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 BlackRock Fund Advisors 400 Howard Street, San Francisco, CA 94105
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(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, 2024
Date of reporting period: October 31, 2023
Item 1. Reports to Stockholders.
(a) The Report to Shareholders is attached herewith.
OCTOBER 31, 2023 |
2023 Semi-Annual Report (Unaudited) |
iShares Trust
· | iShares Global Clean Energy ETF | ICLN | NASDAQ |
Dear Shareholder,
The combination of continued economic growth and cooling inflation provided a supportive backdrop for investors during the 12-month reporting period ended October 31, 2023. Significantly tighter monetary policy helped to rein in inflation, as the annual increase in the Consumer Price Index declined to its long-term average of approximately 3% in October 2023. Meanwhile, real economic growth proved more resilient than many investors anticipated. A moderating labor market also helped ease inflationary pressure, although wages continued to grow and unemployment rates touched the lowest levels in decades before rising slightly. This robust labor market powered further growth in consumer spending, backstopping the economy. On October 7, 2023, Hamas launched a horrific attack on Israel. The ensuing war will have a significant humanitarian impact and could lead to heightened economic and market volatility. We see geopolitics as a structural market risk going forward. See our geopolitical risk dashboard at blackrock.com for more details.
Equity returns were solid during the period, as the durability of consumer spending mitigated investors’ concerns about the economy’s trajectory. The U.S. economy continued to show strength, and growth further accelerated in the third quarter of 2023. However, equity returns were uneven, as the performance of a few notable technology companies supported gains among large-capitalization U.S. stocks, while small-capitalization U.S. stocks declined overall. Meanwhile, international developed market equities advanced, and emerging market equities posted solid gains.
The 10-year U.S. Treasury yield rose during the reporting period, driving its price down, as investors reacted to elevated inflation and attempted to anticipate future interest rate changes. The corporate bond market benefited from improving economic sentiment, although high-yield corporate bond prices fared significantly better than investment-grade bonds as demand from yield-seeking investors remained strong.
The U.S. Federal Reserve (the “Fed”), attempting to manage persistent inflation, raised interest rates six times during the 12-month period, but slowed and then paused its tightening later in the period. The Fed also wound down its bond-buying programs and incrementally reduced its balance sheet by not replacing securities that reach maturity.
Supply constraints appear to have become an embedded feature of the new macroeconomic environment, making it difficult for developed economies to increase production without sparking higher inflation. Geopolitical fragmentation and an aging population risk further exacerbating these constraints, keeping the labor market tight and wage growth high. Although the Fed has decelerated the pace of interest rate hikes and recently opted for several pauses, we believe that the new economic regime means that the Fed will need to maintain high rates for an extended period to keep inflation under control. Furthermore, ongoing structural changes may mean that the Fed will be hesitant to cut interest rates in the event of faltering economic activity lest inflation accelerate again.
While we favor an overweight position in developed market equities in the long term, we prefer an underweight stance in the near term. Expectations for corporate earnings remain elevated, which seems inconsistent with macroeconomic constraints. Nevertheless, we are overweight on Japanese stocks in the near term as shareholder-friendly policies generate increased investor interest. We also believe that stocks with an AI tilt should benefit from an investment cycle that is set to support revenues and margins. In credit, there are selective opportunities in the near term despite tightening credit and financial conditions. For fixed income investing with a six- to twelve-month horizon, we see the most attractive investments in short-term U.S. Treasuries, U.S. inflation-linked bonds, euro area government bonds and gilts, U.S. mortgage-backed securities, and hard-currency emerging market bonds.
Overall, our view is that investors need to think globally, position themselves to be prepared for a decarbonizing economy, and be nimble as market conditions change. We encourage you to talk with your financial advisor and visit iShares.com for further insight about investing in today’s markets.
Rob Kapito
President, BlackRock, Inc.
Rob Kapito
President, BlackRock, Inc.
Total Returns as of October 31, 2023
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6-Month | 12-Month | |||||||
U.S. large cap equities | 1.39% | 10.14% | ||||||
U.S. small cap equities | (5.29) | (8.56) | ||||||
International equities | (7.88) | 14.40 | ||||||
Emerging market equities | (4.78) | 10.80 | ||||||
3-month Treasury bills | 2.63 | 4.77 | ||||||
U.S. Treasury securities | (9.70) | (3.25) | ||||||
U.S. investment grade bonds | (6.13) | 0.36 | ||||||
Tax-exempt municipal bonds | (4.65) | 2.64 | ||||||
U.S. high yield bonds | 0.02 | 6.23 | ||||||
Past performance is not an indication of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.
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2 | THIS PAGE IS NOT PART OF YOUR FUND REPORT |
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Financial Statements | ||||
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Fund Summary as of October 31, 2023 | iShares® Global Clean Energy ETF |
Investment Objective
The iShares Global Clean Energy ETF (the “Fund”) seeks to track the investment results of an index composed of global equities in the clean energy sector, as represented by the S&P Global Clean Energy 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 | |||||||||||||||||||||||||||
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6-Month Total Returns | 1 Year | 5 Years | 10 Years | 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||
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Fund NAV | (30.01 | )% | (30.37 | )% | 11.26 | % | 4.18 | % | (30.37 | )% | 70.46 | % | 50.64% | |||||||||||||||
Fund Market | (30.00 | ) | (30.54 | ) | 11.26 | 4.13 | (30.54 | ) | 70.52 | 49.94 | ||||||||||||||||||
Index | (30.11 | ) | (30.54 | ) | 11.44 | 3.82 | (30.54 | ) | 71.90 | 45.48 | ||||||||||||||||||
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Past performance is not an indication 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” for more information.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||||||
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| Beginning Account Value (05/01/23) | | | Ending Account Value (10/31/23) | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/23) | | | Ending Account Value (10/31/23) | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio | | ||||||||||
$ | 1,000.00 | $ | 699.90 | $ | 1.75 | $ | 1,000.00 | $ | 1,023.10 | $ | 2.09 | 0.41 | % |
(a) | Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period shown). Other fees, such as brokerage commissions and other fees to financial intermediaries, may be paid which are not reflected in the tables and examples above. See “Disclosure of Expenses” for more information. |
Portfolio Information
SECTOR ALLOCATION
Industry | | Percent of Total Investments | (a) | |
Renewable Electricity | 24.7 | % | ||
Electric Utilities | 18.7 | |||
Semiconductors | 15.0 | |||
Heavy Electrical Equipment | 12.5 | |||
Electrical Components & Equipment | 11.7 | |||
Semiconductor Materials & Equipment | 10.9 | |||
Commodity Chemicals | 1.9 | |||
Oil & Gas Refining & Marketing | 1.8 | |||
Independent Power Producers & Energy Traders | 1.2 | |||
Other (each representing less than 1%) | 1.6 |
GEOGRAPHIC ALLOCATION
Country/Geographic Region | | Percent of Total Investments | (a) | |
United States | 36.2 | % | ||
China | 15.7 | |||
Denmark | 9.6 | |||
Brazil | 5.7 | |||
Canada | 4.1 | |||
India | 3.7 | |||
Portugal | 3.5 | |||
Spain | 3.1 | |||
South Korea | 3.0 | |||
Japan | 2.9 | |||
Germany | 2.4 | |||
Switzerland | 1.8 | |||
Taiwan | 1.6 | |||
Thailand | 1.2 | |||
Italy | 1.1 | |||
Other (each representing less than 1%) | 4.4 |
(a) | Excludes money market funds. |
4 | 2 0 2 3 I SHARES SEMI - ANNUAL REPORT TO SHAREHOLDERS |
Past performance is not an indication of future results. Financial markets have experienced extreme volatility and trading in many instruments has been disrupted. These circumstances may continue for an extended period of time and may continue to affect adversely the value and liquidity of the Fund’s investments. As a result, current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at 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. Beginning August 10, 2020, the price used to calculate market return (“Market Price”) is the closing price. Prior to August 10, 2020, Market Price was determined 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.
Shareholders of the Fund may incur the following charges: (1) transactional expenses, including brokerage commissions on purchases and sales of fund shares and (2) ongoing expenses, including management fees and other fund expenses. The expense example shown (which is based on a hypothetical investment of $1,000 invested at the beginning of the period and held through the end of the period) is intended to assist shareholders both in calculating expenses based on an investment in the Fund and in comparing these expenses with similar costs of investing in other funds.
The expense example provides information about actual account values and actual expenses. Annualized expense ratios reflect contractual and voluntary fee waivers, if any. In order to estimate the expenses a shareholder paid during the period covered by this report, shareholders can divide their account value by $1,000 and then multiply the result by the number under the heading entitled “Expenses Paid During the Period.”
The expense example also provides information about hypothetical account values and hypothetical expenses based on a fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses. In order to assist shareholders in comparing the ongoing expenses of investing in the Fund and other funds, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
The expenses shown in the expense example are intended to highlight shareholders’ ongoing costs only and do not reflect any transactional expenses, such as brokerage commissions and other fees paid on purchases and sales of fund shares. Therefore, the hypothetical example is useful in comparing ongoing expenses only and will not help shareholders determine the relative total expenses of owning different funds. If these transactional expenses were included, shareholder expenses would have been higher.
ABOUT FUND PERFORMANCE / DISCLOSURE OF EXPENSES | 5 |
Schedule of Investments (unaudited) October 31, 2023 | iShares® Global Clean Energy ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks | ||||||||
Austria — 0.9% | ||||||||
Verbund AG | 273,543 | $ | 23,767,258 | |||||
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Brazil — 3.7% | ||||||||
AES Brasil Energia SA(a) | 4,696,123 | 9,379,671 | ||||||
Auren Energia SA | 6,001,340 | 15,974,212 | ||||||
CPFL Energia SA | 3,688,039 | 24,461,353 | ||||||
Energisa SA | 4,995,341 | 46,180,958 | ||||||
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95,996,194 | ||||||||
Canada — 4.1% | ||||||||
Ballard Power Systems Inc.(a)(b) | 2,149,865 | 7,177,844 | ||||||
Boralex Inc., Class A | 894,586 | 16,649,911 | ||||||
Brookfield Renewable Corp., Class A | 679,137 | 15,451,071 | ||||||
Canadian Solar Inc.(a)(b) | 1,021,775 | 20,415,064 | ||||||
Innergex Renewable Energy Inc. | 1,419,810 | 8,743,593 | ||||||
Northland Power Inc. | 2,647,365 | 37,207,243 | ||||||
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105,644,726 | ||||||||
Chile — 0.4% | ||||||||
Enel Americas SA(a) | 90,826,898 | 9,338,021 | ||||||
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China — 15.6% | ||||||||
CECEP Solar Energy Co. Ltd., Class A | 6,258,300 | 4,894,078 | ||||||
CECEP Wind Power Corp, Class A | 10,361,220 | 4,475,725 | ||||||
China Conch Venture Holdings Ltd. | 16,325,000 | 13,519,927 | ||||||
China Datang Corp. Renewable Power Co. Ltd., Class H | 46,550,000 | 10,531,962 | ||||||
China Green Electricity Investment of Tianjin Co. Ltd. | 2,268,700 | 3,390,822 | ||||||
China Three Gorges Renewables Group Co. Ltd., Class A | 45,982,596 | 30,073,967 | ||||||
China Yangtze Power Co. Ltd., Class A | 39,304,630 | 120,849,634 | ||||||
Chongqing Three Gorges Water Conservancy & Electric Power Co. Ltd. | 3,062,300 | 3,343,365 | ||||||
Dajin Heavy Industry Co. Ltd. | 1,021,400 | 3,856,019 | ||||||
Flat Glass Group Co. Ltd., Class H | 7,919,000 | 14,221,563 | ||||||
GCL System Integration Technology Co. Ltd., Class A(a) | 9,494,100 | 3,570,809 | ||||||
Ginlong Technologies Co. Ltd., Class A | 642,950 | 5,879,054 | ||||||
Guangxi Guiguan Electric Power Co. Ltd. | 6,397,200 | 4,777,729 | ||||||
Hainan Drinda New Energy Technology Co. Ltd. | 368,300 | 4,381,200 | ||||||
Hoymiles Power Electronics Inc., NVS | 137,877 | 4,208,306 | ||||||
Huaneng Lancang River Hydropower Inc. | 10,802,857 | 11,301,555 | ||||||
JA Solar Technology Co. Ltd., Class A | 5,294,452 | 16,165,224 | ||||||
Jiangsu Akcome Science & Technology Co. Ltd.(a) | 7,196,100 | 2,176,162 | ||||||
Jiangsu GoodWe Power Supply Technology Co. Ltd., NVS | 282,359 | 4,494,934 | ||||||
Jiangsu Haili Wind Power Equipment Technology Co. Ltd. | 351,900 | 3,109,732 | ||||||
Jinko Solar Co. Ltd. | 10,147,684 | 13,121,248 | ||||||
LONGi Green Energy Technology Co. Ltd., Class A | 9,132,440 | 30,043,384 | ||||||
Ming Yang Smart Energy Group Ltd., Class A | 3,637,300 | 6,930,002 | ||||||
NYOCOR Co. Ltd. | 3,242,700 | 2,994,650 | ||||||
Risen Energy Co. Ltd. | 1,825,300 | 4,417,479 | ||||||
Shanghai Aiko Solar Energy Co. Ltd. | 2,964,200 | 7,916,276 | ||||||
Sichuan Chuantou Energy Co. Ltd., Class A | 7,137,100 | 14,298,695 | ||||||
Sungrow Power Supply Co. Ltd., Class A | 1,782,100 | 20,468,340 | ||||||
TCL Zhonghuan Renewable Energy Technology Co. Ltd., Class A | 6,472,000 | 16,285,355 | ||||||
Titan Wind Energy Suzhou Co. Ltd., Class A(a) | 2,887,600 | 5,249,059 | ||||||
Trina Solar Co. Ltd. | 3,474,473 | 14,140,197 | ||||||
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405,086,452 |
Security | Shares | Value | ||||||
Denmark — 9.6% | ||||||||
Orsted A/S(c) | 2,045,781 | $ | 98,850,326 | |||||
Vestas Wind Systems A/S(a) | 6,924,809 | 150,093,611 | ||||||
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248,943,937 | ||||||||
France — 0.4% | ||||||||
Neoen SA(b)(c) | 374,563 | 9,891,050 | ||||||
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Germany — 2.4% | ||||||||
Encavis AG(a)(b) | 937,876 | 12,247,353 | ||||||
Nordex SE(a)(b) | 1,675,536 | 17,676,073 | ||||||
SMA Solar Technology AG(a)(b) | 340,153 | 20,898,905 | ||||||
VERBIO Vereinigte BioEnergie AG(b) | 312,836 | 10,586,682 | ||||||
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61,409,013 | ||||||||
Greece — 0.3% | ||||||||
Terna Energy SA | 614,472 | 9,220,658 | ||||||
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India — 3.7% | ||||||||
MTAR Technologies Ltd.(a) | 380,683 | 11,155,563 | ||||||
NHPC Ltd., NVS | 35,261,770 | 21,264,163 | ||||||
SJVN Ltd. | 10,365,281 | 8,858,083 | ||||||
Suzlon Energy Ltd.(a) | 151,111,711 | 55,537,927 | ||||||
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96,815,736 | ||||||||
Israel — 0.4% | ||||||||
Enlight Renewable Energy Ltd.(a)(b) | 829,997 | 11,183,061 | ||||||
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Italy — 1.0% | ||||||||
ERG SpA | 1,116,830 | 27,441,412 | ||||||
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Japan — 2.9% | ||||||||
Abalance Corp.(b) | 217,200 | 4,628,441 | ||||||
Chubu Electric Power Co. Inc. | 5,267,700 | 63,655,655 | ||||||
RENOVA Inc.(a)(b) | 873,500 | 6,283,744 | ||||||
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74,567,840 | ||||||||
New Zealand — 0.5% | ||||||||
Contact Energy Ltd. | 1,375,255 | 6,241,530 | ||||||
Meridian Energy Ltd. | 2,820,981 | 7,944,897 | ||||||
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14,186,427 | ||||||||
Norway — 0.5% | ||||||||
NEL ASA(a)(b) | 18,316,662 | 12,044,314 | ||||||
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Portugal — 3.5% | ||||||||
EDP - Energias de Portugal SA | 20,614,180 | 86,631,032 | ||||||
Greenvolt Energias Renovaveis SA(a)(b) | 775,479 | 5,181,709 | ||||||
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91,812,741 | ||||||||
Singapore — 0.2% | ||||||||
Maxeon Solar Technologies Ltd.(a) | 652,945 | 4,074,377 | ||||||
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South Korea — 3.0% | ||||||||
CS Wind Corp.(b) | 556,761 | 18,892,052 | ||||||
Doosan Fuel Cell Co. Ltd.(a)(b) | 812,280 | 9,915,548 | ||||||
Hanwha Solutions Corp.(a)(b) | 2,278,088 | 48,523,815 | ||||||
HD Hyundai Energy Solutions Co. Ltd. | 26,831 | 435,320 | ||||||
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77,766,735 | ||||||||
Spain — 3.1% | ||||||||
Corp. ACCIONA Energias Renovables SA(b) | 1,053,523 | 28,514,870 | ||||||
EDP Renovaveis SA | 2,183,020 | 35,118,120 | ||||||
Solaria Energia y Medio Ambiente SA(a) | 1,086,233 | 16,294,126 | ||||||
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79,927,116 | ||||||||
Switzerland — 1.8% | ||||||||
BKW AG | 175,618 | 29,522,781 | ||||||
Meyer Burger Technology AG(a)(b) | 64,764,624 | 17,351,138 | ||||||
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46,873,919 |
6 | 2 0 2 3 I SHARES SEMI - ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (unaudited) (continued) October 31, 2023 | iShares® Global Clean Energy ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Taiwan — 1.5% | ||||||||
Century Iron & Steel Industrial Co. Ltd. | 3,290,000 | $ | 15,314,813 | |||||
Motech Industries Inc. | 7,850,000 | 6,623,191 | ||||||
TSEC Corp. | 10,085,235 | 8,867,605 | ||||||
United Renewable Energy Co. Ltd. | 20,903,000 | 9,629,169 | ||||||
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40,434,778 | ||||||||
Thailand — 1.2% | ||||||||
Energy Absolute PCL, NVDR | 27,423,400 | 32,054,251 | ||||||
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Turkey — 0.4% | ||||||||
Biotrend Cevre VE Enerji Yatirimlari AS(a) | 4,501,005 | 2,856,142 | ||||||
Smart Gunes Enerjisi Teknolojileri ArGE Uretim Sanayi ve Ticaret AS, NVS(a) | 3,030,058 | 7,377,402 | ||||||
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10,233,544 | ||||||||
United Kingdom — 0.3% | ||||||||
ReNew Energy Global PLC(a)(b) | 1,681,262 | 9,078,815 | ||||||
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United States — 35.9% | ||||||||
Altus Power Inc., Class A(a)(b) | 1,208,592 | 6,417,624 | ||||||
Array Technologies Inc.(a)(b) | 2,851,523 | 49,416,894 | ||||||
Avangrid Inc. | 1,048,457 | 31,317,411 | ||||||
Bloom Energy Corp., Class A(a)(b) | 4,205,231 | 43,734,402 | ||||||
Clearway Energy Inc., Class C | 1,654,331 | 35,915,526 | ||||||
Enphase Energy Inc.(a)(b) | 1,794,696 | 142,821,908 | ||||||
First Solar Inc.(a)(b) | 1,523,496 | 217,022,005 | ||||||
Green Plains Inc.(a)(b) | 1,049,805 | 30,843,271 | ||||||
NEXTracker Inc., Class A(a) | 983,316 | 34,180,064 | ||||||
Ormat Technologies Inc.(b) | 1,076,932 | 66,274,395 | ||||||
Plug Power Inc.(a)(b) | 10,878,961 | 64,077,080 | ||||||
REX American Resources Corp.(a) | 162,365 | 6,171,494 | ||||||
Shoals Technologies Group Inc., Class A(a)(b) | 3,412,433 | 52,414,971 | ||||||
SolarEdge Technologies Inc.(a)(b) | 1,135,723 | 86,258,162 | ||||||
Sunnova Energy International Inc.(a)(b) | 2,025,833 | 18,495,855 | ||||||
SunPower Corp.(a)(b) | 1,717,281 | 7,332,790 | ||||||
Sunrun Inc.(a)(b) | 4,361,073 | 42,084,354 | ||||||
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934,778,206 | ||||||||
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Total Common Stocks — 97.3% | 2,532,570,581 | |||||||
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Security | Shares | Value | ||||||
Preferred Stocks | ||||||||
Brazil — 2.0% | ||||||||
Cia. Energetica de Minas Gerais, Preference Shares, NVS | 22,071,032 | $ | 51,393,646 | |||||
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Total Preferred Stocks — 2.0% | 51,393,646 | |||||||
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Total Long-Term Investments — 99.3% | 2,583,964,227 | |||||||
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Short-Term Securities | ||||||||
Money Market Funds — 12.7% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 5.54%(d)(e)(f) | 317,617,143 | 317,744,190 | ||||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 5.33%(d)(e) | 12,610,000 | 12,610,000 | ||||||
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Total Short-Term Securities — 12.7% | 330,354,190 | |||||||
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Total Investments — 112.0% | 2,914,318,417 | |||||||
Liabilities in Excess of Other Assets — (12.0)% | (312,905,915 | ) | ||||||
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Net Assets — 100.0% | $ | 2,601,412,502 | ||||||
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(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 the cash collateral from loaned securities. |
Affiliates
Investments in issuers considered to be affiliate(s) of the Fund during the six months ended October 31, 2023 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
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Affiliated Issuer | Value at 04/30/23 | Purchases at Cost | Proceeds from Sale | Net Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Value at 10/31/23 | Shares Held at 10/31/23 | Income | Capital Gain Distributions from Underlying Funds | |||||||||||||||||||||||||||
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BlackRock Cash Funds: Institutional, SL Agency Shares | $ | 709,863,596 | $ | — | $ | (392,180,100 | )(a) | $ | 91,235 | $ | (30,541 | ) | $ | 317,744,190 | 317,617,143 | $ | 1,602,379 | (b) | $ | — | ||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | 14,710,000 | — | (2,100,000 | )(a) | — | — | 12,610,000 | 12,610,000 | 258,360 | — | ||||||||||||||||||||||||||
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$ | 91,235 | $ | (30,541 | ) | $ | 330,354,190 | $ | 1,860,739 | $ | — | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(a) | Represents net amount purchased (sold). |
(b) | All or a portion represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities. |
7 |
Schedule of Investments (unaudited) (continued) October 31, 2023 | iShares® Global Clean Energy ETF |
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
| ||||||||||||||||
Description | Number of Contracts | Expiration Date | Notional Amount (000) | Value/ Unrealized Appreciation (Depreciation) | ||||||||||||
| ||||||||||||||||
Long Contracts | ||||||||||||||||
Euro STOXX 50 Index | 33 | 12/15/23 | $ | 1,425 | $ | 13,902 | ||||||||||
MSCI Emerging Markets Index | 58 | 12/15/23 | 2,665 | (36,649 | ) | |||||||||||
S&P 500 E-Mini Index | 39 | 12/15/23 | 8,214 | (124,338 | ) | |||||||||||
|
| |||||||||||||||
$ | (147,085 | ) | ||||||||||||||
|
|
OTC Total Return Swaps
| ||||||||||||||||||||||||||||
Reference Entity | Payment Frequency | Counterparty(a) | Termination Date | Net Notional | Accrued Unrealized Appreciation (Depreciation) | Net Value of Reference Entity | Gross Notional Amount Net Asset Percentage | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
Equity Securities Long | Monthly | Goldman Sachs Bank USA(b) | 08/19/26 | $ | 3,560,271 | $ | 280,683 | (c) | $ | 3,845,901 | 0.2 | % | ||||||||||||||||
Monthly | HSBC Bank PLC(d) | 02/10/28 | 702,663 | 23,727 | (e) | 738,613 | 0.0 | (f) | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||
$ | 304,410 | $ | 4,584,514 | |||||||||||||||||||||||||
|
|
|
|
(a) | The Fund receives the total return on a portfolio of long positions underlying the total return swap. The Fund pays the total return on a portfolio of short positions underlying the total return swap. In addition, the Fund pays or receives a variable rate of interest, based on a specified benchmark. The benchmark and spread are determined based upon the country and/or currency of the individual underlying positions. |
(c) | Amount includes $(4,947) of net dividends and financing fees. |
(e) | Amount includes $(12,223) of net dividends, payable for referenced securities purchased and financing fees. |
(f) | Rounds to less than 0.1% |
The following are the specified benchmarks (plus or minus a range) used in determining the variable rate of interest:
(b) | (d) | |||
Range: | 65 basis points | 40 basis points | ||
Benchmarks: | USD - 1D Overnight Fed Funds Effective Rate (FEDL01) | USD - 1D Overnight Bank Funding Rate (OBFR01) |
8 | 2 0 2 3 I SHARES SEMI - ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (unaudited) (continued) October 31, 2023 | iShares® Global Clean Energy ETF |
The following table represents the individual long positions and related values of equity securities underlying the total return swap with Goldman Sachs Bank USA as of period end, termination date August 19, 2026.
Shares | Value | % of Basket Value | ||||||||||
Reference Entity — Long | ||||||||||||
Common Stocks | ||||||||||||
United States | ||||||||||||
Green Plains Inc.(a) | 156,414 | $ | 3,845,901 | 100.0 | % | |||||||
|
| |||||||||||
Net Value of Reference Entity — Goldman Sachs Bank USA |
| $ | 3,845,901 | |||||||||
|
|
The following table represents the individual long positions and related values of equity securities underlying the total return swap with HSBC Bank PLC as of period end, termination date February 10, 2028.
Shares | Value | % of Basket Value | ||||||||||
Reference Entity — Long | ||||||||||||
Common Stocks | ||||||||||||
United States | ||||||||||||
Green Plains Inc.(a) | 25,140 | $ | 738,613 | 100.0 | % | |||||||
|
| |||||||||||
Net Value of Reference Entity — HSBC Bank PLC |
| $ | 738,613 | |||||||||
|
|
(a) | Non-income producing security. |
Balances Reported in the Statement of Assets and Liabilities for Total Return Swaps
Description | Swap Premiums Paid | Swap Premiums Received | Unrealized Appreciation | Unrealized Depreciation | ||||||||||||
Total Return Swaps | $ | — | $ | — | $ | 304,410 | $ | — |
Derivative Financial Instruments Categorized by Risk Exposure
As of period end, the fair values of derivative financial instruments located in the Statement of Assets and Liabilities were as follows:
| ||||||||||||||||||||||||||||
Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Currency Exchange Contracts | Interest Rate Contracts | Other Contracts | Total | ||||||||||||||||||||||
| ||||||||||||||||||||||||||||
Assets — Derivative Financial Instruments | ||||||||||||||||||||||||||||
Futures contracts | ||||||||||||||||||||||||||||
Unrealized appreciation on futures contracts(a) | $ | — | $ | — | $ | 13,902 | $ | — | $ | — | $ | — | $ | 13,902 | ||||||||||||||
Swaps — OTC | ||||||||||||||||||||||||||||
Unrealized appreciation on OTC swaps; Swap premiums paid | $ | — | $ | — | $ | 304,410 | $ | — | $ | — | $ | — | $ | 304,410 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
$ | — | $ | — | $ | 318,312 | $ | — | $ | — | $ | — | $ | 318,312 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Liabilities — Derivative Financial Instruments | ||||||||||||||||||||||||||||
Futures contracts | ||||||||||||||||||||||||||||
Unrealized depreciation on futures contracts(a) | $ | — | $ | — | $ | 160,987 | $ | — | $ | — | $ | — | $ | 160,987 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Net cumulative unrealized appreciation (depreciation) on futures contracts are reported in the Schedule of Investments. In the Statement of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss). |
9 |
Schedule of Investments (unaudited) (continued) October 31, 2023 | iShares® Global Clean Energy ETF |
For the period ended October 31, 2023, the effect of derivative financial instruments in the Statement of Operations was as follows:
| ||||||||||||||||||||||||||||
Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Currency Exchange Contracts | Interest Rate Contracts | Other Contracts | Total | ||||||||||||||||||||||
| ||||||||||||||||||||||||||||
Net Realized Gain (Loss) from | ||||||||||||||||||||||||||||
Futures contracts | $ | — | $ | — | $ | 361,208 | $ | — | $ | — | $ | — | $ | 361,208 | ||||||||||||||
Swaps | — | — | (268,595 | ) | — | — | — | (268,595 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
$ | — | $ | — | $ | 92,613 | $ | — | $ | — | $ | — | $ | 92,613 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on | ||||||||||||||||||||||||||||
Futures contracts | $ | — | $ | — | $ | (678,358 | ) | $ | — | $ | — | $ | — | $ | (678,358 | ) | ||||||||||||
Swaps | — | — | (210,776 | ) | — | — | — | (210,776 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
$ | — | $ | — | $ | (889,134 | ) | $ | — | $ | — | $ | — | $ | (889,134 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Quarterly Balances of Outstanding Derivative Financial Instruments
| ||||
Futures contracts: | ||||
Average notional value of contracts — long | $ | 15,031,587 | ||
Total return swaps: | ||||
Average notional value | $ | 4,109,737 | ||
|
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
Derivative Financial Instruments - Offsetting as of Period End
The Fund’s derivative assets and liabilities (by type) were as follows:
Assets | Liabilities | |||||||
Derivative Financial Instruments: | ||||||||
Futures contracts | $ | 13,902 | $ | 160,987 | ||||
Swaps - OTC(a) | 304,410 | — | ||||||
|
|
|
| |||||
Total derivative assets and liabilities in the Statement of Assets and Liabilities | 318,312 | 160,987 | ||||||
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”) | (13,902 | ) | (160,987 | ) | ||||
|
|
|
| |||||
Total derivative assets and liabilities subject to an MNA | 304,410 | — | ||||||
|
|
|
|
(a) | Includes unrealized appreciation (depreciation) on OTC swaps and swap premiums (paid/received) in the Statement of Assets and Liabilities. |
The following table presents the Fund’s derivative assets by counterparty net of amounts available for offset under an MNA and net of the related collateral received by the Fund:
Counterparty | | Derivative Assets Subject to an MNA by Counterparty |
| | Derivatives Available for Offset |
(a) | | Non-Cash Collateral Received |
| | Cash Collateral Received |
| | Net Amount of Derivative Assets(b) |
| |||||||||||||
Goldman Sachs Bank USA | $ | 280,683 | $ | — | $ | — | $ | — | $ | 280,683 | ||||||||||||||||||
HSBC Bank PLC | 23,727 | — | — | — | 23,727 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
$ | 304,410 | $ | — | $ | — | $ | — | $ | 304,410 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(a) | The amount of derivatives available for offset is limited to the amount of derivative assets and/or liabilities that are subject to an MNA. |
(b) | Net amount represents the net amount receivable from the counterparty in the event of default. |
10 | 2 0 2 3 I SHARES SEMI - ANNUAL REPORT TO SHAREHOLDERS |
Schedule of Investments (unaudited) (continued) October 31, 2023 | iShares® Global Clean Energy ETF |
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of financial instruments. For a 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 Fund’s financial instruments categorized in the fair value hierarchy. The breakdown of the Fund’s financial instruments into major categories is disclosed in the Schedule of Investments above.
| ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| ||||||||||||||||
Assets | ||||||||||||||||
Investments | ||||||||||||||||
Long-Term Investments | ||||||||||||||||
Common Stocks | $ | 1,266,171,183 | $ | 1,266,399,398 | $ | — | $ | 2,532,570,581 | ||||||||
Preferred Stocks | 51,393,646 | — | — | 51,393,646 | ||||||||||||
Short-Term Securities | ||||||||||||||||
Money Market Funds | 330,354,190 | — | — | 330,354,190 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 1,647,919,019 | $ | 1,266,399,398 | $ | — | $ | 2,914,318,417 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Derivative Financial Instruments(a) | ||||||||||||||||
Assets | ||||||||||||||||
Equity Contracts | $ | — | $ | 318,312 | $ | — | $ | 318,312 | ||||||||
Liabilities | ||||||||||||||||
Equity Contracts | (160,987 | ) | — | — | (160,987 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | (160,987 | ) | $ | 318,312 | $ | — | 157,325 | |||||||||
|
|
|
|
|
|
|
|
(a) | Derivative financial instruments are swaps and futures contracts. Swaps and futures contracts are valued at the unrealized appreciation (depreciation) on the instrument. |
See notes to financial statements.
