
6,877,592 | ||||||||
Pharmaceuticals — 9.0% | ||||||||
Bristol-Myers Squibb Co. | 733,367 | 37,064,368 |
14 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Core Dividend Growth ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Pharmaceuticals (continued) | ||||||||
Johnson & Johnson | 988,961 | $ | 138,444,651 | |||||
Merck &Co. Inc. | 1,237,939 | 91,124,690 | ||||||
Perrigo Co. PLC | 22,006 | 1,547,022 | ||||||
Pfizer Inc. | 3,183,073 | 137,063,123 | ||||||
Zoetis Inc. | 46,508 | 4,192,696 | ||||||
|
| |||||||
409,436,550 | ||||||||
Professional Services — 0.2% | ||||||||
Dun & Bradstreet Corp. (The) | 8,938 | 1,271,699 | ||||||
Equifax Inc. | 23,519 | 2,385,767 | ||||||
Exponent Inc. | 8,955 | 451,869 | ||||||
Insperity Inc. | 4,637 | 509,374 | ||||||
ManpowerGroup Inc. | 25,819 | 1,969,732 | ||||||
Robert Half International Inc. | 32,122 | 1,944,345 | ||||||
|
| |||||||
8,532,786 | ||||||||
Real Estate Management & Development — 0.0% |
| |||||||
Jones Lang LaSalle Inc. | 4,467 | 590,805 | ||||||
|
| |||||||
Road & Rail — 1.2% | ||||||||
CSX Corp. | 164,225 | 11,308,533 | ||||||
JB Hunt Transport Services Inc. | 11,297 | 1,249,561 | ||||||
Kansas City Southern | 21,074 | 2,148,705 | ||||||
Ryder System Inc. | 24,873 | 1,375,726 | ||||||
Union Pacific Corp. | 255,399 | 37,344,442 | ||||||
|
| |||||||
53,426,967 | ||||||||
Semiconductors & Semiconductor Equipment — 4.0% |
| |||||||
Analog Devices Inc. | 132,968 | 11,130,751 | ||||||
Broadcom Inc. | 222,772 | 49,787,314 | ||||||
KLA-Tencor Corp. | 77,419 | 7,086,935 | ||||||
Maxim Integrated Products Inc. | 150,990 | 7,552,520 | ||||||
Microchip Technology Inc. | 69,937 | 4,600,456 | ||||||
MKS Instruments Inc. | 9,304 | 685,612 | ||||||
NVIDIA Corp. | 23,174 | 4,885,775 | ||||||
Power Integrations Inc. | 4,970 | 279,910 | ||||||
QUALCOMM Inc. | 823,543 | 51,792,619 | ||||||
Texas Instruments Inc. | 390,796 | 36,277,593 | ||||||
Xilinx Inc. | 81,240 | 6,935,459 | ||||||
|
| |||||||
181,014,944 | ||||||||
Software — 4.0% | ||||||||
Intuit Inc. | 30,381 | 6,410,391 | ||||||
j2 Global Inc. | 16,250 | 1,183,650 | ||||||
Microsoft Corp. | 1,282,308 | 136,963,318 | ||||||
Oracle Corp. | 737,968 | 36,042,357 | ||||||
|
| |||||||
180,599,716 | ||||||||
Specialty Retail — 2.9% | ||||||||
Best Buy Co. Inc. | 95,116 | 6,673,339 | ||||||
Foot Locker Inc. | 56,739 | 2,674,676 | ||||||
Group 1 Automotive Inc. | 4,919 | 284,023 | ||||||
Home Depot Inc. (The) | 376,691 | 66,252,413 | ||||||
Lithia Motors Inc., Class A | 6,149 | 547,753 | ||||||
Lowe’s Companies Inc. | 231,000 | 21,995,820 | ||||||
Monro Inc. | 6,905 | 513,732 | ||||||
Penske Automotive Group Inc. | 17,425 | 773,321 | ||||||
Ross Stores Inc. | 59,287 | 5,869,413 | ||||||
Signet Jewelers Ltd. | 20,185 | 1,131,369 | ||||||
Tiffany & Co. | 32,752 | 3,645,298 | ||||||
TJX Companies Inc. (The) | 150,325 | 16,517,711 |
Security | Shares | Value | ||||||
Specialty Retail (continued) | ||||||||
Tractor Supply Co. | 28,928 | $ | 2,658,194 | |||||
Williams-Sonoma Inc. | 33,849 | 2,009,954 | ||||||
|
| |||||||
131,547,016 | ||||||||
Technology Hardware, Storage & Peripherals — 3.3% |
| |||||||
Apple Inc. | 651,964 | 142,688,841 | ||||||
NetApp Inc. | 82,775 | 6,497,010 | ||||||
|
| |||||||
149,185,851 | ||||||||
Textiles, Apparel & Luxury Goods — 0.7% |
| |||||||
Carter’s Inc. | 14,661 | 1,407,163 | ||||||
Columbia Sportswear Co. | 5,298 | 478,303 | ||||||
Hanesbrands Inc. | 205,120 | 3,519,859 | ||||||
NIKE Inc., Class B | 208,988 | 15,682,460 | ||||||
VF Corp. | 113,288 | 9,389,309 | ||||||
|
| |||||||
30,477,094 | ||||||||
Thrifts & Mortgage Finance — 0.0% |
| |||||||
Provident Financial Services Inc. | 35,239 | 859,831 | ||||||
Washington Federal Inc. | 30,861 | 869,046 | ||||||
|
| |||||||
1,728,877 | ||||||||
Trading Companies & Distributors — 0.3% |
| |||||||
Air Lease Corp. | 15,150 | 577,215 | ||||||
Applied Industrial Technologies Inc. | 10,499 | 690,099 | ||||||
Fastenal Co. | 132,788 | 6,826,631 | ||||||
GATX Corp. | 13,698 | 1,026,391 | ||||||
MSC Industrial Direct Co. Inc., Class A | 20,862 | 1,691,074 | ||||||
WW Grainger Inc. | 11,980 | 3,401,961 | ||||||
|
| |||||||
14,213,371 | ||||||||
Water Utilities — 0.2% | ||||||||
American States Water Co. | 12,090 | 740,150 | ||||||
American Water Works Co. Inc. | 63,088 | 5,585,181 | ||||||
Aqua America Inc. | 71,606 | 2,329,343 | ||||||
California Water Service Group | 15,503 | 651,126 | ||||||
|
| |||||||
9,305,800 | ||||||||
Wireless Telecommunication Services — 0.0% |
| |||||||
Shenandoah Telecommunications Co. | 5,817 | 221,162 | ||||||
|
| |||||||
Total Common Stocks — 99.6% | 4,541,239,636 | |||||||
|
| |||||||
Short-Term Investments |
| |||||||
Money Market Funds — 0.3% | ||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 2.11%(b)(c) | 11,722,258 | 11,722,259 | ||||||
|
| |||||||
Total Short-Term Investments — 0.3% |
| 11,722,259 | ||||||
|
| |||||||
Total Investments in Securities — 99.9% |
| 4,552,961,895 | ||||||
Other Assets, Less Liabilities — 0.1% |
| 5,745,585 | ||||||
|
| |||||||
Net Assets — 100.0% | $ | 4,558,707,480 | ||||||
|
|
(a) | Non-income producing security. |
(b) | Affiliate of the Fund. |
(c) | Annualized 7-day yield as of period-end. |
S C H E D U L E O F I N V E S T M E N T S | 15 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Core Dividend Growth ETF
|
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of
Section 2(a)(3) of the 1940 Act, were as follows:
Affiliated Issuer | | Shares Held at 04/30/18 | | | Shares Purchased | | | Shares Sold | | | Shares Held at 10/31/18 | | | Value at 10/31/18 | | Income | | Net Realized | | | Change in Unrealized Appreciation (Depreciation | ) | ||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | 10,355,036 | 1,367,222 | (b) | — | 11,722,258 | $ | 11,722,259 | $ | 84,411 | $ | — | $ | — | |||||||||||||||||||
BlackRock Inc. | 28,538 | 23,320 | (876 | ) | 50,982 | 20,975,014 | 204,744 | 13,965 | (4,801,091 | ) | ||||||||||||||||||||||
PNC Financial Services Group Inc. (The) | 111,724 | 103,069 | (3,507 | ) | 211,286 | 27,148,138 | 312,558 | 24,057 | (3,186,719 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 59,845,411 | $ | 601,713 | $ | 38,022 | $ | (7,987,810 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
(b) | Net of purchases and sales. |
Futures Contracts
Description | Number of Contracts | Expiration Date | Notional Amount (000) | Value/ Unrealized Appreciation (Depreciation) | ||||||||||||
Long Contracts | ||||||||||||||||
S&P 500 E-Mini | 122 | 12/21/18 | $ | 16,538 | $ | (684,266 | ) | |||||||||
|
|
Derivative Financial Instruments Categorized by Risk Exposure
As of October 31, 2018, the fair values of derivative financial instruments located in the Statement of Assets and Liabilities were as follows:
Equity Contracts | ||||
Liabilities — Derivative Financial Instruments | ||||
Futures contracts | ||||
Net unrealized depreciation(a) | $ | 684,266 | ||
|
|
(a) | Represents cumulative appreciation (depreciation) of futures contracts as reported in the Schedule of Investments. Only current day’s variation margin is reported separately within the Statement of Assets and Liabilities. |
For the six months ended October 31, 2018, the effect of derivative financial instruments in the Statement of Operations was as follows:
Equity Contracts | ||||
Net Realized Gain (Loss)from: | ||||
Futures contracts | $ | 1,157,388 | ||
|
| |||
Net Change in Unrealized Appreciation (Depreciation) on: | ||||
Futures contracts | $ | (667,365) | ||
|
|
Average Quarterly Balances of Outstanding Derivative Financial Instruments
Futures contracts: | ||||
Average notional value of contracts — long | $ | 9,845,403 |
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
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, refer to the Notes to Financial Statements.
16 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Core Dividend Growth ETF
|
Fair Value Measurements (continued)
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $ | 4,541,239,636 | $ | — | $ | — | $ | 4,541,239,636 | ||||||||
Money Market Funds | 11,722,259 | — | — | 11,722,259 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 4,552,961,895 | $ | — | $ | — | $ | 4,552,961,895 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Derivative financial instruments(a) | ||||||||||||||||
Liabilities | ||||||||||||||||
Futures Contracts | $ | (684,266 | ) | $ | — | $ | — | $ | (684,266 | ) | ||||||
|
|
|
|
|
|
|
|
(a) | Shown at the unrealized appreciation (depreciation) on the contracts. |
See notes to financial statements.
S C H E D U L E O F I N V E S T M E N T S | 17 |
Schedule of Investments (unaudited)
October 31, 2018 | iShares® Core High Dividend ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks | ||||||||
Air Freight & Logistics — 1.7% |
| |||||||
United Parcel Service Inc., Class B | 964,726 | $ | 102,781,908 | |||||
|
| |||||||
Banks — 1.0% | ||||||||
Bank of Hawaii Corp. | 57,965 | 4,546,775 | ||||||
BB&T Corp. | 1,166,927 | 57,366,131 | ||||||
|
| |||||||
61,912,906 | ||||||||
Beverages — 8.7% | ||||||||
Coca-Cola Co. (The) | 6,085,896 | 291,392,701 | ||||||
PepsiCo Inc. | 2,172,088 | 244,099,249 | ||||||
|
| |||||||
535,491,950 | ||||||||
Capital Markets — 0.5% | ||||||||
BrightSphere Investment Group PLC | 124,929 | 1,424,191 | ||||||
Cohen & Steers Inc. | 32,177 | 1,235,275 | ||||||
Federated Investors Inc., Class B | 208,183 | 5,135,875 | ||||||
Franklin Resources Inc. | 421,701 | 12,861,881 | ||||||
Legg Mason Inc. | 183,593 | 5,180,994 | ||||||
Moelis & Co., Class A | 73,665 | 2,973,119 | ||||||
Waddell & Reed Financial Inc., Class A | 185,063 | 3,529,151 | ||||||
|
| |||||||
32,340,486 | ||||||||
Chemicals — 0.7% | ||||||||
Air Products & Chemicals Inc. | 273,521 | 42,217,966 | ||||||
|
| |||||||
Commercial Services & Supplies — 0.1% |
| |||||||
KAR Auction Services Inc. | 140,655 | 8,008,896 | ||||||
|
| |||||||
Communications Equipment — 4.5% |
| |||||||
Cisco Systems Inc. | 6,064,912 | 277,469,724 | ||||||
|
| |||||||
Containers & Packaging — 0.1% | ||||||||
Bemis Co. Inc. | 106,697 | 4,883,522 | ||||||
|
| |||||||
Diversified Telecommunication Services — 7.8% |
| |||||||
Verizon Communications Inc. | 8,360,412 | 477,295,921 | ||||||
|
| |||||||
Electric Utilities — 4.1% | ||||||||
ALLETE Inc. | 72,229 | 5,344,946 | ||||||
Alliant Energy Corp. | 339,134 | 14,575,979 | ||||||
American Electric Power Co. Inc. | 794,566 | 58,289,362 | ||||||
Duke Energy Corp. | 1,539,797 | 127,233,426 | ||||||
IDACORP Inc. | 56,526 | 5,271,615 | ||||||
Portland General Electric Co. | 129,978 | 5,859,408 | ||||||
Xcel Energy Inc. | 750,546 | 36,784,260 | ||||||
|
| |||||||
253,358,996 | ||||||||
Electrical Equipment — 1.6% | ||||||||
Eaton Corp. PLC | 627,096 | 44,943,970 | ||||||
Emerson Electric Co. | 745,180 | 50,582,819 | ||||||
|
| |||||||
95,526,789 | ||||||||
Energy Equipment & Services — 1.8% |
| |||||||
Schlumberger Ltd. | 2,145,086 | 110,064,363 | ||||||
|
| |||||||
Food Products — 0.3% | ||||||||
Hershey Co. (The) | 179,525 | 19,236,104 | ||||||
|
| |||||||
Gas Utilities — 0.1% | ||||||||
National Fuel Gas Co. | 122,277 | 6,638,418 | ||||||
|
| |||||||
Hotels, Restaurants & Leisure — 3.9% |
| |||||||
Carnival Corp. | 607,882 | 34,065,707 | ||||||
Cracker Barrel Old Country Store Inc.(a) | 37,342 | 5,925,429 | ||||||
Las Vegas Sands Corp. | 855,068 | 43,634,120 |
Security | Shares | Value | ||||||
Hotels, Restaurants & Leisure (continued) |
| |||||||
McDonald’s Corp. | 896,645 | $ | 158,616,500 | |||||
|
| |||||||
242,241,756 | ||||||||
Household Durables — 0.3% | ||||||||
Garmin Ltd. | 175,831 | 11,632,979 | ||||||
Leggett & Platt Inc. | 200,862 | 7,293,299 | ||||||
|
| |||||||
18,926,278 | ||||||||
Household Products — 8.1% | ||||||||
Clorox Co. (The) | 153,674 | 22,812,905 | ||||||
Colgate-Palmolive Co. | 1,010,662 | 60,184,922 | ||||||
Kimberly-Clark Corp. | 563,497 | 58,772,737 | ||||||
Procter & Gamble Co. (The) | 4,049,370 | 359,098,132 | ||||||
|
| |||||||
500,868,696 | ||||||||
Industrial Conglomerates — 2.2% | ||||||||
3M Co. | 727,573 | 138,428,039 | ||||||
|
| |||||||
Insurance — 0.7% | ||||||||
Cincinnati Financial Corp. | 199,189 | 15,664,223 | ||||||
Erie Indemnity Co., Class A, NVS | 24,957 | 3,236,674 | ||||||
Fidelity National Financial Inc. | 390,298 | 13,055,468 | ||||||
First American Financial Corp. | 138,610 | 6,144,581 | ||||||
Mercury General Corp. | 61,261 | 3,633,390 | ||||||
|
| |||||||
41,734,336 | ||||||||
IT Services — 0.5% | ||||||||
Paychex Inc. | 455,956 | 29,860,559 | ||||||
|
| |||||||
Leisure Products — 0.2% | ||||||||
Hasbro Inc. | 134,458 | 12,331,143 | ||||||
|
| |||||||
Machinery — 0.5% | ||||||||
Cummins Inc. | 227,274 | 31,066,083 | ||||||
|
| |||||||
Metals & Mining — 0.1% | ||||||||
Southern Copper Corp. | 156,660 | 6,006,344 | ||||||
|
| |||||||
Multi-Utilities — 3.9% | ||||||||
Avista Corp. | 91,017 | 4,680,094 | ||||||
CMS Energy Corp. | 379,586 | 18,797,099 | ||||||
Dominion Energy Inc. | 1,437,891 | 102,694,175 | ||||||
DTE Energy Co. | 267,568 | 30,074,643 | ||||||
MDU Resources Group Inc. | 268,996 | 6,714,140 | ||||||
Public Service Enterprise Group Inc. | 803,969 | 42,956,064 | ||||||
WEC Energy Group Inc. | 478,375 | 32,720,850 | ||||||
|
| |||||||
238,637,065 | ||||||||
Oil, Gas & Consumable Fuels — 20.0% |
| |||||||
Chevron Corp. | 3,494,006 | 390,105,770 | ||||||
Exxon Mobil Corp. | 7,553,117 | 601,832,363 | ||||||
ONEOK Inc. | 982,333 | 64,441,045 | ||||||
Phillips 66 | 574,316 | 59,051,171 | ||||||
Valero Energy Corp. | 554,182 | 50,480,438 | ||||||
Williams Companies Inc. (The) | 2,730,365 | 66,429,780 | ||||||
|
| |||||||
1,232,340,567 | ||||||||
Pharmaceuticals — 21.1% | ||||||||
Bristol-Myers Squibb Co. | 2,039,678 | 103,085,326 | ||||||
Eli Lilly & Co. | 956,483 | 103,721,016 | ||||||
Johnson & Johnson | 3,266,130 | 457,225,539 | ||||||
Merck & Co. Inc. | 3,444,803 | 253,571,949 | ||||||
Pfizer Inc. | 8,859,566 | 381,492,912 | ||||||
|
| |||||||
1,299,096,742 | ||||||||
Semiconductors & Semiconductor Equipment — 0.3% |
| |||||||
Maxim Integrated Products Inc. | 418,811 | 20,948,926 | ||||||
|
|
18 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Core High Dividend ETF (Percentages shown are based on Net Assets)
|
Security | Shares | Value | ||||||
Textiles, Apparel & Luxury Goods — 0.3% |
| |||||||
Tapestry Inc. | 363,126 | $ | 15,363,861 | |||||
|
| |||||||
Thrifts & Mortgage Finance — 0.1% |
| |||||||
Northwest Bancshares Inc. | 182,223 | 2,941,079 | ||||||
TFS Financial Corp. | 111,521 | 1,640,474 | ||||||
|
| |||||||
4,581,553 | ||||||||
Tobacco — 4.1% | ||||||||
Altria Group Inc. | 3,921,960 | 255,084,279 | ||||||
|
| |||||||
Trading Companies & Distributors — 0.5% |
| |||||||
Fastenal Co. | 368,418 | 18,940,369 | ||||||
MSC Industrial Direct Co. Inc., Class A | 58,404 | 4,734,228 | ||||||
Watsco Inc. | 48,298 | 7,156,798 | ||||||
|
| |||||||
30,831,395 | ||||||||
|
| |||||||
Total Common Stocks — 99.8% | 6,145,575,571 | |||||||
|
| |||||||
Short-Term Investments | ||||||||
Money Market Funds — 0.4% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 2.36%(b)(c)(d) | 4,445,648 | 4,446,537 |
Security | Shares | Value | ||||||
Money Market Funds (continued) | ||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 2.11%(b)(c) | 18,431,671 | $ | 18,431,671 | |||||
|
| |||||||
22,878,208 | ||||||||
|
| |||||||
Total Short-Term Investments — 0.4% |
| 22,878,208 | ||||||
|
| |||||||
Total Investments in Securities — 100.2% |
| 6,168,453,779 | ||||||
Other Assets, Less Liabilities — (0.2)% |
| (11,295,876 | ) | |||||
|
| |||||||
Net Assets — 100.0% |
| $ | 6,157,157,903 | |||||
|
|
(a) | All or a portion of this security is on loan. |
(b) | Affiliate of the Fund. |
(c) | Annualized 7-day yield as of period-end. |
(d) | All or a portion of this security was purchased with cash collateral received from loaned securities. |
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of
Section 2(a)(3) of the 1940 Act, were as follows:
Affiliated Issuer | | Shares Held at 04/30/18 | | Net Activity | | Shares Held at 10/31/18 | | | Value at 10/31/18 | | Income | | Net Realized Gain (Loss) | (a) | | Change in Unrealized Appreciation (Depreciation) |
| |||||||||||
BlackRock Cash Funds: Institutional, | 4,417,366 | 28,282 | 4,445,648 | $ | 4,446,537 | $ | 80,842 | (b) | $ | 107 | $ | (70) | ||||||||||||||||
BlackRock Cash Funds: Treasury, | 9,926,302 | 8,505,369 | 18,431,671 | 18,431,671 | 137,178 | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
$ | 22,878,208 | $ | 218,020 | $ | 107 | $ | (70) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
(b) | Includes securities lending income earned from the reinvestment of cash collateral from loaned securities (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities, and less fees paid to BTC as securities lending agent. |
Futures Contracts
Description | Number of Contracts | Expiration Date | Notional Amount (000) | Value/ Unrealized Appreciation (Depreciation) | ||||||||||||
Long Contracts | ||||||||||||||||
S&P 500 E-Mini | 77 | 12/21/18 | $ | 10,438 | $ | (503,313) | ||||||||||
|
|
S C H E D U L E O F I N V E S T M E N T S | 19 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Core High Dividend ETF
|
Derivative Financial Instruments Categorized by Risk Exposure
As of October 31, 2018, the fair values of derivative financial instruments located in the Statement of Assets and Liabilities were as follows:
Equity Contracts | ||||
Liabilities — Derivative Financial Instruments | ||||
Futures contracts | ||||
Net unrealized depreciation(a) | $ | 503,313 | ||
|
|
(a) | Represents cumulative appreciation (depreciation) of futures contracts as reported in the Schedule of Investments. Only current day’s variation margin is reported separately within the Statement of Assets and Liabilities. |
For the six months ended October 31, 2018, the effect of derivative financial instruments in the Statement of Operations was as follows:
Equity Contracts | ||||
Net Realized Gain (Loss) from: | ||||
Futures contracts | $ | 192,765 | ||
|
| |||
Net Change in Unrealized Appreciation (Depreciation) on: | ||||
Futures contracts | $ | (316,044 | ) | |
|
|
Average Quarterly Balances of Outstanding Derivative Financial Instruments
Futures contracts: | ||||
Average notional value of contracts — long | $ | 9,677,562 |
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
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, refer to the Notes to Financial Statements.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $ | 6,145,575,571 | $ | — | $ | — | $ | 6,145,575,571 | ||||||||
Money Market Funds | 22,878,208 | — | — | 22,878,208 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 6,168,453,779 | $ | — | $ | — | $ | 6,168,453,779 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Derivative financial instruments(a) | ||||||||||||||||
Liabilities | ||||||||||||||||
Futures Contracts | $ | (503,313) | $ | — | $ | — | $ | (503,313) | ||||||||
|
|
|
|
|
|
|
|
(a) | Shown at the unrealized appreciation (depreciation) on the contracts. |
See notes to financial statements.
20 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited)
October 31, 2018 | iShares® International Select Dividend ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks | ||||||||
Australia — 16.1% | ||||||||
Amcor Ltd./Australia | 1,838,146 | $ | 17,327,050 | |||||
APA Group | 2,580,062 | 17,554,739 | ||||||
AusNet Services | 3,011,887 | 3,650,293 | ||||||
Australia & New Zealand Banking Group Ltd. | 2,605,300 | 47,879,902 | ||||||
Bendigo & Adelaide Bank Ltd. | 3,003,731 | 21,778,585 | ||||||
Commonwealth Bank of Australia | 2,628,234 | 128,958,910 | ||||||
Fortescue Metals Group Ltd. | 3,407,195 | 9,659,396 | ||||||
Harvey Norman Holdings Ltd. | 3,040,552 | 6,874,421 | ||||||
Macquarie Group Ltd. | 2,162,924 | 179,664,331 | ||||||
National Australia Bank Ltd. | 3,079,534 | 55,023,833 | ||||||
Suncorp Group Ltd. | 2,371,607 | 23,549,075 | ||||||
Sydney Airport | 2,493,221 | 11,379,931 | ||||||
Tabcorp Holdings Ltd. | 2,204,536 | 7,218,587 | ||||||
Telstra Corp. Ltd. | 3,191,249 | 6,966,336 | ||||||
Wesfarmers Ltd. | 2,502,024 | 82,671,674 | ||||||
Westpac Banking Corp. | 2,899,081 | 55,169,320 | ||||||
|
| |||||||
675,326,383 | ||||||||
Austria — 0.8% | ||||||||
Oesterreichische Post AG | 863,607 | 35,108,919 | ||||||
|
| |||||||
Belgium — 0.9% | ||||||||
Proximus SADP | 1,436,112 | 36,693,043 | ||||||
|
| |||||||
Canada — 6.4% | ||||||||
Bank of Nova Scotia (The) | 895,564 | 48,179,400 | ||||||
Canadian Imperial Bank of Commerce | 981,549 | 84,966,678 | ||||||
Element Fleet Management Corp. | 1,338,830 | 7,900,958 | ||||||
Emera Inc. | 1,204,521 | 37,256,914 | ||||||
IGM Financial Inc. | 1,228,765 | 30,250,122 | ||||||
National Bank of Canada | 829,615 | 37,751,983 | ||||||
Russel Metals Inc. | 1,141,660 | 21,159,722 | ||||||
|
| |||||||
267,465,777 | ||||||||
Denmark — 0.9% | ||||||||
Tryg A/S | 1,509,806 | 36,502,971 | ||||||
|
| |||||||
Finland — 4.7% | ||||||||
Elisa OYJ | 1,076,440 | 42,871,041 | ||||||
Fortum OYJ | 1,415,550 | 29,824,301 | ||||||
Metso OYJ | 961,509 | 30,406,194 | ||||||
Nokian Renkaat OYJ | 992,460 | 31,576,136 | ||||||
Nordea Bank Abp | 3,813,567 | 33,209,164 | ||||||
UPM-Kymmene OYJ | 939,164 | 30,231,628 | ||||||
|
| |||||||
198,118,464 | ||||||||
France — 8.9% | ||||||||
Bouygues SA, NVS | 1,031,500 | 37,680,195 | ||||||
Casino Guichard Perrachon SA, NVS | 1,748,328 | 77,256,742 | ||||||
CNP Assurances, NVS | 1,029,526 | 22,980,127 | ||||||
Engie SA | 1,626,041 | 21,694,082 | ||||||
Lagardere SCA, NVS | 1,341,151 | 36,758,892 | ||||||
Natixis SA | 1,329,728 | 7,783,341 | ||||||
Orange SA, NVS | 1,113,523 | 17,436,371 | ||||||
SES SA | 3,230,968 | 69,464,564 | ||||||
TOTAL SA, NVS | 1,405,214 | 82,729,516 | ||||||
|
| |||||||
373,783,830 | ||||||||
Germany — 2.5% | ||||||||
Aareal Bank AG | 1,237,463 | 46,143,334 | ||||||
Freenet AG | 1,229,818 | 27,715,614 |
Security | Shares | Value | ||||||
Germany (continued) | ||||||||
ProSiebenSat.1 Media SE | 1,343,398 | $ | 31,082,025 | |||||
|
| |||||||
104,940,973 | ||||||||
Hong Kong — 2.7% | ||||||||
New World Development Co. Ltd. | 6,040,000 | 7,658,443 | ||||||
PCCW Ltd. | 10,903,000 | 5,980,420 | ||||||
VTech Holdings Ltd. | 8,395,400 | 98,524,989 | ||||||
|
| |||||||
112,163,852 | ||||||||
Italy — 5.5% | ||||||||
Azimut Holding SpA(a) | 4,495,237 | 55,440,852 | ||||||
Banca Mediolanum SpA | 4,280,625 | 24,857,070 | ||||||
Enel SpA | 2,799,296 | 13,746,325 | ||||||
Eni SpA | 4,683,868 | 83,352,592 | ||||||
Italgas SpA | 3,402,572 | 17,587,798 | ||||||
Snam SpA | 4,695,503 | 19,440,147 | ||||||
Terna Rete Elettrica Nazionale SpA | 3,517,852 | 18,195,635 | ||||||
|
| |||||||
232,620,419 | ||||||||
Netherlands — 0.8% | ||||||||
Aegon NV | 5,555,300 | 34,166,164 | ||||||
|
| |||||||
New Zealand — 2.4% | ||||||||
SKYCITY Entertainment Group Ltd | 16,078,298 | 40,211,651 | ||||||
Spark New Zealand Ltd | 23,119,567 | 59,633,438 | ||||||
|
| |||||||
99,845,089 | ||||||||
Norway — 4.8% | ||||||||
Equinor ASA | 1,301,335 | 33,954,130 | ||||||
Marine Harvest ASA | 2,470,803 | 59,969,877 | ||||||
Salmar ASA | 2,016,219 | 106,748,696 | ||||||
|
| |||||||
200,672,703 | ||||||||
Portugal — 1.3% | ||||||||
EDP - Energias de Portugal SA | 16,234,696 | 57,097,191 | ||||||
|
| |||||||
Singapore — 0.9% | ||||||||
StarHub Ltd | 28,512,300 | 38,708,206 | ||||||
|
| |||||||
Spain — 6.0% | ||||||||
Enagas SA | 2,018,137 | 53,599,054 | ||||||
Ferrovial SA | 2,117,551 | 42,467,434 | ||||||
Mapfre SA | 3,912,559 | 11,721,177 | ||||||
Naturgy Energy Group SA | 2,581,522 | 63,530,829 | ||||||
Red Electrica Corp. SA | 2,807,434 | 58,211,597 | ||||||
Telefonica SA | 2,740,026 | 22,470,986 | ||||||
|
| |||||||
252,001,077 | ||||||||
Sweden — 5.9% | ||||||||
Hennes & Mauritz AB, Class B | 3,788,686 | 67,046,191 | ||||||
JM AB | 3,225,693 | 61,392,529 | ||||||
Skandinaviska Enskilda Banken AB, Class A | 3,138,674 | 32,541,632 | ||||||
Swedbank AB, Class A | 3,300,169 | 74,418,726 | ||||||
Telia Co. AB | 2,978,974 | 13,448,195 | ||||||
|
| |||||||
248,847,273 | ||||||||
Switzerland — 3.4% | ||||||||
Swiss Prime Site AG, Registered | 145,942 | 11,868,034 | ||||||
Swiss Re AG | 160,777 | 14,538,499 | ||||||
Swisscom AG, Registered | 135,450 | 62,130,063 | ||||||
Zurich Insurance Group AG | 179,709 | 55,954,726 | ||||||
|
| |||||||
144,491,322 | ||||||||
United Kingdom — 24.4% | ||||||||
Ashmore Group PLC | 2,791,389 | 12,561,903 | ||||||
AstraZeneca PLC | 3,231,993 | 247,367,683 | ||||||
Bovis Homes Group PLC | 2,849,567 | 35,281,609 |
S C H E D U L E O F I N V E S T M E N T S | 21 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® International Select Dividend ETF (Percentages shown are based on Net Assets)
|
Security | Shares | Value | ||||||
United Kingdom (continued) | ||||||||
BP PLC | 4,841,881 | $ | 35,097,212 | |||||
BT Group PLC | 4,473,913 | 13,751,137 | ||||||
Centamin PLC | 4,372,297 | 5,558,767 | ||||||
Crest Nicholson Holdings PLC | 4,798,552 | 20,895,632 | ||||||
Dairy Crest Group PLC | 3,061,951 | 18,709,128 | ||||||
Galliford Try PLC | 8,650,076 | 96,599,991 | ||||||
GlaxoSmithKline PLC | 4,249,538 | 82,055,820 | ||||||
Greene King PLC | 4,817,417 | 29,706,213 | ||||||
HSBC Holdings PLC | 3,708,215 | 30,556,458 | ||||||
IG Group Holdings PLC | 2,893,950 | 22,352,858 | ||||||
Legal & General Group PLC | 3,405,383 | 10,943,335 | ||||||
Marks & Spencer Group PLC | 4,488,436 | 16,975,887 | ||||||
National Grid PLC | 3,988,329 | 42,256,741 | ||||||
Phoenix Group Holdings | 4,786,893 | 36,851,613 | ||||||
Royal Dutch Shell PLC, Class A | 4,257,502 | 136,027,729 | ||||||
SSE PLC | 5,232,991 | 76,325,847 | ||||||
Standard Life Aberdeen PLC | 3,416,080 | 11,807,040 | ||||||
United Utilities Group PLC | 3,979,171 | 36,943,133 | ||||||
Vodafone Group PLC | 4,233,572 | 7,996,241 | ||||||
|
| |||||||
1,026,621,977 | ||||||||
|
| |||||||
Total Common Stocks — 99.3% |
| 4,175,175,633 | ||||||
|
|
Security | Shares | Value | ||||||
Short-Term Investments | ||||||||
Money Market Funds — 0.2% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 2.36%(b)(c)(d) | 5,235,381 | $ | 5,236,428 | |||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 2.11%(b)(c) | 2,406,197 | 2,406,197 | ||||||
|
| |||||||
7,642,625 | ||||||||
|
| |||||||
Total Short-Term Investments — 0.2% |
| 7,642,625 | ||||||
|
| |||||||
Total Investments in Securities — 99.5% |
| 4,182,818,258 | ||||||
Other Assets, Less Liabilities — 0.5% |
| 20,636,839 | ||||||
|
| |||||||
Net Assets — 100.0% | $ | 4,203,455,097 | ||||||
|
|
(a) | All or a portion of this security is on loan. |
(b) | Affiliate of the Fund. |
(c) | Annualized 7-day yield as of period-end. |
(d) | All or a portion of this security was purchased with cash collateral received from loaned securities. |
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of
Section 2(a)(3) of the 1940 Act, were as follows:
Shares | Shares | Net | | Change in Unrealized | | |||||||||||||||||||||||||||
Held at | Shares | Shares | Held at | Value at | Realized | Appreciation | ||||||||||||||||||||||||||
Affiliated Issuer | 04/30/18 | Purchased | Sold | 10/31/18 | 10/31/18 | Income | Gain (Loss) | (a) | (Depreciation) | |||||||||||||||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | — | 5,235,381 | (b) | — | 5,235,381 | $ | 5,236,428 | $ | 1,212 | (c) | $ | — | $ | — | ||||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | 3,551,785 | — | (1,145,588 | )(b) | 2,406,197 | 2,406,197 | 25,901 | — | — | |||||||||||||||||||||||
Galliford Try PLC (d) | 9,121,367 | 216,441 | (687,732 | ) | 8,650,076 | 96,599,991 | — | 2,801,345 | (15,287,981 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 104,242,616 | $ | 27,113 | $ | 2,801,345 | $ | (15,287,981 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
(b) | Net of purchases and sales. |
(c) | Includes securities lending income earned from the reinvestment of cash collateral from loaned securities (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities, and less fees paid to BTC as securities lending agent. |
(d) | The Fund held less than 5% at the end of the period. |
Futures Contracts
Description | Number of Contracts | Expiration Date | Notional Amount | Value/ (Depreciation) | ||||||||||||
Long Contracts | ||||||||||||||||
ASX SPI 200 Index | 77 | 12/20/18 | $ | 7,910 | $ | (495,981 | ) | |||||||||
Euro STOXX 50 Index | 284 | 12/21/18 | 10,278 | (448,842 | ) | |||||||||||
FTSE 100 Index | 108 | 12/21/18 | 9,813 | (274,829 | ) | |||||||||||
|
| |||||||||||||||
$ | (1,219,652 | ) | ||||||||||||||
|
|
22 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® International Select Dividend ETF
|
Derivative Financial Instruments Categorized by Risk Exposure
As of October 31, 2018, the fair values of derivative financial instruments located in the Statement of Assets and Liabilities were as follows:
Equity Contracts | ||||
Liabilities — Derivative Financial Instruments | ||||
Futures contracts | ||||
Net unrealized depreciation(a) | $ | 1,219,652 | ||
|
|
(a) | Represents cumulative appreciation (depreciation) of futures contracts as reported in the Schedule of Investments. Only current day’s variation margin is reported separately within the Statement of Assets and Liabilities. |
For the six months ended October 31, 2018, the effect of derivative financial instruments in the Statement of Operations was as follows:
Equity Contracts | ||||
Net Realized Gain (Loss) from: | ||||
Futures contracts | $ | 158,789 | ||
|
| |||
Net Change in Unrealized Appreciation (Depreciation) on: | ||||
Futures contracts | $ | (2,097,774 | ) | |
|
|
Average Quarterly Balances of Outstanding Derivative Financial Instruments
Futures contracts: | ||||
Average notional value of contracts — long | $ | 31,081,009 |
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
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, refer to the Notes to Financial Statements.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $ | 4,175,175,633 | $ | — | $ | — | $ | 4,175,175,633 | ||||||||
Money Market Funds | 7,642,625 | — | — | 7,642,625 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 4,182,818,258 | $ | — | $ | — | $ | 4,182,818,258 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Derivative financial instruments(a) | ||||||||||||||||
Liabilities | ||||||||||||||||
Futures Contracts | $ | (1,219,652 | ) | $ | — | $ | — | $ | (1,219,652 | ) | ||||||
|
|
|
|
|
|
|
|
(a) | Shown at the unrealized appreciation (depreciation) on the contracts. |
See notes to financial statements.
S C H E D U L E O F I N V E S T M E N T S | 23 |
Schedule of Investments (unaudited)
October 31, 2018 | iShares® Select Dividend ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks | ||||||||
Aerospace & Defense — 0.7% | ||||||||
Lockheed Martin Corp. | 378,525 | $ | 111,229,571 | |||||
|
| |||||||
Automobiles — 1.7% | ||||||||
Ford Motor Co. | 30,357,627 | 289,915,338 | ||||||
|
| |||||||
Banks — 4.0% | ||||||||
Bank of Hawaii Corp. | 873,318 | 68,503,064 | ||||||
BB&T Corp. | 2,518,944 | 123,831,287 | ||||||
FNB Corp. | 6,658,251 | 78,767,109 | ||||||
PacWest Bancorp. | 2,678,131 | 108,785,681 | ||||||
People’s United Financial Inc. | 7,199,919 | 112,750,732 | ||||||
Trustmark Corp. | 1,376,512 | 42,396,570 | ||||||
United Bankshares Inc./WV | 2,137,113 | 70,888,038 | ||||||
Valley National Bancorp. | 5,432,038 | 54,211,739 | ||||||
|
| |||||||
660,134,220 | ||||||||
Beverages — 1.4% | ||||||||
Coca-Cola Co. (The) | 4,700,377 | 225,054,051 | ||||||
|
| |||||||
Capital Markets — 1.8% | ||||||||
Federated Investors Inc., Class B | 1,965,861 | 48,497,791 | ||||||
Invesco Ltd. | 6,101,547 | 132,464,585 | ||||||
Lazard Ltd., Class A | 2,787,130 | 110,760,546 | ||||||
|
| |||||||
291,722,922 | ||||||||
Chemicals — 3.1% | ||||||||
CF Industries Holdings Inc. | 3,961,957 | 190,292,795 | ||||||
Huntsman Corp. | 3,594,196 | 78,641,008 | ||||||
LyondellBasell Industries NV, Class A | 1,928,325 | 172,141,573 | ||||||
Olin Corp. | 3,577,721 | 72,269,964 | ||||||
|
| |||||||
513,345,340 | ||||||||
Commercial Services & Supplies — 0.9% |
| |||||||
Pitney Bowes Inc. | 3,859,532 | 25,550,102 | ||||||
Waste Management Inc. | 1,441,503 | 128,971,273 | ||||||
|
| |||||||
154,521,375 | ||||||||
Containers & Packaging — 2.7% |
| |||||||
International Paper Co. | 3,308,129 | 150,056,731 | ||||||
Packaging Corp. of America | 1,022,460 | 93,872,053 | ||||||
Sonoco Products Co. | 2,111,007 | 115,218,762 | ||||||
WestRock Co. | 2,254,628 | 96,881,365 | ||||||
|
| |||||||
456,028,911 | ||||||||
Distributors — 1.1% | ||||||||
Genuine Parts Co. | 1,952,298 | 191,169,020 | ||||||
|
| |||||||
Diversified Consumer Services — 0.6% |
| |||||||
H&R Block Inc. | 3,988,816 | 105,863,177 | ||||||
|
| |||||||
Diversified Telecommunication Services — 4.2% |
| |||||||
AT&T Inc. | 8,518,136 | 261,336,412 | ||||||
CenturyLink Inc. | 20,805,201 | 429,419,349 | ||||||
|
| |||||||
690,755,761 | ||||||||
Electric Utilities — 18.3% |
| |||||||
Alliant Energy Corp. | 5,084,451 | 218,529,704 | ||||||
American Electric Power Co. Inc. | 3,324,050 | 243,852,308 | ||||||
Edison International | 3,855,837 | 267,556,529 | ||||||
Entergy Corp. | 3,490,565 | 293,032,932 | ||||||
Eversource Energy | 3,592,613 | 227,268,698 | ||||||
Exelon Corp. | 5,774,173 | 252,966,519 | ||||||
FirstEnergy Corp. | 8,045,854 | 299,949,437 | ||||||
IDACORP Inc. | 1,086,368 | 101,314,680 | ||||||
NextEra Energy Inc. | 1,088,039 | 187,686,728 |
Security | Shares | Value | ||||||
Electric Utilities (continued) | ||||||||
OGE Energy Corp. | 4,386,229 | $ | 158,562,178 | |||||
Pinnacle West Capital Corp. | 2,468,572 | 203,040,047 | ||||||
PPL Corp. | 11,826,623 | 359,529,339 | ||||||
Xcel Energy Inc. | 4,691,274 | 229,919,339 | ||||||
|
| |||||||
3,043,208,438 | ||||||||
Electrical Equipment — 1.9% | ||||||||
Eaton Corp. PLC | 2,303,822 | 165,114,923 | ||||||
Emerson Electric Co. | 2,238,693 | 151,962,481 | ||||||
|
| |||||||
317,077,404 | ||||||||
Energy Equipment & Services — 0.9% |
| |||||||
Helmerich & Payne Inc. | 2,335,394 | 145,471,692 | ||||||
|
| |||||||
Entertainment — 0.6% | ||||||||
Cinemark Holdings Inc. | 2,346,033 | 97,524,592 | ||||||
|
| |||||||
Food & Staples Retailing — 1.0% |
| |||||||
Sysco Corp. | 2,291,004 | 163,417,315 | ||||||
|
| |||||||
Food Products — 1.1% | ||||||||
General Mills Inc. | 4,333,305 | 189,798,759 | ||||||
|
| |||||||
Gas Utilities — 0.5% | ||||||||
New Jersey Resources Corp. | 1,844,825 | 83,201,607 | ||||||
|
| |||||||
Hotels, Restaurants & Leisure — 2.1% |
| |||||||
Darden Restaurants Inc. | 1,670,245 | 177,964,605 | ||||||
McDonald’s Corp. | 959,130 | 169,670,097 | ||||||
|
| |||||||
347,634,702 | ||||||||
Household Durables — 2.5% | ||||||||
Garmin Ltd. | 2,364,134 | 156,411,105 | ||||||
Leggett & Platt Inc. | 2,759,613 | 100,201,548 | ||||||
Newell Brands Inc. | 7,513,111 | 119,308,203 | ||||||
Tupperware Brands Corp. | 1,079,186 | 37,879,429 | ||||||
|
| |||||||
413,800,285 | ||||||||
Household Products — 1.2% | ||||||||
Kimberly-Clark Corp. | 1,841,319 | 192,049,572 | ||||||
|
| |||||||
Industrial Conglomerates — 0.8% |
| |||||||
General Electric Co. | 13,378,635 | 135,124,213 | ||||||
|
| |||||||
Insurance — 2.6% | ||||||||
Arthur J Gallagher & Co. | 1,947,017 | 144,098,728 | ||||||
Cincinnati Financial Corp. | 2,141,951 | 168,443,027 | ||||||
Old Republic International Corp. | 5,182,697 | 114,278,469 | ||||||
|
| |||||||
426,820,224 | ||||||||
IT Services — 2.0% | ||||||||
International Business Machines Corp. | 1,387,808 | 160,194,677 | ||||||
Western Union Co. (The) | 9,869,936 | 178,053,646 | ||||||
|
| |||||||
338,248,323 | ||||||||
Machinery — 0.5% | ||||||||
Caterpillar Inc. | 759,944 | 92,196,406 | ||||||
|
| |||||||
Media — 1.4% | ||||||||
Interpublic Group of Companies Inc. (The) | 8,299,133 | 192,207,920 | ||||||
Meredith Corp. | 851,333 | 43,894,730 | ||||||
|
| |||||||
236,102,650 | ||||||||
Multi-Utilities — 12.1% | ||||||||
Avista Corp. | 1,404,270 | 72,207,563 | ||||||
Black Hills Corp. | 1,142,760 | 67,994,220 | ||||||
CenterPoint Energy Inc. | 8,766,919 | 236,794,482 | ||||||
CMS Energy Corp. | 4,524,150 | 224,035,908 |
24 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Select Dividend ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Multi-Utilities (continued) | ||||||||
Dominion Energy Inc. | 3,530,216 | $ | 252,128,027 | |||||
DTE Energy Co. | 2,000,382 | 224,842,937 | ||||||
NiSource Inc. | 7,359,273 | 186,631,163 | ||||||
NorthWestern Corp. | 1,074,636 | 63,145,611 | ||||||
Public Service Enterprise Group Inc. | 4,572,911 | 244,330,635 | ||||||
Sempra Energy | 1,726,757 | 190,150,481 | ||||||
WEC Energy Group Inc. | 3,527,791 | 241,300,905 | ||||||
|
| |||||||
2,003,561,932 | ||||||||
Multiline Retail — 4.1% | ||||||||
Kohl’s Corp. | 3,232,248 | 244,778,141 | ||||||
Macy’s Inc. | 6,478,841 | 222,159,458 | ||||||
Target Corp. | 2,627,287 | 219,720,012 | ||||||
|
| |||||||
686,657,611 | ||||||||
Oil, Gas & Consumable Fuels — 10.3% |
| |||||||
Chevron Corp. | 2,006,504 | 224,026,172 | ||||||
ConocoPhillips | 2,215,307 | 154,849,959 | ||||||
Exxon Mobil Corp. | 3,124,895 | 248,991,634 | ||||||
HollyFrontier Corp. | 3,657,324 | 246,649,931 | ||||||
Occidental Petroleum Corp. | 4,109,904 | 275,651,261 | ||||||
ONEOK Inc. | 5,501,944 | 360,927,526 | ||||||
Valero Energy Corp. | 2,194,189 | 199,868,676 | ||||||
|
| |||||||
1,710,965,159 | ||||||||
Paper & Forest Products — 0.4% |
| |||||||
Domtar Corp. | 1,322,902 | 61,263,592 | ||||||
|
| |||||||
Personal Products — 0.4% | ||||||||
Nu Skin Enterprises Inc., Class A | 1,051,741 | 73,853,253 | ||||||
|
| |||||||
Pharmaceuticals — 4.6% | ||||||||
Eli Lilly & Co. | 2,152,677 | 233,436,294 | ||||||
Merck & Co. Inc. | 3,709,790 | 273,077,642 | ||||||
Pfizer Inc. | 5,948,677 | 256,150,031 | ||||||
|
| |||||||
762,663,967 | ||||||||
Semiconductors & Semiconductor Equipment — 2.0% |
| |||||||
Intel Corp. | 2,707,081 | 126,907,957 |
Security | Shares | Value | ||||||
Semiconductors & Semiconductor Equipment (continued) |
| |||||||
QUALCOMM Inc. | 3,203,147 | $ | 201,445,915 | |||||
|
| |||||||
328,353,872 | ||||||||
Specialty Retail — 1.2% | ||||||||
L Brands Inc. | 5,962,291 | 193,297,474 | ||||||
|
| |||||||
Technology Hardware, Storage & Peripherals — 1.2% |
| |||||||
Seagate Technology PLC | 4,783,173 | 192,427,050 | ||||||
|
| |||||||
Thrifts & Mortgage Finance — 0.6% |
| |||||||
New York Community Bancorp. Inc. | 9,985,045 | 95,656,731 | ||||||
|
| |||||||
Tobacco — 2.6% | ||||||||
Altria Group Inc. | 3,735,244 | 242,940,270 | ||||||
Philip Morris International Inc. | 2,206,585 | 194,333,941 | ||||||
|
| |||||||
437,274,211 | ||||||||
Trading Companies & Distributors — 0.6% |
| |||||||
Watsco Inc. | 632,256 | 93,687,694 | ||||||
|
| |||||||
Total Common Stocks — 99.7% |
| 16,551,078,414 | ||||||
|
| |||||||
Short-Term Investments |
| |||||||
Money Market Funds — 0.2% | ||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 2.11%(a)(b) | 23,990,756 | 23,990,756 | ||||||
|
| |||||||
Total Short-Term Investments — 0.2% |
| 23,990,756 | ||||||
|
| |||||||
Total Investments in Securities — 99.9% |
| 16,575,069,170 | ||||||
Other Assets, Less Liabilities — 0.1% |
| 18,592,670 | ||||||
|
| |||||||
Net Assets — 100.0% | $ | 16,593,661,840 | ||||||
|
|
(a) | Affiliate of the Fund. |
(b) | Annualized 7-day yield as of period-end. |
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of
Section 2(a)(3) of the 1940 Act, were as follows:
Affiliated Issuer | | Shares Held at 04/30/18 | | Net Activity | | Shares Held at 10/31/18 | | | Value at 10/31/18 | | Income | | Net Realized Gain (Loss) | (a) | | Change in Unrealized Appreciation (Depreciation) |
| |||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | 18,000,301 | 5,990,455 | 23,990,756 | $ | 23,990,756 | $ | 332,719 | $ | — | $ | — | |||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
Futures Contracts
Description | Number of Contracts | Expiration Date | Notional Amount | Value/ Unrealized (Depreciation) | ||||||||||||
Long Contracts | ||||||||||||||||
S&P 500 E-Mini | 302 | 12/21/18 | $ | 40,938 | $ | (2,385,342 | ) | |||||||||
|
|
S C H E D U L E O F I N V E S T M E N T S | 25 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Select Dividend ETF
|
Derivative Financial Instruments Categorized by Risk Exposure
As of October 31, 2018, the fair values of derivative financial instruments located in the Statement of Assets and Liabilities were as follows:
Equity Contracts | ||||
Liabilities — Derivative Financial Instruments | ||||
Futures contracts | ||||
Net unrealized depreciation(a) | $ | 2,385,342 | ||
|
|
(a) | Represents cumulative appreciation (depreciation) of futures contracts as reported in the Schedule of Investments. Only current day’s variation margin is reported separately within the Statement of Assets and Liabilities. |
For the six months ended October 31, 2018, the effect of derivative financial instruments in the Statement of Operations was as follows:
Equity Contracts | ||||
Net Realized Gain (Loss) from: | ||||
Futures contracts | $ | 2,473,336 | ||
|
| |||
Net Change in Unrealized Appreciation (Depreciation) on: | ||||
Futures contracts | $ | (1,864,645 | ) | |
|
|
Average Quarterly Balances of Outstanding Derivative Financial Instruments
Futures contracts: | ||||
Average notional value of contracts — long | $ | 30,618,948 |
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
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, refer to the Notes to Financial Statements.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $ | 16,551,078,414 | $ | — | $ | — | $ | 16,551,078,414 | ||||||||
Money Market Funds | 23,990,756 | — | — | 23,990,756 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 16,575,069,170 | $ | — | $ | — | $ | 16,575,069,170 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Derivative financial instruments(a) | ||||||||||||||||
Liabilities | ||||||||||||||||
Futures Contracts | $ | (2,385,342 | ) | $ | — | $ | — | $ | (2,385,342 | ) | ||||||
|
|
|
|
|
|
|
|
(a) | Shown at the unrealized appreciation (depreciation) on the contracts. |
See notes to financial statements.
26 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited)
October 31, 2018 | iShares® U.S. Dividend and Buyback ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks | ||||||||
Aerospace & Defense — 3.2% | ||||||||
Boeing Co. (The) | 302 | $ | 107,168 | |||||
General Dynamics Corp. | 111 | 19,156 | ||||||
Harris Corp. | 43 | 6,394 | ||||||
Huntington Ingalls Industries Inc. | 17 | 3,714 | ||||||
L3 Technologies Inc. | 23 | 4,358 | ||||||
Lockheed Martin Corp. | 102 | 29,973 | ||||||
Northrop Grumman Corp. | 45 | 11,788 | ||||||
Raytheon Co. | 93 | 16,279 | ||||||
Spirit AeroSystems Holdings Inc., Class A | 92 | 7,729 | ||||||
Textron Inc. | 124 | 6,650 | ||||||
United Technologies Corp. | 267 | 33,164 | ||||||
|
| |||||||
246,373 | ||||||||
Air Freight & Logistics — 0.6% | ||||||||
CH Robinson Worldwide Inc. | 44 | 3,917 | ||||||
Expeditors International of Washington Inc. | 49 | 3,292 | ||||||
FedEx Corp. | 26 | 5,729 | ||||||
United Parcel Service Inc., Class B | 296 | 31,536 | ||||||
|
| |||||||
44,474 | ||||||||
Airlines — 0.8% | ||||||||
American Airlines Group Inc. | 408 | 14,313 | ||||||
Delta Air Lines Inc. | 365 | 19,976 | ||||||
Southwest Airlines Co. | 256 | 12,570 | ||||||
United Continental Holdings Inc.(a) | 144 | 12,313 | ||||||
|
| |||||||
59,172 | ||||||||
Auto Components — 0.2% | ||||||||
Aptiv PLC | 61 | 4,685 | ||||||
Goodyear Tire & Rubber Co. (The) | 199 | 4,191 | ||||||
Lear Corp. | 31 | 4,120 | ||||||
|
| |||||||
12,996 | ||||||||
Automobiles — 1.0% | ||||||||
Ford Motor Co. | 2,389 | 22,815 | ||||||
General Motors Co. | 1,324 | 48,445 | ||||||
Harley-Davidson Inc. | 140 | 5,351 | ||||||
|
| |||||||
76,611 | ||||||||
Banks — 9.9% | ||||||||
Bank of America Corp. | 4,720 | 129,800 | ||||||
BB&T Corp. | 368 | 18,091 | ||||||
CIT Group Inc. | 372 | 17,625 | ||||||
Citigroup Inc. | 2,142 | 140,215 | ||||||
Citizens Financial Group Inc. | 233 | 8,703 | ||||||
Comerica Inc. | 49 | 3,996 | ||||||
Fifth Third Bancorp. | 522 | 14,089 | ||||||
Huntington Bancshares Inc./OH | 268 | 3,840 | ||||||
JPMorgan Chase & Co. | 1,763 | 192,202 | ||||||
KeyCorp. | 428 | 7,773 | ||||||
M&T Bank Corp. | 94 | 15,549 | ||||||
PacWest Bancorp. | 66 | 2,681 | ||||||
PNC Financial Services Group Inc. (The)(b) | 243 | 31,223 | ||||||
Regions Financial Corp. | 696 | 11,811 | ||||||
SunTrust Banks Inc. | 245 | 15,352 | ||||||
U.S. Bancorp. | 685 | 35,805 | ||||||
Wells Fargo & Co. | 2,255 | 120,034 | ||||||
Zions Bancorp. N.A | 62 | 2,917 | ||||||
|
| |||||||
771,706 | ||||||||
Beverages — 2.0% | ||||||||
Coca-Cola Co. (The) | 1,547 | 74,070 | ||||||
Constellation Brands Inc., Class A | 64 | 12,751 |
Security | Shares | Value | ||||||
Beverages (continued) | ||||||||
Keurig Dr Pepper Inc. | 138 | $ | 3,588 | |||||
Monster Beverage Corp.(a) | 72 | 3,805 | ||||||
PepsiCo Inc. | 576 | 64,731 | ||||||
|
| |||||||
158,945 | ||||||||
Biotechnology — 3.7% | ||||||||
AbbVie Inc. | 1,074 | 83,611 | ||||||
Amgen Inc. | 570 | 109,890 | ||||||
Biogen Inc.(a) | 65 | 19,778 | ||||||
Celgene Corp.(a) | 500 | 35,800 | ||||||
Gilead Sciences Inc. | 573 | 39,067 | ||||||
|
| |||||||
288,146 | ||||||||
Building Products — 0.2% | ||||||||
Fortune Brands Home & Security Inc. | 92 | 4,124 | ||||||
Johnson Controls International PLC | 346 | 11,062 | ||||||
Masco Corp. | 130 | 3,900 | ||||||
|
| |||||||
19,086 | ||||||||
Capital Markets — 3.2% | ||||||||
Ameriprise Financial Inc. | 129 | 16,414 | ||||||
Bank of New York Mellon Corp. (The) | 571 | 27,025 | ||||||
BlackRock Inc.(b) | 47 | 19,337 | ||||||
Charles Schwab Corp. (The) | 68 | 3,144 | ||||||
CME Group Inc. | 49 | 8,979 | ||||||
Franklin Resources Inc. | 215 | 6,557 | ||||||
Goldman Sachs Group Inc. (The) | 226 | 50,934 | ||||||
Intercontinental Exchange Inc. | 178 | 13,713 | ||||||
Invesco Ltd. | 232 | 5,037 | ||||||
Legg Mason Inc. | 124 | 3,499 | ||||||
Moody’s Corp. | 33 | 4,801 | ||||||
Morgan Stanley | 956 | 43,651 | ||||||
MSCI Inc. | 26 | 3,910 | ||||||
Northern Trust Corp. | 72 | 6,773 | ||||||
S&P Global Inc. | 86 | 15,680 | ||||||
State Street Corp. | 192 | 13,200 | ||||||
T Rowe Price Group Inc. | 87 | 8,438 | ||||||
|
| |||||||
251,092 | ||||||||
Chemicals — 1.3% | ||||||||
Air Products & Chemicals Inc. | 48 | 7,409 | ||||||
Albemarle Corp. | 37 | 3,671 | ||||||
Celanese Corp. | 64 | 6,204 | ||||||
DowDuPont Inc. | 636 | 34,293 | ||||||
Eastman Chemical Co. | 49 | 3,839 | ||||||
Ecolab Inc. | 56 | 8,577 | ||||||
Linde PLC | 50 | 8,274 | ||||||
LyondellBasell Industries NV, Class A | 186 | 16,604 | ||||||
PPG Industries Inc. | 145 | 15,238 | ||||||
|
| |||||||
104,109 | ||||||||
Commercial Services & Supplies — 0.2% | ||||||||
Republic Services Inc. | 88 | 6,396 | ||||||
Waste Management Inc. | 132 | 11,810 | ||||||
|
| |||||||
18,206 | ||||||||
Communications Equipment — 2.1% | ||||||||
Cisco Systems Inc. | 3,080 | 140,910 | ||||||
F5 Networks Inc.(a) | 30 | 5,258 | ||||||
Juniper Networks Inc. | 335 | 9,805 | ||||||
Motorola Solutions Inc. | 44 | 5,393 | ||||||
|
| |||||||
161,366 | ||||||||
Consumer Finance — 1.2% | ||||||||
Ally Financial Inc. | 289 | 7,344 |
S C H E D U L E O F I N V E S T M E N T S | 27 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® U.S. Dividend and Buyback ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Consumer Finance (continued) |
| |||||||
American Express Co. | 293 | $ | 30,100 | |||||
Capital One Financial Corp. | 208 | 18,574 | ||||||
Discover Financial Services | 298 | 20,762 | ||||||
Navient Corp. | 305 | 3,532 | ||||||
Synchrony Financial | 507 | 14,642 | ||||||
|
| |||||||
94,954 | ||||||||
Containers & Packaging — 0.2% | ||||||||
International Paper Co. | 175 | 7,938 | ||||||
Sealed Air Corp. | 241 | 7,799 | ||||||
WestRock Co. | 73 | 3,137 | ||||||
|
| |||||||
18,874 | ||||||||
Distributors — 0.1% | ||||||||
Genuine Parts Co. | 47 | 4,602 | ||||||
|
| |||||||
Diversified Consumer Services — 0.0% |
| |||||||
H&R Block Inc. | 119 | 3,158 | ||||||
|
| |||||||
Diversified Financial Services — 0.1% |
| |||||||
Voya Financial Inc. | 121 | 5,295 | ||||||
|
| |||||||
Diversified Telecommunication Services — 3.1% |
| |||||||
AT&T Inc. | 4,322 | 132,599 | ||||||
CenturyLink Inc. | 874 | 18,039 | ||||||
Verizon Communications Inc. | 1,620 | 92,486 | ||||||
|
| |||||||
243,124 | ||||||||
Electric Utilities — 1.2% | ||||||||
American Electric Power Co. Inc. | 154 | 11,297 | ||||||
Duke Energy Corp. | 241 | 19,914 | ||||||
Edison International | 107 | 7,425 | ||||||
Entergy Corp. | 64 | 5,373 | ||||||
Eversource Energy | 95 | 6,010 | ||||||
Exelon Corp. | 131 | 5,739 | ||||||
FirstEnergy Corp. | 164 | 6,114 | ||||||
NextEra Energy Inc. | 94 | 16,215 | ||||||
PPL Corp. | 254 | 7,722 | ||||||
Xcel Energy Inc. | 146 | 7,155 | ||||||
|
| |||||||
92,964 | ||||||||
Electrical Equipment — 0.5% | ||||||||
Eaton Corp. PLC | 227 | 16,269 | ||||||
Emerson Electric Co. | 223 | 15,137 | ||||||
Rockwell Automation Inc. | 62 | 10,214 | ||||||
|
| |||||||
41,620 | ||||||||
Electronic Equipment, Instruments & Components — 0.8% |
| |||||||
Amphenol Corp., Class A | 86 | 7,697 | ||||||
CDW Corp./DE | 61 | 5,491 | ||||||
Corning Inc. | 1,071 | 34,218 | ||||||
Jabil Inc. | 128 | 3,165 | ||||||
TE Connectivity Ltd. | 113 | 8,523 | ||||||
|
| |||||||
59,094 | ||||||||
Energy Equipment & Services — 0.4% |
| |||||||
Baker Hughes a GE Co. | 80 | 2,135 | ||||||
Halliburton Co. | 146 | 5,064 | ||||||
Schlumberger Ltd. | 475 | 24,372 | ||||||
|
| |||||||
31,571 | ||||||||
Entertainment — 1.3% | ||||||||
Electronic Arts Inc.(a) | 46 | 4,185 | ||||||
Twenty-First Century Fox Inc., Class A, NVS | 112 | 5,098 | ||||||
Walt Disney Co. (The) | 792 | 90,946 | ||||||
|
| |||||||
100,229 |
Security | Shares | Value | ||||||
Equity Real Estate Investment Trusts (REITs) — 2.0% |
| |||||||
American Tower Corp. | 104 | $ | 16,204 | |||||
AvalonBay Communities Inc. | 37 | 6,489 | ||||||
Boston Properties Inc. | 35 | 4,227 | ||||||
Colony Capital Inc. | 1,040 | 6,105 | ||||||
Equity Residential | 103 | 6,691 | ||||||
Essex Property Trust Inc. | 16 | 4,013 | ||||||
HCP Inc. | 246 | 6,777 | ||||||
Host Hotels & Resorts Inc. | 264 | 5,045 | ||||||
Macerich Co. (The) | 58 | 2,994 | ||||||
Mid-America Apartment Communities Inc. | 40 | 3,908 | ||||||
Omega Healthcare Investors Inc. | 142 | 4,736 | ||||||
Prologis Inc. | 154 | 9,928 | ||||||
Public Storage | 50 | 10,274 | ||||||
SBA Communications Corp.(a) | 47 | 7,622 | ||||||
Simon Property Group Inc.(c) | 141 | 25,876 | ||||||
SL Green Realty Corp. | 77 | 7,027 | ||||||
Ventas Inc. | 83 | 4,817 | ||||||
Vornado Realty Trust | 54 | 3,676 | ||||||
Welltower Inc. | 116 | 7,664 | ||||||
Weyerhaeuser Co. | 296 | 7,883 | ||||||
|
| |||||||
151,956 | ||||||||
Food & Staples Retailing — 2.2% | ||||||||
Costco Wholesale Corp. | 51 | 11,660 | ||||||
Kroger Co. (The) | 633 | 18,838 | ||||||
Sysco Corp. | 239 | 17,048 | ||||||
Walgreens Boots Alliance Inc. | 832 | 66,369 | ||||||
Walmart Inc. | 587 | 58,864 | ||||||
|
| |||||||
172,779 | ||||||||
Food Products — 1.5% | ||||||||
Archer-Daniels-Midland Co. | 227 | 10,726 | ||||||
Campbell Soup Co. | 118 | 4,414 | ||||||
Conagra Brands Inc. | 346 | 12,318 | ||||||
General Mills Inc. | 362 | 15,855 | ||||||
Hershey Co. (The) | 64 | 6,858 | ||||||
JM Smucker Co. (The) | 62 | 6,716 | ||||||
Kellogg Co. | 94 | 6,155 | ||||||
Kraft Heinz Co. (The) | 231 | 12,698 | ||||||
Mondelez International Inc., Class A | 772 | 32,408 | ||||||
Tyson Foods Inc., Class A | 191 | 11,445 | ||||||
|
| |||||||
119,593 | ||||||||
Health Care Equipment & Supplies — 1.1% |
| |||||||
Abbott Laboratories | 287 | 19,786 | ||||||
Baxter International Inc. | 136 | 8,501 | ||||||
DENTSPLY SIRONA Inc. | 101 | 3,498 | ||||||
Edwards Lifesciences Corp.(a) | 36 | 5,314 | ||||||
Intuitive Surgical Inc.(a) | 14 | 7,296 | ||||||
Medtronic PLC | 418 | 37,545 | ||||||
Stryker Corp. | 41 | 6,651 | ||||||
|
| |||||||
88,591 | ||||||||
Health Care Providers & Services — 3.3% |
| |||||||
Aetna Inc. | 124 | 24,602 | ||||||
AmerisourceBergen Corp. | 94 | 8,272 | ||||||
Anthem Inc. | 72 | 19,841 | ||||||
Cardinal Health Inc. | 215 | 10,879 | ||||||
Cigna Corp. | 76 | 16,250 | ||||||
CVS Health Corp. | 514 | 37,208 | ||||||
DaVita Inc.(a) | 122 | 8,215 | ||||||
Express Scripts Holding Co.(a) | 253 | 24,533 | ||||||
HCA Healthcare Inc. | 122 | 16,291 |
28 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® U.S. Dividend and Buyback ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Health Care Providers & Services (continued) |
| |||||||
Henry Schein Inc.(a)(c) | 61 | $ | 5,063 | |||||
Humana Inc. | 55 | 17,623 | ||||||
McKesson Corp. | 159 | 19,837 | ||||||
Quest Diagnostics Inc. | 51 | 4,800 | ||||||
UnitedHealth Group Inc. | 164 | 42,861 | ||||||
|
| |||||||
256,275 | ||||||||
Hotels, Restaurants & Leisure — 3.1% |
| |||||||
Carnival Corp. | 197 | 11,040 | ||||||
Darden Restaurants Inc. | 44 | 4,688 | ||||||
Domino’s Pizza Inc. | 28 | 7,526 | ||||||
Hilton Worldwide Holdings Inc. | 140 | 9,964 | ||||||
Hyatt Hotels Corp., Class A | 89 | 6,159 | ||||||
Las Vegas Sands Corp. | 171 | 8,726 | ||||||
Marriott International Inc./MD, Class A | 181 | 21,157 | ||||||
McDonald’s Corp. | 480 | 84,912 | ||||||
Royal Caribbean Cruises Ltd. | 33 | 3,456 | ||||||
Six Flags Entertainment Corp. | 74 | 3,986 | ||||||
Starbucks Corp. | 802 | 46,732 | ||||||
Yum! Brands Inc. | 377 | 34,085 | ||||||
|
| |||||||
242,431 | ||||||||
Household Durables — 0.3% | ||||||||
Newell Brands Inc. | 205 | 3,255 | ||||||
NVR Inc.(a) | 2 | 4,478 | ||||||
PulteGroup Inc. | 239 | 5,872 | ||||||
Whirlpool Corp. | 89 | 9,769 | ||||||
|
| |||||||
23,374 | ||||||||
Household Products — 2.4% | ||||||||
Church & Dwight Co. Inc. | 115 | 6,828 | ||||||
Clorox Co. (The) | 40 | 5,938 | ||||||
Colgate-Palmolive Co. | 397 | 23,641 | ||||||
Kimberly-Clark Corp. | 177 | 18,461 | ||||||
Procter & Gamble Co. (The) | 1,440 | 127,699 | ||||||
|
| |||||||
182,567 | ||||||||
Industrial Conglomerates — 2.0% | ||||||||
3M Co. | 242 | 46,043 | ||||||
General Electric Co. | 7,121 | 71,922 | ||||||
Honeywell International Inc. | 243 | 35,191 | ||||||
|
| |||||||
153,156 | ||||||||
Insurance — 3.7% | ||||||||
Aflac Inc. | 372 | 16,022 | ||||||
Allstate Corp. (The) | 179 | 17,134 | ||||||
American International Group Inc. | 1,244 | 51,365 | ||||||
Aon PLC | 153 | 23,896 | ||||||
Assurant Inc. | 42 | 4,083 | ||||||
Assured Guaranty Ltd. | 118 | 4,718 | ||||||
Axis Capital Holdings Ltd. | 71 | 3,961 | ||||||
Chubb Ltd. | 131 | 16,363 | ||||||
Everest Re Group Ltd. | 15 | 3,268 | ||||||
Fidelity National Financial Inc. | 92 | 3,077 | ||||||
Hartford Financial Services Group Inc. (The) | 233 | 10,583 | ||||||
Lincoln National Corp. | 132 | 7,945 | ||||||
Marsh & McLennan Companies Inc. | 170 | 14,408 | ||||||
MetLife Inc. | 876 | 36,082 | ||||||
Principal Financial Group Inc. | 107 | 5,036 | ||||||
Prudential Financial Inc. | 292 | 27,384 | ||||||
Torchmark Corp. | 41 | 3,471 | ||||||
Travelers Companies Inc. (The) | 170 | 21,272 | ||||||
Unum Group | 136 | 4,931 | ||||||
White Mountains Insurance Group Ltd. | 2 | 1,773 |
Security | Shares | Value | ||||||
Insurance (continued) | ||||||||
Willis Towers Watson PLC | 50 | $ | 7,158 | |||||
|
| |||||||
283,930 | ||||||||
Interactive Media & Services — 0.7% | ||||||||
Alphabet Inc., Class A(a) | 14 | 15,268 | ||||||
Alphabet Inc., Class C, NVS(a) | 14 | 15,075 | ||||||
Facebook Inc., Class A(a) | 175 | 26,563 | ||||||
|
| |||||||
56,906 | ||||||||
Internet & Direct Marketing Retail — 0.7% |
| |||||||
Booking Holdings Inc.(a) | 10 | 18,746 | ||||||
eBay Inc.(a) | 729 | 21,163 | ||||||
Expedia Group Inc. | 35 | 4,390 | ||||||
Qurate Retail Inc.(a) | 357 | 7,832 | ||||||
|
| |||||||
52,131 | ||||||||
IT Services — 3.9% | ||||||||
Accenture PLC, Class A | 199 | 31,366 | ||||||
Alliance Data Systems Corp. | 18 | 3,711 | ||||||
Automatic Data Processing Inc. | 135 | 19,451 | ||||||
Cognizant Technology Solutions Corp., Class A | 226 | 15,601 | ||||||
Fidelity National Information Services Inc. | 59 | 6,142 | ||||||
Fiserv Inc.(a) | 140 | 11,102 | ||||||
International Business Machines Corp. | 604 | 69,720 | ||||||
Mastercard Inc., Class A | 197 | 38,941 | ||||||
Paychex Inc. | 103 | 6,745 | ||||||
PayPal Holdings Inc.(a) | 145 | 12,208 | ||||||
VeriSign Inc.(a) | 34 | 4,846 | ||||||
Visa Inc., Class A | 523 | 72,095 | ||||||
Western Union Co. (The) | 314 | 5,665 | ||||||
Worldpay Inc., Class A(a) | 76 | 6,980 | ||||||
|
| |||||||
304,573 | ||||||||
Leisure Products — 0.1% | ||||||||
Hasbro Inc. | 42 | 3,852 | ||||||
|
| |||||||
Life Sciences Tools & Services — 0.2% |
| |||||||
IQVIA Holdings Inc.(a) | 111 | 13,645 | ||||||
Mettler-Toledo International Inc.(a) | 7 | 3,828 | ||||||
|
| |||||||
17,473 | ||||||||
Machinery —1.0% | ||||||||
Allison Transmission Holdings Inc. | 136 | 5,995 | ||||||
Caterpillar Inc. | 138 | 16,742 | ||||||
Cummins Inc. | 65 | 8,885 | ||||||
Deere & Co. | 41 | 5,553 | ||||||
Illinois Tool Works Inc. | 152 | 19,391 | ||||||
Ingersoll-Rand PLC | 107 | 10,265 | ||||||
PACCAR Inc. | 57 | 3,261 | ||||||
Parker-Hannifin Corp. | 34 | 5,155 | ||||||
Terex Corp. | 135 | 4,508 | ||||||
|
| |||||||
79,755 | ||||||||
Media — 2.0% | ||||||||
CBS Corp., Class B, NVS | 339 | 19,442 | ||||||
Charter Communications Inc., Class A(a) | 173 | 55,424 | ||||||
Comcast Corp., Class A | 1,408 | 53,701 | ||||||
Discovery Inc., Class C, NVS(a) | 141 | 4,133 | ||||||
Interpublic Group of Companies Inc. (The) | 229 | 5,304 | ||||||
Liberty Media Corp.-Liberty SiriusXM, Class C, NVS(a) | 137 | 5,654 | ||||||
Omnicom Group Inc. | 136 | 10,107 | ||||||
Sirius XM Holdings Inc.(c) | 631 | 3,798 | ||||||
|
| |||||||
157,563 |
S C H E D U L E O F I N V E S T M E N T S | 29 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® U.S. Dividend and Buyback ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Metals & Mining — 0.1% | ||||||||
Nucor Corp. | 70 | $ | 4,138 | |||||
|
| |||||||
Multi-Utilities — 0.3% | ||||||||
Ameren Corp. | 65 | 4,198 | ||||||
CenterPoint Energy Inc. | 157 | 4,240 | ||||||
Public Service Enterprise Group Inc. | 144 | 7,694 | ||||||
WEC Energy Group Inc. | 103 | 7,045 | ||||||
|
| |||||||
23,177 | ||||||||
Multiline Retail — 0.6% | ||||||||
Dollar General Corp. | 95 | 10,581 | ||||||
Kohl’s Corp. | 87 | 6,588 | ||||||
Macy’s Inc. | 133 | 4,561 | ||||||
Target Corp. | 339 | 28,351 | ||||||
|
| |||||||
50,081 | ||||||||
Oil, Gas & Consumable Fuels — 4.3% |
| |||||||
Anadarko Petroleum Corp. | 113 | 6,012 | ||||||
Apache Corp. | 89 | 3,367 | ||||||
Chevron Corp. | 565 | 63,082 | ||||||
ConocoPhillips | 435 | 30,406 | ||||||
EOG Resources Inc. | 36 | 3,792 | ||||||
Exxon Mobil Corp. | 1,607 | 128,046 | ||||||
Kinder Morgan Inc./DE | 634 | 10,791 | ||||||
Marathon Petroleum Corp. | 286 | 20,149 | ||||||
Occidental Petroleum Corp. | 280 | 18,779 | ||||||
ONEOK Inc. | 55 | 3,608 | ||||||
Phillips 66 | 246 | 25,294 | ||||||
Valero Energy Corp. | 205 | 18,673 | ||||||
|
| |||||||
331,999 | ||||||||
Personal Products — 0.1% | ||||||||
Estee Lauder Companies Inc. (The), Class A | 59 | 8,109 | ||||||
|
| |||||||
Pharmaceuticals — 6.4% | ||||||||
Allergan PLC | 420 | 66,364 | ||||||
Bristol-Myers Squibb Co. | 590 | 29,819 | ||||||
Eli Lilly & Co. | 282 | 30,580 | ||||||
Johnson & Johnson | 1,042 | 145,869 | ||||||
Merck &Co. Inc. | 1,202 | 88,479 | ||||||
Pfizer Inc. | 2,977 | 128,190 | ||||||
Zoetis Inc. | 72 | 6,491 | ||||||
|
| |||||||
495,792 | ||||||||
Professional Services — 0.2% | ||||||||
IHS Markit Ltd.(a) | 200 | 10,506 | ||||||
ManpowerGroup Inc. | 42 | 3,204 | ||||||
Nielsen Holdings PLC | 199 | 5,170 | ||||||
|
| |||||||
18,880 | ||||||||
Road & Rail — 1.5% |
| |||||||
CSX Corp. | 349 | 24,032 | ||||||
Kansas City Southern | 36 | 3,670 | ||||||
Norfolk Southern Corp. | 95 | 15,944 | ||||||
Union Pacific Corp. | 494 | 72,233 | ||||||
|
| |||||||
115,879 | ||||||||
Semiconductors & Semiconductor Equipment — 3.5% |
| |||||||
Analog Devices Inc. | 55 | 4,604 | ||||||
Applied Materials Inc. | 723 | 23,772 | ||||||
Broadcom Inc. | 113 | 25,255 | ||||||
Intel Corp. | 2,011 | 94,276 | ||||||
KLA-Tencor Corp. | 34 | 3,112 | ||||||
Lam Research Corp. | 107 | 15,165 | ||||||
Marvell Technology Group Ltd. | 176 | 2,888 |
Security | Shares | Value | ||||||
Semiconductors & Semiconductor Equipment (continued) |
| |||||||
Maxim Integrated Products Inc. | 106 | $ | 5,302 | |||||
NVIDIA Corp. | 41 | 8,644 | ||||||
QUALCOMM Inc. | 589 | 37,042 | ||||||
Skyworks Solutions Inc. | 88 | 7,635 | ||||||
Texas Instruments Inc. | 377 | 34,997 | ||||||
Xilinx Inc. | 101 | 8,623 | ||||||
|
| |||||||
271,315 | ||||||||
Software — 3.8% | ||||||||
Adobe Inc.(a) | 44 | 10,813 | ||||||
ANSYS Inc.(a) | 21 | 3,141 | ||||||
Autodesk Inc.(a) | 35 | 4,524 | ||||||
CA Inc. | 101 | 4,480 | ||||||
Cadence Design Systems Inc.(a) | 78 | 3,476 | ||||||
CDK Global Inc. | 100 | 5,724 | ||||||
Citrix Systems Inc.(a) | 81 | 8,300 | ||||||
Microsoft Corp. | 1,902 | 203,153 | ||||||
Oracle Corp. | 999 | 48,791 | ||||||
VMware Inc., Class A(a) | 27 | 3,818 | ||||||
|
| |||||||
296,220 | ||||||||
Specialty Retail — 3.0% | ||||||||
AutoZone Inc.(a) | 12 | 8,802 | ||||||
Bed Bath & Beyond Inc. | 225 | 3,091 | ||||||
Best Buy Co. Inc. | 193 | 13,541 | ||||||
CarMax Inc.(a) | 67 | 4,550 | ||||||
Foot Locker Inc. | 92 | 4,337 | ||||||
Home Depot Inc. (The) | 538 | 94,623 | ||||||
L Brands Inc. | 284 | 9,207 | ||||||
Lowe’s Companies Inc. | 359 | 34,184 | ||||||
O’Reilly Automotive Inc.(a) | 48 | 15,396 | ||||||
Ross Stores Inc. | 114 | 11,286 | ||||||
Signet Jewelers Ltd. | 109 | 6,109 | ||||||
TJX Companies Inc. (The) | 203 | 22,306 | ||||||
Tractor Supply Co. | 58 | 5,330 | ||||||
|
| |||||||
232,762 | ||||||||
Technology Hardware, Storage & Peripherals — 5.9% |
| |||||||
Apple Inc. | 1,813 | 396,793 | ||||||
Hewlett Packard Enterprise Co. | 1,647 | 25,117 | ||||||
HP Inc. | 896 | 21,630 | ||||||
NetApp Inc. | 106 | 8,320 | ||||||
Seagate Technology PLC | 154 | 6,195 | ||||||
|
| |||||||
458,055 | ||||||||
Textiles, Apparel & Luxury Goods — 0.8% |
| |||||||
Hanesbrands Inc. | 187 | 3,209 | ||||||
Michael Kors Holdings Ltd.(a) | 67 | 3,712 | ||||||
NIKE Inc., Class B | 524 | 39,321 | ||||||
VF Corp. | 149 | 12,349 | ||||||
|
| |||||||
58,591 | ||||||||
Tobacco — 1.8% |
| |||||||
Altria Group Inc. | 1,120 | 72,845 | ||||||
Philip Morris International Inc. | 782 | 68,871 | ||||||
|
| |||||||
141,716 | ||||||||
Trading Companies & Distributors — 0.1% |
| |||||||
Fastenal Co. | 73 | 3,753 | ||||||
WW Grainger Inc. | 19 | 5,395 | ||||||
|
| |||||||
9,148 |
30 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® U.S. Dividend and Buyback ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Transportation Infrastructure — 0.0% | ||||||||
Macquarie Infrastructure Corp. | 95 | $ | 3,510 | |||||
|
| |||||||
Total Common Stocks — 99.9% | 7,774,044 | |||||||
|
| |||||||
Short-Term Investments | ||||||||
Money Market Funds — 0.7% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 2.36%(b)(d)(e) | 31,411 | 31,417 | ||||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 2.11%(b)(d) | 19,192 | 19,192 | ||||||
|
| |||||||
50,609 | ||||||||
|
| |||||||
Total Short-Term Investments — 0.7% |
| |||||||
(Cost: $50,609) | 50,609 | |||||||
|
| |||||||
Total Investments in Securities — 100.6% |
| |||||||
(Cost: $7,933,941) | 7,824,653 | |||||||
Other Assets, Less Liabilities — (0.6)% |
| (43,123 | ) | |||||
|
| |||||||
Net Assets — 100.0% | $ | 7,781,530 | ||||||
|
|
(a) | Non-income producing security. |
(b) | Affiliate of the Fund. |
(c) | All or a portion of this security is on loan. |
(d) | Annualized 7-day yield as of period-end. |
(e) | All or a portion of this security was purchased with cash collateral received from loaned securities. |
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of
Section 2(a)(3) of the 1940 Act, were as follows:
Affiliated Issuer | | Shares Held at 04/30/18 | | | Shares Purchased |
| | Shares Sold | | | Shares Held at 10/31/18 | | | Value at 10/31/18 | | Income | | Net Realized Gain (Loss | )(a) | | Change in Unrealized Appreciation (Depreciation | ) | ||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | 12,825 | 18,586 | (b) | — | 31,411 | $ | 31,417 | $ | 56 | (c) | $ | 8 | $ | — | ||||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | 14,269 | 4,923 | (b) | — | 19,192 | 19,192 | 147 | — | — | |||||||||||||||||||||||
BlackRock Inc. | 42 | 14 | (9 | ) | 47 | 19,337 | 246 | (61 | ) | (4,860 | ) | |||||||||||||||||||||
PNC Financial Services Group Inc. (The) | 203 | 77 | (37 | ) | 243 | 31,223 | 443 | 350 | (4,419 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 101,169 | $ | 892 | $ | 297 | $ | (9,279 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
(b) | Net of purchases and sales. |
(c) | Includes securities lending income earned from the reinvestment of cash collateral from loaned securities (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities, and less fees paid to BTC as securities lending agent. |
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, refer to the Notes to Financial Statements.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $ | 7,774,044 | $ | — | $ | — | $ | 7,774,044 | ||||||||
Money Market Funds | 50,609 | — | — | 50,609 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 7,824,653 | $ | — | $ | — | $ | 7,824,653 | |||||||||
|
|
|
|
|
|
|
|
S C H E D U L E O F I N V E S T M E N T S | 31 |
Statements of Assets and Liabilities (unaudited)
October 31, 2018 |
iShares Core Dividend Growth ETF | iShares Core High | iShares International Select Dividend ETF | iShares Select Dividend ETF | |||||||||||||
| ||||||||||||||||
ASSETS | ||||||||||||||||
Investments in securities, at value (including securities on loan)(a): |
| |||||||||||||||
Unaffiliated(b) | $ | 4,493,116,484 | $ | 6,145,575,571 | $ | 4,078,575,642 | $ | 16,551,078,414 | ||||||||
Affiliated(c) | 59,845,411 | 22,878,208 | 104,242,616 | 23,990,756 | ||||||||||||
Cash | — | — | — | 2,330,664 | ||||||||||||
Cash pledged: | ||||||||||||||||
Futures contracts(d) | 739,400 | 467,600 | 1,576,201 | 1,643,200 | ||||||||||||
Foreign currency, at value(e) | — | — | 11,188,758 | — | ||||||||||||
Receivables: | ||||||||||||||||
Investments sold | — | — | 139,203 | — | ||||||||||||
Securities lending income — Affiliated | — | 10,173 | 1,212 | — | ||||||||||||
Variation margin on futures contracts | 157,380 | 99,330 | 429,924 | 337,240 | ||||||||||||
Capital shares sold | 614,731 | 50,156 | — | — | ||||||||||||
Dividends | 5,004,838 | 9,988,657 | 5,611,189 | 19,833,667 | ||||||||||||
Tax reclaims | — | — | 5,148,445 | — | ||||||||||||
Foreign withholding tax claims | — | — | 4,418,791 | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total assets | 4,559,478,244 | 6,179,069,695 | 4,211,331,981 | 16,599,213,941 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
LIABILITIES | ||||||||||||||||
Collateral on securities loaned, at value | — | 4,447,052 | 5,236,428 | — | ||||||||||||
Payables: | ||||||||||||||||
Investments purchased | 471,709 | 17,030,521 | — | — | ||||||||||||
Capital shares redeemed | — | 24,443 | 650,828 | 23,119 | ||||||||||||
Securities related to in-kind transactions | — | — | 139,203 | — | ||||||||||||
Investment advisory fees | 299,055 | 409,776 | 1,806,237 | 5,528,982 | ||||||||||||
Professional fees | — | — | 44,188 | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total liabilities | 770,764 | 21,911,792 | 7,876,884 | 5,552,101 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
NET ASSETS | $ | 4,558,707,480 | $ | 6,157,157,903 | $ | 4,203,455,097 | $ | 16,593,661,840 | ||||||||
|
|
|
|
|
|
|
| |||||||||
NET ASSETS CONSIST OF: | ||||||||||||||||
Paid-in capital | $ | 4,285,266,540 | $ | 6,151,356,781 | $ | 4,885,896,724 | $ | 14,674,811,277 | ||||||||
Accumulated earnings (loss) | 273,440,940 | 5,801,122 | (682,441,627 | ) | 1,918,850,563 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
NET ASSETS | $ | 4,558,707,480 | $ | 6,157,157,903 | $ | 4,203,455,097 | $ | 16,593,661,840 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Shares outstanding | 130,050,000 | 69,550,000 | 136,250,000 | 173,050,000 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net asset value | $ | 35.05 | $ | 88.53 | $ | 30.85 | $ | 95.89 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Shares authorized | Unlimited | Unlimited | Unlimited | Unlimited | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Par value | None | None | None | None | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
(a) Securities loaned, at value | $ | — | $ | 4,229,761 | $ | 4,971,643 | $ | — | ||||||||
(b) Investments, at cost — Unaffiliated | $ | 4,258,501,705 | $ | 5,821,747,036 | $ | 4,192,816,989 | $ | 14,502,969,334 | ||||||||
(c) Investments, at cost — Affiliated | $ | 63,580,848 | $ | 22,878,552 | $ | 113,229,946 | $ | 23,990,756 | ||||||||
(d) Cash collateral pledged, at cost | $ | — | $ | — | $ | 1,611,083 | $ | — | ||||||||
(e) Foreign currency, at cost | $ | — | $ | — | $ | 11,331,195 | $ | — |
See notes to financial statements.