11 |
Statement of Assets and Liabilities (unaudited)
October 31, 2023
iShares Global Clean Energy ETF | ||||
| ||||
ASSETS | ||||
Investments, at value — unaffiliated(a)(b) | $ | 2,583,964,227 | ||
Investments, at value — affiliated(c) | 330,354,190 | |||
Cash pledged for futures contracts | 520,000 | |||
Foreign currency collateral pledged for futures contracts(d) | 101,577 | |||
Receivables: | ||||
Investments sold | 5,943,030 | |||
Securities lending income — affiliated | 240,670 | |||
Swaps | 86,677 | |||
Dividends — unaffiliated | 7,833,364 | |||
Dividends — affiliated | 40,710 | |||
From custodian | 8,698,581 | |||
Tax reclaims | 2,146,365 | |||
Variation margin on futures contracts | 48,482 | |||
Unrealized appreciation on OTC swaps | 304,410 | |||
|
| |||
Total assets | 2,940,282,283 | |||
|
| |||
LIABILITIES | ||||
Bank overdraft | 3,103,214 | |||
Foreign bank overdraft(e) | 5,446,584 | |||
Due to broker | 7,911 | |||
Collateral on securities loaned, at value | 317,718,047 | |||
Payables: | ||||
Investments purchased | 1,645 | |||
Swaps | 420,671 | |||
Capital shares redeemed | 11,167,129 | |||
Investment advisory fees | 1,004,580 | |||
|
| |||
Total liabilities | 338,869,781 | |||
|
| |||
Commitments and contingent liabilities | ||||
NET ASSETS | $ | 2,601,412,502 | ||
|
| |||
NET ASSETS CONSIST OF | ||||
Paid-in capital | $ | 5,475,604,552 | ||
Accumulated loss | (2,874,192,050 | ) | ||
|
| |||
NET ASSETS | $ | 2,601,412,502 | ||
|
| |||
NET ASSET VALUE | ||||
Shares outstanding | 199,800,000 | |||
|
| |||
Net asset value | $ | 13.02 | ||
|
| |||
Shares authorized | Unlimited | |||
|
| |||
Par value | None | |||
|
| |||
(a) Investments, at cost — unaffiliated | $ | 3,905,327,655 | ||
(b) Securities loaned, at value | $ | 312,823,186 | ||
(c) Investments, at cost — affiliated | $ | 330,138,190 | ||
(d) Foreign currency collateral pledged, at cost | $ | 101,695 | ||
(e) Foreign bank overdraft, at cost | $ | 5,443,737 |
See notes to financial statements.
12 | 2 0 2 3 I SHARES SEMI - ANNUAL REPORT TO SHAREHOLDERS |
Statement of Operations (unaudited)
Six Months Ended October 31, 2023
iShares Global Clean Energy ETF | ||||
| ||||
INVESTMENT INCOME | ||||
Dividends — unaffiliated | $ | 38,192,726 | ||
Dividends — affiliated | 258,360 | |||
Interest — unaffiliated | 27,546 | |||
Securities lending income — affiliated — net | 1,602,379 | |||
Foreign taxes withheld | (2,543,377 | ) | ||
Foreign withholding tax claims | 42,633 | |||
|
| |||
Total investment income | 37,580,267 | |||
|
| |||
EXPENSES | ||||
Investment advisory | 7,849,706 | |||
Commitment costs | 21,155 | |||
Professional | 4,263 | |||
|
| |||
Total expenses | 7,875,124 | |||
|
| |||
Net investment income | 29,705,143 | |||
|
| |||
REALIZED AND UNREALIZED GAIN (LOSS) | ||||
Net realized gain (loss) from: | ||||
Investments — unaffiliated | (160,046,045 | ) | ||
Investments — affiliated | 91,235 | |||
Foreign currency transactions | (242,355 | ) | ||
Futures contracts | 361,208 | |||
In-kind redemptions — unaffiliated(a) | 60,884,347 | |||
Swaps | (268,595 | ) | ||
|
| |||
(99,220,205 | ) | |||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments — unaffiliated | (1,143,416,030 | ) | ||
Investments — affiliated | (30,541 | ) | ||
Foreign currency translations | (307,173 | ) | ||
Futures contracts | (678,358 | ) | ||
Swaps | (210,776 | ) | ||
|
| |||
(1,144,642,878 | ) | |||
|
| |||
Net realized and unrealized loss | (1,243,863,083 | ) | ||
|
| |||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (1,214,157,940 | ) | |
|
|
(a) | See Note 2 of the Notes to Financial Statements. |
See notes to financial statements.
FINANCIAL STATEMENTS | 13 |
Statements of Changes in Net Assets
iShares Global Clean Energy ETF | ||||||||||
Six Months Ended 10/31/23 (unaudited) | Year Ended 04/30/23 | |||||||||
| ||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||
OPERATIONS | ||||||||||
Net investment income | $ | 29,705,143 | $ | 45,344,322 | ||||||
Net realized loss | (99,220,205 | ) | (529,875,327 | ) | ||||||
Net change in unrealized appreciation (depreciation) | (1,144,642,878 | ) | 477,505,167 | |||||||
|
|
|
| |||||||
Net decrease in net assets resulting from operations | (1,214,157,940 | ) | (7,025,838 | ) | ||||||
|
|
|
| |||||||
DISTRIBUTIONS TO SHAREHOLDERS(a) | ||||||||||
Decrease in net assets resulting from distributions to shareholders | (29,399,981 | ) | (44,565,129 | ) | ||||||
|
|
|
| |||||||
CAPITAL SHARE TRANSACTIONS | ||||||||||
Net decrease in net assets derived from capital share transactions | (728,133,675 | ) | (358,900,445 | ) | ||||||
|
|
|
| |||||||
NET ASSETS | ||||||||||
Total decrease in net assets | (1,971,691,596 | ) | (410,491,412 | ) | ||||||
Beginning of period | 4,573,104,098 | 4,983,595,510 | ||||||||
|
|
|
| |||||||
End of period | $ | 2,601,412,502 | $ | 4,573,104,098 | ||||||
|
|
|
|
(a) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
See notes to financial statements.
14 | 2 0 2 3 I SHARES SEMI - ANNUAL REPORT TO SHAREHOLDERS |
(For a share outstanding throughout each period)
iShares Global Clean Energy ETF | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended | Period From | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/31/23 (unaudited) | Year Ended 04/30/23 | Year Ended 04/30/22 | 04/01/21 to 04/30/21 | Year Ended 03/31/21 | Year Ended 03/31/20 | Year Ended 03/31/19 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 18.73 | $ | 18.88 | $ | 23.19 | $ | 24.07 | $ | 9.62 | $ | 9.75 | $ | 9.47 | ||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||
Net investment income(a) | 0.13 | 0.18 | 0.23 | 0.06 | 0.13 | 0.11 | 0.19 | |||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss)(b) | (5.72 | ) | (0.15 | ) | (4.29 | ) | (0.94 | ) | 14.42 | (0.08 | ) | 0.32 | ||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||
Net increase (decrease) from investment operations | (5.59 | ) | 0.03 | (4.06 | ) | (0.88 | ) | 14.55 | 0.03 | 0.51 | ||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||
Distributions from net investment income(c) | (0.12 | ) | (0.18 | ) | (0.25 | ) | — | (0.10 | ) | (0.16 | ) | (0.23 | ) | |||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 13.02 | $ | 18.73 | $ | 18.88 | $ | 23.19 | $ | 24.07 | $ | 9.62 | $ | 9.75 | ||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||
Total Return(d) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Based on net asset value | (30.01 | )%(e) | 0.04 | % | (17.64 | )% | (3.66 | )%(e) | 151.73 | % | 0.12 | % | 5.69 | % | ||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||
Ratios to Average Net Assets (f) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total expenses | 0.41 | %(g) | 0.41 | % | 0.40 | % | 0.41 | %(g) | 0.42 | % | 0.46 | % | 0.46 | % | ||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||
Total expenses after fees waived and excluding professional fees for foreign withholding tax claims | 0.41 | %(g) | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||
Net investment income | 1.55 | %(g) | 0.90 | % | 1.07 | % | 3.07 | %(g) | 0.57 | % | 1.01 | % | 2.13 | % | ||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||
Supplemental Data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (000) | $ | 2,601,413 | $ | 4,573,104 | $ | 4,983,596 | $ | 5,855,954 | $ | 5,642,271 | $ | 499,227 | $ | 208,595 | ||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover rate(h) | 18 | % | 51 | % | 52 | % | 54 | % | 31 | % | 37 | % | 42 | % | ||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
(d) | Where applicable, assumes the reinvestment of distributions. |
(e) | Not annualized. |
(f) | Excludes fees and expenses incurred indirectly as a result of investments in underlying funds. |
(g) | Annualized. |
(h) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 15 |
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 fund (the “Fund”):
iShares ETF | Diversification Classification | |||
Global Clean Energy | Non-diversified |
2. | SIGNIFICANT ACCOUNTING POLICIES |
The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure 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. The Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. Below is a summary of significant accounting policies:
Investment Transactions and Income Recognition: For financial reporting purposes, investment transactions are recorded on the dates the transactions are executed. Realized gains and losses on investment transactions are determined using the specific identification method. Dividend income and capital gain distributions, if any, are recorded on the ex-dividend date. Non-cash dividends, if any, are recorded on the ex-dividend date at fair value. Dividends from foreign securities where the ex-dividend date may have passed are subsequently recorded when the Fund is informed of the ex-dividend date. Under the applicable foreign tax laws, a withholding tax at various rates may be imposed on capital gains, dividends and interest.
Foreign Currency Translation: The Fund’s books and records are maintained in U.S. dollars. Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using prevailing market rates as quoted by one or more data service providers. Purchases and sales of investments are recorded at the rates of exchange prevailing on the respective dates of such transactions. Generally, when the U.S. dollar rises in value against a foreign currency, the investments denominated in that currency will lose value; the opposite effect occurs if the U.S. dollar falls in relative value.
The Fund does not isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of investments for financial reporting purposes. Accordingly, the effects of changes in exchange rates on investments are not segregated in the Statement of Operations from the effects of changes in market prices of those investments, but are included as a component of net realized and unrealized gain (loss) from investments. The Fund reports realized currency gains (losses) on foreign currency related transactions as components of net realized gain (loss) for financial reporting purposes, whereas such components are generally treated as ordinary income for U.S. federal income tax purposes.
Foreign Taxes: The Fund may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, capital gains on investments, or certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the Fund invests. These foreign taxes, if any, are paid by the 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, 2023, if any, are disclosed in the Statement of Assets and Liabilities.
The Fund files withholding tax reclaims in certain jurisdictions to recover a portion of amounts previously withheld. The Fund may record a reclaim receivable based on collectability, which includes factors such as the jurisdiction’s applicable laws, payment history and market convention. The Statement of Operations includes tax reclaims recorded as well as professional and other fees, if any, associated with recovery of foreign withholding taxes.
Collateralization: If required by an exchange or counterparty agreement, the Fund may be required to deliver/deposit cash and/or securities to/with an exchange, or broker-dealer or custodian as collateral for certain investments.
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 Fund. Because such gains or losses are not taxable to the Fund 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 Fund’s tax year. These reclassifications have no effect on net assets or net asset value (“NAV”) per share.
Distributions: Dividends and distributions paid by the 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 Fund.
Indemnifications: In the normal course of business, the Fund enters into contracts that contain a variety of representations that provide general indemnification. The Fund’s maximum exposure under these arrangements is unknown because it involves future potential claims against the Fund, which cannot be predicted with any certainty.
16 | 2 0 2 3 I SHARES SEMI - ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (unaudited) (continued)
3. | INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS |
Investment Valuation Policies: The 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. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Board of Trustees of the Trust (the “Board”) of the Fund has approved the designation of BlackRock Fund Advisors (“BFA”), the Fund’s investment adviser, as the valuation designee for the Fund. The Fund determines the fair values of its financial instruments using various independent dealers or pricing services under BFA’s policies. If a security’s market price is not readily available or does not otherwise accurately represent the fair value of the security, the security will be valued in accordance with BFA’s policies and procedures as reflecting fair value. BFA has formed a committee (the “Valuation Committee”) to develop pricing policies and procedures and to oversee the pricing function for all financial instruments, with assistance from other BlackRock pricing committees.
Fair Value Inputs and Methodologies: The following methods and inputs are used to establish the fair value of the Fund’s assets and liabilities:
• | Equity investments traded on a recognized securities exchange are valued at that day’s 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 NAV. |
• | Futures contracts are valued based on that day’s last reported settlement or trade price on the exchange where the contract is traded. |
• | Swap agreements are valued utilizing quotes received daily by independent pricing services or through brokers, which are derived using daily swap curves and models that incorporate a number of market data factors, such as discounted cash flows, trades and values of the underlying reference instruments. |
Generally, trading in foreign instruments is substantially completed each day at various times prior to the close of trading on the New York Stock Exchange (“NYSE”). Each business day, the Fund uses current market factors supplied by independent pricing services to value certain foreign instruments (“Systematic Fair Value Price”). The Systematic Fair Value Price is designed to value such foreign securities at fair value as of the close of trading on the NYSE, which follows the close of the local markets.
If events (e.g., market volatility, company announcement or a natural disaster) occur that are expected to materially affect the value of such 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 Valuation Committee, in accordance with BFA’s policies and procedures as reflecting fair value (“Fair Valued Investments”). The fair valuation approaches that may be used by the Valuation Committee include market approach, income approach and cost approach. Valuation techniques such as discounted cash flow, use of market comparables and matrix pricing are types of valuation approaches and are typically used in determining fair value. When determining the price for Fair Valued Investments, the Valuation Committee seeks to determine the price that the Fund might reasonably expect to receive or pay from the current sale or purchase of that asset or liability in an arm’s-length transaction. Fair value determinations shall be based upon all available factors that the Valuation Committee deems relevant and consistent with the principles of fair value measurement.
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/exchanges for identical assets or liabilities that the Fund has the ability to access; |
• | Level 2 – Other observable inputs (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 active, inputs other than quoted prices that are observable for the assets or liabilities (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 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 judgment 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. Investments classified within Level 3 have significant unobservable inputs used by the Valuation Committee in determining the price for Fair Valued Investments. Level 3 investments include equity or debt issued by privately held companies or funds that may not have a secondary market and/or may have a limited number of investors. 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.
NOTES TO FINANCIAL STATEMENTS | 17 |
Notes to Financial Statements (unaudited) (continued)
4. | SECURITIES AND OTHER INVESTMENTS |
Securities Lending: The 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 the 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, the 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 period end, any securities on loan were collateralized by cash and/or U.S. Government obligations. Cash collateral invested in money market funds managed by BFA, or its affiliates is disclosed in the Schedule 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, if any, are also disclosed in the Fund’s Schedule of Investments. The market value of any securities on loan and the value of any related cash collateral are disclosed in the Statement of Assets and Liabilities.
Securities lending transactions are entered into by the 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. When the value of the collateral is greater than that of the market value of the securities loaned, the lender is left 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. Upon an event of default, the parties’ obligations to return the securities or collateral to the other party are extinguished, and the parties can resell or re-pledge the loaned securities or the collateral received in connection with the loaned securities in order to satisfy the defaulting party’s net payment obligation for all transactions under the MSLA. The defaulting party remains liable for any deficiency.
As of period end, the following table is a summary of the securities on loan by counterparty which are subject to offset under an MSLA:
| ||||||||||||||||
iShares ETF and Counterparty | | Securities Loaned at Value | | | Cash Collateral Received | (a) | | Non-Cash Collateral Received, at Fair Value | (a) | Net Amount | ||||||
| ||||||||||||||||
Global Clean Energy | ||||||||||||||||
Barclays Bank PLC | $ | 20,828,971 | $ | (20,828,971 | ) | $ | — | $ | — | |||||||
Barclays Capital, Inc. | 14,949,348 | (14,949,348 | ) | — | — | |||||||||||
BMO Capital Markets Corp. | 23,300 | (22,969 | ) | — | 331 | (b) | ||||||||||
BNP Paribas SA | 16,611,181 | (16,611,181 | ) | — | — | |||||||||||
BofA Securities, Inc. | 34,523,653 | (34,523,653 | ) | — | — | |||||||||||
Citadel Clearing LLC | 1,148,758 | (1,143,761 | ) | — | 4,997 | (b) | ||||||||||
Citigroup Global Markets, Inc. | 15,938,272 | (15,866,096 | ) | — | 72,176 | (b) | ||||||||||
Goldman Sachs & Co. LLC | 64,478,130 | (64,478,130 | ) | — | — | |||||||||||
HSBC Bank PLC | 515,406 | (515,406 | ) | — | — | |||||||||||
J.P. Morgan Securities LLC | 39,384,694 | (39,384,694 | ) | — | — | |||||||||||
Jefferies LLC | 99,715 | (97,482 | ) | — | 2,233 | (b) | ||||||||||
Morgan Stanley | 66,552,276 | (66,552,276 | ) | — | — | |||||||||||
National Financial Services LLC | 272,987 | (269,120 | ) | — | 3,867 | (b) | ||||||||||
Natixis SA | 173,340 | (173,340 | ) | — | — | |||||||||||
Nomura Securities International, Inc. | 266,340 | (266,340 | ) | — | — | |||||||||||
Scotia Capital (USA), Inc. | 381,618 | (381,618 | ) | — | — | |||||||||||
SG Americas Securities LLC | 69,613 | (69,613 | ) | — | — | |||||||||||
State Street Bank & Trust Co. | 9,417,530 | (9,417,530 | ) | — | — | |||||||||||
Toronto-Dominion Bank | 1,001,356 | (1,001,356 | ) | — | — | |||||||||||
UBS AG | 25,998,019 | (25,901,933 | ) | — | 96,086 | (b) | ||||||||||
Wells Fargo Securities LLC | 188,679 | (187,087 | ) | — | 1,592 | (b) | ||||||||||
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$ | 312,823,186 | $ | (312,641,904 | ) | $ | — | $ | 181,282 | ||||||||
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(a) | Collateral received, if any, in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by the Fund is disclosed in the Fund’s Statements of Assets and Liabilities. |
(b) | The market value of the loaned securities is determined as of October 31, 2023. Additional collateral is delivered to the Fund on the next business day in accordance with the MSLA. The net amount would be subject to the borrower default indemnity in the event of default by a counterparty. |
The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Fund benefits from a borrower default indemnity provided by BlackRock, Inc. (“BlackRock”). BlackRock’s indemnity allows for full replacement of the securities loaned to the extent the collateral received does not cover the value of the securities loaned in the event of borrower default. The Fund could incur a loss if the
18 | 2 0 2 3 I SHARES SEMI - ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (unaudited) (continued)
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 the Fund.
5. | DERIVATIVE FINANCIAL INSTRUMENTS |
Futures Contracts: Futures contracts are purchased or sold to gain exposure to, or manage exposure to, changes in interest rates (interest rate risk) and changes in the value of equity securities (equity risk) or foreign currencies (foreign currency exchange rate risk).
Futures contracts are exchange-traded agreements between the Fund and a counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and on a specified date. Depending on the terms of a contract, it 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, the Fund is required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on a contract’s size and risk profile. The initial margin deposit must then be maintained at an established level over the life of the contract. Amounts pledged, which are considered restricted, are included in cash pledged for futures contracts in the Statement of Assets and Liabilities.
Securities deposited as initial margin are designated in the Schedule of Investments and cash deposited, if any, are shown as cash pledged for futures contracts in the Statement of Assets and Liabilities. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in market value of the contract (“variation margin”). Variation margin is recorded as unrealized appreciation (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. The use of futures contracts involves the risk of an imperfect correlation in the movements in the price of futures contracts and interest rates, foreign currency exchange rates or underlying assets.
Swaps: Swap contracts are entered into to manage exposure to issuers, markets and securities. Such contracts are agreements between the Fund and a counterparty to make periodic net payments on a specified notional amount or a net payment upon termination. Swap agreements are privately negotiated in the OTC market and may be entered into as a bilateral contract (“OTC swaps”) or centrally cleared (“centrally cleared swaps”).
For OTC swaps, any upfront premiums paid and any upfront fees received are shown as swap premiums paid and swap premiums received, respectively, in the Statement of Assets and Liabilities and amortized over the term of the contract. The daily fluctuation in market value is recorded as unrealized appreciation (depreciation) on OTC Swaps in the Statement of Assets and Liabilities. Payments received or paid are recorded in the Statement of Operations as realized gains or losses, respectively. When an OTC swap is terminated, a realized gain or loss is recorded in the Statement of Operations equal to the difference between the proceeds from (or cost of) the closing transaction and the Fund’s basis in the contract, if any. Generally, the basis of the contract is the premium received or paid.
Total return swaps are entered into by the Fund to obtain exposure to a security or market without owning such security or investing directly in such market or to exchange the risk/return of one security or market (e.g., fixed-income) with another security or market (e.g., equity or commodity prices) (equity risk, commodity price risk and/or interest rate risk).
Total return swaps are agreements in which there is an exchange of cash flows whereby one party commits to make payments based on the total return (distributions plus capital gains/losses) of an underlying instrument, or basket or underlying instruments, in exchange for fixed or floating rate interest payments. If the total return of the instruments or index underlying the transaction exceeds or falls short of the offsetting fixed or floating interest rate obligation, the Fund receives payment from or makes a payment to the counterparty.
Certain total return swaps are designed to function as a portfolio of direct investments in long and short equity positions. This means that the Fund has the ability to trade in and out of these long and short positions within the swap and will receive the economic benefits and risks equivalent to direct investment in these positions, subject to certain adjustments due to events related to the counterparty. Benefits and risks include capital appreciation (depreciation), corporate actions and dividends received and paid, all of which are reflected in the swap’s market value. The market value also includes interest charges and credits (“financing fees”) related to the notional values of the long and short positions and cash balances within the swap. These interest charges and credits are based on a specified benchmark rate plus or minus a specified spread determined based upon the country and/or currency of the positions in the portfolio.
Positions within the swap and financing fees are reset periodically. During a reset, any unrealized appreciation (depreciation) on positions and accrued financing fees become available for cash settlement between the Fund and the counterparty. The amounts that are available for cash settlement are recorded as realized gains or losses in the Statement of Operations. Cash settlement in and out of the swap may occur at a reset date or any other date, at the discretion of the Fund and the counterparty, over the life of the agreement. Certain swaps have no stated expiration and can be terminated by either party at any time.
Swap transactions involve, to varying degrees, elements of interest rate, credit and market risks in excess of the amounts recognized in the Statement of Assets and Liabilities. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreements may default on its obligation to perform or disagree as to the meaning of the contractual terms in the agreements, and that there may be unfavorable changes in interest rates and/or market values associated with these transactions.
Master Netting Arrangements: In order to define its contractual rights and to secure rights that will help mitigate its counterparty risk, a Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between a Fund and a counterparty that governs certain OTC derivatives and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, a Fund may, under certain circumstances, offset with the counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of
NOTES TO FINANCIAL STATEMENTS | 19 |
Notes to Financial Statements (unaudited) (continued)
the ISDA Master Agreement typically permit a single net payment in the event of default including the bankruptcy or insolvency of the counterparty. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against the right of offset in bankruptcy, insolvency, or other events.
For derivatives traded under an ISDA Master Agreement, the collateral requirements are typically calculated by netting the mark-to-market amount for each transaction under such agreement, and comparing that amount to the value of any collateral currently pledged by a fund and the counterparty.
Cash collateral that has been pledged to cover obligations of the Fund and cash collateral received from the counterparty, if any, is reported separately in the Statement of Assets and Liabilities as cash pledged as collateral and cash received as collateral, respectively. Non-cash collateral pledged by the Fund, if any, is noted in the Schedule of Investments. Generally, the amount of collateral due from or to a counterparty is subject to a certain minimum transfer amount threshold before a transfer is required, which is determined at the close of business of the Fund. Any additional required collateral is delivered to/pledged by the Fund on the next business day. Typically, the counterparty is not permitted to sell, re-pledge or use cash and non-cash collateral it receives. A fund generally agrees not to use non-cash collateral that it receives but may, absent default or certain other circumstances defined in the underlying ISDA Master Agreement, be permitted to use cash collateral received. In such cases, interest may be paid pursuant to the collateral arrangement with the counterparty. To the extent amounts due to the Fund from the counterparty are not fully collateralized, the Fund bears the risk of loss from counterparty non-performance. Likewise, to the extent the Fund has delivered collateral to a counterparty and stands ready to perform under the terms of its agreement with such counterparty, the Fund bears the risk of loss from a counterparty in the amount of the value of the collateral in the event the counterparty fails to return such collateral. Based on the terms of agreements, collateral may not be required for all derivative contracts.
For financial reporting purposes, the Fund does not offset derivative assets and derivative liabilities that are subject to netting arrangements, if any, in the Statement of Assets and Liabilities.
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 the 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 Fund, 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 Fund, 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 Fees | |||
| ||||
First $10 billion | 0.4800% | |||
Over $10 billion, up to and including $20 billion | 0.4300 | |||
Over $20 billion, up to and including $30 billion | 0.3800 | |||
Over $30 billion, up to and including $40 billion | 0.3420 | |||
Over $40 billion | 0.3078 | |||
|
Distributor: BlackRock Investments, LLC, an affiliate of BFA, is the distributor for the Fund. Pursuant to the distribution agreement, BFA is responsible for any fees or expenses for distribution services provided to the Fund.
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 Fund, subject to applicable conditions. As securities lending agent, BTC bears all operational costs directly related to securities lending, including any custodial costs. The Fund is responsible for fees in connection with the investment of cash collateral received for securities on loan (the “collateral investment fees”). The cash collateral is invested in a money market fund, BlackRock Cash Funds: Institutional or BlackRock Cash Funds: Treasury, 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 the Fund bears to an annual rate of 0.04%. The SL Agency Shares of such money market fund will not be subject to a sales load, distribution fee or service fee. The money market fund in which the cash collateral has been invested may, under certain circumstances, impose a liquidity fee of up to 2% of the value redeemed or temporarily restrict redemptions for up to 10 business days during a 90 day period, in the event that the money market fund’s weekly liquid assets fall below certain thresholds.
Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment fees. The 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 the current securities lending agreement, the Fund retains 82% 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 that calendar year exceeds a specified threshold, the Fund, pursuant to the securities lending agreement, will retain for the remainder of that calendar year 85% 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.
20 | 2 0 2 3 I SHARES SEMI - ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (unaudited) (continued)
The share of securities lending income earned by the Fund is shown as securities lending income – affiliated – net in its Statement of Operations. For the six months ended October 31, 2023, the Fund paid BTC $453,378 for securities lending agent services.
Officers and Trustees: Certain officers and/or trustees of the Trust are officers and/or trustees of BlackRock or its affiliates.
Other Transactions: 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, 2023, transactions executed by the Fund pursuant to Rule 17a-7 under the 1940 Act were as follows:
iShares ETF | Purchases | Sales | Net Realized Gain (Loss) | |||||||||
Global Clean Energy | $ | 1,957,682 | $ | 6,887 | $ | 1,390 |
The 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, 2023, purchases and sales of investments, excluding short-term securities and in-kind transactions, were as follows:
iShares ETF | Purchases | Sales | ||||||
Global Clean Energy | $ | 665,132,450 | $ | 813,328,559 |
For the six months ended October 31, 2023, in-kind transactions were as follows:
iShares ETF | In-kind Purchases | In-kind Sales | ||||||
Global Clean Energy | $ | — | $ | 566,928,656 |
8. | INCOME TAX INFORMATION |
The Fund is treated as an entity separate from the Trust’s other funds for federal income tax purposes. It is the Fund’s policy to comply with the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies, and to distribute substantially all of its taxable income to its shareholders. Therefore, no U.S. federal income tax provision is required.
Management has analyzed tax laws and regulations and their application to the Fund as of October 31, 2023, 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 Fund’s financial statements.
As of April 30, 2023, the Fund had non-expiring capital loss carryforwards of $1,384,410,420 available to offset future realized capital gains and qualified late-year losses.
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, 2023, 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) | ||||||||||||
Global Clean Energy | $ | 4,324,741,063 | $ | 123,101,777 | $ | (1,533,367,098 | ) | $ | (1,410,265,321 | ) |
9. | LINE OF CREDIT |
The Fund, along with certain other iShares funds (“Participating Funds”), is a party to a $800 million credit agreement (“Syndicated Credit Agreement”) with a group of lenders, which expires on October 16, 2024. The line of credit may be used for temporary or emergency purposes, including redemptions, settlement of trades and rebalancing of portfolio holdings in certain target markets. The Funds may borrow up to the aggregate commitment amount subject to asset coverage and other limitations as specified in the Syndicated Credit Agreement. The Syndicated Credit Agreement has the following terms: a commitment fee of 0.15% per annum on the unused portion
NOTES TO FINANCIAL STATEMENTS | 21 |
Notes to Financial Statements (unaudited) (continued)
of the credit agreement and interest at a rate equal to the higher of (a) Daily Simple Secured Overnight Financing Rate (“SOFR”) plus 0.10% and 1.00% per annum or (b) the U.S. Federal Funds rate plus 1.00% per annum on amounts borrowed. The commitment fee is generally allocated to each Participating Fund based on the lesser of a Participating Fund’s relative exposure to certain target markets or a Participating Fund’s maximum borrowing amount as set forth by the terms of the Syndicated Credit Agreement.
During the six months ended October 31, 2023, the Fund did not borrow under the Syndicated Credit Agreement.
10. | PRINCIPAL RISKS |
In the normal course of business, the 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. Local, regional or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues, recessions, or other events could have a significant impact on the Fund and its investments. The 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 the 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.
The Fund may be exposed to additional risks when reinvesting cash collateral in money market funds that do not seek to maintain a stable NAV per share of $1.00, which may be subject to redemption gates or liquidity fees under certain circumstances.
Infectious Illness Risk: An outbreak of an infectious illness, such as the COVID-19 pandemic, may adversely impact the economies of many nations and the global economy, and may impact individual issuers and capital markets in ways that cannot be foreseen. An infectious illness outbreak may result in, among other things, closed international borders, prolonged quarantines, supply chain disruptions, market volatility or disruptions and other significant economic, social and political impacts.
Valuation Risk: The market values of equities, such as common stocks and preferred securities or equity related investments, such as futures and options, may decline due to general market conditions which are not specifically related to a particular company. They may also decline due to factors which affect a particular industry or industries. A fund may invest in illiquid investments. An illiquid investment is any investment that a fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. A fund may experience difficulty in selling illiquid investments in a timely manner at the price that it believes the investments are worth. Prices may fluctuate widely over short or extended periods in response to company, market or economic news. Markets also tend to move in cycles, with periods of rising and falling prices. This volatility may cause a fund’s NAV to experience significant increases or decreases over short periods of time. If there is a general decline in the securities and other markets, the NAV of a fund may lose value, regardless of the individual results of the securities and other instruments in which a fund invests.
Counterparty Credit Risk: The Fund may be exposed to counterparty credit risk, or the risk that an entity may fail to or be unable to perform on its commitments related to unsettled or open transactions, including making timely interest and/or principal payments or otherwise honoring its obligations. The Fund manages counterparty credit risk by entering into transactions only with counterparties that BFA believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Fund to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Fund’s exposure to market, issuer and counterparty credit risks with respect to these financial assets is approximately their value recorded in the Statement of Assets and Liabilities, less any collateral held by the Fund.
A derivative contract may suffer a mark-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform under the contract.
With exchange-traded futures, there is less counterparty credit risk to the Fund since the exchange or clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, credit risk is limited to failure of the clearinghouse. While offset rights may exist under applicable law, a fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency). Additionally, credit risk exists in exchange-traded futures with respect to initial and variation margin that is held in a clearing broker’s customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Fund.
Geographic/Asset Class 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 the Fund’s portfolio are disclosed in its Schedule of Investments.
The Fund invests a significant portion of its assets in securities of issuers located in the United States. A decrease in imports or exports, changes in trade regulations, inflation and/or an economic recession in the United States may have a material adverse effect on the U.S. economy and the securities listed on U.S. exchanges. Proposed and adopted policy and legislative changes in the United States may also have a significant effect on U.S. markets generally, as well as on the value of certain securities. Governmental agencies project that the United States will continue to maintain elevated public debt levels for the foreseeable future which may constrain future economic
22 | 2 0 2 3 I SHARES SEMI - ANNUAL REPORT TO SHAREHOLDERS |
Notes to Financial Statements (unaudited) (continued)
growth. Circumstances could arise that could prevent the timely payment of interest or principal on U.S. government debt, such as reaching the legislative “debt ceiling.” Such non-payment would result in substantial negative consequences for the U.S. economy and the global financial system. If U.S. relations with certain countries deteriorate, it could adversely affect issuers that rely on the United States for trade. The United States has also experienced increased internal unrest and discord. If these trends were to continue, they may have an adverse impact on the U.S. economy and the issuers in which the the Fund invests.
Significant Shareholder Redemption Risk: Certain shareholders may own or manage a substantial amount of fund shares and/or hold their fund investments for a limited period of time. Large redemptions of fund shares by these shareholders may force a fund to sell portfolio securities, which may negatively impact the fund’s NAV, increase the fund’s brokerage costs, and/or accelerate the realization of taxable income/gains and cause the fund to make additional taxable distributions to shareholders.
11. | CAPITAL SHARE TRANSACTIONS |
Capital shares are issued and redeemed by the 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 the Fund are not redeemable.
Transactions in capital shares were as follows:
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Six Months Ended 10/31/23 | Year Ended 04/30/23 | |||||||||||||||||
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iShares ETF | Shares | Amount | Shares | Amount | ||||||||||||||
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Global Clean Energy | ||||||||||||||||||
Shares sold | 200,000 | $ | 3,848,099 | 16,300,000 | $ | 333,990,804 | ||||||||||||
Shares redeemed | (44,600,000 | ) | (731,981,774 | ) | (36,000,000 | ) | (692,891,249 | ) | ||||||||||
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(44,400,000 | ) | $ | (728,133,675 | ) | (19,700,000 | ) | $ | (358,900,445 | ) | |||||||||
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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.
12. | FOREIGN WITHHOLDING TAX CLAIMS |
The Internal Revenue Service (“IRS”) 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 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.
13. | SUBSEQUENT EVENTS |
Management has evaluated the impact of all subsequent events on the Fund 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.
NOTES TO FINANCIAL STATEMENTS | 23 |
Board Review and Approval of Investment Advisory Contract
iShares Global Clean Energy ETF (the “Fund”)
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 Board Members who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Board Members”), is required annually to consider the approval of the Investment Advisory Agreement between the Trust and BFA (the “Advisory Agreement”) on behalf of the Fund. The Board’s consideration entails a year-long process whereby the Board and its committees (composed solely of Independent Board Members) assess BlackRock’s services to the Fund, including investment management; fund accounting; administrative and shareholder services; oversight of the Fund’s service providers; risk management and oversight; legal and compliance services; and ability to meet applicable legal and regulatory requirements. The Independent Board Members requested, and BFA provided, such information as the Independent Board Members, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Agreement. At meetings on May 2, 2023 and May 15, 2023, a committee composed of all of the Independent Board Members (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 its independent counsel, and requested certain additional information, which management agreed to provide. At a meeting held on June 7-8, 2023, the Board, including the Independent Board Members, reviewed the additional information provided by management in response to these requests.
After extensive discussions and deliberations, the Board, including all of the Independent Board Members, approved the continuance of the Advisory Agreement for the Fund, based on a review of qualitative and quantitative information provided by BFA and their cumulative experience as Board Members. 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 Board Members were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the continuance of the Advisory Agreement for the Fund, the Board, including the Independent Board Members, 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) potential economies of scale and the sharing of related benefits; (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, none of which was controlling, and conclusions that formed the basis for the Board, including the Independent Board Members, to approve the continuance of the Advisory Agreement 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 other fund(s) in which the Fund invests (if applicable), and waivers/reimbursements (if applicable) of the Fund in comparison with the same information for other ETFs, objectively selected by Broadridge as comprising the Fund’s applicable expense 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 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 any waivers and reimbursements) for the Fund were lower than the median of the investment advisory fee rates and overall expenses (net of any 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-year, three-year, five-year, ten-year, and since inception periods, as applicable, and for the quarter ended December 31, 2022, to that of such 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 Agreement for the coming year.
Nature, Extent and Quality of Services Provided: Based on management’s representations, including information about ongoing enhancements and initiatives with respect 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 Agreement for the coming year as compared with 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 and have made significant investments into the iShares business. The Board also considered BFA’s compliance program and its compliance record with respect to the Fund, including related programs implemented pursuant to regulatory requirements. 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 May 2, 2023 meeting and throughout the year, and matters related to BFA’s portfolio compliance program and other compliance programs and services.
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 Agreement supported the Board’s approval of the continuance of the Advisory Agreement for the coming year.
Costs of Services Provided to the Fund and Profits Realized by BFA and its Affiliates: The Board reviewed information about the estimated profitability to BlackRock in managing the Fund, based on the fees payable to BFA and its affiliates (including fees under the Advisory Agreement), and other sources of revenue and expense to BFA
24 | 2 0 2 3 I SHARES SEMI - ANNUAL REPORT TO SHAREHOLDERS |
Board Review and Approval of Investment Advisory Contract (continued)
and its affiliates from the Fund’s operations for the last calendar year. The Board reviewed BlackRock’s methodology for calculating estimated profitability of the iShares funds, noting that the 15(c) Committee and the Board had focused on the methodology and profitability presentation. The Board recognized that profitability may be affected by numerous factors, including, among other things, fee waivers by BFA, the types of funds managed, expense allocations and business mix. The Board thus recognized that calculating and comparing profitability at individual fund levels is challenging. The Board discussed with management the sources of direct and ancillary revenue, including the revenues to BTC, a BlackRock affiliate, from securities lending by the Fund. The Board also discussed BFA’s estimated 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 information considered with respect to the profits realized by BFA and its affiliates under the Advisory Agreement and from other relationships between the Fund and BFA and/or its affiliates, if any, as well as the other factors considered at the meeting, supported the Board’s approval of the continuance of the Advisory Agreement for the coming year.
Economies of Scale: The Board reviewed information and considered the extent to which economies of scale might be realized as the assets of the Fund increase, noting that the issue of potential 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 estimated profitability (as discussed above), including BFA’s and its affiliates’ estimated costs in providing services. The estimated cost information distinguished, among other things, between fixed and variable costs, and showed how the level and nature of fixed and variable costs may impact the existence or size of scale benefits, with the Board recognizing that potential economies of scale are difficult to measure. 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 Agreement 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 assess the appropriateness of adding new or revised breakpoints in the future.
The Board concluded that this review of potential economies of scale and the sharing of related benefits, as well as the other factors considered at the meeting, supported the Board’s approval of the continuance of the Advisory Agreement 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”). The Board acknowledged BFA’s representation that the iShares funds are fundamentally different investment vehicles from the Other Accounts.
The Board received detailed information regarding how the Other Accounts generally differ from the Fund, including in terms of the types of services 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 investment vehicle, as compared to the Other Accounts, particularly those that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. 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 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 considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund’s expenses borne by BFA under this arrangement and noted that the investment advisory fee rate under the Advisory Agreement 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 other benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Fund by BFA, both direct and indirect, including, but not limited to, payment of revenue to BTC, the Fund’s securities lending agent, for loaning portfolio securities, as applicable (which was included in the profit margins reviewed by the Board pursuant to BFA’s estimated profitability methodology), payment of advisory fees or other 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 or other services, and BlackRock’s profile in the investment community. The Board further considered other direct benefits that might accrue to BFA, including the potential for reduction in the Fund’s expenses that are borne by BFA under the “all-inclusive” management fee arrangement, due in part to the size and scope of BFA’s investment operations servicing the Fund (and other funds in the iShares complex) as well as in response to a changing market environment. The Board also reviewed and considered information provided by BFA concerning authorized participant primary market order processing services that are provided by BlackRock Investments, LLC (“BRIL”), an affiliate of BFA, and paid for by authorized participants under the ETF Servicing Platform. 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 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 Agreement 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 Board Members, determined that the Fund’s investment advisory fee rate under the Advisory Agreement 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 Agreement for the coming year.
BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY CONTRACT | 25 |
Supplemental Information (unaudited)
Tailored Shareholder Reports for Open-End Mutual Funds and ETFs
Effective January 24, 2023, the SEC adopted rule and form amendments to require open-end mutual funds and ETFs to transmit concise and visually engaging streamlined annual and semiannual reports to shareholders that highlight key information. Other information, including financial statements, will no longer appear in a streamlined shareholder report but must be available online, delivered free of charge upon request, and filed on a semiannual basis on Form N-CSR. The rule and form amendments have a compliance date of July 24, 2024. At this time, management is evaluating the impact of these amendments on the shareholder reports for the Funds.
26 | 2 0 2 3 I SHARES SEMI - ANNUAL REPORT TO SHAREHOLDERS |
Electronic Delivery
Shareholders can sign up for e-mail notifications announcing that the shareholder report or prospectus has been posted on the iShares website at 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 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 and Rule 30e-3 notices 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 Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Fund’s Forms N-PORT are available on the SEC’s website at sec.gov. Additionally, the Fund makes its portfolio holdings for the first and third quarters of each fiscal year available at iShares.com/fundreports.
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 iShares.com; and (3) on the SEC website at sec.gov.
A description of the Trust’s policies and procedures with respect to the disclosure of the Fund’s portfolio securities is available in the Fund Prospectus. The Fund discloses its portfolio holdings daily and provides information regarding its top holdings in Fund fact sheets at iShares.com.
GENERAL INFORMATION | 27 |
Glossary of Terms Used in this Report
Portfolio Abbreviation
NVDR | Non-Voting Depositary Receipt | |
NVS | Non-Voting Shares |
28 | 2 0 2 3 I SHARES SEMI - ANNUAL REPORT TO SHAREHOLDERS |
Want to know more?
iShares.com | 1-800-474-2737
This report is intended for the Fund’s 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.
©2023 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc. or its subsidiaries. All other marks are the property of their respective owners.
iS-SAR-408-1023
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OCTOBER 31, 2023 |
| 2023 Semi-Annual Report (Unaudited)
|
iShares Trust
● iShares International Select Dividend ETF | IDV | Cboe BZX |
Dear Shareholder,
The combination of continued economic growth and cooling inflation provided a supportive backdrop for investors during the 12-month reporting period ended October 31, 2023. Significantly tighter monetary policy helped to rein in inflation, as the annual increase in the Consumer Price Index declined to its long-term average of approximately 3% in October 2023. Meanwhile, real economic growth proved more resilient than many investors anticipated. A moderating labor market also helped ease inflationary pressure, although wages continued to grow and unemployment rates touched the lowest levels in decades before rising slightly. This robust labor market powered further growth in consumer spending, backstopping the economy. On October 7, 2023, Hamas launched a horrific attack on Israel. The ensuing war will have a significant humanitarian impact and could lead to heightened economic and market volatility. We see geopolitics as a structural market risk going forward. See our geopolitical risk dashboard at blackrock.com for more details.
Equity returns were solid during the period, as the durability of consumer spending mitigated investors’ concerns about the economy’s trajectory. The U.S. economy continued to show strength, and growth further accelerated in the third quarter of 2023. However, equity returns were uneven, as the performance of a few notable technology companies supported gains among large-capitalization U.S. stocks, while small-capitalization U.S. stocks declined overall. Meanwhile, international developed market equities advanced, and emerging market equities posted solid gains.
The 10-year U.S. Treasury yield rose during the reporting period, driving its price down, as investors reacted to elevated inflation and attempted to anticipate future interest rate changes. The corporate bond market benefited from improving economic sentiment, although high-yield corporate bond prices fared significantly better than investment-grade bonds as demand from yield-seeking investors remained strong.
The U.S. Federal Reserve (the “Fed”), attempting to manage persistent inflation, raised interest rates six times during the 12-month period, but slowed and then paused its tightening later in the period. The Fed also wound down its bond-buying programs and incrementally reduced its balance sheet by not replacing securities that reach maturity.
Supply constraints appear to have become an embedded feature of the new macroeconomic environment, making it difficult for developed economies to increase production without sparking higher inflation. Geopolitical fragmentation and an aging population risk further exacerbating these constraints, keeping the labor market tight and wage growth high. Although the Fed has decelerated the pace of interest rate hikes and recently opted for several pauses, we believe that the new economic regime means that the Fed will need to maintain high rates for an extended period to keep inflation under control. Furthermore, ongoing structural changes may mean that the Fed will be hesitant to cut interest rates in the event of faltering economic activity lest inflation accelerate again.
While we favor an overweight position in developed market equities in the long term, we prefer an underweight stance in the near term. Expectations for corporate earnings remain elevated, which seems inconsistent with macroeconomic constraints. Nevertheless, we are overweight on Japanese stocks in the near term as shareholder-friendly policies generate increased investor interest. We also believe that stocks with an AI tilt should benefit from an investment cycle that is set to support revenues and margins. In credit, there are selective opportunities in the near term despite tightening credit and financial conditions. For fixed income investing with a six- to twelve-month horizon, we see the most attractive investments in short-term U.S. Treasuries, U.S. inflation-linked bonds, euro area government bonds and gilts, U.S. mortgage-backed securities, and hard-currency emerging market bonds.
Overall, our view is that investors need to think globally, position themselves to be prepared for a decarbonizing economy, and be nimble as market conditions change. We encourage you to talk with your financial advisor and visit iShares.com for further insight about investing in today’s markets.
Rob Kapito
President, BlackRock, Inc.
Rob Kapito
President, BlackRock, Inc.
Total Returns as of October 31, 2023
| ||||||||
6-Month
|
12-Month
| |||||||
U.S. large cap equities | 1.39% | 10.14% | ||||||
U.S. small cap equities | (5.29) | (8.56) | ||||||
International equities Far East Index) | (7.88) | 14.40 | ||||||
Emerging market equities | (4.78) | 10.80 | ||||||
3-month Treasury bills U.S. Treasury Bill Index) | 2.63 | 4.77 | ||||||
U.S. Treasury securities U.S. Treasury Index) | (9.70) | (3.25) | ||||||
U.S. investment grade bonds | (6.13) | 0.36 | ||||||
Tax-exempt municipal bonds | (4.65) | 2.64 | ||||||
U.S. high yield bonds | 0.02 | 6.23 | ||||||
Past performance is not an indication of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index. |
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2 | T H I S P A G E I S N O T P A R T O F Y O U R F U N D R E P O R T |
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Fund Summary as of October 31, 2023 | 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-Month Total Returns | 1 Year | 5 Years | 10 Years | 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||||
Fund NAV | (7.76 | )% | 11.97 | % | 2.10 | % | 1.34 | % | 11.97 | % | 10.96 | % | 14.26 | % | ||||||||||||||||||
Fund Market | (7.63 | ) | 11.64 | 2.16 | 1.33 | 11.64 | 11.29 | 14.14 | ||||||||||||||||||||||||
Index | (8.04 | ) | 11.34 | 1.86 | 1.30 | 11.34 | 9.63 | 13.78 |
Past performance is not an indication 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” for more information.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||
| Beginning Account Value (05/01/23) | | | Ending Account Value | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/23) | | | Ending Account Value | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio | | ||||||||||
$ 1,000.00 | $ 922.40 | $ 2.37 | $ | 1,000.00 | $ 1,022.70 | $ 2.49 | 0.49 | % |
(a) | Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period shown). Other fees, such as brokerage commissions and other fees to financial intermediaries, may be paid which are not reflected in the tables and examples above. See “Disclosure of Expenses” for more information. |
Portfolio Information
SECTOR ALLOCATION
Sector | | Percent of Total��Investments | (a) | |
Financials | 26.8 | % | ||
Industrials | 16.7 | |||
Materials | 16.4 | |||
Utilities | 15.0 | |||
Energy | 7.3 | |||
Consumer Discretionary | 6.3 | |||
Communication Services | 4.7 | |||
Consumer Staples | 3.3 | |||
Real Estate | 3.1 | |||
Information Technology | 0.4 |
GEOGRAPHIC ALLOCATION
Country/Geographic Region | | Percent of Total Investments | (a) | |
United Kingdom | 14.5 | % | ||
Canada | 10.0 | |||
South Korea | 9.6 | |||
Australia | 9.1 | |||
Japan | 8.6 | |||
Spain | 8.1 | |||
Italy | 7.5 | |||
Hong Kong | 6.0 | |||
France | 5.7 | |||
Belgium | 2.9 | |||
Netherlands | 2.7 | |||
Norway | 2.5 | |||
Denmark | 2.2 | |||
Switzerland | 2.2 | |||
Finland | 2.0 | |||
Sweden | 1.6 | |||
Israel | 1.4 | |||
Germany | 1.3 | |||
New Zealand | 1.2 | |||
Other (each representing less than 1%) | 0.9 |
(a) | Excludes money market funds. |
4 | 2 0 2 3 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 not an indication of future results. Financial markets have experienced extreme volatility and trading in many instruments has been disrupted. These circumstances may continue for an extended period of time and may continue to affect adversely the value and liquidity of the Fund’s investments. As a result, current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at 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. Beginning August 10, 2020, the price used to calculate market return (“Market Price”) is the closing price. Prior to August 10, 2020, Market Price was determined 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.
Shareholders of the Fund may incur the following charges: (1) transactional expenses, including brokerage commissions on purchases and sales of fund shares and (2) ongoing expenses, including management fees and other fund expenses. The expense example shown (which is based on a hypothetical investment of $1,000 invested at the beginning of the period and held through the end of the period) is intended to assist shareholders both in calculating expenses based on an investment in the Fund and in comparing these expenses with similar costs of investing in other funds.
The expense example provides information about actual account values and actual expenses. Annualized expense ratios reflect contractual and voluntary fee waivers, if any. In order to estimate the expenses a shareholder paid during the period covered by this report, shareholders can divide their account value by $1,000 and then multiply the result by the number under the heading entitled “Expenses Paid During the Period.”
The expense example also provides information about hypothetical account values and hypothetical expenses based on a fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses. In order to assist shareholders in comparing the ongoing expenses of investing in the Fund and other funds, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
The expenses shown in the expense example are intended to highlight shareholders’ ongoing costs only and do not reflect any transactional expenses, such as brokerage commissions and other fees paid on purchases and sales of fund shares. Therefore, the hypothetical example is useful in comparing ongoing expenses only and will not help shareholders determine the relative total expenses of owning different funds. If these transactional expenses were included, shareholder expenses would have been higher.
A B O U T F U N D P E R F O R M A N C E / D I S C L O S U R E O F E X P E N S E S | 5 |
Schedule of Investments (unaudited) October 31, 2023 | iShares® International Select Dividend ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks | ||||||||
Australia — 9.0% | ||||||||
APA Group | 3,261,970 | $ | 17,099,053 | |||||
BHP Group Ltd. | 5,041,327 | 142,707,213 | ||||||
Fortescue Metals Group Ltd. | 5,494,127 | 78,158,432 | ||||||
Harvey Norman Holdings Ltd. | 4,989,114 | 11,661,890 | ||||||
JB Hi-Fi Ltd. | 1,790,592 | 51,470,447 | ||||||
Magellan Financial Group Ltd. | 2,416,825 | 10,029,539 | ||||||
Perpetual Ltd. | 1,765,806 | 21,587,793 | ||||||
Super Retail Group Ltd. | 2,726,979 | 22,945,639 | ||||||
Viva Energy Group Ltd.(a) | 5,543,696 | 9,982,642 | ||||||
|
| |||||||
365,642,648 | ||||||||
Austria — 0.4% | ||||||||
Oesterreichische Post AG(b) | 515,059 | 16,431,270 | ||||||
|
| |||||||
Belgium — 2.9% | ||||||||
Ageas SA/NV | 2,496,584 | 95,900,863 | ||||||
Proximus SADP | 2,693,039 | 22,321,304 | ||||||
|
| |||||||
118,222,167 | ||||||||
Canada — 9.8% | ||||||||
Bank of Nova Scotia (The) | 1,992,655 | 80,683,308 | ||||||
Birchcliff Energy Ltd. | 3,024,558 | 16,706,771 | ||||||
Canadian Utilities Ltd., Class A, NVS | 1,686,647 | 35,685,035 | ||||||
Emera Inc. | 1,696,946 | 55,579,800 | ||||||
Great-West Lifeco Inc. | 1,889,104 | 52,337,751 | ||||||
IGM Financial Inc. | 1,293,805 | 29,127,523 | ||||||
Labrador Iron Ore Royalty Corp. | 1,154,675 | 25,395,772 | ||||||
Manulife Financial Corp. | 1,791,508 | 31,185,868 | ||||||
Peyto Exploration & Development Corp. | 2,864,364 | 30,156,636 | ||||||
Power Corp. of Canada | 1,763,190 | 42,479,306 | ||||||
|
| |||||||
399,337,770 | ||||||||
Denmark — 2.2% | ||||||||
AP Moller - Maersk A/S, Class A | 50,407 | 82,302,591 | ||||||
D/S Norden A/S | 138,892 | 7,891,335 | ||||||
|
| |||||||
90,193,926 | ||||||||
Finland — 2.0% | ||||||||
Fortum OYJ | 5,011,814 | 59,507,417 | ||||||
Metsa Board OYJ, Class B | 2,898,956 | 21,949,909 | ||||||
|
| |||||||
81,457,326 | ||||||||
France — 5.7% | ||||||||
ALD SA(a) | 1,828,076 | 12,296,281 | ||||||
Bouygues SA | 1,596,230 | 56,153,787 | ||||||
Nexity SA(b) | 851,793 | 11,901,650 | ||||||
Orange SA | 1,879,970 | 22,112,285 | ||||||
Rubis SCA | 1,601,093 | 34,859,867 | ||||||
TotalEnergies SE | 1,383,866 | 92,521,811 | ||||||
|
| |||||||
229,845,681 | ||||||||
Germany — 1.2% | ||||||||
Freenet AG | 396,102 | 10,054,217 | ||||||
Hapag-Lloyd AG(a)(b) | 109,762 | 15,875,415 | ||||||
Mercedes-Benz Group AG | 390,476 | 22,973,363 | ||||||
|
| |||||||
48,902,995 | ||||||||
Hong Kong — 5.9% | ||||||||
CK Hutchison Holdings Ltd. | 12,134,000 | 61,425,750 | ||||||
CK Infrastructure Holdings Ltd. | 9,808,500 | 45,462,776 | ||||||
Henderson Land Development Co. Ltd.(b) | 14,007,000 | 36,648,729 | ||||||
Hysan Development Co. Ltd. | 10,697,000 | 19,690,568 | ||||||
Kerry Properties Ltd. | 9,666,500 | 16,266,656 | ||||||
New World Development Co. Ltd.(b) | 19,177,750 | 35,197,277 | ||||||
PCCW Ltd. | 20,671,000 | 10,117,158 |
Security | Shares | Value | ||||||
Hong Kong (continued) | ||||||||
VTech Holdings Ltd. | 2,519,600 | $ | 14,661,104 | |||||
|
| |||||||
239,470,018 | ||||||||
Israel — 1.4% | ||||||||
ICL Group Ltd. | 11,738,991 | 57,096,977 | ||||||
|
| |||||||
Italy — 7.4% | ||||||||
A2A SpA | 6,576,632 | 12,344,290 | ||||||
Anima Holding SpA(a) | 3,959,984 | 16,183,915 | ||||||
Azimut Holding SpA | 1,938,032 | 40,836,074 | ||||||
Enel SpA | 7,317,249 | 46,446,828 | ||||||
Eni SpA | 7,005,519 | 114,523,880 | ||||||
Italgas SpA | 5,602,975 | 28,473,232 | ||||||
Snam SpA | 5,724,568 | 26,250,242 | ||||||
UnipolSai Assicurazioni SpA | 6,596,421 | 15,634,521 | ||||||
|
| |||||||
300,692,982 | ||||||||
Japan — 8.5% | ||||||||
Haseko Corp. | 1,600,800 | 19,700,792 | ||||||
Mitsui OSK Lines Ltd. | 5,023,800 | 129,700,922 | ||||||
MS&AD Insurance Group Holdings Inc. | 1,423,900 | 52,172,424 | ||||||
Nippon Yusen KK | 4,580,400 | 112,069,755 | ||||||
Sojitz Corp. | 1,486,980 | 30,877,697 | ||||||
|
| |||||||
344,521,590 | ||||||||
Netherlands — 2.6% | ||||||||
Flow Traders Ltd., NVS(b) | 551,497 | 10,077,721 | ||||||
NN Group NV | 2,135,366 | 68,486,279 | ||||||
SBM Offshore NV | 2,241,623 | 27,918,205 | ||||||
|
| |||||||
106,482,205 | ||||||||
New Zealand — 1.1% | ||||||||
Spark New Zealand Ltd. | 16,164,791 | 46,928,310 | ||||||
|
| |||||||
Norway — 2.5% | ||||||||
Norsk Hydro ASA | 1,802,425 | 10,278,700 | ||||||
Yara International ASA | 2,806,739 | 91,841,929 | ||||||
|
| |||||||
102,120,629 | ||||||||
Singapore — 0.5% | ||||||||
Golden Agri-Resources Ltd. | 97,041,300 | 19,136,801 | ||||||
|
| |||||||
South Korea — 8.4% | ||||||||
BNK Financial Group Inc. | 2,840,852 | 14,298,460 | ||||||
DB Insurance Co. Ltd. | 864,010 | 56,211,529 | ||||||
DGB Financial Group Inc. | 2,487,247 | 14,486,307 | ||||||
Hana Financial Group Inc. | 2,293,327 | 66,682,520 | ||||||
Industrial Bank of Korea | 2,859,582 | 23,665,823 | ||||||
KB Financial Group Inc. | 1,732,911 | 66,055,512 | ||||||
Samsung Securities Co. Ltd. | 1,120,010 | 29,340,157 | ||||||
Shinhan Financial Group Co. Ltd. | 1,680,943 | 43,207,327 | ||||||
Woori Financial Group Inc. | 2,894,350 | 25,565,073 | ||||||
|
| |||||||
339,512,708 | ||||||||
Spain — 8.0% | ||||||||
ACS Actividades de Construccion y Servicios SA | 3,231,281 | 116,855,927 | ||||||
Cia. de Distribucion Integral Logista Holdings SA | 1,104,620 | 27,124,155 | ||||||
Enagas SA | 3,174,475 | 53,104,799 | ||||||
Mapfre SA | 3,291,798 | 6,842,728 | ||||||
Naturgy Energy Group SA | 2,124,112 | 60,101,051 | ||||||
Redeia Corp. SA | 2,963,064 | 46,208,737 | ||||||
Telefonica SA | 3,519,662 | 13,595,174 | ||||||
|
| |||||||
323,832,571 | ||||||||
Sweden — 1.6% | ||||||||
Samhallsbyggnadsbolaget i Norden AB(b) | 19,477,289 | 5,665,469 | ||||||
Telia Co. AB | 27,637,397 | 58,589,769 | ||||||
|
| |||||||
64,255,238 |
6 | 2 0 2 3 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, 2023 | iShares® International Select Dividend ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Switzerland — 2.2% | ||||||||
Swiss Re AG | 170,028 | $ | 18,577,733 | |||||
Zurich Insurance Group AG | 149,894 | 71,198,531 | ||||||
|
| |||||||
89,776,264 | ||||||||
United Kingdom — 14.3% | ||||||||
abrdn PLC | 3,268,520 | 6,239,916 | ||||||
Ashmore Group PLC | 3,400,818 | 7,006,320 | ||||||
British American Tobacco PLC | 3,833,724 | 114,522,550 | ||||||
Centamin PLC | 3,194,990 | 3,202,252 | ||||||
IG Group Holdings PLC | 2,865,424 | 22,260,316 | ||||||
Jupiter Fund Management PLC | 3,099,387 | 2,960,756 | ||||||
Legal & General Group PLC | 3,760,579 | 9,689,141 | ||||||
National Grid PLC | 2,588,811 | 30,866,312 | ||||||
Persimmon PLC | 6,191,390 | 76,674,162 | ||||||
Phoenix Group Holdings PLC | 4,092,700 | 22,607,616 | ||||||
Rio Tinto PLC | 3,577,911 | 228,272,345 | ||||||
SSE PLC | 2,594,098 | 51,553,948 | ||||||
Vodafone Group PLC | 4,080,640 | 3,756,382 | ||||||
|
| |||||||
579,612,016 | ||||||||
|
| |||||||
Total Common Stocks — 97.6% |
| 3,963,472,092 | ||||||
|
| |||||||
Preferred Stocks | ||||||||
Germany — 0.0% | ||||||||
Schaeffler AG, Preference Shares, NVS | 400,994 | 2,081,183 | ||||||
|
| |||||||
South Korea — 1.1% | ||||||||
Hyundai Motor Co., Series 2, Preference | 604,921 | 44,940,824 | ||||||
|
| |||||||
Total Preferred Stocks — 1.1% |
| 47,022,007 | ||||||
|
| |||||||
Total Long-Term Investments — 98.7% |
| 4,010,494,099 | ||||||
|
|
Security | Shares | Value | ||||||
Short-Term Securities | ||||||||
Money Market Funds — 1.2% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 5.54%(c)(d)(e) | 44,961,142 | $ | 44,979,127 | |||||
BlackRock Cash Funds: Treasury, SL Agency | 2,160,000 | 2,160,000 | ||||||
|
| |||||||
Total Short-Term Securities — 1.2% |
| 47,139,127 | ||||||
|
| |||||||
Total Investments — 99.9% |
| 4,057,633,226 | ||||||
Other Assets Less Liabilities — 0.1% |
| 4,190,584 | ||||||
|
| |||||||
Net Assets — 100.0% | $ | 4,061,823,810 | ||||||
|
|
(a) | 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. |
(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 the cash collateral from loaned securities. |
Affiliates
Investments in issuers considered to be affiliate(s) of the Fund during the six months ended October 31, 2023 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
Affiliated Issuer | Value at 04/30/23 | Purchases at Cost | Proceeds from Sale | Net Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Value at 10/31/23 | Shares Held at 10/31/23 | Income | Capital Gain Distributions from Underlying Funds | |||||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | $ | 68,492,998 | $ | — | $ | (23,522,502 | )(a) | $ | 6,852 | $ | 1,779 | $ | 44,979,127 | 44,961,142 | $ | 4,187,791 | (b) | $ | — | |||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | 4,300,000 | — | (2,140,000 | )(a) | — | — | 2,160,000 | 2,160,000 | 194,253 | — | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
$ | 6,852 | $ | 1,779 | $ | 47,139,127 | $ | 4,382,044 | $ | — | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(a) | Represents net amount purchased (sold). |
(b) | All or a portion represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities. |
S C H E D U L E O F I N V E S T M E N T S | 7 |
Schedule of Investments (unaudited) (continued) October 31, 2023 | iShares® International Select Dividend ETF |
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
| ||||||||||||||||
Description | Number of Contracts | Expiration Date | Notional Amount (000) | Value/ Unrealized Appreciation | ||||||||||||
| ||||||||||||||||
Long Contracts | ||||||||||||||||
Euro STOXX 50 Index | 219 | 12/15/23 | $ 9,455 | $ | (227,224 | ) | ||||||||||
FTSE 100 Index | 163 | 12/15/23 | 14,549 | (572,959 | ) | |||||||||||
SPI 200 Index | 72 | 12/21/23 | 7,777 | (344,998 | ) | |||||||||||
|
| |||||||||||||||
$ | (1,145,181 | ) | ||||||||||||||
|
|
OTC Total Return Swaps
| ||||||||||||||||||||||||||||
Reference Entity | Payment Frequency | Counterparty(a) | Termination Date | Net Notional | Accrued Appreciation (Depreciation) | Net Value of Reference Entity | Gross Notional Amount Net Asset Percentage | |||||||||||||||||||||
| ||||||||||||||||||||||||||||
Equity Securities Long | Monthly | Goldman Sachs Bank USA(b) | 08/19/26 | $ | 6,841,650 | $ | (175,324 | )(c) | $ | 6,703,643 | 0.2 | % | ||||||||||||||||
Monthly | HSBC Bank PLC(d) | 02/10/28 | 4,485,368 | (64,202 | )(e) | 4,449,146 | 0.1 | |||||||||||||||||||||
Monthly | JPMorgan Chase Bank NA(f) | 02/08/24 | 6,373,261 | (120,714 | )(g) | 6,321,273 | 0.1 | |||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||
$ | (360,240 | ) | $ | 17,474,062 | ||||||||||||||||||||||||
|
|
|
|
(a) | The Fund receives the total return on a portfolio of long positions underlying the total return swap. The Fund pays the total return on a portfolio of short positions underlying the total return swap. In addition, the Fund pays or receives a variable rate of interest, based on a specified benchmark. The benchmark and spread are determined based upon the country and/or currency of the individual underlying positions. |
(c) | Amount includes $(37,317) of net dividends and financing fees. |
(e) | Amount includes $(27,980) of net dividends, payable for referenced securities purchased and financing fees. |
(g) | Amount includes $(68,726) of net dividends, payable for referenced securities purchased and financing fees. |
The following are the specified benchmarks (plus or minus a range) used in determining the variable rate of interest:
(b) | (d) | (f) | ||||
Range: | 45 basis points | 45 basis points | 40 basis points | |||
Benchmarks: | EUR - 1D Euro Short Term Rate (ESTR) | EUR - 1D Euro Short Term Rate (ESTR) | EUR - 1D Euro Short Term Rate (ESTR) |
8 | 2 0 2 3 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, 2023 | iShares® International Select Dividend ETF |
The following table represents the individual long positions and related values of equity securities underlying the total return swap with Goldman Sachs Bank USA as of period end, termination date August 19, 2026.