32 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statements of Assets and Liabilities (unaudited) (continued)
October 31, 2018 |
iShares U.S. Dividend | ||||
| ||||
ASSETS | ||||
Investments in securities, at value (including securities on loan)(a): | ||||
Unaffiliated(b) | $ | 7,723,484 | ||
Affiliated(c) | 101,169 | |||
Receivables: | ||||
Securities lending income — Affiliated | 6 | |||
Dividends | 9,643 | |||
|
| |||
Total assets | 7,834,302 | |||
|
| |||
LIABILITIES | ||||
Collateral on securities loaned, at value | 31,411 | |||
Payables: | ||||
Investments purchased | 19,671 | |||
Investment advisory fees | 1,690 | |||
|
| |||
Total liabilities | 52,772 | |||
|
| |||
NET ASSETS | $ | 7,781,530 | ||
|
| |||
NET ASSETS CONSIST OF: | ||||
Paid-in capital | $ | 7,795,056 | ||
Accumulated loss | (13,526 | ) | ||
|
| |||
NET ASSETS | $ | 7,781,530 | ||
|
| |||
Shares outstanding | 300,000 | |||
|
| |||
Net asset value | $ | 25.94 | ||
|
| |||
Shares authorized | Unlimited | |||
|
| |||
Par value | None | |||
|
| |||
(a) Securities loaned, at value | $ | 30,554 | ||
(b) Investments, at cost — Unaffiliated | $ | 7,823,277 | ||
(c) Investments, at cost — Affiliated | $ | 110,664 |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S | 33 |
Statements of Operations (unaudited)
Six Months Ended October 31, 2018 |
iShares Core Dividend | iShares Core High Dividend ETF | iShares Dividend ETF | iShares Select Dividend ETF | |||||||||||||
| ||||||||||||||||
INVESTMENT INCOME | ||||||||||||||||
Dividends — Unaffiliated | $ | 50,214,855 | $ | 104,872,451 | $ | 129,920,721 | $ | 324,383,664 | ||||||||
Dividends — Affiliated | 601,713 | 137,178 | 25,901 | 332,719 | ||||||||||||
Interest — Unaffiliated | 3,409 | 6,383 | — | 16,704 | ||||||||||||
Securities lending income — Affiliated — net | — | 80,842 | 1,212 | — | ||||||||||||
Foreign taxes withheld | — | — | (10,601,850 | ) | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total investment income | 50,819,977 | 105,096,854 | 119,345,984 | 324,733,087 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
EXPENSES | ||||||||||||||||
Investment advisory fees | 1,606,890 | 2,375,717 | 11,329,248 | 33,082,086 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total expenses | 1,606,890 | 2,375,717 | 11,329,248 | 33,082,086 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net investment income | 49,213,087 | 102,721,137 | 108,016,736 | 291,651,001 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||
Investments — Unaffiliated | (9,508,447 | ) | (66,620,022 | ) | (31,945,214 | ) | (33,944,601 | ) | ||||||||
Investments — Affiliated | (67,683 | ) | 107 | 62,666 | — | |||||||||||
In-kind redemptions — Unaffiliated | 71,712,773 | 50,977,960 | 38,956,264 | 216,652,877 | ||||||||||||
In-kind redemptions — Affiliated | 105,705 | — | 2,738,679 | — | ||||||||||||
Futures contracts | 1,157,388 | 192,765 | 158,789 | 2,473,336 | ||||||||||||
Foreign currency transactions | — | — | (1,791,806 | ) | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net realized gain (loss) | 63,399,736 | (15,449,190 | ) | 8,179,378 | 185,181,612 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
Investments — Unaffiliated | 45,817,139 | 286,421,214 | (425,509,735 | ) | (264,989,889 | ) | ||||||||||
Investments — Affiliated | (7,987,810 | ) | (70 | ) | (15,287,981 | ) | — | |||||||||
Futures contracts | (667,365 | ) | (316,044 | ) | (2,097,774 | ) | (1,864,645 | ) | ||||||||
Foreign currency translations | — | — | (475,400 | ) | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net change in unrealized appreciation (depreciation) | 37,161,964 | 286,105,100 | (443,370,890 | ) | (266,854,534 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net realized and unrealized gain (loss) | 100,561,700 | 270,655,910 | (435,191,512 | ) | (81,672,922 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | 149,774,787 | $ | 373,377,047 | $ | (327,174,776 | ) | $ | 209,978,079 | |||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
34 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statements of Operations (unaudited) (continued)
Six Months Ended October 31, 2018 |
iShares U.S. Dividend and Buyback | ||||
ETF | (a) | |||
| ||||
INVESTMENT INCOME | ||||
Dividends — Unaffiliated | $ | 98,325 | ||
Dividends — Affiliated | 836 | |||
Securities lending income — Affiliated — net | 56 | |||
Foreign taxes withheld | (3 | ) | ||
|
| |||
Total investment income | 99,214 | |||
|
| |||
EXPENSES | ||||
Investment advisory fees | 9,903 | |||
|
| |||
Total expenses | 9,903 | |||
|
| |||
Net investment income | 89,311 | |||
|
| |||
REALIZED AND UNREALIZED GAIN (LOSS) | ||||
Net realized gain (loss) from: | ||||
Investments — Unaffiliated | (14,642 | ) | ||
Investments — Affiliated | (92 | ) | ||
In-kind redemptions — Unaffiliated | 134,695 | |||
In-kind redemptions — Affiliated | 389 | |||
|
| |||
Net realized gain | 120,350 | |||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments — Unaffiliated | 56,064 | |||
Investments — Affiliated | (9,279 | ) | ||
|
| |||
Net change in unrealized appreciation (depreciation) | 46,785 | |||
|
| |||
Net realized and unrealized gain | 167,135 | |||
|
| |||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 256,446 | ||
|
|
(a) | For the period from November 07, 2017 (commencement of operations) to October 31, 2018. |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S | 35 |
Statements of Changes in Net Assets
|
iShares Core Dividend Growth ETF | iShares Core High Dividend ETF | |||||||||||||||
Six Months Ended (unaudited) | Year Ended 04/30/18 | Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS | ||||||||||||||||
Net investment income | $ | 49,213,087 | $ | 55,484,703 | $ | 102,721,137 | $ | 223,959,151 | ||||||||
Net realized gain (loss) | 63,399,736 | 80,603,216 | (15,449,190 | ) | 521,739,502 | |||||||||||
Net change in unrealized appreciation (depreciation) | 37,161,964 | 86,795,390 | 286,105,100 | (411,613,823 | ) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 149,774,787 | 222,883,309 | 373,377,047 | 334,084,830 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS(a) | ||||||||||||||||
Decrease in net assets resulting from distributions to shareholders | (47,443,893 | ) | (53,281,964 | ) | (105,255,883 | ) | (224,704,812 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS | ||||||||||||||||
Net increase (decrease) in net assets derived from capital share transactions | 1,112,967,013 | 1,743,811,020 | (118,707,562 | ) | (734,314,483 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
NET ASSETS(a) | ||||||||||||||||
Total increase (decrease) in net assets | 1,215,297,907 | 1,913,412,365 | 149,413,602 | (624,934,465 | ) | |||||||||||
Beginning of period | 3,343,409,573 | 1,429,997,208 | 6,007,744,301 | 6,632,678,766 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 4,558,707,480 | $ | 3,343,409,573 | $ | 6,157,157,903 | $ | 6,007,744,301 | ||||||||
|
|
|
|
|
|
|
|
(a) | Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 13 for this prior year information. |
See notes to financial statements.
36 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statements of Changes in Net Assets (continued)
|
iShares International Select Dividend ETF | iShares Select Dividend ETF | |||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS | ||||||||||||||||
Net investment income | $ | 108,016,736 | $ | 200,116,480 | $ | 291,651,001 | $ | 557,760,724 | ||||||||
Net realized gain | 8,179,378 | 22,043,212 | 185,181,612 | 2,063,528,283 | ||||||||||||
Net change in unrealized appreciation (depreciation) | (443,370,890 | ) | 293,053,884 | (266,854,534 | ) | (1,164,341,884 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | (327,174,776 | ) | 515,213,576 | 209,978,079 | 1,456,947,123 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS(a) | ||||||||||||||||
Decrease in net assets resulting from distributions to shareholders | (131,038,341 | ) | (209,452,431 | ) | (286,844,266 | ) | (548,934,630 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS | ||||||||||||||||
Net increase (decrease) in net assets derived from capital share transactions | (261,123,974 | ) | 606,314,691 | (43,504,047 | ) | (1,394,039,350 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
NET ASSETS(a) | ||||||||||||||||
Total increase (decrease) in net assets | (719,337,091 | ) | 912,075,836 | (120,370,234 | ) | (486,026,857 | ) | |||||||||
Beginning of period | 4,922,792,188 | 4,010,716,352 | 16,714,032,074 | 17,200,058,931 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 4,203,455,097 | $ | 4,922,792,188 | $ | 16,593,661,840 | $ | 16,714,032,074 | ||||||||
|
|
|
|
|
|
|
|
(a) | Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 13 for this prior year information. |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S | 37 |
Statements of Changes in Net Assets (continued)
iShares U.S. Dividend and Buyback ETF | ||||||||
| Six Months Ended |
| Period From | |||||
10/31/18 | 11/07/17 | (a) | ||||||
(unaudited) | to 04/30/18 | |||||||
| ||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||
OPERATIONS | ||||||||
Net investment income | $ | 89,311 | $ | 48,121 | ||||
Net realized gain (loss) | 120,350 | (29,204) | ||||||
Net change in unrealized appreciation (depreciation) | 46,785 | (156,073) | ||||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | 256,446 | (137,156) | ||||||
|
|
|
| |||||
DISTRIBUTIONS TO SHAREHOLDERS(b) | ||||||||
Decrease in net assets resulting from distributions to shareholders | (89,312) | (43,504) | ||||||
|
|
|
| |||||
CAPITAL SHARE TRANSACTIONS | ||||||||
Net increase in net assets derived from capital share transactions | 23,875 | 7,771,181 | ||||||
|
|
|
| |||||
NET ASSETS(b) | ||||||||
Total increase in net assets | 191,009 | 7,590,521 | ||||||
Beginning of period | 7,590,521 | — | ||||||
|
|
|
| |||||
End of period | $ | 7,781,530 | $ | 7,590,521 | ||||
|
|
|
|
(a) | Commencement of operations. |
(b) | Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 13 for this prior year information. |
See notes to financial statements.
38 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
(For a share outstanding throughout each period) |
iShares Core Dividend Growth ETF | ||||||||||||||||||||
|
| |||||||||||||||||||
Six Months Ended | Period From | |||||||||||||||||||
10/31/18 | Year Ended | Year Ended | Year Ended | 06/10/14 | (a) | |||||||||||||||
(unaudited | ) | 04/30/18 | 04/30/17 | 04/30/16 | to 04/30/15 | |||||||||||||||
| ||||||||||||||||||||
Net asset value, beginning of period | $ | 33.86 | $ | 30.75 | $ | 26.72 | $ | 26.35 | $ | 24.96 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net investment income(b) | 0.44 | 0.78 | 0.71 | 0.67 | 0.53 | |||||||||||||||
Net realized and unrealized gain(c) | 1.17 | 3.07 | 3.98 | 0.34 | 1.29 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net increase from investment operations | 1.61 | 3.85 | 4.69 | 1.01 | 1.82 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Distributions | ||||||||||||||||||||
From net investment income | (0.42 | ) | (0.74 | ) | (0.66 | ) | (0.64 | ) | (0.43 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.42 | ) | (0.74 | ) | (0.66 | ) | (0.64 | ) | (0.43 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of period | $ | 35.05 | $ | 33.86 | $ | 30.75 | $ | 26.72 | $ | 26.35 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Return | ||||||||||||||||||||
Based on net asset value | 4.73 | %(d) | 12.59 | % | 17.78 | % | 3.95 | % | 7.31 | %(d) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||
Total expenses | 0.08 | %(e) | 0.08 | % | 0.09 | % | 0.12 | % | 0.12 | %(e) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total expenses after fees waived | 0.08 | %(e) | 0.08 | % | 0.09 | % | 0.10 | % | 0.05 | %(e) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net investment income | 2.45 | %(e) | 2.32 | % | 2.46 | % | 2.62 | % | 2.31 | %(e) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Supplemental Data | ||||||||||||||||||||
Net assets, end of period (000) | $ | 4,558,707 | $ | 3,343,410 | $ | 1,429,997 | $ | 476,955 | $ | 168,627 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Portfolio turnover rate(f) | 8 | %(d) | 24 | % | 27 | % | 45 | % | 47 | %(d) | ||||||||||
|
|
|
|
|
|
|
|
|
|
(a) | Commencement of operations. |
(b) | Based on average shares outstanding. |
(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. |
(f) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
F I N A N C I A L H I G H L I G H T S | 39 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares Core High Dividend ETF | ||||||||||||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Year Ended 04/30/17 | Year Ended 04/30/16 | Year Ended 04/30/15 | Year Ended 04/30/14 | |||||||||||||||||||
| ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 84.44 | $ | 83.27 | $ | 78.83 | $ | 77.18 | $ | 73.80 | $ | 68.58 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income(a) | 1.53 | 2.99 | 2.85 | 2.70 | 2.71 | 2.27 | ||||||||||||||||||
Net realized and unrealized gain(b) | 4.15 | 1.20 | 4.34 | 1.79 | 3.27 | 5.21 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase from investment operations | 5.68 | 4.19 | 7.19 | 4.49 | 5.98 | 7.48 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Distributions | ||||||||||||||||||||||||
From net investment income | (1.59 | ) | (3.02 | ) | (2.75 | ) | (2.84 | ) | (2.60 | ) | (2.26 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (1.59 | ) | (3.02 | ) | (2.75 | ) | (2.84 | ) | (2.60 | ) | (2.26 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 88.53 | $ | 84.44 | $ | 83.27 | $ | 78.83 | $ | 77.18 | $ | 73.80 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Return | ||||||||||||||||||||||||
Based on net asset value | 6.76 | %(c) | 5.03 | % | 9.22 | % | 6.12 | % | 8.21 | % | 11.20 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||||||
Total expenses | 0.08 | %(d) | 0.08 | % | 0.10 | % | 0.12 | % | 0.14 | % | 0.40 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income | 3.46 | %(d) | 3.47 | % | 3.49 | % | 3.63 | % | 3.57 | % | 3.29 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 6,157,158 | $ | 6,007,744 | $ | 6,632,679 | | $ | 5,076,953 | $ | 4,858,218 | $ | 3,542,299 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Portfolio turnover rate(e) | 30 | %(c) | 46 | % | 49 | % | 74 | % | 63 | % | 47 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(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. |
(e) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
40 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares International Select Dividend ETF | ||||||||||||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Year Ended 04/30/17 | Year Ended 04/30/16 | Year Ended 04/30/15 | Year Ended 04/30/14 | |||||||||||||||||||
| ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 34.11 | $ | 31.78 | $ | 29.85 | $ | 35.09 | $ | 39.73 | $ | 36.07 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income(a) | 0.77 | 1.43 | 1.42 | (b) | 1.51 | 1.61 | 1.93 | |||||||||||||||||
Net realized and unrealized gain (loss)(c) | (3.10 | ) | 2.41 | 1.88 | (5.18 | ) | (4.40 | ) | 3.56 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase (decrease) from investment operations | (2.33 | ) | 3.84 | 3.30 | (3.67 | ) | (2.79 | ) | 5.49 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Distributions | ||||||||||||||||||||||||
From net investment income | (0.93 | ) | (1.51 | ) | (1.37 | ) | (1.57 | ) | (1.74 | ) | (1.83 | ) | ||||||||||||
From net realized gain | — | — | — | — | (0.11 | ) | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (0.93 | ) | (1.51 | ) | (1.37 | ) | (1.57 | ) | (1.85 | ) | (1.83 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 30.85 | $ | 34.11 | $ | 31.78 | $ | 29.85 | $ | 35.09 | $ | 39.73 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Return | ||||||||||||||||||||||||
Based on net asset value | (6.96 | )%(d) | 12.35 | % | 11.47 | %(b) | (10.37 | )% | (7.20 | )% | 16.20 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||||||
Total expenses | 0.49 | %(e) | 0.49 | % | 0.50 | % | 0.50 | % | 0.50 | % | 0.50 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total expenses excluding professional fees for foreign withholding tax claims | N/A | N/A | 0.50 | % | N/A | N/A | N/A | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income | 4.69 | %(e) | 4.27 | % | 4.75 | %(b) | 4.97 | % | 4.42 | % | 5.27 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 4,203,455 | $ | 4,922,792 | $ | 4,010,716 | $ | 2,737,391 | $ | 4,612,557 | $ | 3,744,611 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Portfolio turnover rate(f) | 3 | %(d) | 24 | % | 29 | % | 27 | % | 53 | % | 55 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(b) | Reflects the one-time, positive effect of foreign withholding tax claims, net of the associated professional fees, 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. |
(f) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
F I N A N C I A L H I G H L I G H T S | 41 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares Select Dividend ETF | ||||||||||||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Year Ended 04/30/17 | Year Ended 04/30/16 | Year Ended 04/30/15 | Year Ended 04/30/14 | |||||||||||||||||||
| ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 96.31 | $ | 91.51 | $ | 82.05 | $ | 78.32 | $ | 74.82 | $ | 65.47 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income(a) | 1.69 | 3.08 | 2.82 | 2.57 | 2.43 | 2.18 | ||||||||||||||||||
Net realized and unrealized gain (loss)(b) | (0.45 | ) | 4.76 | 9.41 | 3.78 | 3.47 | 9.40 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase from investment operations | 1.24 | 7.84 | 12.23 | 6.35 | 5.90 | 11.58 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Distributions | ||||||||||||||||||||||||
From net investment income | (1.66 | ) | (3.04 | ) | (2.77 | ) | (2.62 | ) | (2.40 | ) | (2.23 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (1.66 | ) | (3.04 | ) | (2.77 | ) | (2.62 | ) | (2.40 | ) | (2.23 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 95.89 | $ | 96.31 | $ | 91.51 | $ | 82.05 | $ | 78.32 | $ | 74.82 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Return | ||||||||||||||||||||||||
Based on net asset value | 1.25 | %(c) | 8.65 | % | 15.12 | % | 8.42 | % | 7.97 | % | 18.06 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||||||
Total expenses | 0.38 | %(d) | 0.39 | % | 0.39 | % | 0.39 | % | 0.39 | % | 0.39 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income | 3.39 | %(d) | 3.24 | % | 3.23 | % | 3.36 | % | 3.16 | % | 3.18 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 16,593,662 | $ | 16,714,032 | $ | 17,200,059 | $ | 14,645,360 | $ | 14,853,105 | $ | 13,567,826 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Portfolio turnover rate(e) | 3 | %(c) | 28 | % | 19 | % | 21 | % | 20 | % | 22 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(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. |
(e) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
42 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares U.S. Dividend and Buyback ETF | ||||||||
Six Months Ended | Period From | |||||||
10/31/18 | 11/07/17 | (a) | ||||||
(unaudited | ) | to 04/30/18 | ||||||
| ||||||||
Net asset value, beginning of period | $ | 25.30 | $ | 24.99 | ||||
|
|
|
| |||||
Net investment income(b) | 0.30 | 0.26 | ||||||
Net realized and unrealized gain(c) | 0.64 | 0.28 | ||||||
|
|
|
| |||||
Net increase from investment operations | 0.94 | 0.54 | ||||||
|
|
|
| |||||
Distributions | ||||||||
From net investment income | (0.30 | ) | (0.23 | ) | ||||
|
|
|
| |||||
Total distributions | (0.30 | ) | (0.23 | ) | ||||
|
|
|
| |||||
Net asset value, end of period | $ | 25.94 | $ | 25.30 | ||||
|
|
|
| |||||
Total Return | ||||||||
Based on net asset value | 3.68 | %(d) | 2.16 | %(d) | ||||
|
|
|
| |||||
Ratios to Average Net Assets | ||||||||
Total expenses | 0.25 | %(e) | 0.25 | %(e) | ||||
|
|
|
| |||||
Net investment income | 2.25 | %(e) | 2.07 | %(e) | ||||
|
|
|
| |||||
Supplemental Data | ||||||||
Net assets, end of period (000) | $ | 7,782 | $ | 7,591 | ||||
|
|
|
| |||||
Portfolio turnover rate(f) | 17 | %(d) | 14 | %(d) | ||||
|
|
|
|
(a) | Commencement of operations. |
(b) | Based on average shares outstanding. |
(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. |
(f) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
F I N A N C I A L H I G H L I G H T S | 43 |
Notes to Financial Statements (unaudited)
1. | ORGANIZATION |
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 is organized as a Delaware statutory trust and is authorized to have multiple series or portfolios.
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 | |||
U.S. Dividend and Buyback | Non-Diversified |
2. | 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 increases and decreases in net assets from operations 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.
Investment Transactions and Income Recognition: Investment 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 are reflected in tax reclaims receivable. 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. Upon notification from issuers, some of the dividend income received from a real estate investment trust may be re-designated as a return of capital or capital gain. Non-cash dividends, if any, are recognized on the ex-dividend date and recorded as non-cash dividend income at fair value. 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 non-U.S. currencies are translated to U.S. dollars using prevailing market rates as quoted by one or more data service providers. Purchases and sales of investments, 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 investments. Such fluctuations are reflected by the Funds as a component of net realized and unrealized gain (loss) from investments for financial reporting purposes. Each Fund reports realized currency gain (loss) 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 each Fund invests. These foreign taxes, if any, are paid by each Fund and are reflected in its statement 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, 2018, if any, are disclosed in the statement of assets and liabilities.
In-kind Redemptions: For financial reporting purposes, 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 net asset value per share.
Distributions: 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.
Recent Accounting Standards: In August 2018, the Financial Accounting Standards Board issued Accounting Standards Update 2018-13 “Changes to the Disclosure Requirements for Fair Value Measurement” which modifies disclosure requirements for fair value measurements. The guidance is effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. Management is currently evaluating the impact of this guidance to the Funds.
Indemnifications: In the normal course of business, each Fund enters into contracts that contain a variety of representations that provide general indemnification. The Funds’ maximum exposure under these arrangements is unknown because it involves future potential claims against the Funds, which cannot be predicted with any certainty.
44 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (unaudited) (continued)
3. | INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS |
Investment Valuation Policies: Each Fund’s investments are valued at fair value (also referred to as “market value” within the financial statements) 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. A fund determines the fair value of its financial instruments using various independent dealers or pricing services under policies approved by the Board of Trustees of the Trust (the “Board”). The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) is the committee formed by management to develop global pricing policies and procedures and to oversee the pricing function for all financial instruments.
Fair Value Inputs and Methodologies: The following methods and inputs are used to establish the fair value of each Fund’s assets and liabilities:
• | Equity investments traded on a recognized securities exchange are valued at that day’s last traded price or 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. |
• | Investments in open-end U.S. mutual funds (including money market funds) are valued at that day’s published net asset value (“NAV”). |
• | Futures contract notional values are determined based on that day’s last reported settlement price on the exchange where the contract is traded. |
If events (e.g., a company announcement, market volatility or a natural disaster) occur that are expected to materially affect the value of an investment, or in the event that application of these methods of valuation results in a price for an investment that is deemed not to be representative of the market 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 as reflecting fair value (“Fair Valued Investments”). The fair valuation approaches that may be used by the Global Valuation Committee include market approach, income approach and the cost approach. 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.
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, regular reviews 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 and large movements in market values, and reviews of any market related activity. The pricing of all Fair Valued Investments is subsequently reported to the Board on a quarterly basis.
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.
Fair Value Hierarchy: Various inputs are used in determining the fair value of financial instruments. 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 price quotations 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, but not limited to, quoted prices for similar assets or liabilities in markets that are active, 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 interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs; and |
• | Level 3 – Unobservable inputs 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 financial instruments). |
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 into or out of an assigned level within the 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 a value determined for financial instruments is based on the pricing transparency of the financial instruments and is not necessarily an indication of the risks associated with investing in those securities.
4. | SECURITIES AND OTHER INVESTMENTS |
Securities Lending: Each Fund may lend its 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 market 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 Fund and any additional required collateral is delivered to the Fund or excess collateral is returned by the Fund, 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
N O T E S T O F I N A N C I A L S T A T E M E N T S | 45 |
Notes to Financial Statements (unaudited) (continued)
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.
As of October 31, 2018, 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 BlackRock Fund Advisors (“BFA”), the Funds’ investment adviser, or its affiliates 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, if any, are also disclosed in its schedule of investments. The market value of any securities on loan as of October 31, 2018 and the value of the related cash collateral are disclosed in the statements of assets and liabilities.
Securities lending transactions are entered into by a fund under Master Securities Lending Agreements (each, an “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, the 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 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, absent an event of default, the borrower can resell or re-pledge the loaned securities, and the fund can reinvest cash collateral received in connection with loaned securities.
The following table is a summary of the securities lending agreements by counterparty which are subject to offset under an MSLA as of October 31, 2018:
iShares ETF and Counterparty |
|
Market Value of |
| | Cash Collateral Received | (a) | | Non-Cash Collateral Received | | Net Amount | ||||||
| ||||||||||||||||
Core High Dividend | ||||||||||||||||
JPMorgan Securities LLC | $ | 4,229,761 | $ | 4,229,761 | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
| |||||||||
International Select Dividend | ||||||||||||||||
Goldman Sachs &Co | $ | 4,971,643 | $ | 4,971,643 | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
| |||||||||
U.S. Dividend and Buyback | ||||||||||||||||
Barclays Bank PLC | $ | 3,198 | $ | 3,198 | $ | — | $ | — | ||||||||
JPMorgan Securities LLC | 27,356 | 27,356 | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 30,554 | $ | 30,554 | $ | — | $ | — | |||||||||
|
|
|
|
|
|
|
|
(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. |
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, each Fund benefits from a borrower default indemnity provided by BlackRock, Inc. (“BlackRock”). BlackRock’s indemnity allows for full replacement of the 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 market 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. Such losses are borne entirely by each Fund.
5. | DERIVATIVE FINANCIAL INSTRUMENTS |
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 specific quantity of an underlying instrument at a set price on a future date. Depending on the terms of a contract, a futures contract is settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash amount on the settlement 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. Securities deposited as initial margin, if any, are designated in the schedule of investments and cash deposited, if any, is shown as cash pledged for futures contracts in the statement of assets and liabilities.
Pursuant to the contract, a fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in market value of the contract (“variation margin”). Variation margin is recorded as unrealized appreciation or depreciation and, if any, shown as variation margin receivable or payable on futures contracts in the statement of assets and liabilities. When the contract is closed, a realized gain or loss is recorded in the statement of operations equal to the difference between the notional amount of the contract at the time it was opened and the notional amount 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 involves the risk of an imperfect correlation in the movements in the price of futures contracts and the assets underlying such contracts.
46 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (unaudited) (continued)
6. | INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES |
Investment Advisory Fees: 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 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 Dividend Growth | 0.08% | |||
Core High Dividend | 0.08 | |||
U.S. Dividend and Buyback | 0.25 |
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:
Aggregate Average Daily Net Assets |
Investment Advisory Fee | |||
| ||||
First $12 billion | 0.5000% | |||
Over $12 billion, up to and including $18 billion | 0.4750 | |||
Over $18 billion, up to and including $24 billion | 0.4513 | |||
Over $24 billion, up to and including $30 billion(a) | 0.4287 | |||
Over $30 billion(a) | 0.4073 |
Each reduced 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. |
(a) | Break level added or amended effective June 29, 2018. |
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:
Aggregate Average Daily Net Assets |
Investment Advisory Fee | |||
| ||||
First $46 billion | 0.4000% | |||
Over $46 billion, up to and including $81 billion | 0.3800 | |||
Over $81 billion, up to and including $111 billion | 0.3610 | |||
Over $111 billion, up to and including $141 billion | 0.3430 | |||
Over $141 billion | 0.3259 |
Each reduced 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. |
Distributor: 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.
Securities Lending: The U.S. Securities and Exchange Commission (the “SEC”) 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, or its affiliates, 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 (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities. Each Fund retains a portion of securities lending income and remits the remaining portion to BTC as compensation for its services as securities lending agent.
Pursuant to a securities lending agreement, each of iShares Core Dividend Growth ETF, iShares Core High Dividend ETF and iShares Select Dividend ETF (the “Group 1 Funds”), retains 71.5% of securities lending income (which excludes collateral investment fees) 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 (which excludes collateral investment fees) 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, the Group 1 Fund, pursuant to a securities lending agreement, will retain for the remainder of that calendar year 75% of securities
N O T E S T O F I N A N C I A L S T A T E M E N T S | 47 |
Notes to Financial Statements (unaudited) (continued)
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.
The share of securities lending income earned by each Fund is shown as securities lending income – affiliated – net in its statement of operations. For the six months ended October 31, 2018, the Funds paid BTC the following amounts for securities lending agent services:
iShares ETF |
Fees Paid | |||
Core High Dividend | $ | 31,677 | ||
International Select Dividend | 260 | |||
U.S. Dividend and Buyback | 24 |
Officers and Trustees: Certain officers and/or trustees of the Trust are officers and/or trustees of BlackRock or its affiliates.
Other Transactions: The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate of BlackRock for 1940 Act purposes.
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, 2018, transactions executed by the Funds pursuant to Rule 17a-7 under the 1940 Act were as follows:
iShares ETF | Purchases | Sales | ||||||
Core High Dividend | $ | 383,544,998 | $ | 326,671,038 | ||||
Select Dividend | 86,224,201 | — |
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 shown as dividends – affiliated in the statement of operations.
A fund, in order to improve its portfolio liquidity and its ability to track its underlying index, may invest in shares of other iShares funds that invest in securities in the fund’s underlying index.
7. | PURCHASES AND SALES |
For the six months ended October 31, 2018, purchases and sales of investments, excluding in-kind transactions and short-term investments, were as follows:
iShares ETF | Purchases | Sales | ||||||
Core Dividend Growth | $ | 339,362,845 | $ | 329,983,233 | ||||
Core High Dividend | 1,784,155,126 | 1,791,836,582 | ||||||
International Select Dividend | 141,746,035 | 179,251,148 | ||||||
Select Dividend | 506,088,947 | 510,010,773 | ||||||
U.S. Dividend and Buyback | 1,424,944 | 1,363,594 |
For the six months ended October 31, 2018, in-kind transactions were as follows:
iShares ETF |
In-kind | In-kind Sales | ||||||
Core Dividend Growth | $ | 1,334,027,481 | $ | 228,705,536 | ||||
Core High Dividend | 439,579,537 | 555,390,371 | ||||||
International Select Dividend | 22,747,211 | 271,647,886 | ||||||
Select Dividend | 682,817,588 | 727,426,970 | ||||||
U.S. Dividend and Buyback | 1,338,249 | 1,340,339 |
8. | 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.
Management has analyzed tax laws and regulations and their application to the Funds as of October 31, 2018, inclusive of the open tax return years, and does not believe that there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.
48 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (unaudited) (continued)
As of April 30, 2018, the Funds had capital loss carryforwards, with no expiration dates, available to offset future realized capital gains as follows:
iShares ETF | Non-Expiring | |||
Core Dividend Growth | $ | 8,799,735 | ||
Core High Dividend | 219,653,257 | |||
International Select Dividend | 510,741,182 | |||
Select Dividend | 158,838,354 |
A fund may own shares in certain foreign investment entities, referred to, under U.S. tax law, as “passive foreign investment companies.” Such fund 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.
As of October 31, 2018, gross unrealized appreciation and depreciation based on cost of investments (including short positions and derivatives, if any) for U.S. federal income tax purposes were as follows:
iShares ETF | Tax Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation |
Net Unrealized | ||||||||||||
Core Dividend Growth | $ | 4,338,877,668 | $ | 372,043,305 | $ | (158,643,344) | $ | 213,399,961 | ||||||||
Core High Dividend | 5,938,768,206 | 508,299,489 | (279,117,229) | 229,182,260 | ||||||||||||
International Select Dividend | 4,366,428,242 | 313,460,645 | (498,290,281) | (184,829,636) | ||||||||||||
Select Dividend | 14,699,523,620 | 2,875,451,606 | (1,002,291,398) | 1,873,160,208 | ||||||||||||
U.S. Dividend and Buyback | 7,969,557 | 406,071 | (550,975) | (144,904) |
9. | 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.
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.
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.
Concentration Risk: 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 issuers located in a single country or a limited number of countries, it assumes the risk that economic, regulatory, political and social conditions in that country or those countries may have a significant impact on the fund and could affect the income from, or the value or liquidity of, the fund’s portfolio.
N O T E S T O F I N A N C I A L S T A T E M E N T S | 49 |
Notes to Financial Statements (unaudited) (continued)
When a fund concentrates its investments in securities within a single or limited number of market sectors, it assumes the risk that economic, regulatory, political and social conditions affecting such sectors may have a significant impact on the fund and could affect the income from, or the value or liquidity of, the fund’s portfolio.
10. | 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 were as follows:
Six Months Ended 10/31/18 | Year Ended 04/30/18 | |||||||||||||||
iShares ETF | Shares | Amount | Shares | Amount | ||||||||||||
Core Dividend Growth | ||||||||||||||||
Shares sold | 37,650,000 | $ | 1,342,896,975 | 65,050,000 | $ | 2,179,045,457 | ||||||||||
Shares redeemed | (6,350,000) | (229,929,962) | (12,800,000) | (435,234,437) | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase | 31,300,000 | $ | 1,112,967,013 | 52,250,000 | $ | 1,743,811,020 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Core High Dividend | ||||||||||||||||
Shares sold | 4,900,000 | $ | 442,336,857 | 25,300,000 | $ | 2,199,961,506 | ||||||||||
Shares redeemed | (6,500,000) | (561,044,419) | (33,800,000) | (2,934,275,989) | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease | (1,600,000) | $ | (118,707,562) | (8,500,000) | $ | (734,314,483) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
International Select Dividend | ||||||||||||||||
Shares sold | 700,000 | $ | 23,761,030 | 22,700,000 | $ | 758,709,526 | ||||||||||
Shares redeemed | (8,750,000) | (284,885,004) | (4,600,000) | (152,394,835) | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) | (8,050,000) | $ | (261,123,974) | 18,100,000 | $ | 606,314,691 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Select Dividend | ||||||||||||||||
Shares sold | 6,950,000 | $ | 688,103,077 | 44,400,000 | $ | 4,297,613,390 | ||||||||||
Shares redeemed | (7,450,000) | (731,607,124) | (58,800,000) | (5,691,652,740) | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease | (500,000) | $ | (43,504,047) | (14,400,000) | $ | (1,394,039,350) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
U.S. Dividend and Buyback | ||||||||||||||||
Shares sold | 50,000 | $ | 1,364,697 | 300,000 | $ | 7,771,181 | ||||||||||
Shares redeemed | (50,000) | (1,340,822) | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase | — | $ | 23,875 | 300,000 | $ | 7,771,181 | ||||||||||
|
|
|
|
|
|
|
|
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 shares sold in the table above.
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 transactions are reflected as a receivable or a payable in the statement of assets and liabilities.
11. | 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 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 impact 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 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.
50 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (unaudited) (continued)
12. | LEGAL PROCEEDINGS |
On June 16, 2016, investors 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 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”) in California State Court. 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.
13. | REGULATION S-X AMENDMENTS |
On August 17, 2018, the SEC adopted amendments to certain disclosure requirements in Securities Act Release No. 33-10532, Disclosure Update and Simplification. The Funds have adopted the amendments pertinent to Regulation S-X in this shareholder report. The amendments impacted certain disclosure presentation on the statement of assets and liabilities, statement of changes in net assets and notes to the financial statements.
Prior year distribution information and undistributed net investment income in the statement of changes in net assets has been modified to conform to the current year presentation in accordance with the Regulation S-X changes.
Distributions for the year ended April 30, 2018 were classified as follows:
iShares ETF | Net Investment Income | |||
Core Dividend Growth | $ | 53,281,964 | ||
Core High Dividend | 224,704,812 | |||
International Select Dividend | 209,452,431 | |||
Select Dividend | 548,934,630 | |||
U.S. Dividend and Buyback | 43,504 |
Undistributed net investment income as of April 30, 2018 are as follows:
iShares ETF |
Undistributed net investment income | |||
Core Dividend Growth | $ | 3,654,883 | ||
Core High Dividend | 14,068,786 | |||
International Select Dividend | 14,797,312 | |||
Select Dividend | 19,156,787 |
14. | 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 additional disclosure in the financial statements.
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Board Review and Approval of Investment Advisory Contract
I. iShares Core Dividend Growth ETF, iShares Core High Dividend ETF and iShares U.S. Dividend and Buyback 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. At a meeting on May 11, 2018, a committee composed of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management and reviewed and discussed information provided in response to initial requests of the 15(c) Committee and/or their independent counsel, and requested certain additional information, which management agreed to provide. 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 24, 2018, management presented additional information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its initial meeting. 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 12-14, 2018, 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 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 various factors, including: (i) the expenses and performance of each Fund; (ii) the nature, extent and quality of the services provided by BFA; (iii) the costs of services provided to each Fund and profits realized by BFA and its affiliates; (iv) economies of scale; (v) the fees and services provided for other comparable funds/accounts managed by BFA and its affiliates; and (vi) other benefits to BFA and/or its affiliates. The material factors, no one of which was controlling, and conclusions that formed the basis for the Board, including the Independent Trustees, to approve the Advisory Contract are discussed below.
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, fees and expenses of another fund in which each Fund invests (if applicable), and waivers/reimbursements (if applicable) of each Fund in comparison with the same information for other ETFs (including, where applicable, funds sponsored by an “at cost” service provider), 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, 2017, to that of relevant comparison fund(s) 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 additional detailed information as requested by the Board, 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 expense level 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, portfolio management, product design and quality, compliance and risk management, global public policy 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 support 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 relevant officers and other employees of BFA (and its affiliates) 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 12-14, 2018 meeting and throughout the year, and matters related to BFA’s portfolio compliance policies and procedures.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided 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 Fund and Profits Realized by BFA and its Affiliates: The Board reviewed information about the profitability to BlackRock in managing the Funds, 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
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Board Review and Approval of Investment Advisory Contract (continued)
from the Funds’ operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, noting that the 15(c) Committee and the Board had focused on the methodology and profitability presentation during their meetings. The Board further noted that it considered the supplemental information the 15(c) Committee requested, which BlackRock provided, regarding the methodology. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC, a BlackRock affiliate, from securities lending by the Funds. The Board also discussed BFA’s profit margin as reflected in the Funds’ 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 Funds and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors and other information 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 and the Board during their meetings and addressed by management. The 15(c) Committee and the Board 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 showed 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 15(c) Committee and the Board reviewed information provided by BFA regarding the sharing of scale benefits with the iShares funds through various means, including, as applicable, through relatively low fee rates established at inception, breakpoints, 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 noted that the Advisory Contract for the Funds did not provide for breakpoints in the Funds’ investment advisory fee rates as the assets of the Funds increase. However, the Board noted that a breakpoint structure for the Funds may be appropriate should material economies of scale exist in the future that are not otherwise shared, 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 of the sharing of scale benefits, as well as the other factors considered at the meeting, the Board concluded that the information concerning the sharing of scale benefits supported the Board’s approval of 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 (collectively, 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 indexes as the Funds. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts 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, particularly those that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged management’s assertion that, for certain iShares funds, and for client segmentation purposes, BlackRock has launched an iShares fund that may provide a similar investment exposure at a lower investment advisory fee rate. The Board also considered the “all-inclusive” nature of the Funds’ advisory fee structure, and the Funds’ expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rates under the Advisory Contract for the Funds 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 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 (or its 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 (including associated commissions) 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 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 a review of the factors described above, as well as such other factors as deemed appropriate by the Board, the Board, including all of the Independent Trustees, determined that the Funds’ investment advisory fee rates under the Advisory Contract do not constitute fees that are 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. At a meeting on May 11, 2018, a committee
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Board Review and Approval of Investment Advisory Contract (continued)
composed of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management and reviewed and discussed information provided in response to initial requests of the 15(c) Committee and/or their independent counsel, and requested certain additional information, which management agreed to provide. 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 24, 2018, management presented additional information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its initial meeting. 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 12-14, 2018, 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 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 various factors, including: (i) the expenses and performance of the Fund; (ii) the nature, extent and quality of the services provided by BFA; (iii) the costs of services provided to the Fund and profits realized by BFA and its affiliates; (iv) economies of scale; (v) the fees and services provided for other comparable funds/accounts managed by BFA and its affiliates; and (vi) other benefits to BFA and/or its affiliates. The material factors, no one of which was controlling, and conclusions that formed the basis for the Board, including the Independent Trustees, to approve the Advisory Contract are discussed below.
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, fees and expenses of another fund in which the Fund invests (if applicable), and waivers/reimbursements (if applicable) of the Fund in comparison with the same information for other ETFs (including, where applicable, funds sponsored by an “at cost” service provider), 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, 2017, to that of relevant comparison fund(s) 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 additional detailed information as requested by the Board, 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 expense level 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, portfolio management, product design and quality, compliance and risk management, global public policy 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 support 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 relevant officers and other employees of BFA (and its affiliates) 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 12-14, 2018 meeting and throughout the year, and matters related to BFA’s portfolio compliance policies and procedures.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided 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 its Affiliates: The Board reviewed information about the profitability to BlackRock in managing the Fund, 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, noting that the 15(c) Committee and the Board had focused on the methodology and profitability presentation during their meetings. The Board further noted that it considered the supplemental information the 15(c) Committee requested, which BlackRock provided, regarding the methodology. The Board discussed the sources of direct and ancillary revenue with management,
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Board Review and Approval of Investment Advisory Contract (continued)
including the revenues to BTC, a BlackRock 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 and other information 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 and the Board during their meetings and addressed by management. The 15(c) Committee and the Board 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 showed 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 15(c) Committee and the Board reviewed information provided by BFA regarding the sharing of scale benefits with the iShares funds through various means, including, as applicable, through relatively low fee rates established at inception, breakpoints, 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 noted that the Advisory Contract for the Fund already provided for breakpoints in the Fund’s investment advisory fee rate, and that BFA and the Board had agreed during the June 12-14, 2018 meeting to revise the Advisory Contract for the Fund to provide for an additional breakpoint, 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 of the sharing of scale benefits, as well as the other factors considered at the meeting, the Board concluded that the information concerning the sharing of scale benefits supported the Board’s approval of 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 (collectively, 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 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, particularly those that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged management’s assertion that, for certain iShares funds, and for client segmentation purposes, BlackRock has launched an iShares fund that may provide a similar investment exposure at a lower investment advisory fee rate. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund’s 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 (or its 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 (including associated commissions) 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 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 a review of the factors described above, as well as such other factors as deemed appropriate by the Board, the Board, including all of the Independent Trustees, 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. At a meeting on May 11, 2018, a committee composed of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management and reviewed and discussed information provided in response to initial requests of the 15(c) Committee and/or their independent counsel, and requested certain additional information, which management agreed to provide.
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Board Review and Approval of Investment Advisory Contract (continued)
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 24, 2018, management presented additional information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its initial meeting. 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 12-14, 2018, 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 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 various factors, including: (i) the expenses and performance of the Fund; (ii) the nature, extent and quality of the services provided by BFA; (iii) the costs of services provided to the Fund and profits realized by BFA and its affiliates; (iv) economies of scale; (v) the fees and services provided for other comparable funds/accounts managed by BFA and its affiliates; and (vi) other benefits to BFA and/or its affiliates. The material factors, no one of which was controlling, and conclusions that formed the basis for the Board, including the Independent Trustees, to approve the Advisory Contract are discussed below.
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, fees and expenses of another fund in which the Fund invests (if applicable), and waivers/reimbursements (if applicable) of the Fund in comparison with the same information for other ETFs (including, where applicable, funds sponsored by an “at cost” service provider), 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, 2017, to that of relevant comparison fund(s) 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 additional detailed information as requested by the Board, 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 expense level 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, portfolio management, product design and quality, compliance and risk management, global public policy 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 support 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 relevant officers and other employees of BFA (and its affiliates) 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 12-14, 2018 meeting and throughout the year, and matters related to BFA’s portfolio compliance policies and procedures.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided 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 its Affiliates: The Board reviewed information about the profitability to BlackRock in managing the Fund, 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, noting that the 15(c) Committee and the Board had focused on the methodology and profitability presentation during their meetings. The Board further noted that it considered the supplemental information the 15(c) Committee requested, which BlackRock provided, regarding the methodology. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC, a BlackRock 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 and other information considered.
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Board Review and Approval of Investment Advisory Contract (continued)
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 and the Board during their meetings and addressed by management. The 15(c) Committee and the Board 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 showed 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 15(c) Committee and the Board reviewed information provided by BFA regarding the sharing of scale benefits with the iShares funds through various means, including, as applicable, through relatively low fee rates established at inception, breakpoints, 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 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 of the sharing of scale benefits, as well as the other factors considered at the meeting, the Board concluded that the information concerning the sharing of scale benefits supported the Board’s approval of 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 (collectively, 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 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, particularly those that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged management’s assertion that, for certain iShares funds, and for client segmentation purposes, BlackRock has launched an iShares fund that may provide a similar investment exposure at a lower investment advisory fee rate. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund’s 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 (or its 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 (including associated commissions) 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 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 a review of the factors described above, as well as such other factors as deemed appropriate by the Board, the Board, including all of the Independent Trustees, 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.
B O A R D R E V I E W A N D A P P R O V A L O F I N V E S T M E N T A D V I S O R Y C O N T R A C T | 57 |
Supplemental Information (unaudited)
Section 19(a) Notices
The amounts and sources of distributions reported in this notice are for financial reporting purposes and are not being provided for tax reporting purposes. The actual amounts and character of the distributions for tax reporting purposes will be reported to shareholders on Form 1099-DIV which is sent to shareholders shortly after calendar year-end.
| ||||||||||||||||||||||||||||||||
Total Cumulative Distributions | % 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(a) | $ | 0.405431 | $ | — | $ | 0.012765 | $ | 0.418196 | 97 | % | — | % | 3 | % | 100% | |||||||||||||||||
International Select Dividend(a) | 0.913319 | — | 0.021367 | 0.934686 | 98 | — | 2 | 100 | ||||||||||||||||||||||||
U.S. Dividend and Buyback(a) | 0.275948 | — | 0.021761 | 0.297709 | 93 | — | 7 | 100 |
(a) | The Fund estimates that it has distributed more than the amount of earned income and net realized gains; therefore, a portion of the distribution may be a return of capital. A return of capital may occur, for example, when some or all of the shareholder’s investment in the Fund is returned to the shareholder. A return of capital does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income”. When distributions exceed total return performance, the difference will incrementally reduce the Fund’s net asset value per share. |
58 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Electronic Delivery
Shareholders can sign up for email notifications announcing that the shareholder report or prospectus has been posted on the iShares website at www.iShares.com. Once you have enrolled, you will no longer receive prospectuses and shareholder reports in the mail.
To enroll in electronic delivery:
• | Go to www.icsdelivery.com. |
• | If your brokerage firm is not listed, electronic delivery may not be available. Please contact your broker-dealer or financial advisor. |
Householding
Householding is an option available to certain fund investors. Householding is a method of delivery, based on the preference of the individual investor, in which a single copy of certain shareholder documents can be delivered to investors who share the same address, even if their accounts are registered under different names. Please contact your broker-dealer if you are interested in enrolling in householding and receiving a single copy of prospectuses and other shareholder documents, or if you are currently enrolled in householding and wish to change your householding status.
Availability of Quarterly Schedule of Investments
The iShares Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The iShares Funds’ Forms N-Q are available on the SEC’s website at www.sec.gov. The iShares Funds also disclose their complete schedule of portfolio holdings on a daily basis on the iShares website at www.iShares.com.
Availability of Proxy Voting Policies and Proxy Voting Records
A description of the policies and procedures that the iShares Funds use to determine how to vote proxies relating to portfolio securities and information about how the iShares Funds voted proxies relating to portfolio securities during the most recent twelve-month period ending June 30 is available without charge, upon request (1) by calling toll-free 1-800-474-2737; (2) on the iShares website at www.iShares.com; and (3) on the SEC website at www.sec.gov.