Shares | Value | % of | ||||||||||
Reference Entity — Long | ||||||||||||
Common Stocks | ||||||||||||
Spain | ||||||||||||
Enagas SA | 401,463 | $ | 6,703,643 | 100.0 | % | |||||||
|
| |||||||||||
Net Value of Reference Entity — Goldman Sachs Bank USA |
| $ | 6,703,643 | |||||||||
|
|
The following table represents the individual long positions and related values of equity securities underlying the total return swap with HSBC Bank PLC as of period end, termination date February 10, 2028.
Shares | Value | % of | ||||||||||
Reference Entity — Long | ||||||||||||
Common Stocks | ||||||||||||
Spain | ||||||||||||
Enagas SA | 258,066 | $ | 4,312,372 | 96.9 | % | |||||||
Red Electrica Corp. SA | 8,780 | 136,774 | 3.1 | |||||||||
|
| |||||||||||
Net Value of Reference Entity — HSBC Bank PLC | $ | 4,449,146 | ||||||||||
|
|
The following table represents the individual long positions and related values of equity securities underlying the total return swap with JPMorgan Chase Bank NA as of period end, termination date February 8, 2024.
Shares | Value | % of | ||||||||||
Reference Entity — Long | ||||||||||||
Common Stocks | ||||||||||||
Spain | ||||||||||||
Enagas SA | 378,285 | $ | 6,321,273 | 100.0 | % | |||||||
|
| |||||||||||
Net Value of Reference Entity — JPMorgan Chase Bank NA |
| $ | 6,321,273 | |||||||||
|
|
Balances Reported in the Statement of Assets and Liabilities for Total Return Swaps
Description | Swap Premiums Paid | Swap Premiums Received | Unrealized Appreciation | Unrealized Depreciation | ||||||||||||
Total Return Swaps | $ | — | $ | — | $ | — | $ | (360,240 | ) |
Derivative Financial Instruments Categorized by Risk Exposure
As of period end, the fair values of derivative financial instruments located in the Statement of Assets and Liabilities were as follows:
Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Currency Exchange Contracts | Interest Rate Contracts | Other Contracts | Total | ||||||||||||||||||||||
Liabilities — Derivative Financial Instruments | ||||||||||||||||||||||||||||
Futures contracts | $ | — | $ | — | $ | 1,145,181 | $ | — | $ | — | $ | — | $ | 1,145,181 | ||||||||||||||
Swaps — OTC | $ | — | $ | — | $ | 360,240 | $ | — | $ | — | $ | — | $ | 360,240 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
$ | — | $ | — | $ | 1,505,421 | $ | — | $ | — | $ | — | $ | 1,505,421 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Net cumulative unrealized appreciation (depreciation) on futures contracts are reported in the Schedule of Investments. In the Statement of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss). |
S C H E D U L E O F I N V E S T M E N T S | 9 |
Schedule of Investments (unaudited) (continued) October 31, 2023 | iShares® International Select Dividend ETF |
For the period ended October 31, 2023, the effect of derivative financial instruments in the Statement of Operations was as follows:
Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Currency Exchange Contracts | Interest Rate Contracts | Other Contracts | Total | ||||||||||||||||||||||
Net Realized Gain (Loss) from | ||||||||||||||||||||||||||||
Futures contracts | $ | — | $ | — | $ | (1,119,430 | ) | $ | — | $ | — | $ | — | $ | (1,119,430 | ) | ||||||||||||
Swaps | — | — | (1,304,803 | ) | — | — | — | (1,304,803 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
$ | — | $ | — | $ | (2,424,233 | ) | $ | — | $ | — | $ | — | $ | (2,424,233 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on | ||||||||||||||||||||||||||||
Futures contracts | $ | — | $ | — | $ | (2,716,318 | ) | $ | — | $ | — | $ | — | $ | (2,716,318 | ) | ||||||||||||
Swaps | — | — | (1,324,881 | ) | — | — | — | (1,324,881 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
$ | — | $ | — | $ | (4,041,199 | ) | $ | — | $ | — | $ | — | $ | (4,041,199 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Quarterly Balances of Outstanding Derivative Financial Instruments
Futures contracts: | $ | 32,770,852 | ||
Total return swaps: | $ | 20,523,423 |
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
Derivative Financial Instruments - Offsetting as of Period End
The Fund’s derivative assets and liabilities (by type) were as follows:
Assets | Liabilities | |||||||
Derivative Financial Instruments: | ||||||||
Futures contracts | $ | — | $ | 1,145,181 | ||||
Swaps - OTC | — | 360,240 | ||||||
|
|
|
| |||||
Total derivative assets and liabilities in the Statement of Assets and Liabilities | — | 1,505,421 | ||||||
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”) | — | (1,145,181 | ) | |||||
|
|
|
| |||||
Total derivative assets and liabilities subject to an MNA | — | 360,240 | ||||||
|
|
|
|
The following table presents the Fund’s derivative liabilities by counterparty net of amounts available for offset under an MNA and net of the related collateral pledged by the Fund:
Counterparty | Derivative Liabilities Subject to an MNA by Counterparty | Derivatives for Offset(a) | Non-Cash Collateral Pledged | Cash Pledged(b) | Net Amount Liabilities(c) | |||||||||||||||
Goldman Sachs Bank USA | $ | 175,324 | $ | — | $ | — | $ | (20,000 | ) | $ | 155,324 | |||||||||
HSBC Bank PLC | 64,202 | — | — | — | 64,202 | |||||||||||||||
JPMorgan Chase Bank NA | 120,714 | — | — | — | 120,714 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
$ | 360,240 | $ | — | $ | — | $ | (20,000 | ) | $ | 340,240 | ||||||||||
|
|
|
|
|
|
|
|
|
|
(a) | The amount of derivatives available for offset is limited to the amount of derivative assets and/or liabilities that are subject to an MNA. |
(b) | Excess of collateral received/pledged, if any, from the individual counterparty is not shown for financial reporting purposes. |
(c) | Net amount represents the net amount payable due to the counterparty in the event of default. |
10 | 2 0 2 3 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, 2023 | iShares® International Select Dividend ETF |
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of financial instruments. For a 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 Fund’s financial instruments categorized in the fair value hierarchy. The breakdown of the Fund’s financial instruments into major categories is disclosed in the Schedule of Investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Assets | ||||||||||||||||||||
Investments | ||||||||||||||||||||
Long-Term Investments | ||||||||||||||||||||
Common Stocks | $ | 451,989,882 | $ | 3,511,482,210 | $ | — | $ | 3,963,472,092 | ||||||||||||
Preferred Stocks |
| — | 47,022,007 | — | 47,022,007 | |||||||||||||||
Short-Term Securities | ||||||||||||||||||||
Money Market Funds | 47,139,127 | — | — | 47,139,127 | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
$ | 499,129,009 | $ | 3,558,504,217 | $ | — | $ | 4,057,633,226 | |||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
Derivative Financial Instruments(a) | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||
Equity Contracts | $ | — | $ | (1,505,421 | ) | $ | — | $ | (1,505,421 | ) | ||||||||||
|
|
|
|
|
|
|
|
(a) | Derivative financial instruments are swaps and futures contracts. Swaps and futures contracts are valued at the unrealized appreciation (depreciation) on the instrument. |
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 | 11 |
Statement of Assets and Liabilities (unaudited)
October 31, 2023
iShares Dividend ETF | ||||
ASSETS | ||||
Investments, at value — unaffiliated(a)(b) | $ | 4,010,494,099 | ||
Investments, at value — affiliated(c) | 47,139,127 | |||
Cash | 6,723 | |||
Cash pledged as collateral for OTC derivatives | 20,000 | |||
Foreign currency collateral pledged for futures contracts(d) | 2,418,688 | |||
Foreign currency, at value(e) | 29,188,802 | |||
Receivables: | ||||
Investments sold | 85 | |||
Securities lending income — affiliated | 407,844 | |||
Swaps | 31,679 | |||
Dividends — unaffiliated | 15,775,619 | |||
Dividends — affiliated | 30,074 | |||
Tax reclaims | 14,050,551 | |||
Variation margin on futures contracts | 68,899 | |||
|
| |||
Total assets | 4,119,632,190 | |||
|
| |||
LIABILITIES | ||||
Cash received for futures contracts | 6,344 | |||
Collateral on securities loaned, at value | 44,948,235 | |||
Payables: | ||||
Investments purchased | 5,976,544 | |||
Swaps | 206,509 | |||
Investment advisory fees | 1,732,363 | |||
IRS compliance fee for foreign withholding tax claims | 4,578,145 | |||
Unrealized depreciation on OTC swaps | 360,240 | |||
|
| |||
Total liabilities | 57,808,380 | |||
|
| |||
Commitments and contingent liabilities | ||||
NET ASSETS | $ | 4,061,823,810 | ||
|
| |||
NET ASSETS CONSIST OF | ||||
Paid-in capital | $ | 5,967,204,695 | ||
Accumulated loss | (1,905,380,885 | ) | ||
|
| |||
NET ASSETS | $ | 4,061,823,810 | ||
|
| |||
NET ASSET VALUE | ||||
Shares outstanding | 164,100,000 | |||
|
| |||
Net asset value | $ | 24.75 | ||
|
| |||
Shares authorized | Unlimited | |||
|
| |||
Par value | None | |||
|
| |||
(a) Investments, at cost — unaffiliated | $ | 4,682,856,356 | ||
(b) Securities loaned, at value | $ | 42,833,072 | ||
(c) Investments, at cost — affiliated | $ | 47,121,673 | ||
(d) Foreign currency collateral pledged, at cost | $ | 2,528,989 | ||
(e) Foreign currency, at cost | $ | 29,086,319 |
See notes to financial statements.
12 | 2 0 2 3 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 |
Statement of Operations (unaudited)
Six Months Ended October 31, 2023
iShares International Select Dividend ETF | ||||
INVESTMENT INCOME | ||||
Dividends — unaffiliated | $ | 185,340,656 | ||
Dividends — affiliated | 194,253 | |||
Interest — unaffiliated | 135,648 | |||
Securities lending income — affiliated — net | 4,187,791 | |||
Other income — unaffiliated | 70,473 | |||
Foreign taxes withheld | (17,100,210 | ) | ||
IRS compliance fee for foreign withholding tax claims | 128,887 | |||
|
| |||
Total investment income | 172,957,498 | |||
|
| |||
EXPENSES | ||||
Investment advisory | 11,411,701 | |||
Professional | 16,338 | |||
Commitment costs | 11,223 | |||
|
| |||
Total expenses | 11,439,262 | |||
|
| |||
Net investment income | 161,518,236 | |||
|
| |||
REALIZED AND UNREALIZED GAIN (LOSS) | ||||
Net realized gain (loss) from: | ||||
Investments — unaffiliated | (65,761,497 | ) | ||
Investments — affiliated | 6,852 | |||
Foreign currency transactions | (3,145,454 | ) | ||
Futures contracts | (1,119,430 | ) | ||
In-kind redemptions — unaffiliated(a) | 33,809,993 | |||
Swaps | (1,304,803 | ) | ||
|
| |||
(37,514,339 | ) | |||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments — unaffiliated | (488,704,193 | ) | ||
Investments — affiliated | 1,779 | |||
Foreign currency translations | (353,275 | ) | ||
Futures contracts | (2,716,318 | ) | ||
Swaps | (1,324,881 | ) | ||
|
| |||
(493,096,888 | ) | |||
|
| |||
Net realized and unrealized loss | (530,611,227 | ) | ||
|
| |||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (369,092,991 | ) | |
|
|
(a) | See Note 2 of the Notes to Financial Statements. |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S | 13 |
Statements of Changes in Net Assets
iShares International Select Dividend ETF | ||||||||
Six Months Ended 10/31/23 (unaudited) | Year Ended 04/30/23 | |||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||
OPERATIONS | ||||||||
Net investment income | $ | 161,518,236 | $ | 346,145,773 | ||||
Net realized loss | (37,514,339 | ) | (158,688,634 | ) | ||||
Net change in unrealized appreciation (depreciation) | (493,096,888 | ) | (219,514,963 | ) | ||||
|
|
|
| |||||
Net decrease in net assets resulting from operations | (369,092,991 | ) | (32,057,824 | ) | ||||
|
|
|
| |||||
DISTRIBUTIONS TO SHAREHOLDERS(a) | ||||||||
Decrease in net assets resulting from distributions to shareholders | (216,248,724 | ) | (304,367,747 | ) | ||||
|
|
|
| |||||
CAPITAL SHARE TRANSACTIONS | ||||||||
Net increase (decrease) in net assets derived from capital share transactions | (375,411,273 | ) | 749,314,980 | |||||
|
|
|
| |||||
NET ASSETS | ||||||||
Total increase (decrease) in net assets | (960,752,988 | ) | 412,889,409 | |||||
Beginning of period | 5,022,576,798 | 4,609,687,389 | ||||||
|
|
|
| |||||
End of period | $ | 4,061,823,810 | $ | 5,022,576,798 | ||||
|
|
|
|
(a) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
See notes to financial statements.
14 | 2 0 2 3 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 International Select Dividend ETF | ||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
Six Months Ended 10/31/23 | Year Ended 04/30/23 | Year Ended 04/30/22 | Year Ended 04/30/21 | Year Ended 04/30/20 | Year Ended 04/30/19 | |||||||||||||||||||||||
| ||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 28.14 | $ | 30.17 | $ | 32.41 | $ | 24.14 | $ | 31.59 | $ | 34.11 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Net investment income(a) | 0.93 | 2.06 | (b) | 1.95 | (b) | 1.35 | 1.83 | 1.71 | ||||||||||||||||||||
Net realized and unrealized gain (loss)(c) | (3.08 | ) | (2.25 | ) | (2.48 | ) | 8.19 | (7.10 | ) | (2.48 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Net increase (decrease) from investment operations | (2.15 | ) | (0.19 | ) | (0.53 | ) | 9.54 | (5.27 | ) | (0.77 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Distributions from net investment income(d) | (1.24 | ) | (1.84 | ) | (1.71 | ) | (1.27 | ) | (2.18 | ) | (1.75 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Net asset value, end of period | $ | 24.75 | $ | 28.14 | $ | 30.17 | $ | 32.41 | $ | 24.14 | $ | 31.59 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Total Return(e) | ||||||||||||||||||||||||||||
Based on net asset value | (7.76 | )%(f) | (0.06 | )%(b) | (1.76 | )%(b) | 40.57 | % | (17.15 | )% | (2.13 | )% | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Ratios to Average Net Assets(g) | ||||||||||||||||||||||||||||
Total expenses | 0.49 | %(h) | 0.51 | % | 0.54 | % | 0.49 | % | 0.49 | % | 0.49 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Total expenses after fees waived | 0.49 | %(h) | 0.51 | % | 0.54 | % | 0.49 | % | 0.49 | % | 0.49 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Total expenses excluding professional fees for foreign withholding tax claims | 0.49 | %(h) | 0.49 | % | 0.49 | % | N/A | N/A | 0.49 | % | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Net investment income | 6.97 | %(h) | 7.58 | %(b) | 6.12 | %(b) | 4.87 | % | 6.06 | % | 5.39 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Supplemental Data | ||||||||||||||||||||||||||||
Net assets, end of period (000) | $ | 4,061,824 | $ | 5,022,579 | $ | 4,609,687 | $ | 4,329,942 | $ | 3,421,123 | $ | 4,377,418 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Portfolio turnover rate(i) | 3 | % | 29 | % | 36 | % | 86 | % | 12 | % | 35 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(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 for the year ended April 30, 2023 and April 30,2022 respectively: |
• Net investment income per share by $0.04 and $0.13.
• Total return by 0.13% and 0.39%.
• Ratio of net investment income to average net assets by 0.15% and 0.41%.
(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) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
(e) | Where applicable, assumes the reinvestment of distributions. |
(f) | Not annualized. |
(g) | Excludes fees and expenses incurred indirectly as a result of investments in underlying funds. |
(h) | Annualized. |
(i) | 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 | 15 |
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 fund (the “Fund”):
iShares ETF | Diversification Classification | |
International Select Dividend | Diversified |
2. | SIGNIFICANT ACCOUNTING POLICIES |
The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure 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. The Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. Below is a summary of significant accounting policies:
Investment Transactions and Income Recognition: For financial reporting purposes, investment transactions are recorded on the dates the transactions are executed. Realized gains and losses on investment transactions are determined using the specific identification method. Dividend income and capital gain distributions, if any, are recorded on the ex-dividend date. Non-cash dividends, if any, are recorded on the ex-dividend date at fair value. Dividends from foreign securities where the ex-dividend date may have passed are subsequently recorded when the Fund is informed of the ex-dividend date. Under the applicable foreign tax laws, a withholding tax at various rates may be imposed on capital gains, dividends and interest. Interest income, including amortization and accretion of premiums and discounts on debt securities, is recognized daily on an accrual basis.
Foreign Currency Translation: The Fund’s books and records are maintained in U.S. dollars. Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using prevailing market rates as quoted by one or more data service providers. Purchases and sales of investments are recorded at the rates of exchange prevailing on the respective dates of such transactions. Generally, when the U.S. dollar rises in value against a foreign currency, the investments denominated in that currency will lose value; the opposite effect occurs if the U.S. dollar falls in relative value.
The Fund does not isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of investments for financial reporting purposes. Accordingly, the effects of changes in exchange rates on investments are not segregated in the Statement of Operations from the effects of changes in market prices of those investments, but are included as a component of net realized and unrealized gain (loss) from investments. The Fund reports realized currency gains (losses) on foreign currency related transactions as components of net realized gain (loss) for financial reporting purposes, whereas such components are generally treated as ordinary income for U.S. federal income tax purposes.
Foreign Taxes: The Fund may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, capital gains on investments, or certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the Fund invests. These foreign taxes, if any, are paid by the 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, 2023, if any, are disclosed in the Statement of Assets and Liabilities.
The Fund files withholding tax reclaims in certain jurisdictions to recover a portion of amounts previously withheld. The Fund may record a reclaim receivable based on collectability, which includes factors such as the jurisdiction’s applicable laws, payment history and market convention. The Statement of Operations includes tax reclaims recorded as well as professional and other fees, if any, associated with recovery of foreign withholding taxes.
Collateralization: If required by an exchange or counterparty agreement, the Fund may be required to deliver/deposit cash and/or securities to/with an exchange, or broker-dealer or custodian as collateral for certain investments.
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 Fund. Because such gains or losses are not taxable to the Fund 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 Fund’s tax year. These reclassifications have no effect on net assets or net asset value (“NAV”) per share.
Distributions: Dividends and distributions paid by the 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 Fund.
Indemnifications: In the normal course of business, the Fund enters into contracts that contain a variety of representations that provide general indemnification. The Fund’s maximum exposure under these arrangements is unknown because it involves future potential claims against the Fund, which cannot be predicted with any certainty.
16 | 2 0 2 3 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: The 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. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Board of Trustees of the Trust (the “Board”) of the Fund has approved the designation of BlackRock Fund Advisors (“BFA”), the Fund’s investment adviser, as the valuation designee for the Fund. The Fund determines the fair values of its financial instruments using various independent dealers or pricing services under BFA’s policies. If a security’s market price is not readily available or does not otherwise accurately represent the fair value of the security, the security will be valued in accordance with BFA’s policies and procedures as reflecting fair value. BFA has formed a committee (the “Valuation Committee”) to develop pricing policies and procedures and to oversee the pricing function for all financial instruments, with assistance from other BlackRock pricing committees.
Fair Value Inputs and Methodologies: The following methods and inputs are used to establish the fair value of the Fund’s assets and liabilities:
• | Equity investments traded on a recognized securities exchange are valued at that day’s 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 NAV. |
• | Futures contracts are valued based on that day’s last reported settlement or trade price on the exchange where the contract is traded. |
• | Swap agreements are valued utilizing quotes received daily by independent pricing services or through brokers, which are derived using daily swap curves and models that incorporate a number of market data factors, such as discounted cash flows, trades and values of the underlying reference instruments. |
Generally, trading in foreign instruments is substantially completed each day at various times prior to the close of trading on the New York Stock Exchange (“NYSE”). Each business day, the Fund uses current market factors supplied by independent pricing services to value certain foreign instruments (“Systematic Fair Value Price”). The Systematic Fair Value Price is designed to value such foreign securities at fair value as of the close of trading on the NYSE, which follows the close of the local markets.
If events (e.g., market volatility, company announcement or a natural disaster) occur that are expected to materially affect the value of such 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 Valuation Committee, in accordance with BFA’s policies and procedures as reflecting fair value (“Fair Valued Investments”). The fair valuation approaches that may be used by the Valuation Committee include market approach, income approach and cost approach. Valuation techniques such as discounted cash flow, use of market comparables and matrix pricing are types of valuation approaches and are typically used in determining fair value. When determining the price for Fair Valued Investments, the Valuation Committee seeks to determine the price that the Fund might reasonably expect to receive or pay from the current sale or purchase of that asset or liability in an arm’s-length transaction. Fair value determinations shall be based upon all available factors that the Valuation Committee deems relevant and consistent with the principles of fair value measurement.
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/exchanges for identical assets or liabilities that the Fund has the ability to access; |
• | Level 2 – Other observable inputs (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 active, inputs other than quoted prices that are observable for the assets or liabilities (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 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 judgment 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. Investments classified within Level 3 have significant unobservable inputs used by the Valuation Committee in determining the price for Fair Valued Investments. Level 3 investments include equity or debt issued by privately held companies or funds that may not have a secondary market and/or may have a limited number of investors. 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.
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 | 17 |
Notes to Financial Statements (unaudited) (continued)
4. | SECURITIES AND OTHER INVESTMENTS |
Securities Lending: The 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 the 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, the 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 period end, any securities on loan were collateralized by cash and/or U.S. Government obligations. Cash collateral invested in money market funds managed by BFA, or its affiliates is disclosed in the Schedule 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, if any, are also disclosed in the Fund’s Schedule of Investments. The market value of any securities on loan and the value of any related cash collateral are disclosed in the Statement of Assets and Liabilities.
Securities lending transactions are entered into by the 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. When the value of the collateral is greater than that of the market value of the securities loaned, the lender is left 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. Upon an event of default, the parties’ obligations to return the securities or collateral to the other party are extinguished, and the parties can resell or re-pledge the loaned securities or the collateral received in connection with the loaned securities in order to satisfy the defaulting party’s net payment obligation for all transactions under the MSLA. The defaulting party remains liable for any deficiency.
As of period end, the following table is a summary of the securities on loan by counterparty which are subject to offset under an MSLA:
| ||||||||||||||||
iShares ETF and Counterparty | Securities Loaned at Value | Cash Collateral Received(a) | Non-Cash Collateral Received, at Fair Value(a) | Net Amount | ||||||||||||
| ||||||||||||||||
International Select Dividend | ||||||||||||||||
Goldman Sachs & Co. LLC | $ | 7,452,217 | $ | (7,383,319 | ) | $ | — | $ | 68,898 | (b) | ||||||
HSBC Bank PLC | 1,308,229 | (1,308,229 | ) | — | — | |||||||||||
J.P. Morgan Securities LLC | 6,045,962 | (6,045,962 | ) | — | — | |||||||||||
Jefferies LLC | 176,086 | (169,619 | ) | — | 6,467 | (b) | ||||||||||
Morgan Stanley | 25,435,521 | (25,435,521 | ) | — | — | |||||||||||
SG Americas Securities LLC | 2,415,057 | (2,415,057 | ) | — | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 42,833,072 | $ | (42,757,707 | ) | $ | — | $ | 75,365 | ||||||||
|
|
|
|
|
|
|
|
(a) | Collateral received, if any, in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by the Fund is disclosed in the Fund’s Statements of Assets and Liabilities. |
(b) | The market value of the loaned securities is determined as of October 31, 2023. Additional collateral is delivered to the Fund on the next business day in accordance with the MSLA. The net amount would be subject to the borrower default indemnity in the event of default by a counterparty. |
The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Fund benefits from a borrower default indemnity provided by BlackRock, Inc. (“BlackRock”). BlackRock’s indemnity allows for full replacement of the securities loaned to the extent the collateral received does not cover the value of the securities loaned in the event of borrower default. The 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 the Fund.