G E N E R A L I N F O R M A T I O N | 59 |
Glossary of Terms Used in this Report
Portfolio Abbreviations - Equity
NVS | Non-Voting Shares |
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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 Morningstar, Inc. or S&P Dow Jones Indices LLC, 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 | ||||
©2018 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. | ||||
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OCTOBER 31, 2018
2018 SEMI-ANNUAL REPORT (UNAUDITED) |
iShares Trust
iShares Morningstar Large-Cap ETF | JKD | NYSE Arca
iShares Morningstar Large-Cap Growth ETF | JKE | NYSE Arca
iShares Morningstar Large-Cap Value ETF | JKF | NYSE Arca
iShares Morningstar Mid-Cap ETF | JKG | NYSE Arca
iShares Morningstar Mid-Cap Growth ETF | JKH | NYSE Arca
iShares Morningstar Mid-Cap Value ETF | JKI | NASDAQ
iShares Morningstar Small-Cap ETF | JKJ | NYSE Arca
iShares Morningstar Small-Cap Growth ETF | JKK | NYSE Arca
iShares Morningstar Small-Cap Value ETF | JKL | NYSE Arca
Page | ||||
5 | ||||
14 | ||||
14 | ||||
15 | ||||
Financial Statements | ||||
47 | ||||
50 | ||||
53 | ||||
58 | ||||
67 | ||||
77 | ||||
78 | ||||
79 |
Fund Summary as of October 31, 2018
| iShares® Morningstar Large-Cap ETF |
Investment Objective
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.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||||||
6 Months | 1 Year | 5 Years | 10 Years | 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||||
Fund NAV | 4.62 | % | 4.38 | % | 11.01 | % | 13.13% | 4.38 | % | 68.55 | % | 243.24% | ||||||||||||||||||||
Fund Market | 4.59 | 4.38 | 10.99 | 13.08 | 4.38 | 68.43 | 241.83 | |||||||||||||||||||||||||
Index | 4.74 | 4.61 | 11.24 | 13.37 | 4.61 | 70.33 | 250.59 |
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.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
| Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio | | ||||||
$ 1,000.00 | $ | 1,046.20 | $ 1.03 | $ | 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. |
Portfolio Information
ALLOCATION BY SECTOR | ||||
Sector | | Percent of Total Investments(a) |
| |
Information Technology | 20.6% | |||
Health Care | 18.3 | |||
Industrials | 15.8 | |||
Financials | 12.0 | |||
Consumer Discretionary | 7.3 | |||
Energy | 7.1 | |||
Communication Services | 6.3 | |||
Consumer Staples | 5.4 | |||
Real Estate | 2.8 | |||
Materials | 2.6 | |||
Utilities | 1.8 |
TEN LARGEST HOLDINGS | ||||
Security | | Percent of Total Investments(a) |
| |
Apple Inc. | 14.8% | |||
Johnson & Johnson | 5.6 | |||
Bank of America Corp. | 3.8 | |||
Chevron Corp. | 3.2 | |||
Comcast Corp., Class A | 2.6 | |||
Walt Disney Co. (The) | 2.6 | |||
Oracle Corp. | 2.1 | |||
McDonald’s Corp. | 2.1 | |||
Altria Group Inc. | 1.9 | |||
Abbott Laboratories | 1.9 |
(a) | Excludes money market funds. |
F U N D S U M M A R Y | 5 |
Fund Summary as of October 31, 2018
| iShares® Morningstar Large-Cap Growth ETF |
Investment Objective
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.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||||||
6 Months | 1 Year | 5 Years | 10 Years | 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||||
Fund NAV | 2.94 | % | 12.57 | % | 13.45 | % | 15.13% | 12.57 | % | 87.92 | % | 309.18% | ||||||||||||||||||||
Fund Market | 2.94 | 12.60 | 13.43 | 15.10 | 12.60 | 87.81 | 307.96 | |||||||||||||||||||||||||
Index | 3.11 | 13.52 | 13.89 | 15.51 | 13.52 | 91.65 | 322.73 |
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.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
| Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio | | ||||||
$ 1,000.00 | $ 1,029.40 | $ 1.28 | $ 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. |
Portfolio Information
ALLOCATION BY SECTOR | ||||
Sector | | Percent of Total Investments(a) |
| |
Information Technology | 30.2% | |||
Consumer Discretionary | 16.3 | |||
Health Care | 15.7 | |||
Communication Services | 15.2 | |||
Financials | 6.7 | |||
Industrials | 4.6 | |||
Real Estate | 3.6 | |||
Energy | 3.3 | |||
Consumer Staples | 2.8 | |||
Materials | 1.6 |
TEN LARGEST HOLDINGS | ||||
Security | | Percent of Total Investments(a) |
| |
Microsoft Corp. | 7.4% | |||
Amazon. com Inc. | 6.0 | |||
Facebook Inc., Class A | 3.6 | |||
Alphabet Inc., Class C | 3.1 | |||
Alphabet Inc., Class A | 3.0 | |||
UnitedHealth Group Inc. | 2.7 | |||
Visa Inc., Class A | 2.6 | |||
Home Depot Inc. (The) | 2.2 | |||
Boeing Co. (The) | 2.2 | |||
Mastercard Inc., Class A | 2.0 |
(a) | Excludes money market funds. |
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Fund Summary as of October 31, 2018
| iShares® Morningstar Large-Cap Value ETF |
Investment Objective
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.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||||||
6 Months | 1 Year | 5 Years | 10 Years | 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||||
Fund NAV | 3.46 | % | 4.71 | % | 9.10 | % | 10.00% | 4.71 | % | 54.58 | % | 159.43% | ||||||||||||||||||||
Fund Market | 3.46 | 4.70 | 9.08 | 9.94 | 4.70 | 54.44 | 157.92 | |||||||||||||||||||||||||
Index | 3.59 | 4.98 | 9.37 | 10.27 | 4.98 | 56.48 | 165.86 |
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.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
| Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio | | ||||||
$ | 1,000.00 | $ | 1,034.60 | $ | 1.28 | $ | 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. |
Portfolio Information
ALLOCATION BY SECTOR | ||||
Sector | | Percent of Total Investments(a) |
| |
Financials | 26.1% | |||
Consumer Staples | 16.4 | |||
Health Care | 15.0 | |||
Information Technology | 11.3 | |||
Energy | 8.5 | |||
Communication Services | 7.1 | |||
Utilities | 5.4 | |||
Industrials | 5.2 | |||
Materials | 2.6 | |||
Consumer Discretionary | 2.0 | |||
Real Estate | 0.4 |
TEN LARGEST HOLDINGS | ||||
Security | | Percent of Total Investments(a) |
| |
Berkshire Hathaway Inc., Class B | 6.2% | |||
JPMorgan Chase & Co. | 5.6 | |||
Exxon Mobil Corp. | 5.2 | |||
Pfizer Inc. | 3.9 | |||
Verizon Communications Inc. | 3.6 | |||
Wells Fargo & Co. | 3.6 | |||
AT&T Inc. | 3.4 | |||
Procter & Gamble Co. (The) | 3.4 | |||
Intel Corp. | 3.3 | |||
Cisco Systems Inc. | 3.2 |
(a) | Excludes money market funds. |
F U N D S U M M A R Y | 7 |
Fund Summary as of October 31, 2018
| iShares® Morningstar Mid-Cap ETF |
Investment Objective
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.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||||||
6 Months | 1 Year | 5 Years | 10 Years | 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||||
Fund NAV | (2.01 | )% | 0.02 | % | 8.74 | % | 14.49% | 0.02 | % | 52.01 | % | 287.07% | ||||||||||||||||||||
Fund Market | (2.12 | ) | (0.06 | ) | 8.72 | 14.47 | (0.06 | ) | 51.88 | 286.39 | ||||||||||||||||||||||
Index | (1.89 | ) | 0.28 | 9.00 | 14.76 | 0.28 | 53.84 | 296.03 |
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.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
| Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio | | ||||||
$ | 1,000.00 | $ | 979.90 | $ | 1.25 | $ | 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. |
Portfolio Information
ALLOCATION BY SECTOR | ||||
Sector | | Percent of Total Investments(a) |
| |
Industrials | 18.2% | |||
Consumer Discretionary | 14.1 | |||
Information Technology | 14.1 | |||
Real Estate | 13.7 | |||
Financials | 13.7 | |||
Health Care | 8.9 | |||
Consumer Staples | 6.0 | |||
Materials | 4.6 | |||
Communication Services | 2.9 | |||
Utilities | 2.0 | |||
Energy | 1.8 |
TEN LARGEST HOLDINGS | ||||
Security | | Percent of Total Investments(a) |
| |
Centene Corp. | 1.5% | |||
Ingersoll-Rand PLC | 1.3 | |||
Xilinx Inc. | 1.2 | |||
Rockwell Collins Inc. | 1.2 | |||
Ventas Inc. | 1.2 | |||
Agilent Technologies Inc. | 1.2 | |||
NetApp Inc. | 1.1 | |||
Dollar Tree Inc. | 1.1 | |||
CBS Corp., Class B | 1.1 | |||
Clorox Co. (The) | 1.1 |
(a) | Excludes money market funds. |
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Fund Summary as of October 31, 2018
| iShares® Morningstar Mid-Cap Growth ETF |
Investment Objective
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.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||||||
6 Months | 1 Year | 5 Years | 10 Years | 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||||
Fund NAV | 1.15 | % | 7.69 | % | 9.75 | % | 14.07% | 7.69 | % | 59.20 | % | 272.98% | ||||||||||||||||||||
Fund Market | 1.21 | 7.80 | 9.78 | 14.09 | 7.80 | 59.43 | 273.54 | |||||||||||||||||||||||||
Index | 1.25 | 7.93 | 9.99 | 14.33 | 7.93 | 60.98 | 281.45 |
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.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
| Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio | | ||||||
$ | 1,000.00 | $ | 1,011.50 | $ | 1.52 | $ | 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. |
Portfolio Information
ALLOCATION BY SECTOR | ||||
Sector | | Percent of Total Investments(a) |
| |
Information Technology | 24.7% | |||
Health Care | 20.1 | |||
Industrials | 17.3 | |||
Consumer Discretionary | 11.1 | |||
Financials | 6.6 | |||
Communication Services | 6.3 | |||
Energy | 5.4 | |||
Real Estate | 5.3 | |||
Materials | 2.2 | |||
Consumer Staples | 1.0 |
TEN LARGEST HOLDINGS | ||||
Security | | Percent of Total Investments(a) |
| |
O’Reilly Automotive Inc. | 1.4% | |||
Twitter Inc. | 1.4 | |||
Square Inc., Class A | 1.2 | |||
Rockwell Automation Inc. | 1.1 | |||
IQVIA Holdings Inc. | 1.1 | |||
Verisk Analytics Inc. | 1.1 | |||
Workday Inc., Class A | 1.1 | |||
Cerner Corp. | 1.0 | |||
IHS Markit Ltd. | 1.0 | |||
SBA Communications Corp. | 1.0 |
(a) | Excludes money market funds. |
F U N D S U M M A R Y | 9 |
Fund Summary as of October 31, 2018
| iShares® Morningstar Mid-Cap Value ETF |
Investment Objective
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.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||||||
6 Months | 1 Year | 5 Years | 10 Years | 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||||
Fund NAV | (2.59 | )% | 2.19 | % | 9.12 | % | 14.00% | 2.19 | % | 54.70 | % | 270.71% | ||||||||||||||||||||
Fund Market | (2.55 | ) | 2.20 | 9.11 | 13.99 | 2.20 | 54.67 | 270.43 | ||||||||||||||||||||||||
Index | (2.46 | ) | 2.44 | 9.43 | 14.33 | 2.44 | 56.92 | 281.65 |
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.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
| Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio | | ||||||
$ | 1,000.00 | $ | 974.10 | $ | 1.49 | $ | 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. |
Portfolio Information
ALLOCATION BY SECTOR | ||||
Sector | | Percent of Total Investments(a) |
| |
Financials | 19.2% | |||
Utilities | 16.3 | |||
Consumer Discretionary | 11.7 | |||
Materials | 11.0 | |||
Industrials | 7.5 | |||
Information Technology | 7.4 | |||
Consumer Staples | 7.0 | |||
Real Estate | 6.5 | |||
Energy | 5.4 | |||
Health Care | 4.1 | |||
Communication Services | 3.9 |
TEN LARGEST HOLDINGS | ||||
Security | | Percent of Total Investments(a) |
| |
Welltower Inc. | 1.5% | |||
Kroger Co. (The) | 1.4 | |||
WEC Energy Group Inc. | 1.3 | |||
PPL Corp. | 1.3 | |||
DTE Energy Co. | 1.2 | |||
Eversource Energy | 1.2 | |||
Motorola Solutions Inc. | 1.2 | |||
CenturyLink Inc. | 1.2 | |||
United Continental Holdings Inc. | 1.2 | |||
AutoZone Inc. | 1.1 |
(a) | Excludes money market funds. |
10 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Fund Summary as of October 31, 2018
| iShares® Morningstar Small-Cap ETF |
Investment Objective
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.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||||||
6 Months | 1 Year | 5 Years | 10 Years | 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||||
Fund NAV | (2.82 | )% | (0.05 | )% | 7.48 | % | 12.91% | (0.05 | )% | 43.43 | % | 236.89% | ||||||||||||||||||||
Fund Market | (2.78 | ) | (0.03 | ) | 7.48 | 12.97 | (0.03 | ) | 43.41 | 238.52 | ||||||||||||||||||||||
Index | (2.74 | ) | 0.14 | 7.59 | 13.06 | 0.14 | 44.15 | 241.37 |
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.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
| Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio | | ||||||
$ | 1,000.00 | $ | 971.80 | $ | 1.24 | $ | 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. |
Portfolio Information
ALLOCATION BY SECTOR | ||||
Sector | | Percent of Total Investments(a) |
| |
Financials | 20.1% | |||
Industrials | 19.6 | |||
Real Estate | 13.1 | |||
Consumer Discretionary | 9.9 | |||
Information Technology | 9.3 | |||
Health Care | 8.3 | |||
Materials | 5.4 | |||
Consumer Staples | 4.5 | |||
Communication Services | 4.1 | |||
Utilities | 3.0 | |||
Energy | 2.7 |
TEN LARGEST HOLDINGS | ||||
Security | | Percent of Total Investments(a) |
| |
Molina Healthcare Inc. | 1.3% | |||
Haemonetics Corp. | 0.9 | |||
PBF Energy Inc., Class A | 0.9 | |||
Genesee & Wyoming Inc., Class A | 0.8 | |||
Primerica Inc. | 0.8 | |||
Casey’s General Stores Inc. | 0.8 | |||
Kemper Corp. | 0.8 | |||
Ciena Corp. | 0.8 | |||
Cable One Inc. | 0.8 | |||
ITT Inc. | 0.8 |
(a) | Excludes money market funds. |
F U N D S U M M A R Y | 11 |
Fund Summary as of October 31, 2018
| iShares® Morningstar Small-Cap Growth ETF |
Investment Objective
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.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||||||
6 Months | 1 Year | 5 Years | 10 Years | 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||||
Fund NAV | 1.64 | % | 6.67 | % | 8.76 | % | 14.27% | 6.67 | % | 52.21 | % | 279.49% | ||||||||||||||||||||
Fund Market | 1.33 | 6.53 | 8.75 | 14.27 | 6.53 | 52.08 | 279.72 | |||||||||||||||||||||||||
Index | 1.75 | 6.85 | 8.85 | 14.39 | 6.85 | 52.83 | 283.50 |
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 14 for more information.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
| Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio | | ||||||
$ | 1,000.00 | $ | 1,016.40 | $ | 1.52 | $ | 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. |
Portfolio Information
ALLOCATION BY SECTOR | ||||
Sector | | Percent of Total Investments(a) |
| |
Information Technology | 27.7% | |||
Health Care | 24.4 | |||
Consumer Discretionary | 12.8 | |||
Industrials | 12.4 | |||
Real Estate | 4.8 | |||
Communication Services | 4.5 | |||
Financials | 4.3 | |||
Energy | 4.2 | |||
Consumer Staples | 2.1 | |||
Materials | 2.1 | |||
Utilities | 0.7 |
TEN LARGEST HOLDINGS | ||||
Security | | Percent of Total Investments(a) |
| |
Sarepta Therapeutics Inc. | 1.3% | |||
Wayfair Inc., Class A | 1.0 | |||
Five Below Inc. | 1.0 | |||
Integrated Device Technology Inc. | 1.0 | |||
Zendesk Inc. | 0.9 | |||
Twilio Inc., Class A | 0.9 | |||
Euronet Worldwide Inc. | 0.9 | |||
LivaNova PLC | 0.9 | |||
RingCentral Inc., Class A | 0.8 | |||
Universal Display Corp. | 0.8 |
(a) | Excludes money market funds. |
12 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Fund Summary as of October 31, 2018
| iShares® Morningstar Small-Cap Value ETF |
Investment Objective
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.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||||||
6 Months | 1 Year | 5 Years | 10 Years | 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||||
Fund NAV | (1.90 | )% | (2.47 | )% | 6.66 | % | 12.66% | (2.47 | )% | 38.02 | % | 229.50% | ||||||||||||||||||||
Fund Market | (1.94 | ) | (2.47 | ) | 6.64 | 12.85 | (2.47 | ) | 37.92 | 234.85 | ||||||||||||||||||||||
Index | (1.78 | ) | (2.20 | ) | 6.87 | 12.92 | (2.20 | ) | 39.38 | 237.12 |
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.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
| Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) | | | Ending Account Value (10/31/18) | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio | | ||||||
$ | 1,000.00 | $ | 981.00 | $ | 1.50 | $ | 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. |
Portfolio Information
ALLOCATION BY SECTOR | ||||
Sector | | Percent of Total Investments(a) |
| |
Financials | 27.2% | |||
Consumer Discretionary | 12.7 | |||
Real Estate | 12.0 | |||
Industrials | 10.6 | |||
Energy | 7.5 | |||
Utilities | 7.2 | |||
Materials | 6.9 | |||
Information Technology | 6.6 | |||
Consumer Staples | 4.6 | |||
Health Care | 2.5 | |||
Communication Services | 2.2 |
TEN LARGEST HOLDINGS | ||||
Security | | Percent of Total Investments(a) |
| |
Popular Inc. | 0.9% | |||
Dun & Bradstreet Corp. (The) | 0.9 | |||
EPR Properties | 0.9 | |||
Nuance Communications Inc. | 0.9 | |||
Williams-Sonoma Inc. | 0.8 | |||
Hanover Insurance Group Inc. (The) | 0.8 | |||
Ashland Global Holdings Inc. | 0.8 | |||
MGIC Investment Corp. | 0.8 | |||
Assured Guaranty Ltd. | 0.8 | |||
Hospitality Properties Trust | 0.7 |
(a) | Excludes money market funds. |
F U N D S U M M A R Y | 13 |
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 ask 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. 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 your 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 at the beginning of the period (or from the commencement of operations if less than 6 months) and held through the end of the period, is intended to help you understand your ongoing costs (in dollars and cents) of investing in your 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 under the heading entitled “Expenses Paid During the Period.”
Hypothetical Example for Comparison Purposes – The table also provides information about hypothetical account values and hypothetical expenses based on your 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 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited)
October 31, 2018 | iShares® Morningstar Large-Cap ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks |
| |||||||
Aerospace & Defense — 4.9% |
| |||||||
General Dynamics Corp. | 41,462 | $ | 7,155,512 | |||||
Lockheed Martin Corp. | 35,756 | 10,506,901 | ||||||
Northrop Grumman Corp. | 26,027 | 6,817,773 | ||||||
Raytheon Co. | 42,323 | 7,408,218 | ||||||
United Technologies Corp. | 107,160 | 13,310,343 | ||||||
|
| |||||||
45,198,747 | ||||||||
Air Freight & Logistics — 2.0% |
| |||||||
FedEx Corp. | 35,877 | 7,905,138 | ||||||
United Parcel Service Inc., Class B | 100,047 | 10,659,008 | ||||||
|
| |||||||
18,564,146 | ||||||||
Airlines — 0.4% |
| |||||||
Southwest Airlines Co. | 82,023 | 4,027,329 | ||||||
|
| |||||||
Auto Components — 0.4% |
| |||||||
Aptiv PLC | 44,649 | 3,429,043 | ||||||
|
| |||||||
Banks — 5.7% |
| |||||||
Bank of America Corp. | 1,279,674 | 35,191,035 | ||||||
M&T Bank Corp. | 23,933 | 3,958,757 | ||||||
PNC Financial Services Group Inc. (The)(a) | 68,200 | 8,763,018 | ||||||
SunTrust Banks Inc. | 73,486 | 4,604,633 | ||||||
|
| |||||||
52,517,443 | ||||||||
Biotechnology — 3.6% |
| |||||||
AbbVie Inc. | 212,541 | 16,546,317 | ||||||
Biogen Inc.(b) | 29,483 | 8,970,793 | ||||||
Celgene Corp.(b) | 103,842 | 7,435,087 | ||||||
|
| |||||||
32,952,197 | ||||||||
Capital Markets — 1.6% |
| |||||||
Bank of New York Mellon Corp. (The) | 139,189 | 6,587,815 | ||||||
State Street Corp. | 60,091 | 4,131,256 | ||||||
T Rowe Price Group Inc. | 39,845 | 3,864,567 | ||||||
|
| |||||||
14,583,638 | ||||||||
Chemicals — 2.5% |
| |||||||
Air Products & Chemicals Inc. | 34,194 | 5,277,844 | ||||||
Linde PLC | 83,795 | 13,865,558 | ||||||
PPG Industries Inc. | 39,574 | 4,158,832 | ||||||
|
| |||||||
23,302,234 | ||||||||
Commercial Services & Supplies — 0.6% |
| |||||||
Waste Management Inc. | 61,660 | 5,516,720 | ||||||
|
| |||||||
Consumer Finance — 1.5% |
| |||||||
American Express Co. | 102,393 | 10,518,833 | ||||||
Synchrony Financial | 115,744 | 3,342,687 | ||||||
|
| |||||||
13,861,520 | ||||||||
Electric Utilities — 1.3% |
| |||||||
NextEra Energy Inc. | 68,131 | 11,752,598 | ||||||
|
| |||||||
Electrical Equipment — 0.7% |
| |||||||
Emerson Electric Co. | 94,832 | 6,437,196 | ||||||
|
| |||||||
Electronic Equipment, Instruments & Components — 0.9% |
| |||||||
Corning Inc. | 131,302 | 4,195,099 | ||||||
TE Connectivity Ltd. | 55,479 | 4,184,226 | ||||||
|
| |||||||
8,379,325 | ||||||||
Entertainment — 3.7% |
| |||||||
Twenty-First Century Fox Inc., Class A, NVS | 154,158 | 7,017,272 | ||||||
Twenty-First Century Fox Inc., Class B | 71,239 | 3,218,578 |
Security | Shares | Value | ||||||
Entertainment (continued) |
| |||||||
Walt Disney Co. (The) | 207,887 | $ | 23,871,664 | |||||
|
| |||||||
34,107,514 | ||||||||
Equity Real Estate Investment Trusts (REITs) — 2.8% |
| |||||||
AvalonBay Communities Inc. | 22,883 | 4,013,221 | ||||||
Digital Realty Trust Inc.(c) | 34,174 | 3,528,807 | ||||||
Prologis Inc. | 96,504 | 6,221,613 | ||||||
Simon Property Group Inc. | 45,988 | 8,439,718 | ||||||
Weyerhaeuser Co. | 125,015 | 3,329,149 | ||||||
|
| |||||||
25,532,508 | ||||||||
Food & Staples Retailing — 2.1% |
| |||||||
Costco Wholesale Corp. | 62,498 | 14,288,918 | ||||||
Sysco Corp. | 75,085 | 5,355,813 | ||||||
|
| |||||||
19,644,731 | ||||||||
Food Products — 0.6% |
| |||||||
Kraft Heinz Co. (The) | 97,076 | 5,336,268 | ||||||
|
| |||||||
Health Care Equipment & Supplies — 3.2% |
| |||||||
Abbott Laboratories | 248,173 | 17,109,047 | ||||||
Danaher Corp. | 90,381 | 8,983,871 | ||||||
Zimmer Biomet Holdings Inc. | 33,422 | 3,796,405 | ||||||
|
| |||||||
29,889,323 | ||||||||
Health Care Providers & Services — 2.2% |
| |||||||
Aetna Inc. | 47,980 | 9,519,232 | ||||||
Anthem Inc. | 37,956 | 10,459,535 | ||||||
|
| |||||||
19,978,767 | ||||||||
Hotels, Restaurants & Leisure — 3.2% |
| |||||||
Carnival Corp. | 66,546 | 3,729,238 | ||||||
Las Vegas Sands Corp. | 62,604 | 3,194,682 | ||||||
McDonald’s Corp. | 109,558 | 19,380,810 | ||||||
Royal Caribbean Cruises Ltd. | 29,120 | 3,049,738 | ||||||
|
| |||||||
29,354,468 | ||||||||
Household Products — 0.8% |
| |||||||
Colgate-Palmolive Co. | 128,540 | 7,654,557 | ||||||
|
| |||||||
Industrial Conglomerates — 3.3% |
| |||||||
3M Co. | 82,925 | 15,777,310 | ||||||
Honeywell International Inc. | 104,952 | 15,199,149 | ||||||
|
| |||||||
30,976,459 | ||||||||
Insurance — 3.2% |
| |||||||
Allstate Corp. (The) | 54,485 | 5,215,304 | ||||||
American International Group Inc. | 134,485 | 5,552,886 | ||||||
Aon PLC | 37,854 | 5,912,038 | ||||||
Marsh & McLennan Companies Inc. | 77,098 | 6,534,055 | ||||||
Progressive Corp. (The) | 90,066 | 6,277,600 | ||||||
|
| |||||||
29,491,883 | ||||||||
Internet & Direct Marketing Retail — 0.5% |
| |||||||
eBay Inc.(b) | 148,278 | 4,304,510 | ||||||
|
| |||||||
IT Services — 0.4% |
| |||||||
DXC Technology Co. | 46,329 | 3,374,141 | ||||||
|
| |||||||
Machinery — 1.3% |
| |||||||
Illinois Tool Works Inc. | 46,996 | 5,995,280 | ||||||
Parker-Hannifin Corp. | 22,005 | 3,336,618 | ||||||
Stanley Black & Decker Inc. | 25,874 | 3,014,838 | ||||||
|
| |||||||
12,346,736 | ||||||||
Media — 2.6% |
| |||||||
Comcast Corp., Class A | 638,304 | 24,344,915 | ||||||
|
|
S C H E D U L E O F I N V E S T M E N T S | 15 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Morningstar Large-Cap ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Metals & Mining — 0.1% |
| |||||||
Southern Copper Corp. | 30,360 | $ | 1,164,002 | |||||
|
| |||||||
Multi-Utilities — 0.5% |
| |||||||
Sempra Energy | 43,438 | 4,783,393 | ||||||
|
| |||||||
Multiline Retail — 0.5% |
| |||||||
Dollar General Corp. | 42,955 | 4,784,328 | ||||||
|
| |||||||
Oil, Gas & Consumable Fuels — 7.1% |
| |||||||
Anadarko Petroleum Corp. | 81,418 | 4,331,438 | ||||||
Chevron Corp. | 265,307 | 29,621,526 | ||||||
Continental Resources Inc./OK(b) | 24,492 | 1,290,239 | ||||||
EOG Resources Inc. | 84,769 | 8,929,566 | ||||||
Kinder Morgan Inc./DE | 299,085 | 5,090,427 | ||||||
Marathon Petroleum Corp. | 104,164 | 7,338,354 | ||||||
ONEOK Inc. | 67,179 | 4,406,942 | ||||||
Williams Companies Inc. (The) | 190,829 | 4,642,870 | ||||||
|
| |||||||
65,651,362 | ||||||||
Pharmaceuticals — 9.3% |
| |||||||
Allergan PLC | 47,192 | 7,456,808 | ||||||
Bristol-Myers Squibb Co. | 233,081 | 11,779,914 | ||||||
Eli Lilly & Co. | 136,372 | 14,788,180 | ||||||
Johnson & Johnson | 367,769 | 51,483,982 | ||||||
|
| |||||||
85,508,884 | ||||||||
Road & Rail — 2.4% |
| |||||||
Norfolk Southern Corp. | 42,122 | 7,069,335 | ||||||
Union Pacific Corp. | 104,760 | 15,318,007 | ||||||
|
| |||||||
22,387,342 | ||||||||
Semiconductors & Semiconductor Equipment — 2.4% |
| |||||||
Analog Devices Inc. | 58,543 | 4,900,635 | ||||||
Broadcom Inc. | 61,558 | 13,757,597 | ||||||
Lam Research Corp. | 26,317 | 3,729,908 | ||||||
|
| |||||||
22,388,140 | ||||||||
Software — 2.1% |
| |||||||
Oracle Corp. | 397,355 | 19,406,818 | ||||||
|
| |||||||
Specialty Retail — 2.3% |
| |||||||
Lowe’s Companies Inc. | 116,293 | 11,073,419 |
Security | Shares | Value | ||||||
Specialty Retail (continued) |
| |||||||
TJX Companies Inc. (The) | 91,779 | $ | 10,084,677 | |||||
|
| |||||||
21,158,096 | ||||||||
Technology Hardware, Storage & Peripherals — 14.8% |
| |||||||
Apple Inc. | 622,981 | 136,345,622 | ||||||
|
| |||||||
Textiles, Apparel & Luxury Goods — 0.5% |
| |||||||
VF Corp. | 52,380 | 4,341,254 | ||||||
|
| |||||||
Tobacco — 1.9% |
| |||||||
Altria Group Inc. | 266,998 | 17,365,550 | ||||||
|
| |||||||
Total Common Stocks — 99.9% |
| 922,143,707 | ||||||
|
| |||||||
Short-Term Investments | ||||||||
Money Market Funds — 0.4% |
| |||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 2.36%(a)(d)(e) | 3,613,819 | 3,614,541 | ||||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 2.11%(a)(d) | 278,683 | 278,683 | ||||||
|
| |||||||
3,893,224 | ||||||||
|
| |||||||
Total Short-Term Investments — 0.4% |
| 3,893,224 | ||||||
|
| |||||||
Total Investments in Securities — 100.3% |
| 926,036,931 | ||||||
Other Assets, Less Liabilities — (0.3)% |
| (2,708,214 | ) | |||||
|
| |||||||
Net Assets — 100.0% | $ | 923,328,717 | ||||||
|
|
(a) | Affiliate of the Fund. |
(b) | Non-income producing security. |
(c) | All or a portion of this security is on loan. |
(d) | Annualized 7-day yield as of period-end. |
(e) | All or a portion of this security was purchased with cash collateral received from loaned securities. |
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of
Section 2(a)(3) of the 1940 Act, were as follows:
Affiliated Issuer | | Shares Held at 04/30/18 | | | Shares Purchased | | | Shares Sold | | | Shares Held at 10/31/18 | | | Value at 10/31/18 | | Income | | Net Realized | | | Change in Unrealized Appreciation (Depreciation | ) | ||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | — | 3,613,819 | (b) | — | 3,613,819 | $ | 3,614,541 | $ | 2,819 | (c) | $ | 420 | $ | (183 | ) | |||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | 506,865 | — | (228,182 | )(b) | 278,683 | 278,683 | 14,645 | — | — | |||||||||||||||||||||||
PNC Financial Services Group Inc. (The) | 72,715 | 4,480 | (8,995 | ) | 68,200 | 8,763,018 | 131,751 | (56,971 | ) | (1,149,542 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 12,656,242 | $ | 149,215 | $ | (56,551 | ) | $ | (1,149,725 | ) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
(b) | Net of purchases and sales. |
(c) | Includes securities lending income earned from the reinvestment of cash collateral from loaned securities (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities, and less fees paid to BTC as securities lending agent. |
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, refer to the Notes to Financial Statements.
16 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Morningstar Large-Cap ETF
|
Fair Value Measurements (continued)
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $ | 922,143,707 | $ | — | $ | — | $ | 922,143,707 | ||||||||
Money Market Funds | 3,893,224 | — | — | 3,893,224 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 926,036,931 | $ | — | $ | — | $ | 926,036,931 | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
S C H E D U L E O F I N V E S T M E N T S | 17 |
Schedule of Investments (unaudited)
October 31, 2018 | iShares® Morningstar Large-Cap Growth ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks |
| |||||||
Aerospace & Defense — 2.2% |
| |||||||
Boeing Co. (The) | 59,510 | $ | 21,117,719 | |||||
|
| |||||||
Automobiles — 1.0% |
| |||||||
Tesla Inc.(a)(b) | 29,967 | 10,108,468 | ||||||
|
| |||||||
Beverages — 2.0% |
| |||||||
Brown-Forman Corp., Class A | 35,971 | 1,667,975 | ||||||
Brown-Forman Corp., Class B, NVS | 77,326 | 3,583,287 | ||||||
Constellation Brands Inc., Class A | 40,061 | 7,981,353 | ||||||
Monster Beverage Corp.(a) | 126,324 | 6,676,224 | ||||||
|
| |||||||
19,908,839 | ||||||||
Biotechnology — 2.4% |
| |||||||
Alexion Pharmaceuticals Inc.(a) | 65,412 | 7,330,723 | ||||||
Regeneron Pharmaceuticals Inc.(a) | 20,576 | 6,980,202 | ||||||
Vertex Pharmaceuticals Inc.(a) | 52,140 | 8,835,644 | ||||||
|
| |||||||
23,146,569 | ||||||||
Capital Markets — 6.7% |
| |||||||
BlackRock Inc.(c) | 21,712 | 8,932,751 | ||||||
Charles Schwab Corp. (The) | 207,965 | 9,616,301 | ||||||
CME Group Inc. | 60,207 | 11,032,331 | ||||||
Intercontinental Exchange Inc. | 118,674 | 9,142,645 | ||||||
Moody’s Corp. | 44,437 | 6,464,695 | ||||||
Northern Trust Corp. | 71,855 | 6,759,400 | ||||||
S&P Global Inc. | 46,775 | 8,528,018 | ||||||
TD Ameritrade Holding Corp. | 103,437 | 5,349,762 | ||||||
|
| |||||||
65,825,903 | ||||||||
Chemicals — 1.6% |
| |||||||
Ecolab Inc. | 56,392 | 8,636,435 | ||||||
Sherwin-Williams Co. (The) | 18,675 | 7,348,052 | ||||||
|
| |||||||
15,984,487 | ||||||||
Electronic Equipment, Instruments & Components — 0.7% |
| |||||||
Amphenol Corp., Class A | 82,278 | 7,363,881 | ||||||
|
| |||||||
Energy Equipment & Services — 1.8% |
| |||||||
Halliburton Co. | 216,524 | 7,509,052 | ||||||
Schlumberger Ltd. | 205,013 | 10,519,217 | ||||||
|
| |||||||
18,028,269 | ||||||||
Entertainment — 3.2% |
| |||||||
Activision Blizzard Inc. | 131,342 | 9,069,165 | ||||||
Electronic Arts Inc.(a) | 73,849 | 6,718,782 | ||||||
Netflix Inc.(a) | 51,165 | 15,440,574 | ||||||
|
| |||||||
31,228,521 | ||||||||
Equity Real Estate Investment Trusts (REITs) — 3.6% |
| |||||||
American Tower Corp. | 74,148 | 11,553,000 | ||||||
Crown Castle International Corp.(b) | 84,104 | 9,145,469 | ||||||
Equinix Inc. | 18,976 | 7,186,970 | ||||||
Public Storage(b) | 35,952 | 7,387,057 | ||||||
|
| |||||||
35,272,496 | ||||||||
Health Care Equipment & Supplies — 5.5% |
| |||||||
Baxter International Inc. | 112,638 | 7,041,001 | ||||||
Becton Dickinson and Co. | 43,423 | 10,009,002 | ||||||
Boston Scientific Corp.(a) | 262,816 | 9,498,170 | ||||||
Edwards Lifesciences Corp.(a) | 54,860 | 8,097,336 | ||||||
Intuitive Surgical Inc.(a) | 19,169 | 9,990,500 | ||||||
Stryker Corp. | 58,206 | 9,442,177 | ||||||
|
| |||||||
54,078,186 |
Security | Shares | Value | ||||||
Health Care Providers & Services — 4.6% |
| |||||||
Cigna Corp. | 48,562 | $ | 10,383,041 | |||||
Humana Inc. | 27,706 | 8,877,280 | ||||||
UnitedHealth Group Inc. | 100,315 | 26,217,325 | ||||||
|
| |||||||
45,477,646 | ||||||||
Hotels, Restaurants & Leisure — 3.6% |
| |||||||
Hilton Worldwide Holdings Inc. | 94,110 | 6,697,809 | ||||||
Marriott International Inc./MD, Class A | 66,442 | 7,766,405 | ||||||
Starbucks Corp. | 212,799 | 12,399,798 | ||||||
Yum! Brands Inc. | 89,267 | 8,070,629 | ||||||
|
| |||||||
34,934,641 | ||||||||
Industrial Conglomerates — 0.8% |
| |||||||
Roper Technologies Inc. | 26,431 | 7,477,330 | ||||||
|
| |||||||
Interactive Media & Services — 9.7% |
| |||||||
Alphabet Inc., Class A(a) | 26,999 | 29,444,570 | ||||||
Alphabet Inc., Class C, NVS(a) | 27,812 | 29,947,127 | ||||||
Facebook Inc., Class A(a) | 233,133 | 35,387,258 | ||||||
|
| |||||||
94,778,955 | ||||||||
Internet & Direct Marketing Retail — 7.3% |
| |||||||
Amazon.com Inc.(a) | 36,606 | 58,496,753 | ||||||
Booking Holdings Inc.(a) | 6,819 | 12,782,761 | ||||||
|
| |||||||
71,279,514 | ||||||||
IT Services — 12.4% |
| |||||||
Accenture PLC, Class A | 85,265 | 13,439,470 | ||||||
Automatic Data Processing Inc. | 73,866 | 10,642,613 | ||||||
Cognizant Technology Solutions Corp., Class A | 120,770 | 8,336,753 | ||||||
Fidelity National Information Services Inc. | 77,660 | 8,084,406 | ||||||
Fiserv Inc.(a) | 101,794 | 8,072,264 | ||||||
Mastercard Inc., Class A | 100,754 | 19,916,043 | ||||||
Paychex Inc. | 101,235 | 6,629,880 | ||||||
PayPal Holdings Inc.(a) | 158,954 | 13,382,337 | ||||||
Visa Inc., Class A | 184,135 | 25,383,010 | ||||||
Worldpay Inc., Class A(a) | 81,101 | 7,448,316 | ||||||
|
| |||||||
121,335,092 | ||||||||
Life Sciences Tools & Services — 2.2% |
| |||||||
Illumina Inc.(a) | 27,884 | 8,676,107 | ||||||
Thermo Fisher Scientific Inc. | 56,202 | 13,131,597 | ||||||
|
| |||||||
21,807,704 | ||||||||
Machinery — 0.7% |
| |||||||
Fortive Corp. | 89,364 | 6,635,277 | ||||||
|
| |||||||
Media — 1.6% |
| |||||||
Charter Communications Inc., | 32,202 | 10,316,554 | ||||||
Sirius XM Holdings Inc. | 888,589 | 5,349,306 | ||||||
|
| |||||||
15,665,860 | ||||||||
Oil, Gas & Consumable Fuels — 1.5% |
| |||||||
Concho Resources Inc.(a)(b) | 55,904 | 7,775,687 | ||||||
Pioneer Natural Resources Co. | 46,689 | 6,875,889 | ||||||
|
| |||||||
14,651,576 | ||||||||
Personal Products — 0.8% |
| |||||||
Estee Lauder Companies Inc. (The), Class A | 57,995 | 7,970,833 | ||||||
|
| |||||||
Pharmaceuticals — 0.9% |
| |||||||
Zoetis Inc. | 102,216 | 9,214,772 | ||||||
|
| |||||||
Road & Rail — 1.0% |
| |||||||
CSX Corp. | 143,002 | 9,847,118 | ||||||
|
| |||||||
Semiconductors & Semiconductor Equipment — 3.4% |
| |||||||
Applied Materials Inc. | 201,458 | 6,623,939 |
18 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Morningstar Large-Cap Growth ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Semiconductors & Semiconductor Equipment (continued) |
| |||||||
NVIDIA Corp. | 70,282 | $ | 14,817,554 | |||||
Texas Instruments Inc. | 132,979 | 12,344,441 | ||||||
|
| |||||||
33,785,934 | ||||||||
Software — 13.6% |
| |||||||
Adobe Inc.(a) | 60,638 | 14,902,395 | ||||||
Autodesk Inc.(a) | 54,803 | 7,083,288 | ||||||
Intuit Inc. | 45,796 | 9,662,956 | ||||||
Microsoft Corp. | 681,330 | 72,772,857 | ||||||
Red Hat Inc.(a) | 46,025 | 7,899,731 | ||||||
salesforce.com Inc.(a) | 97,740 | 13,413,837 | ||||||
ServiceNow Inc.(a) | 42,092 | 7,620,336 | ||||||
|
| |||||||
133,355,400 | ||||||||
Specialty Retail — 3.1% |
| |||||||
Home Depot Inc. (The) | 120,953 | 21,273,214 | ||||||
Ross Stores Inc. | 88,520 | 8,763,480 | ||||||
|
| |||||||
30,036,694 | ||||||||
Textiles, Apparel & Luxury Goods — 1.3% |
| |||||||
NIKE Inc., Class B | 172,268 | 12,926,991 | ||||||
|
| |||||||
Wireless Telecommunication Services — 0.7% |
| |||||||
T-Mobile U.S. Inc.(a) | 107,345 | 7,358,500 | ||||||
|
| |||||||
Total Common Stocks — 99.9% | 980,603,175 | |||||||
|
|
Security | Shares | Value | ||||||
Short-Term Investments |
| |||||||
Money Market Funds — 1.4% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 2.36%(c)(d)(e) | 12,477,923 | $ | 12,480,419 | |||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 2.11%(c)(d) | 1,088,637 | 1,088,637 | ||||||
|
| |||||||
13,569,056 | ||||||||
|
| |||||||
Total Short-Term Investments — 1.4% |
| 13,569,056 | ||||||
|
| |||||||
Total Investments in Securities — 101.3% |
| 994,172,231 | ||||||
Other Assets, Less Liabilities — (1.3)% |
| (12,377,443 | ) | |||||
|
| |||||||
Net Assets — 100.0% | $ | 981,794,788 | ||||||
|
|
(a) | Non-income producing security. |
(b) | All or a portion of this security is on loan. |
(c) | Affiliate of the Fund. |
(d) | Annualized 7-day yield as of period-end. |
(e) | All or a portion of this security was purchased with cash collateral received from loaned securities. |
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of
Section 2(a)(3) of the 1940 Act, were as follows:
Affiliated Issuer | | Shares Held at 04/30/18 | | | Shares Purchased | | | Shares Sold | | | Shares Held at 10/31/18 | | | Value at 10/31/18 | | Income | | Net Realized | | | Change in Unrealized Appreciation (Depreciation | ) | ||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | 18,324,574 | — | (5,846,651 | )(b) | 12,477,923 | $ | 12,480,419 | $ | 129,825 | (c) | $ | 2,904 | $ | (1,183 | ) | |||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | 1,161,372 | — | (72,735 | )(b) | 1,088,637 | 1,088,637 | 9,868 | — | — | |||||||||||||||||||||||
BlackRock Inc. | 17,935 | 4,007 | (230 | ) | 21,712 | 8,932,751 | 113,876 | 39,400 | (2,371,804 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 22,501,807 | $ | 253,569 | $ | 42,304 | $ | (2,372,987 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
(b) | Net of purchases and sales. |
(c) | Includes securities lending income earned from the reinvestment of cash collateral from loaned securities (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities, and less fees paid to BTC as securities lending agent. |
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, refer to the Notes to Financial Statements.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $ | 980,603,175 | $ | — | $ | — | $ | 980,603,175 | ||||||||
Money Market Funds | 13,569,056 | — | — | 13,569,056 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 994,172,231 | $ | — | $ | — | $ | 994,172,231 | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
S C H E D U L E O F I N V E S T M E N T S | 19 |
Schedule of Investments (unaudited)
October 31, 2018 | iShares® Morningstar Large-Cap Value ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks |
| |||||||
Airlines — 0.5% |
| |||||||
Delta Air Lines Inc. | 37,500 | $ | 2,052,375 | |||||
|
| |||||||
Automobiles — 1.3% |
| |||||||
Ford Motor Co. | 233,328 | 2,228,282 | ||||||
General Motors Co. | 78,171 | 2,860,277 | ||||||
|
| |||||||
5,088,559 | ||||||||
Banks — 13.5% |
| |||||||
BB&T Corp. | 46,144 | 2,268,439 | ||||||
Citigroup Inc. | 149,928 | 9,814,287 | ||||||
JPMorgan Chase & Co. | 200,227 | 21,828,747 | ||||||
U.S. Bancorp. | 91,228 | 4,768,488 | ||||||
Wells Fargo & Co. | 258,232 | 13,745,689 | ||||||
|
| |||||||
52,425,650 | ||||||||
Beverages — 5.3% |
| |||||||
Coca-Cola Co. (The) | 228,034 | 10,918,268 | ||||||
PepsiCo Inc. | 84,259 | 9,469,026 | ||||||
|
| |||||||
20,387,294 | ||||||||
Biotechnology — 3.3% |
| |||||||
Amgen Inc. | 38,562 | 7,434,368 | ||||||
Gilead Sciences Inc. | 77,230 | 5,265,541 | ||||||
|
| |||||||
12,699,909 | ||||||||
Building Products — 0.5% |
| |||||||
Johnson Controls International PLC | 55,038 | 1,759,565 | ||||||
|
| |||||||
Capital Markets — 2.1% |
| |||||||
Goldman Sachs Group Inc. (The) | 20,919 | 4,714,515 | ||||||
Morgan Stanley | 79,000 | 3,607,140 | ||||||
|
| |||||||
8,321,655 | ||||||||
Chemicals — 2.3% |
| |||||||
DowDuPont Inc. | 137,464 | 7,412,059 | ||||||
LyondellBasell Industries NV, Class A | 18,997 | 1,695,862 | ||||||
|
| |||||||
9,107,921 | ||||||||
Communications Equipment — 3.2% |
| |||||||
Cisco Systems Inc. | 272,340 | 12,459,555 | ||||||
|
| |||||||
Consumer Finance — 1.0% |
| |||||||
Capital One Financial Corp. | 28,502 | 2,545,228 | ||||||
Discover Financial Services | 20,398 | 1,421,129 | ||||||
|
| |||||||
3,966,357 | ||||||||
Containers & Packaging — 0.3% |
| |||||||
International Paper Co. | 24,364 | 1,105,151 | ||||||
|
| |||||||
Diversified Financial Services — 6.2% |
| |||||||
Berkshire Hathaway Inc., Class B(a) | 116,139 | 23,841,014 | ||||||
|
| |||||||
Diversified Telecommunication Services — 7.1% |
| |||||||
AT&T Inc. | 432,639 | 13,273,364 | ||||||
Verizon Communications Inc. | 246,163 | 14,053,446 | ||||||
|
| |||||||
27,326,810 | ||||||||
Electric Utilities — 3.9% |
| |||||||
American Electric Power Co. Inc. | 29,374 | 2,154,877 | ||||||
Duke Energy Corp. | 42,439 | 3,506,735 | ||||||
Edison International | 19,410 | 1,346,860 | ||||||
Exelon Corp. | 57,545 | 2,521,046 | ||||||
PG&E Corp. | 30,787 | 1,441,139 | ||||||
Southern Co. (The) | 60,418 | 2,720,623 | ||||||
Xcel Energy Inc. | 30,329 | 1,486,424 | ||||||
|
| |||||||
15,177,704 |
Security | Shares | Value | ||||||
Electrical Equipment — 0.5% |
| |||||||
Eaton Corp. PLC | 25,832 | $ | 1,851,380 | |||||
|
| |||||||
Equity Real Estate Investment Trusts (REITs) — 0.4% |
| |||||||
Equity Residential | 21,941 | 1,425,287 | ||||||
|
| |||||||
Food & Staples Retailing — 3.2% |
| |||||||
Walgreens Boots Alliance Inc. | 50,255 | 4,008,841 | ||||||
Walmart Inc. | 85,496 | 8,573,539 | ||||||
|
| |||||||
12,582,380 | ||||||||
Food Products — 1.8% |
| |||||||
Archer-Daniels-Midland Co. | 33,315 | 1,574,134 | ||||||
General Mills Inc. | 35,475 | 1,553,805 | ||||||
Mondelez International Inc., Class A | 87,371 | 3,667,834 | ||||||
|
| |||||||
6,795,773 | ||||||||
Health Care Equipment & Supplies — 1.9% |
| |||||||
Medtronic PLC | 80,458 | 7,226,738 | ||||||
|
| |||||||
Health Care Providers & Services — 2.9% |
| |||||||
CVS Health Corp. | 60,652 | 4,390,598 | ||||||
Express Scripts Holding Co.(a) | 33,495 | 3,248,010 | ||||||
HCA Healthcare Inc. | 16,086 | 2,147,964 | ||||||
McKesson Corp. | 11,892 | 1,483,646 | ||||||
|
| |||||||
11,270,218 | ||||||||
Household Products — 4.0% |
| |||||||
Kimberly-Clark Corp. | 20,717 | 2,160,783 | ||||||
Procter & Gamble Co. (The) | 148,293 | 13,150,623 | ||||||
|
| |||||||
15,311,406 | ||||||||
Industrial Conglomerates — 1.3% |
| |||||||
General Electric Co. | 517,777 | 5,229,548 | ||||||
|
| |||||||
Insurance — 3.1% |
| |||||||
Aflac Inc. | 45,768 | 1,971,228 | ||||||
Chubb Ltd. | 27,599 | 3,447,391 | ||||||
MetLife Inc. | 59,268 | 2,441,249 | ||||||
Prudential Financial Inc. | 24,843 | 2,329,776 | ||||||
Travelers Companies Inc. (The) | 15,958 | 1,996,825 | ||||||
|
| |||||||
12,186,469 | ||||||||
IT Services — 1.6% |
| |||||||
International Business Machines Corp. | 54,379 | 6,276,968 | ||||||
|
| |||||||
Machinery — 2.4% |
| |||||||
Caterpillar Inc. | 35,407 | 4,295,577 | ||||||
Cummins Inc. | 8,951 | 1,223,512 | ||||||
Deere & Co. | 19,164 | 2,595,572 | ||||||
PACCAR Inc. | 20,884 | 1,194,774 | ||||||
|
| |||||||
9,309,435 | ||||||||
Multi-Utilities — 1.5% |
| |||||||
Consolidated Edison Inc. | 18,534 | 1,408,584 | ||||||
Dominion Energy Inc. | 38,949 | 2,781,737 | ||||||
Public Service Enterprise Group Inc. | 30,076 | 1,606,961 | ||||||
|
| |||||||
5,797,282 | ||||||||
Multiline Retail — 0.7% |
| |||||||
Target Corp. | 31,358 | 2,622,470 | ||||||
|
| |||||||
Oil, Gas & Consumable Fuels — 8.5% |
| |||||||
ConocoPhillips | 69,233 | 4,839,386 | ||||||
Exxon Mobil Corp. | 252,232 | 20,097,846 | ||||||
Occidental Petroleum Corp. | 45,559 | 3,055,642 | ||||||
Phillips 66 | 25,446 | 2,616,358 |
20 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Morningstar Large-Cap Value ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Oil, Gas & Consumable Fuels (continued) |
| |||||||
Valero Energy Corp. | 25,464 | $ | 2,319,516 | |||||
|
| |||||||
32,928,748 | ||||||||
Pharmaceuticals — 6.9% |
| |||||||
Merck & Co. Inc. | 158,443 | 11,662,989 | ||||||
Pfizer Inc. | 349,239 | 15,038,232 | ||||||
|
| |||||||
26,701,221 | ||||||||
Semiconductors & Semiconductor Equipment — 5.4% |
| |||||||
Intel Corp. | 274,703 | 12,878,077 | ||||||
Micron Technology Inc.(a) | 69,097 | 2,606,339 | ||||||
QUALCOMM Inc. | 83,788 | 5,269,427 | ||||||
|
| |||||||
20,753,843 | ||||||||
Technology Hardware, Storage & Peripherals — 1.1% |
| |||||||
Hewlett Packard Enterprise Co. | 87,674 | 1,337,029 | ||||||
HP Inc. | 94,287 | 2,276,088 | ||||||
Western Digital Corp. | 17,392 | 749,073 | ||||||
|
| |||||||
4,362,190 | ||||||||
Tobacco — 2.1% |
| |||||||
Philip Morris International Inc. | 92,611 | 8,156,251 | ||||||
|
| |||||||
Wireless Telecommunication Services — 0.1% |
| |||||||
Sprint Corp.(a) | 34,023 | 208,221 | ||||||
|
| |||||||
Total Common Stocks — 99.9% | 386,715,347 | |||||||
|
|
Security | Shares | Value | ||||||
Short-Term Investments | ||||||||
Money Market Funds — 0.1% |
| |||||||
BlackRock Cash Funds: Treasury, | 436,056 | $ | 436,056 | |||||
|
| |||||||
Total Short-Term Investments — 0.1% | 436,056 | |||||||
|
| |||||||
Total Investments in Securities — 100.0% |
| 387,151,403 | ||||||
Other Assets, Less Liabilities — (0.0)% |
| (113,945 | ) | |||||
|
| |||||||
Net Assets — 100.0% | $ | 387,037,458 | ||||||
|
|
(a) | Non-income producing security. |
(b) | Affiliate of the Fund. |
(c) | Annualized 7-day yield as of period-end. |
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of
Section 2(a)(3) of the 1940 Act, were as follows:
| Shares Held at | | | Shares Held at | | Value at | Net Realized | | Change in Unrealized Appreciation | | ||||||||||||||||||
Affiliated Issuer | 04/30/18 | Net Activity | 10/31/18 | 10/31/18 | Income | Gain (Loss) | (a) | (Depreciation) | ||||||||||||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | 273,624 | (273,624) | — | $ | — | $ | 738 | (b) | $ | 159 | $ | (7) | ||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | 503,723 | (67,667) | 436,056 | 436,056 | 5,425 | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
$ | 436,056 | $ | 6,163 | $ | 159 | $ | (7) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
(b) | Includes securities lending income earned from the reinvestment of cash collateral from loaned securities (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities, and less fees paid to BTC as securities lending agent. |
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, refer to the Notes to Financial Statements.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $ | 386,715,347 | $ | — | $ | — | $ | 386,715,347 | ||||||||
Money Market Funds | 436,056 | — | — | 436,056 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 387,151,403 | $ | — | $ | — | $ | 387,151,403 | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
S C H E D U L E O F I N V E S T M E N T S | 21 |
Schedule of Investments (unaudited)
October 31, 2018 | iShares® Morningstar Mid-Cap ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks | ||||||||
Aerospace & Defense — 4.5% |
| |||||||
Curtiss-Wright Corp. | 17,129 | $ | 1,874,940 | |||||
Harris Corp. | 45,765 | 6,805,713 | ||||||
L3 Technologies Inc. | 30,506 | 5,779,972 | ||||||
Rockwell Collins Inc. | 64,015 | 8,195,200 | ||||||
Spirit AeroSystems Holdings Inc., Class A | 41,478 | 3,484,567 | ||||||
Textron Inc. | 96,747 | 5,188,542 | ||||||
|
| |||||||
31,328,934 | ||||||||
Air Freight & Logistics — 1.4% |
| |||||||
CH Robinson Worldwide Inc. | 53,958 | 4,803,881 | ||||||
Expeditors International of Washington Inc. | 67,898 | 4,561,387 | ||||||
|
| |||||||
9,365,268 | ||||||||
Auto Components — 0.3% |
| |||||||
Gentex Corp. | 104,733 | 2,204,630 | ||||||
|
| |||||||
Automobiles — 0.2% |
| |||||||
Thor Industries Inc. | 19,497 | 1,357,771 | ||||||
|
| |||||||
Banks — 6.1% |
| |||||||
Bank OZK(a) | 46,818 | 1,280,940 | ||||||
BOK Financial Corp. | 12,368 | 1,060,309 | ||||||
Citizens Financial Group Inc. | 185,364 | 6,923,345 | ||||||
Comerica Inc. | 66,754 | 5,444,456 | ||||||
Commerce Bancshares Inc. | 36,956 | 2,350,402 | ||||||
Cullen/Frost Bankers Inc. | 24,890 | 2,437,229 | ||||||
East West Bancorp. Inc. | 56,439 | 2,959,661 | ||||||
Signature Bank/New York NY | 21,558 | 2,369,224 | ||||||
Sterling Bancorp./DE | 87,815 | 1,578,914 | ||||||
SVB Financial Group(b) | 20,725 | 4,916,592 | ||||||
Synovus Financial Corp. | 45,703 | 1,716,605 | ||||||
Webster Financial Corp. | 35,920 | 2,113,533 | ||||||
Western Alliance Bancorp.(b) | 37,930 | 1,829,743 | ||||||
Wintrust Financial Corp. | 21,952 | 1,671,425 | ||||||
Zions Bancorp. N.A | 75,713 | 3,562,297 | ||||||
|
| |||||||
42,214,675 | ||||||||
Beverages — 0.9% |
| |||||||
Keurig Dr Pepper Inc. | 70,312 | 1,828,112 | ||||||
Molson Coors Brewing Co., Class B | 72,898 | 4,665,472 | ||||||
|
| |||||||
6,493,584 | ||||||||
Building Products — 1.4% |
| |||||||
Fortune Brands Home & Security Inc. | 55,468 | 2,486,630 | ||||||
Masco Corp. | 119,752 | 3,592,560 | ||||||
Owens Corning | 43,197 | 2,041,922 | ||||||
USG Corp. | 33,140 | 1,399,171 | ||||||
|
| |||||||
9,520,283 | ||||||||
Capital Markets — 2.8% |
| |||||||
Affiliated Managers Group Inc. | 20,810 | 2,365,264 | ||||||
Ameriprise Financial Inc. | 55,251 | 7,030,137 | ||||||
LPL Financial Holdings Inc. | 34,310 | 2,113,496 | ||||||
Nasdaq Inc. | 44,849 | 3,888,857 | ||||||
Raymond James Financial Inc. | 51,136 | 3,921,620 | ||||||
|
| |||||||
19,319,374 | ||||||||
Chemicals — 3.4% |
| |||||||
Albemarle Corp. | 42,237 | 4,190,755 | ||||||
Axalta Coating Systems Ltd.(b) | 83,395 | 2,058,188 | ||||||
Chemours Co. (The) | 68,875 | 2,273,564 | ||||||
International Flavors & Fragrances Inc., New | 39,420 | 5,702,497 | ||||||
NewMarket Corp. | 3,479 | 1,342,755 |
Security | Shares | Value | ||||||
Chemicals (continued) |
| |||||||
Olin Corp. | 65,041 | $ | 1,313,828 | |||||
RPM International Inc. | 51,971 | 3,179,066 | ||||||
Scotts Miracle-Gro Co. (The) | 15,227 | 1,016,250 | ||||||
Westlake Chemical Corp. | 14,060 | 1,002,478 | ||||||
WR Grace & Co. | 26,187 | 1,696,656 | ||||||
|
| |||||||
23,776,037 | ||||||||
Commercial Services & Supplies — 1.4% |
| |||||||
ADT Inc.(a) | 47,131 | 364,794 | ||||||
KAR Auction Services Inc. | 52,301 | 2,978,019 | ||||||
Republic Services Inc. | 84,899 | 6,170,459 | ||||||
|
| |||||||
9,513,272 | ||||||||
Communications Equipment — 0.8% |
| |||||||
ARRIS International PLC(b) | 66,019 | 1,641,893 | ||||||
F5 Networks Inc.(b) | 23,686 | 4,151,682 | ||||||
|
| |||||||
5,793,575 | ||||||||
Construction Materials — 0.2% |
| |||||||
Eagle Materials Inc. | 18,508 | 1,366,631 | ||||||
|
| |||||||
Consumer Finance — 0.2% |
| |||||||
SLM Corp.(a)(b) | 169,566 | 1,719,399 | ||||||
|
| |||||||
Containers & Packaging — 1.0% |
| |||||||
AptarGroup Inc. | 24,218 | 2,469,267 | ||||||
Avery Dennison Corp. | 34,046 | 3,088,653 | ||||||
Graphic Packaging Holding Co. | 120,868 | 1,330,757 | ||||||
|
| |||||||
6,888,677 | ||||||||
Distributors — 0.5% |
| |||||||
LKQ Corp.(b) | 123,882 | 3,378,262 | ||||||
|
| |||||||
Diversified Consumer Services — 0.3% |
| |||||||
ServiceMaster Global Holdings Inc.(b) | 52,795 | 2,263,850 | ||||||
|
| |||||||
Diversified Financial Services — 0.4% |
| |||||||
Jefferies Financial Group Inc. | 112,944 | 2,424,908 | ||||||
|
| |||||||
Electric Utilities — 0.1% |
| |||||||
Avangrid Inc. | 21,662 | 1,018,331 | ||||||
|
| |||||||
Electrical Equipment — 1.8% |
| |||||||
Acuity Brands Inc. | 15,649 | 1,966,141 | ||||||
AMETEK Inc. | 90,316 | 6,058,397 | ||||||
nVent Electric PLC | 63,453 | 1,549,522 | ||||||
Sensata Technologies Holding PLC(a)(b) | 66,088 | 3,099,527 | ||||||
|
| |||||||
12,673,587 | ||||||||
Electronic Equipment, Instruments & Components — 2.9% |
| |||||||
CDW Corp./DE | 58,951 | 5,306,180 | ||||||
Flex Ltd.(a)(b) | 207,492 | 1,630,887 | ||||||
Jabil Inc. | 59,699 | 1,476,356 | ||||||
Keysight Technologies Inc.(b) | 72,997 | 4,166,669 | ||||||
Trimble Inc.(b) | 97,349 | 3,638,906 | ||||||
Zebra Technologies Corp., Class A(b) | 20,911 | 3,477,499 | ||||||
|
| |||||||
19,696,497 | ||||||||
Equity Real Estate Investment Trusts (REITs) — 12.7% |
| |||||||
Alexandria Real Estate Equities Inc.(a) | 41,189 | 5,034,531 | ||||||
Apartment Investment & Management Co., Class A | 61,283 | 2,637,620 | ||||||
Boston Properties Inc. | 60,141 | 7,262,627 | ||||||
Camden Property Trust | 36,144 | 3,262,719 | ||||||
CubeSmart | 72,396 | 2,098,036 | ||||||
Duke Realty Corp. | 139,144 | 3,836,200 | ||||||
Essex Property Trust Inc. | 25,724 | 6,451,065 |
22 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Morningstar Mid-Cap ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Equity Real Estate Investment Trusts (REITs) (continued) |
| |||||||
Extra Space Storage Inc.(a) | 49,268 | $ | 4,437,076 | |||||
Federal Realty Investment Trust | 28,622 | 3,550,559 | ||||||
Forest City Realty Trust Inc., Class A | 104,063 | 2,618,225 | ||||||
Healthcare Trust of America Inc., Class A | 80,825 | 2,122,464 | ||||||
Highwoods Properties Inc. | 40,294 | 1,718,136 | ||||||
Host Hotels & Resorts Inc. | 288,857 | 5,520,057 | ||||||
Kilroy Realty Corp.(a) | 39,200 | 2,700,096 | ||||||
Macerich Co. (The) | 41,201 | 2,126,796 | ||||||
Mid-America Apartment Communities Inc. | 44,325 | 4,330,996 | ||||||
National Retail Properties Inc. | 61,142 | 2,858,388 | ||||||
Realty Income Corp. | 112,962 | 6,808,220 | ||||||
STORE Capital Corp.(a) | 71,251 | 2,068,417 | ||||||
Sun Communities Inc. | 33,631 | 3,378,907 | ||||||
UDR Inc. | 104,247 | 4,085,440 | ||||||
Ventas Inc. | 138,821 | 8,057,171 | ||||||
VICI Properties Inc. | 27,215 | 587,572 | ||||||
|
| |||||||
87,551,318 | ||||||||
Food & Staples Retailing — 0.4% |
| |||||||
U.S. Foods Holding Corp.(b) | 84,519 | 2,465,419 | ||||||
|
| |||||||
Food Products — 2.5% |
| |||||||
Hershey Co. (The) | 54,436 | 5,832,817 | ||||||
Hormel Foods Corp. | 105,892 | 4,621,127 | ||||||
McCormick & Co. Inc./MD, NVS | 47,235 | 6,801,840 | ||||||
|
| |||||||
17,255,784 | ||||||||
Gas Utilities — 0.6% |
| |||||||
Atmos Energy Corp. | 43,309 | 4,031,202 | ||||||
|
| |||||||
Health Care Equipment & Supplies — 2.9% |
| |||||||
Cooper Companies Inc. (The)(a) | 19,138 | 4,943,537 | ||||||
DENTSPLY SIRONA Inc. | 86,596 | 2,998,820 | ||||||
Hologic Inc.(b) | 105,982 | 4,132,238 | ||||||
STERIS PLC | 32,930 | 3,599,578 | ||||||
Varian Medical Systems Inc.(b) | 35,654 | 4,256,018 | ||||||
|
| |||||||
19,930,191 | ||||||||
Health Care Providers & Services — 4.8% |
| |||||||
AmerisourceBergen Corp. | 62,355 | 5,487,240 | ||||||
Centene Corp.(b) | 79,940 | 10,417,781 | ||||||
DaVita Inc.(b) | 49,401 | 3,326,664 | ||||||
Encompass Health Corp. | 38,504 | 2,591,319 | ||||||
Henry Schein Inc.(b) | 59,631 | 4,949,373 | ||||||
Laboratory Corp. of America | 39,686 | 6,371,587 | ||||||
|
| |||||||
33,143,964 | ||||||||
Hotels, Restaurants & Leisure — 3.2% |
| |||||||
Aramark | 95,994 | 3,448,104 | ||||||
Caesars Entertainment Corp.(a)(b) | 234,985 | 2,018,521 | ||||||
Darden Restaurants Inc. | 48,322 | 5,148,709 | ||||||
MGM Resorts International | 199,019 | 5,309,827 | ||||||
Norwegian Cruise Line Holdings Ltd.(b) | 79,354 | 3,497,131 | ||||||
Six Flags Entertainment Corp. | 27,825 | 1,498,655 | ||||||
Wyndham Destinations Inc. | 38,720 | 1,389,274 | ||||||
|
| |||||||
22,310,221 | ||||||||
Household Durables — 2.1% |
| |||||||
DR Horton Inc. | 133,638 | 4,805,622 | ||||||
Lennar Corp., Class A(a) | 113,617 | 4,883,259 | ||||||
Lennar Corp., Class B | 6,089 | 217,804 | ||||||
PulteGroup Inc. | 101,766 | 2,500,391 | ||||||
Toll Brothers Inc. | 52,802 | 1,777,315 | ||||||
|
| |||||||
14,184,391 |
Security | Shares | Value | ||||||
Household Products — 1.9% |
| |||||||
Church & Dwight Co. Inc. | 95,578 | $ | 5,674,466 | |||||
Clorox Co. (The) | 49,885 | 7,405,428 | ||||||
|
| |||||||
13,079,894 | ||||||||
Industrial Conglomerates — 0.3% |
| |||||||
Carlisle Companies Inc. | 23,265 | 2,247,166 | ||||||
|
| |||||||
Insurance — 4.2% |
| |||||||
Arch Capital Group Ltd.(a)(b) | 157,850 | 4,478,205 | ||||||
Arthur J Gallagher & Co. | 71,518 | 5,293,047 | ||||||
Athene Holding Ltd., Class A(b) | 49,402 | 2,258,660 | ||||||
Everest Re Group Ltd. | 15,912 | 3,466,588 | ||||||
Torchmark Corp. | 40,379 | 3,418,486 | ||||||
Willis Towers Watson PLC | 50,930 | 7,291,139 | ||||||
WR Berkley Corp. | 37,478 | 2,844,580 | ||||||
|
| |||||||
29,050,705 | ||||||||
IT Services — 2.4% |
| |||||||
Akamai Technologies Inc.(b) | 66,016 | 4,769,656 | ||||||
Alliance Data Systems Corp. | 18,403 | 3,794,330 | ||||||
Booz Allen Hamilton Holding Corp. | 55,507 | 2,749,817 | ||||||
First Data Corp., Class A(b) | 219,703 | 4,117,234 | ||||||
Genpact Ltd. | 54,004 | 1,480,250 | ||||||
|
| |||||||
16,911,287 | ||||||||
Leisure Products — 1.2% |
| |||||||
Brunswick Corp./DE | 33,776 | 1,756,014 | ||||||
Hasbro Inc. | 45,483 | 4,171,246 | ||||||
Polaris Industries Inc. | 22,788 | 2,027,676 | ||||||
|
| |||||||
7,954,936 | ||||||||
Life Sciences Tools & Services — 1.2% |
| |||||||
Agilent Technologies Inc. | 124,150 | 8,043,678 | ||||||
|
| |||||||
Machinery — 4.7% |
| |||||||
AGCO Corp. | 25,884 | 1,450,539 | ||||||
Allison Transmission Holdings Inc. | 46,747 | 2,060,608 | ||||||
Crane Co. | 19,730 | 1,717,299 | ||||||
Donaldson Co. Inc. | 50,232 | 2,575,897 | ||||||
Dover Corp. | 57,526 | 4,765,454 | ||||||
Gardner Denver Holdings Inc.(b) | 41,610 | 1,125,967 | ||||||
Ingersoll-Rand PLC | 95,540 | 9,166,107 | ||||||
Lincoln Electric Holdings Inc. | 25,382 | 2,053,658 | ||||||
Middleby Corp. (The)(a)(b) | 21,703 | 2,437,247 | ||||||
Oshkosh Corp. | 28,471 | 1,598,362 | ||||||
Snap-on Inc. | 21,967 | 3,381,600 | ||||||
|
| |||||||
32,332,738 | ||||||||
Marine — 0.2% |
| |||||||
Kirby Corp.(a)(b) | 20,987 | 1,509,805 | ||||||
|
| |||||||
Media — 2.9% |
| |||||||
CBS Corp., Class B, NVS | 131,844 | 7,561,253 | ||||||
Discovery Inc., Class A(a)(b) | 60,852 | 1,970,996 | ||||||
Discovery Inc., Class C, NVS(b) | 140,077 | 4,105,657 | ||||||
Liberty Media Corp.-Liberty SiriusXM, Class A(b) | 32,407 | 1,336,465 | ||||||
Liberty Media Corp.-Liberty SiriusXM, Class C, NVS(b) | 63,781 | 2,632,242 | ||||||
News Corp., Class A, NVS | 150,283 | 1,982,233 | ||||||
News Corp., Class B | 48,234 | 643,441 | ||||||
|
| |||||||
20,232,287 | ||||||||
Multiline Retail — 1.1% |
| |||||||
Dollar Tree Inc.(a)(b) | 92,649 | 7,810,311 | ||||||
|
| |||||||
Oil, Gas & Consumable Fuels — 1.8% |
| |||||||
Marathon Oil Corp. | 332,660 | 6,317,214 |
S C H E D U L E O F I N V E S T M E N T S | 23 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Morningstar Mid-Cap ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Oil, Gas & Consumable Fuels (continued) |
| |||||||
Newfield Exploration Co.(b) | 77,837 | $ | 1,572,307 | |||||
Noble Energy Inc. | 188,158 | 4,675,726 | ||||||
|
| |||||||
12,565,247 | ||||||||
Personal Products — 0.3% |
| |||||||
Coty Inc., Class A | 175,444 | 1,850,934 | ||||||
|
| |||||||
Professional Services — 0.4% |
| |||||||
Robert Half International Inc. | 47,688 | 2,886,555 | ||||||
|
| |||||||
Real Estate Management & Development — 1.1% |
| |||||||
CBRE Group Inc., Class A(b) | 123,076 | 4,958,732 | ||||||
Jones Lang LaSalle Inc. | 17,735 | 2,345,631 | ||||||
|
| |||||||
7,304,363 | ||||||||
Road & Rail — 0.7% |
| |||||||
AMERCO | 2,978 | 972,257 | ||||||
Kansas City Southern | 39,787 | 4,056,683 | ||||||
|
| |||||||
5,028,940 | ||||||||
Semiconductors & Semiconductor Equipment — 4.9% |
| |||||||
KLA-Tencor Corp. | 60,806 | 5,566,181 | ||||||
Marvell Technology Group Ltd. | 229,146 | 3,760,286 | ||||||
Maxim Integrated Products Inc. | 108,279 | 5,416,116 | ||||||
MKS Instruments Inc. | 21,339 | 1,572,471 | ||||||
ON Semiconductor Corp.(b) | 165,996 | 2,821,932 | ||||||
Qorvo Inc.(a)(b) | 48,934 | 3,597,138 | ||||||
Teradyne Inc. | 72,611 | 2,501,449 | ||||||
Xilinx Inc. | 98,501 | 8,409,030 | ||||||
|
| |||||||
33,644,603 | ||||||||
Software — 2.0% |
| |||||||
Citrix Systems Inc.(b) | 50,192 | 5,143,174 | ||||||
Symantec Corp. | 242,068 | 4,393,534 | ||||||
VMware Inc., Class A(b) | 28,717 | 4,060,297 | ||||||
|
| |||||||
13,597,005 | ||||||||
Specialty Retail — 3.6% |
| |||||||
Advance Auto Parts Inc. | 28,852 | 4,609,395 | ||||||
Best Buy Co. Inc. | 94,668 | 6,641,907 | ||||||
CarMax Inc.(b) | 68,766 | 4,669,899 | ||||||
Tiffany & Co. | 42,431 | 4,722,570 | ||||||
Tractor Supply Co. | 47,439 | 4,359,170 | ||||||
|
| |||||||
25,002,941 | ||||||||
Technology Hardware, Storage & Peripherals — 1.1% |
| |||||||
NetApp Inc. | 100,976 | 7,925,606 | ||||||
|
|
Security | Shares | Value | ||||||
Textiles, Apparel & Luxury Goods — 1.6% |
| |||||||
Carter’s Inc. | 18,098 | $ | 1,737,046 | |||||
Columbia Sportswear Co. | 11,716 | 1,057,720 | ||||||
PVH Corp. | 29,878 | 3,608,964 | ||||||
Tapestry Inc. | 112,181 | 4,746,378 | ||||||
|
| |||||||
11,150,108 | ||||||||
Trading Companies & Distributors — 1.3% |
| |||||||
United Rentals Inc.(b) | 32,227 | 3,869,496 | ||||||
WW Grainger Inc. | 17,708 | 5,028,541 | ||||||
|
| |||||||
8,898,037 | ||||||||
Water Utilities — 1.2% |
| |||||||
American Water Works Co. Inc. | 70,295 | 6,223,217 | ||||||
Aqua America Inc. | 69,291 | 2,254,036 | ||||||
|
| |||||||
8,477,253 | ||||||||
|
| |||||||
Total Common Stocks — 99.9% |
| 690,694,434 | ||||||
|
| |||||||
Short-Term Investments | ||||||||
Money Market Funds — 3.7% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 2.36%(c)(d)(e) | 25,351,476 | 25,356,547 | ||||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 2.11%(c)(d) | 400,916 | 400,916 | ||||||
|
| |||||||
25,757,463 | ||||||||
|
| |||||||
Total Short-Term Investments — 3.7% |
| 25,757,463 | ||||||
|
| |||||||
Total Investments in Securities — 103.6% |
| 716,451,897 | ||||||
Other Assets, Less Liabilities — (3.6)% |
| (25,167,851 | ) | |||||
|
| |||||||
Net Assets — 100.0% | $ | 691,284,046 | ||||||
|
|
(a) | All or a portion of this security is on loan. |
(b) | Non-income producing security. |
(c) | Affiliate of the Fund. |
(d) | Annualized 7-day yield as of period-end. |
(e) | All or a portion of this security was purchased with cash collateral received from loaned securities. |
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of
Section 2(a)(3) of the 1940 Act, were as follows:
Affiliated Issuer | | Shares Held at 04/30/18 | | Net Activity | | Shares Held at 10/31/18 | | | Value at 10/31/18 | | Income | | Net Realized Gain (Loss) | (a) | | Change in Unrealized Appreciation (Depreciation) | | |||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | 14,878,471 | 10,473,005 | 25,351,476 | $ | 25,356,547 | $ | 36,400 | (b) | $ | 1,562 | $ | 405 | ||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | 1,177,639 | (776,723 | ) | 400,916 | 400,916 | 10,342 | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
$ | 25,757,463 | $ | 46,742 | $ | 1,562 | $ | 405 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
(b) | Includes securities lending income earned from the reinvestment of cash collateral from loaned securities (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities, and less fees paid to BTC as securities lending agent. |
24 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Morningstar Mid-Cap ETF
|
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, refer to the Notes to Financial Statements.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $ | 690,694,434 | $ | — | $ | — | $ | 690,694,434 | ||||||||
Money Market Funds | 25,757,463 | — | — | 25,757,463 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 716,451,897 | $ | — | $ | — | $ | 716,451,897 | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
S C H E D U L E O F I N V E S T M E N T S | 25 |
Schedule of Investments (unaudited)
October 31, 2018 | iShares® Morningstar Mid-Cap Growth ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks |
| |||||||
Aerospace & Defense — 2.9% |
| |||||||
BWX Technologies Inc. | 16,679 | $ | 975,054 | |||||
HEICO Corp. | 6,868 | 575,744 | ||||||
HEICO Corp., Class A | 11,956 | 796,987 | ||||||
Hexcel Corp. | 14,651 | 857,377 | ||||||
Huntington Ingalls Industries Inc. | 7,239 | 1,581,577 | ||||||
Teledyne Technologies Inc.(a) | 6,007 | 1,329,229 | ||||||
TransDigm Group Inc.(a) | 8,090 | 2,671,722 | ||||||
|
| |||||||
8,787,690 | ||||||||
Air Freight & Logistics — 0.6% |
| |||||||
XPO Logistics Inc.(a)(b) | 21,083 | 1,884,399 | ||||||
|
| |||||||
Banks — 1.0% |
| |||||||
First Republic Bank/CA | 27,026 | 2,459,096 | ||||||
Pinnacle Financial Partners Inc. | 12,251 | 640,727 | ||||||
|
| |||||||
3,099,823 | ||||||||
Biotechnology — 4.9% |
| |||||||
Alkermes PLC(a) | 25,977 | 1,060,641 | ||||||
Alnylam Pharmaceuticals Inc.(a) | 14,948 | 1,202,268 | ||||||
BioMarin Pharmaceutical Inc.(a) | 29,666 | 2,734,315 | ||||||
Bluebird Bio Inc.(a) | 9,053 | 1,038,379 | ||||||
Exact Sciences Corp.(a) | 20,528 | 1,458,514 | ||||||
Exelixis Inc.(a) | 49,757 | 690,130 | ||||||
Incyte Corp.(a) | 29,512 | 1,912,968 | ||||||
Ionis Pharmaceuticals Inc.(a)(b) | 22,966 | 1,137,965 | ||||||
Neurocrine Biosciences Inc.(a) | 15,130 | 1,621,180 | ||||||
Sage Therapeutics Inc.(a)(b) | 7,805 | 1,004,347 | ||||||
Seattle Genetics Inc.(a) | 17,795 | 998,833 | ||||||
|
| |||||||
14,859,540 | ||||||||
Building Products — 1.2% |
| |||||||
Allegion PLC | 15,892 | 1,362,421 | ||||||
AO Smith Corp. | 24,183 | 1,101,052 | ||||||
Lennox International Inc. | 6,051 | 1,276,096 | ||||||
|
| |||||||
3,739,569 | ||||||||
Capital Markets — 3.9% |
| |||||||
Cboe Global Markets Inc. | 18,676 | 2,107,586 | ||||||
E*TRADE Financial Corp. | 43,387 | 2,144,185 | ||||||
Eaton Vance Corp., NVS | 19,754 | 889,918 | ||||||
FactSet Research Systems Inc. | 6,405 | 1,433,183 | ||||||
Interactive Brokers Group Inc., Class A | 12,559 | 620,540 | ||||||
MarketAxess Holdings Inc. | 6,286 | 1,317,986 | ||||||
MSCI Inc. | 14,842 | 2,231,940 | ||||||
SEI Investments Co. | 22,033 | 1,177,664 | ||||||
|
| |||||||
11,923,002 | ||||||||
Chemicals — 0.6% |
| |||||||
FMC Corp. | 22,521 | 1,758,440 | ||||||
|
| |||||||
Commercial Services & Supplies — 1.7% |
| |||||||
Cintas Corp. | 14,384 | 2,616,018 | ||||||
Copart Inc.(a) | 34,179 | 1,671,695 | ||||||
Rollins Inc. | 16,411 | 971,531 | ||||||
|
| |||||||
5,259,244 | ||||||||
Communications Equipment — 1.7% |
| |||||||
Arista Networks Inc.(a) | 8,611 | 1,983,544 | ||||||
Palo Alto Networks Inc.(a) | 15,515 | 2,839,866 | ||||||
Ubiquiti Networks Inc.(b) | 3,356 | 312,410 | ||||||
|
| |||||||
5,135,820 |
Security | Shares | Value | ||||||
Construction Materials — 1.3% |
| |||||||
Martin Marietta Materials Inc. | 10,539 | $ | 1,805,120 | |||||
Vulcan Materials Co. | 22,095 | 2,234,688 | ||||||
|
| |||||||
4,039,808 | ||||||||
Consumer Finance — 0.3% |
| |||||||
Credit Acceptance Corp.(a) | 2,069 | 878,125 | ||||||
|
| |||||||
Distributors — 0.3% |
| |||||||
Pool Corp. | 6,754 | 984,396 | ||||||
|
| |||||||
Diversified Consumer Services — 1.1% |
| |||||||
Bright Horizons Family Solutions Inc.(a) | 9,797 | 1,125,773 | ||||||
Grand Canyon Education Inc.(a) | 8,067 | 1,005,955 | ||||||
Service Corp. International/U.S. | 30,189 | 1,251,938 | ||||||
|
| |||||||
3,383,666 | ||||||||
Diversified Telecommunication Services — 0.4% |
| |||||||
Zayo Group Holdings Inc.(a) | 35,320 | 1,055,362 | ||||||
|
| |||||||
Electrical Equipment — 1.1% |
| |||||||
Rockwell Automation Inc. | 20,580 | 3,390,143 | ||||||
|
| |||||||
Electronic Equipment, Instruments & Components — 1.3% |
| |||||||
Cognex Corp. | 28,784 | 1,233,107 | ||||||
FLIR Systems Inc. | 23,082 | 1,068,927 | ||||||
IPG Photonics Corp.(a) | 6,014 | 803,170 | ||||||
National Instruments Corp. | 18,769 | 919,118 | ||||||
|
| |||||||
4,024,322 | ||||||||
Energy Equipment & Services — 1.2% |
| |||||||
Baker Hughes a GE Co. | 69,550 | 1,856,290 | ||||||
Core Laboratories NV | 7,396 | 630,435 | ||||||
Helmerich & Payne Inc. | 18,222 | 1,135,048 | ||||||
|
| |||||||
3,621,773 | ||||||||
Entertainment — 1.8% |
| |||||||
Liberty Media Corp.-Liberty Formula One, Class A(a) | 4,291 | 135,982 | ||||||
Liberty Media Corp.-Liberty Formula One, Class C, NVS(a)(b) | 33,925 | 1,122,239 | ||||||
Lions Gate Entertainment Corp., Class A | 9,253 | 177,287 | ||||||
Lions Gate Entertainment Corp., Class B, NVS | 17,707 | 315,008 | ||||||
Live Nation Entertainment Inc.(a) | 23,075 | 1,206,822 | ||||||
Take-Two Interactive Software Inc.(a) | 19,018 | 2,450,850 | ||||||
|
| |||||||
5,408,188 | ||||||||
Equity Real Estate Investment Trusts (REITs) — 5.0% |
| |||||||
American Campus Communities Inc. | 22,921 | 905,609 | ||||||
American Homes 4 Rent, Class A | 43,008 | 906,178 | ||||||
CyrusOne Inc. | 17,477 | 930,301 | ||||||
Douglas Emmett Inc. | 25,132 | 909,527 | ||||||
Equity LifeStyle Properties Inc. | 14,902 | 1,411,070 | ||||||
Hudson Pacific Properties Inc. | 26,216 | 794,345 | ||||||
Invitation Homes Inc. | 49,565 | 1,084,482 | ||||||
Iron Mountain Inc. | 47,829 | 1,464,046 | ||||||
Regency Centers Corp. | 28,205 | 1,787,069 | ||||||
SBA Communications Corp.(a) | 19,189 | 3,111,880 | ||||||
Vornado Realty Trust | 28,959 | 1,971,529 | ||||||
|
| |||||||
15,276,036 | ||||||||
Food Products — 1.0% |
| |||||||
Lamb Weston Holdings Inc. | 24,492 | 1,914,295 | ||||||
Post Holdings Inc.(a)(b) | 11,148 | 985,706 | ||||||
|
| |||||||
2,900,001 | ||||||||
Health Care Equipment & Supplies — 6.4% |
| |||||||
ABIOMED Inc.(a) | 7,490 | 2,555,588 | ||||||
Align Technology Inc.(a) | 12,211 | 2,701,073 |
26 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Morningstar Mid-Cap Growth ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Health Care Equipment & Supplies (continued) |
| |||||||
DexCom Inc.(a) | 14,780 | $ | 1,962,340 | |||||
Hill-Rom Holdings Inc. | 11,108 | 933,961 | ||||||
ICU Medical Inc.(a) | 2,764 | 704,074 | ||||||
IDEXX Laboratories Inc.(a) | 14,468 | 3,068,952 | ||||||
Insulet Corp.(a) | 9,867 | 870,368 | ||||||
Masimo Corp.(a) | 8,028 | 928,037 | ||||||
ResMed Inc. | 23,846 | 2,525,768 | ||||||
Teleflex Inc. | 7,659 | 1,843,828 | ||||||
West Pharmaceutical Services Inc. | 12,301 | 1,302,922 | ||||||
|
| |||||||
19,396,911 | ||||||||
Health Care Providers & Services — 1.0% |
| |||||||
Chemed Corp. | 2,691 | 818,952 | ||||||
WellCare Health Plans Inc.(a) | 8,355 | 2,305,896 | ||||||
|
| |||||||
3,124,848 | ||||||||
Health Care Technology — 1.9% |
| |||||||
athenahealth Inc.(a) | 6,775 | 864,084 | ||||||
Cerner Corp.(a) | 54,947 | 3,147,364 | ||||||
Veeva Systems Inc., Class A(a) | 20,166 | 1,842,164 | ||||||
|
| |||||||
5,853,612 | ||||||||
Hotels, Restaurants & Leisure — 3.0% |
| |||||||
Chipotle Mexican Grill Inc.(a) | 4,092 | 1,883,670 | ||||||
Domino’s Pizza Inc. | 6,995 | 1,880,186 | ||||||
Dunkin’ Brands Group Inc. | 14,009 | 1,016,493 | ||||||
Vail Resorts Inc. | 6,746 | 1,695,405 | ||||||
Wyndham Hotels & Resorts Inc. | 16,709 | 823,587 | ||||||
Wynn Resorts Ltd. | 16,274 | 1,637,164 | ||||||
|
| |||||||
8,936,505 | ||||||||
Household Durables — 0.4% |
| |||||||
NVR Inc.(a) | 571 | 1,278,486 | ||||||
|
| |||||||
Insurance — 1.3% |
| |||||||
Brown & Brown Inc. | 38,762 | 1,092,313 | ||||||
Erie Indemnity Co., Class A, NVS | 3,314 | 429,793 | ||||||
Markel Corp.(a) | 2,322 | 2,538,503 | ||||||
|
| |||||||
4,060,609 | ||||||||
Interactive Media & Services — 3.1% |
| |||||||
IAC/InterActiveCorp.(a) | 12,937 | 2,543,285 | ||||||
Snap Inc., Class A, NVS(a) | 111,678 | 738,191 | ||||||
TripAdvisor Inc.(a) | 17,077 | 890,395 | ||||||
Twitter Inc.(a) | 120,020 | 4,170,695 | ||||||
Zillow Group Inc., Class A(a) | 8,214 | 331,599 | ||||||
Zillow Group Inc., Class C, NVS(a)(b) | 19,207 | 773,274 | ||||||
|
| |||||||
9,447,439 | ||||||||
Internet & Direct Marketing Retail — 2.1% |
| |||||||
Expedia Group Inc. | 19,864 | 2,491,542 | ||||||
GrubHub Inc.(a) | 15,131 | 1,403,249 | ||||||
MercadoLibre Inc. | 7,375 | 2,393,187 | ||||||
|
| |||||||
6,287,978 | ||||||||
IT Services — 8.8% |
| |||||||
Black Knight Inc.(a) | 23,735 | 1,157,556 | ||||||
Broadridge Financial Solutions Inc. | 19,436 | 2,272,846 | ||||||
EPAM Systems Inc.(a) | 8,545 | 1,020,871 | ||||||
FleetCor Technologies Inc.(a) | 14,768 | 2,954,043 | ||||||
Gartner Inc.(a) | 15,172 | 2,238,173 | ||||||
Global Payments Inc. | 26,429 | 3,018,985 | ||||||
GoDaddy Inc., Class A(a) | 27,642 | 2,022,565 | ||||||
GreenSky Inc., Class A(a)(b) | 6,776 | 89,308 | ||||||
Jack Henry & Associates Inc. | 12,910 | 1,934,305 |
Security | Shares | Value | ||||||
IT Services (continued) |
| |||||||
Square Inc., Class A(a)(b) | 50,379 | $ | 3,700,338 | |||||
Total System Services Inc. | 28,062 | 2,557,851 | ||||||
VeriSign Inc.(a) | 17,875 | 2,547,903 | ||||||
WEX Inc.(a) | 7,190 | 1,265,152 | ||||||
|
| |||||||
26,779,896 | ||||||||
Life Sciences Tools & Services — 4.6% |
| |||||||
Bio-Rad Laboratories Inc., Class A(a) | 3,354 | 915,139 | ||||||
Bio-Techne Corp. | 6,312 | 1,058,649 | ||||||
Bruker Corp. | 16,744 | 524,590 | ||||||
Charles River Laboratories International Inc.(a) | 8,034 | 978,702 | ||||||
IQVIA Holdings Inc.(a) | 27,080 | 3,328,944 | ||||||
Mettler-Toledo International Inc.(a)(b) | 4,212 | 2,303,206 | ||||||
PerkinElmer Inc. | 18,523 | 1,601,869 | ||||||
PRA Health Sciences Inc.(a) | 9,689 | 938,573 | ||||||
Waters Corp.(a) | 12,877 | 2,442,638 | ||||||
|
| |||||||
14,092,310 | ||||||||
Machinery — 3.2% |
| |||||||
Graco Inc. | 27,963 | 1,136,137 | ||||||
IDEX Corp. | 12,827 | 1,626,720 | ||||||
Nordson Corp. | 8,748 | 1,073,117 | ||||||
Toro Co. (The) | 17,602 | 991,521 | ||||||
WABCO Holdings Inc.(a) | 8,835 | 949,321 | ||||||
Wabtec Corp. | 14,349 | 1,176,905 | ||||||
Woodward Inc. | 9,288 | 683,968 | ||||||
Xylem Inc./NY | 30,006 | 1,967,793 | ||||||
|
| |||||||
9,605,482 | ||||||||
Media — 1.1% |
| |||||||
GCI Liberty Inc., Class A(a) | 16,623 | 786,767 | ||||||
Liberty Broadband Corp., Class A(a) | 4,402 | 364,441 | ||||||
Liberty Broadband Corp., Class C, | 25,484 | 2,113,388 | ||||||
|
| |||||||
3,264,596 | ||||||||
Metals & Mining — 0.3% |
| |||||||
Royal Gold Inc. | 10,958 | 839,712 | ||||||
|
| |||||||
Oil, Gas & Consumable Fuels — 4.3% |
| |||||||
Antero Resources Corp.(a)(b) | 37,088 | 589,328 | ||||||
Cabot Oil & Gas Corp. | 73,714 | 1,786,090 | ||||||
Centennial Resource Development Inc./DE, Class A(a) | 31,670 | 606,797 | ||||||
Cheniere Energy Inc.(a) | 36,881 | 2,227,981 | ||||||
Cimarex Energy Co. | 15,951 | 1,267,626 | ||||||
Diamondback Energy Inc. | 16,470 | 1,850,569 | ||||||
Energen Corp.(a) | 13,692 | 985,413 | ||||||
EQT Corp. | 44,088 | 1,497,670 | ||||||
Parsley Energy Inc., Class A(a) | 43,944 | 1,029,169 | ||||||
WPX Energy Inc.(a) | 66,042 | 1,059,314 | ||||||
|
| |||||||
12,899,957 | ||||||||
Pharmaceuticals — 1.2% |
| |||||||
Catalent Inc.(a)(b) | 24,222 | 977,115 | ||||||
Jazz Pharmaceuticals PLC(a) | 10,102 | 1,604,400 | ||||||
Nektar Therapeutics(a) | 28,777 | 1,113,094 | ||||||
|
| |||||||
3,694,609 | ||||||||
Professional Services — 4.2% |
| |||||||
CoStar Group Inc.(a) | 6,079 | 2,197,072 | ||||||
Equifax Inc. | 20,115 | 2,040,466 | ||||||
IHS Markit Ltd.(a) | 59,604 | 3,130,998 | ||||||
TransUnion | 30,683 | 2,017,407 | ||||||
Verisk Analytics Inc.(a) | 27,493 | 3,294,761 | ||||||
|
| |||||||
12,680,704 |
S C H E D U L E O F I N V E S T M E N T S | 27 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Morningstar Mid-Cap Growth ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Real Estate Management & Development — 0.2% |
| |||||||
Howard Hughes Corp. (The)(a)(b) | 6,551 | $ | 730,568 | |||||
|
| |||||||
Road & Rail — 1.2% |
| |||||||
JB Hunt Transport Services Inc. | 14,621 | 1,617,229 | ||||||
Knight-Swift Transportation Holdings Inc. | 21,455 | 686,560 | ||||||
Old Dominion Freight Line Inc. | 10,960 | 1,429,403 | ||||||
|
| |||||||
3,733,192 | ||||||||
Semiconductors & Semiconductor Equipment — 3.1% |
| |||||||
Advanced Micro Devices Inc.(a)(b) | 143,292 | 2,609,347 | ||||||
Cypress Semiconductor Corp. | 60,457 | 782,314 | ||||||
Microchip Technology Inc.(b) | 39,357 | 2,588,903 | ||||||
Monolithic Power Systems Inc. | 6,509 | 768,843 | ||||||
Skyworks Solutions Inc. | 29,904 | 2,594,471 | ||||||
|
| |||||||
9,343,878 | ||||||||
Software — 9.8% |
| |||||||
ANSYS Inc.(a) | 14,081 | 2,105,814 | ||||||
Aspen Technology Inc.(a) | 11,909 | 1,010,955 | ||||||
Blackbaud Inc. | 8,127 | 582,868 | ||||||
Cadence Design Systems Inc.(a) | 47,301 | 2,108,206 | ||||||
CDK Global Inc. | 21,615 | 1,237,243 | ||||||
Fair Isaac Corp.(a) | 4,879 | 940,232 | ||||||
Fortinet Inc.(a)(b) | 24,014 | 1,973,471 | ||||||
Guidewire Software Inc.(a)(b) | 13,423 | 1,194,244 | ||||||
LogMeIn Inc. | 8,679 | 747,435 | ||||||
Nutanix Inc., Class A(a) | 11,752 | 487,826 | ||||||
Paycom Software Inc.(a) | 8,243 | 1,032,024 | ||||||
Pegasystems Inc. | 6,182 | 330,861 | ||||||
Proofpoint Inc.(a) | 8,576 | 779,987 | ||||||
PTC Inc.(a) | 17,719 | 1,460,223 | ||||||
Splunk Inc.(a) | 24,222 | 2,418,324 | ||||||
SS&C Technologies Holdings Inc. | 34,436 | 1,761,746 | ||||||
Synopsys Inc.(a) | 24,823 | 2,222,403 | ||||||
Tableau Software Inc., Class A(a) | 11,705 | 1,248,689 | ||||||
Tyler Technologies Inc.(a) | 6,446 | 1,364,360 | ||||||
Ultimate Software Group Inc. (The)(a) | 5,204 | 1,387,543 | ||||||
Workday Inc., Class A(a) | 24,426 | 3,249,146 | ||||||
|
| |||||||
29,643,600 | ||||||||
Specialty Retail — 3.0% |
| |||||||
Burlington Stores Inc.(a) | 11,311 | 1,939,723 |
Security | Shares | Value | ||||||
Specialty Retail (continued) |
| |||||||
Floor & Decor Holdings Inc., | 9,582 | $ | 245,108 | |||||
O’Reilly Automotive Inc.(a) | 13,460 | 4,317,295 | ||||||
Ulta Salon Cosmetics & Fragrance Inc.(a) | 9,487 | 2,604,371 | ||||||
|
| |||||||
9,106,497 | ||||||||
Textiles, Apparel & Luxury Goods — 1.3% |
| |||||||
Lululemon Athletica Inc.(a) | 18,033 | 2,537,784 | ||||||
Under Armour Inc., Class A(a)(b) | 31,127 | 688,218 | ||||||
Under Armour Inc., Class C, | 31,899 | 632,557 | ||||||
|
| |||||||
3,858,559 | ||||||||
Trading Companies & Distributors — 1.1% |
| |||||||
Fastenal Co. | 47,944 | 2,464,801 | ||||||
Watsco Inc. | 5,362 | 794,541 | ||||||
|
| |||||||
3,259,342 | ||||||||
|
| |||||||
Total Common Stocks — 99.9% |
| 303,328,637 | ||||||
|
| |||||||
Short-Term Investments | ||||||||
Money Market Funds — 6.4% | ||||||||
BlackRock Cash Funds: Institutional, | 19,122,211 | 19,126,035 | ||||||
BlackRock Cash Funds: Treasury, | 304,122 | 304,122 | ||||||
|
| |||||||
19,430,157 | ||||||||
|
| |||||||
Total Short-Term Investments — 6.4% |
| 19,430,157 | ||||||
|
| |||||||
Total Investments in Securities — 106.3% |
| 322,758,794 | ||||||
Other Assets, Less Liabilities — (6.3)% |
| (19,134,501 | ) | |||||
|
| |||||||
Net Assets — 100.0% |
| $ | 303,624,293 | |||||
|
|
(a) | Non-income producing security. |
(b) | All or a portion of this security is on loan. |
(c) | Affiliate of the Fund. |
(d) | Annualized 7-day yield as of period-end. |
(e) | All or a portion of this security was purchased with cash collateral received from loaned securities. |
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of
Section 2(a)(3) of the 1940 Act, were as follows:
Affiliated Issuer | | Shares Held at 04/30/18 | | Net Activity | | Shares Held at 10/31/18 | | | Value at 10/31/18 | | Income | | Net Realized Gain (Loss) | (a) | | Change in Unrealized Appreciation (Depreciation) | | |||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | 25,472,183 | (6,349,972 | ) | 19,122,211 | $ | 19,126,035 | $ | 49,820 | (b) | $ | 1,741 | $ | 1,329 | |||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | 123,544 | 180,578 | 304,122 | 304,122 | 1,703 | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
$ | 19,430,157 | $ | 51,523 | $ | 1,741 | $ | 1,329 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
(b) | Includes securities lending income earned from the reinvestment of cash collateral from loaned securities (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities, and less fees paid to BTC as securities lending agent. |
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, refer to the Notes to Financial Statements.
28 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Morningstar Mid-Cap Growth ETF
|
Fair Value Measurements (continued)
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $ | 303,328,637 | $ | — | $ | — | $ | 303,328,637 | ||||||||
Money Market Funds | 19,430,157 | — | — | 19,430,157 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 322,758,794 | $ | — | $ | — | $ | 322,758,794 | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
S C H E D U L E O F I N V E S T M E N T S | 29 |
Schedule of Investments (unaudited)
October 31, 2018 | iShares® Morningstar Mid-Cap Value ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks |
| |||||||
Aerospace & Defense — 0.5% |
| |||||||
Arconic Inc. | 110,020 | $ | 2,236,707 | |||||
|
| |||||||
Airlines — 2.8% |
| |||||||
Alaska Air Group Inc. | 31,520 | 1,935,958 | ||||||
American Airlines Group Inc. | 104,906 | 3,680,103 | ||||||
JetBlue Airways Corp.(a) | 80,077 | 1,339,688 | ||||||
United Continental Holdings Inc.(a) | 58,612 | 5,011,912 | ||||||
|
| |||||||
11,967,661 | ||||||||
Auto Components — 1.9% |
| |||||||
Adient PLC | 22,193 | 675,111 | ||||||
Autoliv Inc. | 22,293 | 1,857,899 | ||||||
BorgWarner Inc. | 53,462 | 2,106,937 | ||||||
Goodyear Tire & Rubber Co. (The) | 60,575 | 1,275,710 | ||||||
Lear Corp. | 16,769 | 2,228,600 | ||||||
|
| |||||||
8,144,257 | ||||||||
Automobiles — 0.4% |
| |||||||
Harley-Davidson Inc. | 42,631 | 1,629,357 | ||||||
|
| |||||||
Banks — 6.0% |
| |||||||
CIT Group Inc. | 28,958 | 1,372,030 | ||||||
Fifth Third Bancorp. | 170,558 | 4,603,360 | ||||||
First Horizon National Corp. | 83,328 | 1,344,914 | ||||||
Huntington Bancshares Inc./OH | 282,639 | 4,050,217 | ||||||
KeyCorp. | 269,280 | 4,890,125 | ||||||
PacWest Bancorp. | 31,337 | 1,272,909 | ||||||
People’s United Financial Inc. | 95,505 | 1,495,608 | ||||||
Prosperity Bancshares Inc. | 16,956 | 1,102,649 | ||||||
Regions Financial Corp. | 282,189 | 4,788,747 | ||||||
Umpqua Holdings Corp. | 56,279 | 1,080,557 | ||||||
|
| |||||||
26,001,116 | ||||||||
Biotechnology — 0.3% |
| |||||||
United Therapeutics Corp.(a) | 11,171 | 1,238,417 | ||||||
|
| |||||||
Capital Markets — 1.3% |
| |||||||
Franklin Resources Inc. | 78,246 | 2,386,503 | ||||||
Invesco Ltd. | 105,161 | 2,283,045 | ||||||
Janus Henderson Group PLC | 43,024 | 1,057,100 | ||||||
|
| |||||||
5,726,648 | ||||||||
Chemicals — 3.0% |
| |||||||
Celanese Corp. | 34,545 | 3,348,792 | ||||||
CF Industries Holdings Inc. | 59,759 | 2,870,225 | ||||||
Eastman Chemical Co. | 36,162 | 2,833,292 | ||||||
Huntsman Corp. | 55,027 | 1,203,991 | ||||||
Mosaic Co. (The) | 90,769 | 2,808,393 | ||||||
|
| |||||||
13,064,693 | ||||||||
Commercial Services & Supplies — 0.3% |
| |||||||
Stericycle Inc.(a) | 21,951 | 1,096,892 | ||||||
|
| |||||||
Communications Equipment — 2.0% |
| |||||||
CommScope Holding Co. Inc.(a) | 49,293 | 1,185,990 | ||||||
Juniper Networks Inc. | 88,254 | 2,583,194 | ||||||
Motorola Solutions Inc. | 41,534 | 5,090,407 | ||||||
|
| |||||||
8,859,591 | ||||||||
Construction & Engineering — 1.4% |
| |||||||
AECOM(a)(b) | 41,232 | 1,201,501 | ||||||
Fluor Corp. | 35,993 | 1,578,653 | ||||||
Jacobs Engineering Group Inc. | 30,510 | | 2,290,996 | |
Security | Shares | Value | ||||||
Construction & Engineering (continued) |
| |||||||
Quanta Services Inc.(a) | 38,031 | $ | 1,186,567 | |||||
|
| |||||||
6,257,717 | ||||||||
Consumer Finance — 0.8% |
| |||||||
Ally Financial Inc. | 108,036 | 2,745,195 | ||||||
Santander Consumer USA Holdings Inc. | 29,634 | 555,637 | ||||||
|
| |||||||
3,300,832 | ||||||||
Containers & Packaging — 3.4% |
| |||||||
Ball Corp. | 88,028 | 3,943,654 | ||||||
Berry Global Group Inc.(a) | 33,736 | 1,471,564 | ||||||
Crown Holdings Inc.(a)(b) | 34,602 | 1,463,319 | ||||||
Packaging Corp. of America | 24,188 | 2,220,700 | ||||||
Sealed Air Corp. | 40,650 | 1,315,434 | ||||||
Sonoco Products Co. | 25,541 | 1,394,028 | ||||||
WestRock Co. | 65,299 | 2,805,898 | ||||||
|
| |||||||
14,614,597 | ||||||||
Distributors — 0.8% |
| |||||||
Genuine Parts Co. | 37,563 | 3,678,169 | ||||||
|
| |||||||
Diversified Consumer Services — 0.3% |
| |||||||
H&R Block Inc. | 52,697 | 1,398,578 | ||||||
|
| |||||||
Diversified Financial Services — 0.6% |
| |||||||
AXA Equitable Holdings Inc. | 34,410 | 698,179 | ||||||
Voya Financial Inc. | 41,100 | 1,798,536 | ||||||
|
| |||||||
2,496,715 | ||||||||
Diversified Telecommunication Services — 1.2% |
| |||||||
CenturyLink Inc. | 243,293 | 5,021,568 | ||||||
|
| |||||||
Electric Utilities — 7.2% |
| |||||||
Alliant Energy Corp. | 59,837 | 2,571,794 | ||||||
Entergy Corp. | 46,292 | 3,886,213 | ||||||
Evergy Inc. | 69,542 | 3,893,657 | ||||||
Eversource Energy | 81,111 | 5,131,082 | ||||||
FirstEnergy Corp. | 124,402 | 4,637,707 | ||||||
IDACORP Inc. | 12,879 | 1,201,096 | ||||||
OGE Energy Corp. | 51,123 | 1,848,096 | ||||||
Pinnacle West Capital Corp. | 28,661 | 2,357,367 | ||||||
PPL Corp. | 179,063 | 5,443,515 | ||||||
|
| |||||||
30,970,527 | ||||||||
Electrical Equipment — 0.3% |
| |||||||
Hubbell Inc. | 14,020 | 1,425,834 | ||||||
|
| |||||||
Electronic Equipment, Instruments & Components — 0.6% |
| |||||||
Arrow Electronics Inc.(a) | 22,368 | 1,514,537 | ||||||
Avnet Inc. | 29,585 | 1,185,471 | ||||||
|
| |||||||
2,700,008 | ||||||||
Energy Equipment & Services — 1.1% |
| |||||||
National Oilwell Varco Inc. | 97,936 | 3,604,045 | ||||||
Transocean Ltd.(a) | 109,950 | 1,210,549 | ||||||
|
| |||||||
4,814,594 | ||||||||
Entertainment — 0.7% |
| |||||||
Viacom Inc., Class A | 2,260 | 79,936 | ||||||
Viacom Inc., Class B, NVS | 90,465 | 2,893,071 | ||||||
|
| |||||||
2,973,007 | ||||||||
Equity Real Estate Investment Trusts (REITs) — 6.4% |
| |||||||
Brixmor Property Group Inc. | 77,344 | 1,252,973 | ||||||
Gaming and Leisure Properties Inc. | 51,434 | 1,732,811 | ||||||
HCP Inc. | 120,259 | 3,313,135 | ||||||
Kimco Realty Corp. | 107,857 | 1,735,419 |
30 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Morningstar Mid-Cap Value ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Equity Real Estate Investment Trusts (REITs) (continued) |
| |||||||
Lamar Advertising Co., Class A | 21,659 | $ | 1,588,038 | |||||
Liberty Property Trust | 37,834 | 1,584,110 | ||||||
Medical Properties Trust Inc. | 93,560 | 1,390,302 | ||||||
Omega Healthcare Investors Inc.(b) | 51,278 | 1,710,121 | ||||||
Park Hotels & Resorts Inc. | 51,494 | 1,496,931 | ||||||
SL Green Realty Corp.(b) | 22,157 | 2,022,048 | ||||||
VEREIT Inc. | 247,641 | 1,815,208 | ||||||
Welltower Inc. | 95,225 | 6,291,516 | ||||||
WP Carey Inc. | 27,442 | 1,811,446 | ||||||
|
| |||||||
27,744,058 | ||||||||
Food & Staples Retailing — 1.4% |
| |||||||
Kroger Co. (The) | 203,918 | 6,068,600 | ||||||
|
| |||||||
Food Products — 5.2% |
| |||||||
Bunge Ltd. | 36,107 | 2,231,413 | ||||||
Campbell Soup Co. | 49,250 | 1,842,443 | ||||||
Conagra Brands Inc. | 119,847 | 4,266,553 | ||||||
Ingredion Inc. | 18,180 | 1,839,452 | ||||||
JM Smucker Co. (The) | 29,113 | 3,153,520 | ||||||
Kellogg Co. | 64,776 | 4,241,532 | ||||||
Pilgrim’s Pride Corp.(a) | 13,455 | 237,615 | ||||||
Seaboard Corp. | 69 | 266,685 | ||||||
Tyson Foods Inc., Class A | 75,744 | 4,538,581 | ||||||
|
| |||||||
22,617,794 | ||||||||
Gas Utilities — 0.8% |
| |||||||
National Fuel Gas Co. | 21,967 | 1,192,589 | ||||||
UGI Corp. | 44,502 | 2,361,276 | ||||||
|
| |||||||
3,553,865 | ||||||||
Health Care Providers & Services — 2.3% |
| |||||||
Cardinal Health Inc. | 79,048 | 3,999,829 | ||||||
Quest Diagnostics Inc. | 34,981 | 3,292,062 | ||||||
Universal Health Services Inc., Class B | 22,035 | 2,678,574 | ||||||
|
| |||||||
9,970,465 | ||||||||
Household Durables — 2.0% |
| |||||||
Garmin Ltd. | 30,928 | 2,046,196 | ||||||
Leggett & Platt Inc. | 33,379 | 1,211,991 | ||||||
Mohawk Industries Inc.(a) | 16,231 | 2,024,493 | ||||||
Newell Brands Inc.(b) | 111,266 | 1,766,904 | ||||||
Whirlpool Corp. | 16,526 | 1,813,894 | ||||||
|
| |||||||
8,863,478 | ||||||||
Independent Power and Renewable Electricity Producers — 1.8% |
| |||||||
AES Corp./VA | 169,365 | 2,469,342 | ||||||
NRG Energy Inc. | 77,666 | 2,810,733 | ||||||
Vistra Energy Corp.(a) | 103,542 | 2,343,155 | ||||||
|
| |||||||
7,623,230 | ||||||||
Insurance — 8.2% |
| |||||||
Alleghany Corp. | 3,823 | 2,296,400 | ||||||
American Financial Group Inc./OH | 18,014 | 1,801,940 | ||||||
Assurant Inc. | 13,532 | 1,315,446 | ||||||
Axis Capital Holdings Ltd. | 21,355 | 1,191,395 | ||||||
Brighthouse Financial Inc.(a)(b) | 30,613 | 1,213,193 | ||||||
Cincinnati Financial Corp. | 38,718 | 3,044,784 | ||||||
Fidelity National Financial Inc. | 70,365 | 2,353,709 | ||||||
First American Financial Corp. | 28,330 | 1,255,869 | ||||||
Hartford Financial Services Group Inc. (The) | 91,741 | 4,166,876 | ||||||
Lincoln National Corp. | 55,462 | 3,338,258 | ||||||
Loews Corp.(b) | 71,174 | 3,313,861 | ||||||
Old Republic International Corp. | 72,773 | 1,604,645 | ||||||
Principal Financial Group Inc. | 67,783 | 3,190,546 |
Security | Shares | Value | ||||||
Insurance (continued) |
| |||||||
Reinsurance Group of America Inc. | 16,293 | $ | 2,319,634 | |||||
RenaissanceRe Holdings Ltd. | 10,323 | 1,261,058 | ||||||
Unum Group | 55,980 | 2,029,835 | ||||||
|
| |||||||
35,697,449 | ||||||||
Internet & Direct Marketing Retail — 0.6% |
| |||||||
Qurate Retail Inc.(a)(b) | 114,737 | 2,517,330 | ||||||
|
| |||||||
IT Services — 1.7% |
| |||||||
Leidos Holdings Inc. | 38,518 | 2,495,196 | ||||||
Sabre Corp. | 64,083 | 1,579,646 | ||||||
Teradata Corp.(a)(b) | 30,439 | 1,107,980 | ||||||
Western Union Co. (The) | 114,479 | 2,065,201 | ||||||
|
| |||||||
7,248,023 | ||||||||
Leisure Products — 0.3% |
| |||||||
Mattel Inc.(a) | 87,957 | 1,194,456 | ||||||
|
| |||||||
Machinery — 1.0% |
| |||||||
Flowserve Corp. | 33,493 | 1,537,328 | ||||||
Pentair PLC | 41,305 | 1,658,396 | ||||||
Trinity Industries Inc. | 37,869 | 1,081,160 | ||||||
|
| |||||||
4,276,884 | ||||||||
Media — 2.0% |
| |||||||
Altice USA Inc., Class A | 30,186 | 492,334 | ||||||
DISH Network Corp., Class A(a) | 58,636 | 1,802,471 | ||||||
Interpublic Group of Companies Inc. (The) | 98,234 | 2,275,099 | ||||||
Omnicom Group Inc. | 57,431 | 4,268,272 | ||||||
|
| |||||||
8,838,176 | ||||||||
Metals & Mining — 4.6% |
| |||||||
Alcoa Corp.(a) | 47,725 | 1,669,898 | ||||||
Freeport-McMoRan Inc. | 370,888 | 4,320,845 | ||||||
Newmont Mining Corp. | 136,529 | 4,221,477 | ||||||
Nucor Corp. | 80,972 | 4,787,065 | ||||||
Reliance Steel & Aluminum Co. | 18,519 | 1,461,519 | ||||||
Steel Dynamics Inc. | 60,096 | 2,379,801 | ||||||
U.S. Steel Corp. | 45,294 | 1,201,650 | ||||||
|
| |||||||
20,042,255 | ||||||||
Mortgage Real Estate Investment — 2.0% |
| |||||||
AGNC Investment Corp. | 122,306 | 2,181,939 | ||||||
Annaly Capital Management Inc.(b) | 330,648 | 3,263,496 | ||||||
New Residential Investment Corp.(b) | 86,992 | 1,555,417 | ||||||
Starwood Property Trust Inc.(b) | 68,360 | 1,484,779 | ||||||
|
| |||||||
8,485,631 | ||||||||
Multi-Utilities — 6.6% |
| |||||||
Ameren Corp. | 62,465 | 4,033,990 | ||||||
CenterPoint Energy Inc. | 125,960 | 3,402,180 | ||||||
CMS Energy Corp. | 72,505 | 3,590,448 | ||||||
DTE Energy Co. | 46,527 | 5,229,635 | ||||||
MDU Resources Group Inc. | 50,097 | 1,250,421 | ||||||
NiSource Inc. | 92,923 | 2,356,527 | ||||||
SCANA Corp. | 36,565 | 1,464,428 | ||||||
Vectren Corp. | 21,266 | 1,521,157 | ||||||
WEC Energy Group Inc. | 80,764 | 5,524,257 | ||||||
|
| |||||||
28,373,043 | ||||||||
Multiline Retail — 1.8% |
| |||||||
Kohl’s Corp. | 42,672 | 3,231,551 | ||||||
Macy’s Inc. | 78,573 | 2,694,268 | ||||||
Nordstrom Inc. | 29,339 | 1,929,626 | ||||||
|
| |||||||
7,855,445 |
S C H E D U L E O F I N V E S T M E N T S | 31 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Morningstar Mid-Cap Value ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Oil, Gas & Consumable Fuels — 4.3% |
| |||||||
Apache Corp. | 97,902 | $ | 3,703,632 | |||||
Devon Energy Corp. | 130,233 | 4,219,549 | ||||||
Hess Corp. | 64,435 | 3,698,569 | ||||||
HollyFrontier Corp. | 41,486 | 2,797,816 | ||||||
Murphy Oil Corp. | 41,708 | 1,328,817 | ||||||
Targa Resources Corp. | 57,734 | 2,983,116 | ||||||
|
| |||||||
18,731,499 | ||||||||
Personal Products — 0.3% |
| |||||||
Herbalife Nutrition Ltd.(a) | 27,001 | 1,438,073 | ||||||
|
| |||||||
Pharmaceuticals — 1.5% |
| |||||||
Mylan NV(a) | 131,965 | 4,123,906 | ||||||
Perrigo Co. PLC | 32,222 | 2,265,207 | ||||||
|
| |||||||
6,389,113 | ||||||||
Professional Services — 0.8% |
| |||||||
ManpowerGroup Inc. | 16,644 | 1,269,771 | ||||||
Nielsen Holdings PLC | 91,180 | 2,368,856 | ||||||
|
| |||||||
3,638,627 | ||||||||
Real Estate Management & Development — 0.0% |
| |||||||
Cushman & Wakefield PLC(a) | 12,018 | 195,413 | ||||||
|
| |||||||
Semiconductors & Semiconductor Equipment — 0.2% |
| |||||||
First Solar Inc.(a) | 19,285 | 806,113 | ||||||
|
| |||||||
Software — 1.9% |
| |||||||
CA Inc. | 80,277 | 3,561,088 | ||||||
Dell Technologies Inc., Class V(a) | 51,027 | 4,612,330 | ||||||
|
| |||||||
8,173,418 | ||||||||
Specialty Retail — 2.3% |
| |||||||
AutoZone Inc.(a) | 6,767 | 4,963,391 | ||||||
Foot Locker Inc. | 29,972 | 1,412,880 | ||||||
Gap Inc. (The) | 55,539 | 1,516,215 | ||||||
L Brands Inc. | 58,437 | 1,894,528 | ||||||
|
| |||||||
9,787,014 | ||||||||
Technology Hardware, Storage & Peripherals — 1.0% |
| |||||||
Seagate Technology PLC | 66,892 | 2,691,065 | ||||||
Xerox Corp. | 56,808 | 1,583,239 | ||||||
|
| |||||||
4,274,304 |
Security | Shares | Value | ||||||
Textiles, Apparel & Luxury Goods — 1.3% |
| |||||||
Hanesbrands Inc. | 92,276 | $ | 1,583,456 | |||||
Michael Kors Holdings Ltd.(a) | 38,221 | 2,117,825 | ||||||
Ralph Lauren Corp. | 14,142 | 1,832,945 | ||||||
|
| |||||||
5,534,226 | ||||||||
Thrifts & Mortgage Finance — 0.3% |
| |||||||
New York Community Bancorp. Inc. | 125,755 | 1,204,733 | ||||||
|
| |||||||
Trading Companies & Distributors — 0.4% |
| |||||||
HD Supply Holdings Inc.(a) | 47,024 | 1,766,692 | ||||||
|
| |||||||
Total Common Stocks — 99.9% |
| 432,526,892 | ||||||
|
| |||||||
Short-Term Investments | ||||||||
Money Market Funds — 2.3% | ||||||||
BlackRock Cash Funds: Institutional, | 9,758,635 | 9,760,587 | ||||||
BlackRock Cash Funds: Treasury, | 117,718 | 117,718 | ||||||
|
| |||||||
9,878,305 | ||||||||
|
| |||||||
Total Short-Term Investments — 2.3% |
| 9,878,305 | ||||||
|
| |||||||
Total Investments in Securities — 102.2% |
| 442,405,197 | ||||||
Other Assets, Less Liabilities — (2.2)% |
| (9,443,821 | ) | |||||
|
| |||||||
Net Assets — 100.0% |
| $ | 432,961,376 | |||||
|
|
(a) | Non-income producing security. |
(b) | All or a portion of this security is on loan. |
(c) | Affiliate of the Fund. |
(d) | Annualized 7-day yield as of period-end. |
(e) | All or a portion of this security was purchased with cash collateral received from loaned securities. |
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:
Affiliated Issuer | | Shares Held at 04/30/18 | | Net Activity | | Shares Held at 10/31/18 |
| | Value at 10/31/18 | | Income | | Net Realized Gain (Loss) | (a) | | Change in Unrealized Appreciation (Depreciation) | | |||||||||||
BlackRock Cash Funds: Institutional, | 3,552,612 | 6,206,023 | 9,758,635 | $ | 9,760,587 | $ | 17,736 | (b) | $ | (305 | ) | $ | 328 | |||||||||||||||
BlackRock Cash Funds: Treasury, | 454,765 | (337,047 | ) | 117,718 | 117,718 | 5,802 | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
$ | 9,878,305 | $ | 23,538 | $ | (305 | ) | $ | 328 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
(b) | Includes securities lending income earned from the reinvestment of cash collateral from loaned securities (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities, and less fees paid to BTC as securities lending agent. |
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, refer to the Notes to Financial Statements.
32 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Morningstar Mid-Cap Value ETF
|
Fair Value Measurements (continued)
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $ | 432,526,892 | $ | — | $ | — | $ | 432,526,892 | ||||||||
Money Market Funds | 9,878,305 | — | — | 9,878,305 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 442,405,197 | $ | — | $ | — | $ | 442,405,197 | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
S C H E D U L E O F I N V E S T M E N T S | 33 |
Schedule of Investments (unaudited)
October 31, 2018 | iShares® Morningstar Small-Cap ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks |
| |||||||
Aerospace & Defense — 0.8% |
| |||||||
Aerojet Rocketdyne Holdings Inc.(a)(b) | 27,111 | $ | 957,560 | |||||
Moog Inc., Class A | 12,656 | 905,537 | ||||||
|
| |||||||
1,863,097 | ||||||||
Air Freight & Logistics — 0.3% |
| |||||||
Hub Group Inc., Class A(a) | 13,139 | 602,029 | ||||||
|
| |||||||
Airlines — 0.2% |
| |||||||
Allegiant Travel Co. | 4,980 | 568,417 | ||||||
|
| |||||||
Auto Components — 1.4% |
| |||||||
Delphi Technologies PLC | 34,608 | 741,996 | ||||||
Dorman Products Inc.(a)(b) | 11,390 | 899,924 | ||||||
LCI Industries | 9,835 | 682,057 | ||||||
Visteon Corp.(a)(b) | 11,446 | 904,692 | ||||||
|
| |||||||
3,228,669 | ||||||||
Banks — 10.4% |
| |||||||
BancFirst Corp. | 6,779 | 388,979 | ||||||
BankUnited Inc. | 41,137 | 1,361,635 | ||||||
CenterState Bank Corp. | 27,799 | 683,300 | ||||||
Columbia Banking System Inc. | 28,560 | 1,059,290 | ||||||
Community Bank System Inc. | 19,921 | 1,163,187 | ||||||
CVB Financial Corp. | 39,922 | 872,296 | ||||||
First Citizens BancShares Inc./NC, Class A | 3,566 | 1,521,363 | ||||||
First Commonwealth Financial Corp. | 39,145 | 528,458 | ||||||
First Financial Bancorp. | 38,161 | 998,673 | ||||||
First Merchants Corp. | 19,319 | 803,864 | ||||||
Glacier Bancorp. Inc. | 32,650 | 1,384,360 | ||||||
Great Western Bancorp. Inc. | 22,963 | 841,594 | ||||||
Heartland Financial USA Inc. | 11,178 | 593,999 | ||||||
Home BancShares Inc./AR | 62,753 | 1,194,817 | ||||||
Independent Bank Corp./Rockland MA | 10,734 | 842,082 | ||||||
Independent Bank Group Inc. | 9,143 | 529,471 | ||||||
Investors Bancorp. Inc. | 95,212 | 1,064,470 | ||||||
LegacyTexas Financial Group Inc. | 17,540 | 675,816 | ||||||
MB Financial Inc. | 32,875 | 1,459,321 | ||||||
Pacific Premier Bancorp. Inc.(a) | 17,565 | 513,425 | ||||||
Renasant Corp. | 19,283 | 672,591 | ||||||
S&T Bancorp. Inc. | 13,654 | 547,662 | ||||||
South State Corp. | 14,387 | 973,568 | ||||||
TowneBank/Portsmouth VA | 25,295 | 711,548 | ||||||
UMB Financial Corp. | 17,611 | 1,124,462 | ||||||
Union Bankshares Corp. | 23,404 | 799,013 | ||||||
United Community Banks Inc./GA | 29,005 | 721,354 | ||||||
|
| |||||||
24,030,598 | ||||||||
Beverages — 0.5% |
| |||||||
Boston Beer Co. Inc. (The), Class A, NVS(a)(b) | 3,366 | 1,034,338 | ||||||
|
| |||||||
Biotechnology — 2.2% |
| |||||||
Aimmune Therapeutics Inc.(a) | 14,619 | 388,573 | ||||||
AnaptysBio Inc.(a) | 8,800 | 657,536 | ||||||
Array BioPharma Inc.(a)(b) | 82,659 | 1,339,076 | ||||||
Atara Biotherapeutics Inc.(a)(b) | 17,685 | 604,296 | ||||||
Clovis Oncology Inc.(a)(b) | 20,589 | 239,450 | ||||||
Immunomedics Inc.(a)(b) | 63,407 | 1,428,560 | ||||||
OPKO Health Inc.(a)(b) | 141,785 | 479,233 | ||||||
|
| |||||||
5,136,724 | ||||||||
Building Products — 1.5% |
| |||||||
Armstrong World Industries Inc.(a)(b) | 20,177 | 1,245,930 |
Security | Shares | Value | ||||||
Building Products (continued) |
| |||||||
Builders FirstSource Inc.(a)(b) | 44,874 | $ | 555,540 | |||||
Masonite International Corp.(a) | 10,761 | 596,052 | ||||||
Patrick Industries Inc.(a) | 9,089 | 395,462 | ||||||
Universal Forest Products Inc. | 24,023 | 679,130 | ||||||
|
| |||||||
3,472,114 | ||||||||
Capital Markets — 2.5% |
| |||||||
BGC Partners Inc., Class A | 104,928 | 1,111,187 | ||||||
BrightSphere Investment Group PLC | 32,251 | 367,661 | ||||||
Cohen & Steers Inc. | 8,434 | 323,781 | ||||||
Evercore Inc., Class A | 15,991 | 1,306,305 | ||||||
Moelis & Co., Class A | 17,805 | 718,610 | ||||||
Stifel Financial Corp. | 27,804 | 1,271,199 | ||||||
Virtu Financial Inc., Class A | 25,041 | 593,973 | ||||||
|
| |||||||
5,692,716 | ||||||||
Chemicals — 3.4% |
| |||||||
Ferro Corp.(a) | 32,816 | 555,903 | ||||||
GCP Applied Technologies Inc.(a)(b) | 28,144 | 730,900 | ||||||
HB Fuller Co. | 19,728 | 877,107 | ||||||
Innospec Inc. | 9,523 | 637,279 | ||||||
Kraton Corp.(a) | 12,432 | 342,377 | ||||||
Minerals Technologies Inc. | 13,762 | 753,470 | ||||||
PolyOne Corp. | 31,225 | 1,008,880 | ||||||
Sensient Technologies Corp. | 16,510 | 1,070,839 | ||||||
Tronox Ltd., Class A | 36,747 | 420,753 | ||||||
Valvoline Inc. | 74,470 | 1,483,442 | ||||||
|
| |||||||
7,880,950 | ||||||||
Commercial Services & Supplies — 3.1% |
| |||||||
ABM Industries Inc. | 25,669 | 789,322 | ||||||
Brady Corp., Class A, NVS | 18,800 | 757,452 | ||||||
Brink’s Co. (The) | 19,898 | 1,319,635 | ||||||
Covanta Holding Corp. | 45,407 | 667,029 | ||||||
Herman Miller Inc. | 23,206 | 764,638 | ||||||
Matthews International Corp., Class A | 12,507 | 520,541 | ||||||
Tetra Tech Inc. | 21,605 | 1,426,794 | ||||||
UniFirst Corp./MA | 6,014 | 897,890 | ||||||
|
| |||||||
7,143,301 | ||||||||
Communications Equipment — 3.3% |
| |||||||
Casa Systems Inc.(a)(b) | 11,763 | 169,387 | ||||||
Ciena Corp.(a) | 55,661 | 1,739,963 | ||||||
Finisar Corp.(a) | 45,716 | 763,000 | ||||||
Infinera Corp.(a)(b) | 59,698 | 330,727 | ||||||
NETGEAR Inc.(a) | 12,406 | 688,285 | ||||||
NetScout Systems Inc.(a)(b) | 28,270 | 714,100 | ||||||
Plantronics Inc. | 12,859 | 758,295 | ||||||
ViaSat Inc.(a)(b) | 21,857 | 1,393,602 | ||||||
Viavi Solutions Inc.(a) | 88,371 | 1,018,918 | ||||||
|
| |||||||
7,576,277 | ||||||||
Construction & Engineering — 2.7% |
| |||||||
Comfort Systems USA Inc. | 14,527 | 776,904 | ||||||
Dycom Industries Inc.(a)(b) | 12,176 | 826,507 | ||||||
EMCOR Group Inc. | 22,713 | 1,612,168 | ||||||
Granite Construction Inc. | 17,822 | 814,822 | ||||||
MasTec Inc.(a) | 25,400 | 1,105,154 | ||||||
Valmont Industries Inc. | 8,735 | 1,085,848 | ||||||
|
| |||||||
6,221,403 | ||||||||
Consumer Finance — 0.4% |
| |||||||
Nelnet Inc., Class A | 8,469 | 476,720 |
34 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Morningstar Small-Cap ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Consumer Finance (continued) |
| |||||||
PRA Group Inc.(a)(b) | 17,648 | $ | 544,264 | |||||
|
| |||||||
1,020,984 | ||||||||
Containers & Packaging — 0.3% |
| |||||||
Silgan Holdings Inc. | 30,183 | 725,298 | ||||||
|
| |||||||
Diversified Telecommunication Services — 0.5% |
| |||||||
Vonage Holdings Corp.(a)(b) | 85,902 | 1,139,061 | ||||||
|
| |||||||
Electric Utilities — 0.3% |
| |||||||
Otter Tail Corp. | 15,470 | 697,233 | ||||||
|
| |||||||
Electrical Equipment — 1.1% |
| |||||||
EnerSys | 16,449 | 1,308,847 | ||||||
Generac Holdings Inc.(a) | 24,207 | 1,228,021 | ||||||
|
| |||||||
2,536,868 | ||||||||
Electronic Equipment, Instruments & Components — 0.5% |
| |||||||
SYNNEX Corp. | 16,178 | 1,255,575 | ||||||
|
| |||||||
Energy Equipment & Services — 1.0% |
| |||||||
C&J Energy Services Inc.(a) | 24,787 | 465,500 | ||||||
Dril-Quip Inc.(a)(b) | 14,644 | 623,249 | ||||||
Forum Energy Technologies Inc.(a)(b) | 31,152 | 279,122 | ||||||
FTS International Inc.(a) | 12,778 | 163,686 | ||||||
RPC Inc. | 22,690 | 337,627 | ||||||
Superior Energy Services Inc.(a) | 60,198 | 471,350 | ||||||
|
| |||||||
2,340,534 | ||||||||
Entertainment — 0.8% |
| |||||||
Cinemark Holdings Inc. | 41,497 | 1,725,030 | ||||||
|
| |||||||
Equity Real Estate Investment Trusts (REITs) — 12.5% |
| |||||||
Alexander’s Inc. | 1,476 | 464,955 | ||||||
American Assets Trust Inc. | 14,728 | 564,966 | ||||||
Americold Realty Trust | 22,370 | 553,657 | ||||||
Brandywine Realty Trust | 69,619 | 978,843 | ||||||
Cousins Properties Inc. | 163,864 | 1,361,710 | ||||||
EastGroup Properties Inc. | 13,930 | 1,334,355 | ||||||
Empire State Realty Trust Inc., Class A | 52,731 | 836,314 | ||||||
Equity Commonwealth | 47,434 | 1,412,584 | ||||||
Four Corners Property Trust Inc.(b) | 25,959 | 677,011 | ||||||
Healthcare Realty Trust Inc.(b) | 48,814 | 1,359,958 | ||||||
JBG SMITH Properties | 42,278 | 1,584,579 | ||||||
Life Storage Inc.(b) | 18,190 | 1,712,770 | ||||||
National Health Investors Inc. | 16,473 | 1,210,107 | ||||||
Paramount Group Inc. | 80,786 | 1,154,432 | ||||||
Pebblebrook Hotel Trust(b) | 26,912 | 907,204 | ||||||
PotlatchDeltic Corp.(b) | 24,177 | 876,416 | ||||||
PS Business Parks Inc. | 7,778 | 1,015,807 | ||||||
Rayonier Inc.(b) | 50,541 | 1,526,338 | ||||||
Retail Opportunity Investments Corp. | 43,985 | 773,696 | ||||||
RLJ Lodging Trust | 68,455 | 1,330,765 | ||||||
Ryman Hospitality Properties Inc. | 20,036 | 1,554,593 | ||||||
STAG Industrial Inc.(b) | 40,715 | 1,077,319 | ||||||
Taubman Centers Inc. | 23,819 | 1,310,283 | ||||||
Uniti Group Inc.(a) | 68,599 | 1,312,985 | ||||||
Urban Edge Properties | 44,446 | 910,699 | ||||||
Washington REIT | 30,662 | 854,550 | ||||||
|
| |||||||
28,656,896 | ||||||||
Food & Staples Retailing — 1.3% |
| |||||||
Casey’s General Stores Inc. | 14,284 | 1,801,355 |
Security | Shares | Value | ||||||
Food & Staples Retailing (continued) |
| |||||||
Performance Food Group Co.(a) | 40,905 | $ | 1,199,335 | |||||
|
| |||||||
3,000,690 | ||||||||
Food Products — 1.6% |
| |||||||
Cal-Maine Foods Inc. | 11,796 | 574,111 | ||||||
Hain Celestial Group Inc. (The)(a) | 34,847 | 866,994 | ||||||
J&J Snack Foods Corp. | 5,836 | 911,350 | ||||||
Lancaster Colony Corp. | 7,624 | 1,306,601 | ||||||
|
| |||||||
3,659,056 | ||||||||
Gas Utilities — 1.8% |
| |||||||
New Jersey Resources Corp. | 34,462 | 1,554,236 | ||||||
ONE Gas Inc. | 20,500 | 1,617,655 | ||||||
South Jersey Industries Inc. | 33,397 | 986,548 | ||||||
|
| |||||||
4,158,439 | ||||||||
Health Care Equipment & Supplies — 1.3% |
| |||||||
Haemonetics Corp.(a) | 20,171 | 2,107,264 | ||||||
Integer Holdings Corp.(a) | 11,535 | 859,012 | ||||||
|
| |||||||
2,966,276 | ||||||||
Health Care Providers & Services — 3.3% |
| |||||||
Acadia Healthcare Co. Inc.(a)(b) | 34,470 | 1,430,505 | ||||||
Molina Healthcare Inc.(a) | 24,074 | 3,051,861 | ||||||
Premier Inc., Class A(a)(b) | 20,765 | 934,425 | ||||||
Select Medical Holdings Corp.(a) | 42,240 | 700,339 | ||||||
Tenet Healthcare Corp.(a) | 32,330 | 831,851 | ||||||
Tivity Health Inc.(a)(b) | 15,604 | 536,934 | ||||||
|
| |||||||
7,485,915 | ||||||||
Health Care Technology — 0.4% |
| |||||||
Allscripts Healthcare Solutions Inc.(a)(b) | 68,062 | 810,619 | ||||||
|
| |||||||
Hotels, Restaurants & Leisure — 2.5% |
| |||||||
Bloomin’ Brands Inc. | 36,092 | 720,035 | ||||||
Boyd Gaming Corp. | 31,510 | 836,905 | ||||||
Cheesecake Factory Inc. (The) | 16,435 | 794,468 | ||||||
Cracker Barrel Old Country Store Inc. | 9,373 | 1,487,308 | ||||||
Dave & Buster’s Entertainment Inc. | 15,347 | 913,914 | ||||||
Papa John’s International Inc. | 8,763 | 477,934 | ||||||
Red Rock Resorts Inc., Class A | 27,157 | 628,413 | ||||||
|
| |||||||
5,858,977 | ||||||||
Household Durables — 1.3% |
| |||||||
Helen of Troy Ltd.(a)(b) | 10,288 | 1,276,946 | ||||||
KB Home | 33,376 | 666,519 | ||||||
LGI Homes Inc.(a)(b) | 7,277 | 311,383 | ||||||
Tempur Sealy International Inc.(a)(b) | 17,825 | 823,693 | ||||||
|
| |||||||
3,078,541 | ||||||||
Household Products — 0.9% |
| |||||||
Central Garden & Pet Co.(a)(b) | 4,022 | 130,635 | ||||||
Central Garden & Pet Co., Class A, NVS(a) | 15,930 | 472,324 | ||||||
Energizer Holdings Inc. | 23,338 | 1,371,574 | ||||||
|
| |||||||
1,974,533 | ||||||||
Independent Power and Renewable Electricity Producers — 0.2% |
| |||||||
TerraForm Power Inc., Class A | 31,879 | 359,276 | ||||||
|
| |||||||
Insurance — 4.6% |
| |||||||
Enstar Group Ltd.(a) | 5,889 | 1,069,442 | ||||||
FBL Financial Group Inc., Class A | 3,890 | 268,332 | ||||||
Horace Mann Educators Corp. | 15,997 | 628,362 | ||||||
Kemper Corp. | 23,511 | 1,767,792 | ||||||
Mercury General Corp. | 10,573 | 627,085 | ||||||
National General Holdings Corp. | 23,775 | 662,372 | ||||||
Navigators Group Inc. (The) | 9,050 | 625,808 |
S C H E D U L E O F I N V E S T M E N T S | 35 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Morningstar Small-Cap ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Insurance (continued) |
| |||||||
Primerica Inc. | 16,660 | $ | 1,828,268 | |||||
ProAssurance Corp. | 20,900 | 917,928 | ||||||
RLI Corp. | 15,209 | 1,124,401 | ||||||
White Mountains Insurance Group Ltd.(b) | 1,240 | 1,099,471 | ||||||
|
| |||||||
10,619,261 | ||||||||
Interactive Media & Services — 0.5% |
| |||||||
Cargurus Inc.(a)(b) | 12,795 | 568,354 | ||||||
Cars.com Inc.(a)(b) | 25,022 | 653,324 | ||||||
|
| |||||||
1,221,678 | ||||||||
Internet & Direct Marketing Retail — 0.4% |
| |||||||
Liberty Expedia Holdings Inc., Class A(a) | 21,223 | 921,503 | ||||||
|
| |||||||
IT Services — 2.8% |
| |||||||
CACI International Inc., Class A(a) | 9,643 | 1,720,890 | ||||||
CoreLogic Inc./U.S.(a)(b) | 31,604 | 1,283,754 | ||||||
CSG Systems International Inc. | 13,072 | 458,827 | ||||||
MAXIMUS Inc. | 25,077 | 1,629,253 | ||||||
Science Applications International Corp. | 16,579 | 1,152,406 | ||||||
TTEC Holdings Inc. | 5,402 | 134,618 | ||||||
|
| |||||||
6,379,748 | ||||||||
Machinery — 4.4% |
| |||||||
Actuant Corp., Class A(b) | 23,813 | 567,940 | ||||||
Barnes Group Inc. | 18,397 | 1,041,270 | ||||||
EnPro Industries Inc. | 8,177 | 508,609 | ||||||
Franklin Electric Co. Inc. | 15,123 | 641,518 | ||||||
Gates Industrial Corp. PLC(a) | 18,159 | 273,293 | ||||||
Hillenbrand Inc. | 24,336 | 1,165,694 | ||||||
ITT Inc. | 34,192 | 1,726,696 | ||||||
Mueller Industries Inc. | 22,439 | 546,390 | ||||||
Mueller Water Products Inc., Class A | 61,690 | 632,939 | ||||||
SPX FLOW Inc.(a) | 16,594 | 568,013 | ||||||
Terex Corp. | 25,281 | 844,133 | ||||||
Watts Water Technologies Inc., Class A | 10,845 | 759,692 | ||||||
Welbilt Inc.(a)(b) | 50,794 | 950,864 | ||||||
|
| |||||||
10,227,051 | ||||||||
Media — 2.3% |
| |||||||
Cable One Inc. | 1,937 | 1,735,048 | ||||||
Emerald Expositions Events Inc. | 9,712 | 141,990 | ||||||
John Wiley & Sons Inc., Class A | 17,735 | 961,946 | ||||||
Nexstar Media Group Inc., Class A | 17,788 | 1,332,143 | ||||||
Tribune Media Co., Class A | 31,482 | 1,196,631 | ||||||
|
| |||||||
5,367,758 | ||||||||
Metals & Mining — 1.5% |
| |||||||
Allegheny Technologies Inc.(a)(b) | 49,078 | 1,270,630 | ||||||
Commercial Metals Co. | 45,612 | 869,365 | ||||||
Kaiser Aluminum Corp. | 6,487 | 618,665 | ||||||
Worthington Industries Inc. | 15,756 | 659,861 | ||||||
|
| |||||||
3,418,521 | ||||||||
Mortgage Real Estate Investment — 0.3% |
| |||||||
Colony Credit Real Estate Inc.(b) | 32,562 | 694,873 | ||||||
|
| |||||||
Oil, Gas & Consumable Fuels — 1.7% |
| |||||||
Carrizo Oil & Gas Inc.(a) | 33,231 | 605,137 | ||||||
Laredo Petroleum Inc.(a)(b) | 59,676 | 312,702 | ||||||
PBF Energy Inc., Class A | 46,765 | 1,957,115 | ||||||
SM Energy Co. | 40,296 | 980,805 | ||||||
|
| |||||||
3,855,759 | ||||||||
Paper & Forest Products — 0.2% |
| |||||||
Boise Cascade Co. | 15,164 | 466,900 | ||||||
|
|
Security | Shares | Value | ||||||
Pharmaceuticals — 1.2% |
| |||||||
Akorn Inc.(a) | 36,861 | $ | 245,863 | |||||
Corcept Therapeutics Inc.(a) | 41,169 | 483,736 | ||||||
Horizon Pharma PLC(a) | 65,076 | 1,185,034 | ||||||
Prestige Consumer Healthcare Inc.(a) | 20,178 | 729,636 | ||||||
|
| |||||||
2,644,269 | ||||||||
Professional Services — 0.4% |
| |||||||
FTI Consulting Inc.(a)(b) | 14,893 | 1,029,255 | ||||||
|
| |||||||
Real Estate Management & Development — 0.7% |
| |||||||
HFF Inc., Class A | 15,240 | 560,070 | ||||||
Newmark Group Inc., Class A | 9,230 | 89,900 | ||||||
Realogy Holdings Corp. | 48,343 | 921,901 | ||||||
|
| |||||||
1,571,871 | ||||||||
Road & Rail — 1.7% |
| |||||||
Avis Budget Group Inc.(a) | 25,930 | 729,152 | ||||||
Genesee & Wyoming Inc., Class A(a) | 23,195 | 1,837,740 | ||||||
Saia Inc.(a) | 10,021 | 629,920 | ||||||
Schneider National Inc., Class B | 11,068 | 242,057 | ||||||
Werner Enterprises Inc. | 17,306 | 557,080 | ||||||
|
| |||||||
3,995,949 | ||||||||
Semiconductors & Semiconductor Equipment — 1.8% |
| |||||||
Advanced Energy Industries Inc.(a)(b) | 15,256 | 656,466 | ||||||
Diodes Inc.(a)(b) | 15,440 | 466,134 | ||||||
Kulicke & Soffa Industries Inc. | 26,333 | 535,350 | ||||||
Semtech Corp.(a) | 25,861 | 1,162,193 | ||||||
Versum Materials Inc. | 42,542 | 1,342,625 | ||||||
|
| |||||||
4,162,768 | ||||||||
Software — 0.8% |
| |||||||
j2 Global Inc. | 18,267 | 1,330,568 | ||||||
Progress Software Corp. | 17,557 | 564,282 | ||||||
|
| |||||||
1,894,850 | ||||||||
Specialty Retail — 2.3% |
| |||||||
Aaron’s Inc. | 27,014 | 1,273,170 | ||||||
Abercrombie & Fitch Co., Class A | 26,122 | 514,604 | ||||||
Children’s Place Inc. (The) | 6,393 | 955,114 | ||||||
Guess? Inc. | 22,133 | 470,105 | ||||||
Lithia Motors Inc., Class A | 9,051 | 806,263 | ||||||
RH(a)(b) | 7,627 | 882,520 | ||||||
Tailored Brands Inc. | 19,437 | 408,371 | ||||||
|
| |||||||
5,310,147 | ||||||||
Textiles, Apparel & Luxury Goods — 1.9% |
| |||||||
G-III Apparel Group Ltd.(a)(b) | 16,304 | 649,877 | ||||||
Skechers U.S.A. Inc., Class A(a) | 52,751 | 1,507,096 | ||||||
Steven Madden Ltd. | 31,145 | 973,904 | ||||||
Wolverine World Wide Inc. | 37,132 | 1,305,933 | ||||||
|
| |||||||
4,436,810 | ||||||||
Thrifts & Mortgage Finance — 1.8% |
| |||||||
Axos Financial Inc.(a)(b) | 21,547 | 654,167 | ||||||
Essent Group Ltd.(a) | 38,308 | 1,510,101 | ||||||
Northwest Bancshares Inc. | 40,235 | 649,393 | ||||||
TFS Financial Corp. | 20,860 | 306,851 | ||||||
Walker & Dunlop Inc. | 11,221 | 470,833 | ||||||
WSFS Financial Corp. | 12,382 | 526,607 | ||||||
|
| |||||||
4,117,952 | ||||||||
Tobacco — 0.3% |
| |||||||
Vector Group Ltd. | 42,344 | 572,491 | ||||||
|
| |||||||
Trading Companies & Distributors — 3.2% |
| |||||||
Air Lease Corp. | 37,782 | 1,439,494 |
36 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Morningstar Small-Cap ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Trading Companies & Distributors (continued) |
| |||||||
Applied Industrial Technologies Inc. | 15,093 | $ | 992,063 | |||||
Kaman Corp. | 10,919 | 693,575 | ||||||
MRC Global Inc.(a)(b) | 35,313 | 559,005 | ||||||
MSC Industrial Direct Co. Inc., Class A | 17,985 | 1,457,864 | ||||||
Rush Enterprises Inc., Class A | 11,980 | 423,972 | ||||||
Triton International Ltd. | 20,183 | 649,287 | ||||||
Univar Inc.(a) | 44,731 | 1,101,277 | ||||||
|
| |||||||
7,316,537 | ||||||||
Water Utilities — 0.7% |
| |||||||
American States Water Co. | 14,319 | 876,609 | ||||||
California Water Service Group | 18,749 | 787,458 | ||||||
|
| |||||||
1,664,067 | ||||||||
|
| |||||||
Total Common Stocks — 99.8% | 229,790,452 | |||||||
|
| |||||||
Short-Term Investments | ||||||||
Money Market Funds — 9.9% |
| |||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 2.36%(c)(d)(e) | 22,542,443 | 22,546,951 |
Security | Shares | Value | ||||||
Money Market Funds (continued) |
| |||||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 2.11%(c)(d) | 179,023 | $ | 179,023 | |||||
|
| |||||||
22,725,974 | ||||||||
|
| |||||||
Total Short-Term Investments — 9.9% |
| 22,725,974 | ||||||
|
| |||||||
Total Investments in Securities — 109.7% |
| 252,516,426 | ||||||
Other Assets, Less Liabilities — (9.7)% |
| (22,413,372 | ) | |||||
|
| |||||||
Net Assets — 100.0% | $ | 230,103,054 | ||||||
|
|
(a) | Non-income producing security. |
(b) | All or a portion of this security is on loan. |
(c) | Affiliate of the Fund. |
(d) | Annualized 7-day yield as of period-end. |
(e) | All or a portion of this security was purchased with cash collateral received from loaned securities. |
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:
Affiliated Issuer | | Shares Held at 04/30/18 | | Net Activity | | Shares Held at 10/31/18 | | | Value at 10/31/18 | | Income | | Net Realized Gain (Loss) | (a) | | Change in Unrealized Appreciation (Depreciation | ) | |||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | 18,537,935 | 4,004,508 | 22,542,443 | $ | 22,546,951 | $ | 69,898 | (b) | $ | 847 | $ | 1,684 | ||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | 172,408 | 6,615 | 179,023 | 179,023 | 2,736 | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
$ | 22,725,974 | $ | 72,634 | $ | 847 | $ | 1,684 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
(b) | Includes securities lending income earned from the reinvestment of cash collateral from loaned securities (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities, and less fees paid to BTC as securities lending agent. |
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, refer to the Notes to Financial Statements.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $229,790,452 | $ — | $ — | $229,790,452 | ||||||||||||
Money Market Funds | 22,725,974 | — | — | 22,725,974 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$252,516,426 | $ — | $ — | $252,516,426 | |||||||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
S C H E D U L E O F I N V E S T M E N T S | 37 |
Schedule of Investments (unaudited)
October 31, 2018 | iShares® Morningstar Small-Cap Growth ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks | ||||||||
Aerospace & Defense — 1.2% |
| |||||||
Axon Enterprise Inc.(a) | 17,890 | $ | 1,104,171 | |||||
Cubic Corp. | 7,675 | 503,557 | ||||||
Mercury Systems Inc.(a)(b) | 14,839 | 695,355 | ||||||
|
| |||||||
2,303,083 | ||||||||
Air Freight & Logistics — 0.3% |
| |||||||
Forward Air Corp. | 8,988 | 539,190 | ||||||
|
| |||||||
Alternative Carriers — 0.3% |
| |||||||
Cogent Communications Holdings Inc. | 12,809 | 665,812 | ||||||
|
| |||||||
Application Software — 10.9% |
| |||||||
2U Inc.(a)(b) | 17,618 | 1,108,348 | ||||||
8x8 Inc.(a) | 28,569 | 491,101 | ||||||
ACI Worldwide Inc.(a)(b) | 35,497 | 890,620 | ||||||
Alarm.com Holdings Inc.(a)(b) | 10,701 | 475,980 | ||||||
Blackline Inc.(a) | 11,107 | 515,143 | ||||||
Box Inc., Class A(a) | 43,453 | 782,154 | ||||||
Cision Ltd.(a)(b) | 20,456 | 302,544 | ||||||
Cloudera Inc.(a) | 35,844 | 493,213 | ||||||
Cornerstone OnDemand Inc.(a)(b) | 16,396 | 807,503 | ||||||
Coupa Software Inc.(a) | 15,562 | 1,008,884 | ||||||
Dropbox Inc., Class A(a)(b) | 14,118 | 331,349 | ||||||
Ebix Inc. | 6,950 | 398,305 | ||||||
Ellie Mae Inc.(a)(b) | 10,622 | 704,026 | ||||||
Envestnet Inc.(a) | 13,911 | 723,650 | ||||||
Five9 Inc.(a) | 17,868 | 703,285 | ||||||
HubSpot Inc.(a)(b) | 11,070 | 1,501,646 | ||||||
Manhattan Associates Inc.(a)(b) | 20,169 | 962,868 | ||||||
Mimecast Ltd.(a)(b) | 9,910 | 345,463 | ||||||
MINDBODY Inc., Class A(a)(b) | 9,692 | 308,593 | ||||||
New Relic Inc.(a) | 13,869 | 1,237,808 | ||||||
Paylocity Holding Corp.(a) | 9,702 | 638,295 | ||||||
Q2 Holdings Inc.(a)(b) | 11,160 | 594,047 | ||||||
RealPage Inc.(a) | 22,454 | 1,190,062 | ||||||
RingCentral Inc., Class A(a) | 20,815 | 1,617,950 | ||||||
Trade Desk Inc. (The), Class A(a)(b) | 10,861 | 1,341,877 | ||||||
Zendesk Inc.(a) | 32,513 | 1,787,240 | ||||||
|
| |||||||
21,261,954 | ||||||||
Asset Management & Custody Banks — 0.1% |
| |||||||
WisdomTree Investments Inc. | 35,756 | 277,824 | ||||||
|
| |||||||
Automotive Retail — 0.4% |
| |||||||
Monro Inc. | 10,075 | 749,580 | ||||||
|
| |||||||
Biotechnology — 10.8% |
| |||||||
ACADIA Pharmaceuticals Inc.(a)(b) | 29,877 | 582,004 | ||||||
Acceleron Pharma Inc.(a) | 11,836 | 600,914 | ||||||
Agios Pharmaceuticals Inc.(a)(b) | 15,477 | 975,980 | ||||||
Amicus Therapeutics Inc.(a) | 57,946 | 647,836 | ||||||
Arena Pharmaceuticals Inc.(a) | 15,115 | 539,001 | ||||||
Blueprint Medicines Corp.(a) | 13,459 | 817,903 | ||||||
CRISPR Therapeutics AG(a) | 8,824 | 289,162 | ||||||
Emergent BioSolutions Inc.(a) | 13,494 | 825,698 | ||||||
Enanta Pharmaceuticals Inc.(a) | 4,824 | 372,220 | ||||||
Esperion Therapeutics Inc.(a)(b) | 7,579 | 344,314 | ||||||
FibroGen Inc.(a) | 23,031 | 987,339 | ||||||
Global Blood Therapeutics Inc.(a)(b) | 15,944 | 559,475 | ||||||
Halozyme Therapeutics Inc.(a) | 38,468 | 597,408 | ||||||
Heron Therapeutics Inc.(a)(b) | 20,953 | 581,655 |
Security | Shares | Value | ||||||
Biotechnology (continued) |
| |||||||
Insmed Inc.(a)(b) | 23,678 | $ | 345,699 | |||||
Intercept Pharmaceuticals Inc.(a)(b) | 6,706 | 643,843 | ||||||
Intrexon Corp.(a)(b) | 21,894 | 253,095 | ||||||
Ironwood Pharmaceuticals Inc.(a)(b) | 42,653 | 558,754 | ||||||
Ligand Pharmaceuticals Inc.(a) | 6,475 | 1,067,145 | ||||||
Loxo Oncology Inc.(a) | 8,602 | 1,313,181 | ||||||
Madrigal Pharmaceuticals Inc.(a)(b) | 2,550 | 486,693 | ||||||
Momenta Pharmaceuticals Inc.(a) | 24,069 | 301,103 | ||||||
Myriad Genetics Inc.(a) | 22,919 | 1,032,043 | ||||||
Portola Pharmaceuticals Inc.(a)(b) | 20,310 | 399,904 | ||||||
Puma Biotechnology Inc.(a) | 9,349 | 346,380 | ||||||
Repligen Corp.(a)(b) | 11,947 | 647,766 | ||||||
Sarepta Therapeutics Inc.(a)(b) | 19,150 | 2,561,504 | ||||||
Spark Therapeutics Inc.(a)(b) | 9,951 | 447,696 | ||||||
Spectrum Pharmaceuticals Inc.(a) | 30,381 | 361,534 | ||||||
TESARO Inc.(a)(b) | 13,115 | 378,761 | ||||||
Ultragenyx Pharmaceutical Inc.(a) | 14,469 | 701,023 | ||||||
Xencor Inc.(a) | 14,583 | 477,156 | ||||||
|
| |||||||
21,044,189 | ||||||||
Building Products — 1.3% |
| |||||||
AAON Inc. | 12,529 | 432,124 | ||||||
American Woodmark Corp.(a) | 4,812 | 290,837 | ||||||
Simpson Manufacturing Co. Inc. | 12,782 | 729,597 | ||||||
Trex Co. Inc.(a)(b) | 18,020 | 1,104,626 | ||||||
|
| |||||||
2,557,184 | ||||||||
Casinos & Gaming — 0.8% |
| |||||||
Churchill Downs Inc. | 3,659 | 913,323 | ||||||
Eldorado Resorts Inc.(a)(b) | 19,919 | 727,044 | ||||||
|
| |||||||
1,640,367 | ||||||||
Commercial Printing — 0.6% |
| |||||||
Cimpress NV(a)(b) | 8,812 | 1,101,412 | ||||||
|
| |||||||
Communications Equipment — 0.9% |
| |||||||
InterDigital Inc. | 10,670 | 757,036 | ||||||
Lumentum Holdings Inc.(a) | 19,261 | 1,052,614 | ||||||
|
| |||||||
1,809,650 | ||||||||
Construction Materials — 0.2% |
| |||||||
Summit Materials Inc., Class A(a) | 34,308 | 463,158 | ||||||
|
| |||||||
Consumer Finance — 1.1% |
| |||||||
FirstCash Inc. | 13,596 | 1,093,118 | ||||||
Green Dot Corp., Class A(a) | 14,506 | 1,098,685 | ||||||
|
| |||||||
2,191,803 | ||||||||
Data Processing & Outsourced Services — 1.2% |
| |||||||
Euronet Worldwide Inc.(a)(b) | 15,657 | 1,740,745 | ||||||
ExlService Holdings Inc.(a)(b) | 10,512 | 673,819 | ||||||
|
| |||||||
2,414,564 | ||||||||
Distillers & Vintners — 0.1% |
| |||||||
MGP Ingredients Inc. | 3,884 | 276,424 | ||||||
|
| |||||||
Diversified REITs — 0.2% |
| |||||||
Alexander & Baldwin Inc. | 20,807 | 406,569 | ||||||
|
| |||||||
Diversified Support Services — 0.8% |
| |||||||
Healthcare Services Group Inc. | 22,608 | 917,659 | ||||||
Mobile Mini Inc. | 13,678 | 562,439 | ||||||
|
| |||||||
1,480,098 | ||||||||
Education Services — 0.4% |
| |||||||
Chegg Inc.(a)(b) | 31,441 | 857,711 | ||||||
|
|
38 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Morningstar Small-Cap Growth ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Electronic Components — 2.1% |
| |||||||
Dolby Laboratories Inc., Class A | 19,748 | $ | 1,358,860 | |||||
II-VI Inc.(a) | 18,021 | 670,922 | ||||||
Littelfuse Inc. | 7,697 | 1,394,388 | ||||||
Rogers Corp.(a) | 5,636 | 693,566 | ||||||
|
| |||||||
4,117,736 | ||||||||
Electronic Equipment & Instruments — 1.0% |
| |||||||
Coherent Inc.(a) | 7,454 | 917,886 | ||||||
Itron Inc.(a)(b) | 10,228 | 533,288 | ||||||
Novanta Inc.(a) | 9,981 | 580,994 | ||||||
|
| |||||||
2,032,168 | ||||||||
Electronic Manufacturing Services — 0.2% |
| |||||||
Methode Electronics Inc. | 11,367 | 336,463 | ||||||
|
| |||||||
Environmental & Facilities Services — 0.9% |
| |||||||
Advanced Disposal Services Inc.(a) | 21,977 | 595,357 | ||||||
Clean Harbors Inc.(a)(b) | 15,656 | 1,065,234 | ||||||
|
| |||||||
1,660,591 | ||||||||
Financial Exchanges & Data — 0.4% |
| |||||||
Morningstar Inc. | 5,616 | 700,877 | ||||||
|
| |||||||
Food Retail — 0.5% |
| |||||||
Sprouts Farmers Market Inc.(a)(b) | 38,976 | 1,048,065 | ||||||
|
| |||||||
General Merchandise Stores — 0.8% |
| |||||||
Ollie’s Bargain Outlet Holdings Inc.(a) | 15,776 | 1,465,590 | ||||||
|
| |||||||
Health Care Equipment — 5.8% |
| |||||||
Cantel Medical Corp. | 11,128 | 880,781 | ||||||
CONMED Corp. | 7,921 | 534,113 | ||||||
Globus Medical Inc., Class A(a) | 22,484 | 1,188,279 | ||||||
Inogen Inc.(a) | 5,371 | 1,018,181 | ||||||
Integra LifeSciences Holdings | 21,681 | 1,161,451 | ||||||
LivaNova PLC(a) | 14,910 | 1,669,771 | ||||||
Nevro Corp.(a) | 9,256 | 451,323 | ||||||
Novocure Ltd.(a) | 20,801 | 689,345 | ||||||
NuVasive Inc.(a)(b) | 15,771 | 885,857 | ||||||
NxStage Medical Inc.(a)(b) | 20,363 | 577,902 | ||||||
Penumbra Inc.(a)(b) | 9,493 | 1,291,048 | ||||||
Wright Medical Group NV(a)(b) | 35,633 | 961,378 | ||||||
|
| |||||||
11,309,429 | ||||||||
Health Care REITs — 0.5% |
| |||||||
Physicians Realty Trust(b) | 55,818 | 925,462 | ||||||
|
| |||||||
Health Care Services — 1.5% |
| |||||||
Amedisys Inc.(a)(b) | 8,885 | 977,350 | ||||||
AMN Healthcare Services Inc.(a)(b) | 14,554 | 736,724 | ||||||
Diplomat Pharmacy Inc.(a)(b) | 17,380 | 344,819 | ||||||
LHC Group Inc.(a)(b) | 8,933 | 816,744 | ||||||
|
| |||||||
2,875,637 | ||||||||
Health Care Supplies — 1.3% |
| |||||||
Merit Medical Systems Inc.(a)(b) | 16,784 | 958,702 | ||||||
Neogen Corp.(a) | 15,898 | 965,327 | ||||||
Quidel Corp.(a) | 10,650 | 685,434 | ||||||
|
| |||||||
2,609,463 | ||||||||
Health Care Technology — 2.2% |
| |||||||
HMS Holdings Corp.(a) | 25,582 | 737,273 | ||||||
Medidata Solutions Inc.(a) | 18,310 | 1,287,193 | ||||||
Omnicell Inc.(a) | 12,037 | 851,016 | ||||||
Teladoc Health Inc.(a)(b) | 21,339 | 1,479,646 | ||||||
|
| |||||||
4,355,128 |
Security | Shares | Value | ||||||
Homebuilding — 0.6% |
| |||||||
Cavco Industries Inc.(a) | 2,610 | $ | 523,592 | |||||
Installed Building Products Inc.(a) | 6,800 | 207,128 | ||||||
TopBuild Corp.(a) | 10,954 | 499,722 | ||||||
|
| |||||||
1,230,442 | ||||||||
Homefurnishing Retail — 0.1% |
| |||||||
At Home Group Inc.(a)(b) | 8,112 | 221,782 | ||||||
|
| |||||||
Hotels, Resorts & Cruise Lines — 1.9% |
| |||||||
Choice Hotels International Inc. | 10,590 | 777,306 | ||||||
Hilton Grand Vacations Inc.(a) | 29,712 | 798,361 | ||||||
Hyatt Hotels Corp., Class A | 13,270 | 918,284 | ||||||
Marriott Vacations Worldwide Corp. | 12,567 | 1,112,054 | ||||||
|
| |||||||
3,606,005 | ||||||||
Household Appliances — 0.4% |
| |||||||
iRobot Corp.(a)(b) | 8,402 | 740,804 | ||||||
|
| |||||||
Household Products — 0.4% |
| |||||||
WD-40 Co. | 4,250 | 710,090 | ||||||
|
| |||||||
Human Resource & Employment Services — 2.2% |
| |||||||
ASGN Inc.(a) | 16,060 | 1,077,305 | ||||||
Insperity Inc. | 11,705 | 1,285,794 | ||||||
Korn/Ferry International | 17,454 | 787,874 | ||||||
TriNet Group Inc.(a) | 13,402 | 629,760 | ||||||
WageWorks Inc.(a)(b) | 12,182 | 484,965 | ||||||
|
| |||||||
4,265,698 | ||||||||
Hypermarkets & Super Centers — 0.3% |
| |||||||
PriceSmart Inc. | 7,021 | 492,523 | ||||||
|
| |||||||
Industrial Machinery — 2.8% |
| |||||||
Albany International Corp., Class A | 8,882 | 621,562 | ||||||
Chart Industries Inc.(a) | 9,497 | 646,271 | ||||||
ESCO Technologies Inc. | 7,963 | 487,495 | ||||||
Evoqua Water Technologies Corp.(a) | 17,851 | 171,370 | ||||||
John Bean Technologies Corp.(b) | 9,695 | 1,007,989 | ||||||