5. | DERIVATIVE FINANCIAL INSTRUMENTS |
Futures Contracts: Futures contracts are purchased or sold to gain exposure to, or manage exposure to, changes in interest rates (interest rate risk) and changes in the value of equity securities (equity risk) or foreign currencies (foreign currency exchange rate risk).
Futures contracts are exchange-traded agreements between the Fund and a counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and on a specified date. Depending on the terms of a contract, it 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, the Fund is required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on a contract’s size and risk profile. The initial margin deposit must then be maintained at an established level over the life of the contract. Amounts pledged, which are considered restricted, are included in cash pledged for futures contracts in the Statement of Assets and Liabilities.
18 | 2 0 2 3 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 deposited as initial margin are designated in the Schedule of Investments and cash deposited, if any, are shown as cash pledged for futures contracts in the Statement of Assets and Liabilities. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in market value of the contract (“variation margin”). Variation margin is recorded as unrealized appreciation (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. The use of futures contracts involves the risk of an imperfect correlation in the movements in the price of futures contracts and interest rates, foreign currency exchange rates or underlying assets.
Swaps: Swap contracts are entered into to manage exposure to issuers, markets and securities. Such contracts are agreements between the Fund and a counterparty to make periodic net payments on a specified notional amount or a net payment upon termination. Swap agreements are privately negotiated in the OTC market and may be entered into as a bilateral contract (“OTC swaps”) or centrally cleared (“centrally cleared swaps”).
For OTC swaps, any upfront premiums paid and any upfront fees received are shown as swap premiums paid and swap premiums received, respectively, in the Statement of Assets and Liabilities and amortized over the term of the contract. The daily fluctuation in market value is recorded as unrealized appreciation (depreciation) on OTC Swaps in the Statement of Assets and Liabilities. Payments received or paid are recorded in the Statement of Operations as realized gains or losses, respectively. When an OTC swap is terminated, a realized gain or loss is recorded in the Statement of Operations equal to the difference between the proceeds from (or cost of) the closing transaction and the Fund’s basis in the contract, if any. Generally, the basis of the contract is the premium received or paid.
Total return swaps are entered into by the Fund to obtain exposure to a security or market without owning such security or investing directly in such market or to exchange the risk/return of one security or market (e.g., fixed-income) with another security or market (e.g., equity or commodity prices) (equity risk, commodity price risk and/or interest rate risk).
Total return swaps are agreements in which there is an exchange of cash flows whereby one party commits to make payments based on the total return (distributions plus capital gains/losses) of an underlying instrument, or basket or underlying instruments, in exchange for fixed or floating rate interest payments. If the total return of the instruments or index underlying the transaction exceeds or falls short of the offsetting fixed or floating interest rate obligation, the Fund receives payment from or makes a payment to the counterparty.
Certain total return swaps are designed to function as a portfolio of direct investments in long and short equity positions. This means that the Fund has the ability to trade in and out of these long and short positions within the swap and will receive the economic benefits and risks equivalent to direct investment in these positions, subject to certain adjustments due to events related to the counterparty. Benefits and risks include capital appreciation (depreciation), corporate actions and dividends received and paid, all of which are reflected in the swap’s market value. The market value also includes interest charges and credits (“financing fees”) related to the notional values of the long and short positions and cash balances within the swap. These interest charges and credits are based on a specified benchmark rate plus or minus a specified spread determined based upon the country and/or currency of the positions in the portfolio.
Positions within the swap and financing fees are reset periodically. During a reset, any unrealized appreciation (depreciation) on positions and accrued financing fees become available for cash settlement between the Fund and the counterparty. The amounts that are available for cash settlement are recorded as realized gains or losses in the Statement of Operations. Cash settlement in and out of the swap may occur at a reset date or any other date, at the discretion of the Fund and the counterparty, over the life of the agreement. Certain swaps have no stated expiration and can be terminated by either party at any time.
Swap transactions involve, to varying degrees, elements of interest rate, credit and market risks in excess of the amounts recognized in the Statements of Assets and Liabilities. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreements may default on its obligation to perform or disagree as to the meaning of the contractual terms in the agreements, and that there may be unfavorable changes in interest rates and/or market values associated with these transactions.
Master Netting Arrangements: In order to define its contractual rights and to secure rights that will help mitigate its counterparty risk, a Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between a Fund and a counterparty that governs certain OTC derivatives and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, a Fund may, under certain circumstances, offset with the counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of default including the bankruptcy or insolvency of the counterparty. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against the right of offset in bankruptcy, insolvency, or other events.
For derivatives traded under an ISDA Master Agreement, the collateral requirements are typically calculated by netting the mark-to-market amount for each transaction under such agreement, and comparing that amount to the value of any collateral currently pledged by a fund and the counterparty.
Cash collateral that has been pledged to cover obligations of the Fund and cash collateral received from the counterparty, if any, is reported separately in the Statement of Assets and Liabilities as cash pledged as collateral and cash received as collateral, respectively. Non-cash collateral pledged by the Fund, if any, is noted in the Schedule of Investments. Generally, the amount of collateral due from or to a counterparty is subject to a certain minimum transfer amount threshold before a transfer is required, which is determined at the close of business of the Fund. Any additional required collateral is delivered to/pledged by the Fund on the next business day. Typically, the counterparty is not permitted to sell, re-pledge or use cash and non-cash collateral it receives. A fund generally agrees not to use non-cash collateral that it receives but may, absent default or certain other circumstances defined in the underlying ISDA Master Agreement, be permitted to use cash collateral received. In such cases, interest may be paid pursuant to the collateral arrangement with the counterparty. To the extent amounts due to the Fund from the counterparty are not fully collateralized, the Fund bears the risk of loss from counterparty non-performance. Likewise, to the extent the Fund has delivered collateral to a counterparty and stands ready to perform under the terms of its agreement with such counterparty, the Fund bears the risk of loss from a counterparty in the amount of the value of the collateral in the event the counterparty fails to return such collateral. Based on the terms of agreements, collateral may not be required for all derivative contracts.
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 | 19 |
Notes to Financial Statements (unaudited) (continued)
For financial reporting purposes, the Fund does not offset derivative assets and derivative liabilities that are subject to netting arrangements, if any, in the Statement of Assets and Liabilities.
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 the 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 Fund, 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 Fund, 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 Fees | |||
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 | 0.4287 | |||
Over $30 billion | 0.4073 |
Expense Waivers: BFA may from time to time voluntarily waive and/or reimburse fees or expenses in order to limit total annual fund operating expenses (excluding acquired fund fees and expenses, if any). BFA has elected to implement a voluntary fee waiver for the Fund in an amount equal to the acquired fund fees and expenses, if any, attributable to the Fund’s investments in other iShares funds.
For the six months ended October 31, 2023, there were no fees waived by BFA pursuant to this arrangement.
Distributor: BlackRock Investments, LLC, an affiliate of BFA, is the distributor for the Fund. Pursuant to the distribution agreement, BFA is responsible for any fees or expenses for distribution services provided to the Fund.
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 Fund, subject to applicable conditions. As securities lending agent, BTC bears all operational costs directly related to securities lending, including any custodial costs. The Fund is responsible for fees in connection with the investment of cash collateral received for securities on loan (the “collateral investment fees”). The cash collateral is invested in a money market fund, BlackRock Cash Funds: Institutional or BlackRock Cash Funds: Treasury, 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 the Fund bears to an annual rate of 0.04%. The SL Agency Shares of such money market fund will not be subject to a sales load, distribution fee or service fee. The money market fund in which the cash collateral has been invested may, under certain circumstances, impose a liquidity fee of up to 2% of the value redeemed or temporarily restrict redemptions for up to 10 business days during a 90 day period, in the event that the money market fund’s weekly liquid assets fall below certain thresholds.
Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment fees. The 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 the current securities lending agreement, the Fund retains 82% 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 that calendar year exceeds a specified threshold, the Fund, pursuant to the securities lending agreement, will retain for the remainder of that calendar year 85% 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.
The share of securities lending income earned by the Fund is shown as securities lending income – affiliated – net in its Statement of Operations. For the six months ended October 31, 2023, the Fund paid BTC $898,175 for securities lending agent services.
Officers and Trustees: Certain officers and/or trustees of the Trust are officers and/or trustees of BlackRock or its affiliates.
20 | 2 0 2 3 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)
Other Transactions: 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, 2023, transactions executed by the Fund pursuant to Rule 17a-7 under the 1940 Act were as follows:
iShares ETF | Purchases | Sales |
Net Realized | |||||||||
International Select Dividend | $ | — | $ | 11,475,458 | $ | (3,710,187 | ) |
The 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, 2023, purchases and sales of investments, excluding short-term securities and in-kind transactions, were as follows:
iShares ETF |
Purchases |
Sales | ||||||
International Select Dividend | $ | 157,733,471 | $ | 230,209,016 |
For the six months ended October 31, 2023, in-kind transactions were as follows:
iShares ETF |
In-kind |
In-kind Sales | ||||||
International Select Dividend | $ | 9,850,720 | $ | 341,162,516 |
8. | INCOME TAX INFORMATION |
The Fund is treated as an entity separate from the Trust’s other funds for federal income tax purposes. It is the Fund’s policy to comply with the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies, and to distribute substantially all of its taxable income to its shareholders. Therefore, no U.S. federal income tax provision is required.
Management has analyzed tax laws and regulations and their application to the Fund as of October 31, 2023, 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 Fund’s financial statements.
As of April 30, 2023, the Fund had non-expiring capital loss carryforwards of $1,155,168,435 available to offset future realized capital gains and qualified late-year losses.
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, 2023, 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 (Depreciation) | ||||||||||||
International Select Dividend | $ | 4,795,345,699 | $ | 260,801,219 | $ | (1,000,019,113 | ) | $ | (739,217,894 | ) |
9. | LINE OF CREDIT |
The Fund, along with certain other iShares funds (“Participating Funds”), is a party to a $800 million credit agreement (“Syndicated Credit Agreement”) with a group of lenders, which expires on October 16, 2024. The line of credit may be used for temporary or emergency purposes, including redemptions, settlement of trades and rebalancing of portfolio holdings in certain target markets. The Funds may borrow up to the aggregate commitment amount subject to asset coverage and other limitations as specified in the Syndicated Credit Agreement. The Syndicated Credit Agreement has the following terms: a commitment fee of 0.15% per annum on the unused portion of the credit agreement and interest at a rate equal to the higher of (a) Daily Simple Secured Overnight Financing Rate (“SOFR”) plus 0.10% and 1.00% per annum or (b) the U.S. Federal Funds rate plus 1.00% per annum on amounts borrowed. The commitment fee is generally allocated to each Participating Fund based on the lesser of a Participating Fund’s relative exposure to certain target markets or a Participating Fund’s maximum borrowing amount as set forth by the terms of the Syndicated Credit Agreement.
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 | 21 |
Notes to Financial Statements (unaudited) (continued)
During the six months ended October 31, 2023, the Fund did not borrow under the Syndicated Credit Agreement.
10. | PRINCIPAL RISKS |
In the normal course of business, the 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. Local, regional or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues, recessions, or other events could have a significant impact on the Fund and its investments. The 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 the 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.
The Fund may be exposed to additional risks when reinvesting cash collateral in money market funds that do not seek to maintain a stable NAV per share of $1.00, which may be subject to redemption gates or liquidity fees under certain circumstances.
Infectious Illness Risk: An outbreak of an infectious illness, such as the COVID-19 pandemic, may adversely impact the economies of many nations and the global economy, and may impact individual issuers and capital markets in ways that cannot be foreseen. An infectious illness outbreak may result in, among other things, closed international borders, prolonged quarantines, supply chain disruptions, market volatility or disruptions and other significant economic, social and political impacts.
Valuation Risk: The market values of equities, such as common stocks and preferred securities or equity related investments, such as futures and options, may decline due to general market conditions which are not specifically related to a particular company. They may also decline due to factors which affect a particular industry or industries. A fund may invest in illiquid investments. An illiquid investment is any investment that a fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. A fund may experience difficulty in selling illiquid investments in a timely manner at the price that it believes the investments are worth. Prices may fluctuate widely over short or extended periods in response to company, market or economic news. Markets also tend to move in cycles, with periods of rising and falling prices. This volatility may cause a fund’s NAV to experience significant increases or decreases over short periods of time. If there is a general decline in the securities and other markets, the NAV of a fund may lose value, regardless of the individual results of the securities and other instruments in which a fund invests.
Counterparty Credit Risk: The Fund may be exposed to counterparty credit risk, or the risk that an entity may fail to or be unable to perform on its commitments related to unsettled or open transactions, including making timely interest and/or principal payments or otherwise honoring its obligations. The Fund manages counterparty credit risk by entering into transactions only with counterparties that BFA believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Fund to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Fund’s exposure to market, issuer and counterparty credit risks with respect to these financial assets is approximately their value recorded in the Statement of Assets and Liabilities, less any collateral held by the Fund.
A derivative contract may suffer a mark-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform under the contract.
With exchange-traded futures, there is less counterparty credit risk to the Fund since the exchange or clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, credit risk is limited to failure of the clearinghouse. While offset rights may exist under applicable law, a fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency). Additionally, credit risk exists in exchange-traded futures with respect to initial and variation margin that is held in a clearing broker’s customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Fund.
Geographic/Asset Class 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 the Fund’s portfolio are disclosed in its Schedule of Investments.
The Fund invests a significant portion of its assets in securities of issuers located in Europe or with significant exposure to European issuers or countries. The European financial markets have recently experienced volatility and adverse trends due to concerns about economic downturns in, or rising government debt levels of, several European countries as well as acts of war in the region. These events may spread to other countries in Europe and may affect the value and liquidity of certain of the Fund’s investments.
Responses to the financial problems by European governments, central banks and others, including austerity measures and reforms, may not work, may result in social unrest and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets and asset valuations around the world. The United Kingdom has withdrawn from the European Union, and one or more other countries may withdraw from the European Union and/or abandon the Euro, the common currency of the European Union. These events and
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Notes to Financial Statements (unaudited) (continued)
actions have adversely affected, and may in the future adversely affect, the value and exchange rate of the Euro and may continue to significantly affect the economies of every country in Europe, including countries that do not use the Euro and non-European Union member states. The impact of these actions, especially if they occur in a disorderly fashion, is not clear but could be significant and far reaching. In addition, Russia launched a large-scale invasion of Ukraine on February 24, 2022. The extent and duration of the military action, resulting sanctions and resulting future market disruptions in the region are impossible to predict, but have been, and may continue to be significant and have a severe adverse effect on the region, including significant negative impacts on the economy and the markets for certain securities and commodities, such as oil and natural gas, as well as other sectors.
The Fund invests a significant portion of its assets in securities within a single or limited number of market sectors. When a fund concentrates its investments in this manner, 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. Investment percentages in specific sectors are presented in the Schedule of Investments.
Significant Shareholder Redemption Risk: Certain shareholders may own or manage a substantial amount of fund shares and/or hold their fund investments for a limited period of time. Large redemptions of fund shares by these shareholders may force a fund to sell portfolio securities, which may negatively impact the fund’s NAV, increase the fund’s brokerage costs, and/or accelerate the realization of taxable income/gains and cause the fund to make additional taxable distributions to shareholders.
11. | CAPITAL SHARE TRANSACTIONS |
Capital shares are issued and redeemed by the 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 the Fund are not redeemable.
Transactions in capital shares were as follows:
Six Months Ended 10/31/23
|
Year Ended 04/30/23
| |||||||||||||||
iShares ETF
|
Shares
|
Amount
|
Shares
|
Amount
| ||||||||||||
International Select Dividend | ||||||||||||||||
Shares sold | 800,000 | $ | 21,597,105 | 29,750,000 | $ | 855,301,402 | ||||||||||
Shares redeemed | (15,200,000 | ) | (397,008,378 | ) | (4,050,000 | ) | (105,986,422 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
(14,400,000 | ) | $ | (375,411,273 | ) | 25,700,000 | $ | 749,314,980 | |||||||||
|
|
|
|
|
|
|
|
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.
12. | FOREIGN WITHHOLDING TAX CLAIMS |
The Internal Revenue Service (“IRS”) 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 iShares International Select Dividend ETF is able to pass through to 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.
The iShares International Select Dividend ETF is seeking a closing agreement with the Internal Revenue Service (“IRS”) to address any prior years’ U.S. income tax liabilities attributable to Fund shareholders resulting from the recovery of foreign taxes. The closing agreement would result in the Fund paying a compliance fee to the IRS, on behalf of its shareholders, representing the estimated tax savings generated from foreign tax credits claimed by Fund shareholders on their tax returns in prior years. The Fund has accrued a liability for the estimated IRS compliance fee related to foreign withholding tax claims, which is disclosed in the Statement of Assets and Liabilities. The actual IRS compliance fee may differ from the estimate and that difference may be material.
13. | SUBSEQUENT EVENTS |
Management has evaluated the impact of all subsequent events on the Fund 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 | 23 |
Board Review and Approval of Investment Advisory Contract
iShares International Select Dividend ETF (the “Fund”)
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 Board Members who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Board Members”), is required annually to consider the approval of the Investment Advisory Agreement between the Trust and BFA (the “Advisory Agreement”) on behalf of the Fund. The Board’s consideration entails a year-long process whereby the Board and its committees (composed solely of Independent Board Members) assess BlackRock’s services to the Fund, including investment management; fund accounting; administrative and shareholder services; oversight of the Fund’s service providers; risk management and oversight; legal and compliance services; and ability to meet applicable legal and regulatory requirements. The Independent Board Members requested, and BFA provided, such information as the Independent Board Members, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Agreement. At meetings on May 2, 2023 and May 15, 2023, a committee composed of all of the Independent Board Members (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 its independent counsel, and requested certain additional information, which management agreed to provide. At a meeting held on June 7-8, 2023, the Board, including the Independent Board Members, reviewed the additional information provided by management in response to these requests.
After extensive discussions and deliberations, the Board, including all of the Independent Board Members, approved the continuance of the Advisory Agreement for the Fund, based on a review of qualitative and quantitative information provided by BFA and their cumulative experience as Board Members. 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 Board Members were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the continuance of the Advisory Agreement for the Fund, the Board, including the Independent Board Members, 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) potential economies of scale and the sharing of related benefits; (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, none of which was controlling, and conclusions that formed the basis for the Board, including the Independent Board Members, to approve the continuance of the Advisory Agreement 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 other fund(s) in which the Fund invests (if applicable), and waivers/reimbursements (if applicable) of the Fund in comparison with the same information for other ETFs, objectively selected by Broadridge as comprising the Fund’s applicable expense 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 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 any waivers and reimbursements) for the Fund were within range of the median of the investment advisory fee rates and overall expenses (net of any 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-year, three-year, five-year, ten-year, and since inception periods, as applicable, and for the quarter ended December 31, 2022, to that of such 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 Agreement for the coming year.
Nature, Extent and Quality of Services Provided: Based on management’s representations, including information about ongoing enhancements and initiatives with respect 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 Agreement for the coming year as compared with 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 and have made significant investments into the iShares business. The Board also considered BFA’s compliance program and its compliance record with respect to the Fund, including related programs implemented pursuant to regulatory requirements. 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 May 2, 2023 meeting and throughout the year, and matters related to BFA’s portfolio compliance program and other compliance programs and services.
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 Agreement supported the Board’s approval of the continuance of the Advisory Agreement for the coming year.
Costs of Services Provided to the Fund and Profits Realized by BFA and its Affiliates: The Board reviewed information about the estimated profitability to BlackRock in managing the Fund, based on the fees payable to BFA and its affiliates (including fees under the Advisory Agreement), and other sources of revenue and expense to BFA
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Board Review and Approval of Investment Advisory Contract (continued)
and its affiliates from the Fund’s operations for the last calendar year. The Board reviewed BlackRock’s methodology for calculating estimated profitability of the iShares funds, noting that the 15(c) Committee and the Board had focused on the methodology and profitability presentation. The Board recognized that profitability may be affected by numerous factors, including, among other things, fee waivers by BFA, the types of funds managed, expense allocations and business mix. The Board thus recognized that calculating and comparing profitability at individual fund levels is challenging. The Board discussed with management the sources of direct and ancillary revenue, including the revenues to BTC, a BlackRock affiliate, from securities lending by the Fund. The Board also discussed BFA’s estimated 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 information considered with respect to the profits realized by BFA and its affiliates under the Advisory Agreement and from other relationships between the Fund and BFA and/or its affiliates, if any, as well as the other factors considered at the meeting, supported the Board’s approval of the continuance of the Advisory Agreement for the coming year.
Economies of Scale: The Board reviewed information and considered the extent to which economies of scale might be realized as the assets of the Fund increase, noting that the issue of potential 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 estimated profitability (as discussed above), including BFA’s and its affiliates’ estimated costs in providing services. The estimated cost information distinguished, among other things, between fixed and variable costs, and showed how the level and nature of fixed and variable costs may impact the existence or size of scale benefits, with the Board recognizing that potential economies of scale are difficult to measure. 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 Agreement 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 assess the appropriateness of adding new or revised breakpoints in the future.
The Board concluded that this review of potential economies of scale and the sharing of related benefits, as well as the other factors considered at the meeting, supported the Board’s approval of the continuance of the Advisory Agreement 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”). The Board acknowledged BFA’s representation that the iShares funds are fundamentally different investment vehicles from the Other Accounts.
The Board received detailed information regarding how the Other Accounts generally differ from the Fund, including in terms of the types of services 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 investment vehicle, as compared to the Other Accounts, particularly those that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. 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 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 considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund’s expenses borne by BFA under this arrangement and noted that the investment advisory fee rate under the Advisory Agreement 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 other benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Fund by BFA, both direct and indirect, including, but not limited to, payment of revenue to BTC, the Fund’s securities lending agent, for loaning portfolio securities, as applicable (which was included in the profit margins reviewed by the Board pursuant to BFA’s estimated profitability methodology), payment of advisory fees or other 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 or other services, and BlackRock’s profile in the investment community. The Board further considered other direct benefits that might accrue to BFA, including the potential for reduction in the Fund’s expenses that are borne by BFA under the “all-inclusive” management fee arrangement, due in part to the size and scope of BFA’s investment operations servicing the Fund (and other funds in the iShares complex) as well as in response to a changing market environment. The Board also reviewed and considered information provided by BFA concerning authorized participant primary market order processing services that are provided by BlackRock Investments, LLC (“BRIL”), an affiliate of BFA, and paid for by authorized participants under the ETF Servicing Platform. 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 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 Agreement 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 Board Members, determined that the Fund’s investment advisory fee rate under the Advisory Agreement 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 Agreement 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 | 25 |
Tailored Shareholder Reports for Open-End Mutual Funds and ETFs
Effective January 24, 2023, the SEC adopted rule and form amendments to require open-end mutual funds and ETFs to transmit concise and visually engaging streamlined annual and semiannual reports to shareholders that highlight key information. Other information, including financial statements, will no longer appear in a streamlined shareholder report but must be available online, delivered free of charge upon request, and filed on a semiannual basis on Form N-CSR. The rule and form amendments have a compliance date of July 24, 2024. At this time, management is evaluating the impact of these amendments on the shareholder reports for the Funds.
26 | 2 0 2 3 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 e-mail notifications announcing that the shareholder report or prospectus has been posted on the iShares website at 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 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 and Rule 30e-3 notices 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 Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Fund’s Forms N-PORT are available on the SEC’s website at sec.gov. Additionally, the Fund makes its portfolio holdings for the first and third quarters of each fiscal year available at iShares.com/fundreports.
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 iShares.com; and (3) on the SEC website at sec.gov.
A description of the Trust’s policies and procedures with respect to the disclosure of the Fund’s portfolio securities is available in the Fund Prospectus. The Fund discloses its portfolio holdings daily and provides information regarding its top holdings in Fund fact sheets at iShares.com.
G E N E R A L I N F O R M A T I O N | 27 |
Glossary of Terms Used in this Report
Portfolio Abbreviation
NVS | Non-Voting Shares |
28 | 2 0 2 3 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 |
Want to know more?
iShares.com | 1-800-474-2737
This report is intended for the Fund’s 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 companies listed above
©2023 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc. or its subsidiaries. All other marks are the property of their respective owners.
iS-SAR-406-1023
| OCTOBER 31, 2023 |
2023 Semi-Annual Report (Unaudited)
|
iShares Trust
· | iShares Environmentally Aware Real Estate ETF | ERET | NASDAQ |
· | iShares Global REIT ETF | REET | NYSE Arca |
· | iShares International Developed Real Estate ETF | IFGL | NASDAQ |
Dear Shareholder,
The combination of continued economic growth and cooling inflation provided a supportive backdrop for investors during the 12-month reporting period ended October 31, 2023. Significantly tighter monetary policy helped to rein in inflation, as the annual increase in the Consumer Price Index declined to its long-term average of approximately 3% in October 2023. Meanwhile, real economic growth proved more resilient than many investors anticipated. A moderating labor market also helped ease inflationary pressure, although wages continued to grow and unemployment rates touched the lowest levels in decades before rising slightly. This robust labor market powered further growth in consumer spending, backstopping the economy. On October 7, 2023, Hamas launched a horrific attack on Israel. The ensuing war will have a significant humanitarian impact and could lead to heightened economic and market volatility. We see geopolitics as a structural market risk going forward. See our geopolitical risk dashboard at blackrock.com for more details.
Equity returns were solid during the period, as the durability of consumer spending mitigated investors’ concerns about the economy’s trajectory. The U.S. economy continued to show strength, and growth further accelerated in the third quarter of 2023. However, equity returns were uneven, as the performance of a few notable technology companies supported gains among large-capitalization U.S. stocks, while small-capitalization U.S. stocks declined overall. Meanwhile, international developed market equities advanced, and emerging market equities posted solid gains.
The 10-year U.S. Treasury yield rose during the reporting period, driving its price down, as investors reacted to elevated inflation and attempted to anticipate future interest rate changes. The corporate bond market benefited from improving economic sentiment, although high-yield corporate bond prices fared significantly better than investment-grade bonds as demand from yield-seeking investors remained strong.
The U.S. Federal Reserve (the “Fed”), attempting to manage persistent inflation, raised interest rates six times during the 12-month period, but slowed and then paused its tightening later in the period. The Fed also wound down its bond-buying programs and incrementally reduced its balance sheet by not replacing securities that reach maturity.
Supply constraints appear to have become an embedded feature of the new macroeconomic environment, making it difficult for developed economies to increase production without sparking higher inflation. Geopolitical fragmentation and an aging population risk further exacerbating these constraints, keeping the labor market tight and wage growth high. Although the Fed has decelerated the pace of interest rate hikes and recently opted for several pauses, we believe that the new economic regime means that the Fed will need to maintain high rates for an extended period to keep inflation under control. Furthermore, ongoing structural changes may mean that the Fed will be hesitant to cut interest rates in the event of faltering economic activity lest inflation accelerate again.
While we favor an overweight position in developed market equities in the long term, we prefer an underweight stance in the near term. Expectations for corporate earnings remain elevated, which seems inconsistent with macroeconomic constraints. Nevertheless, we are overweight on Japanese stocks in the near term as shareholder-friendly policies generate increased investor interest. We also believe that stocks with an AI tilt should benefit from an investment cycle that is set to support revenues and margins. In credit, there are selective opportunities in the near term despite tightening credit and financial conditions. For fixed income investing with a six- to twelve-month horizon, we see the most attractive investments in short-term U.S. Treasuries, U.S. inflation-linked bonds, euro area government bonds and gilts, U.S. mortgage-backed securities, and hard-currency emerging market bonds.
Overall, our view is that investors need to think globally, position themselves to be prepared for a decarbonizing economy, and be nimble as market conditions change. We encourage you to talk with your financial advisor and visit iShares.com for further insight about investing in today’s markets.
Rob Kapito
President, BlackRock, Inc.
Rob Kapito
President, BlackRock, Inc.
Total Returns as of October 31, 2023 | ||||||||
6-Month | 12-Month | |||||||
U.S. large cap equities (S&P 500® Index) | 1.39 | % | 10.14 | % | ||||
U.S. small cap equities (Russell 2000® Index) | (5.29 | ) | (8.56 | ) | ||||
International equities (MSCI Europe, Australasia, Far East Index) | (7.88 | ) | 14.40 | |||||
Emerging market equities (MSCI Emerging Markets Index) | (4.78 | ) | 10.80 | |||||
3-month Treasury bills (ICE BofA 3-Month U.S. Treasury Bill Index) | 2.63 | 4.77 | ||||||
U.S. Treasury securities (ICE BofA 10-Year U.S. Treasury Index) | (9.70 | ) | (3.25 | ) | ||||
U.S. investment grade bonds (Bloomberg U.S. Aggregate Bond Index) | (6.13 | ) | 0.36 | |||||
Tax-exempt municipal bonds (Bloomberg Municipal Bond Index) | (4.65 | ) | 2.64 | |||||
U.S. high yield bonds (Bloomberg U.S. Corporate High Yield 2% Issuer Capped Index) | 0.02 | 6.23 | ||||||
Past performance is not an indication of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index. |
|
2 | T H I S P A G E I S N O T P A R T O F Y O U R F U N D R E P O R T |
Table of Contents
Page | ||||
2 | ||||
Semi-Annual Report: | ||||
4 | ||||
7 | ||||
7 | ||||
8 | ||||
Financial Statements | ||||
24 | ||||
25 | ||||
26 | ||||
28 | ||||
31 | ||||
39 | ||||
43 | ||||
44 | ||||
45 |
Fund Summary as of October 31, 2023 | iShares® Environmentally Aware Real Estate ETF |
Investment Objective
The iShares Environmentally Aware Real Estate ETF (the “Fund”) seeks to track the investment results of an index composed of developed market real estate equities while targeting increased exposure to green certification and energy efficiency relative to the parent index as represented by FTSE EPRA Nareit Developed Green Target 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 that Index.
Performance
Cumulative Total Returns | ||||||||
6-Month Total Returns | Since Inception | |||||||
Fund NAV | (11.26 | )% | (9.80 | )% | ||||
Fund Market | (11.30 | ) | (9.53 | ) | ||||
Index | (11.47 | ) | (10.37 | ) |
The inception date of the Fund was November 15, 2022. The first day of secondary market trading was November 17, 2022.