Proto Labs Inc.(a) | 8,292 | 990,479 | ||||||
RBC Bearings Inc.(a) | 7,543 | 1,113,950 | ||||||
Sun Hydraulics Corp. | 8,747 | 405,861 | ||||||
|
| |||||||
5,444,977 | ||||||||
Industrial REITs — 1.4% |
| |||||||
First Industrial Realty Trust Inc. | 38,647 | 1,186,463 | ||||||
Rexford Industrial Realty Inc. | 27,986 | 886,316 | ||||||
Terreno Realty Corp. | 17,897 | 669,885 | ||||||
|
| |||||||
2,742,664 | ||||||||
Interactive Home Entertainment — 0.4% |
| |||||||
Zynga Inc., Class A(a) | 237,366 | 864,012 | ||||||
|
| |||||||
Interactive Media & Services — 0.9% |
| |||||||
Match Group Inc.(a)(b) | 15,812 | 817,796 | ||||||
Yelp Inc.(a) | 23,613 | 1,011,109 | ||||||
|
| |||||||
1,828,905 | ||||||||
Internet & Direct Marketing Retail — 3.0% |
| |||||||
Etsy Inc.(a)(b) | 36,746 | 1,562,440 | ||||||
Groupon Inc.(a) | 125,775 | 411,284 | ||||||
Shutterfly Inc.(a)(b) | 10,244 | 512,200 | ||||||
Shutterstock Inc.(b) | 5,695 | 232,812 | ||||||
Stamps.com Inc.(a) | 5,234 | 1,058,158 | ||||||
Wayfair Inc., Class A(a)(b) | 18,307 | 2,019,079 | ||||||
|
| |||||||
5,795,973 |
S C H E D U L E O F I N V E S T M E N T S | 39 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Morningstar Small-Cap Growth ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Internet Services & Infrastructure — 1.8% |
| |||||||
GTT Communications Inc.(a)(b) | 10,617 | $ | 381,151 | |||||
Okta Inc.(a)(b) | 23,848 | 1,391,769 | ||||||
Twilio Inc., Class A(a) | 23,583 | 1,773,913 | ||||||
|
| |||||||
3,546,833 | ||||||||
IT Consulting & Other Services — 0.6% |
| |||||||
LiveRamp Holdings Inc.(a) | 23,764 | 1,085,540 | ||||||
|
| |||||||
Leisure Facilities — 0.7% |
| |||||||
Planet Fitness Inc., Class A(a) | 27,054 | 1,328,081 | ||||||
|
| |||||||
Leisure Products — 0.3% |
| |||||||
Callaway Golf Co. | 27,196 | 581,994 | ||||||
|
| |||||||
Life Sciences Tools & Services — 0.7% |
| |||||||
Cambrex Corp.(a)(b) | 10,188 | 542,918 | ||||||
Syneos Health Inc.(a)(b) | 18,617 | 849,494 | ||||||
|
| |||||||
1,392,412 | ||||||||
Managed Health Care — 0.8% |
| |||||||
HealthEquity Inc.(a) | 16,622 | 1,525,900 | ||||||
|
| |||||||
Movies & Entertainment — 1.8% |
| |||||||
IMAX Corp.(a) | 16,333 | 316,207 | ||||||
Madison Square Garden Co. (The), Class A(a) | 5,285 | 1,461,937 | ||||||
Pandora Media Inc.(a) | 81,612 | 693,702 | ||||||
World Wrestling Entertainment Inc., Class A | 13,305 | 965,810 | ||||||
|
| |||||||
3,437,656 | ||||||||
Office REITs — 0.4% |
| |||||||
Corporate Office Properties Trust | 31,663 | 818,172 | ||||||
|
| |||||||
Office Services & Supplies — 0.6% |
| |||||||
MSA Safety Inc. | 10,727 | 1,120,328 | ||||||
|
| |||||||
Oil & Gas Drilling — 0.6% |
| |||||||
Patterson-UTI Energy Inc. | 67,492 | 1,123,067 | ||||||
|
| |||||||
Oil & Gas Equipment & Services — 0.3% |
| |||||||
Keane Group Inc.(a)(b) | 13,814 | 173,642 | ||||||
Oil States International Inc.(a)(b) | 18,436 | 410,570 | ||||||
|
| |||||||
584,212 | ||||||||
Oil & Gas Exploration & Production — 3.3% |
| |||||||
Callon Petroleum Co.(a) | 69,754 | 695,447 | ||||||
CNX Resources Corp.(a)(b) | 65,325 | 1,022,336 | ||||||
Extraction Oil & Gas Inc.(a) | 35,594 | 284,396 | ||||||
Jagged Peak Energy Inc.(a)(b) | 19,000 | 234,080 | ||||||
Kosmos Energy Ltd.(a) | 78,423 | 508,965 | ||||||
Matador Resources Co.(a)(b) | 31,760 | 915,958 | ||||||
PDC Energy Inc.(a)(b) | 20,261 | 860,080 | ||||||
Range Resources Corp. | 63,502 | 1,006,507 | ||||||
SRC Energy Inc.(a)(b) | 74,298 | 526,030 | ||||||
Tellurian Inc.(a)(b) | 28,829 | 230,632 | ||||||
WildHorse Resource Development Corp.(a) | 7,837 | 166,223 | ||||||
|
| |||||||
6,450,654 | ||||||||
Packaged Foods & Meats — 0.2% |
| |||||||
Calavo Growers Inc. | 4,806 | 466,182 | ||||||
|
| |||||||
Personal Products — 0.4% |
| |||||||
Inter Parfums Inc. | 5,294 | 312,293 | ||||||
USANA Health Sciences Inc.(a) | 4,249 | 497,218 | ||||||
|
| |||||||
809,511 | ||||||||
Pharmaceuticals — 1.2% |
| |||||||
Aerie Pharmaceuticals Inc.(a)(b) | 11,915 | 633,640 |
Security | Shares | Value | ||||||
Pharmaceuticals (continued) |
| |||||||
Medicines Co. (The)(a)(b) | 20,109 | $ | 467,735 | |||||
MyoKardia Inc.(a)(b) | 10,196 | 539,776 | ||||||
Supernus Pharmaceuticals Inc.(a) | 16,002 | 761,055 | ||||||
|
| |||||||
2,402,206 | ||||||||
Publishing — 0.6% |
| |||||||
New York Times Co. (The), Class A(b) | 43,272 | 1,142,381 | ||||||
|
| |||||||
Real Estate Operating Companies — 0.4% |
| |||||||
Kennedy-Wilson Holdings Inc. | 38,454 | 729,857 | ||||||
|
| |||||||
Real Estate Services — 0.2% |
| |||||||
Redfin Corp.(a)(b) | 20,719 | 320,109 | ||||||
|
| |||||||
Regional Banks — 2.5% |
| |||||||
Ameris Bancorp. | 12,267 | 526,132 | ||||||
Cadence BanCorp. | 22,838 | 503,806 | ||||||
Eagle Bancorp. Inc.(a) | 9,700 | 476,949 | ||||||
FCB Financial Holdings Inc., Class A(a) | 14,332 | 560,811 | ||||||
First Financial Bankshares Inc. | 20,760 | 1,224,632 | ||||||
ServisFirst Bancshares Inc. | 14,052 | 505,591 | ||||||
Texas Capital Bancshares Inc.(a)(b) | 15,389 | 1,003,825 | ||||||
|
| |||||||
4,801,746 | ||||||||
Renewable Electricity — 0.7% |
| |||||||
Ormat Technologies Inc. | 15,518 | 794,056 | ||||||
Pattern Energy Group Inc., Class A | 27,930 | 500,506 | ||||||
|
| |||||||
1,294,562 | ||||||||
Research & Consulting Services — 0.4% |
| |||||||
Exponent Inc. | 15,951 | 804,887 | ||||||
|
| |||||||
Restaurants — 1.5% |
| |||||||
Jack in the Box Inc. | 8,351 | 659,144 | ||||||
Texas Roadhouse Inc. | 20,396 | 1,233,142 | ||||||
Wendy’s Co. (The) | 57,411 | 989,766 | ||||||
|
| |||||||
2,882,052 | ||||||||
Retail REITs — 0.9% |
| |||||||
Acadia Realty Trust(b) | 24,975 | 695,304 | ||||||
Spirit Realty Capital Inc. | 131,422 | 1,027,720 | ||||||
|
| |||||||
1,723,024 | ||||||||
Semiconductor Equipment — 1.6% |
| |||||||
Brooks Automation Inc. | 21,645 | 671,645 | ||||||
Cabot Microelectronics Corp. | 7,831 | 764,462 | ||||||
Entegris Inc. | 43,450 | 1,153,163 | ||||||
SolarEdge Technologies Inc.(a)(b) | 13,093 | 507,092 | ||||||
|
| |||||||
3,096,362 | ||||||||
Semiconductors — 4.7% |
| |||||||
Ambarella Inc.(a)(b) | 10,268 | 357,121 | ||||||
Cirrus Logic Inc.(a) | 18,695 | 699,941 | ||||||
Cree Inc.(a)(b) | 31,224 | 1,212,116 | ||||||
Integrated Device Technology Inc.(a) | 39,690 | 1,857,889 | ||||||
MaxLinear Inc.(a)(b) | 19,188 | 372,439 | ||||||
Mellanox Technologies Ltd.(a)(b) | 13,959 | 1,182,188 | ||||||
Power Integrations Inc. | 9,037 | 508,964 | ||||||
Rambus Inc.(a) | 32,991 | 287,351 | ||||||
Silicon Laboratories Inc.(a) | 13,298 | 1,084,186 | ||||||
Universal Display Corp. | 13,005 | 1,599,745 | ||||||
|
| |||||||
9,161,940 | ||||||||
Soft Drinks — 0.2% |
| |||||||
National Beverage Corp.(a) | 3,725 | 344,376 | ||||||
|
|
40 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Morningstar Small-Cap Growth ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Specialized Consumer Services — 0.6% |
| |||||||
Sotheby’s(a) | 11,262 | $ | 473,004 | |||||
Weight Watchers International Inc.(a)(b) | 11,843 | 782,822 | ||||||
|
| |||||||
1,255,826 | ||||||||
Specialized REITs — 0.9% |
| |||||||
CoreSite Realty Corp. | 11,260 | 1,056,863 | ||||||
QTS Realty Trust Inc., Class A | 15,630 | 598,942 | ||||||
|
| |||||||
1,655,805 | ||||||||
Specialty Chemicals — 1.5% |
| |||||||
Balchem Corp. | 9,879 | 925,168 | ||||||
Ingevity Corp.(a) | 12,900 | 1,174,932 | ||||||
PQ Group Holdings Inc.(a) | 11,219 | 180,065 | ||||||
Quaker Chemical Corp. | 4,086 | 735,072 | ||||||
|
| |||||||
3,015,237 | ||||||||
Specialty Stores — 1.3% |
| |||||||
Five Below Inc.(a)(b) | 17,099 | 1,946,208 | ||||||
National Vision Holdings Inc.(a) | 14,796 | 612,998 | ||||||
|
| |||||||
2,559,206 | ||||||||
Steel — 0.3% |
| |||||||
Carpenter Technology Corp. | 14,487 | 631,778 | ||||||
|
| |||||||
Systems Software — 2.1% |
| |||||||
CommVault Systems Inc.(a) | 11,775 | 685,541 | ||||||
FireEye Inc.(a)(b) | 59,800 | 1,105,702 | ||||||
Imperva Inc.(a) | 10,072 | 557,485 | ||||||
Qualys Inc.(a)(b) | 10,283 | 732,561 | ||||||
SailPoint Technologies Holding Inc.(a) | 19,858 | 517,102 | ||||||
Varonis Systems Inc.(a) | 8,949 | 546,515 | ||||||
|
| |||||||
4,144,906 | ||||||||
Technology Hardware, Storage & Peripherals — 0.6% |
| |||||||
Pure Storage Inc., Class A(a)(b) | 53,302 | 1,075,634 | ||||||
|
| |||||||
Thrifts & Mortgage Finance — 0.2% |
| |||||||
LendingTree Inc.(a)(b) | 2,275 | 458,845 | ||||||
|
| |||||||
Trading Companies & Distributors — 0.7% |
| |||||||
Beacon Roofing Supply Inc.(a) | 20,872 | 582,538 | ||||||
SiteOne Landscape Supply Inc.(a)(b) | 12,427 | 845,533 | ||||||
|
| |||||||
1,428,071 |
Security | Shares | Value | ||||||
Trucking — 0.8% |
| |||||||
Heartland Express Inc.(b) | 14,603 | $ | 284,320 | |||||
Landstar System Inc. | 12,609 | 1,262,035 | ||||||
|
| |||||||
1,546,355 | ||||||||
Wireless Telecommunication Services — 0.4% |
| |||||||
Shenandoah Telecommunications Co. | 14,112 | 536,538 | ||||||
U.S. Cellular Corp.(a) | 4,361 | 208,325 | ||||||
|
| |||||||
744,863 | ||||||||
|
| |||||||
Total Common Stocks — 100.0% |
| 194,911,626 | ||||||
|
| |||||||
Short-Term Investments | ||||||||
Money Market Funds — 19.4% | ||||||||
BlackRock Cash Funds: Institutional, | 37,714,092 | 37,721,635 | ||||||
BlackRock Cash Funds: Treasury, | 128,316 | 128,316 | ||||||
|
| |||||||
37,849,951 | ||||||||
|
| |||||||
Total Short -Term Investments — 19.4% |
| 37,849,951 | ||||||
|
| |||||||
Total Investments in Securities — 119.4% |
| 232,761,577 | ||||||
Other Assets, Less Liabilities — (19.4)% |
| (37,751,168 | ) | |||||
|
| |||||||
Net Assets — 100.0% |
| $ | 195,010,409 | |||||
|
|
(a) | Non-income producing security. |
(b) | All or a portion of this security is on loan. |
(c) | Affiliate of the Fund. |
(d) | Annualized 7-day yield as of period-end. |
(e) | All or a portion of this security was purchased with cash collateral received from loaned securities. |
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of
Section 2(a)(3) of the 1940 Act, were as follows:
| Shares Held at | | | Shares Held at | | Value at | Net Realized | | Change in Unrealized Appreciation | | ||||||||||||||||||
Affiliated Issuer | 04/30/18 | Net Activity | 10/31/18 | 10/31/18 | Income | Gain (Loss) | (a) | (Depreciation) | ||||||||||||||||||||
BlackRock Cash Funds: Institutional, | 34,493,817 | 3,220,275 | 37,714,092 | $ | 37,721,635 | $ | 84,400 | (b) | $ | 458 | $ | 2,521 | ||||||||||||||||
BlackRock Cash Funds: Treasury, | 178,468 | (50,152) | 128,316 | 128,316 | 1,322 | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
$ | 37,849,951 | $ | 85,722 | $ | 458 | $ | 2,521 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
(b) | Includes securities lending income earned from the reinvestment of cash collateral from loaned securities (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities, and less fees paid to BTC as securities lending agent. |
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, refer to the Notes to Financial Statements.
S C H E D U L E O F I N V E S T M E N T S | 41 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Morningstar Small-Cap Growth ETF
|
Fair Value Measurements (continued)
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $ | 194,911,626 | $ | — | $ | — | $ | 194,911,626 | ||||||||
Money Market Funds | 37,849,951 | — | — | 37,849,951 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 232,761,577 | $ | — | $ | — | $ | 232,761,577 | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
42 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited)
October 31, 2018 | iShares® Morningstar Small-Cap Value ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks | ||||||||
Aerospace & Defense — 0.5% |
| |||||||
Esterline Technologies Corp.(a) | 18,396 | $ | 2,158,955 | |||||
|
| |||||||
Air Freight & Logistics — 0.2% |
| |||||||
Atlas Air Worldwide Holdings Inc.(a) | 17,774 | 917,494 | ||||||
|
| |||||||
Airlines — 1.5% |
| |||||||
Hawaiian Holdings Inc. | 35,217 | 1,218,860 | ||||||
SkyWest Inc. | 36,164 | 2,071,836 | ||||||
Spirit Airlines Inc.(a)(b) | 47,382 | 2,459,126 | ||||||
|
| |||||||
5,749,822 | ||||||||
Auto Components — 1.3% |
| |||||||
American Axle & Manufacturing Holdings Inc.(a)(b) | 77,520 | 1,175,979 | ||||||
Cooper-Standard Holdings Inc.(a) | 11,499 | 1,065,382 | ||||||
Dana Inc. | 100,362 | 1,562,636 | ||||||
Tenneco Inc., Class A | 34,907 | 1,201,848 | ||||||
|
| |||||||
5,005,845 | ||||||||
Banks — 13.5% |
| |||||||
Associated Banc-Corp. | 119,487 | 2,769,709 | ||||||
BancorpSouth Bank | 62,363 | 1,789,818 | ||||||
Bank of Hawaii Corp. | 29,183 | 2,289,115 | ||||||
Banner Corp. | 22,854 | 1,321,418 | ||||||
Berkshire Hills Bancorp. Inc. | 28,028 | 935,294 | ||||||
Cathay General Bancorp. | 53,574 | 2,018,133 | ||||||
Chemical Financial Corp. | 49,574 | 2,323,038 | ||||||
First BanCorp./Puerto Rico(a) | 150,573 | 1,389,789 | ||||||
First Busey Corp. | 30,139 | 841,481 | ||||||
First Hawaiian Inc. | 62,724 | 1,554,301 | ||||||
First Midwest Bancorp. Inc. | 71,555 | 1,642,903 | ||||||
FNB Corp. | 225,138 | 2,663,383 | ||||||
Fulton Financial Corp. | 122,165 | 1,955,862 | ||||||
Hancock Whitney Corp. | 59,241 | 2,485,752 | ||||||
Hilltop Holdings Inc. | 50,495 | 1,004,851 | ||||||
Hope Bancorp Inc. | 85,809 | 1,242,514 | ||||||
IBERIABANK Corp. | 38,900 | 2,897,661 | ||||||
International Bancshares Corp. | 38,112 | 1,474,934 | ||||||
NBT Bancorp. Inc. | 30,357 | 1,107,727 | ||||||
Old National Bancorp./IN | 105,873 | 1,889,833 | ||||||
Park National Corp. | 9,462 | 864,827 | ||||||
Popular Inc. | 71,041 | 3,694,842 | ||||||
Simmons First National Corp., Class A | 64,134 | 1,717,509 | ||||||
TCF Financial Corp. | 116,431 | 2,431,079 | ||||||
Trustmark Corp. | 46,948 | 1,445,998 | ||||||
United Bankshares Inc./WV | 72,085 | 2,391,059 | ||||||
Valley National Bancorp. | 230,144 | 2,296,837 | ||||||
WesBanco Inc. | 37,884 | 1,519,148 | ||||||
Westamerica Bancorp. | 18,525 | 1,078,340 | ||||||
|
| |||||||
53,037,155 | ||||||||
Building Products — 0.2% |
| |||||||
JELD-WEN Holding Inc.(a)(b) | 48,191 | 783,586 | ||||||
|
| |||||||
Capital Markets — 1.4% |
| |||||||
Artisan Partners Asset Management Inc., Class A | 35,181 | 964,311 | ||||||
Federated Investors Inc., Class B | 66,454 | 1,639,420 | ||||||
Legg Mason Inc. | 59,383 | 1,675,788 | ||||||
Waddell & Reed Financial Inc., Class A | 55,323 | 1,055,010 | ||||||
|
| |||||||
5,334,529 | ||||||||
Chemicals — 2.6% |
| |||||||
Ashland Global Holdings Inc. | 43,343 | 3,206,515 |
Security | Shares | Value | ||||||
Chemicals (continued) |
| |||||||
Cabot Corp. | 42,742 | $ | 2,080,681 | |||||
Kronos Worldwide Inc. | 15,278 | 214,350 | ||||||
Platform Specialty Products Corp.(a)(b) | 162,115 | 1,754,084 | ||||||
Stepan Co. | 14,060 | 1,161,216 | ||||||
Trinseo SA | 29,554 | 1,592,370 | ||||||
Venator Materials PLC(a) | 34,578 | 233,747 | ||||||
|
| |||||||
10,242,963 | ||||||||
Commercial Services & Supplies — 0.9% |
| |||||||
Deluxe Corp. | 33,067 | 1,561,093 | ||||||
HNI Corp. | 30,404 | 1,152,007 | ||||||
Pitney Bowes Inc. | 130,524 | 864,069 | ||||||
|
| |||||||
3,577,169 | ||||||||
Communications Equipment — 0.3% |
| |||||||
EchoStar Corp., Class A(a) | 33,657 | 1,364,791 | ||||||
|
| |||||||
Construction & Engineering — 0.5% |
| |||||||
KBR Inc. | 97,643 | 1,931,379 | ||||||
|
| |||||||
Consumer Finance — 0.9% |
| |||||||
Navient Corp. | 163,524 | 1,893,608 | ||||||
OneMain Holdings Inc.(a) | 51,852 | 1,478,819 | ||||||
|
| |||||||
3,372,427 | ||||||||
Containers & Packaging — 1.4% |
| |||||||
Bemis Co. Inc. | 63,194 | 2,892,389 | ||||||
Greif Inc., Class A, NVS | 18,034 | 853,008 | ||||||
Owens-Illinois Inc.(a)(b) | 110,568 | 1,732,601 | ||||||
|
| |||||||
5,477,998 | ||||||||
Diversified Consumer Services — 1.0% |
| |||||||
Adtalem Global Education Inc.(a)(b) | 41,595 | 2,105,955 | ||||||
Graham Holdings Co., Class B | 3,042 | 1,767,554 | ||||||
|
| |||||||
3,873,509 | ||||||||
Diversified Financial Services — 0.2% |
| |||||||
Cannae Holdings Inc.(a) | 46,820 | 864,765 | ||||||
|
| |||||||
Electric Utilities — 3.4% |
| |||||||
ALLETE Inc. | 35,657 | 2,638,618 | ||||||
El Paso Electric Co. | 28,232 | 1,610,635 | ||||||
Hawaiian Electric Industries Inc. | 75,596 | 2,819,731 | ||||||
MGE Energy Inc. | 24,069 | 1,503,831 | ||||||
PNM Resources Inc. | 55,319 | 2,124,803 | ||||||
Portland General Electric Co. | 61,960 | 2,793,157 | ||||||
|
| |||||||
13,490,775 | ||||||||
Electrical Equipment — 0.6% |
| |||||||
Regal Beloit Corp. | 30,171 | 2,163,261 | ||||||
|
| |||||||
Electronic Equipment, Instruments & Components — 2.6% |
| |||||||
Anixter International Inc.(a) | 19,960 | 1,311,172 | ||||||
AVX Corp. | 32,712 | 545,636 | ||||||
Belden Inc.(b) | 28,218 | 1,525,183 | ||||||
Plexus Corp.(a)(b) | 22,409 | 1,308,686 | ||||||
Sanmina Corp.(a)(b) | 47,176 | 1,193,553 | ||||||
Tech Data Corp.(a) | 26,633 | 1,881,888 | ||||||
TTM Technologies Inc.(a)(b) | 64,233 | 751,526 | ||||||
Vishay Intertechnology Inc. | 91,748 | 1,678,988 | ||||||
|
| |||||||
10,196,632 | ||||||||
Energy Equipment & Services — 2.5% |
| |||||||
Diamond Offshore Drilling Inc.(a) | 44,904 | 636,739 | ||||||
Ensco PLC, Class A | 303,491 | 2,166,926 | ||||||
Frank’s International NV(a) | 51,230 | 363,733 | ||||||
McDermott International Inc.(a) | 125,622 | 971,058 |
S C H E D U L E O F I N V E S T M E N T S | 43 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Morningstar Small-Cap Value ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Energy Equipment & Services (continued) |
| |||||||
Nabors Industries Ltd. | 225,988 | $ | 1,123,160 | |||||
Oceaneering International Inc.(a) | 68,423 | 1,295,932 | ||||||
Rowan Companies PLC, Class A(a) | 88,225 | 1,403,660 | ||||||
U.S. Silica Holdings Inc. | 53,933 | 755,062 | ||||||
Weatherford International PLC(a)(b) | 692,344 | 934,664 | ||||||
|
| |||||||
9,650,934 | ||||||||
Equity Real Estate Investment Trusts (REITs) — 12.0% |
| |||||||
Apple Hospitality REIT Inc.(b) | 150,332 | 2,430,868 | ||||||
Chesapeake Lodging Trust | 41,986 | 1,233,969 | ||||||
Colony Capital Inc. | 340,116 | 1,996,481 | ||||||
Columbia Property Trust Inc. | 81,920 | 1,839,104 | ||||||
CoreCivic Inc. | 82,335 | 1,849,244 | ||||||
DiamondRock Hospitality Co. | 146,878 | 1,534,875 | ||||||
EPR Properties | 51,621 | 3,548,428 | ||||||
GEO Group Inc. (The) | 84,572 | 1,869,887 | ||||||
Hospitality Properties Trust | 114,120 | 2,923,754 | ||||||
LaSalle Hotel Properties | 76,651 | 2,530,250 | ||||||
Lexington Realty Trust | 148,077 | 1,150,558 | ||||||
LTC Properties Inc.(b) | 27,553 | 1,178,442 | ||||||
Mack-Cali Realty Corp. | 62,693 | 1,272,668 | ||||||
Outfront Media Inc. | 96,710 | 1,713,701 | ||||||
Piedmont Office Realty Trust Inc., Class A | 89,136 | 1,606,231 | ||||||
Retail Properties of America Inc., Class A | 152,459 | 1,870,672 | ||||||
Sabra Health Care REIT Inc. | 123,786 | 2,679,967 | ||||||
Select Income REIT | 62,141 | 1,175,086 | ||||||
Senior Housing Properties Trust | 165,000 | 2,651,550 | ||||||
SITE Centers Corp. | 101,151 | 1,257,307 | ||||||
Summit Hotel Properties Inc. | 74,116 | 853,816 | ||||||
Sunstone Hotel Investors Inc. | 158,475 | 2,293,133 | ||||||
Tanger Factory Outlet Centers Inc.(b) | 66,424 | 1,478,598 | ||||||
Weingarten Realty Investors | 82,700 | 2,325,524 | ||||||
Xenia Hotels & Resorts Inc. | 77,719 | 1,597,126 | ||||||
|
| |||||||
46,861,239 | ||||||||
Food & Staples Retailing — 0.4% |
| |||||||
Rite Aid Corp.(a)(b) | 740,638 | 888,766 | ||||||
United Natural Foods Inc.(a)(b) | 35,122 | 763,201 | ||||||
|
| |||||||
1,651,967 | ||||||||
Food Products — 2.5% |
| |||||||
B&G Foods Inc.(b) | 45,723 | 1,190,627 | ||||||
Darling Ingredients Inc.(a)(b) | 114,362 | 2,362,719 | ||||||
Flowers Foods Inc. | 127,385 | 2,459,804 | ||||||
Fresh Del Monte Produce Inc. | 21,078 | 696,206 | ||||||
Sanderson Farms Inc. | 13,940 | 1,371,557 | ||||||
TreeHouse Foods Inc.(a)(b) | 39,032 | 1,778,298 | ||||||
|
| |||||||
9,859,211 | ||||||||
Gas Utilities — 1.7% |
| |||||||
Northwest Natural Holding Co. | 20,384 | 1,320,679 | ||||||
Southwest Gas Holdings Inc. | 34,115 | 2,636,066 | ||||||
Spire Inc. | 35,180 | 2,553,365 | ||||||
|
| |||||||
6,510,110 | ||||||||
Health Care Equipment & Supplies — 0.5% |
| |||||||
Avanos Medical Inc.(a) | 32,814 | 1,857,272 | ||||||
|
| |||||||
Health Care Providers & Services — 2.0% |
| |||||||
Brookdale Senior Living Inc.(a)(b) | 130,432 | 1,164,758 | ||||||
LifePoint Health Inc.(a)(b) | 26,849 | 1,741,426 | ||||||
Magellan Health Inc.(a)(b) | 17,353 | 1,128,986 | ||||||
MEDNAX Inc.(a) | 64,895 | 2,679,514 |
Security | Shares | Value | ||||||
Health Care Providers & Services (continued) |
| |||||||
Patterson Companies Inc. | 57,296 | $ | 1,293,744 | |||||
|
| |||||||
8,008,428 | ||||||||
Hotels, Restaurants & Leisure — 1.5% |
| |||||||
Brinker International Inc. | 28,346 | 1,228,799 | ||||||
Extended Stay America Inc. | 131,170 | 2,135,448 | ||||||
Penn National Gaming Inc.(a) | 74,148 | 1,800,313 | ||||||
Scientific Games Corp./DE, | 38,026 | 846,459 | ||||||
|
| |||||||
6,011,019 | ||||||||
Household Durables — 1.4% |
| |||||||
MDC Holdings Inc. | 31,431 | 883,211 | ||||||
Meritage Homes Corp.(a) | 26,558 | 989,286 | ||||||
Taylor Morrison Home Corp., | 80,241 | 1,327,186 | ||||||
TRI Pointe Group Inc.(a)(b) | 105,694 | 1,257,759 | ||||||
Tupperware Brands Corp. | 34,692 | 1,217,689 | ||||||
|
| |||||||
5,675,131 | ||||||||
Household Products — 0.5% |
| |||||||
Spectrum Brands Holdings Inc. | 32,071 | 2,083,011 | ||||||
|
| |||||||
Independent Power and Renewable Electricity Producers — 0.4% |
| |||||||
Clearway Energy Inc., Class A | 24,044 | 466,935 | ||||||
Clearway Energy Inc., Class C | 50,717 | 994,560 | ||||||
|
| |||||||
1,461,495 | ||||||||
Insurance — 5.4% |
| |||||||
American Equity Investment Life Holding Co. | 62,739 | 1,958,712 | ||||||
American National Insurance Co. | 5,964 | 735,003 | ||||||
AmTrust Financial Services Inc. | 69,327 | 994,149 | ||||||
Argo Group International Holdings Ltd. | 23,528 | 1,449,560 | ||||||
Aspen Insurance Holdings Ltd. | 41,451 | 1,735,968 | ||||||
Assured Guaranty Ltd. | 75,255 | 3,008,695 | ||||||
CNO Financial Group Inc. | 114,261 | 2,159,533 | ||||||
Employers Holdings Inc. | 23,145 | 1,063,744 | ||||||
Genworth Financial Inc., Class A(a) | 347,541 | 1,487,475 | ||||||
Hanover Insurance Group Inc. (The) | 29,534 | 3,289,497 | ||||||
Selective Insurance Group Inc. | 40,879 | 2,651,003 | ||||||
Third Point Reinsurance Ltd.(a) | 54,515 | 602,936 | ||||||
|
| |||||||
21,136,275 | ||||||||
IT Services — 1.0% |
| |||||||
Conduent Inc.(a)(b) | 127,560 | 2,436,396 | ||||||
Travelport Worldwide Ltd. | 87,608 | 1,310,616 | ||||||
|
| |||||||
3,747,012 | ||||||||
Leisure Products — 0.1% |
| |||||||
Acushnet Holdings Corp. | 23,301 | 569,243 | ||||||
|
| |||||||
Machinery — 3.0% |
| |||||||
Colfax Corp.(a)(b) | 66,884 | 1,874,759 | ||||||
Harsco Corp.(a) | 56,134 | 1,542,001 | ||||||
Kennametal Inc. | 56,690 | 2,009,660 | ||||||
Meritor Inc.(a) | 59,960 | 1,018,720 | ||||||
Navistar International Corp.(a) | 45,266 | 1,515,958 | ||||||
Rexnord Corp.(a) | 72,526 | 1,944,422 | ||||||
Timken Co. (The) | 48,183 | 1,905,638 | ||||||
|
| |||||||
11,811,158 | ||||||||
Media — 1.7% |
| |||||||
AMC Networks Inc., Class A(a)(b) | 31,534 | 1,847,262 | ||||||
Meredith Corp. | 27,628 | 1,424,500 | ||||||
Sinclair Broadcast Group Inc., Class A | 53,151 | 1,522,244 | ||||||
TEGNA Inc. | 149,485 | 1,725,057 | ||||||
|
| |||||||
6,519,063 |
44 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Morningstar Small-Cap Value ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Metals & Mining — 1.3% |
| |||||||
AK Steel Holding Corp.(a)(b) | 219,337 | $ | 811,547 | |||||
Cleveland-Cliffs Inc.(a)(b) | 206,874 | 2,225,964 | ||||||
Compass Minerals International Inc. | 23,507 | 1,140,325 | ||||||
Hecla Mining Co. | 331,106 | 794,654 | ||||||
|
| |||||||
4,972,490 | ||||||||
Mortgage Real Estate Investment — 3.2% |
| |||||||
Apollo Commercial Real Estate Finance Inc.(b) | 77,728 | 1,454,291 | ||||||
Blackstone Mortgage Trust Inc., Class A | 82,167 | 2,772,315 | ||||||
Chimera Investment Corp. | 129,880 | 2,415,768 | ||||||
Invesco Mortgage Capital Inc. | 78,876 | 1,189,450 | ||||||
MFA Financial Inc. | 311,510 | 2,158,764 | ||||||
Two Harbors Investment Corp. | 172,241 | 2,530,220 | ||||||
|
| |||||||
12,520,808 | ||||||||
Multi-Utilities — 1.7% |
| |||||||
Avista Corp. | 45,623 | 2,345,935 | ||||||
Black Hills Corp. | 37,224 | 2,214,828 | ||||||
NorthWestern Corp. | 34,936 | 2,052,839 | ||||||
|
| |||||||
6,613,602 | ||||||||
Multiline Retail — 0.5% |
| |||||||
Big Lots Inc. | 27,984 | 1,161,895 | ||||||
Dillard’s Inc., Class A(b) | 13,335 | 939,051 | ||||||
|
| |||||||
2,100,946 | ||||||||
Oil, Gas & Consumable Fuels — 5.0% |
| |||||||
Arch Coal Inc., Class A | 13,589 | 1,303,185 | ||||||
Chesapeake Energy Corp.(a) | 633,406 | 2,223,255 | ||||||
CVR Energy Inc. | 20,243 | 870,449 | ||||||
Delek U.S. Holdings Inc. | 53,622 | 1,969,000 | ||||||
Gulfport Energy Corp.(a) | 109,447 | 997,062 | ||||||
Oasis Petroleum Inc.(a) | 185,463 | 1,865,758 | ||||||
Peabody Energy Corp. | 57,474 | 2,037,453 | ||||||
QEP Resources Inc.(a) | 164,560 | 1,466,230 | ||||||
SemGroup Corp., Class A | 45,474 | 840,814 | ||||||
Southwestern Energy Co.(a) | 407,217 | 2,174,539 | ||||||
Whiting Petroleum Corp.(a) | 63,160 | 2,355,868 | ||||||
World Fuel Services Corp. | 47,234 | 1,511,488 | ||||||
|
| |||||||
19,615,101 | ||||||||
Paper & Forest Products — 1.6% |
| |||||||
Domtar Corp. | 43,669 | 2,022,311 | ||||||
KapStone Paper and Packaging Corp. | 61,785 | 2,162,475 | ||||||
Louisiana-Pacific Corp. | 99,091 | 2,157,211 | ||||||
|
| |||||||
6,341,997 | ||||||||
Personal Products — 1.1% |
| |||||||
Edgewell Personal Care Co.(a) | 37,495 | 1,799,010 | ||||||
Nu Skin Enterprises Inc., Class A | 38,551 | 2,707,051 | ||||||
|
| |||||||
4,506,061 | ||||||||
Professional Services — 0.9% |
| |||||||
Dun & Bradstreet Corp. (The) | 25,799 | 3,670,682 | ||||||
|
| |||||||
Road & Rail — 0.7% |
| |||||||
Hertz Global Holdings Inc.(a)(b) | 37,893 | 521,029 | ||||||
Ryder System Inc. | 36,865 | 2,039,003 | ||||||
|
| |||||||
2,560,032 | ||||||||
Semiconductors & Semiconductor Equipment — 0.2% |
| |||||||
Amkor Technology Inc.(a) | 89,565 | 640,390 | ||||||
|
| |||||||
Software — 1.9% |
| |||||||
Avaya Holdings Corp.(a)(b) | 71,743 | 1,178,020 | ||||||
Nuance Communications Inc.(a)(b) | 199,132 | 3,462,906 | ||||||
TiVo Corp. | 85,865 | 944,515 |
Security | Shares | Value | ||||||
Software (continued) |
| |||||||
Verint Systems Inc.(a)(b) | 44,427 | $ | 2,028,981 | |||||
|
| |||||||
7,614,422 | ||||||||
Specialty Retail — 6.1% |
| |||||||
American Eagle Outfitters Inc. | 116,991 | 2,697,812 | ||||||
AutoNation Inc.(a)(b) | 39,936 | 1,616,609 | ||||||
Bed Bath & Beyond Inc. | 97,292 | 1,336,792 | ||||||
Dick’s Sporting Goods Inc. | 53,104 | 1,878,289 | ||||||
DSW Inc., Class A | 47,343 | 1,256,957 | ||||||
GameStop Corp., Class A | 70,818 | 1,033,943 | ||||||
Group 1 Automotive Inc. | 13,174 | 760,667 | ||||||
Michaels Companies Inc. (The)(a)(b) | 67,747 | 1,073,790 | ||||||
Murphy USA Inc.(a)(b) | 20,779 | 1,675,411 | ||||||
Party City Holdco Inc.(a)(b) | 39,719 | 415,858 | ||||||
Penske Automotive Group Inc. | 25,393 | 1,126,941 | ||||||
Sally Beauty Holdings Inc.(a)(b) | 83,433 | 1,485,942 | ||||||
Signet Jewelers Ltd. | 36,042 | 2,020,154 | ||||||
Urban Outfitters Inc.(a)(b) | 52,952 | 2,089,486 | ||||||
Williams-Sonoma Inc. | 55,930 | 3,321,123 | ||||||
|
| |||||||
23,789,774 | ||||||||
Technology Hardware, Storage & Peripherals — 0.6% |
| |||||||
NCR Corp.(a)(b) | 81,860 | 2,197,941 | ||||||
|
| |||||||
Textiles, Apparel & Luxury Goods — 0.7% |
| |||||||
Deckers Outdoor Corp.(a) | 20,875 | 2,654,674 | ||||||
|
| |||||||
Thrifts & Mortgage Finance — 2.7% |
| |||||||
Capitol Federal Financial Inc. | 96,100 | 1,192,601 | ||||||
Flagstar Bancorp. Inc.(a) | 20,478 | 630,518 | ||||||
MGIC Investment Corp.(a)(b) | 251,450 | 3,070,205 | ||||||
Provident Financial Services Inc. | 42,738 | 1,042,807 | ||||||
Radian Group Inc. | 148,091 | 2,841,866 | ||||||
Washington Federal Inc. | 58,053 | 1,634,772 | ||||||
|
| |||||||
10,412,769 | ||||||||
Trading Companies & Distributors — 1.1% |
| |||||||
Aircastle Ltd. | 38,481 | 747,686 | ||||||
GATX Corp. | 26,176 | 1,961,368 | ||||||
WESCO International Inc.(a) | 32,703 | 1,641,036 | ||||||
|
| |||||||
4,350,090 | ||||||||
Transportation Infrastructure — 0.5% |
| |||||||
Macquarie Infrastructure Corp. | 53,347 | 1,971,172 | ||||||
|
| |||||||
Wireless Telecommunication Services — 0.5% |
| |||||||
Telephone & Data Systems Inc. | 63,950 | 1,971,578 | ||||||
|
| |||||||
Total Common Stocks — 99.9% |
| 391,460,152 | ||||||
|
| |||||||
Short-Term Investments |
| |||||||
Money Market Funds — 7.8% |
| |||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 2.36%(c)(d)(e) | 30,536,913 | 30,543,020 |
S C H E D U L E O F I N V E S T M E N T S | 45 |
Schedule of Investments (unaudited) (continued)
October 31, 2018 | iShares® Morningstar Small-Cap Value ETF
(Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Money Market Funds (continued) |
| |||||||
BlackRock Cash Funds: Treasury, | 225,090 | $ | 225,090 | |||||
|
| |||||||
30,768,110 | ||||||||
|
| |||||||
Total Short-Term Investments — 7.8% |
| 30,768,110 | ||||||
|
| |||||||
Total Investments in Securities — 107.7% |
| 422,228,262 | ||||||
Other Assets, Less Liabilities — (7.7)% |
| (30,227,773 | ) | |||||
|
| |||||||
Net Assets — 100.0% |
| $ | 392,000,489 | |||||
|
|
(a) | Non-income producing security. |
(b) | All or a portion of this security is on loan. |
(c) | Affiliate of the Fund. |
(d) | Annualized 7-day yield as of period-end. |
(e) | All or a portion of this security was purchased with cash collateral received from loaned securities. |
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of
Section 2(a)(3) of the 1940 Act, were as follows:
| Shares Held at |
| | Shares Held at |
| Value at | Net Realized | | Change in Unrealized Appreciation | | ||||||||||||||||||
Affiliated Issuer | 04/30/18 | Net Activity | 10/31/18 | 10/31/18 | Income | Gain (Loss) | (a) | (Depreciation) | ||||||||||||||||||||
BlackRock Cash Funds: Institutional, | 34,562,106 | (4,025,193) | 30,536,913 | $ | 30,543,020 | $ | 100,651 | (b) | $ | 940 | $ | 2,932 | ||||||||||||||||
BlackRock Cash Funds: Treasury, | 415,787 | (190,697) | 225,090 | 225,090 | 4,739 | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
$ | 30,768,110 | $ | 105,390 | $ | 940 | $ | 2,932 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
(b) | Includes securities lending income earned from the reinvestment of cash collateral from loaned securities (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities, and less fees paid to BTC as securities lending agent. |
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, refer to the Notes to Financial Statements.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $ | 391,460,152 | $ | — | $ | — | $ | 391,460,152 | ||||||||
Money Market Funds | 30,768,110 | — | — | 30,768,110 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 422,228,262 | $ | — | $ | — | $ | 422,228,262 | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
46 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statements of Assets and Liabilities (unaudited)
October 31, 2018
iShares Large-Cap ETF | iShares Growth ETF | iShares Value ETF | iShares Morningstar Mid-Cap ETF | |||||||||||||
ASSETS | ||||||||||||||||
Investments in securities, at value (including securities on loan)(a): | ||||||||||||||||
Unaffiliated(b) | $ | 913,380,689 | $ | 971,670,424 | $ | 386,715,347 | $ | 690,694,434 | ||||||||
Affiliated(c) | 12,656,242 | 22,501,807 | 436,056 | 25,757,463 | ||||||||||||
Receivables: | ||||||||||||||||
Investments sold | 6,726,759 | — | — | — | ||||||||||||
Securities lending income — Affiliated | 761 | 7,059 | — | 5,846 | ||||||||||||
Dividends | 875,612 | 310,424 | 641,611 | 328,606 | ||||||||||||
Tax reclaims | — | — | — | 2,209 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total assets | 933,640,063 | 994,489,714 | 387,793,014 | 716,788,558 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
LIABILITIES | ||||||||||||||||
Collateral on securities loaned, at value | 3,614,926 | 12,479,791 | — | 25,353,887 | ||||||||||||
Payables: | ||||||||||||||||
Investments purchased | 6,533,974 | — | 672,056 | — | ||||||||||||
Investment advisory fees | 162,446 | 215,135 | 83,500 | 150,625 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total liabilities | 10,311,346 | 12,694,926 | 755,556 | 25,504,512 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
NET ASSETS | $ | 923,328,717 | $ | 981,794,788 | $ | 387,037,458 | $ | 691,284,046 | ||||||||
|
|
|
|
|
|
|
| |||||||||
NET ASSETS CONSIST OF: | ||||||||||||||||
Paid-in capital | $ | 795,958,446 | $ | 670,465,422 | $ | 346,532,933 | $ | 656,688,919 | ||||||||
Accumulated earnings | 127,370,271 | 311,329,366 | 40,504,525 | 34,595,127 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
NET ASSETS | $ | 923,328,717 | $ | 981,794,788 | $ | 387,037,458 | $ | 691,284,046 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Shares outstanding | 5,850,000 | 5,800,000 | 3,750,000 | 3,950,000 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net asset value | $ | 157.83 | $ | 169.27 | $ | 103.21 | $ | 175.01 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Shares authorized | Unlimited | Unlimited | Unlimited | Unlimited | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Par value | None | None | None | None | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
(a) Securities loaned, at value | $ | 3,555,022 | $ | 12,575,823 | $ | — | $ | 25,195,411 | ||||||||
(b) Investments, at cost — Unaffiliated | $ | 788,461,078 | $ | 686,266,984 | $ | 342,542,091 | $ | 652,608,717 | ||||||||
(c) Investments, at cost — Affiliated | $ | 13,776,892 | $ | 21,811,029 | $ | 436,056 | $ | 25,755,833 |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S | 47 |
Statements of Assets and Liabilities (unaudited) (continued)
October 31, 2018
iShares Morningstar Mid-Cap Growth ETF | iShares Value ETF | iShares ETF | iShares Morningstar Small-Cap Growth ETF | |||||||||||||
ASSETS | ||||||||||||||||
Investments in securities, at value (including securities on loan)(a): | ||||||||||||||||
Unaffiliated(b) | $ | 303,328,637 | $ | 432,526,892 | $ | 229,790,452 | $ | 194,911,626 | ||||||||
Affiliated(c) | 19,430,157 | 9,878,305 | 22,725,974 | 37,849,951 | ||||||||||||
Cash | — | 23,751 | — | — | ||||||||||||
Receivables: | ||||||||||||||||
Securities lending income — Affiliated | 5,728 | 2,558 | 7,815 | 12,760 | ||||||||||||
Dividends | 64,007 | 405,873 | 173,768 | 6,140 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total assets | 322,828,529 | 442,837,379 | 252,698,009 | 232,780,477 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
LIABILITIES | ||||||||||||||||
Collateral on securities loaned, at value | 19,127,439 | 9,763,165 | 22,544,554 | 37,718,742 | ||||||||||||
Payables: | ||||||||||||||||
Investment advisory fees | 76,797 | 112,838 | 50,401 | 51,326 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total liabilities | 19,204,236 | 9,876,003 | 22,594,955 | 37,770,068 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
NET ASSETS | $ | 303,624,293 | $ | 432,961,376 | $ | 230,103,054 | $ | 195,010,409 | ||||||||
|
|
|
|
|
|
|
| |||||||||
NET ASSETS CONSIST OF: | ||||||||||||||||
Paid-in capital | $ | 241,750,858 | $ | 421,387,083 | $ | 225,900,416 | $ | 170,496,747 | ||||||||
Accumulated earnings | 61,873,435 | 11,574,293 | 4,202,638 | 24,513,662 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
NET ASSETS | $ | 303,624,293 | $ | 432,961,376 | $ | 230,103,054 | $ | 195,010,409 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Shares outstanding | 1,450,000 | 2,850,000 | 1,400,000 | 1,050,000 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net asset value | $ | 209.40 | $ | 151.92 | $ | 164.36 | $ | 185.72 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Shares authorized | Unlimited | Unlimited | Unlimited | Unlimited | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Par value | None | None | None | None | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
(a) Securities loaned, at value | $ | 19,409,526 | $ | 9,570,789 | $ | 22,442,643 | $ | 38,003,261 | ||||||||
(b) Investments, at cost — Unaffiliated | $ | 249,930,576 | $ | 414,290,292 | $ | 223,570,449 | $ | 173,686,528 | ||||||||
(c) Investments, at cost — Affiliated | $ | 19,426,596 | $ | 9,877,622 | $ | 22,722,764 | $ | 37,844,516 |
See notes to financial statements.
48 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statements of Assets and Liabilities (unaudited) (continued)
October 31, 2018
iShares Morningstar Small-Cap Value ETF | ||||
ASSETS | ||||
Investments in securities, at value (including securities on loan)(a): | ||||
Unaffiliated(b) | $ | 391,460,152 | ||
Affiliated(c) | 30,768,110 | |||
Receivables: | ||||
Investments sold | 133,608 | |||
Securities lending income — Affiliated | 11,677 | |||
Dividends | 316,376 | |||
|
| |||
Total assets | 422,689,923 | |||
|
| |||
LIABILITIES | ||||
Collateral on securities loaned, at value | 30,547,040 | |||
Payables: | ||||
Securities related to in-kind transactions | 37,198 | |||
Investment advisory fees | 105,196 | |||
|
| |||
Total liabilities | 30,689,434 | |||
|
| |||
NET ASSETS | $ | 392,000,489 | ||
|
| |||
NET ASSETS CONSIST OF: | ||||
Paid-in capital | $ | 417,491,177 | ||
Accumulated loss | (25,490,688 | ) | ||
|
| |||
NET ASSETS | $ | 392,000,489 | ||
|
| |||
Shares outstanding | 2,800,000 | |||
|
| |||
Net asset value | $ | 140.00 | ||
|
| |||
Shares authorized | Unlimited | |||
|
| |||
Par value | None | |||
|
| |||
(a) Securities loaned, at value | $ | 30,296,640 | ||
(b) Investments, at cost — Unaffiliated | $ | 399,299,951 | ||
(c) Investments, at cost — Affiliated | $ | 30,762,051 |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S | 49 |
Statements of Operations (unaudited)
Six Months Ended October 31, 2018
iShares Morningstar Large-Cap ETF | iShares Morningstar Large-Cap Growth ETF | iShares Morningstar Large-Cap Value ETF | iShares Morningstar Mid-Cap ETF | |||||||||||||
INVESTMENT INCOME | ||||||||||||||||
Dividends — Unaffiliated | $ | 10,434,477 | $ | 4,409,831 | $ | 5,892,278 | $ | 8,193,534 | ||||||||
Dividends — Affiliated | 146,396 | 123,744 | 5,425 | 10,342 | ||||||||||||
Securities lending income — Affiliated — net | 2,819 | 129,825 | 738 | 36,400 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total investment income | 10,583,692 | 4,663,400 | 5,898,441 | 8,240,276 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
EXPENSES | ||||||||||||||||
Investment advisory fees | 979,599 | 1,278,329 | 495,722 | 956,790 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total expenses | 979,599 | 1,278,329 | 495,722 | 956,790 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net investment income | 9,604,093 | 3,385,071 | 5,402,719 | 7,283,486 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||
Investments — Unaffiliated | 6,878,702 | (5,752,534 | ) | (2,532,306 | ) | (11,911,162 | ) | |||||||||
Investments — Affiliated | (36,525 | ) | (2,642 | ) | 159 | 1,562 | ||||||||||
In-kind redemptions — Unaffiliated | 22,903,758 | 33,165,209 | 5,810,538 | 40,471,555 | ||||||||||||
In-kind redemptions — Affiliated | (20,026 | ) | 44,946 | — | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net realized gain | 29,725,909 | 27,454,979 | 3,278,391 | 28,561,955 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
Investments — Unaffiliated | 6,074,671 | (1,972,348 | ) | 4,544,785 | (47,194,407 | ) | ||||||||||
Investments — Affiliated | (1,149,725 | ) | (2,372,987 | ) | (7 | ) | 405 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net change in unrealized appreciation (depreciation) | 4,924,946 | (4,345,335 | ) | 4,544,778 | (47,194,002 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net realized and unrealized gain (loss) | 34,650,855 | 23,109,644 | 7,823,169 | (18,632,047 | ) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | 44,254,948 | $ | 26,494,715 | $ | 13,225,888 | $ | (11,348,561 | ) | |||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
50 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statements of Operations (unaudited) (continued)
Six Months Ended October 31, 2018
iShares Morningstar Mid-Cap Growth ETF | iShares Value ETF | iShares Morningstar Small-Cap ETF | iShares Morningstar Small-Cap Growth ETF | |||||||||||||
INVESTMENT INCOME | ||||||||||||||||
Dividends — Unaffiliated | $ | 839,649 | $ | 5,976,478 | $ | 1,993,120 | $ | 366,961 | ||||||||
Dividends — Affiliated | 1,703 | 5,802 | 2,736 | 1,322 | ||||||||||||
Securities lending income — Affiliated — net | 49,820 | 17,736 | 69,898 | 84,400 | ||||||||||||
Foreign taxes withheld | (1,792 | ) | — | — | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total investment income | 889,380 | 6,000,016 | 2,065,754 | 452,683 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
EXPENSES | ||||||||||||||||
Investment advisory fees | 437,634 | 670,165 | 321,252 | 302,673 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total expenses | 437,634 | 670,165 | 321,252 | 302,673 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net investment income | 451,746 | 5,329,851 | 1,744,502 | 150,010 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||
Investments — Unaffiliated | (3,360,781 | ) | (1,825,336 | ) | (3,462,643 | ) | (1,713,888 | ) | ||||||||
Investments — Affiliated | 1,741 | (305 | ) | 847 | 458 | |||||||||||
In-kind redemptions — Unaffiliated | 16,524,571 | 17,938,081 | 18,130,904 | 9,730,748 | ||||||||||||
Litigation proceeds | 109,052 | (a) | — | — | 17,803 | (a) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net realized gain | 13,274,583 | 16,112,440 | 14,669,108 | 8,035,121 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
Investments — Unaffiliated | (13,198,478 | ) | (33,977,220 | ) | (22,992,544 | ) | (7,567,359 | ) | ||||||||
Investments — Affiliated | 1,329 | 328 | 1,684 | 2,521 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net change in unrealized appreciation (depreciation) | (13,197,149 | ) | (33,976,892 | ) | (22,990,860 | ) | (7,564,838 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net realized and unrealized gain (loss) | 77,434 | (17,864,452 | ) | (8,321,752 | ) | 470,283 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | 529,180 | $ | (12,534,601 | ) | $ | (6,577,250 | ) | $ | 620,293 | ||||||
|
|
|
|
|
|
|
|
(a) | Represents proceeds received from settlement of class action litigation where the Fund was able to recover a portion of investment losses previously realized. |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S | 51 |
Statements of Operations (unaudited) (continued)
Six Months Ended October 31, 2018
iShares Morningstar Small-Cap Value ETF | ||||
INVESTMENT INCOME | ||||
Dividends — Unaffiliated | $ | 4,762,294 | ||
Dividends — Affiliated | 4,739 | |||
Securities lending income — Affiliated — net | 100,651 | |||
Foreign taxes withheld | (3,745 | ) | ||
|
| |||
Total investment income | 4,863,939 | |||
|
| |||
EXPENSES | ||||
Investment advisory fees | 672,548 | |||
|
| |||
Total expenses | 672,548 | |||
|
| |||
Net investment income | 4,191,391 | |||
|
| |||
REALIZED AND UNREALIZED GAIN (LOSS) | ||||
Net realized gain (loss) from: | ||||
Investments — Unaffiliated | 11,162,780 | |||
Investments — Affiliated | 940 | |||
In-kind redemptions — Unaffiliated | 7,536,504 | |||
|
| |||
Net realized gain | 18,700,224 | |||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments — Unaffiliated | (28,603,965 | ) | ||
Investments — Affiliated | 2,932 | |||
|
| |||
Net change in unrealized appreciation (depreciation) | (28,601,033 | ) | ||
|
| |||
Net realized and unrealized loss | (9,900,809 | ) | ||
|
| |||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (5,709,418 | ) | |
|
|
See notes to financial statements.
52 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statements of Changes in Net Assets
iShares Morningstar Large-Cap ETF | iShares Morningstar Large-Cap Growth ETF | |||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | |||||||||||||
| ||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS | ||||||||||||||||
Net investment income | $ | 9,604,093 | $ | 17,883,272 | $ | 3,385,071 | $ | 8,186,933 | ||||||||
Net realized gain | 29,725,909 | 87,213,011 | 27,454,979 | 71,161,100 | ||||||||||||
Net change in unrealized appreciation (depreciation) | 4,924,946 | (32,124,717 | ) | (4,345,335 | ) | 86,100,342 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 44,254,948 | 72,971,566 | 26,494,715 | 165,448,375 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS(a) | ||||||||||||||||
Decrease in net assets resulting from distributions to shareholders | (9,364,570 | ) | (17,784,765 | ) | (3,588,566 | ) | (7,986,129 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS | ||||||||||||||||
Net increase (decrease) in net assets derived from capital share transactions | (55,943,321 | ) | 74,761,644 | 26,571,590 | 45,828,677 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
NET ASSETS(a) | ||||||||||||||||
Total increase (decrease) in net assets | (21,052,943 | ) | 129,948,445 | 49,477,739 | 203,290,923 | |||||||||||
Beginning of period | 944,381,660 | 814,433,215 | 932,317,049 | 729,026,126 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 923,328,717 | $ | 944,381,660 | $ | 981,794,788 | $ | 932,317,049 | ||||||||
|
|
|
|
|
|
|
|
(a) | Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 11 for this prior year information. |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S | 53 |
Statements of Changes in Net Assets (continued)
iShares Morningstar Large-Cap Value ETF | iShares Morningstar Mid-Cap ETF | |||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | |||||||||||||
| ||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS | ||||||||||||||||
Net investment income | $ | 5,402,719 | $ | 9,714,855 | $ | 7,283,486 | $ | 10,851,929 | ||||||||
Net realized gain | 3,278,391 | 26,701,073 | 28,561,955 | 71,952,042 | ||||||||||||
Net change in unrealized appreciation (depreciation) | 4,544,778 | (3,502,054 | ) | (47,194,002 | ) | (16,956,105 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 13,225,888 | 32,913,874 | (11,348,561 | ) | 65,847,866 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS(a) | ||||||||||||||||
Decrease in net assets resulting from distributions to shareholders | (5,186,925 | ) | (9,667,473 | ) | (6,810,262 | ) | (10,424,753 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS | ||||||||||||||||
Net increase (decrease) in net assets derived from capital share transactions | 4,974,557 | (29,490,293 | ) | (38,415,182 | ) | (55,171,942 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
NET ASSETS(a) | ||||||||||||||||
Total increase (decrease) in net assets | 13,013,520 | (6,243,892 | ) | (56,574,005 | ) | 251,171 | ||||||||||
Beginning of period | 374,023,938 | 380,267,830 | 747,858,051 | 747,606,880 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 387,037,458 | $ | 374,023,938 | $ | 691,284,046 | $ | 747,858,051 | ||||||||
|
|
|
|
|
|
|
|
(a) | Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 11 for this prior year information. |
See notes to financial statements.
54 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statements of Changes in Net Assets (continued)
iShares Morningstar Mid-Cap Growth ETF | iShares Morningstar Mid-Cap Value ETF | |||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | |||||||||||||
| ||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS | ||||||||||||||||
Net investment income | $ | 451,746 | $ | 924,321 | $ | 5,329,851 | $ | 8,565,141 | ||||||||
Net realized gain | 13,274,583 | 18,116,001 | 16,112,440 | 19,062,956 | ||||||||||||
Net change in unrealized appreciation (depreciation) | (13,197,149 | ) | 18,992,061 | (33,976,892 | ) | 6,451,687 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 529,180 | 38,032,383 | (12,534,601 | ) | 34,079,784 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS(a) | ||||||||||||||||
Decrease in net assets resulting from distributions to shareholders | (423,553 | ) | (1,105,496 | ) | (4,852,618 | ) | (8,237,672 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS | ||||||||||||||||
Net increase in net assets derived from capital share transactions | 44,380,119 | 9,438,807 | 32,547,669 | 7,434,871 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
NET ASSETS(a) | ||||||||||||||||
Total increase in net assets | 44,485,746 | 46,365,694 | 15,160,450 | 33,276,983 | ||||||||||||
Beginning of period | 259,138,547 | 212,772,853 | 417,800,926 | 384,523,943 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 303,624,293 | $ | 259,138,547 | $ | 432,961,376 | $ | 417,800,926 | ||||||||
|
|
|
|
|
|
|
|
(a) | Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 11 for this prior year information. |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S | 55 |
Statements of Changes in Net Assets (continued)
iShares Morningstar Small-Cap ETF | iShares Morningstar Small-Cap Growth ETF | |||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | |||||||||||||
| ||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS | ||||||||||||||||
Net investment income | $ | 1,744,502 | $ | 2,907,099 | $ | 150,010 | $ | 576,559 | ||||||||
Net realized gain | 14,669,108 | 20,568,657 | 8,035,121 | 12,802,051 | ||||||||||||
Net change in unrealized appreciation (depreciation) | (22,990,860 | ) | (6,708,099 | ) | (7,564,838 | ) | 9,688,393 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | (6,577,250 | ) | 16,767,657 | 620,293 | 23,067,003 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS(a) | ||||||||||||||||
Decrease in net assets resulting from distributions to shareholders | (1,794,797 | ) | (3,185,010 | ) | (346,838 | ) | (605,018 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS | ||||||||||||||||
Net increase (decrease) in net assets derived from capital share transactions | (8,463,343 | ) | (8,287,953 | ) | 29,999,919 | 26,149,737 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
NET ASSETS(a) | ||||||||||||||||
Total increase (decrease) in net assets | (16,835,390 | ) | 5,294,694 | 30,273,374 | 48,611,722 | |||||||||||
Beginning of period | 246,938,444 | 241,643,750 | 164,737,035 | 116,125,313 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 230,103,054 | $ | 246,938,444 | $ | 195,010,409 | $ | 164,737,035 | ||||||||
|
|
|
|
|
|
|
|
(a) | Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 11 for this prior year information. |
See notes to financial statements.
56 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statements of Changes in Net Assets (continued)
iShares Morningstar Small-Cap Value ETF | ||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | |||||||
| ||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||
OPERATIONS | ||||||||
Net investment income | $ | 4,191,391 | $ | 8,352,525 | ||||
Net realized gain | 18,700,224 | 32,813,003 | ||||||
Net change in unrealized appreciation (depreciation) | (28,601,033 | ) | (34,770,387 | ) | ||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | (5,709,418 | ) | 6,395,141 | |||||
|
|
|
| |||||
DISTRIBUTIONS TO SHAREHOLDERS(a) | ||||||||
Decrease in net assets resulting from distributions to shareholders | (4,774,940 | ) | (8,746,485 | ) | ||||
|
|
|
| |||||
CAPITAL SHARE TRANSACTIONS | ||||||||
Net decrease in net assets derived from capital share transactions | (44,675,737 | ) | (32,039,381 | ) | ||||
|
|
|
| |||||
NET ASSETS(a) | ||||||||
Total decrease in net assets | (55,160,095 | ) | (34,390,725 | ) | ||||
Beginning of period | 447,160,584 | 481,551,309 | ||||||
|
|
|
| |||||
End of period | $ | 392,000,489 | $ | 447,160,584 | ||||
|
|
|
|
(a) | Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 11 for this prior year information. |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S | 57 |
(For a share outstanding throughout each period)
iShares Morningstar Large-Cap ETF | ||||||||||||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Year Ended 04/30/17 | Year Ended 04/30/16 | Year Ended 04/30/15 | Year Ended 04/30/14 | |||||||||||||||||||
| ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 152.32 | $ | 142.88 | $ | 120.58 | $ | 122.54 | $ | 110.41 | $ | 94.86 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income(a) | 1.59 | 2.93 | 2.57 | 2.27 | 2.33 | 2.17 | ||||||||||||||||||
Net realized and unrealized gain (loss)(b) | 5.48 | 9.42 | 22.44 | (1.27 | ) | 12.05 | 15.49 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase from investment operations | 7.07 | 12.35 | 25.01 | 1.00 | 14.38 | 17.66 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Distributions | ||||||||||||||||||||||||
From net investment income | (1.56 | ) | (2.91 | ) | (2.71 | ) | (2.96 | ) | (2.25 | ) | (2.11 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (1.56 | ) | (2.91 | ) | (2.71 | ) | (2.96 | ) | (2.25 | ) | (2.11 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 157.83 | $ | 152.32 | $ | 142.88 | $ | 120.58 | $ | 122.54 | $ | 110.41 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Return | ||||||||||||||||||||||||
Based on net asset value | 4.62 | %(c) | 8.66 | % | 20.97 | % | 0.87 | % | 13.09 | % | 18.80 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||||||
Total expenses | 0.20 | %(d) | 0.20 | % | 0.20 | % | 0.20 | % | 0.20 | % | 0.20 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income | 1.96 | %(d) | 1.91 | % | 1.96 | % | 1.91 | % | 1.96 | % | 2.13 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 923,329 | $ | 944,382 | $ | 814,433 | $ | 608,927 | $ | 667,832 | $ | 469,247 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Portfolio turnover rate(e) | 22 | %(c) | 46 | % | 45 | % | 39 | % | 27 | % | 35 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(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. |
(e) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
58 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares Morningstar Large-Cap Growth ETF | ||||||||||||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Year Ended 04/30/17 | Year Ended 04/30/16 | Year Ended 04/30/15 | Year Ended 04/30/14 | |||||||||||||||||||
| ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 165.01 | $ | 136.27 | $ | 116.36 | $ | 118.09 | $ | 100.37 | $ | 83.14 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income(a) | 0.59 | 1.48 | 1.12 | 1.13 | 1.11 | 0.93 | ||||||||||||||||||
Net realized and unrealized gain (loss)(b) | 4.30 | 28.70 | 19.88 | (1.64 | ) | 17.67 | 17.26 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase (decrease) from investment operations | 4.89 | 30.18 | 21.00 | (0.51 | ) | 18.78 | 18.19 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Distributions | ||||||||||||||||||||||||
From net investment income | (0.63 | ) | (1.44 | ) | (1.09 | ) | (1.22 | ) | (1.06 | ) | (0.96 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (0.63 | ) | (1.44 | ) | (1.09 | ) | (1.22 | ) | (1.06 | ) | (0.96 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 169.27 | $ | 165.01 | $ | 136.27 | $ | 116.36 | $ | 118.09 | $ | 100.37 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Return | ||||||||||||||||||||||||
Based on net asset value | 2.94 | %(c) | 22.26 | % | 18.15 | % | (0.44 | )% | 18.77 | % | 21.98 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||||||
Total expenses | 0.25 | %(d) | 0.25 | % | 0.25 | % | 0.25 | % | 0.25 | % | 0.25 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income | 0.66 | %(d) | 0.97 | % | 0.91 | % | 0.96 | % | 0.99 | % | 1.00 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 981,795 | $ | 932,317 | $ | 729,026 | $ | 791,246 | $ | 726,248 | $ | 521,926 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Portfolio turnover rate(e) | 13 | %(c) | 48 | % | 31 | % | 22 | % | 21 | % | 23 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(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. |
(e) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
F I N A N C I A L H I G H L I G H T S | 59 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares Morningstar Large-Cap Value ETF | ||||||||||||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Year Ended 04/30/17 | Year Ended 04/30/16 | Year Ended 04/30/15 | Year Ended 04/30/14 | |||||||||||||||||||
| ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 101.09 | $ | 95.07 | $ | 85.03 | $ | 86.04 | $ | 82.96 | $ | 72.21 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income(a) | 1.44 | 2.55 | 2.53 | 2.56 | 2.21 | 2.05 | ||||||||||||||||||
Net realized and unrealized gain (loss)(b) | 2.06 | 6.02 | 10.03 | (1.03 | ) | 3.07 | 10.75 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase from investment operations | 3.50 | 8.57 | 12.56 | 1.53 | 5.28 | 12.80 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Distributions | ||||||||||||||||||||||||
From net investment income | (1.38 | ) | (2.55 | ) | (2.52 | ) | (2.54 | ) | (2.20 | ) | (2.05 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (1.38 | ) | (2.55 | ) | (2.52 | ) | (2.54 | ) | (2.20 | ) | (2.05 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 103.21 | $ | 101.09 | $ | 95.07 | $ | 85.03 | $ | 86.04 | $ | 82.96 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Return | ||||||||||||||||||||||||
Based on net asset value | 3.46 | %(c) | 9.07 | % | 14.95 | % | 1.92 | % | 6.42 | % | 17.98 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||||||
Total expenses | 0.25 | %(d) | 0.25 | % | 0.25 | % | 0.25 | % | 0.25 | % | 0.25 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income | 2.72 | %(d) | 2.54 | % | 2.78 | % | 3.10 | % | 2.60 | % | 2.67 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 387,037 | $ | 374,024 | $ | 380,268 | $ | 289,101 | $ | 305,434 | $ | 298,657 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Portfolio turnover rate(e) | 11 | %(c) | 24 | % | 31 | % | 27 | % | 14 | % | 26 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(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. |
(e) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
60 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares Morningstar Mid-Cap ETF | ||||||||||||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Year Ended 04/30/17 | Year Ended 04/30/16 | Year Ended 04/30/15 | Year Ended 04/30/14 | |||||||||||||||||||
| ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 180.21 | $ | 168.00 | $ | 145.96 | $ | 151.49 | $ | 133.53 | $ | 111.77 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income(a) | 1.79 | 2.48 | 2.01 | 2.30 | 2.01 | 1.55 | ||||||||||||||||||
Net realized and unrealized gain (loss)(b) | (5.30 | ) | 12.13 | 22.68 | (5.42 | ) | 18.03 | 21.81 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase (decrease) from investment operations | (3.51 | ) | 14.61 | 24.69 | (3.12 | ) | 20.04 | 23.36 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Distributions | ||||||||||||||||||||||||
From net investment income | (1.69 | ) | (2.40 | ) | (2.65 | ) | (2.41 | ) | (2.08 | ) | (1.60 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (1.69 | ) | (2.40 | ) | (2.65 | ) | (2.41 | ) | (2.08 | ) | (1.60 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 175.01 | $ | 180.21 | $ | 168.00 | $ | 145.96 | $ | 151.49 | $ | 133.53 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Return | ||||||||||||||||||||||||
Based on net asset value | (2.01 | )%(c) | 8.73 | % | 17.06 | % | (2.03 | )% | 15.09 | % | 21.04 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||||||
Total expenses | 0.25 | %(d) | 0.25 | % | 0.25 | % | 0.25 | % | 0.25 | % | 0.25 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income | 1.90 | %(d) | 1.40 | % | 1.28 | % | 1.59 | % | 1.39 | % | 1.26 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 691,284 | $ | 747,858 | $ | 747,607 | $ | 540,062 | $ | 515,075 | $ | 280,415 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Portfolio turnover rate(e) | 35 | %(c) | 50 | % | 56 | % | 51 | % | 55 | % | 50 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(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. |
(e) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
F I N A N C I A L H I G H L I G H T S | 61 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares Morningstar Mid-Cap Growth ETF | ||||||||||||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Year Ended 04/30/17 | Year Ended 04/30/16 | Year Ended 04/30/15 | Year Ended 04/30/14 | |||||||||||||||||||
| ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 207.31 | $ | 177.31 | $ | 153.60 | $ | 165.11 | $ | 142.18 | $ | 119.51 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income(a) | 0.35 | 0.75 | 0.84 | 0.60 | 0.60 | 0.55 | ||||||||||||||||||
Net realized and unrealized gain (loss)(b) | 2.07 | 30.14 | 23.76 | (11.46 | ) | 23.19 | 22.75 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase (decrease) from investment operations | 2.42 | 30.89 | 24.60 | (10.86 | ) | 23.79 | 23.30 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Distributions | ||||||||||||||||||||||||
From net investment income | (0.33 | ) | (0.89 | ) | (0.89 | ) | (0.65 | ) | (0.86 | ) | (0.63 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (0.33 | ) | (0.89 | ) | (0.89 | ) | (0.65 | ) | (0.86 | ) | (0.63 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 209.40 | $ | 207.31 | $ | 177.31 | $ | 153.60 | $ | 165.11 | $ | 142.18 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Return | ||||||||||||||||||||||||
Based on net asset value | 1.15 | %(c)(d) | 17.46 | % | 16.06 | % | (6.58 | )% | 16.78 | % | 19.52 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||||||
Total expenses | 0.30 | %(e) | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income | 0.31 | %(e) | 0.38 | % | 0.52 | % | 0.39 | % | 0.39 | % | 0.41 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 303,624 | $ | 259,139 | $ | 212,773 | $ | 207,355 | $ | 231,160 | $ | 199,052 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Portfolio turnover rate(f) | 18 | %(c) | 43 | % | 47 | % | 44 | % | 50 | % | 41 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(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) | Includes proceeds received from a class action litigation, which impacted the Fund’s total return. Not including these proceeds, the Fund’s total return would have been 1.12% for the six months ended October 31, 2018. |
(e) | Annualized. |
(f) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
62 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares Morningstar Mid-Cap Value ETF | ||||||||||||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Year Ended 04/30/17 | Year Ended 04/30/16 | Year Ended 04/30/15 | Year Ended 04/30/14 | |||||||||||||||||||
| ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 157.66 | $ | 147.89 | $ | 125.61 | $ | 125.84 | $ | 118.75 | $ | 96.24 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income(a) | 1.93 | 3.26 | 2.87 | 2.86 | 2.38 | 2.28 | ||||||||||||||||||
Net realized and unrealized gain (loss)(b) | (5.93 | ) | 9.65 | 22.21 | (0.12 | ) | 7.22 | 22.46 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase (decrease) from investment operations | (4.00 | ) | 12.91 | 25.08 | 2.74 | 9.60 | 24.74 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Distributions | ||||||||||||||||||||||||
From net investment income | (1.74 | ) | (3.14 | ) | (2.80 | ) | (2.97 | ) | (2.51 | ) | (2.23 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (1.74 | ) | (3.14 | ) | (2.80 | ) | (2.97 | ) | (2.51 | ) | (2.23 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 151.92 | $ | 157.66 | $ | 147.89 | $ | 125.61 | $ | 125.84 | $ | 118.75 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Return | ||||||||||||||||||||||||
Based on net asset value | (2.59 | )%(c) | 8.81 | % | 20.15 | % | 2.29 | % | 8.13 | % | 25.94 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||||||
Total expenses | 0.30 | %(d) | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income | 2.39 | %(d) | 2.13 | % | 2.06 | % | 2.37 | % | 1.93 | % | 2.11 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 432,961 | $ | 417,801 | $ | 384,524 | $ | 194,702 | $ | 226,507 | $ | 189,994 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Portfolio turnover rate(e) | 19 | %(c) | 45 | % | 38 | % | 38 | % | 33 | % | 39 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(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. |
(e) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
F I N A N C I A L H I G H L I G H T S | 63 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares Morningstar Small-Cap ETF | ||||||||||||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Year Ended 04/30/17 | Year Ended 04/30/16 | Year Ended 04/30/15 | Year Ended 04/30/14 | |||||||||||||||||||
| ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 170.30 | $ | 161.10 | $ | 134.45 | $ | 140.33 | $ | 130.00 | $ | 107.69 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income(a) | 1.23 | 1.96 | 1.67 | 2.05 | 1.61 | 1.21 | ||||||||||||||||||
Net realized and unrealized gain (loss)(b) | (5.91 | ) | 9.40 | 27.48 | (5.99 | ) | 10.40 | 22.28 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase (decrease) from investment operations | (4.68 | ) | 11.36 | 29.15 | (3.94 | ) | 12.01 | 23.49 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Distributions | ||||||||||||||||||||||||
From net investment income | (1.26 | ) | (2.16 | ) | (2.50 | ) | (1.94 | ) | (1.68 | ) | (1.18 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (1.26 | ) | (2.16 | ) | (2.50 | ) | (1.94 | ) | (1.68 | ) | (1.18 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 164.36 | $ | 170.30 | $ | 161.10 | $ | 134.45 | $ | 140.33 | $ | 130.00 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Return | ||||||||||||||||||||||||
Based on net asset value | (2.82 | )%(c) | 7.09 | % | 21.86 | % | (2.78 | )% | 9.27 | % | 21.89 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||||||
Total expenses | 0.25 | %(d) | 0.25 | % | 0.25 | % | 0.25 | % | 0.25 | % | 0.25 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income | 1.36 | %(d) | 1.18 | % | 1.13 | % | 1.53 | % | 1.19 | % | 0.99 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 230,103 | $ | 246,938 | $ | 241,644 | $ | 194,947 | $ | 224,533 | $ | 214,500 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Portfolio turnover rate(e) | 40 | %(c) | 56 | % | 66 | % | 65 | % | 61 | % | 68 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(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. |
(e) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
64 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares Morningstar Small-Cap Growth ETF | ||||||||||||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Year Ended 04/30/17 | Year Ended 04/30/16 | Year Ended 04/30/15 | Year Ended 04/30/14 | |||||||||||||||||||
| ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 183.04 | $ | 154.83 | $ | 130.57 | $ | 139.32 | $ | 125.88 | $ | 103.68 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income(a) | 0.15 | 0.72 | 0.86 | 0.83 | 0.77 | 0.67 | ||||||||||||||||||
Net realized and unrealized gain (loss)(b) | 2.88 | 28.26 | 25.25 | (8.79 | ) | 13.49 | 22.29 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase (decrease) from investment operations | 3.03 | 28.98 | 26.11 | (7.96 | ) | 14.26 | 22.96 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Distributions | ||||||||||||||||||||||||
From net investment income | (0.35 | ) | (0.77 | ) | (1.85 | ) | (0.79 | ) | (0.82 | ) | (0.76 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (0.35 | ) | (0.77 | ) | (1.85 | ) | (0.79 | ) | (0.82 | ) | (0.76 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 185.72 | $ | 183.04 | $ | 154.83 | $ | 130.57 | $ | 139.32 | $ | 125.88 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Return | ||||||||||||||||||||||||
Based on net asset value | 1.64 | %(c)(d) | 18.75 | % | 20.10 | % | (5.73 | )% | 11.35 | % | 22.16 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||||||
Total expenses | 0.30 | %(e) | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income | 0.15 | %(e) | 0.42 | % | 0.60 | % | 0.62 | % | 0.58 | % | 0.55 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 195,010 | $ | 164,737 | $ | 116,125 | $ | 110,984 | $ | 118,423 | $ | 132,177 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Portfolio turnover rate(f) | 28 | %(c) | 51 | % | 63 | % | 59 | % | 61 | % | 62 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(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) | Includes proceeds received from a class action litigation, which impacted the Fund’s total return. Not including these proceeds, the Fund’s total return would have been 1.63% for the six months ended October 31, 2018. |
(e) | Annualized. |
(f) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
F I N A N C I A L H I G H L I G H T S | 65 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares Morningstar Small-Cap Value ETF | ||||||||||||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Year Ended 04/30/17 | Year Ended 04/30/16 | Year Ended 04/30/15 | Year Ended 04/30/14 | |||||||||||||||||||
| ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 144.25 | $ | 143.75 | $ | 122.26 | $ | 128.47 | $ | 122.17 | $ | 103.19 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income(a) | 1.44 | 2.58 | 3.08 | 3.04 | 3.11 | 2.10 | ||||||||||||||||||
Net realized and unrealized gain (loss)(b) | (4.05 | ) | 0.61 | 21.83 | (6.28 | ) | 6.40 | 19.15 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase (decrease) from investment operations | (2.61 | ) | 3.19 | 24.91 | (3.24 | ) | 9.51 | 21.25 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Distributions | ||||||||||||||||||||||||
From net investment income | (1.64 | ) | (2.69 | ) | (3.42 | ) | (2.97 | ) | (3.21 | ) | (2.27 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (1.64 | ) | (2.69 | ) | (3.42 | ) | (2.97 | ) | (3.21 | ) | (2.27 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 140.00 | $ | 144.25 | $ | 143.75 | $ | 122.26 | $ | 128.47 | $ | 122.17 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Return | ||||||||||||||||||||||||
Based on net asset value | (1.90 | )%(c) | 2.23 | % | 20.58 | % | (2.42 | )% | 7.83 | % | 20.78 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||||||
Total expenses | 0.30 | %(d) | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income | 1.87 | %(d) | 1.78 | % | 2.29 | % | 2.56 | % | 2.47 | % | 1.85 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 392,000 | $ | 447,161 | $ | 481,551 | $ | 379,000 | $ | 430,379 | $ | 366,517 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Portfolio turnover rate(e) | 27 | %(c) | 54 | % | 48 | % | 51 | % | 40 | % | 52 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(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. |
(e) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
66 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (unaudited)
1. | ORGANIZATION |
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 is organized as a Delaware statutory trust and is authorized to have multiple series or portfolios.
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 | |||
Morningstar Mid-Cap Value | Diversified | |||
Morningstar Small-Cap | Diversified | |||
Morningstar Small-Cap Growth | Diversified | |||
Morningstar Small-Cap Value | Diversified |
2. | 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 increases and decreases in net assets from operations 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.
Investment Transactions and Income Recognition: Investment 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 are reflected in tax reclaims receivable. 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. Upon notification from issuers, some of the dividend income received from a real estate investment trust may be re-designated as a return of capital or capital gain. Non-cash dividends, if any, are recognized on the ex-dividend date and recorded as non-cash dividend income at fair value. Interest income is accrued daily.
In-kind Redemptions: For financial reporting purposes, 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 net asset value per share.
Distributions: 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.
Recent Accounting Standards: In August 2018, the Financial Accounting Standards Board issued Accounting Standards Update 2018-13 “Changes to the Disclosure Requirements for Fair Value Measurement” which modifies disclosure requirements for fair value measurements. The guidance is effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. Management is currently evaluating the impact of this guidance to the Funds.
Indemnifications: In the normal course of business, each Fund enters into contracts that contain a variety of representations that provide general indemnification. The Funds’ maximum exposure under these arrangements is unknown because it involves future potential claims against the Funds, which cannot be predicted with any certainty.
3. | INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS |
Investment Valuation Policies: Each Fund’s investments are valued at fair value (also referred to as “market value” within the financial statements) 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. A fund determines the fair value of its financial instruments using various independent dealers or pricing services under policies approved by the Board of Trustees of the Trust (the “Board”). The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) is the committee formed by management to develop global pricing policies and procedures and to oversee the pricing function for all financial instruments.
Fair Value Inputs and Methodologies: The following methods and inputs are used to establish the fair value of each Fund’s assets and liabilities:
• | Equity investments traded on a recognized securities exchange are valued at that day’s last traded price or 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. |
N O T E S T O F I N A N C I A L S T A T E M E N T S | 67 |
Notes to Financial Statements (unaudited) (continued)
• | Investments in open-end U.S. mutual funds (including money market funds) are valued at that day’s published net asset value (“NAV”). |
If events (e.g., a company announcement, market volatility or a natural disaster) occur that are expected to materially affect the value of an investment, or in the event that application of these methods of valuation results in a price for an investment that is deemed not to be representative of the market 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 as reflecting fair value (“Fair Valued Investments”). The fair valuation approaches that may be used by the Global Valuation Committee include market approach, income approach and the cost approach. 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.
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, regular reviews 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 and large movements in market values, and reviews of any market related activity. The pricing of all Fair Valued Investments is subsequently reported to the Board on a quarterly basis.
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.
Fair Value Hierarchy: Various inputs are used in determining the fair value of financial instruments. 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 price quotations 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, but not limited to, quoted prices for similar assets or liabilities in markets that are active, 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 interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs; and |
• | Level 3 – Unobservable inputs 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 financial instruments). |
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 into or out of an assigned level within the 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 a value determined for financial instruments is based on the pricing transparency of the financial instruments and is not necessarily an indication of the risks associated with investing in those securities.
4. | SECURITIES AND OTHER INVESTMENTS |
Securities Lending: Each Fund may lend its 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 market 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 Fund and any additional required collateral is delivered to the Fund or excess collateral is returned by the Fund, 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.
As of October 31, 2018, 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 BlackRock FundAdvisors (“BFA”), the Funds’ investment adviser, or its affiliates 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, if any, are also disclosed in its schedule of investments. The market value of any securities on loan as of October 31, 2018 and the value of the related cash collateral are disclosed in the statements of assets and liabilities.
Securities lending transactions are entered into by a fund under Master Securities Lending Agreements (each, an “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, the 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 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
68 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (unaudited) (continued)
insolvency. Under the MSLA, absent an event of default, the borrower can resell or re-pledge the loaned securities, and the fund can reinvest cash collateral received in connection with loaned securities.
The following table is a summary of the securities lending agreements by counterparty which are subject to offset under an MSLA as of October 31, 2018:
| ||||||||||||||||
iShares ETF and Counterparty | | Market Value of Securities on Loan |
| | Cash Collateral Received | (a) | | Non-Cash Collateral Received |
| Net Amount | ||||||
| ||||||||||||||||
Morningstar Large-Cap | ||||||||||||||||
Citigroup Global Markets Inc. | $ | 3,555,022 | $ | 3,555,022 | $ | — | $ | — | ||||||||
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|
|
|
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| |||||||||
Morningstar Large-Cap Growth | ||||||||||||||||
Barclays Bank PLC | $ | 618,116 | $ | 618,116 | $ | — | $ | — | ||||||||
Citigroup Global Markets Inc. | 10,142,096 | 10,142,096 | — | — | ||||||||||||
Merrill Lynch, Pierce, Fenner & Smith | 1,701,703 | 1,701,703 | — | — | ||||||||||||
State Street Bank & Trust Company | 7,688 | 7,688 | — | — | ||||||||||||
UBS Securities LLC | 106,220 | 106,220 | — | — | ||||||||||||
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|
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|
|
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| |||||||||
$ | 12,575,823 | $ | 12,575,823 | $ | — | $ | — | |||||||||
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|
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| |||||||||
Morningstar Mid-Cap | ||||||||||||||||
Barclays Bank PLC | $ | 1,982,711 | $ | 1,982,711 | $ | — | $ | — | ||||||||
Citigroup Global Markets Inc. | 3,833,409 | 3,833,409 | — | — | ||||||||||||
Credit Suisse Securities (USA) LLC | 3,030,476 | 3,030,476 | — | — | ||||||||||||
Deutsche Bank Securities Inc. | 3,176 | 3,176 | — | — | ||||||||||||
Goldman Sachs & Co. | 2,428,283 | 2,428,283 | — | — | ||||||||||||
HSBC Bank PLC | 37,593 | 37,593 | — | — | ||||||||||||
JPMorgan Securities LLC | 148,916 | 148,916 | — | — | ||||||||||||
Merrill Lynch, Pierce, Fenner & Smith | 4,970,190 | 4,970,190 | — | — | ||||||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 4,456,524 | 4,456,524 | — | — | ||||||||||||
State Street Bank & Trust Company | 165,388 | 165,388 | — | — | ||||||||||||
TD Prime Services LLC | 265,266 | 265,266 | — | — | ||||||||||||
UBS AG | 1,990,706 | 1,990,706 | — | — | ||||||||||||
Wells Fargo Bank, National Association | 451,941 | 451,941 | — | — | ||||||||||||
Wells Fargo Securities LLC | 1,430,832 | 1,430,832 | — | — | ||||||||||||
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|
|
|
|
|
|
| |||||||||
$ | 25,195,411 | $ | 25,195,411 | $ | — | $ | — | |||||||||
|
|
|
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|
|
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| |||||||||
Morningstar Mid-Cap Growth | ||||||||||||||||
Barclays Bank PLC | $ | 3,104,388 | $ | 3,104,388 | $ | — | $ | — | ||||||||
BMO Capital Markets | 20,880 | 20,880 | — | — | ||||||||||||
BNP Paribas Securities Corp. | 20,028 | 20,028 | — | — | ||||||||||||
Citigroup Global Markets Inc. | 3,774,031 | 3,774,031 | — | — | ||||||||||||
Deutsche Bank Securities Inc. | 622,747 | 622,747 | — | — | ||||||||||||
Goldman Sachs & Co. | 1,583,772 | 1,583,772 | — | — | ||||||||||||
HSBC Bank PLC | 3,480,960 | 3,480,960 | — | — | ||||||||||||
JPMorgan Securities LLC | 4,061,081 | 4,061,081 | — | — | ||||||||||||
National Financial Services LLC | 287,949 | 287,949 | — | — | ||||||||||||
TD Prime Services LLC | 2,453,690 | 2,453,690 | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 19,409,526 | $ | 19,409,526 | $ | — | $ | — | |||||||||
|
|
|
|
|
|
|
| |||||||||
Morningstar Mid-Cap Value | ||||||||||||||||
Barclays Bank PLC | $ | 848,325 | $ | 848,325 | $ | — | $ | — | ||||||||
Citigroup Global Markets Inc. | 172,843 | 172,843 | — | — | ||||||||||||
Credit Suisse Securities (USA) LLC | 221,338 | 221,338 | — | — | ||||||||||||
Goldman Sachs & Co. | 2,308,758 | 2,308,758 | — | — | ||||||||||||
Merrill Lynch, Pierce, Fenner & Smith | 1,196,230 | 1,196,230 | — | — | ||||||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 7,005 | 7,005 | — | — | ||||||||||||
State Street Bank & Trust Company | 9,104 | 9,104 | — | — | ||||||||||||
TD Prime Services LLC | 1,563,270 | 1,563,270 | — | — | ||||||||||||
UBS Securities LLC | 1,342,885 | 1,342,885 | — | — | ||||||||||||
Wells Fargo Bank, National Association | 1,901,031 | 1,901,031 | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 9,570,789 | $ | 9,570,789 | $ | — | $ | — | |||||||||
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|
|
N O T E S T O F I N A N C I A L S T A T E M E N T S | 69 |
Notes to Financial Statements (unaudited) (continued)
| ||||||||||||||||
iShares ETF and Counterparty | | Market Value of Securities on Loan | | | Cash Collateral Received | (a) | | Non-Cash Collateral Received | | Net Amount | ||||||
| ||||||||||||||||
Morningstar Small-Cap | ||||||||||||||||
Barclays Bank PLC | $ | 1,085,526 | $ | 1,085,526 | $ | — | $ | — | ||||||||
Barclays Capital Inc. | 50,403 | 50,403 | — | — | ||||||||||||
BNP Paribas New York Branch | 18,398 | 18,398 | — | — | ||||||||||||
BNP Paribas Prime Brokerage International Ltd. | 6,980 | 6,980 | — | — | ||||||||||||
Citigroup Global Markets Inc. | 1,712,699 | 1,712,699 | — | — | ||||||||||||
Credit Suisse Securities (USA) LLC | 1,807,371 | 1,807,371 | — | — | ||||||||||||
Deutsche Bank Securities Inc. | 1,407,538 | 1,407,538 | — | — | ||||||||||||
Goldman Sachs & Co. | 5,189,189 | 5,189,189 | — | — | ||||||||||||
HSBC Bank PLC | 110,732 | 110,732 | — | — | ||||||||||||
ING Financial Markets LLC | 130,366 | 130,366 | — | — | ||||||||||||
JPMorgan Securities LLC | 5,095,254 | 5,095,254 | — | — | ||||||||||||
Merrill Lynch, Pierce, Fenner & Smith | 1,793,553 | 1,793,553 | — | — | ||||||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 1,832,522 | 1,832,522 | — | — | ||||||||||||
National Financial Services LLC | 235,954 | 235,954 | — | — | ||||||||||||
Scotia Capital (USA) Inc. | 65,786 | 65,786 | — | — | ||||||||||||
State Street Bank & Trust Company | 344,269 | 344,269 | — | — | ||||||||||||
TD Prime Services LLC | 66,812 | 66,812 | — | — | ||||||||||||
UBS AG | 17,875 | 17,875 | — | — | ||||||||||||
Wells Fargo Bank, National Association | 196,712 | 196,712 | — | — | ||||||||||||
Wells Fargo Securities LLC | 1,274,704 | 1,274,704 | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 22,442,643 | $ | 22,442,643 | $ | — | $ | — | |||||||||
|
|
|
|
|
|
|
| |||||||||
Morningstar Small-Cap Growth | ||||||||||||||||
Barclays Bank PLC | $ | 1,790,174 | $ | 1,790,174 | $ | — | $ | — | ||||||||
Barclays Capital Inc. | 146,062 | 146,062 | — | — | ||||||||||||
BNP Paribas New York Branch | 1,509,153 | 1,509,153 | — | — | ||||||||||||
BNP Paribas Prime Brokerage International Ltd. | 1,458,473 | 1,458,473 | — | — | ||||||||||||
Citigroup Global Markets Inc. | 7,068,379 | 7,068,379 | — | — | ||||||||||||
Credit Suisse Securities (USA) LLC | 1,058,602 | 1,058,602 | — | — | ||||||||||||
Deutsche Bank Securities Inc. | 2,526,760 | 2,526,760 | — | — | ||||||||||||
Goldman Sachs & Co. | 3,096,002 | 3,096,002 | — | — | ||||||||||||
HSBC Bank PLC | 1,926,289 | 1,926,289 | — | — | ||||||||||||
Jefferies LLC | 2,661 | 2,661 | — | — | ||||||||||||
JPMorgan Securities LLC | 2,978,388 | 2,978,388 | — | — | ||||||||||||
Merrill Lynch, Pierce, Fenner & Smith | 1,840,924 | 1,840,924 | — | — | ||||||||||||
Mizuho Securities USA Inc. | 42,875 | 42,875 | — | — | ||||||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 5,934,555 | 5,934,555 | — | — | ||||||||||||
National Financial Services LLC | 1,156,852 | 1,156,852 | — | — | ||||||||||||
RBC Capital Markets LLC | 704,630 | 704,630 | — | — | ||||||||||||
Scotia Capital (USA) Inc. | 183,198 | 183,198 | — | — | ||||||||||||
SG Americas Securities LLC | 671,660 | 671,660 | — | — | ||||||||||||
State Street Bank & Trust Company | 711,767 | 711,767 | — | — | ||||||||||||
UBS AG | 323,649 | 323,649 | — | — | ||||||||||||
UBS Securities LLC | 939,730 | 939,730 | — | — | ||||||||||||
Wells Fargo Bank, National Association | 1,175,966 | 1,175,966 | — | — | ||||||||||||
Wells Fargo Securities LLC | 756,512 | 756,512 | — | — | ||||||||||||
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|
|
|
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| |||||||||
$ | 38,003,261 | $ | 38,003,261 | $ | — | $ | — | |||||||||
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70 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (unaudited) (continued)
| ||||||||||||||||
iShares ETF and Counterparty | | Market Value of Securities on Loan | | | Cash Collateral Received | (a) | | Non-Cash Collateral Received | | Net Amount | ||||||
| ||||||||||||||||
Morningstar Small-Cap Value | ||||||||||||||||
Barclays Bank PLC | $ | 828,286 | $ | 828,286 | $ | — | $ | — | ||||||||
BNP Paribas Prime Brokerage International Ltd. | 112,560 | 112,560 | — | — | ||||||||||||
BNP Paribas Securities Corp. | 3,165 | 3,165 | — | — | ||||||||||||
Citigroup Global Markets Inc. | 8,485,426 | 8,485,426 | — | — | ||||||||||||
Credit Suisse Securities (USA) LLC | 154,151 | 154,151 | — | — | ||||||||||||
Deutsche Bank Securities Inc. | 944,011 | 944,011 | — | — | ||||||||||||
Goldman Sachs & Co. | 6,498,015 | 6,498,015 | — | — | ||||||||||||
JPMorgan Securities LLC | 4,631,913 | 4,631,913 | — | — | ||||||||||||
Merrill Lynch, Pierce, Fenner & Smith | 15,383 | 15,383 | — | — | ||||||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 4,252,168 | 4,252,168 | — | — | ||||||||||||
National Financial Services LLC | 99,988 | 99,988 | — | — | ||||||||||||
RBC Capital Markets LLC | 854,923 | 854,923 | — | — | ||||||||||||
Scotia Capital (USA) Inc. | 470,707 | 470,707 | — | — | ||||||||||||
State Street Bank & Trust Company | 1,012,545 | 1,012,545 | — | — | ||||||||||||
UBS Securities LLC | 87,250 | 87,250 | — | — | ||||||||||||
Wells Fargo Bank, National Association | 1,537,569 | 1,537,569 | — | — | ||||||||||||
Wells Fargo Securities LLC | 308,580 | 308,580 | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 30,296,640 | $ | 30,296,640 | $ | — | $ | — | |||||||||
|
|
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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. |
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, each Fund benefits from a borrower default indemnity provided by BlackRock, Inc. (“BlackRock”). BlackRock’s indemnity allows for full replacement of the 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 market 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. Such losses are borne entirely by each Fund.
5. | INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES |
Investment Advisory Fees: 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 | |||
Morningstar Mid-Cap Value | 0.30 | |||
Morningstar Small-Cap | 0.25 | |||
Morningstar Small-Cap Growth | 0.30 | |||
Morningstar Small-Cap Value | 0.30 |
Distributor: 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.
Securities Lending: The U.S. Securities and Exchange Commission (the “SEC”) 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, or its affiliates, 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 (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities. Each Fund retains a portion of securities lending income and remits the remaining portion to BTC as compensation for its services as securities lending agent.
N O T E S T O F I N A N C I A L S T A T E M E N T S | 71 |
Notes to Financial Statements (unaudited) (continued)
Pursuant to a securities lending agreement, each Fund retains 71.5% of securities lending income (which excludes collateral investment fees) 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.
The share of securities lending income earned by each Fund is shown as securities lending income – affiliated – net in its statement of operations. For the six months ended October 31, 2018, the Funds paid BTC the following amounts for securities lending agent services:
iShares ETF | Fees Paid to BTC | |||
Morningstar Large-Cap | $ | 1,393 | ||
Morningstar Large-Cap Growth | 50,968 | |||
Morningstar Large-Cap Value | 332 | |||
Morningstar Mid-Cap | 17,310 | |||
Morningstar Mid-Cap Growth | 23,316 | |||
Morningstar Mid-Cap Value | 7,039 | |||
Morningstar Small-Cap | 30,664 | |||
Morningstar Small-Cap Growth | 38,546 | |||
Morningstar Small-Cap Value | 44,982 |
Officers and Trustees: Certain officers and/or trustees of the Trust are officers and/or trustees of BlackRock or its affiliates.
Other Transactions: The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate of BlackRock for 1940 Act purposes.
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, 2018, transactions executed by the Funds pursuant to Rule 17a-7 under the 1940 Act were as follows:
iShares ETF | Purchases | Sales | ||||||
Morningstar Large-Cap | $ | 104,445,174 | $ | 119,645,832 | ||||
Morningstar Large-Cap Growth | 54,450,255 | 62,554,464 | ||||||
Morningstar Large-Cap Value | 29,078,524 | 23,475,779 | ||||||
Morningstar Mid-Cap | 121,042,240 | 140,811,059 | ||||||
Morningstar Mid-Cap Growth | 28,397,276 | 34,596,440 | ||||||
Morningstar Mid-Cap Value | 51,055,592 | 45,839,637 | ||||||
Morningstar Small-Cap | 63,995,686 | 44,769,215 | ||||||
Morningstar Small-Cap Growth | 26,706,118 | 28,887,361 | ||||||
Morningstar Small-Cap Value | 58,982,765 | 51,239,544 |
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 shown as dividends – affiliated in the statement of operations.
A fund, in order to improve its portfolio liquidity and its ability to track its underlying index, may invest in shares of other iShares funds that invest in securities in the fund’s underlying index.
6. PURCHASES AND SALES
For the six months ended October 31, 2018, purchases and sales of investments, excluding in-kind transactions and short-term investments, were as follows:
iShares ETF | Purchases | Sales | ||||||
Morningstar Large-Cap | $ | 221,592,386 | $ | 215,301,322 | ||||
Morningstar Large-Cap Growth | 125,448,215 | 125,442,855 | ||||||
Morningstar Large-Cap Value | 43,408,065 | 43,407,930 | ||||||
Morningstar Mid-Cap | 269,243,380 | 263,490,679 | ||||||
Morningstar Mid-Cap Growth | 50,868,950 | 50,222,652 | ||||||
Morningstar Mid-Cap Value | 82,839,727 | 82,187,680 | ||||||
Morningstar Small-Cap | 103,015,343 | 101,023,933 | ||||||
Morningstar Small-Cap Growth | 56,795,285 | 55,339,486 | ||||||
Morningstar Small-Cap Value | 119,008,064 | 119,094,811 |
72 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D��E R S |
Notes to Financial Statements (unaudited) (continued)
For the six months ended October 31, 2018, in-kind transactions were as follows:
iShares ETF
| In-kind Purchases | In-kind Sales | ||||||
Morningstar Large-Cap | $ | 32,622,493 | $ | 88,066,993 | ||||
Morningstar Large-Cap Growth | 124,834,625 | 98,353,115 | ||||||
Morningstar Large-Cap Value | 31,004,749 | 25,781,100 | ||||||
Morningstar Mid-Cap | 149,041,673 | 186,590,643 | ||||||
Morningstar Mid-Cap Growth | 89,151,465 | 45,111,220 | ||||||
Morningstar Mid-Cap Value | 88,575,097 | 56,250,073 | ||||||
Morningstar Small-Cap | 62,136,042 | 71,561,297 | ||||||
Morningstar Small-Cap Growth | 49,766,471 | 20,284,082 | ||||||
Morningstar Small-Cap Value | 7,594,917 | 51,180,845 |
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.
Management has analyzed tax laws and regulations and their application to the Funds as of October 31, 2018, inclusive of the open tax return years, and does not believe that there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.
As of April 30, 2018, 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 2019 | Total | |||||||||
Morningstar Large-Cap | $ | 20,601,346 | $ | — | $ | 20,601,346 | ||||||
Morningstar Large-Cap Growth | — | 982,680 | 982,680 | |||||||||
Morningstar Large-Cap Value | — | 5,511,604 | 5,511,604 | |||||||||
Morningstar Mid-Cap | 27,440,863 | — | 27,440,863 | |||||||||
Morningstar Mid-Cap Growth | — | 3,999,375 | 3,999,375 | |||||||||
Morningstar Mid-Cap Value | 13,655,020 | — | 13,655,020 | |||||||||
Morningstar Small-Cap | 14,006,741 | — | 14,006,741 | |||||||||
Morningstar Small-Cap Growth | 2,472,113 | — | 2,472,113 | |||||||||
Morningstar Small-Cap Value | 24,643,135 | — | 24,643,135 |
(a) | Must be utilized prior to losses subject to expiration. |
A fund may own shares in certain foreign investment entities, referred to, under U.S. tax law, as “passive foreign investment companies.” Such fund 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.
As of October 31, 2018, gross unrealized appreciation and depreciation based on cost of investments (including short positions and derivatives, if any) for U.S. federal income tax purposes were as follows:
iShares ETF | Tax Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation (Depreciation) | ||||||||||||
Morningstar Large-Cap | $ | 808,864,977 | $ | 154,342,718 | $ | (37,170,764 | ) | $ | 117,171,954 | |||||||
Morningstar Large-Cap Growth | 709,557,925 | 299,808,180 | (15,193,874 | ) | 284,614,306 | |||||||||||
Morningstar Large-Cap Value | 345,427,562 | 59,633,219 | (17,909,378 | ) | 41,723,841 | |||||||||||
Morningstar Mid-Cap | 683,878,262 | 77,976,599 | (45,402,964 | ) | 32,573,635 | |||||||||||
Morningstar Mid-Cap Growth | 270,188,760 | 66,456,219 | (13,886,185 | ) | 52,570,034 | |||||||||||
Morningstar Mid-Cap Value | 434,093,026 | 45,140,786 | (36,828,615 | ) | 8,312,171 | |||||||||||
Morningstar Small-Cap | 248,925,860 | 25,258,599 | (21,668,033 | ) | 3,590,566 | |||||||||||
Morningstar Small-Cap Growth | 213,712,428 | 34,738,558 | (15,689,409 | ) | 19,049,149 | |||||||||||
Morningstar Small-Cap Value | 441,305,324 | 37,072,843 | (56,149,905 | ) | (19,077,062 | ) |
8. | 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
N O T E S T O F I N A N C I A L S T A T E M E N T S | 73 |
Notes to Financial Statements (unaudited) (continued)
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.
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.
Concentration Risk: 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, regulatory, political and social conditions affecting such sectors may have a significant impact on the fund and could affect the income from, or the value or liquidity of, the fund’s portfolio.
9. | 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 were as follows:
| ||||||||||||||||
Six Months Ended 10/31/18 | Year Ended 04/30/18 | |||||||||||||||
iShares ETF | Shares | Amount | Shares | Amount | ||||||||||||
| ||||||||||||||||
Morningstar Large-Cap | ||||||||||||||||
Shares sold | 200,000 | $ | 32,755,184 | 2,650,000 | $ | 406,573,237 | ||||||||||
Shares redeemed | (550,000) | (88,698,505) | (2,150,000) | (331,811,593) | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) | (350,000) | $ | (55,943,321) | 500,000 | $ | 74,761,644 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Morningstar Large-Cap Growth | ||||||||||||||||
Shares sold | 700,000 | $ | 125,004,441 | 400,000 | $ | 61,288,903 | ||||||||||
Shares redeemed | (550,000) | (98,432,851) | (100,000) | (15,460,226) | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase | 150,000 | $ | 26,571,590 | 300,000 | $ | 45,828,677 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Morningstar Large-Cap Value | ||||||||||||||||
Shares sold | 300,000 | $ | 31,089,543 | 300,000 | $ | 30,177,879 | ||||||||||
Shares redeemed | (250,000) | (26,114,986) | (600,000) | (59,668,172) | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) | 50,000 | $ | 4,974,557 | (300,000) | $ | (29,490,293) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Morningstar Mid-Cap | ||||||||||||||||
Shares sold | 800,000 | $ | 149,636,727 | 1,600,000 | $ | 284,851,591 | ||||||||||
Shares redeemed | (1,000,000) | (188,051,909) | (1,900,000) | (340,023,533) | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease | (200,000) | $ | (38,415,182) | (300,000) | $ | (55,171,942) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Morningstar Mid-Cap Growth | ||||||||||||||||
Shares sold | 400,000 | $ | 89,560,746 | 100,000 | $ | 19,775,703 | ||||||||||
Shares redeemed | (200,000) | (45,180,627) | (50,000) | (10,336,896) | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase | 200,000 | $ | 44,380,119 | 50,000 | $ | 9,438,807 | ||||||||||
|
|
|
|
|
|
|
|
74 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (unaudited) (continued)
| ||||||||||||||||
Six Months Ended 10/31/18 | Year Ended 04/30/18 | |||||||||||||||
iShares ETF | Shares | Amount | Shares | Amount | ||||||||||||
| ||||||||||||||||
Morningstar Mid-Cap Value | ||||||||||||||||
Shares sold | 550,000 | $ | 89,087,429 | 800,000 | $ | 122,777,182 | ||||||||||
Shares redeemed | (350,000) | (56,539,760) | (750,000) | (115,342,311) | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase | 200,000 | $ | 32,547,669 | 50,000 | $ | 7,434,871 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Morningstar Small-Cap | ||||||||||||||||
Shares sold | 350,000 | $ | 63,896,504 | 500,000 | $ | 83,216,849 | ||||||||||
Shares redeemed | (400,000) | (72,359,847) | (550,000) | (91,504,802) | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease | (50,000) | $ | (8,463,343) | (50,000) | $ | (8,287,953) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Morningstar Small-Cap Growth | ||||||||||||||||
Shares sold | 250,000 | $ | 50,338,702 | 450,000 | $ | 76,726,833 | ||||||||||
Shares redeemed | (100,000) | (20,338,783) | (300,000) | (50,577,096) | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase | 150,000 | $ | 29,999,919 | 150,000 | $ | 26,149,737 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Morningstar Small-Cap Value | ||||||||||||||||
Shares sold | 50,000 | $ | 7,767,669 | 1,400,000 | $ | 205,200,031 | ||||||||||
Shares redeemed | (350,000) | (52,443,406) | (1,650,000) | (237,239,412) | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net decrease | (300,000) | $ | (44,675,737) | (250,000) | $ | (32,039,381) | ||||||||||
|
|
|
|
|
|
|
|
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 shares sold in the table above.
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 transactions are reflected as a receivable or a payable in the statement of assets and liabilities.
10. | LEGAL PROCEEDINGS |
On June 16, 2016, investors 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 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”) in California State Court. 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.
Certain iShares funds (the “Impacted Funds”), along with thousands of other former shareholders of Tribune Company (“Tribune”), were named as defendants in one or more lawsuits (the “Litigation”) arising out of Tribune’s 2007 leveraged buyout transaction (“LBO”). The Litigation seeks to “claw back” from former Tribune shareholders, including the Impacted Funds, proceeds received in connection with the LBO. The iShares Morningstar Mid-Cap Value ETF received proceeds of $404,668 in the LBO. The claims that were originally brought against the Impacted Funds were dismissed but are currently subject to appeals in multiple appellate courts. The outcome of these appeals could result in new claims being brought against the Impacted Funds and/or previously dismissed claims being revived and subject to continuing litigation. The Impacted Funds intend to vigorously defend the Litigation.
11. | REGULATION S-X AMENDMENTS |
On August 17, 2018, the SEC adopted amendments to certain disclosure requirements in Securities Act Release No. 33-10532, Disclosure Update and Simplification. The Funds have adopted the amendments pertinent to Regulation S-X in this shareholder report. The amendments impacted certain disclosure presentation on the statement of assets and liabilities, statement of changes in net assets and notes to the financial statements.
Prior year distribution information and undistributed net investment income in the statement of changes in net assets has been modified to conform to the current year presentation in accordance with the Regulation S-X changes.
N O T E S T O F I N A N C I A L S T A T E M E N T S | 75 |
Notes to Financial Statements (unaudited) (continued)
Distributions for the year ended April 30, 2018 were classified as follows:
iShares ETF | Net Investment Income | |||
Morningstar Large-Cap | $ | 17,784,765 | ||
Morningstar Large-Cap Growth | 7,986,129 | |||
Morningstar Large-Cap Value | 9,667,473 | |||
Morningstar Mid-Cap | 10,424,753 | |||
Morningstar Mid-Cap Growth | 1,105,496 | |||
Morningstar Mid-Cap Value | 8,237,672 | |||
Morningstar Small-Cap | 3,185,010 | |||
Morningstar Small-Cap Growth | 605,018 | |||
Morningstar Small-Cap Value | 8,746,485 |
Undistributed net investment income as of April 30, 2018 are as follows:
iShares ETF | Undistributed net investment income | |||
Morningstar Large-Cap | $ | 834,231 | ||
Morningstar Large-Cap Growth | 446,256 | |||
Morningstar Large-Cap Value | 798,103 | |||
Morningstar Mid-Cap | 427,176 | |||
Morningstar Mid-Cap Growth | — | |||
Morningstar Mid-Cap Value | 327,469 | |||
Morningstar Small-Cap | — | |||
Morningstar Small-Cap Growth | — | |||
Morningstar Small-Cap Value | 112,834 |
12. | 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 additional disclosure in the financial statements.
76 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Supplemental Information (unaudited)
Proxy Results
Section 19(a) Notices
The amounts and sources of distributions reported in this notice are for financial reporting purposes and are not being provided for tax reporting purposes. The actual amounts and character of the distributions for tax reporting purposes will be reported to shareholders on Form 1099-DIV which is sent to shareholders shortly after calendar year-end.
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(a) | $ | 1.553879 | $ | — | $ | 0.008123 | $ | 1.562002 | 99 | % | — | % | 1 | % | 100 | % | ||||||||||||||||||||
Morningstar Large-Cap Growth(a) | 0.619236 | — | 0.012573 | 0.631809 | 98 | — | 2 | 100 | ||||||||||||||||||||||||||||
Morningstar Large-Cap Value(a) | 1.380829 | — | 0.002351 | 1.383180 | 100 | — | 0 | (b) | 100 | |||||||||||||||||||||||||||
Morningstar Mid-Cap(a) | 1.572574 | — | 0.113517 | 1.686091 | 93 | — | 7 | 100 | ||||||||||||||||||||||||||||
Morningstar Mid-Cap Growth(a) | 0.299928 | — | 0.027612 | 0.327540 | 92 | — | 8 | 100 | ||||||||||||||||||||||||||||
Morningstar Mid-Cap Value(a) | 1.696809 | — | 0.048100 | 1.744909 | 97 | — | 3 | 100 | ||||||||||||||||||||||||||||
Morningstar Small-Cap(a) | 1.128703 | — | 0.128397 | 1.257100 | 90 | — | 10 | 100 | ||||||||||||||||||||||||||||
Morningstar Small-Cap Growth(a) | 0.272911 | — | 0.073927 | 0.346838 | 79 | — | 21 | 100 | ||||||||||||||||||||||||||||
Morningstar Small-Cap Value(a) | 1.392829 | — | 0.243194 | 1.636023 | 85 | — | 15 | 100 |
(a) | The Fund estimates that it has distributed more than the amount of earned income and net realized gains; therefore, a portion of the distribution may be a return of capital. A return of capital may occur, for example, when some or all of the shareholder’s investment in the Fund is returned to the shareholder. A return of capital does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income”. When distributions exceed total return performance, the difference will incrementally reduce the Fund’s net asset value per share. |
(b) | Rounds to less than 1%. |
S U P P L E M E N T A L I N F O R M A T I O N | 77 |
Electronic Delivery
Shareholders can sign up for email notifications announcing that the shareholder report or prospectus has been posted on the iShares website at www.iShares.com. Once you have enrolled, you will no longer receive prospectuses and shareholder reports in the mail.
To enroll in electronic delivery:
• Go to www.icsdelivery.com.
• If your brokerage firm is not listed, electronic delivery may not be available. Please contact your broker-dealer or financial advisor.
Householding
Householding is an option available to certain fund investors. Householding is a method of delivery, based on the preference of the individual investor, in which a single copy of certain shareholder documents can be delivered to investors who share the same address, even if their accounts are registered under different names. Please contact your broker-dealer if you are interested in enrolling in householding and receiving a single copy of prospectuses and other shareholder documents, or if you are currently enrolled in householding and wish to change your householding status.
Availability of Quarterly Schedule of Investments
The iShares Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The iShares Funds’ Forms N-Q are available on the SEC’s website at www.sec.gov. The iShares Funds also disclose their complete schedule of portfolio holdings on a daily basis on the iShares website at www.iShares.com.
Availability of Proxy Voting Policies and Proxy Voting Records
A description of the policies and procedures that the iShares Funds use to determine how to vote proxies relating to portfolio securities and information about how the iShares Funds voted proxies relating to portfolio securities during the most recent twelve-month period ending June 30 is available without charge, upon request (1) by calling toll-free 1-800-474-2737; (2) on the iShares website at www.iShares.com; and (3) on the SEC website at www.sec.gov.
78 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Glossary of Terms Used in this Report
Portfolio Abbreviations - Equity
NVS | Non-Voting Shares |
G L O S S A R Y O F T E R M S U S E D I N T H I S R E P O R T | 79 |
| 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.
| ||||
©2018 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. | ||||
|
|
OCTOBER 31, 2018
2018 SEMI-ANNUAL REPORT (UNAUDITED) |
iShares Trust
▶ | iShares Cohen & Steers REIT ETF | ICF | Cboe BZX |
▶ | iShares Core U.S. REIT ETF | USRT | NYSE Arca |
▶ | iShares Europe Developed Real Estate ETF | IFEU | NASDAQ |
▶ | iShares Global REIT ETF | REET | NYSE Arca |
▶ | iShares International Developed Real Estate ETF | IFGL | NASDAQ |
Page | ||||
| ||||
5 | ||||
10 | ||||
10 | ||||
11 | ||||
Financial Statements | ||||
27 | ||||
29 | ||||
31 | ||||
34 | ||||
39 | ||||
48 | ||||
54 | ||||
55 |
Fund Summary as of October 31, 2018 | iShares® Cohen & Steers REIT ETF |
Investment Objective
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.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||||
6 Months | 1 Year | 5 Years | 10 Years | 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||
Fund NAV | 6.65 | % | 2.19 | % | 8.05 | % | 10.73 | % | 2.19 | % | 47.27 | % | 177.08 | % | ||||||||||||||||
Fund Market | 6.69 | 2.23 | 8.06 | 10.71 | 2.23 | 47.32 | 176.69 | |||||||||||||||||||||||
Index | 6.83 | 2.54 | 8.44 | 11.03 | 2.54 | 49.94 | 184.65 |
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.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||||
| Beginning Account Value (05/01/18) |
| | Ending Account Value (10/31/18) |
| | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) |
| | Ending Account Value (10/31/18) |
| | Expenses Paid During the Period | (a) | Annualized Expense Ratio | ||||||||||
$ 1,000.00 | $ | 1,066.50 | $ | 1.77 | $ | 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. |
Portfolio Information
ALLOCATION BY SECTOR | ||||
Percent of | ||||
Sector | Total Investments | (a) | ||
Specialized REITs | 27.1 | % | ||
Residential REITs | 18.9 | |||
Retail REITs | 17.3 | |||
Office REITs | 13.6 | |||
Industrial REITs | 10.1 | |||
Health Care REITs | 9.0 | |||
Hotel & Resort REITs | 4.0 |
TEN LARGEST HOLDINGS | ||||
Percent of | ||||
Security | Total Investments | (a) | ||
American Tower Corp. | 8.4 | % | ||
Simon Property Group Inc. | 8.4 | |||
Prologis Inc. | 8.1 | |||
Public Storage | 6.2 | |||
Equinix Inc. | 6.0 | |||
Welltower Inc. | 4.9 | |||
AvalonBay Communities Inc. | 4.8 | |||
Equity Residential | 4.8 | |||
Digital Realty Trust Inc. | 4.3 | |||
Ventas Inc. | 4.1 |
(a) | Excludes money market funds. |
F U N D S U M M A R Y | 5 |
Fund Summary as of October 31, 2018 | iShares® Core U.S. REIT ETF |
Investment Objective
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 (formerly known as 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.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||||
6 Months | 1 Year | 5 Years | 10 Years | 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||
Fund NAV | 6.54 | % | 1.74 | % | 7.44 | % | 10.71 | % | 1.74 | % | 43.19 | % | 176.64 | % | ||||||||||||||||
Fund Market | 6.51 | 1.72 | 7.43 | 10.66 | 1.72 | 43.10 | 175.28 | |||||||||||||||||||||||
Index | 6.56 | 1.70 | 7.70 | 11.10 | 1.70 | 44.88 | 186.47 |
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.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||||
| Beginning Account Value (05/01/18) |
| | Ending Account Value (10/31/18) |
| | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) |
| | Ending Account Value (10/31/18) |
| | Expenses Paid During the Period | (a) | Annualized Expense Ratio | ||||||||||
$ 1,000.00 | $ | 1,065.40 | $ | 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 10 for more information. |
Portfolio Information
ALLOCATION BY SECTOR | ||||
Percent of | ||||
Sector | Total Investments | (a) | ||
Specialized REITs | 19.3 | % | ||
Retail REITs | 18.9 | |||
Residential REITs | 16.7 | |||
Office REITs | 12.6 | |||
Health Care REITs | 11.8 | |||
Industrial REITs | 8.3 | |||
Hotel & Resort REITs | 6.5 | |||
Diversified REITs | 5.8 | |||
Real Estate Operating Companies | 0.1 |
(a) | Excludes money market funds. |
TEN LARGEST HOLDINGS | ||||
Percent of | ||||
Security | Total Investments | (a) | ||
Simon Property Group Inc. | 6.8 | % | ||
Prologis Inc. | 4.9 | |||
Public Storage | 3.7 | |||
Equinix Inc. | 3.6 | |||
Welltower Inc. | 3.0 | |||
AvalonBay Communities Inc. | 2.9 | |||
Equity Residential | 2.8 | |||
Digital Realty Trust Inc. | 2.6 | |||
Ventas Inc. | 2.5 | |||
Boston Properties Inc. | 2.3 |
6 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Fund Summary as of October 31, 2018 | iShares® Europe Developed Real Estate ETF |
Investment Objective
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 (formerly known as 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.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||||
6 Months | 1 Year | 5 Years | 10 Years | 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||
Fund NAV | (9.69 | )% | (1.00 | )% | 4.82 | % | 8.49 | % | (1.00 | )% | 26.55 | % | 125.89 | % | ||||||||||||||||
Fund Market | (9.87 | ) | (1.54 | ) | 4.61 | 8.32 | (1.54 | ) | 25.30 | 122.43 | ||||||||||||||||||||
Index | (9.71 | ) | (0.89 | ) | 4.90 | 8.50 | (0.89 | ) | 27.01 | 126.09 |
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.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||||
| Beginning Account Value (05/01/18) |
| | Ending Account Value (10/31/18) |
| | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) |
| | Ending Account Value (10/31/18) |
| | Expenses Paid During the Period | (a) | Annualized Expense Ratio | ||||||||||
$ 1,000.00 | $ | 903.10 | $ | 2.30 | $ | 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. |
Portfolio Information
ALLOCATION BY SECTOR | ||||
| ||||
Sector | Percent of Total Investments(a) | |||
| ||||
Real Estate Operating Companies | 42.8% | |||
Retail REITs | 21.9 | |||
Diversified REITs | 14.2 | |||
Office REITs | 7.5 | |||
Industrial REITs | 5.5 | |||
Residential REITs | 2.5 | |||
Diversified Real Estate Activities | 1.9 | |||
Health Care REITs | 1.8 | |||
Specialized REITs | 1.2 | |||
Other (each representing less than 1%) | 0.7 |
(a) | Excludes money market funds. |
TEN LARGEST COUNTRIES | ||||
| ||||
Country | Percent of Total Investments(a) | |||
| ||||
United Kingdom | 27.2% | |||
Germany | 27.1 | |||
France | 18.6 | |||
Sweden | 8.7 | |||
Switzerland | 5.5 | |||
Belgium | 4.2 | |||
Spain | 3.1 | |||
Netherlands | 1.8 | |||
Ireland | 1.1 | |||
Austria | 0.9 |
F U N D S U M M A R Y | 7 |
Fund Summary as of October 31, 2018 | iShares® Global REIT ETF |
Investment Objective
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 REITS Index (formerly known as 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.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
6 Months | 1 Year | Since Inception | 1 Year | Since Inception | ||||||||||||||||||||||
Fund NAV | 1.72 | % | 2.12 | % | 4.00 | % | 2.12 | % | 18.44 | % | ||||||||||||||||
Fund Market | 1.63 | 1.87 | 3.96 | 1.87 | 18.24 | |||||||||||||||||||||
Index | 1.12 | 1.04 | 3.19 | 1.04 | 14.51 |
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.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||||
| Beginning Account Value (05/01/18) |
| | Ending Account Value (10/31/18) |
| | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) |
| | Ending Account Value (10/31/18) |
| | Expenses Paid During the Period | (a) | Annualized Expense Ratio | ||||||||||
$ 1,000.00 | $ | 1,017.20 | $ | 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. |
Portfolio Information
ALLOCATION BY SECTOR | ||||
| ||||
Sector | Percent of Total Investments(a) | |||
| ||||
Retail REITs | 24.2% | |||
Office REITs | 14.9 | |||
Residential REITs | 13.9 | |||
Diversified REITs | 13.7 | |||
Industrial REITs | 10.2 | |||
Specialized REITs | 9.1 | |||
Health Care REITs | 8.8 | |||
Hotel & Resort REITs | 5.1 | |||
Real Estate Operating Companies | 0.1 |
(a) | Excludes money market funds. |
TEN LARGEST COUNTRIES | ||||
| ||||
Country | Percent of Total Investments(a) | |||
| ||||
United States | 65.4% | |||
Japan | 7.8 | |||
Australia | 5.7 | |||
United Kingdom | 5.3 | |||
France | 4.0 | |||
Canada | 3.1 | |||
Singapore | 2.4 | |||
Hong Kong | 1.8 | |||
South Africa | 1.1 | |||
Belgium | 0.9 |
8 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Fund Summary as of October 31, 2018 | iShares® International Developed Real Estate ETF |
Investment Objective
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 (formerly known as FTSE EPRA/NAREIT Developed Real Estate 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.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||||
6 Months | 1 Year | 5 Years | 10 Years | 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||
Fund NAV | (8.65 | )% | (1.59 | )% | 1.72 | % | 8.17 | % | (1.59 | )% | 8.90 | % | 119.30 | % | ||||||||||||||||
Fund Market | (8.27 | ) | (1.93 | ) | 1.67 | 7.86 | (1.93 | ) | 8.65 | 113.19 | ||||||||||||||||||||
Index | (8.51 | ) | (1.29 | ) | 1.98 | 8.39 | (1.29 | ) | 10.30 | 123.90 |
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.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||||
| Beginning Account Value (05/01/18) |
| | Ending Account Value (10/31/18) |
| | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/18) |
| | Ending Account Value (10/31/18) |
| | Expenses Paid During the Period | (a) | Annualized Expense Ratio | ||||||||||
$ 1,000.00 | $ | 913.50 | $ | 2.32 | $ | 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. |
Portfolio Information
ALLOCATION BY SECTOR | ||||
| ||||
Sector | Percent of Total Investments(a) | |||
| ||||
Real Estate Operating Companies | 21.3% | |||
Retail REITs | 18.6 | |||
Diversified Real Estate Activities | 17.3 | |||
Diversified REITs | 15.0 | |||
Office REITs | 10.6 | |||
Industrial REITs | 7.2 | |||
Residential REITs | 3.8 | |||
Real Estate Development | 3.5 | |||
Other (each representing less than 1%) | 2.7 |
(a) | Excludes money market funds. |
TEN LARGEST COUNTRIES | ||||
| ||||
Country | Percent of Total Investments(a) | |||
| ||||
Japan | 24.1% | |||
Hong Kong | 15.6 | |||
United Kingdom | 10.4 | |||
Germany | 10.4 | |||
Australia | 10.1 | |||
France | 7.1 | |||
Canada | 6.3 | |||
Singapore | 5.1 | |||
Sweden | 3.4 | |||
Switzerland | 2.1 |
F U N D S U M M A R Y | 9 |
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 ask 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. Since shares of a fund may not trade in the secondary market until after the fund’s inception, for the period from inception to the first day of secondary market trading in shares of the fund, the NAV of the fund is used as a proxy for the Market Price to calculate market returns. 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 your 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 at the beginning of the period (or from the commencement of operations if less than 6 months) and held through the end of the period, is intended to help you understand your ongoing costs (in dollars and cents) of investing in your 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 under the heading entitled “Expenses Paid During the Period.”
Hypothetical Example for Comparison Purposes – The table also provides information about hypothetical account values and hypothetical expenses based on your 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 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
iShares® Cohen & Steers REIT ETF | ||
October 31, 2018 | (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks | ||||||||
Health Care REITs — 9.0% | ||||||||
Ventas Inc. | 1,341,543 | $ | 77,863,156 | |||||
Welltower Inc. | 1,400,542 | 92,533,810 | ||||||
|
| |||||||
170,396,966 | ||||||||
Hotel & Resort REITs — 4.0% | ||||||||
Host Hotels & Resorts Inc. | 2,791,195 | 53,339,737 | ||||||
Park Hotels & Resorts Inc.(a) | 757,276 | 22,014,013 | ||||||
|
| |||||||
75,353,750 | ||||||||
Industrial REITs — 10.0% | ||||||||
Duke Realty Corp. | 1,344,247 | 37,060,890 | ||||||
Prologis Inc.(a) | 2,369,367 | 152,753,090 | ||||||
|
| |||||||
189,813,980 | ||||||||
Office REITs — 13.6% | ||||||||
Alexandria Real Estate Equities Inc. | 387,742 | 47,393,705 | ||||||
Boston Properties Inc. | 581,196 | 70,185,229 | ||||||
Douglas Emmett Inc. | 603,507 | 21,840,919 | ||||||
Highwoods Properties Inc. | 389,429 | 16,605,253 | ||||||
Kilroy Realty Corp.(a) | 372,139 | 25,632,934 | ||||||
SL Green Realty Corp. | 332,921 | 30,382,370 | ||||||
Vornado Realty Trust(a) | 651,563 | 44,358,409 | ||||||
|
| |||||||
256,398,819 | ||||||||
Residential REITs — 18.8% | ||||||||
American Campus Communities Inc. | 514,672 | 20,334,691 | ||||||
American Homes 4 Rent, Class A | 978,138 | 20,609,368 | ||||||
AvalonBay Communities Inc. | 520,367 | 91,261,964 | ||||||
Equity LifeStyle Properties Inc. | 334,115 | 31,637,349 | ||||||
Equity Residential(a) | 1,386,355 | 90,057,621 | ||||||
Essex Property Trust Inc. | 248,670 | 62,361,462 | ||||||
UDR Inc.(a) | 1,007,535 | 39,485,297 | ||||||
|
| |||||||
355,747,752 | ||||||||
Retail REITs — 17.2% | ||||||||
Federal Realty Investment Trust | 275,682 | 34,198,352 | ||||||
National Retail Properties Inc.(a) | 579,256 | 27,080,218 | ||||||
Realty Income Corp.(a) | 1,070,739 | 64,533,440 |
Security | Shares | Value | ||||||
Retail REITs (continued) | ||||||||
Regency Centers Corp.(a) | 637,939 | $ | 40,419,815 | |||||
Simon Property Group Inc. | 864,722 | 158,693,781 | ||||||
|
| |||||||
324,925,606 | ||||||||
Specialized REITs — 27.1% | ||||||||
American Tower Corp. | 1,020,955 | 159,074,998 | ||||||
Digital Realty Trust Inc.(a) | 775,428 | 80,070,695 | ||||||
Equinix Inc. | 299,167 | 113,306,510 | ||||||
Extra Space Storage Inc.(a) | 474,810 | 42,761,389 | ||||||
Public Storage | 564,149 | 115,915,695 | ||||||
|
| |||||||
511,129,287 | ||||||||
|
| |||||||
Total Common Stocks — 99.7% | 1,883,766,160 | |||||||
|
| |||||||
Short-Term Investments | ||||||||
Money Market Funds — 8.9% | ||||||||
BlackRock Cash Funds: Institutional, | 162,550,357 | 162,582,867 | ||||||
BlackRock Cash Funds: Treasury, | 4,792,949 | 4,792,949 | ||||||
|
| |||||||
167,375,816 | ||||||||
|
| |||||||
Total Short -Term Investments — 8.9% |
| 167,375,816 | ||||||
|
| |||||||
Total Investments in Securities — 108.6% |
| 2,051,141,976 | ||||||
Other Assets, Less Liabilities — (8.6)% |
| (162,654,153 | ) | |||||
|
| |||||||
Net Assets — 100.0% | $ | 1,888,487,823 | ||||||
|
|
(a) | All or a portion of this security is on loan. |
(b) | Affiliate of the Fund. |
(c) | Annualized 7-day yield as of period-end. |
(d) | All or a portion of this security was purchased with cash collateral received from loaned securities. |
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:
| ||||||||||||||||||||||||||||
Change in | ||||||||||||||||||||||||||||
Shares | Shares | Unrealized | ||||||||||||||||||||||||||
Held at | Held at | Value at | Net Realized | Appreciation | ||||||||||||||||||||||||
Affiliated Issuer | 04/30/18 | Net Activity | 10/31/18 | 10/31/18 | Income | Gain (Loss) | (a) | (Depreciation | ) | |||||||||||||||||||
| ||||||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, | 69,336,192 | 93,214,165 | 162,550,357 | $ | 162,582,867 | $ | 123,840 | (b) | $ | 3,496 | $ | (1,377 | ) | |||||||||||||||
BlackRock Cash Funds: Treasury, | 5,157,999 | (365,050 | ) | 4,792,949 | 4,792,949 | 52,470 | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
$ | 167,375,816 | $ | 176,310 | $ | 3,496 | $ | (1,377 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
(b) | Includes securities lending income earned from the reinvestment of cash collateral from loaned securities (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities, and less fees paid to BTC as securities lending agent. |
S C H E D U L E O F I N V E S T M E N T S | 11 |
Schedule of Investments (unaudited) (continued) October 31, 2018 | iShares® Cohen & Steers REIT ETF |
Futures Contracts
| ||||||||||||||||
Description | | Number of Contracts | | | Expiration Date |
| | Notional Amount (000) |
| | Value/ Unrealized Appreciation (Depreciation) |
| ||||
| ||||||||||||||||
Long Contracts | ||||||||||||||||
Dow Jones U.S. Real Estate | 144 | 12/21/18 | $ 4,448 | $ | (83,286 | ) | ||||||||||
|
|
Derivative Financial Instruments Categorized by Risk Exposure
As of October 31, 2018, the fair values of derivative financial instruments located in the Statement of Assets and Liabilities were as follows:
| ||||
Equity Contracts | ||||
| ||||
Liabilities — Derivative Financial Instruments | ||||
Futures contracts | ||||
Net unrealized depreciation(a) | $ | 83,286 | ||
|
|
(a) | Represents cumulative appreciation (depreciation) of futures contracts as reported in the Schedule of Investments. Only current day’s variation margin is reported separately within the Statement of Assets and Liabilities. |
For the six months ended October 31, 2018, the effect of derivative financial instruments in the Statement of Operations was as follows:
| ||||
Equity Contracts | ||||
| ||||
Net Realized Gain (Loss) from: | ||||
Futures contracts | $ | 53,994 | ||
|
| |||
Net Change in Unrealized Appreciation (Depreciation) on: | ||||
Futures contracts | $ | (88,586 | ) | |
|
|
Average Quarterly Balances of Outstanding Derivative Financial Instruments
| ||||
Futures contracts: | ||||
Average notional value of contracts — long | $ | 4,527,820 | ||
|
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
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, refer to the Notes to Financial Statements.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $ | 1,883,766,160 | $ | — | $ | — | $ | 1,883,766,160 | ||||||||
Money Market Funds | 167,375,816 | — | — | 167,375,816 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 2,051,141,976 | $ | — | $ | — | $ | 2,051,141,976 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Derivative financial instruments(a) | ||||||||||||||||
Liabilities | ||||||||||||||||
Futures Contracts | $ | (83,286 | ) | $ | — | $ | — | $ | (83,286) | |||||||
|
|
|
|
|
|
|
|
(a) | Shown at the unrealized appreciation (depreciation) on the contracts. |
See notes to financial statements.