Past performance is not an indication 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” for more information.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||||||||||
| Beginning Account Value (05/01/23) | | | Ending Account Value (10/31/23) | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/23) | | | Ending Account Value (10/31/23) | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio | | ||||||||||||||
$ 1,000.00 | $ 887.40 | $ 1.42 | $ �� 1,000.00 | $ 1,023.60 | $ 1.53 | 0.30 | % |
(a) | Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period shown). Other fees, such as brokerage commissions and other fees to financial intermediaries, may be paid which are not reflected in the tables and examples above. See “Disclosure of Expenses” for more information. |
Portfolio Information
INDUSTRY ALLOCATION
Industry | | Percent of Total Investments | (a) | |
Retail REITs | 15.4 | % | ||
Industrial REITs | 14.3 | |||
Multi-Family Residential REITs | 11.4 | |||
Data Center REITs | 10.1 | |||
Office REITs | 8.3 | |||
Real Estate Operating Companies | 8.0 | |||
Diversified REITs | 6.2 | |||
Diversified Real Estate Activities | 5.8 | |||
Health Care REITs | 5.7 | |||
Self Storage REITs | 4.2 | |||
Single-Family Residential REITs | 3.5 | |||
Other Specialized REITs | 3.0 | |||
Hotel & Resort REITs | 2.5 | |||
Real Estate Development | 1.5 | |||
Other (each representing less than 1%) | 0.1 |
GEOGRAPHIC ALLOCATION
Country/Geographic Region | | Percent of Total Investments | (a) | |
United States | 59.7 | % | ||
Japan | 10.4 | |||
Hong Kong | 5.8 | |||
Singapore | 5.7 | |||
Australia | 4.1 | |||
United Kingdom | 3.5 | |||
Germany | 2.2 | |||
Canada | 1.9 | |||
Sweden | 1.6 | |||
France | 1.6 |
(a) | Excludes money market funds. |
4 | 2 0 2 3 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, 2023 | 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 (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-Month Total Returns | 1 Year | 5 Years | Since Inception | 1 Year | 5 Years | Since Inception | ||||||||||||||||||||||||||
Fund NAV | (11.59 | )% | (6.19 | )% | (0.24 | )% | 1.70 | % | (6.19 | )% | (1.18 | )% | 17.04 | % | ||||||||||||||||||
Fund Market | (11.71 | ) | (6.34 | ) | (0.21 | ) | 1.70 | (6.34 | ) | (1.03 | ) | 17.01 | ||||||||||||||||||||
Index | (11.97 | ) | (7.04 | ) | (1.01 | ) | 0.92 | (7.04 | ) | (4.93 | ) | 8.87 |
The inception date of the Fund was July 8, 2014. The first day of secondary market trading was July 10, 2014.
Past performance is not an indication 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” for more information.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||||||||||
| Beginning Account Value (05/01/23) | | | Ending Account Value (10/31/23) | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/23) | | | Ending Account Value (10/31/23) | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio |
| ||||||||||||||
$ 1,000.00 | $ 884.10 | $ 0.66 | $ 1,000.00 | $ 1,024.40 | $ 0.71 | 0.14 | % |
(a) | Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period shown). Other fees, such as brokerage commissions and other fees to financial intermediaries, may be paid which are not reflected in the tables and examples above. See “Disclosure of Expenses” for more information. |
Portfolio Information
INDUSTRY ALLOCATION
Industry | | Percent of Total Investments | (a) | |
Retail REITs | 19.3 | % | ||
Industrial REITs | 17.4 | |||
Multi-Family Residential REITs | 10.7 | |||
Data Center REITs | 9.0 | |||
Health Care REITs | 9.0 | |||
Office REITs | 8.2 | |||
Diversified REITs | 8.1 | |||
Self Storage REITs | 6.3 | |||
Single-Family Residential REITs | 4.6 | |||
Other Specialized REITs | 3.9 | |||
Hotel & Resort REITs | 3.3 | |||
Other (each representing less than 1%) | 0.2 |
GEOGRAPHIC ALLOCATION
Country/Geographic Region | | Percent of Total Investments | (a) | |
United States | 71.5 | % | ||
Japan | 7.7 | |||
United Kingdom | 4.4 | |||
Australia | 3.7 | |||
Singapore | 3.4 | |||
Canada | 2.5 | |||
France | 1.7 | |||
Hong Kong | 1.1 | |||
Belgium | 1.1 | |||
Mexico | 0.8 |
(a) | Excludes money market funds. |
F U N D S U M M A R Y | 5 |
Fund Summary as of October 31, 2023 | 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 (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-Month Total Returns | 1 Year | 5 Years | 10 Years | 1 Year | 5 Years | 10 Years | ||||||||||||||||||||||||||
Fund NAV | (13.98 | )% | (3.27 | )% | (4.18 | )% | (1.28 | )% | (3.27 | )% | (19.23 | )% | (12.05 | )% | ||||||||||||||||||
Fund Market | (14.02 | ) | (3.14 | ) | (4.15 | ) | (1.28 | ) | (3.14 | ) | (19.09 | ) | (12.09 | ) | ||||||||||||||||||
Index | (14.04 | ) | (3.56 | ) | (4.15 | ) | (1.13 | ) | (3.56 | ) | (19.10 | ) | (10.77 | ) |
Past performance is not an indication 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” for more information.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||||||||||
| Beginning Account Value (05/01/23) | | | Ending Account Value (10/31/23) | | | Expenses Paid During the Period | (a) | | Beginning Account Value (05/01/23) | | | Ending Account Value (10/31/23) | | | Expenses Paid During the Period | (a) | | Annualized Expense Ratio | | ||||||||||||||
$ 1,000.00 | $ 860.20 | $ 2.24 | $ 1,000.00 | $ 1,022.70 | $ 2.44 | 0.48 | % |
(a) | Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period shown). Other fees, such as brokerage commissions and other fees to financial intermediaries, may be paid which are not reflected in the tables and examples above. See “Disclosure of Expenses” for more information. |
Portfolio Information
INDUSTRY ALLOCATION
Industry | | Percent of Total Investments | (a) | |
Real Estate Operating Companies | 20.0 | % | ||
Retail REITs | 16.5 | |||
Diversified Real Estate Activities | 14.5 | |||
Industrial REITs | 13.1 | |||
Diversified REITs | 12.3 | |||
Office REITs | 9.6 | |||
Multi-Family Residential REITs | 5.1 | |||
Real Estate Development | 2.7 | |||
Health Care REITs | 2.3 | |||
Hotel & Resort REITs | 1.7 | |||
Self Storage REITs | 1.1 | |||
Other (each representing less than 1%) | 1.1 |
GEOGRAPHIC ALLOCATION
Country/Geographic Region | | Percent of Total Investments | (a) | |
Japan | 28.8 | % | ||
Hong Kong | 11.0 | |||
United Kingdom | 10.9 | �� | ||
Singapore | 9.6 | |||
Australia | 9.0 | |||
Canada | 6.5 | |||
Germany | 5.3 | |||
Sweden | 4.3 | |||
France | 4.1 | |||
Switzerland | 3.6 |
(a) | Excludes money market funds. |
6 | 2 0 2 3 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 not an indication of future results. Financial markets have experienced extreme volatility and trading in many instruments has been disrupted. These circumstances may continue for an extended period of time and may continue to affect adversely the value and liquidity of each Fund’s investments. As a result, current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at 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. Beginning August 10, 2020, the price used to calculate market return (“Market Price”) is the closing price. Prior to August 10, 2020, Market Price was determined 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.
Shareholders of each Fund may incur the following charges: (1) transactional expenses, including brokerage commissions on purchases and sales of fund shares and (2) ongoing expenses, including management fees and other fund expenses. The expense examples shown (which are based on a hypothetical investment of $1,000 invested at the beginning of the period and held through the end of the period) are intended to assist shareholders both in calculating expenses based on an investment in each Fund and in comparing these expenses with similar costs of investing in other funds.
The expense examples provide information about actual account values and actual expenses. Annualized expense ratios reflect contractual and voluntary fee waivers, if any. In order to estimate the expenses a shareholder paid during the period covered by this report, shareholders can divide their account value by $1,000 and then multiply the result by the number under the heading entitled “Expenses Paid During the Period.”
The expense examples also provide information about hypothetical account values and hypothetical expenses based on a fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses. In order to assist shareholders in comparing the ongoing expenses of investing in the Funds and other funds, compare the 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
The expenses shown in the expense examples are intended to highlight shareholders’ ongoing costs only and do not reflect any transactional expenses, such as brokerage commissions and other fees paid on purchases and sales of fund shares. Therefore, the hypothetical examples are useful in comparing ongoing expenses only and will not help shareholders determine the relative total expenses of owning different funds. If these transactional expenses were included, shareholder expenses would have been higher.
ABOUT FUND PERFORMANCE / DISCLOSURE OF EXPENSES | 7 |
Schedule of Investments (unaudited) October 31, 2023 | iShares® Environmentally Aware Real Estate ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks | ||||||||
Data Center REITs — 10.1% | ||||||||
Digital Realty Trust Inc. | 1,875 | $ | 233,175 | |||||
Equinix Inc. | 762 | 555,985 | ||||||
Keppel DC REIT | 7,500 | 9,256 | ||||||
|
| |||||||
798,416 | ||||||||
Diversified Real Estate Activities — 5.8% | ||||||||
Allreal Holding AG, Registered | 63 | 10,109 | ||||||
City Developments Ltd. | 2,100 | 9,693 | ||||||
Heiwa Real Estate Co. Ltd. | 200 | 5,120 | ||||||
Mitsubishi Estate Co. Ltd. | 7,800 | 99,842 | ||||||
Mitsui Fudosan Co. Ltd. | 5,100 | 110,542 | ||||||
New World Development Co. Ltd.(a) | 12,000 | 22,024 | ||||||
Nomura Real Estate Holdings Inc. | 600 | 14,014 | ||||||
Peach Property Group AG(a)(b) | 122 | 1,601 | ||||||
Sumitomo Realty & Development Co. Ltd. | 1,800 | 45,169 | ||||||
Sun Hung Kai Properties Ltd. | 10,500 | 107,821 | ||||||
Tokyo Tatemono Co. Ltd. | 1,200 | 15,934 | ||||||
UOL Group Ltd. | 3,000 | 12,921 | ||||||
|
| |||||||
454,790 | ||||||||
Diversified REITs — 6.1% | ||||||||
Abrdn Property Income Trust | 1,956 | 1,108 | ||||||
Activia Properties Inc. | 3 | 8,116 | ||||||
Alexander & Baldwin Inc. | 387 | 6,115 | ||||||
American Assets Trust Inc. | 351 | 6,230 | ||||||
Argosy Property Ltd. | 4,323 | 2,670 | ||||||
Armada Hoffler Properties Inc. | 363 | 3,616 | ||||||
Balanced Commercial Property Trust Ltd. | 1,929 | 1,483 | ||||||
British Land Co. PLC (The) | 7,530 | 27,298 | ||||||
Broadstone Net Lease Inc. | 780 | 11,037 | ||||||
Charter Hall Long Wale REIT | 3,477 | 6,680 | ||||||
Cromwell European Real Estate Investment Trust | 2,400 | 2,920 | ||||||
Custodian Reit PLC | 2,010 | 2,010 | ||||||
Daiwa House REIT Investment Corp. | 14 | 24,776 | ||||||
Empire State Realty Trust Inc., Class A | 1,641 | 13,276 | ||||||
Essential Properties Realty Trust Inc. | 795 | 17,450 | ||||||
Global Net Lease Inc. | 992 | 7,877 | ||||||
GPT Group (The) | 13,752 | 31,737 | ||||||
Growthpoint Properties Australia Ltd. | 1,524 | 1,913 | ||||||
H&R Real Estate Investment Trust | 1,257 | 7,732 | ||||||
Heiwa Real Estate REIT Inc. | 6 | 5,609 | ||||||
Hulic Reit Inc. | 6 | 6,121 | ||||||
ICADE | 144 | 4,705 | ||||||
Land Securities Group PLC | 3,057 | 21,190 | ||||||
Lar Espana Real Estate SOCIMI SA | 891 | 5,166 | ||||||
LXI REIT PLC | 3,807 | 3,968 | ||||||
Merlin Properties SOCIMI SA | 3,687 | 30,741 | ||||||
Mirvac Group | 27,777 | 32,228 | ||||||
Mori Trust Reit Inc. | 9 | 4,388 | ||||||
NIPPON REIT Investment Corp. | 3 | 6,931 | ||||||
Nomura Real Estate Master Fund Inc. | 21 | 23,173 | ||||||
NTT UD REIT Investment Corp. | 6 | 4,946 | ||||||
OUE Commercial Real Estate Investment Trust | 25,200 | 4,325 | ||||||
Picton Property Income Ltd. | 2,436 | 1,925 | ||||||
Schroder REIT Ltd. | 3,483 | 1,717 | ||||||
Sekisui House Reit Inc. | 24 | 12,640 | ||||||
Star Asia Investment Corp. | 6 | 2,261 | ||||||
Stockland | 15,855 | 35,784 | ||||||
Stride Property Group | 2,178 | 1,726 | ||||||
Sunlight REIT | 12,000 | 3,319 | ||||||
Suntec REIT | 21,600 | 17,358 | ||||||
Takara Leben Real Estate Investment Corp. | 3 | 1,965 |
Security | Shares | Value | ||||||
Diversified REITs (continued) | ||||||||
Tokyu REIT Inc. | 5 | $ | 5,966 | |||||
UK Commercial Property REIT Ltd. | 4,029 | 2,584 | ||||||
United Urban Investment Corp. | 12 | 12,098 | ||||||
WP Carey Inc. | 891 | 47,802 | ||||||
|
| |||||||
484,680 | ||||||||
Health Care Facilities — 0.1% | ||||||||
Chartwell Retirement Residences | 1,506 | 11,034 | ||||||
|
| |||||||
Health Care REITs — 5.7% | ||||||||
Aedifica SA | 228 | 12,439 | ||||||
Assura PLC | 6,840 | 3,404 | ||||||
CareTrust REIT Inc. | 393 | 8,457 | ||||||
Cofinimmo SA | 129 | 8,022 | ||||||
Community Healthcare Trust Inc. | 57 | 1,634 | ||||||
Healthcare Realty Trust Inc., Class A | 870 | 12,484 | ||||||
Healthpeak Properties Inc. | 2,061 | 32,048 | ||||||
Impact Healthcare Reit PLC, Class B | 741 | 747 | ||||||
LTC Properties Inc. | 93 | 2,940 | ||||||
Medical Properties Trust Inc. | 1,614 | 7,715 | ||||||
National Health Investors Inc. | 213 | 10,658 | ||||||
NorthWest Healthcare Properties REIT | 550 | 1,590 | ||||||
Omega Healthcare Investors Inc. | 597 | 19,761 | ||||||
Parkway Life REIT | 1,500 | 3,680 | ||||||
Physicians Realty Trust | 468 | 5,082 | ||||||
Primary Health Properties PLC | 2,409 | 2,628 | ||||||
Sabra Health Care REIT Inc. | 615 | 8,389 | ||||||
Target Healthcare REIT PLC | 1,497 | 1,312 | ||||||
Universal Health Realty Income Trust | 54 | 2,076 | ||||||
Ventas Inc. | 2,694 | 114,387 | ||||||
Vital Healthcare Property Trust | 1,299 | 1,514 | ||||||
Welltower Inc. | 2,265 | 189,377 | ||||||
|
| |||||||
450,344 | ||||||||
Hotel & Resort REITs — 2.5% | ||||||||
Apple Hospitality REIT Inc. | 885 | 13,877 | ||||||
CapitaLand Ascott Trust | 8,080 | 5,313 | ||||||
CDL Hospitality Trusts | 4,500 | 3,182 | ||||||
DiamondRock Hospitality Co. | 1,170 | 9,044 | ||||||
Far East Hospitality Trust | 4,800 | 2,073 | ||||||
Hoshino Resorts REIT Inc. | 1 | 3,934 | ||||||
Host Hotels & Resorts Inc. | 4,179 | 64,691 | ||||||
Hotel Property Investments Ltd. | 2,010 | 3,264 | ||||||
Invincible Investment Corp. | 15 | 5,769 | ||||||
Japan Hotel REIT Investment Corp. | 12 | 5,456 | ||||||
Park Hotels & Resorts Inc. | 1,041 | 12,003 | ||||||
Pebblebrook Hotel Trust | 678 | 8,088 | ||||||
RLJ Lodging Trust | 749 | 7,040 | ||||||
Ryman Hospitality Properties Inc. | 291 | 24,909 | ||||||
Service Properties Trust | 447 | 3,241 | ||||||
Summit Hotel Properties Inc. | 465 | 2,623 | ||||||
Sunstone Hotel Investors Inc. | 1,422 | 13,224 | ||||||
Xenia Hotels & Resorts Inc. | 779 | 9,060 | ||||||
|
| |||||||
196,791 | ||||||||
Industrial REITs — 14.3% | ||||||||
Advance Logistics Investment Corp. | 3 | 2,444 | ||||||
AIMS APAC REIT | 4,347 | 3,809 | ||||||
Americold Realty Trust Inc. | 1,422 | 37,285 | ||||||
CapitaLand Ascendas REIT | 28,200 | 53,581 | ||||||
Centuria Industrial REIT | 2,265 | 4,099 | ||||||
CRE Logistics REIT Inc. | 3 | 3,152 | ||||||
Dexus Industria REIT | 1,230 | 1,859 | ||||||
Dream Industrial REIT | 966 | 8,157 |
8 | 2 0 2 3 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, 2023 | iShares® Environmentally Aware Real Estate ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Industrial REITs (continued) | ||||||||
EastGroup Properties Inc. | 234 | $ | 38,200 | |||||
ESR Kendall Square REIT Co. Ltd. | 861 | 2,043 | ||||||
ESR-LOGOS REIT | 49,600 | 9,962 | ||||||
First Industrial Realty Trust Inc. | 612 | 25,888 | ||||||
Frasers Logistics & Commercial Trust | 20,100 | 15,268 | ||||||
GLP J-Reit | 48 | 42,992 | ||||||
Goodman Property Trust | 4,731 | 5,540 | ||||||
Granite REIT | 267 | 12,159 | ||||||
Industrial & Infrastructure Fund Investment Corp. | 12 | 10,786 | ||||||
Innovative Industrial Properties Inc. | 105 | 7,542 | ||||||
Intervest Offices & Warehouses NV | 171 | 3,628 | ||||||
Japan Logistics Fund Inc. | 6 | 11,114 | ||||||
LaSalle Logiport REIT | 15 | 14,711 | ||||||
LondonMetric Property PLC | 4,788 | 9,649 | ||||||
LXP Industrial Trust | 1,500 | 11,865 | ||||||
Mapletree Industrial Trust | 15,600 | 24,522 | ||||||
Mapletree Logistics Trust | 21,600 | 23,195 | ||||||
Mitsubishi Estate Logistics REIT Investment Corp. | 2 | 5,033 | ||||||
Mitsui Fudosan Logistics Park Inc. | 5 | 15,116 | ||||||
Montea NV | 57 | 4,029 | ||||||
Nippon Prologis REIT Inc. | 33 | 58,719 | ||||||
Prologis Inc. | 4,851 | 488,738 | ||||||
Rexford Industrial Realty Inc. | 723 | 31,263 | ||||||
Segro PLC | 5,595 | 48,632 | ||||||
SOSiLA Logistics REIT Inc. | 6 | 4,754 | ||||||
STAG Industrial Inc. | 876 | 29,101 | ||||||
Terreno Realty Corp. | 360 | 19,181 | ||||||
Tritax Big Box REIT PLC | 11,322 | 18,850 | ||||||
Urban Logistics REIT PLC | 2,208 | 2,796 | ||||||
Warehouse REIT PLC | 1,995 | 1,758 | ||||||
Warehouses De Pauw CVA | 705 | 17,443 | ||||||
|
| |||||||
1,128,863 | ||||||||
Multi-Family Residential REITs — 11.3% | ||||||||
Advance Residence Investment Corp. | 8 | 17,394 | ||||||
Apartment Income REIT Corp. | 975 | 28,480 | ||||||
Apartment Investment & Management Co., | 804 | 4,711 | ||||||
AvalonBay Communities Inc. | 1,113 | 184,469 | ||||||
Boardwalk REIT | 171 | 7,985 | ||||||
Camden Property Trust | 690 | 58,567 | ||||||
Canadian Apartment Properties REIT | 846 | 24,903 | ||||||
Centerspace | 84 | 4,081 | ||||||
Comforia Residential REIT Inc. | 4 | 8,489 | ||||||
Daiwa Securities Living Investments Corp. | 12 | 8,873 | ||||||
Elme Communities | 765 | 9,761 | ||||||
Empiric Student Property PLC | 3,342 | 3,432 | ||||||
Equity Residential | 3,321 | 183,751 | ||||||
Essex Property Trust Inc. | 468 | 100,115 | ||||||
Independence Realty Trust Inc. | 939 | 11,634 | ||||||
Ingenia Communities Group | 2,661 | 6,623 | ||||||
InterRent REIT | 627 | 5,317 | ||||||
Irish Residential Properties REIT PLC | 2,940 | 2,832 | ||||||
Kenedix Residential Next Investment Corp.(b) | 6 | 8,360 | ||||||
Killam Apartment REIT | 543 | 6,136 | ||||||
Mid-America Apartment Communities Inc. | 718 | 84,832 | ||||||
NexPoint Residential Trust Inc. | 129 | 3,482 | ||||||
Nippon Accommodations Fund Inc. | 3 | 12,086 | ||||||
Residential Secure Income PLC, NVS(c) | 819 | 534 | ||||||
Samty Residential Investment Corp. | 3 | 2,240 | ||||||
Triple Point Social Housing REIT PLC(c) | 1,578 | 1,042 | ||||||
UDR Inc. | 2,340 | 74,435 | ||||||
UNITE Group PLC (The) | 2,280 | 24,128 | ||||||
Veris Residential Inc. | 270 | 3,615 |
Security | Shares | Value | ||||||
Multi-Family Residential REITs (continued) | ||||||||
Xior Student Housing NV | 100 | $ | 2,877 | |||||
|
| |||||||
895,184 | ||||||||
Office REITs — 8.3% | ||||||||
Abacus Group | 2,697 | 1,642 | ||||||
Alexandria Real Estate Equities Inc. | 969 | 90,243 | ||||||
Allied Properties REIT | 513 | 5,863 | ||||||
Boston Properties Inc. | 1,599 | 85,658 | ||||||
Brandywine Realty Trust | 1,653 | 6,182 | ||||||
Centuria Office REIT | 1,968 | 1,370 | ||||||
Champion REIT | 24,000 | 7,581 | ||||||
CLS Holdings PLC | 663 | 700 | ||||||
Corporate Office Properties Trust | 672 | 15,322 | ||||||
Cousins Properties Inc. | 1,797 | 32,112 | ||||||
Covivio | 243 | 10,414 | ||||||
Cromwell Property Group | 9,939 | 2,027 | ||||||
Daiwa Office Investment Corp. | 1 | 4,375 | ||||||
Derwent London PLC | 486 | 10,801 | ||||||
Dexus | 6,900 | 28,498 | ||||||
Douglas Emmett Inc. | 909 | 10,190 | ||||||
Easterly Government Properties Inc., Class A | 519 | 5,584 | ||||||
Gecina SA | 282 | 27,690 | ||||||
Global One Real Estate Investment Corp. | 3 | 2,276 | ||||||
Great Portland Estates PLC | 1,170 | 5,546 | ||||||
Helical PLC | 384 | 896 | ||||||
Highwoods Properties Inc. | 798 | 14,276 | ||||||
Hudson Pacific Properties Inc. | 1,780 | 7,939 | ||||||
Ichigo Office REIT Investment Corp. | 6 | 3,366 | ||||||
Inmobiliaria Colonial SOCIMI SA | 3,270 | 18,346 | ||||||
Japan Excellent Inc. | 6 | 5,266 | ||||||
Japan Prime Realty Investment Corp. | 3 | 7,027 | ||||||
Japan Real Estate Investment Corp. | 6 | 22,286 | ||||||
JBG SMITH Properties | 1,545 | 19,884 | ||||||
JR Global Reit | 482 | 1,406 | ||||||
Kenedix Office Investment Corp. | 8 | 8,344 | ||||||
Keppel Pacific Oak US REIT | 6,900 | 1,270 | ||||||
Keppel REIT | 27,000 | 15,678 | ||||||
Kilroy Realty Corp. | 1,071 | 30,609 | ||||||
Mirai Corp. | 9 | 2,718 | ||||||
Mori Hills REIT Investment Corp. | 21 | 19,655 | ||||||
Nippon Building Fund Inc. | 6 | 24,108 | ||||||
NSI NV | 93 | 1,679 | ||||||
One REIT Inc. | 1 | 1,733 | ||||||
Orix JREIT Inc. | 15 | 17,239 | ||||||
Paramount Group Inc. | 1,941 | 8,308 | ||||||
Piedmont Office Realty Trust Inc., Class A | 1,359 | 7,080 | ||||||
Precinct Properties New Zealand Ltd. | 7,476 | 4,835 | ||||||
Prosperity REIT | 9,000 | 1,555 | ||||||
Regional REIT Ltd.(c) | 909 | 311 | ||||||
Sankei Real Estate Inc. | 3 | 1,817 | ||||||
SL Green Realty Corp. | 768 | 22,495 | ||||||
Vornado Realty Trust | 1,417 | 27,206 | ||||||
Workspace Group PLC | 357 | 2,098 | ||||||
|
| |||||||
653,504 | ||||||||
Other Specialized REITs — 2.9% | ||||||||
Arena REIT | 2,172 | 4,394 | ||||||
Charter Hall Social Infrastructure REIT | 822 | 1,246 | ||||||
EPR Properties | 267 | 11,401 | ||||||
Four Corners Property Trust Inc. | 450 | 9,585 | ||||||
Gaming and Leisure Properties Inc. | 1,068 | 48,477 | ||||||
Safehold Inc. | 189 | 3,075 |
S C H E D U L E O F I N V E S T M E N T S | 9 |
Schedule of Investments (unaudited) (continued) October 31, 2023 | iShares® Environmentally Aware Real Estate ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Other Specialized REITs (continued) | ||||||||
VICI Properties Inc., Class A | 5,535 | $ | 154,426 | |||||
|
| |||||||
232,604 | ||||||||
Real Estate Development — 1.5% | ||||||||
CK Asset Holdings Ltd. | 16,500 | 82,472 | ||||||
Lifestyle Communities Ltd.(a) | 627 | 6,238 | ||||||
Sino Land Co. Ltd. | 28,000 | 27,953 | ||||||
|
| |||||||
116,663 | ||||||||
Real Estate Operating Companies — 8.0% | ||||||||
Aberdeen Standard European Logistics Income PLC(c) | 2,172 | 1,348 | ||||||
Aeon Mall Co. Ltd. | 600 | 6,823 | ||||||
Amot Investments Ltd. | 1,170 | 4,900 | ||||||
Aroundtown SA(b) | 5,828 | 13,170 | ||||||
Atrium Ljungberg AB, Class B | 504 | 7,750 | ||||||
Azrieli Group Ltd. | 270 | 11,625 | ||||||
CA Immobilien Anlagen AG | 327 | 11,057 | ||||||
Capitaland Investment Ltd./Singapore | 21,300 | 45,735 | ||||||
Castellum AB | 2,046 | 19,608 | ||||||
Catena AB | 159 | 5,267 | ||||||
Cibus Nordic Real Estate AB | 210 | 1,971 | ||||||
Citycon OYJ | 900 | 4,761 | ||||||
Corem Property Group AB, Class B | 2,706 | 1,747 | ||||||
Deutsche EuroShop AG | 81 | 1,469 | ||||||
Deutsche Wohnen SE | 318 | 6,843 | ||||||
Dios Fastigheter AB | 510 | 2,761 | ||||||
Entra ASA(c) | 393 | 3,066 | ||||||
Fabege AB | 2,124 | 15,847 | ||||||
Fastighets AB Balder, Class B(a)(b) | 3,795 | 16,124 | ||||||
Grainger PLC | 3,576 | 9,884 | ||||||
Grand City Properties SA(b) | 591 | 5,285 | ||||||
Hiag Immobilien Holding AG | 15 | 1,290 | ||||||
Hongkong Land Holdings Ltd. | 10,500 | 33,303 | ||||||
Hufvudstaden AB, Class A | 1,542 | 16,440 | ||||||
Hulic Co. Ltd. | 1,800 | 16,503 | ||||||
Hysan Development Co. Ltd. | 6,000 | 11,045 | ||||||
Intershop Holding AG | 6 | 3,981 | ||||||
Kennedy-Wilson Holdings Inc. | 645 | 8,301 | ||||||
Kojamo OYJ | 912 | 7,791 | ||||||
LEG Immobilien SE(b) | 438 | 27,380 | ||||||
Mobimo Holding AG, Registered | 30 | 8,286 | ||||||
NP3 Fastigheter AB | 99 | 1,323 | ||||||
Nyfosa AB | 909 | 4,399 | ||||||
Pandox AB, Class B | 237 | 2,333 | ||||||
Phoenix Spree Deutschland Ltd.(b) | 375 | 711 | ||||||
Platzer Fastigheter Holding AB, Class B | 249 | 1,305 | ||||||
PSP Swiss Property AG, Registered | 165 | 20,301 | ||||||
Sagax AB, Class B | 732 | 13,251 | ||||||
Samhallsbyggnadsbolaget i Norden AB(a) | 5,823 | 1,694 | ||||||
Shurgard Self Storage Ltd. | 117 | 4,379 | ||||||
Sirius Real Estate Ltd. | 5,184 | 5,037 | ||||||
Swire Properties Ltd. | 16,200 | 31,367 | ||||||