12 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) October 31, 2018 | iShares® Core U.S. REIT ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
| ||||||||
Common Stocks |
| |||||||
Diversified REITs — 5.8% |
| |||||||
Alexander & Baldwin Inc.(a) | 60,009 | $ | 1,172,576 | |||||
American Assets Trust Inc. | 33,577 | 1,288,013 | ||||||
Armada Hoffler Properties Inc. | 42,406 | 635,242 | ||||||
Colony Capital Inc. | 430,538 | 2,527,258 | ||||||
Empire State Realty Trust Inc., Class A | 120,069 | 1,904,294 | ||||||
Forest City Realty Trust Inc., Class A | 187,172 | 4,709,248 | ||||||
Gladstone Commercial Corp. | 24,518 | 465,597 | ||||||
Global Net Lease Inc. | 62,616 | 1,267,974 | ||||||
Lexington Realty Trust | 187,925 | 1,460,177 | ||||||
Liberty Property Trust | 129,391 | 5,417,601 | ||||||
One Liberty Properties Inc. | 13,056 | 338,542 | ||||||
PS Business Parks Inc. | 17,440 | 2,277,664 | ||||||
STORE Capital Corp. | 162,364 | 4,713,427 | ||||||
VEREIT Inc. | 852,261 | 6,247,073 | ||||||
Washington REIT(a) | 69,046 | 1,924,312 | ||||||
WP Carey Inc.(a) | 92,791 | 6,125,134 | ||||||
|
| |||||||
42,474,132 | ||||||||
Health Care REITs — 11.8% | ||||||||
CareTrust REIT Inc. | 70,996 | 1,253,789 | ||||||
Community Healthcare Trust Inc. | 15,195 | 451,595 | ||||||
Global Medical REIT Inc.(a) | 16,514 | 151,268 | ||||||
HCP Inc. | 412,861 | 11,374,321 | ||||||
Healthcare Realty Trust Inc. | 112,687 | 3,139,460 | ||||||
Healthcare Trust of America Inc., Class A | 180,952 | 4,751,800 | ||||||
LTC Properties Inc. | 34,310 | 1,467,439 | ||||||
MedEquities Realty Trust Inc.(a) | 25,985 | 214,896 | ||||||
Medical Properties Trust Inc.(a) | 318,369 | 4,730,963 | ||||||
National Health Investors Inc. | 35,669 | 2,620,245 | ||||||
New Senior Investment Group Inc. | 65,064 | 372,166 | ||||||
Omega Healthcare Investors Inc.(a) | 171,901 | 5,732,898 | ||||||
Physicians Realty Trust(a) | 159,878 | 2,650,777 | ||||||
Sabra Health Care REIT Inc. | 155,610 | 3,368,957 | ||||||
Senior Housing Properties Trust | 206,325 | 3,315,643 | ||||||
Universal Health Realty Income Trust | 11,178 | 716,510 | ||||||
Ventas Inc. | 312,710 | 18,149,688 | ||||||
Welltower Inc. | 326,978 | 21,603,436 | ||||||
|
| |||||||
86,065,851 | ||||||||
Hotel & Resort REITs — 6.5% | ||||||||
Apple Hospitality REIT Inc.(a) | 190,047 | 3,073,060 | ||||||
Ashford Hospitality Trust Inc. | 74,093 | 381,579 | ||||||
Braemar Hotels & Resorts Inc. | 25,510 | 271,427 | ||||||
Chatham Lodging Trust | 39,458 | 769,431 | ||||||
Chesapeake Lodging Trust | 51,739 | 1,520,609 | ||||||
CorePoint Lodging Inc. | 36,084 | 590,695 | ||||||
DiamondRock Hospitality Co. | 188,406 | 1,968,843 | ||||||
Hersha Hospitality Trust | 31,056 | 545,343 | ||||||
Hospitality Properties Trust | 143,126 | 3,666,888 | ||||||
Host Hotels & Resorts Inc.(a) | 643,310 | 12,293,654 | ||||||
LaSalle Hotel Properties | 96,645 | 3,190,252 | ||||||
Park Hotels & Resorts Inc.(a) | 176,343 | 5,126,291 | ||||||
Pebblebrook Hotel Trust(a) | 59,444 | 2,003,857 | ||||||
RLJ Lodging Trust | 152,116 | 2,957,135 | ||||||
Ryman Hospitality Properties Inc. | 39,137 | 3,036,640 | ||||||
Summit Hotel Properties Inc. | 93,393 | 1,075,887 | ||||||
Sunstone Hotel Investors Inc. | 199,066 | 2,880,485 | ||||||
Xenia Hotels & Resorts Inc. | 98,285 | 2,019,757 | ||||||
|
| |||||||
47,371,833 |
Security | Shares | Value | ||||||
| ||||||||
Industrial REITs — 8.3% | ||||||||
Americold Realty Trust | 75,276 | $ | 1,863,081 | |||||
Duke Realty Corp. | 313,086 | 8,631,781 | ||||||
EastGroup Properties Inc. | 31,970 | 3,062,406 | ||||||
First Industrial Realty Trust Inc. | 108,961 | 3,345,103 | ||||||
Industrial Logistics Properties Trust(a) | 17,596 | 379,897 | ||||||
Monmouth Real Estate Investment Corp. | 67,502 | 1,009,830 | ||||||
Prologis Inc.(a) | 550,047 | 35,461,530 | ||||||
Rexford Industrial Realty Inc.(a) | 79,195 | 2,508,106 | ||||||
STAG Industrial Inc. | 91,691 | 2,426,144 | ||||||
Terreno Realty Corp. | 50,042 | 1,873,072 | ||||||
|
| |||||||
60,560,950 | ||||||||
Office REITs — 12.6% | ||||||||
Alexandria Real Estate Equities Inc. | 91,776 | 11,217,780 | ||||||
Boston Properties Inc. | 135,677 | 16,384,355 | ||||||
Brandywine Realty Trust | 154,699 | 2,175,068 | ||||||
City Office REIT Inc. | 30,936 | 340,915 | ||||||
Columbia Property Trust Inc. | 103,785 | 2,329,973 | ||||||
Corporate Office Properties Trust | 94,344 | 2,437,849 | ||||||
Cousins Properties Inc. | 366,783 | 3,047,967 | ||||||
Douglas Emmett Inc. | 142,705 | 5,164,494 | ||||||
Easterly Government Properties Inc.(a) | 53,281 | 968,116 | ||||||
Equity Commonwealth | 103,016 | 3,067,816 | ||||||
Franklin Street Properties Corp. | 90,934 | 632,901 | ||||||
Government Properties Income Trust(a) | 87,303 | 770,886 | ||||||
Highwoods Properties Inc. | 89,392 | 3,811,675 | ||||||
Hudson Pacific Properties Inc. | 135,235 | 4,097,621 | ||||||
JBG SMITH Properties | 91,778 | 3,439,839 | ||||||
Kilroy Realty Corp.(a) | 85,155 | 5,865,476 | ||||||
Mack-Cali Realty Corp.(a) | 78,916 | 1,601,995 | ||||||
NorthStar Realty Europe Corp. | 38,952 | 522,736 | ||||||
Paramount Group Inc. | 182,508 | 2,608,039 | ||||||
Piedmont Office Realty Trust Inc., Class A | 112,265 | 2,023,015 | ||||||
Select Income REIT | 77,136 | 1,458,642 | ||||||
SL Green Realty Corp. | 73,505 | 6,708,066 | ||||||
Tier REIT Inc. | 44,086 | 955,344 | ||||||
Vornado Realty Trust | 151,318 | 10,301,729 | ||||||
|
| |||||||
91,932,297 | ||||||||
Real Estate Operating Companies — 0.1% | ||||||||
Essential Properties Realty Trust Inc. | 28,604 | 389,014 | ||||||
|
| |||||||
Residential REITs — 16.7% | ||||||||
American Campus Communities Inc. | 119,506 | 4,721,682 | ||||||
American Homes 4 Rent, Class A | 227,297 | 4,789,148 | ||||||
Apartment Investment & Management Co., Class A | 137,203 | 5,905,217 | ||||||
AvalonBay Communities Inc. | 121,269 | 21,268,157 | ||||||
Bluerock Residential Growth REIT Inc. | 20,837 | 197,326 | ||||||
Camden Property Trust | 77,910 | 7,032,936 | ||||||
Clipper Realty Inc. | 12,956 | 174,129 | ||||||
Equity LifeStyle Properties Inc. | 74,366 | 7,041,717 | ||||||
Equity Residential | 315,251 | 20,478,705 | ||||||
Essex Property Trust Inc. | 57,753 | 14,483,297 | ||||||
Front Yard Residential Corp. | 43,004 | 398,647 | ||||||
Independence Realty Trust Inc.(a) | 76,083 | 753,982 | ||||||
Investors Real Estate Trust | 106,245 | 576,910 | ||||||
Invitation Homes Inc.(a) | 262,103 | 5,734,814 | ||||||
Mid-America Apartment Communities Inc. | 99,623 | 9,734,163 | ||||||
NexPoint Residential Trust Inc.(a) | 14,404 | 513,359 | ||||||
Preferred Apartment Communities Inc., Class A(a) | 34,842 | 587,088 | ||||||
Sun Communities Inc. | 73,115 | 7,345,864 | ||||||
UDR Inc. | 233,130 | 9,136,365 |
S C H E D U L E O F I N V E S T M E N T S | 13 |
Schedule of Investments (unaudited) (continued) October 31, 2018 | iShares® Core U.S. REIT ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
| ||||||||
Residential REITs (continued) | ||||||||
UMH Properties Inc. | 28,967 | $ | 415,097 | |||||
|
| |||||||
121,288,603 | ||||||||
Retail REITs — 18.8% | ||||||||
Acadia Realty Trust | 70,261 | 1,956,066 | ||||||
Agree Realty Corp. | 26,486 | 1,516,853 | ||||||
Alexander’s Inc. | 1,856 | 584,659 | ||||||
American Finance Trust Inc. | 47,151 | 630,409 | ||||||
Brixmor Property Group Inc. | 264,652 | 4,287,362 | ||||||
Brookfield Property REIT Inc., Class A | 137,137 | 2,645,373 | ||||||
CBL & Associates Properties Inc.(a) | 147,692 | 487,384 | ||||||
Cedar Realty Trust Inc. | 77,119 | 290,739 | ||||||
Federal Realty Investment Trust | 63,933 | 7,930,889 | ||||||
Getty Realty Corp. | 28,894 | 775,226 | ||||||
Kimco Realty Corp.(a) | 357,417 | 5,750,840 | ||||||
Kite Realty Group Trust | 72,167 | 1,143,125 | ||||||
Macerich Co. (The) | 119,509 | 6,169,055 | ||||||
National Retail Properties Inc. | 137,294 | 6,418,494 | ||||||
Pennsylvania REIT(a) | 59,989 | 536,902 | ||||||
Ramco-Gershenson Properties Trust(a) | 72,094 | 957,408 | ||||||
Realty Income Corp.(a) | 254,818 | 15,357,881 | ||||||
Regency Centers Corp. | 133,317 | 8,446,965 | ||||||
Retail Opportunity Investments Corp. | 97,376 | 1,712,844 | ||||||
Retail Properties of America Inc., Class A | 192,238 | 2,358,760 | ||||||
Retail Value Inc.(a)(b) | 13,390 | 375,054 | ||||||
Saul Centers Inc. | 10,292 | 491,546 | ||||||
Simon Property Group Inc. | 270,674 | 49,674,092 | ||||||
SITE Centers Corp.(a) | 133,885 | 1,664,191 | ||||||
Spirit MTA REIT | 37,534 | 401,989 | ||||||
Spirit Realty Capital Inc. | 375,375 | 2,935,432 | ||||||
Tanger Factory Outlet Centers Inc.(a) | 83,513 | 1,858,999 | ||||||
Taubman Centers Inc. | 51,975 | 2,859,145 | ||||||
Urban Edge Properties | 95,875 | 1,964,479 | ||||||
Urstadt Biddle Properties Inc., Class A | 25,786 | 513,399 | ||||||
Washington Prime Group Inc.(a) | 163,023 | 1,043,347 | ||||||
Weingarten Realty Investors | 104,778 | 2,946,357 | ||||||
Whitestone REIT | 33,289 | 448,070 | ||||||
|
| |||||||
137,133,334 | ||||||||
Specialized REITs — 19.3% | ||||||||
CoreCivic Inc.(a) | 103,604 | 2,326,946 | ||||||
CoreSite Realty Corp. | 31,923 | 2,996,293 | ||||||
CubeSmart | 162,981 | 4,723,189 | ||||||
CyrusOne Inc. | 90,689 | 4,827,375 | ||||||
Digital Realty Trust Inc. | 180,570 | 18,645,658 | ||||||
EPR Properties | 64,686 | 4,446,516 |
Security | Shares | Value | ||||||
| ||||||||
Specialized REITs (continued) | ||||||||
Equinix Inc. | 69,602 | $ | 26,361,061 | |||||
Extra Space Storage Inc.(a) | 107,176 | 9,652,270 | ||||||
Farmland Partners Inc. | 27,656 | 189,444 | ||||||
Four Corners Property Trust Inc. | 60,570 | 1,579,666 | ||||||
Gaming and Leisure Properties Inc. | 177,151 | 5,968,217 | ||||||
GEO Group Inc. (The) | 104,831 | 2,317,813 | ||||||
Gladstone Land Corp. | 12,155 | 152,059 | ||||||
Iron Mountain Inc. | 249,247 | 7,629,451 | ||||||
Lamar Advertising Co., Class A | 73,099 | 5,359,619 | ||||||
Life Storage Inc. | 40,306 | 3,795,213 | ||||||
National Storage Affiliates Trust | 51,219 | 1,363,962 | ||||||
Outfront Media Inc. | 121,583 | 2,154,451 | ||||||
Public Storage | 130,480 | 26,809,725 | ||||||
QTS Realty Trust Inc., Class A(a) | 44,662 | 1,711,448 | ||||||
Safety Income & Growth Inc. | 7,417 | 133,358 | ||||||
VICI Properties Inc. | 325,834 | 7,034,756 | ||||||
|
| |||||||
140,178,490 | ||||||||
|
| |||||||
Total Common Stocks — 99.9% | 727,394,504 | |||||||
|
| |||||||
Short-Term Investments | ||||||||
Money Market Funds — 11.3% | ||||||||
BlackRock Cash Funds: Institutional, | 80,241,269 | 80,257,318 | ||||||
BlackRock Cash Funds: Treasury, | 1,558,319 | 1,558,319 | ||||||
|
| |||||||
81,815,637 | ||||||||
|
| |||||||
Total Short-Term Investments — 11.3% | 81,815,637 | |||||||
|
| |||||||
Total Investments in Securities — 111.2% | 809,210,141 | |||||||
Other Assets, Less Liabilities — (11.2)% | (81,222,252 | ) | ||||||
|
| |||||||
Net Assets — 100.0% | $ | 727,987,889 | ||||||
|
|
(a) | All or a portion of this security is on loan. |
(b) | Non-income producing security. |
(c) | Affiliate of the Fund. |
(d) | Annualized 7-day yield as of period-end. |
(e) | All or a portion of this security was purchased with cash collateral received from loaned securities. |
14 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued) October 31, 2018 | iShares® Core U.S. REIT ETF |
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:
| ||||||||||||||||||||||||||||
Change in | ||||||||||||||||||||||||||||
Shares | Shares | Unrealized | ||||||||||||||||||||||||||
Held at | Held at | Value at | Net Realized | Appreciation | ||||||||||||||||||||||||
Affiliated Issuer | 04/30/18 | Net Activity | 10/31/18 | 10/31/18 | Income | Gain (Loss) | (a) | (Depreciation | ) | |||||||||||||||||||
| ||||||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, | 23,274,027 | 56,967,242 | 80,241,269 | $ | 80,257,318 | $ | 55,928 | (b) | $ | (1,999 | ) | $ | 1,226 | |||||||||||||||
BlackRock Cash Funds: Treasury, | 968,319 | 590,000 | 1,558,319 | 1,558,319 | 18,491 | — | — | |||||||||||||||||||||
|
|
| �� |
|
|
|
| |||||||||||||||||||||
$ | 81,815,637 | $ | 74,419 | $ | (1,999 | ) | $ | 1,226 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
(b) | Includes securities lending income earned from the reinvestment of cash collateral from loaned securities (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities, and less fees paid to BTC as securities lending agent. |
Futures Contracts
| ||||||||||||||||
Description | | Number of Contracts | | | Expiration Date | | | Notional Amount (000) |
| | Value/ Unrealized Appreciation (Depreciation) | | ||||
| ||||||||||||||||
Long Contracts | ||||||||||||||||
Dow Jones U.S. Real Estate | 69 | 12/21/18 | $ 2,131 | $ | (6,588 | ) | ||||||||||
|
|
Derivative Financial Instruments Categorized by Risk Exposure
As of October 31, 2018, the fair values of derivative financial instruments located in the Statement of Assets and Liabilities were as follows:
| ||||
Equity Contracts | ||||
| ||||
Liabilities — Derivative Financial Instruments | ||||
Futures contracts | ||||
Net unrealized depreciation(a) | $ | 6,588 | ||
|
|
(a) | Represents cumulative appreciation (depreciation) of futures contracts as reported in the Schedule of Investments. Only current day’s variation margin is reported separately within the Statement of Assets and Liabilities. |
For the six months ended October 31, 2018, the effect of derivative financial instruments in the Statement of Operations was as follows:
| ||||
Equity Contracts | ||||
| ||||
Net Realized Gain (Loss) from: | ||||
Futures contracts | $ | (17,502 | ) | |
|
| |||
Net Change in Unrealized Appreciation (Depreciation) on: | ||||
Futures contracts | $ | (9,556 | ) | |
|
|
Average Quarterly Balances of Outstanding Derivative Financial Instruments
| ||||
Futures contracts: | ||||
Average notional value of contracts — long | $ | 1,336,650 | ||
|
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
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, refer to the Notes to Financial Statements.
S C H E D U L E O F I N V E S T M E N T S | 15 |
Schedule of Investments (unaudited) (continued) October 31, 2018 | iShares® Core U.S. REIT ETF |
Fair Value Measurements (continued)
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $ | 727,394,504 | $ | — | $ | — | $ | 727,394,504 | ||||||||
Money Market Funds | 81,815,637 | — | — | 81,815,637 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 809,210,141 | $ | — | $ | — | $ | 809,210,141 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Derivative financial instruments(a) | ||||||||||||||||
Liabilities | ||||||||||||||||
Futures Contracts | $ | (6,588 | ) | $ | — | $ | — | $ | (6,588 | ) | ||||||
|
|
|
|
|
|
|
|
(a) | Shown at the unrealized appreciation (depreciation) on the contracts. |
See notes to financial statements.
16 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) October 31, 2018 | iShares® Europe Developed Real Estate ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks | ||||||||
Austria — 0.9% | ||||||||
CA Immobilien Anlagen AG | 9,546 | $ | 310,854 | |||||
|
| |||||||
Belgium — 4.2% | ||||||||
Aedifica SA | 2,509 | 210,085 | ||||||
Befimmo SA | 2,641 | 144,981 | ||||||
Cofinimmo SA | 3,087 | 369,709 | ||||||
Intervest Offices & Warehouses NV | 2,328 | 60,536 | ||||||
Leasinvest Real Estate SCA | 341 | 34,310 | ||||||
Montea SCA | 1,113 | 67,594 | ||||||
Retail Estates NV | 924 | 73,809 | ||||||
Shurgard Self Storage Europe Sarl(a) | 3,021 | 84,838 | ||||||
Warehouses De Pauw CVA | 2,385 | 309,686 | ||||||
Wereldhave Belgium NV | 306 | 29,679 | ||||||
Xior Student Housing NV(b) | 1,444 | 63,154 | ||||||
|
| |||||||
1,448,381 | ||||||||
Finland — 0.7% | ||||||||
Citycon OYJ | 53,748 | 104,564 | ||||||
Kojamo OYJ(a) | 11,977 | 123,478 | ||||||
|
| |||||||
228,042 | ||||||||
France — 18.5% | ||||||||
Carmila SA | 4,255 | 93,819 | ||||||
Covivio | 4,950 | 497,763 | ||||||
Gecina SA | 7,246 | 1,064,846 | ||||||
ICADE | 4,459 | 378,415 | ||||||
Klepierre SA | 27,707 | 941,802 | ||||||
Mercialys SA | 5,766 | 84,604 | ||||||
Unibail-Rodamco-Westfield | 18,645 | 3,386,028 | ||||||
|
| |||||||
6,447,277 | ||||||||
Germany — 27.0% | ||||||||
ADLER Real Estate AG | 4,034 | 65,361 | ||||||
ADO Properties SA(c) | 4,041 | 238,777 | ||||||
alstria office REIT AG | 21,770 | 313,758 | ||||||
Aroundtown SA | 88,369 | 733,927 | ||||||
Deutsche EuroShop AG | 7,090 | 220,113 | ||||||
Deutsche Wohnen SE | 49,211 | 2,254,874 | ||||||
DIC Asset AG | 6,227 | 67,239 | ||||||
Grand City Properties SA | 15,277 | 370,079 | ||||||
Hamborner REIT AG | 10,523 | 106,116 | ||||||
LEG Immobilien AG | 8,764 | 959,838 | ||||||
Sirius Real Estate Ltd. | 128,563 | 91,663 | ||||||
TAG Immobilien AG | 17,508 | 400,319 | ||||||
TLG Immobilien AG | 11,766 | 299,158 | ||||||
Vonovia SE | 71,889 | 3,292,362 | ||||||
|
| |||||||
9,413,584 | ||||||||
Ireland — 1.1% | ||||||||
Green REIT PLC | 95,420 | 157,633 | ||||||
Hibernia REIT PLC | 96,128 | 151,396 | ||||||
Irish Residential Properties REIT PLC | 50,590 | 81,510 | ||||||
|
| |||||||
390,539 | ||||||||
Italy — 0.5% | ||||||||
Beni Stabili SpA SIIQ | 141,782 | 121,368 | ||||||
Immobiliare Grande Distribuzione SIIQ SpA | 6,715 | 47,423 | ||||||
|
| |||||||
168,791 | ||||||||
Netherlands — 1.8% | ||||||||
Eurocommercial Properties NV | 6,597 | 244,424 | ||||||
NSI NV | 2,411 | 95,203 | ||||||
Vastned Retail NV | 2,532 | 100,411 |
Security | Shares | Value | ||||||
Netherlands (continued) | ||||||||
Wereldhave NV | 5,590 | $ | 192,482 | |||||
|
| |||||||
632,520 | ||||||||
Norway — 0.6% | ||||||||
Entra ASA(c) | 15,101 | 205,181 | ||||||
|
| |||||||
Spain — 3.1% | ||||||||
Inmobiliaria Colonial SOCIMI SA | 42,101 | 423,360 | ||||||
Lar Espana Real Estate SOCIMI SA | 9,282 | 92,023 | ||||||
Merlin Properties SOCIMI SA | 46,146 | 579,326 | ||||||
|
| |||||||
1,094,709 | ||||||||
Sweden — 8.7% | ||||||||
Castellum AB | 37,307 | 644,322 | ||||||
Catena AB | 2,245 | 45,688 | ||||||
Dios Fastigheter AB | 11,670 | 70,418 | ||||||
Fabege AB | 36,559 | 467,603 | ||||||
Fastighets AB Balder, Class B(a) | 13,434 | 337,772 | ||||||
Hembla AB(a) | 4,995 | 85,475 | ||||||
Hemfosa Fastigheter AB | 22,135 | 273,911 | ||||||
Hufvudstaden AB, Class A | 15,177 | 224,673 | ||||||
Klovern AB, Class B | 72,094 | 83,376 | ||||||
Kungsleden AB | 26,100 | 182,906 | ||||||
Pandox AB | 10,352 | 177,145 | ||||||
Victoria Park AB, Class B | 4,797 | 19,262 | ||||||
Wallenstam AB, Class B | 22,704 | 204,815 | ||||||
Wihlborgs Fastigheter AB | 18,413 | 208,392 | ||||||
|
| |||||||
3,025,758 | ||||||||
Switzerland — 5.4% | ||||||||
Allreal Holding AG, Registered | 1,956 | 300,624 | ||||||
Hiag Immobilien Holding AG | 344 | 40,696 | ||||||
Mobimo Holding AG, Registered | 844 | 188,367 | ||||||
PSP Swiss Property AG, Registered | 5,429 | 524,873 | ||||||
Swiss Prime Site AG, Registered | 10,393 | 845,161 | ||||||
|
| |||||||
1,899,721 | ||||||||
United Kingdom — 27.1% | ||||||||
Assura PLC | 326,094 | 218,333 | ||||||
Big Yellow Group PLC | 20,299 | 223,707 | ||||||
British Land Co. PLC (The) | 135,932 | 1,028,227 | ||||||
Capital & Counties Properties PLC | 101,728 | 325,347 | ||||||
Capital & Regional PLC | 74,608 | 40,039 | ||||||
Civitas Social Housing PLC | 48,719 | 68,476 | ||||||
Custodian Reit PLC | 49,516 | 75,290 | ||||||
Daejan Holdings PLC | 634 | 47,552 | ||||||
Derwent London PLC | 13,887 | 519,725 | ||||||
Empiric Student Property PLC | 81,548 | 98,780 | ||||||
F&C Commercial Property Trust Ltd. | 73,017 | 125,578 | ||||||
F&C UK Real Estate Investment Ltd. | 33,108 | 39,765 | ||||||
GCP Student Living PLC | 54,259 | 104,271 | ||||||
Grainger PLC | 56,584 | 195,933 | ||||||
Great Portland Estates PLC | 38,985 | 347,546 | ||||||
Hammerson PLC | 109,889 | 615,701 | ||||||
Hansteen Holdings PLC | 55,784 | 68,569 | ||||||
Helical PLC | 13,678 | 54,354 | ||||||
Intu Properties PLC | 122,685 | 307,408 | ||||||
Land Securities Group PLC | 98,766 | 1,076,723 | ||||||
LondonMetric Property PLC | 89,423 | 206,011 | ||||||
LXI REIT PLC | 33,341 | 50,483 | ||||||
MedicX Fund Ltd. | 61,954 | 62,854 | ||||||
NewRiver REIT PLC | 41,478 | 134,086 | ||||||
Phoenix Spree Deutschland Ltd. | 11,902 | 55,356 |
S C H E D U L E O F I N V E S T M E N T S | 17 |
Schedule of Investments (unaudited) (continued) October 31, 2018 | iShares® Europe Developed Real Estate ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
United Kingdom (continued) | ||||||||
Picton Property Income Ltd. (The) | 74,845 | $ | 83,010 | |||||
Primary Health Properties PLC(b) | 99,052 | 138,714 | ||||||
RDI REIT PLC | 175,999 | 74,324 | ||||||
Regional REIT Ltd.(c) | 44,085 | 56,442 | ||||||
Safestore Holdings PLC | 28,392 | 193,724 | ||||||
Schroder REIT Ltd. | 71,818 | 53,683 | ||||||
Segro PLC | 139,727 | 1,097,283 | ||||||
Shaftesbury PLC | 31,712 | 363,464 | ||||||
Standard Life Investment Property Income Trust Ltd. | 55,909 | 65,008 | ||||||
Target Healthcare REIT Ltd. | 47,216 | 66,062 | ||||||
Triple Point Social Housing Reit PLC(b)(c) | 36,420 | 47,699 | ||||||
Tritax Big Box REIT PLC | 204,803 | 373,951 | ||||||
UK Commercial Property REIT Ltd. | 91,533 | 102,571 | ||||||
UNITE Group PLC (The) | 36,119 | 393,438 | ||||||
Workspace Group PLC | 18,490 | 227,042 | ||||||
|
| |||||||
9,426,529 | ||||||||
|
| |||||||
Total Common Stocks — 99.6% | 34,691,886 | |||||||
|
| |||||||
Rights | ||||||||
Italy — 0.0% | ||||||||
Beni Stabili SpA SIIQ (Expires 11/10/18)(a) | 155,316 | 2 | ||||||
|
| |||||||
Total Rights — 0.0% | 2 | |||||||
|
|
Security | Shares | Value | ||||||
Short-Term Investments | ||||||||
Money Market Funds — 0.4% | ||||||||
BlackRock Cash Funds: Institutional, | 135,480 | $ | 135,508 | |||||
BlackRock Cash Funds: Treasury, | 14,953 | 14,953 | ||||||
|
| |||||||
150,461 | ||||||||
|
| |||||||
Total Short-Term Investments — 0.4% | 150,461 | |||||||
|
| |||||||
Total Investments in Securities — 100.0% | 34,842,349 | |||||||
Other Assets, Less Liabilities — (0.0)% | (8,390 | ) | ||||||
|
| |||||||
Net Assets — 100.0% | $ | 34,833,959 | ||||||
|
|
(a) | Non-income producing security. |
(b) | All or a portion of this security is on loan. |
(c) | Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors. |
(d) | Affiliate of the Fund. |
(e) | Annualized 7-day yield as of period-end. |
(f) | All or a portion of this security was purchased with cash collateral received from loaned securities. |
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:
| ||||||||||||||||||||||||||||
Change in | ||||||||||||||||||||||||||||
Shares | Shares | Unrealized | ||||||||||||||||||||||||||
Held at | Held at | Value at | Net Realized | Appreciation | ||||||||||||||||||||||||
Affiliated Issuer | 04/30/18 | Net Activity | 10/31/18 | 10/31/18 | Income | Gain (Loss) | (a) | (Depreciation | ) | |||||||||||||||||||
| ||||||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, | 320,398 | (184,918 | ) | 135,480 | $ | 135,508 | $ | 3,236 | (b) | $ | 218 | $ | (29) | |||||||||||||||
BlackRock Cash Funds: Treasury, | 11,698 | 3,255 | 14,953 | 14,953 | 341 | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
$ | 150,461 | $ | 3,577 | $ | 218 | $ | (29 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
(b) | Includes securities lending income earned from the reinvestment of cash collateral from loaned securities (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities, and less fees paid to BTC as securities lending agent. |
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, refer to the Notes to Financial Statements.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $ | 34,691,886 | $ | — | $ | — | $ | 34,691,886 | ||||||||
Rights | — | 2 | — | 2 | ||||||||||||
Money Market Funds | 150,461 | — | — | 150,461 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 34,842,347 | $ | 2 | $ | — | $ | 34,842,349 | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
18 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) October 31, 2018 | iShares® Global REIT ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks | ||||||||
Australia — 5.7% | ||||||||
BWP Trust | 530,525 | $ | 1,300,993 | |||||
Charter Hall Retail REIT | 361,831 | 1,089,903 | ||||||
Cromwell Property Group | 1,581,512 | 1,154,523 | ||||||
Dexus | 1,092,798 | 7,900,108 | ||||||
Goodman Group | 1,894,215 | 13,935,406 | ||||||
GPT Group (The) | 1,931,071 | 7,062,215 | ||||||
Investa Office Fund | 575,517 | 2,263,832 | ||||||
Mirvac Group | 3,973,008 | 6,110,436 | ||||||
Scentre Group | 5,482,941 | 15,466,414 | ||||||
Shopping Centres Australasia Property Group | 853,228 | 1,554,144 | ||||||
Stockland | 2,602,780 | 6,659,439 | ||||||
Vicinity Centres | 3,432,623 | 6,447,108 | ||||||
|
| |||||||
70,944,521 | ||||||||
Belgium — 0.9% | ||||||||
Aedifica SA | 19,151 | 1,603,558 | ||||||
Befimmo SA | 21,805 | 1,197,013 | ||||||
Cofinimmo SA | 24,554 | 2,940,669 | ||||||
Intervest Offices & Warehouses NV | 21,474 | 558,399 | ||||||
Leasinvest Real Estate SCA | 3,767 | 379,016 | ||||||
Montea SCA(a) | 8,176 | 496,540 | ||||||
Retail Estates NV | 7,314 | 584,242 | ||||||
Warehouses De Pauw CVA | 18,051 | 2,343,877 | ||||||
Wereldhave Belgium NV | 3,151 | 305,612 | ||||||
Xior Student Housing NV(a) | 9,646 | 421,875 | ||||||
|
| |||||||
10,830,801 | ||||||||
Canada — 3.1% | ||||||||
Allied Properties REIT | 107,045 | 3,447,937 | ||||||
Artis REIT | 153,730 | 1,311,080 | ||||||
Boardwalk REIT | 41,030 | 1,531,224 | ||||||
Canadian Apartment Properties REIT | 153,764 | 5,480,825 | ||||||
Choice Properties REIT | 246,515 | 2,241,301 | ||||||
Cominar REIT | 194,367 | 1,617,690 | ||||||
Crombie REIT | 100,654 | 1,009,414 | ||||||
Dream Global REIT | 190,704 | 1,948,789 | ||||||
Dream Office REIT | 53,085 | 941,847 | ||||||
Granite REIT | 50,519 | 2,091,158 | ||||||
H&R Real Estate Investment Trust | 307,183 | 4,657,159 | ||||||
InterRent REIT | 89,936 | 864,262 | ||||||
Killam Apartment REIT | 85,916 | 1,057,881 | ||||||
Northview Apartment Real Estate Investment Trust | 48,497 | 934,673 | ||||||
NorthWest Healthcare Properties REIT | 91,015 | 735,328 | ||||||
RioCan REIT | 333,737 | 6,099,134 | ||||||
SmartCentres Real Estate Investment Trust | 126,735 | 2,902,866 | ||||||
|
| |||||||
38,872,568 | ||||||||
China — 0.1% | ||||||||
Spring REIT(a) | 1,170,000 | 702,949 | ||||||
Yuexiu REIT | 1,331,000 | 808,169 | ||||||
|
| |||||||
1,511,118 | ||||||||
France — 4.0% | ||||||||
Carmila SA | 32,981 | 727,203 | ||||||
Covivio | 37,945 | 3,815,679 | ||||||
Gecina SA | 56,210 | 8,260,426 | ||||||
ICADE | 33,957 | 2,881,775 | ||||||
Klepierre SA | 214,272 | 7,283,423 | ||||||
Mercialys SA | 44,499 | 652,933 | ||||||
Unibail-Rodamco-Westfield | 111,431 | 20,236,445 |
Security | Shares | Value | ||||||
France (continued) | ||||||||
Unibail-Rodamco-Westfield, New(b) | 32,560 | $ | 5,913,064 | |||||
|
| |||||||
49,770,948 | ||||||||
Germany — 0.3% | ||||||||
alstria office REIT AG | 169,045 | 2,436,342 | ||||||
Hamborner REIT AG | 91,756 | 925,281 | ||||||
|
| |||||||
3,361,623 | ||||||||
Greece — 0.0% | ||||||||
Grivalia Properties REIC AE | 1,008 | 8,669 | ||||||
|
| |||||||
Hong Kong — 1.8% | ||||||||
Champion REIT | 2,209,000 | 1,487,808 | ||||||
Link REIT | 2,317,000 | 20,541,304 | ||||||
|
| |||||||
22,029,112 | ||||||||
Ireland — 0.2% | ||||||||
Green REIT PLC | 768,796 | 1,270,040 | ||||||
Hibernia REIT PLC | 760,139 | 1,197,173 | ||||||
Irish Residential Properties REIT PLC | 423,399 | 682,179 | ||||||
|
| |||||||
3,149,392 | ||||||||
Italy — 0.1% | ||||||||
Beni Stabili SpA SIIQ | 1,126,956 | 964,696 | ||||||
Immobiliare Grande Distribuzione SIIQ SpA | 53,970 | 381,152 | ||||||
|
| |||||||
1,345,848 | ||||||||
Japan — 7.8% | ||||||||
Activia Properties Inc. | 580 | 2,405,210 | ||||||
Advance Residence Investment Corp. | 1,268 | 3,238,116 | ||||||
AEON REIT Investment Corp. | 1,022 | 1,127,456 | ||||||
Comforia Residential REIT Inc. | 606 | 1,450,362 | ||||||
Daiwa House REIT Investment Corp. | 2,044 | 4,473,599 | ||||||
Daiwa Office Investment Corp. | 257 | 1,569,031 | ||||||
Frontier Real Estate Investment Corp. | 410 | 1,571,264 | ||||||
Fukuoka REIT Corp. | 1,022 | 1,544,025 | ||||||
GLP J-REIT | 3,066 | 3,034,621 | ||||||
Hulic Reit Inc. | 1,066 | 1,550,047 | ||||||
Industrial & Infrastructure Fund Investment Corp. | 2,044 | 2,052,060 | ||||||
Invesco Office J-Reit Inc. | 8,953 | 1,265,344 | ||||||
Invincible Investment Corp. | 5,444 | 2,252,756 | ||||||
Japan Excellent Inc. | 1,197 | 1,552,796 | ||||||
Japan Hotel REIT Investment Corp. | 4,297 | 3,057,455 | ||||||
Japan Logistics Fund Inc. | 1,022 | 2,039,381 | ||||||
Japan Prime Realty Investment Corp. | 1,022 | 3,649,515 | ||||||
Japan Real Estate Investment Corp. | 1,342 | 6,920,774 | ||||||
Japan Rental Housing Investments Inc. | 2,044 | 1,602,889 | ||||||
Japan Retail Fund Investment Corp. | 3,066 | 5,661,729 | ||||||
Kenedix Office Investment Corp. | 331 | 2,050,144 | ||||||
Kenedix Residential Next Investment Corp. | 1,202 | 1,836,204 | ||||||
Kenedix Retail REIT Corp. | 441 | 937,841 | ||||||
MCUBS MidCity Investment Corp. | 2,044 | 1,568,476 | ||||||
Mori Hills REIT Investment Corp. | 1,399 | 1,730,543 | ||||||
Mori Trust Sogo REIT Inc. | 1,086 | 1,539,675 | ||||||
Nippon Accommodations Fund Inc. | 412 | 1,887,413 | ||||||
Nippon Building Fund Inc. | 1,323 | 7,561,340 | ||||||
Nippon Prologis REIT Inc. | 2,044 | 4,122,231 | ||||||
NIPPON REIT Investment Corp. | 457 | 1,486,146 | ||||||
Nomura Real Estate Master Fund Inc. | 4,350 | 5,639,139 | ||||||
Orix JREIT Inc. | 3,066 | 4,689,129 | ||||||
Premier Investment Corp. | 1,271 | 1,314,303 | ||||||
Sekisui House Reit Inc. | 4,088 | 2,553,755 | ||||||
Tokyu REIT Inc. | 1,022 | 1,438,977 |
S C H E D U L E O F I N V E S T M E N T S | 19 |
Schedule of Investments (unaudited) (continued) October 31, 2018 | iShares® Global REIT ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Japan (continued) | ||||||||
United Urban Investment Corp. | 3,168 | $ | 4,825,477 | |||||
|
| |||||||
97,199,223 | ||||||||
Mexico — 0.5% | ||||||||
Concentradora Fibra Danhos SA de CV | 242,627 | 320,492 | ||||||
Concentradora Fibra Hotelera Mexicana SA de CV(c) | 693,488 | 333,885 | ||||||
Fibra Uno Administracion SA de CV | 3,222,264 | 3,473,509 | ||||||
Macquarie Mexico Real Estate Management SA de CV | 890,050 | 869,349 | ||||||
PLA Administradora Industrial S. de RL de CV | 868,309 | 1,059,070 | ||||||
Prologis Property Mexico SA de CV | 413,301 | 730,843 | ||||||
|
| |||||||
6,787,148 | ||||||||
Netherlands — 0.4% | ||||||||
Eurocommercial Properties NV | 49,873 | 1,847,830 | ||||||
NSI NV | 18,781 | 741,601 | ||||||
Vastned Retail NV | 18,791 | 745,190 | ||||||
Wereldhave NV | 42,984 | 1,480,084 | ||||||
|
| |||||||
4,814,705 | ||||||||
New Zealand — 0.1% | ||||||||
Kiwi Property Group Ltd. | 1,597,740 | 1,371,971 | ||||||
|
| |||||||
Singapore — 2.4% | ||||||||
Ascendas REIT | 2,603,450 | 4,737,647 | ||||||
Ascott Residence Trust(a) | 1,300,032 | 985,726 | ||||||
CapitaLand Commercial Trust | 2,617,764 | 3,270,315 | ||||||
CapitaLand Mall Trust | 2,517,600 | 3,836,031 | ||||||
CapitaLand Retail China Trust | 697,200 | 689,749 | ||||||
CDL Hospitality Trusts(a) | 928,800 | 972,530 | ||||||
First REIT | 800,200 | 693,414 | ||||||
Fortune REIT | 1,187,000 | 1,299,138 | ||||||
Keppel REIT | 2,220,700 | 1,812,096 | ||||||
Lippo Malls Indonesia Retail Trust | 2,283,800 | 395,806 | ||||||
Mapletree Commercial Trust | 2,218,392 | 2,579,153 | ||||||
Mapletree Industrial Trust | 1,541,700 | 2,059,608 | ||||||
Mapletree Logistics Trust | 2,310,440 | 2,018,799 | ||||||
Mapletree North Asia Commercial Trust | 2,334,900 | 1,905,284 | ||||||
Suntec REIT | 2,122,200 | 2,712,517 | ||||||
|
| |||||||
29,967,813 | ||||||||
South Africa — 1.1% | ||||||||
Delta Property Fund Ltd. | 645,734 | 260,196 | ||||||
Emira Property Fund Ltd. | 497,060 | 501,562 | ||||||
Equites Property Fund Ltd. | 337,260 | 457,255 | ||||||
Growthpoint Properties Ltd. | 3,129,983 | 4,801,091 | ||||||
Hyprop Investments Ltd. | 285,842 | 1,747,428 | ||||||
Octodec Investments Ltd. | 74,606 | 97,664 | ||||||
Rebosis Property Fund Ltd. | 167,608 | 70,375 | ||||||
Redefine Properties Ltd. | 5,789,714 | 3,760,153 | ||||||
SA Corporate Real Estate Ltd. | 2,875,585 | 773,119 | ||||||
Vukile Property Fund Ltd. | 838,301 | 1,152,460 | ||||||
|
| |||||||
13,621,303 | ||||||||
Spain — 0.7% | ||||||||
Inmobiliaria Colonial SOCIMI SA | 321,818 | 3,236,142 | ||||||
Lar Espana Real Estate SOCIMI SA | 73,933 | 732,985 | ||||||
Merlin Properties SOCIMI SA | 357,609 | 4,489,491 | ||||||
|
| |||||||
8,458,618 | ||||||||
Turkey — 0.0% | ||||||||
Emlak Konut Gayrimenkul Yatirim Ortakligi AS | 2,112,589 | 629,633 | ||||||
Is Gayrimenkul Yatirim Ortakligi AS(a) | 856,436 | 132,975 | ||||||
|
| |||||||
762,608 |
Security | Shares | Value | ||||||
United Kingdom — 5.3% | ||||||||
Assura PLC | 2,502,895 | $ | 1,675,790 | |||||
Big Yellow Group PLC | 151,677 | 1,671,570 | ||||||
British Land Co. PLC (The) | 1,040,939 | 7,873,951 | ||||||
Capital & Regional PLC | 730,421 | 391,984 | ||||||
Civitas Social Housing PLC | 333,172 | 468,281 | ||||||
Custodian Reit PLC | 457,979 | 696,367 | ||||||
Derwent London PLC | 105,688 | 3,955,403 | ||||||
Empiric Student Property PLC | 642,499 | 778,263 | ||||||
F&C UK Real Estate Investment Ltd. | 302,184 | 362,949 | ||||||
GCP Student Living PLC | 457,868 | 879,901 | ||||||
Great Portland Estates PLC | 298,557 | 2,661,593 | ||||||
Hammerson PLC | 842,847 | 4,722,414 | ||||||
Hansteen Holdings PLC | 457,572 | 562,445 | ||||||
Intu Properties PLC | 936,482 | 2,346,512 | ||||||
Land Securities Group PLC | 756,714 | 8,249,514 | ||||||
LondonMetric Property PLC | 680,068 | 1,566,729 | ||||||
LXI REIT PLC | 264,440 | 400,397 | ||||||
MedicX Fund Ltd. | 495,152 | 502,348 | ||||||
NewRiver REIT PLC | 315,811 | 1,020,924 | ||||||
Primary Health Properties PLC | 806,473 | 1,129,396 | ||||||
RDI REIT PLC | 1,482,732 | 626,152 | ||||||
Regional REIT Ltd.(c) | 387,780 | 496,477 | ||||||
Safestore Holdings PLC | 218,939 | 1,493,861 | ||||||
Schroder REIT Ltd. | 572,911 | 428,242 | ||||||
Segro PLC | 1,064,358 | 8,358,455 | ||||||
Shaftesbury PLC | 242,497 | 2,779,358 | ||||||
Standard Life Investment Property Income Trust Ltd. | 582,209 | 676,965 | ||||||
Target Healthcare REIT Ltd. | 428,963 | 600,177 | ||||||
Triple Point Social Housing Reit PLC(a)(c) | 336,367 | 440,538 | ||||||
Tritax Big Box REIT PLC | 1,548,912 | 2,828,165 | ||||||
UK Commercial Property REIT Ltd. | 614,222 | 688,289 | ||||||
UNITE Group PLC (The) | 272,720 | 2,970,688 | ||||||
Workspace Group PLC | 133,661 | 1,641,247 | ||||||
|
| |||||||
65,945,345 | ||||||||
United States — 65.1% | ||||||||
Acadia Realty Trust | 85,201 | 2,371,996 | ||||||
Agree Realty Corp.(a) | 31,889 | 1,826,283 | ||||||
Alexander’s Inc. | 2,310 | 727,673 | ||||||
Alexandria Real Estate Equities Inc. | 111,909 | 13,678,637 | ||||||
American Assets Trust Inc. | 39,967 | 1,533,134 | ||||||
American Campus Communities Inc. | 145,613 | 5,753,170 | ||||||
American Homes 4 Rent, Class A | 276,360 | 5,822,905 | ||||||
Americold Realty Trust(a) | 92,327 | 2,285,093 | ||||||
Apartment Investment & Management Co., Class A | 165,928 | 7,141,541 | ||||||
Apple Hospitality REIT Inc. | 230,280 | 3,723,628 | ||||||
Ashford Hospitality Trust Inc. | 90,528 | 466,219 | ||||||
AvalonBay Communities Inc. | 147,865 | 25,932,564 | ||||||
Boston Properties Inc. | 164,821 | 19,903,784 | ||||||
Brandywine Realty Trust | 187,215 | 2,632,243 | ||||||
Brixmor Property Group Inc. | 320,460 | 5,191,452 | ||||||
Brookfield Property REIT Inc., Class A | 167,001 | 3,221,449 | ||||||
Camden Property Trust | 94,481 | 8,528,800 | ||||||
CareTrust REIT Inc. | 79,158 | 1,397,930 | ||||||
CBL & Associates Properties Inc.(a) | 183,535 | 605,665 | ||||||
Chatham Lodging Trust | 48,554 | 946,803 | ||||||
Chesapeake Lodging Trust | 63,033 | 1,852,540 | ||||||
Colony Capital Inc. | 515,765 | 3,027,541 | ||||||
Columbia Property Trust Inc. | 124,419 | 2,793,207 | ||||||
Corporate Office Properties Trust | 109,717 | 2,835,087 | ||||||
Cousins Properties Inc. | 447,705 | 3,720,429 |
20 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued) October 31, 2018 | iShares® Global REIT ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
United States (continued) | ||||||||
CubeSmart | 197,301 | $ | 5,717,783 | |||||
CyrusOne Inc.(a) | 110,376 | 5,875,314 | ||||||
DiamondRock Hospitality Co. | 218,845 | 2,286,930 | ||||||
Digital Realty Trust Inc.(a) | 220,179 | 22,735,684 | ||||||
Douglas Emmett Inc. | 167,110 | 6,047,711 | ||||||
Duke Realty Corp. | 379,969 | 10,475,745 | ||||||
Easterly Government Properties Inc.(a) | 61,026 | 1,108,842 | ||||||
EastGroup Properties Inc.(a) | 36,662 | 3,511,853 | ||||||
Empire State Realty Trust Inc., Class A | 143,802 | 2,280,700 | ||||||
EPR Properties | 78,802 | 5,416,849 | ||||||
Equity Commonwealth(a) | 124,684 | 3,713,089 | ||||||
Equity LifeStyle Properties Inc. | 91,072 | 8,623,608 | ||||||
Equity Residential | 384,308 | 24,964,648 | ||||||
Essex Property Trust Inc. | 70,518 | 17,684,504 | ||||||
Extra Space Storage Inc. | 130,623 | 11,763,907 | ||||||
Federal Realty Investment Trust | 78,307 | 9,713,983 | ||||||
First Industrial Realty Trust Inc. | 131,582 | 4,039,567 | ||||||
Forest City Realty Trust Inc., Class A | 227,993 | 5,736,304 | ||||||
Four Corners Property Trust Inc.(a) | 70,969 | 1,850,872 | ||||||
Franklin Street Properties Corp.(a) | 112,724 | 784,559 | ||||||
Gaming and Leisure Properties Inc. | 215,258 | 7,252,042 | ||||||
Getty Realty Corp. | 35,025 | 939,721 | ||||||
Global Net Lease Inc. | 77,149 | 1,562,267 | ||||||
Government Properties Income Trust(a) | 104,109 | 919,282 | ||||||
HCP Inc. | 502,380 | 13,840,569 | ||||||
Healthcare Realty Trust Inc.(a) | 131,393 | 3,660,609 | ||||||
Healthcare Trust of America Inc., Class A | 220,845 | 5,799,390 | ||||||
Hersha Hospitality Trust | 37,907 | 665,647 | ||||||
Highwoods Properties Inc. | 108,530 | 4,627,719 | ||||||
Hospitality Properties Trust | 172,802 | 4,427,187 | ||||||
Host Hotels & Resorts Inc.(a) | 783,018 | 14,963,474 | ||||||
Hudson Pacific Properties Inc.(a) | 164,883 | 4,995,955 | ||||||
Independence Realty Trust Inc.(a) | 93,049 | 922,116 | ||||||
Investors Real Estate Trust(a) | 132,498 | 719,464 | ||||||
Invitation Homes Inc.(a) | 318,483 | 6,968,408 | ||||||
JBG SMITH Properties | 112,672 | 4,222,947 | ||||||
Kilroy Realty Corp.(a) | 103,540 | 7,131,835 | ||||||
Kimco Realty Corp. | 433,982 | 6,982,770 | ||||||
Kite Realty Group Trust | 87,978 | 1,393,572 | ||||||
LaSalle Hotel Properties | 116,661 | 3,850,980 | ||||||
Lexington Realty Trust | 230,717 | 1,792,671 | ||||||
Liberty Property Trust | 156,737 | 6,562,578 | ||||||
Life Storage Inc.(a) | 48,508 | 4,567,513 | ||||||
LTC Properties Inc. | 41,484 | 1,774,271 | ||||||
Macerich Co. (The) | 145,690 | 7,520,518 | ||||||
Mack-Cali Realty Corp.(a) | 95,491 | 1,938,467 | ||||||
Medical Properties Trust Inc. | 386,082 | 5,737,178 | ||||||
Mid-America Apartment Communities Inc. | 121,745 | 11,895,704 | ||||||
Monmouth Real Estate Investment Corp. | 82,478 | 1,233,871 | ||||||
National Health Investors Inc. | 42,997 | 3,158,560 | ||||||
National Retail Properties Inc. | 166,983 | 7,806,455 | ||||||
National Storage Affiliates Trust | 59,800 | 1,592,474 | ||||||
New Senior Investment Group Inc. | 76,451 | 437,300 | ||||||
Omega Healthcare Investors Inc.(a) | 208,757 | 6,962,046 | ||||||
Paramount Group Inc. | 223,320 | 3,191,243 | ||||||
Park Hotels & Resorts Inc. | 215,931 | 6,277,114 | ||||||
Pebblebrook Hotel Trust(a) | 72,234 | 2,435,008 | ||||||
Pennsylvania REIT(a) | 74,867 | 670,060 | ||||||
Physicians Realty Trust | 192,850 | 3,197,453 | ||||||
Piedmont Office Realty Trust Inc., Class A | 134,471 | 2,423,167 |
Security | Shares | Value | ||||||
United States (continued) | ||||||||
Prologis Inc.(a) | 669,025 | $ | 43,132,042 | |||||
PS Business Parks Inc. | 21,462 | 2,802,937 | ||||||
Public Storage(a) | 158,862 | 32,641,375 | ||||||
QTS Realty Trust Inc., Class A | 54,007 | 2,069,548 | ||||||
Ramco-Gershenson Properties Trust(a) | 82,301 | 1,092,957 | ||||||
Realty Income Corp.(a) | 309,907 | 18,678,095 | ||||||
Regency Centers Corp. | 161,969 | 10,262,356 | ||||||
Retail Opportunity Investments Corp. | 116,706 | 2,052,859 | ||||||
Retail Properties of America Inc., Class A | 233,026 | 2,859,229 | ||||||
Retail Value Inc.(b) | 16,462 | 461,101 | ||||||
Rexford Industrial Realty Inc. | 96,467 | 3,055,110 | ||||||
RLJ Lodging Trust | 184,116 | 3,579,215 | ||||||
Ryman Hospitality Properties Inc. | 47,022 | 3,648,437 | ||||||
Sabra Health Care REIT Inc. | 187,805 | 4,065,978 | ||||||
Saul Centers Inc. | 12,725 | 607,746 | ||||||
Select Income REIT | 93,378 | 1,765,778 | ||||||
Senior Housing Properties Trust | 252,934 | 4,064,649 | ||||||
Seritage Growth Properties, Class A(a) | 34,998 | 1,330,624 | ||||||
Simon Property Group Inc. | 329,084 | 60,393,496 | ||||||
SITE Centers Corp. | 164,764 | 2,048,017 | ||||||
SL Green Realty Corp. | 89,474 | 8,165,397 | ||||||
Spirit MTA REIT. | 46,186 | 494,652 | ||||||
Spirit Realty Capital Inc. | 454,938 | 3,557,615 | ||||||
STAG Industrial Inc.(a) | 109,642 | 2,901,127 | ||||||
STORE Capital Corp. | 197,060 | 5,720,652 | ||||||
Summit Hotel Properties Inc. | 111,627 | 1,285,943 | ||||||
Sun Communities Inc. | 89,480 | 8,990,056 | ||||||
Sunstone Hotel Investors Inc. | 241,563 | 3,495,417 | ||||||
Tanger Factory Outlet Centers Inc.(a) | 95,881 | 2,134,311 | ||||||
Taubman Centers Inc. | 63,097 | 3,470,966 | ||||||
Terreno Realty Corp. | 60,679 | 2,271,215 | ||||||
Tier REIT Inc. | 52,632 | 1,140,535 | ||||||
UDR Inc. | 284,430 | 11,146,812 | ||||||
Universal Health Realty Income Trust | 13,388 | 858,171 | ||||||
Urban Edge Properties | 115,780 | 2,372,332 | ||||||
Urstadt Biddle Properties Inc., Class A | 31,356 | 624,298 | ||||||
Ventas Inc. | 379,982 | 22,054,155 | ||||||
VEREIT Inc. | 1,033,900 | 7,578,487 | ||||||
VICI Properties Inc. | 397,320 | 8,578,139 | ||||||
Vornado Realty Trust | 184,182 | 12,539,111 | ||||||
Washington Prime Group Inc.(a) | 196,865 | 1,259,936 | ||||||
Washington REIT | 82,298 | 2,293,645 | ||||||
Weingarten Realty Investors | 127,584 | 3,587,662 | ||||||
Welltower Inc. | 398,108 | 26,302,996 | ||||||
WP Carey Inc. | 112,629 | 7,434,640 | ||||||
Xenia Hotels & Resorts Inc. | 119,622 | 2,458,232 | ||||||
|
| |||||||
812,599,881 | ||||||||
|
| |||||||
Total Common Stocks — 99.6% | 1,243,353,215 | |||||||
|
| |||||||
Rights | ||||||||
Italy —0.0% | ||||||||
Beni Stabili SpA SIIQ (Expires 11/10/18)(b) | 1,124,752 | 13 | ||||||
|
| |||||||
Total Rights — 0.0% | 13 | |||||||
|
|
S C H E D U L E O F I N V E S T M E N T S | 21 |
Schedule of Investments (unaudited) (continued) October 31, 2018 | iShares® Global REIT ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Short-Term Investments | ||||||||
Money Market Funds — 7.1% | ||||||||
BlackRock Cash Funds: Institutional, | 86,667,444 | $ | 86,684,778 | |||||
BlackRock Cash Funds: Treasury, | 1,706,897 | 1,706,897 | ||||||
|
| |||||||
88,391,675 | ||||||||
|
| |||||||
Total Short-Term Investments — 7.1% | 88,391,675 | |||||||
|
| |||||||
Total Investments in Securities — 106.7% |
| 1,331,744,903 | ||||||
Other Assets, Less Liabilities — (6.7)% | (83,632,291 | ) | ||||||
|
| |||||||
Net Assets — 100.0% | $ | 1,248,112,612 | ||||||
|
|
(a) | All or a portion of this security is on loan. |
(b) | Non-income producing security. |
(c) | Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors. |
(d) | Affiliate of the Fund. |
(e) | Annualized 7-day yield as of period-end. |
(f) | All or a portion of this security was purchased with cash collateral received from loaned securities. |
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of
Section 2(a)(3) of the 1940 Act, were as follows:
| ||||||||||||||||||||||||||||
Change in | ||||||||||||||||||||||||||||
Shares | Shares | Unrealized | ||||||||||||||||||||||||||
Held at | Held at | Value at | Net Realized | Appreciation | ||||||||||||||||||||||||
Affiliated Issuer | 04/30/18 | Net Activity | 10/31/18 | 10/31/18 | Income | Gain (Loss) | (a) | (Depreciation | ) | |||||||||||||||||||
| ||||||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | 22,434,150 | 64,233,294 | 86,667,444 | $ | 86,684,778 | $ | 68,221 | (b) | $ | (988 | ) | $ | 1,304 | |||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | 3,806,172 | (2,099,275 | ) | 1,706,897 | 1,706,897 | 28,940 | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
$ | 88,391,675 | $ | 97,161 | $ | (988 | ) | $ | 1,304 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
(b) | Includes securities lending income earned from the reinvestment of cash collateral from loaned securities (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities, and less fees paid to BTC as securities lending agent. |
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, refer to the Notes to Financial Statements.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $ | 1,243,353,215 | $ | — | $ | — | $ | 1,243,353,215 | ||||||||
Rights | — | 13 | — | 13 | ||||||||||||
Money Market Funds | 88,391,675 | — | — | 88,391,675 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 1,331,744,890 | $ | 13 | $ | — | $ | 1,331,744,903 | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
22 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) October 31, 2018 | iShares® International Developed Real Estate ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks | ||||||||
Australia — 10.1% | ||||||||
BGP Holdings PLC(a)(b) | 6,603,392 | $ | 75 | |||||
BWP Trust | 333,826 | 818,633 | ||||||
Charter Hall Retail REIT | 231,404 | 697,032 | ||||||
Cromwell Property Group | 1,022,892 | 746,724 | ||||||
Dexus | 702,259 | 5,076,805 | ||||||
Goodman Group | 1,216,946 | 8,952,857 | ||||||
GPT Group (The) | 1,242,510 | 4,544,045 | ||||||
Investa Office Fund | 376,322 | 1,480,286 | ||||||
Mirvac Group | 2,553,578 | 3,927,370 | ||||||
Scentre Group | 3,519,698 | 9,928,450 | ||||||
Shopping Centres Australasia Property Group | 514,018 | 936,277 | ||||||
Stockland | 1,675,770 | 4,287,604 | ||||||
Vicinity Centres | 2,207,729 | 4,146,528 | ||||||
|
| |||||||
45,542,686 | ||||||||
Austria — 0.3% | ||||||||
CA Immobilien Anlagen AG | 47,808 | 1,556,812 | ||||||
|
| |||||||
Belgium — 1.6% | ||||||||
Aedifica SA | 12,450 | 1,042,468 | ||||||
Befimmo SA | 13,115 | 719,964 | ||||||
Cofinimmo SA | 15,365 | 1,840,164 | ||||||
Intervest Offices & Warehouses NV | 11,288 | 293,527 | ||||||
Leasinvest Real Estate SCA | 1,791 | 180,201 | ||||||
Montea SCA | 5,605 | 340,400 | ||||||
Retail Estates NV | 4,587 | 366,409 | ||||||
Shurgard Self Storage Europe Sarl(b) | 14,986 | 420,846 | ||||||
Warehouses De Pauw CVA | 11,899 | 1,545,055 | ||||||
Wereldhave Belgium NV | 1,663 | 161,293 | ||||||
Xior Student Housing NV | 6,846 | 299,415 | ||||||
|
| |||||||
7,209,742 | ||||||||
Canada — 6.2% | ||||||||
Allied Properties REIT | 68,972 | 2,221,600 | ||||||
Artis REIT | 94,952 | 809,794 | ||||||
Boardwalk REIT | 26,394 | 985,014 | ||||||
Canadian Apartment Properties REIT | 98,989 | 3,528,403 | ||||||
Chartwell Retirement Residences | 145,952 | 1,570,380 | ||||||
Choice Properties REIT | 159,380 | 1,449,075 | ||||||
Cominar REIT | 125,662 | 1,045,868 | ||||||
Crombie REIT | 61,254 | 614,289 | ||||||
Dream Global REIT | 123,711 | 1,264,193 | ||||||
Dream Office REIT | 32,223 | 571,708 | ||||||
First Capital Realty Inc. | 106,093 | 1,586,649 | ||||||
Granite REIT | 31,375 | 1,298,721 | ||||||
H&R Real Estate Investment Trust | 196,342 | 2,976,714 | ||||||
InterRent REIT | 67,701 | 650,590 | ||||||
Killam Apartment REIT | 55,776 | 686,768 | ||||||
Northview Apartment Real Estate Investment Trust | 32,645 | 629,160 | ||||||
NorthWest Healthcare Properties REIT | 60,756 | 490,859 | ||||||
RioCan REIT | 213,144 | 3,895,264 | ||||||
SmartCentres Real Estate Investment Trust | 80,676 | 1,847,884 | ||||||
|
| |||||||
28,122,933 | ||||||||
Finland — 0.3% | ||||||||
Citycon OYJ | 266,098 | 517,679 | ||||||
Kojamo OYJ(b) | 60,206 | 620,701 | ||||||
|
| |||||||
1,138,380 | ||||||||
France — 7.1% | ||||||||
Carmila SA | 20,843 | 459,570 | ||||||
Covivio | 24,568 | 2,470,512 |
Security | Shares | Value | ||||||
France (continued) | ||||||||
Gecina SA | 35,891 | $ | 5,274,416 | |||||
ICADE | 22,078 | 1,873,658 | ||||||
Klepierre SA | 137,448 | 4,672,062 | ||||||
Mercialys SA | 28,220 | 414,072 | ||||||
Unibail-Rodamco-Westfield | 66,441 | 12,066,029 | ||||||
Unibail-Rodamco-Westfield, New(b) | 26,187 | 4,755,695 | ||||||
|
| |||||||
31,986,014 | ||||||||
Germany — 10.4% | ||||||||
ADLER Real Estate AG | 19,756 | 320,099 | ||||||
ADO Properties SA(c) | 20,311 | 1,200,147 | ||||||
alstria office REIT AG | 109,394 | 1,576,629 | ||||||
Aroundtown SA | 437,576 | 3,634,179 | ||||||
Deutsche EuroShop AG | 34,860 | 1,082,248 | ||||||
Deutsche Wohnen SE | 244,352 | 11,196,336 | ||||||
DIC Asset AG | 31,374 | 338,775 | ||||||
Grand City Properties SA | 76,194 | 1,845,769 | ||||||
Hamborner REIT AG | 53,619 | 540,701 | ||||||
LEG Immobilien AG | 43,492 | 4,763,268 | ||||||
Sirius Real Estate Ltd. | 624,454 | 445,226 | ||||||
TAG Immobilien AG | 87,007 | 1,989,410 | ||||||
TLG Immobilien AG | 58,492 | 1,487,196 | ||||||
Vonovia SE | 357,018 | 16,350,660 | ||||||
|
| |||||||
46,770,643 | ||||||||
Hong Kong — 15.5% | ||||||||
Champion REIT | 1,328,000 | 894,436 | ||||||
CK Asset Holdings Ltd. | 1,826,000 | 11,855,933 | ||||||
Hang Lung Properties Ltd. | 1,328,000 | 2,405,490 | ||||||
Henderson Land Development Co. Ltd. | 830,138 | 3,865,097 | ||||||
Hongkong Land Holdings Ltd. | 796,800 | 4,717,056 | ||||||
Hysan Development Co. Ltd. | 422,000 | 1,978,276 | ||||||
Link REIT | 1,494,000 | 13,245,019 | ||||||
New World Development Co. Ltd. | 3,984,333 | 5,051,952 | ||||||
Sino Land Co. Ltd. | 2,174,800 | 3,412,256 | ||||||
Sun Hung Kai Properties Ltd. | 996,000 | 12,946,450 | ||||||
Swire Properties Ltd. | 697,200 | 2,379,021 | ||||||
Wharf Holdings Ltd. (The) | 848,900 | 2,118,081 | ||||||
Wharf Real Estate Investment Co. Ltd. | 836,900 | 5,182,985 | ||||||
|
| |||||||
70,052,052 | ||||||||
Ireland — 0.4% | ||||||||
Green REIT PLC | 484,643 | 800,623 | ||||||
Hibernia REIT PLC | 490,862 | 773,078 | ||||||
Irish Residential Properties REIT PLC | 258,462 | 416,433 | ||||||
|
| |||||||
1,990,134 | ||||||||
Israel — 0.3% | ||||||||
Azrieli Group Ltd. | 25,324 | 1,228,713 | ||||||
|
| |||||||
Italy — 0.2% | ||||||||
Beni Stabili SpA SIIQ | 695,540 | 595,395 | ||||||
Immobiliare Grande Distribuzione SIIQ SpA | 34,635 | 244,603 | ||||||
|
| |||||||
839,998 | ||||||||
Japan — 23.9% | ||||||||
Activia Properties Inc. | 430 | 1,783,173 | ||||||
Advance Residence Investment Corp. | 874 | 2,231,951 | ||||||
Aeon Mall Co. Ltd. | 83,000 | 1,536,370 | ||||||
AEON REIT Investment Corp. | 996 | 1,098,773 | ||||||
Comforia Residential REIT Inc. | 378 | 904,681 | ||||||
Daiwa House REIT Investment Corp. | 1,162 | 2,543,210 | ||||||
Daiwa Office Investment Corp. | 184 | 1,123,353 | ||||||
Frontier Real Estate Investment Corp. | 332 | 1,272,341 |
S C H E D U L E O F I N V E S T M E N T S | 23 |
Schedule of Investments (unaudited) (continued) October 31, 2018 | iShares® International Developed Real Estate ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Japan (continued) | ||||||||
Fukuoka REIT Corp. | 498 | $ | 752,373 | |||||
GLP J-REIT | 2,324 | 2,300,215 | ||||||
Hulic Co. Ltd. | 249,000 | 2,283,594 | ||||||
Hulic Reit Inc. | 664 | 965,508 | ||||||
Industrial & Infrastructure Fund Investment Corp. | 1,000 | 1,003,943 | ||||||
Invesco Office J-Reit Inc. | 5,815 | 821,844 | ||||||
Invincible Investment Corp. | 3,154 | 1,305,142 | ||||||
Japan Excellent Inc. | 830 | 1,076,709 | ||||||
Japan Hotel REIT Investment Corp. | 2,822 | 2,007,945 | ||||||
Japan Logistics Fund Inc. | 664 | 1,324,999 | ||||||
Japan Prime Realty Investment Corp. | 581 | 2,074,724 | ||||||
Japan Real Estate Investment Corp. | 904 | 4,661,982 | ||||||
Japan Rental Housing Investments Inc. | 996 | 781,055 | ||||||
Japan Retail Fund Investment Corp. | 1,826 | 3,371,923 | ||||||
Kenedix Office Investment Corp. | 253 | 1,567,029 | ||||||
Kenedix Residential Next Investment Corp. | 588 | 898,243 | ||||||
Kenedix Retail REIT Corp. | 332 | 706,039 | ||||||
MCUBS MidCity Investment Corp. | 1,056 | 810,328 | ||||||
Mitsubishi Estate Co. Ltd. | 813,400 | 13,013,103 | ||||||
Mitsui Fudosan Co. Ltd. | 647,400 | 14,593,820 | ||||||
Mori Hills REIT Investment Corp. | 996 | 1,232,038 | ||||||
Mori Trust Sogo REIT Inc. | 700 | 992,424 | ||||||
Nippon Accommodations Fund Inc. | 332 | 1,520,925 | ||||||
Nippon Building Fund Inc. | 870 | 4,972,310 | ||||||
Nippon Prologis REIT Inc. | 1,328 | 2,678,240 | ||||||
NIPPON REIT Investment Corp. | 297 | 965,832 | ||||||
Nomura Real Estate Holdings Inc. | 83,000 | 1,558,433 | ||||||
Nomura Real Estate Master Fund Inc. | 2,822 | 3,658,310 | ||||||
NTT Urban Development Corp. | 64,900 | 965,550 | ||||||
Orix JREIT Inc. | 1,826 | 2,792,677 | ||||||
Premier Investment Corp. | 830 | 858,278 | ||||||
Sekisui House Reit Inc. | 2,490 | 1,555,492 | ||||||
Sumitomo Realty & Development Co. Ltd. | 298,800 | 10,280,806 | ||||||
Tokyo Tatemono Co. Ltd. | 149,400 | 1,611,092 | ||||||
Tokyu REIT Inc. | 498 | 701,185 | ||||||
United Urban Investment Corp. | 1,920 | 2,924,532 | ||||||
|
| |||||||
108,082,494 | ||||||||
Netherlands — 0.7% | ||||||||
Eurocommercial Properties NV | 32,868 | 1,217,783 | ||||||
NSI NV | 12,087 | 477,277 | ||||||
Vastned Retail NV | 12,616 | 500,309 | ||||||
Wereldhave NV | 27,722 | 954,562 | ||||||
|
| |||||||
3,149,931 | ||||||||
New Zealand — 0.2% | ||||||||
Kiwi Property Group Ltd. | 985,193 | 845,980 | ||||||
|
| |||||||
Norway — 0.2% | ||||||||
Entra ASA(c) | 75,032 | 1,019,477 | ||||||
|
| |||||||
Singapore — 5.1% | ||||||||
Ascendas REIT | 1,643,695 | 2,991,126 | ||||||
CapitaLand Commercial Trust | 1,613,467 | 2,015,669 | ||||||
CapitaLand Ltd. | 1,743,000 | 3,952,210 | ||||||
CapitaLand Mall Trust | 1,577,000 | 2,402,852 | ||||||
CDL Hospitality Trusts | 529,300 | 554,221 | ||||||
City Developments Ltd. | 332,000 | 1,896,389 | ||||||
Fortune REIT | 996,000 | 1,090,094 | ||||||
Keppel REIT | 1,344,600 | 1,097,197 | ||||||
Mapletree Commercial Trust | 1,294,855 | 1,505,428 | ||||||
Mapletree Industrial Trust | 896,400 | 1,197,530 |
Security | Shares | Value | ||||||
Singapore (continued) | ||||||||
Mapletree Logistics Trust | 1,411,061 | $ | 1,232,946 | |||||
Suntec REIT | 1,344,600 | 1,718,618 | ||||||
UOL Group Ltd. | 332,000 | 1,445,667 | ||||||
|
| |||||||
23,099,947 | ||||||||
Spain — 1.2% | ||||||||
Inmobiliaria Colonial SOCIMI SA | 204,208 | 2,053,478 | ||||||
Lar Espana Real Estate SOCIMI SA | 46,247 | 458,501 | ||||||
Merlin Properties SOCIMI SA | 228,995 | 2,874,846 | ||||||
|
| |||||||
5,386,825 | ||||||||
Sweden — 3.3% | ||||||||
Castellum AB | 185,142 | 3,197,552 | ||||||
Catena AB | 11,805 | 240,241 | ||||||
Dios Fastigheter AB | 56,916 | 343,438 | ||||||
Fabege AB | 181,438 | 2,320,656 | ||||||
Fastighets AB Balder, Class B(b) | 66,732 | 1,677,847 | ||||||
Hembla AB(b) | 25,027 | 428,266 | ||||||
Hemfosa Fastigheter AB | 110,405 | 1,366,216 | ||||||
Hufvudstaden AB, Class A | 75,032 | 1,110,740 | ||||||
Klovern AB, Class B | 363,562 | 420,457 | ||||||
Kungsleden AB | 129,102 | 904,732 | ||||||
Pandox AB | 51,460 | 880,592 | ||||||
Victoria Park AB, Class B | 24,526 | 98,483 | ||||||
Wallenstam AB, Class B | 112,600 | 1,015,774 | ||||||
Wihlborgs Fastigheter AB | 91,798 | 1,038,938 | ||||||
|
| |||||||
15,043,932 | ||||||||
Switzerland — 2.1% | ||||||||
Allreal Holding AG, Registered | 9,628 | 1,479,758 | ||||||
Hiag Immobilien Holding AG | 1,731 | 204,781 | ||||||
Mobimo Holding AG, Registered | 4,150 | 926,210 | ||||||
PSP Swiss Property AG, Registered | 26,892 | 2,599,908 | ||||||
Swiss Prime Site AG, Registered | 51,667 | 4,201,571 | ||||||
|
| |||||||
9,412,228 | ||||||||
United Kingdom — 10.4% | ||||||||
Assura PLC | 1,613,924 | 1,080,588 | ||||||
Big Yellow Group PLC | 100,264 | 1,104,968 | ||||||
British Land Co. PLC (The) | 675,621 | 5,110,584 | ||||||
Capital & Counties Properties PLC | 507,794 | 1,624,030 | ||||||
Capital & Regional PLC | 379,808 | 203,826 | ||||||
Civitas Social Housing PLC | 242,273 | 340,521 | ||||||
Custodian Reit PLC | 248,170 | 377,348 | ||||||
Daejan Holdings PLC | 2,988 | 224,112 | ||||||
Derwent London PLC | 69,222 | 2,590,653 | ||||||
Empiric Student Property PLC | 405,538 | 491,231 | ||||||
F&C Commercial Property Trust Ltd. | 369,848 | 636,083 | ||||||
F&C UK Real Estate Investment Ltd. | 159,692 | 191,804 | ||||||
GCP Student Living PLC | 266,433 | 512,014 | ||||||
Grainger PLC | 284,524 | 985,222 | ||||||
Great Portland Estates PLC | 194,117 | 1,730,526 | ||||||
Hammerson PLC | 547,136 | 3,065,566 | ||||||
Hansteen Holdings PLC | 280,806 | 345,165 | ||||||
Helical PLC | 68,890 | 273,755 | ||||||
Intu Properties PLC | 615,196 | 1,541,476 | ||||||
Land Securities Group PLC | 491,139 | 5,354,279 | ||||||
LondonMetric Property PLC | 440,235 | 1,014,206 | ||||||
LXI REIT PLC | 148,422 | 224,731 | ||||||
MedicX Fund Ltd. | 302,452 | 306,848 | ||||||
NewRiver REIT PLC | 209,872 | 678,454 | ||||||
Phoenix Spree Deutschland Ltd. | 59,096 | 274,856 | ||||||
Picton Property Income Ltd. (The) | 376,683 | 417,774 |
24 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (unaudited) (continued) October 31, 2018 | iShares® International Developed Real Estate ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
United Kingdom (continued) | ||||||||
Primary Health Properties PLC(d) | 484,660 | $ | 678,724 | |||||
RDI REIT PLC | 897,681 | 379,087 | ||||||
Regional REIT Ltd.(c) | 215,136 | 275,440 | ||||||
Safestore Holdings PLC | 141,551 | 965,828 | ||||||
Schroder REIT Ltd. | 365,202 | 272,982 | ||||||
Segro PLC | 694,378 | 5,452,984 | ||||||
Shaftesbury PLC | 157,222 | 1,801,986 | ||||||
Standard Life Investment Property Income Trust Ltd. | 273,734 | 318,285 | ||||||
Target Healthcare REIT Ltd. | 223,104 | 312,153 | ||||||
Triple Point Social Housing Reit PLC(c)(d) | 187,404 | 245,442 | ||||||
Tritax Big Box REIT PLC | 1,013,400 | 1,850,371 | ||||||
UK Commercial Property REIT Ltd. | 435,418 | 487,923 | ||||||
UNITE Group PLC (The) | 179,551 | 1,955,816 | ||||||
Workspace Group PLC | 91,993 | 1,129,598 | ||||||
|
| |||||||
46,827,239 | ||||||||
|
| |||||||
Total Common Stocks — 99.5% | 449,306,160 | |||||||
|
| |||||||
Rights | ||||||||
Italy — 0.0% | ||||||||
Beni Stabili SpA SIIQ (Expires 10/11/18)(b) | 670,400 | 8 | ||||||
|
| |||||||
Total Rights — 0.0% | 8 | |||||||
|
| |||||||
Short-Term Investments | ||||||||
Money Market Funds — 0.3% | ||||||||
BlackRock Cash Funds: Institutional, | 688,690 | 688,828 |
Security | Shares | Value | ||||||
Money Market Funds (continued) | ||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 2.11%(e)(f) | 721,582 | $ | 721,582 | |||||
|
| |||||||
1,410,410 | ||||||||
|
| |||||||
Total Short-Term Investments — 0.3% | 1,410,410 | |||||||
|
| |||||||
Total Investments in Securities — 99.8% | 450,716,578 | |||||||
Other Assets, Less Liabilities — 0.2% | 1,096,368 | |||||||
|
| |||||||
Net Assets — 100.0% | $ | 451,812,946 | ||||||
|
|
(a) | Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. |
(b) | Non-income producing security. |
(c) | Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors. |
(d) | All or a portion of this security is on loan. |
(e) | Affiliate of the Fund. |
(f) | Annualized 7-day yield as of period-end. |
(g) | All or a portion of this security was purchased with cash collateral received from loaned securities. |
Affiliates
Investments in issuers considered to be affiliates of the Fund during the six months ended October 31, 2018, for purposes of
Section 2(a)(3) of the 1940 Act, were as follows:
| ||||||||||||||||||||||||||||
Change in | ||||||||||||||||||||||||||||
Shares | Shares | Unrealized | ||||||||||||||||||||||||||
Held at | Held at | Value at | Net Realized | Appreciation | ||||||||||||||||||||||||
Affiliated Issuer | 04/30/18 | Net Activity | 10/31/18 | 10/31/18 | Income | Gain (Loss) | (a) | (Depreciation | ) | |||||||||||||||||||
| ||||||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | 4,142,978 | (3,454,288 | ) | 688,690 | $ | 688,828 | $ | 19,107 | (b) | $ | 584 | $ | (95) | |||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | 384,002 | 337,580 | 721,582 | 721,582 | 7,056 | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
$ | 1,410,410 | $ | 26,163 | $ | 584 | $ | (95 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Includes realized capital gain distributions from an affiliated fund, if any. |
(b) | Includes securities lending income earned from the reinvestment of cash collateral from loaned securities (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities, and less fees paid to BTC as securities lending agent. |
Futures Contracts
| ||||||||||||||||
Description | Number of Contracts | Expiration Date | Notional Amount (000) | Value/ Unrealized Appreciation (Depreciation) | ||||||||||||
| ||||||||||||||||
Long Contracts | ||||||||||||||||
MSCI EAFE E-Mini | 27 | 12/21/18 | $ | 2,447 | $ | (119,029) | ||||||||||
|
|
S C H E D U L E O F I N V E S T M E N T S | 25 |
Schedule of Investments (unaudited) (continued) October 31, 2018 | iShares® International Developed Real Estate ETF |
Derivative Financial Instruments Categorized by Risk Exposure
As of October 31, 2018, the fair values of derivative financial instruments located in the Statement of Assets and Liabilities were as follows:
| ||||
Equity | ||||
Contracts | ||||
| ||||
Liabilities — Derivative Financial Instruments | ||||
Futures contracts | ||||
Net unrealized depreciation(a) | $ | 119,029 | ||
|
|
(a) | Represents cumulative appreciation (depreciation) of futures contracts as reported in the Schedule of Investments. Only current day’s variation margin is reported separately within the Statement of Assets and Liabilities. |
For the six months ended October 31, 2018, the effect of derivative financial instruments in the Statement of Operations was as follows:
| ||||
Equity | ||||
Contracts | ||||
| ||||
Net Realized Gain (Loss) from: | ||||
Futures contracts | $ | (136,914 | ) | |
|
| |||
Net Change in Unrealized Appreciation (Depreciation) on: | ||||
Futures contracts | $ | (139,406 | ) | |
|
|
Average Quarterly Balances of Outstanding Derivative Financial Instruments
| ||||
Futures contracts: | ||||
Average notional value of contracts — long | $ | 3,034,045 | ||
|
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
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, refer to the Notes to Financial Statements.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2018. 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 | $ | 449,306,085 | $ | — | $ | 75 | $ | 449,306,160 | ||||||||
Rights | — | 8 | — | 8 | ||||||||||||
Money Market Funds | 1,410,410 | — | — | 1,410,410 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 450,716,495 | $ | 8 | $ | 75 | $ | 450,716,578 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Derivative financial instruments(a) | ||||||||||||||||
Liabilities | ||||||||||||||||
Futures Contracts | $ | (119,029 | ) | $ | — | $ | — | $ | (119,029 | ) | ||||||
|
|
|
|
|
|
|
|
(a) | Shown at the unrealized appreciation (depreciation) on the contracts. |
See notes to financial statements.