Swiss Prime Site AG, Registered | 303 | 28,163 | ||||||
TAG Immobilien AG(b) | 966 | 10,562 | ||||||
Tricon Residential Inc. | 984 | 6,521 | ||||||
VGP NV | 36 | 2,931 | ||||||
Vonovia SE | 4,665 | 107,398 | ||||||
Wallenstam AB, Class B | 1,788 | 6,047 | ||||||
Wharf Real Estate Investment Co. Ltd. | 13,000 | 45,475 | ||||||
Wihlborgs Fastigheter AB | 1,392 | 9,023 | ||||||
|
| |||||||
633,581 | ||||||||
Retail REITs — 15.3% | ||||||||
Acadia Realty Trust | 346 | 4,955 |
Security | Shares | Value | ||||||
Retail REITs (continued) | ||||||||
AEON REIT Investment Corp. | 6 | $ | 5,712 | |||||
Agree Realty Corp. | 347 | 19,411 | ||||||
Ascencio | 36 | 1,630 | ||||||
Brixmor Property Group Inc. | 1,032 | 21,455 | ||||||
BWP Trust | 3,420 | 7,073 | ||||||
Capital & Counties Properties PLC | 6,962 | 8,826 | ||||||
CapitaLand Integrated Commercial Trust | 81,900 | 105,259 | ||||||
Carmila SA | 420 | 5,885 | ||||||
Charter Hall Retail REIT | 3,762 | 7,310 | ||||||
Choice Properties REIT | 1,200 | 10,419 | ||||||
Crombie REIT | 501 | 4,400 | ||||||
Eurocommercial Properties NV | 402 | 8,630 | ||||||
Federal Realty Investment Trust | 492 | 44,866 | ||||||
First Capital Real Estate Investment Trust | 1,284 | 12,074 | ||||||
Fortune REIT | 9,000 | 5,035 | ||||||
Frasers Centrepoint Trust | 15,900 | 24,053 | ||||||
Frontier Real Estate Investment Corp. | 2 | 5,983 | ||||||
Fukuoka REIT Corp. | 3 | 3,230 | ||||||
Getty Realty Corp. | 158 | 4,206 | ||||||
Hamborner REIT AG | 459 | 3,037 | ||||||
Hammerson PLC | 36,531 | 9,786 | ||||||
HomeCo Daily Needs REIT | 7,716 | 5,262 | ||||||
Immobiliare Grande Distribuzione SIIQ SpA | 348 | 714 | ||||||
InvenTrust Properties Corp. | 261 | 6,551 | ||||||
Japan Metropolitan Fund Invest | 12 | 7,744 | ||||||
Kenedix Retail REIT Corp.(b) | 3 | 5,240 | ||||||
Kimco Realty Corp. | 2,838 | 50,914 | ||||||
Kite Realty Group Trust | 1,131 | 24,113 | ||||||
Kiwi Property Group Ltd. | 8,721 | 3,938 | ||||||
Klepierre SA | 1,842 | 44,731 | ||||||
Lendlease Global Commercial REIT | 27,600 | 10,280 | ||||||
Link REIT | 16,200 | 74,344 | ||||||
LOTTE Reit Co. Ltd. | 1,115 | 2,377 | ||||||
Macerich Co. (The) | 858 | 8,340 | ||||||
Mapletree Pan Asia Commercial Trust | 32,700 | 31,781 | ||||||
Mercialys SA | 513 | 4,370 | ||||||
NETSTREIT Corp. | 480 | 6,840 | ||||||
NewRiver REIT PLC | 2,121 | 2,011 | ||||||
NNN REIT Inc. | 531 | 19,291 | ||||||
Paragon REIT | 13,800 | 8,013 | ||||||
Phillips Edison & Co. Inc. | 942 | 33,262 | ||||||
Prinmaris REIT | 330 | 2,958 | ||||||
Realty Income Corp. | 2,061 | 97,650 | ||||||
Regency Centers Corp. | 750 | 45,195 | ||||||
Region RE Ltd. | 8,112 | 10,143 | ||||||
Retail Estates NV | 60 | 3,653 | ||||||
Retail Opportunity Investments Corp. | 489 | 5,741 | ||||||
RioCan REIT | 1,494 | 18,153 | ||||||
RPT Realty | 354 | 3,820 | ||||||
Scentre Group | 39,198 | 60,725 | ||||||
Simon Property Group Inc. | 1,296 | 142,417 | ||||||
SITE Centers Corp. | 699 | 8,150 | ||||||
SmartCentres Real Estate Investment Trust | 486 | 7,531 | ||||||
Spirit Realty Capital Inc. | 438 | 15,764 | ||||||
Starhill Global REIT | 12,300 | 4,002 | ||||||
Supermarket Income Reit PLC | 9,084 | 8,016 | ||||||
Tanger Factory Outlet Centers Inc. | 627 | 14,139 | ||||||
Unibail-Rodamco-Westfield, New(b) | 477 | 23,635 | ||||||
Urban Edge Properties | 450 | 7,137 | ||||||
Vastned Retail NV | 81 | 1,622 | ||||||
Vicinity Ltd. | 45,078 | 48,825 | ||||||
Waypoint REIT Ltd. | 5,403 | 7,297 |
10 | 2 0 2 3 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, 2023 | iShares® Environmentally Aware Real Estate ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Retail REITs (continued) | ||||||||
Wereldhave NV | 282 | $ | 4,252 | |||||
|
| |||||||
1,214,176 | ||||||||
Self Storage REITs — 4.2% | ||||||||
Abacus Storage King(b) | 2,697 | 1,702 | ||||||
Big Yellow Group PLC | 837 | 9,735 | ||||||
CubeSmart | 966 | 32,931 | ||||||
Extra Space Storage Inc. | 917 | 94,992 | ||||||
National Storage Affiliates Trust | 366 | 10,438 | ||||||
National Storage REIT | 5,808 | 7,405 | ||||||
Public Storage | 697 | 166,381 | ||||||
Safestore Holdings PLC | 945 | 7,864 | ||||||
|
| |||||||
331,448 | ||||||||
Single-Family Residential REITs — 3.5% | ||||||||
American Homes 4 Rent, Class A | 1,444 | 47,277 | ||||||
Equity LifeStyle Properties Inc. | 1,026 | 67,511 | ||||||
Invitation Homes Inc. | 3,093 | 91,831 | ||||||
PRS REIT PLC (The) | 2,934 | 2,575 | ||||||
Sun Communities Inc. | 588 | 65,409 | ||||||
Tritax EuroBox PLC(c) | 5,097 | 2,788 | ||||||
|
| |||||||
277,391 | ||||||||
|
| |||||||
Total Long-Term Investments — 99.6% | 7,879,469 | |||||||
|
|
Security | Shares | Value | ||||||
Short-Term Securities | ||||||||
Money Market Funds — 0.6% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 5.54%(d)(e)(f) | 36,972 | $ | 36,987 | |||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 5.33%(d)(e) | 10,000 | 10,000 | ||||||
|
| |||||||
Total Short -Term Investments — 0.6% | 46,987 | |||||||
|
| |||||||
Total Investments — 100.2% | 7,926,456 | |||||||
Liabilities in Excess of Other Assets — (0.2)% |
| (12,405 | ) | |||||
|
| |||||||
Net Assets — 100.0% | $ | 7,914,051 | ||||||
|
|
(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 the cash collateral from loaned securities. |
Affiliates
Investments in issuers considered to be affiliate(s) of the Fund during the six months ended October 31, 2023 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
Affiliated Issuer | Value at 04/30/23 | Purchases at Cost | Proceeds from Sale | Net Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Value at 10/31/23 | Shares Held at 10/31/23 | Income | Capital Gain | |||||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | $ | 66,735 | $ | — | $ | (29,761 | )(a) | $ | 8 | $ | 5 | $ | 36,987 | 36,972 | $ | 355 | (b) | $ | — | |||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | — | 10,000 | (a) | — | — | — | 10,000 | 10,000 | 172 | — | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
$ | 8 | $ | 5 | $ | 46,987 | $ | 527 | $ | — | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(a) | Represents net amount purchased (sold). |
(b) | All or a portion represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities. |
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
Description | Number of Contracts | Expiration Date | Notional Amount (000) | Value/ Unrealized Appreciation (Depreciation) | ||||||||||||
Long Contracts | ||||||||||||||||
Dow Jones U.S. Real Estate Index | 1 | 12/15/23 | $ | 29 | $ | (1,178 | ) | |||||||||
|
|
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, 2023 | iShares® Environmentally Aware Real Estate ETF |
Derivative Financial Instruments Categorized by Risk Exposure
As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:
Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Currency Exchange Contracts | Interest Rate Contracts | Other Contracts | Total | ||||||||||||||||||||||
Liabilities — Derivative Financial Instruments | ||||||||||||||||||||||||||||
Futures contracts | ||||||||||||||||||||||||||||
Unrealized depreciation on futures contracts(a) | $ | — | $ | — | $ | 1,178 | $ | — | $ | — | $ | — | $ | 1,178 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Net cumulative unrealized appreciation (depreciation) on futures contracts are reported in the Schedule of Investments. In the Statements of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss). |
For the period ended October 31, 2023, the effect of derivative financial instruments in the Statements of Operations was as follows:
Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Currency Exchange Contracts | Interest Rate Contracts | Other Contracts | Total | ||||||||||||||||||||||
Net Realized Gain (Loss) from | ||||||||||||||||||||||||||||
Futures contracts | $ | — | $ | — | $ | (3,324 | ) | $ | — | $ | — | $ | — | $ | (3,324 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on | ||||||||||||||||||||||||||||
Futures contracts | $ | — | $ | — | $ | (2,029 | ) | $ | — | $ | — | $ | — | $ | (2,029 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Quarterly Balances of Outstanding Derivative Financial Instruments
Futures contracts: | ||||
Average notional value of contracts — long | $ | 31,625 |
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of financial instruments. For a 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 Fund’s financial instruments categorized in the fair value hierarchy. The breakdown of the Fund’s financial instruments into major categories is disclosed in the Schedule of Investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets | ||||||||||||||||
Investments | ||||||||||||||||
Long-Term Investments | ||||||||||||||||
Common Stocks | $ | 4,995,024 | $ | 2,884,445 | $ | — | $ | 7,879,469 | ||||||||
Short-Term Securities | ||||||||||||||||
Money Market Funds | 46,987 | — | — | 46,987 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 5,042,011 | $ | 2,884,445 | $ | — | $ | 7,926,456 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Derivative Financial Instruments(a) | ||||||||||||||||
Liabilities | ||||||||||||||||
Equity Contracts | $ | (1,178 | ) | $ | — | $ | — | $ | (1,178 | ) | ||||||
|
|
|
|
|
|
|
|
(a) | Derivative financial instruments are futures contracts. Futures contracts are valued at the unrealized appreciation (depreciation) on the instrument. |
See notes to financial statements.
12 | 2 0 2 3 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, 2023 | iShares® Global REIT ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks | ||||||||
Australia — 3.7% | ||||||||
Abacus Group | 1,210,886 | $ | 737,400 | |||||
Abacus Storage King(a) | 1,210,886 | 764,285 | ||||||
Arena REIT | 778,580 | 1,575,077 | ||||||
BWP Trust | 1,166,047 | 2,411,406 | ||||||
Centuria Industrial REIT | 1,264,069 | 2,287,759 | ||||||
Centuria Office REIT | 1,121,624 | 780,892 | ||||||
Charter Hall Long Wale REIT | 1,564,502 | 3,005,620 | ||||||
Charter Hall Retail REIT | 1,159,233 | 2,252,546 | ||||||
Charter Hall Social Infrastructure REIT | 799,901 | 1,212,104 | ||||||
Cromwell Property Group | 3,452,863 | 704,154 | ||||||
Dexus | 2,586,074 | 10,680,968 | ||||||
Dexus Industria REIT | 508,395 | 768,440 | ||||||
GPT Group (The) | 4,607,604 | 10,633,560 | ||||||
Growthpoint Properties Australia Ltd. | 677,151 | 850,160 | ||||||
HealthCo REIT(b) | 1,072,616 | 935,569 | ||||||
HomeCo Daily Needs REIT | 4,130,255 | 2,816,566 | ||||||
Hotel Property Investments Ltd. | 469,626 | 762,642 | ||||||
Mirvac Group | 9,472,421 | 10,990,407 | ||||||
National Storage REIT | 3,007,650 | 3,834,705 | ||||||
Region RE Ltd. | 2,763,023 | 3,454,860 | ||||||
Scentre Group | 12,422,985 | 19,245,576 | ||||||
Stockland | 5,726,104 | 12,923,478 | ||||||
Vicinity Ltd. | 8,978,093 | 9,724,450 | ||||||
Waypoint REIT Ltd. | 1,611,163 | 2,175,936 | ||||||
|
| |||||||
105,528,560 | ||||||||
Belgium — 1.1% | ||||||||
Aedifica SA | 112,215 | 6,121,950 | ||||||
Ascencio | 12,284 | 556,058 | ||||||
Cofinimmo SA | 80,331 | 4,995,420 | ||||||
Home Invest Belgium SA, NVS | 23,306 | 337,350 | ||||||
Intervest Offices & Warehouses NV | 63,115 | 1,338,979 | ||||||
Montea NV | 35,052 | 2,477,394 | ||||||
Retail Estates NV | 29,582 | 1,801,145 | ||||||
Shurgard Self Storage Ltd. | 60,623 | 2,268,798 | ||||||
Warehouses De Pauw CVA | 380,932 | 9,425,213 | ||||||
Xior Student Housing NV | 73,158 | 2,104,976 | ||||||
|
| |||||||
31,427,283 | ||||||||
Canada — 2.4% | ||||||||
Allied Properties REIT | 302,976 | 3,462,895 | ||||||
Boardwalk REIT | 89,722 | 4,189,938 | ||||||
Canadian Apartment Properties REIT | 396,860 | 11,681,864 | ||||||
Choice Properties REIT | 614,013 | 5,330,966 | ||||||
Crombie REIT | 254,795 | 2,237,897 | ||||||
Dream Industrial REIT | 596,399 | 5,036,115 | ||||||
First Capital Real Estate Investment Trust | 503,183 | 4,731,571 | ||||||
Granite REIT | 142,212 | 6,476,068 | ||||||
H&R Real Estate Investment Trust | 627,193 | 3,857,910 | ||||||
InterRent REIT | 315,620 | 2,676,539 | ||||||
Killam Apartment REIT | 272,354 | 3,077,546 | ||||||
NorthWest Healthcare Properties REIT | 519,436 | 1,502,029 | ||||||
Prinmaris REIT | 228,704 | 2,049,966 | ||||||
RioCan REIT | 719,923 | 8,747,577 | ||||||
SmartCentres Real Estate Investment Trust | 308,240 | 4,776,692 | ||||||
|
| |||||||
69,835,573 | ||||||||
China — 0.0% | ||||||||
Yuexiu REIT(b) | 5,508,000 | 788,478 | ||||||
|
| |||||||
France — 1.7% | ||||||||
ARGAN SA, NVS | 23,542 | 1,610,695 | ||||||
Carmila SA | 135,979 | 1,905,392 |
Security | Shares | Value | ||||||
France (continued) | ||||||||
Covivio | 128,062 | $ | 5,488,017 | |||||
Gecina SA | 124,026 | 12,178,217 | ||||||
ICADE | 77,790 | 2,541,809 | ||||||
Klepierre SA | 494,196 | 12,000,947 | ||||||
Mercialys SA | 209,664 | 1,785,980 | ||||||
Unibail-Rodamco-Westfield, New(a) | 244,970 | 12,138,064 | ||||||
|
| |||||||
49,649,121 | ||||||||
Germany — 0.0% | ||||||||
Hamborner REIT AG | 173,092 | 1,145,203 | ||||||
|
| |||||||
Hong Kong — 1.1% | ||||||||
Champion REIT | 4,360,000 | 1,377,271 | ||||||
Fortune REIT | 3,343,000 | 1,870,374 | ||||||
Link REIT | 6,103,220 | 28,008,528 | ||||||
Prosperity REIT | 2,859,000 | 493,963 | ||||||
Sunlight REIT | 2,460,000 | 680,396 | ||||||
|
| |||||||
32,430,532 | ||||||||
India — 0.3% | ||||||||
Embassy Office Parks REIT | 1,451,388 | 5,432,937 | ||||||
Mindspace Business Parks REIT(c) | 522,066 | 1,938,370 | ||||||
Nexus Select Trust, NVS(a) | 770,942 | 1,178,561 | ||||||
|
| |||||||
8,549,868 | ||||||||
Ireland — 0.0% | ||||||||
Irish Residential Properties REIT PLC | 1,069,753 | 1,030,375 | ||||||
|
| |||||||
Italy — 0.0% | ||||||||
Immobiliare Grande Distribuzione SIIQ SpA | 158,275 | 324,893 | ||||||
|
| |||||||
Japan — 7.7% | ||||||||
Activia Properties Inc. | 1,750 | 4,734,602 | ||||||
Advance Logistics Investment Corp. | 1,531 | 1,247,149 | ||||||
Advance Residence Investment Corp. | 3,073 | 6,681,326 | ||||||
AEON REIT Investment Corp. | 4,209 | 4,006,935 | ||||||
Comforia Residential REIT Inc. | 1,603 | 3,401,982 | ||||||
CRE Logistics REIT Inc. | 1,458 | 1,532,006 | ||||||
Daiwa House REIT Investment Corp. | 5,082 | 8,993,856 | ||||||
Daiwa Office Investment Corp. | 633 | 2,769,034 | ||||||
Daiwa Securities Living Investments Corp. | 4,908 | 3,629,020 | ||||||
Frontier Real Estate Investment Corp. | 1,148 | 3,434,393 | ||||||
Fukuoka REIT Corp. | 1,763 | 1,898,154 | ||||||
Global One Real Estate Investment Corp. | 2,516 | 1,908,579 | ||||||
GLP J-Reit | 11,101 | 9,942,689 | ||||||
Hankyu Hanshin REIT Inc. | 1,546 | 1,452,506 | ||||||
Health Care & Medical Investment Corp. | 868 | 812,779 | ||||||
Heiwa Real Estate REIT Inc. | 2,396 | 2,239,820 | ||||||
Hoshino Resorts REIT Inc. | 594 | 2,337,044 | ||||||
Hulic Reit Inc. | 3,004 | 3,064,358 | ||||||
Ichigo Office REIT Investment Corp. | 2,867 | 1,608,494 | ||||||
Industrial & Infrastructure Fund Investment Corp. | 4,693 | 4,218,064 | ||||||
Invincible Investment Corp. | 16,104 | 6,193,604 | ||||||
Japan Excellent Inc. | 2,934 | 2,575,227 | ||||||
Japan Hotel REIT Investment Corp. | 10,725 | 4,875,942 | ||||||
Japan Logistics Fund Inc. | 2,143 | 3,969,451 | ||||||
Japan Metropolitan Fund Invest | 16,400 | 10,583,687 | ||||||
Japan Prime Realty Investment Corp. | 2,176 | 5,096,833 | ||||||
Japan Real Estate Investment Corp. | 3,186 | 11,833,828 | ||||||
Kenedix Office Investment Corp. | 3,638 | 3,794,391 | ||||||
Kenedix Residential Next Investment Corp.(a) | 2,513 | 3,501,273 | ||||||
Kenedix Retail REIT Corp.(a) | 1,419 | 2,478,679 | ||||||
LaSalle Logiport REIT | 4,441 | 4,355,385 | ||||||
Mirai Corp. | 3,841 | 1,159,839 | ||||||
Mitsubishi Estate Logistics REIT Investment Corp. | 1,170 | 2,944,559 |
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, 2023 | iShares® Global REIT ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Japan (continued) | ||||||||
Mitsui Fudosan Logistics Park Inc. | 1,284 | $ | 3,881,828 | |||||
Mori Hills REIT Investment Corp. | 3,806 | 3,562,212 | ||||||
Mori Trust Reit Inc. | 6,086 | 2,967,007 | ||||||
Nippon Accommodations Fund Inc. | 1,110 | 4,471,965 | ||||||
Nippon Building Fund Inc. | 3,656 | 14,689,565 | ||||||
Nippon Prologis REIT Inc. | 5,897 | 10,492,976 | ||||||
NIPPON REIT Investment Corp. | 1,033 | 2,386,562 | ||||||
Nomura Real Estate Master Fund Inc. | 10,695 | 11,801,485 | ||||||
NTT UD REIT Investment Corp. | 3,197 | 2,635,493 | ||||||
One REIT Inc. | 591 | 1,023,928 | ||||||
Orix JREIT Inc. | 6,315 | 7,257,590 | ||||||
Samty Residential Investment Corp. | 992 | 740,670 | ||||||
Sankei Real Estate Inc. | 1,164 | 705,153 | ||||||
Sekisui House Reit Inc. | 9,811 | 5,167,213 | ||||||
SOSiLA Logistics REIT Inc. | 1,656 | 1,311,989 | ||||||
Star Asia Investment Corp. | 4,032 | 1,519,164 | ||||||
Starts Proceed Investment Corp. | 611 | 839,336 | ||||||
Takara Leben Real Estate Investment Corp. | 1,622 | 1,062,188 | ||||||
Tokyu REIT Inc. | 2,262 | 2,699,221 | ||||||
United Urban Investment Corp. | 7,069 | 7,126,744 | ||||||
|
| |||||||
219,617,777 | ||||||||
Malaysia — 0.1% | ||||||||
Axis Real Estate Investment Trust(b) | 3,253,200 | 1,235,937 | ||||||
|
| |||||||
Mexico — 0.8% | ||||||||
Concentradora Fibra Danhos SA de CV(b) | 572,315 | 614,249 | ||||||
FIBRA Macquarie Mexico(c) | 1,741,750 | 2,699,234 | ||||||
Fibra Uno Administracion SA de CV | 6,907,834 | 10,486,850 | ||||||
PLA Administradora Industrial S. de RL de CV | 1,851,209 | 3,004,403 | ||||||
Prologis Property Mexico SA de CV | 1,445,664 | 5,180,784 | ||||||
|
| |||||||
21,985,520 | ||||||||
Netherlands — 0.2% | ||||||||
Eurocommercial Properties NV | 123,123 | 2,643,248 | ||||||
NSI NV | 42,955 | 775,389 | ||||||
Vastned Retail NV | 41,173 | 824,253 | ||||||
Wereldhave NV | 97,278 | 1,466,899 | ||||||
|
| |||||||
5,709,789 | ||||||||
New Zealand — 0.3% | ||||||||
Argosy Property Ltd. | 2,020,891 | 1,248,013 | ||||||
Goodman Property Trust | 2,622,428 | 3,070,930 | ||||||
Kiwi Property Group Ltd. | 3,794,955 | 1,713,479 | ||||||
Stride Property Group | 1,164,557 | 922,720 | ||||||
Vital Healthcare Property Trust | 1,151,199 | 1,341,377 | ||||||
|
| |||||||
8,296,519 | ||||||||
Philippines — 0.0% | ||||||||
AREIT Inc. | 1,678,920 | 970,542 | ||||||
|
| |||||||
Saudi Arabia — 0.2% | ||||||||
Al Maather REIT Fund | 112,901 | 275,567 | ||||||
Al Rajhi REIT | 275,670 | 608,420 | ||||||
Alahli REIT Fund 1 | 108,261 | 225,953 | ||||||
Alinma Retail REIT Fund, NVS | 216,642 | 261,592 | ||||||
Al-Jazira Reit Fund | 29,972 | 141,248 | ||||||
Alkhabeer REIT | 303,968 | 510,448 | ||||||
Bonyan REIT, NVS | 156,766 | 386,107 | ||||||
Derayah REIT | 265,894 | 559,911 | ||||||
MEFIC REIT REIT, NVS | 139,240 | 176,295 | ||||||
Mulkia Gulf Real Estate REIT Fund, NVS | 141,547 | 222,606 | ||||||
Musharaka Real Estate Income Fund, NVS | 196,998 | 291,958 | ||||||
Riyad REIT Fund | 355,018 | 770,297 | ||||||
Sedco Capital REIT Fund | 171,126 | 357,615 | ||||||
Sico Saudi REIT, NVS | 101,614 | 122,815 |
Security | Shares | Value | ||||||
Saudi Arabia (continued) | ||||||||
Taleem REIT | 75,872 | $ | 221,162 | |||||
|
| |||||||
5,131,994 | ||||||||
Singapore — 3.3% | ||||||||
AIMS APAC REIT | 1,505,328 | 1,319,192 | ||||||
CapitaLand Ascendas REIT | 8,533,214 | 16,213,481 | ||||||
CapitaLand Ascott Trust(b) | 5,453,032 | 3,585,396 | ||||||
CapitaLand China Trust(b) | 2,719,830 | 1,569,098 | ||||||
CapitaLand Integrated Commercial Trust | 12,161,926 | 15,630,742 | ||||||
CDL Hospitality Trusts | 2,090,900 | 1,478,367 | ||||||
Cromwell European Real Estate Investment Trust(b) | 739,700 | 900,078 | ||||||
Digital Core REIT Management Pte Ltd. | 1,721,800 | 870,335 | ||||||
ESR-LOGOS REIT | 14,707,942 | 2,954,157 | ||||||
Far East Hospitality Trust | 2,349,000 | 1,014,281 | ||||||
First REIT | 2,709,200 | 465,005 | ||||||
Frasers Centrepoint Trust | 2,574,770 | 3,894,995 | ||||||
Frasers Logistics & Commercial Trust | 6,867,400 | 5,216,526 | ||||||
Keppel DC REIT | 3,088,733 | 3,811,803 | ||||||
Keppel Pacific Oak US REIT | 2,000,900 | 368,166 | ||||||
Keppel REIT | 5,236,000 | 3,040,345 | ||||||
Lendlease Global Commercial REIT(b) | 4,552,091 | 1,695,460 | ||||||
Mapletree Industrial Trust | 4,686,310 | 7,366,418 | ||||||
Mapletree Logistics Trust | 7,870,513 | 8,451,740 | ||||||
Mapletree Pan Asia Commercial Trust | 5,539,691 | 5,384,054 | ||||||
OUE Commercial Real Estate Investment Trust | 5,219,100 | 895,803 | ||||||
Paragon REIT | 2,587,300 | 1,502,322 | ||||||
Parkway Life REIT | 914,600 | 2,243,754 | ||||||
Sasseur Real Estate Investment Trust(b) | 1,222,700 | 558,264 | ||||||
Starhill Global REIT(b) | 3,447,700 | 1,121,631 | ||||||
Suntec REIT | 5,093,300 | 4,093,021 | ||||||
|
| |||||||
95,644,434 | ||||||||
South Africa — 0.5% | ||||||||
Attacq Ltd. | 1,725,607 | 745,333 | ||||||
Emira Property Fund Ltd. | 567,816 | 252,261 | ||||||
Equites Property Fund Ltd. | 1,791,325 | 1,101,716 | ||||||
Growthpoint Properties Ltd. | 8,071,961 | 4,196,770 | ||||||
Hyprop Investments Ltd. | 855,576 | 1,304,194 | ||||||
Investec Property Fund Ltd. | 1,426,221 | 566,279 | ||||||
Redefine Properties Ltd. | 16,423,507 | 3,088,424 | ||||||
Resilient REIT Ltd. | 713,323 | 1,421,862 | ||||||
Stor-Age Property REIT Ltd.(b) | 971,301 | 625,385 | ||||||
|
| |||||||
13,302,224 | ||||||||
South Korea — 0.1% | ||||||||
ESR Kendall Square REIT Co. Ltd. | 291,332 | 691,256 | ||||||
JR Global Reit | 278,251 | 811,577 | ||||||
LOTTE Reit Co. Ltd. | 293,543 | 625,764 | ||||||
SK REITs Co. Ltd. | 372,349 | 1,037,668 | ||||||
|
| |||||||
3,166,265 | ||||||||
Spain — 0.4% | ||||||||
Inmobiliaria Colonial SOCIMI SA | 765,093 | 4,292,382 | ||||||
Lar Espana Real Estate SOCIMI SA | 146,907 | 851,824 | ||||||
Merlin Properties SOCIMI SA | 795,486 | 6,632,590 | ||||||
|
| |||||||
11,776,796 | ||||||||
Turkey — 0.1% | ||||||||
AKIS Gayrimenkul Yatirimi AS(a) | 906,101 | 363,154 | ||||||
Alarko Gayrimenkul Yatirim Ortakligi AS | 160,926 | 220,483 | ||||||
Emlak Konut Gayrimenkul Yatirim Ortakligi AS | 4,408,979 | 1,021,316 | ||||||
Is Gayrimenkul Yatirim Ortakligi AS(a) | 1,015,686 | 776,131 | ||||||
Ozak Gayrimenkul Yatirim Ortakligi(a) | 894,656 | 276,428 | ||||||
|
| |||||||
2,657,512 |
14 | 2 0 2 3 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, 2023 | iShares® Global REIT ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
United Kingdom — 4.4% | ||||||||
Abrdn Property Income Trust | 917,936 | $ | 519,918 | |||||
AEW U.K. REIT PLC | 378,824 | 431,434 | ||||||
Assura PLC | 6,952,949 | 3,459,822 | ||||||
Balanced Commercial Property Trust Ltd. | 1,302,641 | 1,001,527 | ||||||
Big Yellow Group PLC | 407,150 | 4,735,188 | ||||||
British Land Co. PLC (The) | 2,212,779 | 8,021,934 | ||||||
Capital & Counties Properties PLC | 3,256,602 | 4,128,375 | ||||||
CLS Holdings PLC | 398,468 | 420,930 | ||||||
Custodian Reit PLC | 979,551 | 979,469 | ||||||
Derwent London PLC | 265,059 | 5,890,666 | ||||||
Empiric Student Property PLC | 1,319,425 | 1,355,122 | ||||||
Great Portland Estates PLC | 510,333 | 2,419,107 | ||||||
Hammerson PLC | 9,265,473 | 2,482,082 | ||||||
Helical PLC | 245,743 | 573,481 | ||||||
Home Reit PLC(d) | 1,719,812 | 593,950 | ||||||
Impact Healthcare Reit PLC, Class B | 747,183 | 753,531 | ||||||
Land Securities Group PLC | 1,756,187 | 12,173,364 | ||||||
Life Science Reit PLC | 843,575 | 629,548 | ||||||
LondonMetric Property PLC | 2,541,651 | 5,121,800 | ||||||
LXI REIT PLC | 3,614,116 | 3,766,804 | ||||||
NewRiver REIT PLC | 730,339 | 692,398 | ||||||
Picton Property Income Ltd. | 1,299,453 | 1,026,623 | ||||||
Primary Health Properties PLC | 3,152,631 | 3,439,097 | ||||||
PRS REIT PLC (The) | 1,241,480 | 1,089,681 | ||||||
Regional REIT Ltd.(c) | 1,020,925 | 349,308 | ||||||
Residential Secure Income PLC, NVS(c) | 445,546 | 290,265 | ||||||
Safestore Holdings PLC | 509,234 | 4,237,588 | ||||||
Schroder REIT Ltd. | 1,203,601 | 593,316 | ||||||
Segro PLC | 2,930,500 | 25,472,313 | ||||||
Sirius Real Estate Ltd. | 2,762,835 | 2,684,508 | ||||||
Supermarket Income Reit PLC | 2,969,985 | 2,620,763 | ||||||