26 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statements of Assets and Liabilities (unaudited)
October 31, 2018
iShares Cohen & Steers REIT ETF | iShares Core U.S. REIT ETF | iShares Europe Real Estate ETF | iShares Global REIT ETF | |||||||||||||
| ||||||||||||||||
ASSETS | ||||||||||||||||
Investments in securities, at value (including securities on loan)(a): | ||||||||||||||||
Unaffiliated(b) | $ | 1,883,766,160 | $ | 727,394,504 | $ | 34,691,888 | $ | 1,243,353,228 | ||||||||
Affiliated(c) | 167,375,816 | 81,815,637 | 150,461 | 88,391,675 | ||||||||||||
Cash pledged: | ||||||||||||||||
Futures contracts | 129,000 | 46,000 | — | — | ||||||||||||
Foreign currency, at value(d) | — | — | 33,887 | 849,292 | ||||||||||||
Receivables: | ||||||||||||||||
Securities lending income — Affiliated | 22,082 | 15,012 | 143 | 13,668 | ||||||||||||
Dividends | 540,653 | 676,589 | 51,169 | 2,220,504 | ||||||||||||
Tax reclaims | — | — | 57,257 | 121,669 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total assets | 2,051,833,711 | 809,947,742 | 34,984,805 | 1,334,950,036 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
LIABILITIES | ||||||||||||||||
Collateral on securities loaned, at value | 162,503,560 | 80,258,703 | 135,277 | 86,689,569 | ||||||||||||
Payables: | ||||||||||||||||
Variation margin on futures contracts | 46,079 | 22,334 | — | — | ||||||||||||
Capital shares redeemed | 207,811 | 1,627,610 | — | — | ||||||||||||
Investment advisory fees | 588,438 | 51,206 | 15,569 | 147,855 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total liabilities | 163,345,888 | 81,959,853 | 150,846 | 86,837,424 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
NET ASSETS | $ | 1,888,487,823 | $ | 727,987,889 | $ | 34,833,959 | $ | 1,248,112,612 | ||||||||
|
|
|
|
|
|
|
| |||||||||
NET ASSETS CONSIST OF: | ||||||||||||||||
Paid-in capital | $ | 1,895,693,067 | $ | 751,474,047 | $ | 40,733,173 | $ | 1,321,911,996 | ||||||||
Accumulated loss | (7,205,244 | ) | (23,486,158) | (5,899,214 | ) | (73,799,384 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
NET ASSETS | $ | 1,888,487,823 | $ | 727,987,889 | $ | 34,833,959 | $ | 1,248,112,612 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Shares outstanding | 19,150,000 | 15,500,000 | 950,000 | 51,100,000 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net asset value | $ | 98.62 | $ | 46.97 | $ | 36.67 | $ | 24.42 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Shares authorized | Unlimited | Unlimited | Unlimited | Unlimited | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Par value | None | None | None | None | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
(a) Securities loaned, at value | $ | 159,170,712 | $ | 78,183,906 | $ | 130,799 | $ | 84,845,080 | ||||||||
(b) Investments, at cost — Unaffiliated | $ | 1,804,701,136 | $ | 741,779,204 | $ | 37,603,288 | $ | 1,281,776,379 | ||||||||
(c) Investments, at cost — Affiliated | $ | 167,372,733 | $ | 81,813,200 | $ | 150,459 | $ | 88,389,458 | ||||||||
(d) Foreign currency, at cost | $ | — | $ | — | $ | 34,053 | $ | 856,697 |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S | 27 |
Statements of Assets and Liabilities (unaudited) (continued)
October 31, 2018
iShares International Developed Real Estate ETF | ||||
| ||||
ASSETS | ||||
Investments in securities, at value (including securities on loan)(a): | ||||
Unaffiliated(b) | $ | 449,306,168 | ||
Affiliated(c) | 1,410,410 | |||
Cash pledged: | ||||
Futures contracts | 135,000 | |||
Foreign currency, at value(d) | 157,981 | |||
Receivables: | ||||
Securities lending income — Affiliated | 2,430 | |||
Variation margin on futures contracts | 19,446 | |||
Securities related to in-kind transactions | 8,031 | |||
Dividends | 1,339,797 | |||
Tax reclaims | 214,271 | |||
Foreign withholding tax claims | 97,607 | |||
|
| |||
Total assets | 452,691,141 | |||
|
| |||
LIABILITIES | ||||
Collateral on securities loaned, at value | 686,707 | |||
Payables: | ||||
Investments purchased | 8,031 | |||
Investment advisory fees | 182,481 | |||
Professional fees | 976 | |||
|
| |||
Total liabilities | 878,195 | |||
|
| |||
NET ASSETS | $ | 451,812,946 | ||
|
| |||
NET ASSETS CONSIST OF: | ||||
Paid-in capital | $ | 569,277,707 | ||
Accumulated loss | (117,464,761 | ) | ||
|
| |||
NET ASSETS | $ | 451,812,946 | ||
|
| |||
Shares outstanding | 16,600,000 | |||
|
| |||
Net asset value | $ | 27.22 | ||
|
| |||
Shares authorized | Unlimited | |||
|
| |||
Par value | None | |||
|
| |||
(a) Securities loaned, at value | $ | 660,742 | ||
(b) Investments, at cost — Unaffiliated | $ | 483,704,165 | ||
(c) Investments, at cost — Affiliated | $ | 1,410,272 | ||
(d) Foreign currency, at cost | $ | 158,687 |
See notes to financial statements.
28 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statements of Operations (unaudited)
Six Months Ended October 31, 2018
iShares Cohen & Steers REIT ETF | iShares Core U.S. REIT ETF | iShares Europe Real Estate ETF | iShares Global REIT ETF | |||||||||||||
| ||||||||||||||||
INVESTMENT INCOME | ||||||||||||||||
Dividends — Unaffiliated | $ | 36,008,386 | $ | 17,383,307 | (a) | $ | 989,938 | $ | 30,117,779 | |||||||
Dividends — Affiliated | 52,470 | 18,491 | 341 | 28,940 | ||||||||||||
Non-cash dividends — Unaffiliated | — | 4,706,277 | 220,534 | 6,653,990 | ||||||||||||
Interest — Unaffiliated | 1,867 | 433 | — | — | ||||||||||||
Securities lending income — Affiliated — net | 123,840 | 55,928 | 3,236 | 68,221 | ||||||||||||
Foreign taxes withheld | — | — | (91,303 | ) | (1,336,194 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total investment income | 36,186,563 | 22,164,436 | 1,122,746 | 35,532,736 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
EXPENSES | ||||||||||||||||
Investment advisory fees | 4,192,324 | 273,934 | 100,395 | 818,141 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total expenses | 4,192,324 | 273,934 | 100,395 | 818,141 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net investment income | 31,994,239 | 21,890,502 | 1,022,351 | 34,714,595 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||
Investments — Unaffiliated | (64,725,857 | ) | (17,883,517 | ) | (259,996 | ) | (20,562,971 | ) | ||||||||
Investments — Affiliated | 3,496 | (1,999 | ) | 218 | (988 | ) | ||||||||||
In-kind redemptions — Unaffiliated | 104,584,093 | 16,389,232 | 266,374 | 792,498 | ||||||||||||
Futures contracts | 53,994 | (17,502 | ) | — | — | |||||||||||
Foreign currency transactions | — | — | (14,384 | ) | (260,988 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net realized gain (loss) | 39,915,726 | (1,513,786 | ) | (7,788 | ) | (20,032,449 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||
Investments — Unaffiliated | 90,661,065 | 5,100,238 | (5,178,547 | ) | (4,750,040 | ) | ||||||||||
Investments — Affiliated | (1,377 | ) | 1,226 | (29 | ) | 1,304 | ||||||||||
Futures contracts | (88,586 | ) | (9,556 | ) | — | — | ||||||||||
Foreign currency translations | — | — | (1,655 | ) | 2,012 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net change in unrealized appreciation (depreciation) | 90,571,102 | 5,091,908 | (5,180,231 | ) | (4,746,724 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net realized and unrealized gain (loss) | 130,486,828 | 3,578,122 | (5,188,019 | ) | (24,779,173 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | 162,481,067 | $ | 25,468,624 | $ | (4,165,668 | ) | $ | 9,935,422 | |||||||
|
|
|
|
|
|
|
|
(a) | Includes $7,478,311 related to a special distribution from GGP Inc. |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S | 29 |
Statements of Operations (unaudited) (continued)
Six Months Ended October 31, 2018
iShares Real Estate ETF | ||||
| ||||
INVESTMENT INCOME | ||||
Dividends — Unaffiliated | $ | 10,196,594 | ||
Dividends — Affiliated | 7,056 | |||
Non-cash dividends — Unaffiliated | 827,936 | |||
Securities lending income — Affiliated — net | 19,107 | |||
Foreign taxes withheld | (1,026,036 | ) | ||
|
| |||
Total investment income | 10,024,657 | |||
|
| |||
EXPENSES | ||||
Investment advisory fees | 1,203,774 | |||
|
| |||
Total expenses | 1,203,774 | |||
|
| |||
Net investment income | 8,820,883 | |||
|
| |||
REALIZED AND UNREALIZED GAIN (LOSS) | ||||
Net realized gain (loss) from: | ||||
Investments — Unaffiliated | (5,247,180 | ) | ||
Investments — Affiliated | 584 | |||
In-kind redemptions — Unaffiliated | 4,523,321 | |||
Futures contracts | (136,914 | ) | ||
Foreign currency transactions | (153,979 | ) | ||
|
| |||
Net realized loss | (1,014,168 | ) | ||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments — Unaffiliated | (50,877,099 | ) | ||
Investments — Affiliated | (95 | ) | ||
Futures contracts | (139,406 | ) | ||
Foreign currency translations | 21,832 | |||
|
| |||
Net change in unrealized appreciation (depreciation) | (50,994,768 | ) | ||
|
| |||
Net realized and unrealized loss | (52,008,936 | ) | ||
|
| |||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (43,188,053 | ) | |
|
|
See notes to financial statements.
30 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statements of Changes in Net Assets
iShares Cohen & Steers REIT ETF | iShares Core U.S. REIT ETF | |||||||||||||||||||
Six Months Ended | Six Months Ended | |||||||||||||||||||
10/31/18 | Year Ended | 10/31/18 | Year Ended | |||||||||||||||||
(unaudited) | 04/30/18 | (unaudited) | 04/30/18 | |||||||||||||||||
| ||||||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||||||
OPERATIONS | ||||||||||||||||||||
Net investment income | $ | 31,994,239 | $ | 79,233,916 | $ | 21,890,502 | $ | 9,422,974 | ||||||||||||
Net realized gain (loss) | 39,915,726 | 100,050,936 | (1,513,786 | ) | 4,852,767 | |||||||||||||||
Net change in unrealized appreciation (depreciation) | 90,571,102 | (247,982,045 | ) | 5,091,908 | (30,121,687 | ) | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
Net increase (decrease) in net assets resulting from operations | 162,481,067 | (68,697,193 | ) | 25,468,624 | (15,845,946 | ) | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS(a) | ||||||||||||||||||||
Decrease in net assets resulting from distributions to shareholders | (40,933,337 | ) | (94,799,127 | ) | (26,191,386 | ) | (9,746,374 | ) | ||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
CAPITAL SHARE TRANSACTIONS | ||||||||||||||||||||
Net increase (decrease) in net assets derived from capital share transactions | (709,708,493 | ) | (599,603,099 | ) | 214,235,959 | 415,301,713 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
NET ASSETS(a) | ||||||||||||||||||||
Total increase (decrease) in net assets | (588,160,763 | ) | (763,099,419 | ) | 213,513,197 | 389,709,393 | ||||||||||||||
Beginning of period | 2,476,648,586 | 3,239,748,005 | 514,474,692 | 124,765,299 | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
End of period | $ | 1,888,487,823 | $ | 2,476,648,586 | $ | 727,987,889 | $ | 514,474,692 | ||||||||||||
|
|
|
|
|
|
|
|
(a) | Prior year distribution character information and undistributed net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 13 for this prior year information. |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S | 31 |
Statements of Changes in Net Assets (continued)
iShares Europe Developed Real Estate ETF | iShares Global REIT ETF | |||||||||||||||||||
Six Months Ended | Six Months Ended | |||||||||||||||||||
10/31/18 | Year Ended | 10/31/18 | Year Ended | |||||||||||||||||
(unaudited) | 04/30/18 | (unaudited) | 04/30/18 | |||||||||||||||||
| ||||||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||||||
OPERATIONS | ||||||||||||||||||||
Net investment income | $ | 1,022,351 | $ | 1,357,516 | $ | 34,714,595 | $ | 22,351,630 | ||||||||||||
Net realized gain (loss) | (7,788 | ) | (219,656 | ) | (20,032,449 | ) | 4,943,189 | |||||||||||||
Net change in unrealized appreciation (depreciation) | (5,180,231 | ) | 6,225,396 | (4,746,724 | ) | (32,318,103 | ) | |||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
Net increase (decrease) in net assets resulting from operations | (4,165,668 | ) | 7,363,256 | 9,935,422 | (5,023,284 | ) | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS(a) | ||||||||||||||||||||
Decrease in net assets resulting from distributions to shareholders | (1,059,949 | ) | (1,532,567 | ) | (39,826,584 | ) | (25,228,265 | ) | ||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
CAPITAL SHARE TRANSACTIONS | ||||||||||||||||||||
Net increase (decrease) in net assets derived from capital share transactions | (3,671,669 | ) | (3,603,079 | ) | 364,624,348 | 592,812,067 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
NET ASSETS(a) | ||||||||||||||||||||
Total increase (decrease) in net assets | (8,897,286 | ) | 2,227,610 | 334,733,186 | 562,560,518 | |||||||||||||||
Beginning of period | 43,731,245 | 41,503,635 | 913,379,426 | 350,818,908 | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
End of period | $ | 34,833,959 | $ | 43,731,245 | $ | 1,248,112,612 | $ | 913,379,426 | ||||||||||||
|
|
|
|
|
|
|
|
(a) | Prior year distribution character information and undistributed (distributions in excess of) net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 13 for this prior year information. |
See notes to financial statements.
32 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statements of Changes in Net Assets (continued)
iShares International Developed Real Estate ETF | ||||||||
Six Months | ||||||||
Ended | ||||||||
10/31/18 | Year Ended | |||||||
(unaudited) | 04/30/18 | |||||||
| ||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||
OPERATIONS | ||||||||
Net investment income | $ | 8,820,883 | $ | 17,568,904 | ||||
Net realized gain (loss) | (1,014,168 | ) | 13,990,595 | |||||
Net change in unrealized appreciation (depreciation) | (50,994,768 | ) | 39,790,467 | |||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | (43,188,053 | ) | 71,349,966 | |||||
|
|
|
| |||||
DISTRIBUTIONS TO SHAREHOLDERS(a) | ||||||||
Decrease in net assets resulting from distributions to shareholders | (9,996,817 | ) | (29,082,296 | ) | ||||
|
|
|
| |||||
CAPITAL SHARE TRANSACTIONS | ||||||||
Net decrease in net assets derived from capital share transactions | (30,094,875 | ) | (27,146,089 | ) | ||||
|
|
|
| |||||
NET ASSETS(a) | ||||||||
Total increase (decrease) in net assets | (83,279,745 | ) | 15,121,581 | |||||
Beginning of period | 535,092,691 | 519,971,110 | ||||||
|
|
|
| |||||
End of period | $ | 451,812,946 | $ | 535,092,691 | ||||
|
|
|
|
(a) | Prior year distribution character information and distributions in excess of net investment income has been modified or removed to conform with current year Regulation S-X presentation changes. Refer to Note 13 for this prior year information. |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S | 33 |
(For a share outstanding throughout each period)
iShares Cohen & Steers REIT ETF | ||||||||||||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Year Ended 04/30/17 | Year Ended 04/30/16 | Year Ended 04/30/15 | Year Ended 04/30/14 | |||||||||||||||||||
| ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 93.99 | $ | 99.68 | $ | 100.01 | $ | 95.12 | $ | 85.53 | $ | 88.36 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income(a) | 1.29 | 2.60 | 2.42 | 2.23 | 2.41 | 2.07 | ||||||||||||||||||
Net realized and unrealized gain (loss)(b) | 4.95 | (5.17 | ) | 1.15 | 6.33 | 10.13 | (2.30 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase (decrease) from investment operations | 6.24 | (2.57 | ) | 3.57 | 8.56 | 12.54 | (0.23 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Distributions | ||||||||||||||||||||||||
From net investment income | (1.61 | ) | (3.12 | ) | (3.90 | ) | (3.67 | ) | (2.95 | ) | (2.60 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (1.61 | ) | (3.12 | ) | (3.90 | ) | (3.67 | ) | (2.95 | ) | (2.60 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 98.62 | $ | 93.99 | $ | 99.68 | $ | 100.01 | $ | 95.12 | $ | 85.53 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Return | ||||||||||||||||||||||||
Based on net asset value | 6.65 | %(c) | (2.68 | )% | 3.58 | % | 9.22 | % | 14.80 | % | 0.05 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||||||
Total expenses | 0.34 | %(d) | 0.34 | % | 0.34 | % | 0.35 | % | 0.35 | % | 0.35 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income | 2.59 | %(d) | 2.63 | % | 2.37 | % | 2.33 | % | 2.57 | % | 2.58 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 1,888,488 | $ | 2,476,649 | $ | 3,239,748 | $ | 3,680,246 | $ | 3,410,150 | $ | 2,715,666 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Portfolio turnover rate(e) | 13 | %(c) | 12 | % | 8 | % | 14 | % | 8 | % | 13 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(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. |
(e) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
34 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares Core U.S. REIT ETF | ||||||||||||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Year Ended 04/30/17 | Year Ended 04/30/16 | Year Ended 04/30/15 | Year Ended 04/30/14 | |||||||||||||||||||
| ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 45.73 | $ | 48.93 | $ | 47.95 | $ | 46.04 | $ | 42.38 | $ | 45.04 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income(a) | 1.57 | (b) | 1.70 | 1.27 | 1.02 | 1.04 | 1.17 | |||||||||||||||||
Net realized and unrealized gain (loss)(c) | 1.44 | (3.20 | ) | 1.60 | 2.77 | 4.19 | (2.30 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase (decrease) from investment operations | 3.01 | (1.50 | ) | 2.87 | 3.79 | 5.23 | (1.13 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Distributions | ||||||||||||||||||||||||
From net investment income | (1.77 | ) | (1.70 | ) | (1.89 | ) | (1.88 | ) | (1.57 | ) | (1.53 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (1.77 | ) | (1.70 | ) | (1.89 | ) | (1.88 | ) | (1.57 | ) | (1.53 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 46.97 | $ | 45.73 | $ | 48.93 | $ | 47.95 | $ | 46.04 | $ | 42.38 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Return | ||||||||||||||||||||||||
Based on net asset value | 6.54 | %(d) | (3.18 | )% | 6.02 | % | 8.48 | % | 12.44 | % | (2.21 | )% | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||||||
Total expenses | 0.08 | %(e) | 0.08 | % | 0.28 | % | 0.48 | % | 0.48 | % | 0.48 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income | 6.39 | %(b)(e) | 3.60 | % | 2.57 | % | 2.22 | % | 2.26 | % | 2.89 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 727,988 | $ | 514,475 | $ | 124,765 | $ | 74,323 | $ | 85,180 | $ | 80,527 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Portfolio turnover rate(f) | 9 | %(d) | 8 | % | 30 | % | 11 | % | 10 | % | 19 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(b) | Includes a one-time special distribution from GGP Inc. Excluding such special distribution, the net investment income would have been $1.03 per share and 4.21% of average net assets. |
(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. |
(f) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
F I N A N C I A L H I G H L I G H T S | 35 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares Europe Developed Real Estate ETF | ||||||||||||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Year Ended 04/30/17 | Year Ended 04/30/16 | Year Ended 04/30/15 | Year Ended 04/30/14 | |||||||||||||||||||
| ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 41.65 | $ | 36.09 | $ | 38.11 | $ | 39.39 | $ | 37.33 | $ | 32.37 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income(a) | 0.98 | 1.31 | 0.97 | 0.93 | 1.18 | 0.96 | ||||||||||||||||||
Net realized and unrealized gain (loss)(b) | (4.95 | ) | 5.71 | (2.09 | ) | (0.91 | ) | 1.90 | 5.13 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase (decrease) from investment operations | (3.97 | ) | 7.02 | (1.12 | ) | 0.02 | 3.08 | 6.09 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Distributions | ||||||||||||||||||||||||
From net investment income | (1.01 | ) | (1.46 | ) | (0.90 | ) | (1.30 | ) | (1.02 | ) | (1.13 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (1.01 | ) | (1.46 | ) | (0.90 | ) | (1.30 | ) | (1.02 | ) | (1.13 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 36.67 | $ | 41.65 | $ | 36.09 | $ | 38.11 | $ | 39.39 | $ | 37.33 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Return | ||||||||||||||||||||||||
Based on net asset value | (9.69 | )%(c) | 19.80 | % | (2.97 | )% | 0.16 | % | 8.39 | % | 19.62 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||||||
Total expenses | 0.48 | %(d) | 0.48 | % | 0.48 | % | 0.48 | % | 0.48 | % | 0.48 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income | 4.89 | %(d) | 3.34 | % | 2.75 | % | 2.47 | % | 3.15 | % | 2.82 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 34,834 | $ | 43,731 | $ | 41,504 | $ | 78,115 | $ | 80,746 | $ | 37,332 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Portfolio turnover rate(e) | 10 | %(c) | 12 | % | 10 | % | 14 | % | 15 | % | 9 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(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. |
(e) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
36 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares Global REIT ETF | ||||||||||||||||||||
Six Months Ended | Period From | |||||||||||||||||||
10/31/18 | Year Ended | Year Ended | Year Ended | 07/08/14 | (a) | |||||||||||||||
(unaudited) | 04/30/18 | 04/30/17 | 04/30/16 | to 04/30/15 | ||||||||||||||||
| ||||||||||||||||||||
Net asset value, beginning of period | $ | 24.82 | $ | 25.42 | $ | 26.35 | $ | 25.81 | $ | 24.90 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net investment income(b) | 0.76 | 0.97 | 0.86 | 0.87 | 0.69 | |||||||||||||||
Net realized and unrealized gain (loss)(c) | (0.32 | ) | (0.56 | ) | (0.47 | ) | 0.64 | 0.87 | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net increase from investment operations | 0.44 | 0.41 | 0.39 | 1.51 | 1.56 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Distributions | ||||||||||||||||||||
From net investment income | (0.84 | ) | (0.99 | ) | (1.29 | ) | (0.97 | ) | (0.65 | ) | ||||||||||
From net realized gain | — | (0.02 | ) | (0.03 | ) | — | — | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (0.84 | ) | (1.01 | ) | (1.32 | ) | (0.97 | ) | (0.65 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of period | $ | 24.42 | $ | 24.82 | $ | 25.42 | $ | 26.35 | $ | 25.81 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Return | ||||||||||||||||||||
Based on net asset value | 1.72 | %(d) | 1.61 | % | 1.53 | % | 6.17 | % | 6.30 | %(d) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||
Total expenses | 0.14 | %(e) | 0.14 | % | 0.14 | % | 0.14 | % | 0.14 | %(e) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net investment income | 5.94 | %(e) | 3.83 | % | 3.31 | % | 3.47 | % | 3.23 | %(e) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Supplemental Data | ||||||||||||||||||||
Net assets, end of period (000) | $ | 1,248,113 | $ | 913,379 | $ | 350,819 | $ | 144,910 | $ | 23,226 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Portfolio turnover rate(f) | 7 | %(d) | 7 | % | 5 | % | 9 | % | 12 | %(d) | ||||||||||
|
|
|
|
|
|
|
|
|
|
(a) | Commencement of operations. |
(b) | Based on average shares outstanding. |
(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. |
(f) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
F I N A N C I A L H I G H L I G H T S | 37 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares International Developed Real Estate ETF | ||||||||||||||||||||||||
Six Months Ended 10/31/18 (unaudited) | Year Ended 04/30/18 | Year Ended 04/30/17 | Year Ended 04/30/16 | Year Ended 04/30/15 | Year Ended 04/30/14 | |||||||||||||||||||
| ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 30.40 | $ | 28.11 | $ | 30.06 | $ | 32.17 | $ | 30.79 | $ | 36.55 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income(a) | 0.52 | 0.91 | 0.82 | 0.75 | 1.16 | 0.93 | ||||||||||||||||||
Net realized and unrealized gain (loss)(b) | (3.11 | ) | 2.86 | (0.76 | ) | (1.79 | ) | 1.27 | (3.08 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net increase (decrease) from investment operations | (2.59 | ) | 3.77 | 0.06 | (1.04 | ) | 2.43 | (2.15 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Distributions | ||||||||||||||||||||||||
From net investment income | (0.59 | ) | (1.48 | ) | (2.01 | ) | (1.07 | ) | (1.05 | ) | (3.61 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (0.59 | ) | (1.48 | ) | (2.01 | ) | (1.07 | ) | (1.05 | ) | (3.61 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 27.22 | $ | 30.40 | $ | 28.11 | $ | 30.06 | $ | 32.17 | $ | 30.79 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Return | ||||||||||||||||||||||||
Based on net asset value | (8.65 | )%(c) | 13.69 | % | 0.63 | %(d) | (3.11 | )% | 8.06 | % | (5.27 | )% | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Ratios to Average Net Assets | ||||||||||||||||||||||||
Total expenses | 0.48 | %(e) | 0.48 | % | 0.48 | % | 0.48 | % | 0.48 | % | 0.48 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total expenses excluding professional fees for foreign withholding tax claims | N/A | N/A | 0.48 | % | N/A | N/A | N/A | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net investment income | 3.52 | %(e) | 3.08 | % | 2.85 | %(d) | 2.56 | % | 3.71 | % | 2.86 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 451,813 | $ | 535,093 | $ | 519,971 | $ | 700,478 | $ | 1,000,337 | $ | 775,820 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Portfolio turnover rate(f) | 6 | %(c) | 8 | % | 7 | % | 12 | % | 11 | % | 9 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Based on average shares outstanding. |
(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, 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. |
(f) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
38 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (unaudited)
1. ORGANIZATION
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 is organized as a Delaware statutory trust and is authorized to have multiple series or portfolios.
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 |
2. 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 increases and decreases in net assets from operations 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.
Investment Transactions and Income Recognition: Investment 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 are reflected in tax reclaims receivable. 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. Upon notification from issuers, some of the dividend income received from a real estate investment trust may be re-designated as a return of capital or capital gain. Non-cash dividends, if any, are recognized on the ex-dividend date and recorded as non-cash dividend income at fair value. 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 non-U.S. currencies are translated to U.S. dollars using prevailing market rates as quoted by one or more data service providers. Purchases and sales of investments, 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 investments. Such fluctuations are reflected by the Funds as a component of net realized and unrealized gain (loss) from investments for financial reporting purposes. Each Fund reports realized currency gain (loss) 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 each Fund invests. These foreign taxes, if any, are paid by each Fund and are reflected in its statement 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, 2018, if any, are disclosed in the statement of assets and liabilities.
In-kind Redemptions: For financial reporting purposes, 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 net asset value per share.
Distributions: 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.
Recent Accounting Standards: In August 2018, the Financial Accounting Standards Board issued Accounting Standards Update 2018-13 “Changes to the Disclosure Requirements for Fair Value Measurement” which modifies disclosure requirements for fair value measurements. The guidance is effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. Management is currently evaluating the impact of this guidance to the Funds.
Indemnifications: In the normal course of business, each Fund enters into contracts that contain a variety of representations that provide general indemnification. The Funds’ maximum exposure under these arrangements is unknown because it involves future potential claims against the Funds, which cannot be predicted with any certainty.
N O T E S T O F I N A N C I A L S T A T E M E N T S | 39 |
Notes to Financial Statements (unaudited) (continued)
3. INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS
Investment Valuation Policies: Each Fund’s investments are valued at fair value (also referred to as “market value” within the financial statements) 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. A fund determines the fair value of its financial instruments using various independent dealers or pricing services under policies approved by the Board of Trustees of the Trust (the “Board”). The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) is the committee formed by management to develop global pricing policies and procedures and to oversee the pricing function for all financial instruments.
Fair Value Inputs and Methodologies: The following methods and inputs are used to establish the fair value of each Fund’s assets and liabilities:
• | Equity investments traded on a recognized securities exchange are valued at that day’s last traded price or 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. |
• | Investments in open-end U.S. mutual funds (including money market funds) are valued at that day’s published net asset value (“NAV”). |
• | Futures contract notional values are determined based on that day’s last reported settlement price on the exchange where the contract is traded. |
If events (e.g., a company announcement, market volatility or a natural disaster) occur that are expected to materially affect the value of an investment, or in the event that application of these methods of valuation results in a price for an investment that is deemed not to be representative of the market 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 as reflecting fair value (“Fair Valued Investments”). The fair valuation approaches that may be used by the Global Valuation Committee include market approach, income approach and the cost approach. 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.
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, regular reviews 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 and large movements in market values, and reviews of any market related activity. The pricing of all Fair Valued Investments is subsequently reported to the Board on a quarterly basis.
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.
Fair Value Hierarchy: Various inputs are used in determining the fair value of financial instruments. 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 price quotations 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, but not limited to, quoted prices for similar assets or liabilities in markets that are active, 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 interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs; and |
• | Level 3 – Unobservable inputs 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 financial instruments). |
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 into or out of an assigned level within the 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 a value determined for financial instruments is based on the pricing transparency of the financial instruments and is not necessarily an indication of the risks associated with investing in those securities.
4. SECURITIES AND OTHER INVESTMENTS
Securities Lending: Each Fund may lend its 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 market 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 Fund and any additional required collateral is delivered to the Fund or excess collateral is returned by the Fund, 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
40 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (unaudited) (continued)
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.
As of October 31, 2018, 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 BlackRock Fund Advisors (“BFA”), the Funds’ investment adviser, or its affiliates 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, if any, are also disclosed in its schedule of investments. The market value of any securities on loan as of October 31, 2018 and the value of the related cash collateral are disclosed in the statements of assets and liabilities.
Securities lending transactions are entered into by a fund under Master Securities Lending Agreements (each, an “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, the 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 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, absent an event of default, the borrower can resell or re-pledge the loaned securities, and the fund can reinvest cash collateral received in connection with loaned securities.
The following table is a summary of the securities lending agreements by counterparty which are subject to offset under an MSLA as of October 31, 2018:
| ||||||||||||||||
iShares ETF and Counterparty | | Market Value of Securities on Loan | | | Cash Collateral Received | (a) | | Non-Cash Collateral Received | | Net Amount | ||||||
| ||||||||||||||||
Cohen & Steers REIT | ||||||||||||||||
Barclays Bank PLC | $ | 26,092,126 | $ | 26,092,126 | $ | — | $ | — | ||||||||
Citigroup Global Markets Inc. | 38,766,602 | 38,766,602 | — | — | ||||||||||||
Goldman Sachs & Co. | 20,214,461 | 20,214,461 | — | — | ||||||||||||
Merrill Lynch, Pierce, Fenner & Smith | 71,526,761 | 71,526,761 | — | — | ||||||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 920,976 | 920,976 | — | — | ||||||||||||
National Financial Services LLC | 767,132 | 767,132 | — | — | ||||||||||||
UBS Securities LLC | 882,654 | 882,654 | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 159,170,712 | $ | 159,170,712 | $ | — | $ | — | |||||||||
|
|
|
|
|
|
|
| |||||||||
Core U.S. REIT | ||||||||||||||||
Barclays Bank PLC | $ | 956,504 | $ | 956,504 | $ | — | $ | — | ||||||||
Barclays Capital Inc. | 386,701 | 386,701 | — | — | ||||||||||||
BNP Paribas New York Branch | 4,176 | 4,176 | — | — | ||||||||||||
Citigroup Global Markets Inc. | 1,664,531 | 1,664,531 | — | — | ||||||||||||
Credit Suisse Securities (USA) LLC | 228,106 | 228,106 | — | — | ||||||||||||
Deutsche Bank Securities Inc. | 613,775 | 613,775 | — | — | ||||||||||||
Goldman Sachs & Co. | 4,514,308 | 4,514,308 | — | — | ||||||||||||
HSBC Bank PLC | 628,612 | 628,612 | — | — | ||||||||||||
JPMorgan Securities LLC | 5,913,738 | 5,913,738 | — | — | ||||||||||||
Merrill Lynch, Pierce, Fenner & Smith | 50,577,890 | 50,577,890 | — | — | ||||||||||||
Morgan Stanley & Co. LLC (U.S. Equity Securities Lending) | 11,546,357 | 11,546,357 | — | — | ||||||||||||
State Street Bank & Trust Company | 284,816 | 284,816 | — | — | ||||||||||||
UBS Securities LLC | 864,392 | 864,392 | — | — | ||||||||||||
|
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|
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| |||||||||
$ | 78,183,906 | $ | 78,183,906 | $ | — | $ | — | |||||||||
|
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| |||||||||
Europe Developed Real Estate | ||||||||||||||||
Citigroup Global Markets Inc. | $ | 39,401 | $ | 39,401 | $ | — | $ | — | ||||||||
Goldman Sachs & Co. | 91,398 | 91,398 | — | — | ||||||||||||
|
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| |||||||||
$ | 130,799 | $ | 130,799 | $ | — | $ | — | |||||||||
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N O T E S T O F I N A N C I A L S T A T E M E N T S | 41 |
Notes to Financial Statements (unaudited) (continued)
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| ||||||||
iShares ETF and Counterparty | | Market Value of Securities on Loan | | | Cash Collateral Received | (a) | | Non-Cash Collateral Received | | Net Amount | ||||||
|
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|
|
|
|
|
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| ||||||||
Global REIT | ||||||||||||||||
Barclays Bank PLC | $ | 7,549,694 | $ | 7,549,694 | $ | — | $ | — | ||||||||
BNP Paribas New York Branch | 86,185 | 86,185 | — | — | ||||||||||||
Citigroup Global Markets Inc. | 1,440,883 | 1,440,883 | — | — | ||||||||||||
Credit Suisse Securities (USA) LLC | 436,880 | 436,880 | — | — | ||||||||||||
Deutsche Bank Securities Inc. | 2,311,594 | 2,311,594 | — | — | ||||||||||||
Goldman Sachs & Co. | 36,842,348 | 36,842,348 | — | — | ||||||||||||
ING Financial Markets LLC | 376,336 | 376,336 | — | — | ||||||||||||
Jefferies LLC | 555,990 | 555,990 | — | — | ||||||||||||
JPMorgan Securities LLC | 814,934 | 814,934 | — | — | ||||||||||||
Merrill Lynch, Pierce, Fenner & Smith | 32,386,776 | 32,386,776 | — | — | ||||||||||||
State Street Bank & Trust Company | 435,689 | 435,689 | — | — | ||||||||||||
UBS AG | 57,239 | 57,239 | — | — | ||||||||||||
Wells Fargo Bank, National Association | 1,550,532 | 1,550,532 | — | — | ||||||||||||
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$ | 84,845,080 | $ | 84,845,080 | $ | — | $ | — | |||||||||
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| |||||||||
International Developed Real Estate | ||||||||||||||||
Citigroup Global Markets Inc. | $ | 660,739 | $ | 660,739 | $ | — | $ | — | ||||||||
Morgan Stanley & Co. LLC | 3 | 3 | — | — | ||||||||||||
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| |||||||||
$ | 660,742 | $ | 660,742 | $ | — | $ | — | |||||||||
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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. |
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, each Fund benefits from a borrower default indemnity provided by BlackRock, Inc. (“BlackRock”). BlackRock’s indemnity allows for full replacement of the 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 market 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. Such losses are borne entirely by each Fund.
5. DERIVATIVE FINANCIAL INSTRUMENTS
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 specific quantity of an underlying instrument at a set price on a future date. Depending on the terms of a contract, a futures contract is settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash amount on the settlement 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. Securities deposited as initial margin, if any, are designated in the schedule of investments and cash deposited, if any, is shown as cash pledged for futures contracts in the statement of assets and liabilities.
Pursuant to the contract, a fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in market value of the contract (“variation margin”). Variation margin is recorded as unrealized appreciation or depreciation and, if any, shown as variation margin receivable or payable on futures contracts in the statement of assets and liabilities. When the contract is closed, a realized gain or loss is recorded in the statement of operations equal to the difference between the notional amount of the contract at the time it was opened and the notional amount 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 involves the risk of an imperfect correlation in the movements in the price of futures contracts and the assets underlying such contracts.
6. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Investment Advisory Fees: 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).
42 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (unaudited) (continued)
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:
Aggregate Average Daily Net Assets | Investment Advisory Fee | |||
First $121 billion | 0.3500 | % | ||
Over $121 billion, up to and including $181 billion | 0.3325 | |||
Over $181 billion, up to and including $231 billion | 0.3159 | |||
Over $231 billion, up to and including $281 billion | 0.3001 | |||
Over $281 billion | 0.2851 |
Each reduced 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 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 |
Distributor: 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.
Securities Lending: The U.S. Securities and Exchange Commission (the “SEC”) 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, or its affiliates, 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 (excluding collateral investment fees), net of fees and other payments to and from borrowers of securities. Each Fund retains a portion of securities lending income and remits the remaining portion to BTC as compensation for its services as securities lending agent.
Pursuant to a securities lending agreement, each of iShares Cohen & Steers REIT ETF and iShares Core U.S. REIT ETF (the “Group 1 Funds”), retains 71.5% of securities lending income (which excludes collateral investment fees) 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, each of iShares Europe Developed Real Estate ETF, iShares Global REIT ETF and iShares International Developed Real Estate ETF (the “Group 2 Funds”), retains 80% of securities lending income (which excludes collateral investment fees) 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.
The share of securities lending income earned by each Fund is shown as securities lending income – affiliated – net in its statement of operations. For the six months ended October 31, 2018, the Funds paid BTC the following amounts for securities lending agent services:
iShares ETF | Fees Paid to BTC | |||
Cohen & Steers REIT | $ | 63,281 | ||
Core U.S. REIT | 26,683 | |||
Europe Developed Real Estate | 777 | |||
Global REIT | 20,900 | |||
International Developed Real Estate | 4,749 |
Officers and Trustees: Certain officers and/or trustees of the Trust are officers and/or trustees of BlackRock or its affiliates.
Other Transactions: The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate of BlackRock for 1940 Act purposes.
N O T E S T O F I N A N C I A L S T A T E M E N T S | 43 |
Notes to Financial Statements (unaudited) (continued)
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, 2018, transactions executed by the Funds pursuant to Rule 17a-7 under the 1940 Act were as follows:
iShares ETF | Purchases | Sales | ||||||
Cohen & Steers REIT | $ | — | $ | 1,674,209 | ||||
Core U.S. REIT | 3,826,186 | 5,926,479 | ||||||
Europe Developed Real Estate | 42,214 | 198,766 | ||||||
International Developed Real Estate | 804,336 | 1,685,912 |
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 shown as dividends – affiliated in the statement of operations.
A fund, in order to improve its portfolio liquidity and its ability to track its underlying index, may invest in shares of other iShares funds that invest in securities in the fund’s underlying index.
7. PURCHASES AND SALES
For the six months ended October 31, 2018, purchases and sales of investments, excluding in-kind transactions and short-term investments, were as follows:
iShares ETF | Purchases | Sales | ||||||
Cohen & Steers REIT | $ | 305,496,435 | $ | 315,342,999 | ||||
Core U.S. REIT | 63,962,932 | 57,007,470 | ||||||
Europe Developed Real Estate | 3,899,071 | 4,055,254 | ||||||
Global REIT | 112,949,916 | 75,177,386 | ||||||
International Developed Real Estate | 29,965,207 | 27,471,723 |
For the six months ended October 31, 2018, in-kind transactions were as follows:
iShares ETF | In-kind Purchases | In-kind Sales | ||||||
Cohen & Steers REIT | $ | 113,990,487 | $ | 813,425,728 | ||||
Core U.S. REIT | 360,635,330 | 151,948,773 | ||||||
Europe Developed Real Estate | — | 3,611,330 | ||||||
Global REIT | 339,883,840 | 7,126,273 | ||||||
International Developed Real Estate | 15,975,697 | 44,491,139 |
8. 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.
Management has analyzed tax laws and regulations and their application to the Funds as of October 31, 2018, inclusive of the open tax return years, and does not believe that there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.
As of April 30, 2018, 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 2019 | Total | |||||||||
Cohen & Steers REIT | $ | 40,482,099 | $ | — | $ | 40,482,099 | ||||||
Europe Developed Real Estate | 1,983,566 | 495,537 | 2,479,103 | |||||||||
Global REIT | 694,159 | — | 694,159 | |||||||||
International Developed Real Estate | 56,022,525 | 6,772,206 | 62,794,731 |
(a) | Must be utilized prior to losses subject to expiration. |
A fund may own shares in certain foreign investment entities, referred to, under U.S. tax law, as “passive foreign investment companies.” Such fund 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.
44 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (unaudited) (continued)
As of October 31, 2018, gross unrealized appreciation and depreciation based on cost of investments (including short positions and derivatives, if any) for U.S. federal income tax purposes were as follows:
iShares ETF | Tax Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation (Depreciation) | ||||||||||||
Cohen & Steers REIT | $ | 2,048,753,163 | $ | 120,080,221 | $ | (117,774,694 | ) | $ | 2,305,527 | |||||||
Core U.S. REIT | 826,848,725 | 18,494,291 | (36,139,463 | ) | (17,645,172) | |||||||||||
Europe Developed Real Estate | 38,808,236 | 3,716,796 | (7,682,683 | ) | (3,965,887) | |||||||||||
Global REIT | 1,384,150,005 | 32,330,615 | (84,735,717 | ) | (52,405,102) | |||||||||||
International Developed Real Estate | 508,430,946 | 32,150,848 | (89,984,245 | ) | (57,833,397) |
9. 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.
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.
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.
Concentration Risk: 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 issuers located in a single country or a limited number of countries, it assumes the risk that economic, regulatory, political and social conditions in that country or those countries may have a significant impact on the fund and could affect the income from, or the value or liquidity of, the fund’s portfolio.
When a fund concentrates its investments in securities within a single or limited number of market sectors, it assumes the risk that economic, regulatory, political and social conditions affecting such sectors may have a significant impact on the fund and could affect the income from, or the value or liquidity of, the fund’s portfolio.
10. 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.
N O T E S T O F I N A N C I A L S T A T E M E N T S | 45 |
Notes to Financial Statements (unaudited) (continued)
Transactions in capital shares were as follows:
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Six Months Ended 10/31/18 | Year Ended 04/30/18 | |||||||||||||||||||
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iShares ETF | Shares | Amount | Shares | Amount | ||||||||||||||||
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Cohen & Steers REIT | ||||||||||||||||||||
Shares sold | 1,150,000 | $ | 114,727,607 | 3,550,000 | $ | 352,423,262 | ||||||||||||||
Shares redeemed | (8,350,000 | ) | (824,436,100 | ) | (9,700,000 | ) | (952,026,361 | ) | ||||||||||||
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Net decrease | (7,200,000 | ) | $ | (709,708,493 | ) | (6,150,000 | ) | $ | (599,603,099 | ) | ||||||||||
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Core U.S. REIT | ||||||||||||||||||||
Shares sold | 7,550,000 | $ | 371,315,366 | 9,450,000 | $ | 450,928,397 | ||||||||||||||
Shares redeemed | (3,300,000 | ) | (157,079,407 | ) | (750,000 | ) | (35,626,684 | ) | ||||||||||||
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Net increase | 4,250,000 | $ | 214,235,959 | 8,700,000 | $ | 415,301,713 | ||||||||||||||
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Europe Developed Real Estate | ||||||||||||||||||||
Shares sold | — | $ | — | 50,000 | $ | 2,033,658 | ||||||||||||||
Shares redeemed | (100,000 | ) | (3,671,669 | ) | (150,000 | ) | (5,636,737 | ) | ||||||||||||
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Net decrease | (100,000 | ) | $ | (3,671,669 | ) | (100,000 | ) | $ | (3,603,079 | ) | ||||||||||
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Global REIT | ||||||||||||||||||||
Shares sold | 14,600,000 | $ | 372,066,812 | 26,750,000 | $ | 689,487,351 | ||||||||||||||
Shares redeemed | (300,000 | ) | (7,442,464 | ) | (3,750,000 | ) | (96,675,284 | ) | ||||||||||||
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Net increase | 14,300,000 | $ | 364,624,348 | 23,000,000 | $ | 592,812,067 | ||||||||||||||
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International Developed Real Estate | ||||||||||||||||||||
Shares sold | 600,000 | $ | 16,436,012 | 3,200,000 | $ | 93,956,457 | ||||||||||||||
Shares redeemed | (1,600,000 | ) | (46,530,887 | ) | (4,100,000 | ) | (121,102,546 | ) | ||||||||||||
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Net decrease | (1,000,000 | ) | $ | (30,094,875 | ) | (900,000 | ) | $ | (27,146,089 | ) | ||||||||||
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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 shares sold in the table above.
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 transactions are reflected as a receivable or a payable in the statement of assets and liabilities.
11. 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 impact 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.
12. LEGAL PROCEEDINGS
On June 16, 2016, investors 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 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”) in California State Court. 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
46 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (unaudited) (continued)
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.
13. REGULATION S-X AMENDMENTS
On August 17, 2018, the SEC adopted amendments to certain disclosure requirements in Securities Act Release No. 33-10532, Disclosure Update and Simplification. The Funds have adopted the amendments pertinent to Regulation S-X in this shareholder report. The amendments impacted certain disclosure presentation on the statement of assets and liabilities, statement of changes in net assets and notes to the financial statements.
Prior year distribution information and undistributed (distributions in excess of) net investment income in the statement of changes in net assets has been modified to conform to the current year presentation in accordance with the Regulation S-X changes.
Distributions for the year ended April 30, 2018 were classified as follows:
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iShares ETF | Net Investment Income | Net Realized Gains | ||||||
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Cohen & Steers REIT | $ | 94,799,127 | $ | — | ||||
Core U.S. REIT | 9,746,374 | — | ||||||
Europe Developed Real Estate | 1,532,567 | — | ||||||
Global REIT | 24,671,382 | 556,883 | ||||||
International Developed Real Estate | 29,082,296 | — | ||||||
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Undistributed (distributions in excess of) net investment income as of April 30, 2018 are as follows:
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iShares ETF | Undistributed (distributions in excess of) net investment income | |||
| ||||
Cohen & Steers REIT | $ | — | ||
Core U.S. REIT | — | |||
Europe Developed Real Estate | 21,428 | |||
Global REIT | (3,275,920 | ) | ||
International Developed Real Estate | (1,977,236 | ) | ||
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14. 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 additional disclosure in the financial statements.
N O T E S T O F I N A N C I A L S T A T E M E N T S | 47 |
Board Review and Approval of Investment Advisory Contract
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. At a meeting on May 11, 2018, a committee composed of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management and reviewed and discussed information provided in response to initial requests of the 15(c) Committee and/or their independent counsel, and requested certain additional information, which management agreed to provide. 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 24, 2018, management presented additional information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its initial meeting. 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 12-14, 2018, 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 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 various factors, including: (i) the expenses and performance of the Fund; (ii) the nature, extent and quality of the services provided by BFA; (iii) the costs of services provided to the Fund and profits realized by BFA and its affiliates; (iv) economies of scale; (v) the fees and services provided for other comparable funds/accounts managed by BFA and its affiliates; and (vi) other benefits to BFA and/or its affiliates. The material factors, no one of which was controlling, and conclusions that formed the basis for the Board, including the Independent Trustees, to approve the Advisory Contract are discussed below.
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, fees and expenses of another fund in which the Fund invests (if applicable), and waivers/reimbursements (if applicable) of the Fund in comparison with the same information for other ETFs (including, where applicable, funds sponsored by an “at cost” service provider), 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, 2017, to that of relevant comparison fund(s) 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 additional detailed information as requested by the Board, 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 expense level 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, portfolio management, product design and quality, compliance and risk management, global public policy 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 support 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 relevant officers and other employees of BFA (and its affiliates) 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 12-14, 2018 meeting and throughout the year, and matters related to BFA’s portfolio compliance policies and procedures.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided 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 its Affiliates: The Board reviewed information about the profitability to BlackRock in managing the Fund, 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
48 | 2 0 1 8 I S H A R E S S E M I - A N N U A L R E P O R T T O S H A R E H O L D E R S |
Board Review and Approval of Investment Advisory Contract (continued)
from the Fund’s operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, noting that the 15(c) Committee and the Board had focused on the methodology and profitability presentation during their meetings. The Board further noted that it considered the supplemental information the 15(c) Committee requested, which BlackRock provided, regarding the methodology. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC, a BlackRock 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 and other information 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 and the Board during their meetings and addressed by management. The 15(c) Committee and the Board 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 showed 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 15(c) Committee and the Board reviewed information provided by BFA regarding the sharing of scale benefits with the iShares funds through various means, including, as applicable, through relatively low fee rates established at inception, breakpoints, 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 noted that the Advisory Contract for the Fund already provided for breakpoints in the Fund’s investment advisory fee rate, and that BFA and the Board had considered during the June 12-14, 2018 meeting whether to add additional breakpoints and, if so, at what level(s), 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 of the sharing of scale benefits, as well as the other factors considered at the meeting, the Board concluded that the information concerning the sharing of scale benefits supported the Board’s approval of 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 (collectively, 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 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, particularly those that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged management’s assertion that, for certain iShares funds, and for client segmentation purposes, BlackRock has launched an iShares fund that may provide a similar investment exposure at a lower investment advisory fee rate. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund’s 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 (or its 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 (including associated commissions) 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 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 a review of the factors described above, as well as such other factors as deemed appropriate by the Board, the Board, including all of the Independent Trustees, 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, 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
B O A R D R E V I E W A N D A P P R O V A L O F I N V E S T M E N T A D V I S O R Y C O N T R A C T | 49 |
Board Review and Approval of Investment Advisory Contract (continued)
Independent Trustees, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. At a meeting on May 11, 2018, a committee composed of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management and reviewed and discussed information provided in response to initial requests of the 15(c) Committee and/or their independent counsel, and requested certain additional information, which management agreed to provide. 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 24, 2018, management presented additional information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its initial meeting. 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 12-14, 2018, 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 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 various factors, including: (i) the expenses and performance of each Fund; (ii) the nature, extent and quality of the services provided by BFA; (iii) the costs of services provided to each Fund and profits realized by BFA and its affiliates; (iv) economies of scale; (v) the fees and services provided for other comparable funds/accounts managed by BFA and its affiliates; and (vi) other benefits to BFA and/or its affiliates. The material factors, no one of which was controlling, and conclusions that formed the basis for the Board, including the Independent Trustees, to approve the Advisory Contract are discussed below.
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, fees and expenses of another fund in which each Fund invests (if applicable), and waivers/reimbursements (if applicable) of each Fund in comparison with the same information for other ETFs (including, where applicable, funds sponsored by an “at cost” service provider), 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, 2017, to that of relevant comparison fund(s) 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 additional detailed information as requested by the Board, 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 expense level 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, portfolio management, product design and quality, compliance and risk management, global public policy 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 support 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 relevant officers and other employees of BFA (and its affiliates) 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 12-14, 2018 meeting and throughout the year, and matters related to BFA’s portfolio compliance policies and procedures.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided 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 Fund and Profits Realized by BFA and its Affiliates: The Board reviewed information about the profitability to BlackRock in managing the Funds, 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, noting that the 15(c) Committee and the Board had focused on the methodology and profitability presentation during their meetings. The Board further noted that it considered the supplemental information the 15(c) Committee requested, which BlackRock provided, regarding the methodology. The Board discussed the sources of direct and ancillary revenue with management,
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Board Review and Approval of Investment Advisory Contract (continued)
including the revenues to BTC, a BlackRock affiliate, from securities lending by the Funds. The Board also discussed BFA’s profit margin as reflected in the Funds’ 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 Funds and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors and other information 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 and the Board during their meetings and addressed by management. The 15(c) Committee and the Board 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 showed 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 15(c) Committee and the Board reviewed information provided by BFA regarding the sharing of scale benefits with the iShares funds through various means, including, as applicable, through relatively low fee rates established at inception, breakpoints, 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 noted that the Advisory Contract for the Funds did not provide for breakpoints in the Funds’ investment advisory fee rates as the assets of the Funds increase. However, the Board noted that a breakpoint structure for the Funds may be appropriate should material economies of scale exist in the future that are not otherwise shared, 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 of the sharing of scale benefits, as well as the other factors considered at the meeting, the Board concluded that the information concerning the sharing of scale benefits supported the Board’s approval of 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 (collectively, 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 indexes as the Funds. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts 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, particularly those that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged management’s assertion that, for certain iShares funds, and for client segmentation purposes, BlackRock has launched an iShares fund that may provide a similar investment exposure at a lower investment advisory fee rate. The Board also considered the “all-inclusive” nature of the Funds’ advisory fee structure, and the Funds’ expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rates under the Advisory Contract for the Funds 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 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 (or its 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 (including associated commissions) 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 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 a review of the factors described above, as well as such other factors as deemed appropriate by the Board, the Board, including all of the Independent Trustees, determined that the Funds’ investment advisory fee rates under the Advisory Contract do not constitute fees that are 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 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. At a meeting on May 11, 2018, a committee composed of all of the Independent Trustees (the “15(c) Committee”), with independent counsel, met with management and reviewed and discussed information provided in response to initial requests of the 15(c) Committee and/or their independent counsel, and requested certain additional information, which management agreed to provide. 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
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Board Review and Approval of Investment Advisory Contract (continued)
information, which management agreed to provide. At a meeting held on May 24, 2018, management presented additional information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its initial meeting. 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 12-14, 2018, 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 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 various factors, including: (i) the expenses and performance of the Fund; (ii) the nature, extent and quality of the services provided by BFA; (iii) the costs of services provided to the Fund and profits realized by BFA and its affiliates; (iv) economies of scale; (v) the fees and services provided for other comparable funds/accounts managed by BFA and its affiliates; and (vi) other benefits to BFA and/or its affiliates. The material factors, no one of which was controlling, and conclusions that formed the basis for the Board, including the Independent Trustees, to approve the Advisory Contract are discussed below.
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, fees and expenses of another fund in which the Fund invests (if applicable), and waivers/reimbursements (if applicable) of the Fund in comparison with the same information for other ETFs (including, where applicable, funds sponsored by an “at cost” service provider), 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, 2017, to that of relevant comparison fund(s) 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 additional detailed information as requested by the Board, 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 expense level 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, portfolio management, product design and quality, compliance and risk management, global public policy 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 support 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 relevant officers and other employees of BFA (and its affiliates) 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 12-14, 2018 meeting and throughout the year, and matters related to BFA’s portfolio compliance policies and procedures.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided 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 its Affiliates: The Board reviewed information about the profitability to BlackRock in managing the Fund, 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, noting that the 15(c) Committee and the Board had focused on the methodology and profitability presentation during their meetings. The Board further noted that it considered the supplemental information the 15(c) Committee requested, which BlackRock provided, regarding the methodology. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC, a BlackRock 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 and other information considered.
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Board Review and Approval of Investment Advisory Contract (continued)
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 and the Board during their meetings and addressed by management. The 15(c) Committee and the Board 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 showed 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 15(c) Committee and the Board reviewed information provided by BFA regarding the sharing of scale benefits with the iShares funds through various means, including, as applicable, through relatively low fee rates established at inception, breakpoints, 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 noted that the Advisory Contract for the Fund did not provide for breakpoints in the Fund’s investment advisory fee rate as the assets of the Fund increase. However, the Board noted that a breakpoint structure for the Fund may be appropriate should material economies of scale exist in the future that are not otherwise shared, 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 of the sharing of scale benefits, as well as the other factors considered at the meeting, the Board concluded that the information concerning the sharing of scale benefits supported the Board’s approval of 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 (collectively, 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 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, particularly those that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged management’s assertion that, for certain iShares funds, and for client segmentation purposes, BlackRock has launched an iShares fund that may provide a similar investment exposure at a lower investment advisory fee rate. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund’s 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 (or its 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 (including associated commissions) 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 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 a review of the factors described above, as well as such other factors as deemed appropriate by the Board, the Board, including all of the Independent Trustees, 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) |
Section 19(a) Notices
The amounts and sources of distributions reported in this notice are for financial reporting purposes and are not being provided for tax reporting purposes. The actual amounts and character of the distributions for tax reporting purposes will be reported to shareholders on Form 1099-DIV which is sent to shareholders shortly after calendar year-end.
Total Cumulative Distributions | % Breakdown of the Total Cumulative | |||||||||||||||||||||||||||||||||||
for the Fiscal Year-to-Date | Distributions for the Fiscal Year-to-Date | |||||||||||||||||||||||||||||||||||
Net | Net | |||||||||||||||||||||||||||||||||||
Investment | Net Realized | Return of | Total Per | Investment | Net Realized | Return of | Total Per | |||||||||||||||||||||||||||||
iShares ETF | Income | Capital Gains | Capital | Share | Income | Capital Gains | Capital | Share | ||||||||||||||||||||||||||||
Cohen & Steers REIT(a) | $ | 1.588022 | $ | — | $ | 0.024684 | $ | 1.612706 | 98 | % | — | % | 2 | % | 100 | % | ||||||||||||||||||||
Core U.S.REIT(a) | 1.694468 | — | 0.074315 | 1.768783 | 96 | — | 4 | 100 |
(a) | The Fund estimates that it has distributed more than the amount of earned income and net realized gains; therefore, a portion of the distribution may be a return of capital. A return of capital may occur, for example, when some or all of the shareholder’s investment in the Fund is returned to the shareholder. A return of capital does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income”. When distributions exceed total return performance, the difference will incrementally reduce the Fund’s net asset value per share. |
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General Information |
Electronic Delivery
Shareholders can sign up for email notifications announcing that the shareholder report or prospectus has been posted on the iShares website at www.iShares.com. Once you have enrolled, you will no longer receive prospectuses and shareholder reports in the mail.
To enroll in electronic delivery:
• | Go to www.icsdelivery.com. |
• | If your brokerage firm is not listed, electronic delivery may not be available. Please contact your broker-dealer or financial advisor. |
Householding
Householding is an option available to certain fund investors. Householding is a method of delivery, based on the preference of the individual investor, in which a single copy of certain shareholder documents can be delivered to investors who share the same address, even if their accounts are registered under different names. Please contact your broker-dealer if you are interested in enrolling in householding and receiving a single copy of prospectuses and other shareholder documents, or if you are currently enrolled in householding and wish to change your householding status.
Availability of Quarterly Schedule of Investments
The iShares Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The iShares Funds’ Forms N-Q are available on the SEC’s website at www.sec.gov. The iShares Funds also disclose their complete schedule of portfolio holdings on a daily basis on the iShares website at www.iShares.com.
Availability of Proxy Voting Policies and Proxy Voting Records
A description of the policies and procedures that the iShares Funds use to determine how to vote proxies relating to portfolio securities and information about how the iShares Funds voted proxies relating to portfolio securities during the most recent twelve-month period ending June 30 is available without charge, upon request (1) by calling toll-free 1-800-474-2737; (2) on the iShares website at www.iShares.com; and (3) on the SEC website at www.sec.gov.
G E N E R A L I N F O R M A T I O N | 55 |
| 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. or FTSE International Limited, 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.
©2018 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.
| |||||||
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. |
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.
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 28, 2018
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 28, 2018
By: | /s/ Jack Gee | |
Jack Gee, Treasurer and Chief Financial Officer (Principal Financial Officer) |
Date: December 28, 2018