Target Healthcare REIT PLC | 1,472,463 | 1,290,377 | ||||||
Triple Point Social Housing REIT PLC(c) | 761,482 | 502,665 | ||||||
Tritax Big Box REIT PLC | 4,471,735 | 7,445,070 | ||||||
UK Commercial Property REIT Ltd. | 1,776,956 | 1,139,852 | ||||||
UNITE Group PLC (The) | 824,790 | 8,728,353 | ||||||
Urban Logistics REIT PLC | 1,110,528 | 1,406,482 | ||||||
Warehouse REIT PLC | 954,138 | 840,787 | ||||||
Workspace Group PLC | 341,939 | 2,009,719 | ||||||
|
| |||||||
125,317,217 | ||||||||
United States — 71.1% | ||||||||
Acadia Realty Trust | 218,006 | 3,121,846 | ||||||
Agree Realty Corp. | 220,270 | 12,321,904 | ||||||
Alexander & Baldwin Inc. | 173,946 | 2,748,347 | ||||||
Alexandria Real Estate Equities Inc. | 411,049 | 38,280,993 | ||||||
American Assets Trust Inc. | 116,066 | 2,060,171 | ||||||
American Homes 4 Rent, Class A | 797,853 | 26,121,707 | ||||||
Americold Realty Trust Inc. | 645,772 | 16,932,142 | ||||||
Apartment Income REIT Corp. | 355,719 | 10,390,552 | ||||||
Apartment Investment & Management Co., Class A(a) | 357,708 | 2,096,169 | ||||||
Apple Hospitality REIT Inc. | 508,495 | 7,973,202 | ||||||
Armada Hoffler Properties Inc. | 159,666 | 1,590,273 | ||||||
AvalonBay Communities Inc. | 339,274 | 56,231,273 | ||||||
Boston Properties Inc. | 374,668 | 20,070,965 | ||||||
Brandywine Realty Trust | 394,698 | 1,476,171 | ||||||
Brixmor Property Group Inc. | 716,738 | 14,900,983 | ||||||
Broadstone Net Lease Inc. | 450,308 | 6,371,858 | ||||||
Camden Property Trust | 247,866 | 21,038,866 | ||||||
CareTrust REIT Inc. | 236,220 | 5,083,454 | ||||||
Centerspace | 36,476 | 1,772,004 | ||||||
Community Healthcare Trust Inc. | 60,621 | 1,738,004 | ||||||
Corporate Office Properties Trust | 267,385 | 6,096,378 |
Security | Shares | Value | ||||||
United States (continued) | ||||||||
Cousins Properties Inc. | 365,252 | $ | 6,527,053 | |||||
CubeSmart | 534,524 | 18,221,923 | ||||||
DiamondRock Hospitality Co. | 498,515 | 3,853,521 | ||||||
Digital Realty Trust Inc. | 714,837 | 88,897,129 | ||||||
Douglas Emmett Inc. | 374,099 | 4,193,650 | ||||||
Easterly Government Properties Inc., Class A | 225,363 | 2,424,906 | ||||||
EastGroup Properties Inc. | 104,813 | 17,110,722 | ||||||
Elme Communities | 205,845 | 2,626,582 | ||||||
Empire State Realty Trust Inc., Class A | 309,018 | 2,499,956 | ||||||
EPR Properties | 176,454 | 7,534,586 | ||||||
Equinix Inc. | 223,565 | 163,121,967 | ||||||
Equity LifeStyle Properties Inc. | 424,045 | 27,902,161 | ||||||
Equity Residential | 893,119 | 49,416,274 | ||||||
Essential Properties Realty Trust Inc. | 372,224 | 8,170,317 | ||||||
Essex Property Trust Inc. | 152,789 | 32,684,623 | ||||||
Extra Space Storage Inc. | 500,617 | 51,858,915 | ||||||
Federal Realty Investment Trust | 193,339 | 17,630,583 | ||||||
First Industrial Realty Trust Inc. | 315,985 | 13,366,165 | ||||||
Four Corners Property Trust Inc. | 207,243 | 4,414,276 | ||||||
Gaming and Leisure Properties Inc. | 602,892 | 27,365,268 | ||||||
Getty Realty Corp.(b) | 106,221 | 2,827,603 | ||||||
Global Net Lease Inc. | 458,986 | 3,644,349 | ||||||
Healthcare Realty Trust Inc., Class A | 909,902 | 13,057,094 | ||||||
Healthpeak Properties Inc. | 1,312,923 | 20,415,953 | ||||||
Highwoods Properties Inc. | 252,755 | 4,521,787 | ||||||
Host Hotels & Resorts Inc. | 1,689,032 | 26,146,215 | ||||||
Hudson Pacific Properties Inc. | 332,278 | 1,481,960 | ||||||
Independence Realty Trust Inc. | 534,057 | 6,616,966 | ||||||
Innovative Industrial Properties Inc. | 66,261 | 4,759,528 | ||||||
InvenTrust Properties Corp. | 161,203 | 4,046,195 | ||||||
Invitation Homes Inc. | 1,463,703 | 43,457,342 | ||||||
JBG SMITH Properties | 259,144 | 3,335,183 | ||||||
Kilroy Realty Corp. | 280,653 | 8,021,063 | ||||||
Kimco Realty Corp. | 1,450,974 | 26,030,474 | ||||||
Kite Realty Group Trust | 518,449 | 11,053,333 | ||||||
LTC Properties Inc. | 97,915 | 3,095,093 | ||||||
LXP Industrial Trust | 695,755 | 5,503,422 | ||||||
Macerich Co. (The) | 513,969 | 4,995,779 | ||||||
Medical Properties Trust Inc. | 1,432,232 | 6,846,069 | ||||||
Mid-America Apartment Communities Inc. | 277,696 | 32,809,782 | ||||||
National Health Investors Inc. | 99,736 | 4,990,789 | ||||||
National Storage Affiliates Trust | 189,704 | 5,410,358 | ||||||
NETSTREIT Corp. | 160,839 | 2,291,956 | ||||||
NexPoint Residential Trust Inc. | 54,178 | 1,462,264 | ||||||
NNN REIT Inc. | 434,226 | 15,775,431 | ||||||
Omega Healthcare Investors Inc. | 559,793 | 18,529,148 | ||||||
Paramount Group Inc. | 436,248 | 1,867,141 | ||||||
Park Hotels & Resorts Inc. | 513,294 | 5,918,280 | ||||||
Pebblebrook Hotel Trust(b) | 288,719 | 3,444,418 | ||||||
Phillips Edison & Co. Inc. | 281,157 | 9,927,654 | ||||||
Physicians Realty Trust | 561,325 | 6,095,989 | ||||||
Piedmont Office Realty Trust Inc., Class A | 292,557 | 1,524,222 | ||||||
Prologis Inc. | 2,209,681 | 222,625,361 | ||||||
Public Storage | 375,144 | 89,550,624 | ||||||
Realty Income Corp. | 1,612,920 | 76,420,150 | ||||||
Regency Centers Corp. | 433,076 | 26,097,160 | ||||||
Retail Opportunity Investments Corp. | 293,865 | 3,449,975 | ||||||
Rexford Industrial Realty Inc. | 491,497 | 21,252,330 | ||||||
RLJ Lodging Trust | 372,978 | 3,505,993 | ||||||
RPT Realty | 207,696 | 2,241,040 | ||||||
Ryman Hospitality Properties Inc. | 137,355 | 11,757,588 | ||||||
Sabra Health Care REIT Inc. | 548,222 | 7,477,748 |
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, 2023 | iShares® Global REIT ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
United States (continued) | ||||||||
Safehold Inc. | 104,362 | $ | 1,697,970 | |||||
Service Properties Trust | 393,061 | 2,849,692 | ||||||
Simon Property Group Inc. | 776,830 | 85,365,849 | ||||||
SITE Centers Corp. | 451,605 | 5,265,714 | ||||||
SL Green Realty Corp. | 143,317 | 4,197,755 | ||||||
Spirit Realty Capital Inc. | 337,925 | 12,161,921 | ||||||
STAG Industrial Inc. | 429,877 | 14,280,514 | ||||||
Summit Hotel Properties Inc. | 251,506 | 1,418,494 | ||||||
Sun Communities Inc. | 294,109 | 32,716,685 | ||||||
Sunstone Hotel Investors Inc. | 493,912 | 4,593,382 | ||||||
Tanger Factory Outlet Centers Inc. | 242,139 | 5,460,234 | ||||||
Terreno Realty Corp. | 194,613 | 10,368,981 | ||||||
UDR Inc. | 783,132 | 24,911,429 | ||||||
Universal Health Realty Income Trust | 30,620 | 1,177,033 | ||||||
Urban Edge Properties | 273,556 | 4,338,598 | ||||||
Ventas Inc. | 955,105 | 40,553,758 | ||||||
Veris Residential Inc. | 187,428 | 2,509,661 | ||||||
VICI Properties Inc., Class A | 2,403,150 | 67,047,885 | ||||||
Vornado Realty Trust | 422,925 | 8,120,160 | ||||||
Welltower Inc. | 1,189,681 | 99,469,228 | ||||||
WP Carey Inc. | 507,924 | 27,250,123 | ||||||
Xenia Hotels & Resorts Inc. | 265,250 | 3,084,857 | ||||||
|
| |||||||
2,041,358,571 | ||||||||
|
| |||||||
Total Common Stocks — 99.5% | 2,856,880,983 | |||||||
|
| |||||||
Preferred Stocks | ||||||||
Bermuda — 0.0% | ||||||||
Brookfield Property Partners LP, 6.25% | 4,496 | 53,952 | ||||||
|
| |||||||
Total Preferred Stocks — 0.0% | 53,952 | |||||||
|
| |||||||
Total Long-Term Investments — 99.5% | 2,856,934,935 | |||||||
|
|
Security | Shares | Value | ||||||
Short-Term Securities | ||||||||
Money Market Funds — 0.4% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 5.54%(e)(f)(g) | 5,705,520 | $ | 5,707,802 | |||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 5.33%(e)(f) | 5,400,000 | 5,400,000 | ||||||
|
| |||||||
Total Short-Term Securities — 0.4% | 11,107,802 | |||||||
|
| |||||||
Total Investments — 99.9% | 2,868,042,737 | |||||||
Other Assets Less Liabilities — 0.1% | 1,789,388 | |||||||
|
| |||||||
Net Assets — 100.0% | $ | 2,869,832,125 | ||||||
|
|
(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) | Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. |
(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 the cash collateral from loaned securities. |
Affiliates
Investments in issuers considered to be affiliate(s) of the Fund during the six months ended October 31, 2023 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
Affiliated Issuer | | Value at 04/30/23 | | | Purchases at Cost | | | Proceeds from Sale | | | Net Realized Gain (Loss) | | | Change in Unrealized Appreciation (Depreciation) | | | Value at 10/31/23 | | | Shares Held at 10/31/23 | | Income | | Capital Gain Distributions from Underlying Funds | ||||||||||||
BlackRock Cash Funds: Institutional, | $ | 15,717,990 | $ | — | $ | (10,008,906 | )(a) | $ | (3,693 | ) | $ | 2,411 | $ | 5,707,802 | 5,705,520 | $ | 46,651 | (b) | $ | — | ||||||||||||||||
BlackRock Cash Funds: Treasury, | 7,630,000 | — | (2,230,000 | )(a) | — | — | 5,400,000 | 5,400,000 | 224,600 | — | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
$ | (3,693 | ) | $ | 2,411 | $ | 11,107,802 | $ | 271,251 | $ | — | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(a) | Represents net amount purchased (sold). |
(b) | All or a portion represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities. |
16 | 2 0 2 3 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, 2023 | iShares® Global REIT ETF |
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
Description | Number of Contracts | Expiration Date | Notional Amount (000) | Value/ Unrealized Appreciation (Depreciation) | ||||||||||||
Long Contracts | ||||||||||||||||
Dow Jones U.S. Real Estate Index | 333 | 12/15/23 | $ | 9,710 | $ | (257,146 | ) | |||||||||
SPI 200 Index | 15 | 12/21/23 | 1,620 | (31,754 | ) | |||||||||||
|
| |||||||||||||||
$ | (288,900 | ) | ||||||||||||||
|
|
Derivative Financial Instruments Categorized by Risk Exposure
As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:
Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Currency Exchange Contracts | Interest Rate Contracts | Other Contracts | Total | ||||||||||||||||||||||
Liabilities — Derivative Financial Instruments | ||||||||||||||||||||||||||||
Futures contracts | ||||||||||||||||||||||||||||
Unrealized depreciation on futures contracts(a) | $ | — | $ | — | $ | 288,900 | $ | — | $ | — | $ | — | $ | 288,900 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Net cumulative unrealized appreciation (depreciation) on futures contracts are reported in the Schedule of Investments. In the Statements of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss). |
For the period ended October 31, 2023, the effect of derivative financial instruments in the Statements of Operations was as follows:
Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Currency Exchange Contracts | Interest Rate Contracts | Other Contracts | Total | ||||||||||||||||||||||
Net Realized Gain (Loss) from | ||||||||||||||||||||||||||||
Futures contracts | $ | — | $ | — | $ | (1,579,535 | ) | $ | — | $ | — | $ | — | $ | (1,579,535 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on | ||||||||||||||||||||||||||||
Futures contracts | $ | — | $ | — | $ | (686,868 | ) | $ | — | $ | — | $ | — | $ | (686,868 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Quarterly Balances of Outstanding Derivative Financial Instruments
Futures contracts: | ||||
Average notional value of contracts — long | $ | 15,694,286 |
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of financial instruments. For a 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 Fund’s financial instruments categorized in the fair value hierarchy. The breakdown of the Fund’s financial instruments into major categories is disclosed in the Schedule of Investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets | ||||||||||||||||
Investments | ||||||||||||||||
Long-Term Investments | ||||||||||||||||
Common Stocks | $ | 2,208,305,978 | $ | 647,981,055 | $ | 593,950 | $ | 2,856,880,983 | ||||||||
Preferred Stocks | 53,952 | — | — | 53,952 | ||||||||||||
Short-Term Securities | ||||||||||||||||
Money Market Funds | 11,107,802 | — | — | 11,107,802 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 2,219,467,732 | $ | 647,981,055 | $ | 593,950 | $ | 2,868,042,737 | |||||||||
|
|
|
|
|
|
|
|
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, 2023 | iShares® Global REIT ETF |
Fair Value Hierarchy as of Period End (continued)
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Derivative Financial Instruments(a) | ||||||||||||||||
Liabilities | ||||||||||||||||
Equity Contracts | $ (257,146 | ) | $ (31,754 | ) | $ | — | $ (288,900 | ) | ||||||||
|
|
|
|
|
|
|
|
(a) | Derivative financial instruments are futures contracts. Futures contracts are valued at the unrealized appreciation (depreciation) on the instrument. |
See notes to financial statements.
18 | 2 0 2 3 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, 2023 | iShares® International Developed Real Estate ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks |
| |||||||
Australia — 9.0% | ||||||||
Abacus Group | 110,487 | $ | 67,284 | |||||
Abacus Storage King(a) | 110,487 | 69,737 | ||||||
Arena REIT | 70,966 | 143,565 | ||||||
BWP Trust | 104,838 | 216,807 | ||||||
Centuria Industrial REIT | 114,462 | 207,158 | ||||||
Centuria Office REIT | 100,284 | 69,819 | ||||||
Charter Hall Long Wale REIT | 143,370 | 275,433 | ||||||
Charter Hall Retail REIT | 105,345 | 204,700 | ||||||
Charter Hall Social Infrastructure REIT | 72,712 | 110,182 | ||||||
Cromwell Property Group | 310,351 | 63,291 | ||||||
Dexus | 232,714 | 961,152 | ||||||
Dexus Industria REIT | 46,068 | 69,632 | ||||||
GPT Group (The) | 414,463 | 956,509 | ||||||
Growthpoint Properties Australia Ltd. | 56,925 | 71,469 | ||||||
HealthCo REIT(b) | 97,620 | 85,147 | ||||||
HomeCo Daily Needs REIT | 377,996 | 257,769 | ||||||
Hotel Property Investments Ltd. | 40,708 | 66,107 | ||||||
Ingenia Communities Group | 78,954 | 196,515 | ||||||
Lifestyle Communities Ltd. | 20,180 | 200,755 | ||||||
Mirvac Group | 852,805 | 989,470 | ||||||
National Storage REIT | 270,636 | 345,056 | ||||||
Region RE Ltd. | 249,933 | 312,514 | ||||||
Scentre Group | 1,124,818 | 1,742,558 | ||||||
Stockland | 516,034 | 1,164,658 | ||||||
Vicinity Ltd. | 815,047 | 882,803 | ||||||
Waypoint REIT Ltd. | 146,384 | 197,697 | ||||||
|
| |||||||
9,927,787 | ||||||||
Austria — 0.3% | ||||||||
CA Immobilien Anlagen AG | 8,823 | 298,334 | ||||||
|
| |||||||
Belgium — 2.7% | ||||||||
Aedifica SA | 10,191 | 555,975 | ||||||
Ascencio | 1,149 | 52,012 | ||||||
Cofinimmo SA | 7,230 | 449,601 | ||||||
Home Invest Belgium SA, NVS | 2,085 | 30,180 | ||||||
Intervest Offices & Warehouses NV | 5,909 | 125,359 | ||||||
Montea NV | 3,125 | 220,868 | ||||||
Retail Estates NV | 2,685 | 163,480 | ||||||
Shurgard Self Storage Ltd. | 5,490 | 205,462 | ||||||
VGP NV | 2,198 | 178,932 | ||||||
Warehouses De Pauw CVA | 34,339 | 849,633 | ||||||
Xior Student Housing NV | 6,666 | 191,801 | ||||||
|
| |||||||
3,023,303 | ||||||||
Canada — 6.5% | ||||||||
Allied Properties REIT | 27,514 | 314,474 | ||||||
Boardwalk REIT | 8,006 | 373,873 | ||||||
Canadian Apartment Properties REIT | 36,032 | 1,060,628 | ||||||
Chartwell Retirement Residences | 50,784 | 372,068 | ||||||
Choice Properties REIT | 55,257 | 479,751 | ||||||
Crombie REIT | 22,704 | 199,412 | ||||||
Dream Industrial REIT | 53,578 | 452,424 | ||||||
First Capital Real Estate Investment Trust | 45,608 | 428,865 | ||||||
Granite REIT | 12,898 | 587,351 | ||||||
H&R Real Estate Investment Trust | 56,736 | 348,987 | ||||||
InterRent REIT | 28,480 | 241,518 | ||||||
Killam Apartment REIT | 25,067 | 283,252 | ||||||
NorthWest Healthcare Properties REIT | 45,574 | 131,784 | ||||||
Prinmaris REIT | 20,919 | 187,505 | ||||||
RioCan REIT | 64,628 | 785,276 | ||||||
SmartCentres Real Estate Investment Trust | 27,916 | 432,605 |
Security | Shares | Value | ||||||
Canada (continued) | ||||||||
StorageVault Canada Inc., NVS | 51,821 | $ | 160,685 | |||||
Tricon Residential Inc. | 52,139 | 345,526 | ||||||
|
| |||||||
7,185,984 | ||||||||
Finland — 0.4% | ||||||||
Citycon OYJ | 15,660 | 82,833 | ||||||
Kojamo OYJ | 39,403 | 336,613 | ||||||
|
| |||||||
419,446 | ||||||||
France — 4.0% | ||||||||
ARGAN SA, NVS | 2,161 | 147,851 | ||||||
Carmila SA | 12,243 | 171,554 | ||||||
Covivio | 11,483 | 492,097 | ||||||
Gecina SA | 11,216 | 1,101,309 | ||||||
ICADE | 6,996 | 228,596 | ||||||
Klepierre SA | 44,476 | 1,080,045 | ||||||
Mercialys SA | 19,005 | 161,890 | ||||||
Unibail-Rodamco-Westfield, New(a) | 22,240 | 1,101,974 | ||||||
|
| |||||||
4,485,316 | ||||||||
Germany — 5.2% | ||||||||
Aroundtown SA(a) | 147,132 | 332,492 | ||||||
Deutsche EuroShop AG | 2,558 | 46,392 | ||||||
Deutsche Wohnen SE | 10,630 | 228,740 | ||||||
DIC Asset AG(b) | 10,927 | 45,216 | ||||||
Grand City Properties SA(a) | 21,576 | 192,935 | ||||||
Hamborner REIT AG | 15,458 | 102,273 | ||||||
LEG Immobilien SE(a) | 16,035 | 1,002,374 | ||||||
TAG Immobilien AG(a) | 32,598 | 356,426 | ||||||
Vonovia SE | 150,715 | 3,469,773 | ||||||
|
| |||||||
5,776,621 | ||||||||
Hong Kong — 10.9% | ||||||||
Champion REIT | 407,000 | 128,566 | ||||||
CK Asset Holdings Ltd. | 421,000 | 2,104,295 | ||||||
Fortune REIT | 297,000 | 166,168 | ||||||
Hongkong Land Holdings Ltd.(b) | 237,700 | 753,918 | ||||||
Hysan Development Co. Ltd. | 132,000 | 242,980 | ||||||
Link REIT | 551,640 | 2,531,553 | ||||||
New World Development Co. Ltd. | 304,333 | 558,548 | ||||||
Prosperity REIT | 247,000 | 42,675 | ||||||
Sino Land Co. Ltd.(b) | 730,800 | 729,578 | ||||||
Sun Hung Kai Properties Ltd. | 307,500 | 3,157,625 | ||||||
Sunlight REIT | 238,000 | 65,827 | ||||||
Swire Properties Ltd. | 229,600 | 444,553 | ||||||
Wharf Real Estate Investment Co. Ltd. | 334,900 | 1,171,493 | ||||||
|
| |||||||
12,097,779 | ||||||||
Ireland — 0.1% | ||||||||
Irish Residential Properties REIT PLC | 95,813 | 92,286 | ||||||
|
| |||||||
Israel — 0.7% | ||||||||
Amot Investments Ltd. | 46,884 | 196,343 | ||||||
Azrieli Group Ltd. | 7,885 | 339,506 | ||||||
Melisron Ltd. | 5,409 | 293,186 | ||||||
|
| |||||||
829,035 | ||||||||
Italy — 0.0% | ||||||||
Immobiliare Grande Distribuzione SIIQ SpA | 14,753 | 30,284 | ||||||
|
| |||||||
Japan — 28.6% | ||||||||
Activia Properties Inc. | 158 | 427,467 | ||||||
Advance Logistics Investment Corp. | 140 | 114,044 | ||||||
Advance Residence Investment Corp. | 281 | 610,951 | ||||||
Aeon Mall Co. Ltd. | 25,800 | 293,380 | ||||||
AEON REIT Investment Corp. | 381 | 362,709 | ||||||
Comforia Residential REIT Inc. | 146 | 309,850 |
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, 2023 | iShares® International Developed Real Estate ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Japan (continued) | ||||||||
CRE Logistics REIT Inc. | 133 | $ | 139,751 | |||||
Daiwa House REIT Investment Corp. | 459 | 812,314 | ||||||
Daiwa Office Investment Corp. | 57 | 249,344 | ||||||
Daiwa Securities Living Investments Corp. | 445 | 329,037 | ||||||
Frontier Real Estate Investment Corp. | 105 | 314,121 | ||||||
Fukuoka REIT Corp. | 157 | 169,036 | ||||||
Global One Real Estate Investment Corp. | 218 | 165,370 | ||||||
GLP J-Reit | 1,005 | 900,135 | ||||||
Hankyu Hanshin REIT Inc. | 141 | 132,473 | ||||||
Health Care & Medical Investment Corp. | 74 | 69,292 | ||||||
Heiwa Real Estate Co. Ltd. | 6,900 | 176,632 | ||||||
Heiwa Real Estate REIT Inc. | 212 | 198,181 | ||||||
Hoshino Resorts REIT Inc. | 55 | 216,393 | ||||||
Hulic Co. Ltd. | 89,300 | 818,714 | ||||||
Hulic Reit Inc. | 274 | 279,505 | ||||||
Ichigo Office REIT Investment Corp. | 253 | 141,942 | ||||||
Industrial & Infrastructure Fund Investment Corp. | 419 | 376,597 | ||||||
Invincible Investment Corp. | 1,451 | 558,055 | ||||||
Japan Excellent Inc. | 263 | 230,840 | ||||||
Japan Hotel REIT Investment Corp. | 967 | 439,630 | ||||||
Japan Logistics Fund Inc. | 192 | 355,639 | ||||||
Japan Metropolitan Fund Invest | 1,484 | 957,695 | ||||||
Japan Prime Realty Investment Corp. | 199 | 466,117 | ||||||
Japan Real Estate Investment Corp. | 288 | 1,069,725 | ||||||
Kenedix Office Investment Corp. | 326 | 340,014 | ||||||
Kenedix Residential Next Investment Corp.(a) | 227 | 316,271 | ||||||
Kenedix Retail REIT Corp.(a) | 131 | 228,828 | ||||||
LaSalle Logiport REIT | 402 | 394,250 | ||||||
Mirai Corp. | 350 | 105,687 | ||||||
Mitsubishi Estate Co. Ltd. | 238,800 | 3,056,716 | ||||||
Mitsubishi Estate Logistics REIT Investment Corp. | 105 | 264,255 | ||||||
Mitsui Fudosan Co. Ltd. | 193,100 | 4,185,415 | ||||||
Mitsui Fudosan Logistics Park Inc. | 116 | 350,695 | ||||||
Mori Hills REIT Investment Corp. | 343 | 321,030 | ||||||
Mori Trust Reit Inc. | 547 | 266,670 | ||||||
Nippon Accommodations Fund Inc. | 100 | 402,880 | ||||||
Nippon Building Fund Inc. | 330 | 1,325,918 | ||||||
Nippon Prologis REIT Inc. | 531 | 944,848 | ||||||
NIPPON REIT Investment Corp. | 94 | 217,170 | ||||||
Nomura Real Estate Holdings Inc. | 23,300 | 544,197 | ||||||
Nomura Real Estate Master Fund Inc. | 969 | 1,069,251 | ||||||
NTT UD REIT Investment Corp. | 293 | 241,539 | ||||||
One REIT Inc. | 53 | 91,824 | ||||||
Orix JREIT Inc. | 568 | 652,781 | ||||||
Samty Residential Investment Corp. | 97 | 72,424 | ||||||
Sankei Real Estate Inc. | 99 | 59,974 | ||||||
Sekisui House Reit Inc. | 887 | 467,161 | ||||||
SOSiLA Logistics REIT Inc. | 154 | 122,009 | ||||||
Star Asia Investment Corp. | 369 | 139,031 | ||||||
Starts Proceed Investment Corp. | 53 | 72,807 | ||||||
Sumitomo Realty & Development Co. Ltd. | 85,300 | 2,140,512 | ||||||
Takara Leben Real Estate Investment Corp. | 142 | 92,991 | ||||||
Tokyo Tatemono Co. Ltd. | 42,700 | 566,984 | ||||||
Tokyu REIT Inc. | 201 | 239,851 | ||||||
United Urban Investment Corp. | 637 | 642,203 | ||||||
|
| |||||||
31,621,125 | ||||||||
Netherlands — 0.5% | ||||||||
Eurocommercial Properties NV | 10,945 | 234,971 | ||||||
NSI NV | 3,825 | 69,046 | ||||||
Vastned Retail NV | 3,755 | 75,172 |
Security | Shares | Value | ||||||
Netherlands (continued) | ||||||||
Wereldhave NV | 8,743 | $ | 131,840 | |||||
|
| |||||||
511,029 | ||||||||
New Zealand — 0.8% | ||||||||
Argosy Property Ltd. | 181,362 | 112,001 | ||||||
Goodman Property Trust | 239,594 | 280,571 | ||||||
Kiwi Property Group Ltd. | 335,890 | 151,659 | ||||||
Precinct Properties New Zealand Ltd. | 285,954 | 184,922 | ||||||
Stride Property Group | 104,067 | 82,456 | ||||||
Vital Healthcare Property Trust | 106,584 | 124,192 | ||||||
|
| |||||||
935,801 | ||||||||
Norway — 0.1% | ||||||||
Entra ASA(c) | 15,583 | 121,571 | ||||||
|
| |||||||
Singapore — 9.5% | ||||||||
AIMS APAC REIT(b) | 137,926 | 120,871 | ||||||
CapitaLand Ascendas REIT | 770,390 | 1,463,775 | ||||||
CapitaLand Ascott Trust | 493,930 | 324,761 | ||||||
CapitaLand Integrated Commercial Trust | 1,097,707 | 1,410,794 | ||||||
Capitaland Investment Ltd./Singapore | 548,500 | 1,177,729 | ||||||
CDL Hospitality Trusts | 191,721 | 135,556 | ||||||
City Developments Ltd. | 101,100 | 466,658 | ||||||
Cromwell European Real Estate Investment Trust | 70,500 | 85,786 | ||||||
Digital Core REIT Management Pte Ltd. | 151,500 | 76,580 | ||||||
ESR-LOGOS REIT | 1,318,720 | 264,871 | ||||||
Far East Hospitality Trust | 212,400 | 91,713 | ||||||
Frasers Centrepoint Trust | 235,749 | 356,630 | ||||||
Frasers Logistics & Commercial Trust | 616,200 | 468,070 | ||||||
Keppel DC REIT | 278,371 | 343,537 | ||||||
Keppel Pacific Oak US REIT | 184,000 | 33,856 | ||||||
Keppel REIT | 473,800 | 275,118 | ||||||
Lendlease Global Commercial REIT | 406,247 | 151,310 | ||||||
Mapletree Industrial Trust | 426,545 | 670,487 | ||||||
Mapletree Logistics Trust | 715,060 | 767,866 | ||||||
Mapletree Pan Asia Commercial Trust | 494,517 | 480,624 | ||||||
OUE Commercial Real Estate Investment Trust(b) | 465,800 | 79,950 | ||||||
Paragon REIT | 230,765 | 133,994 | ||||||
Parkway Life REIT(b) | 82,800 | 203,130 | ||||||
Starhill Global REIT | 309,300 | 100,624 | ||||||
Suntec REIT | 454,800 | 365,481 | ||||||
UOL Group Ltd. | 106,400 | 458,247 | ||||||
|
| |||||||
10,508,018 | ||||||||
South Korea — 0.3% | ||||||||
ESR Kendall Square REIT Co. Ltd. | 26,474 | 62,816 | ||||||
JR Global Reit | 24,767 | 72,238 | ||||||
LOTTE Reit Co. Ltd. | 25,605 | 54,584 | ||||||
SK REITs Co. Ltd. | 33,858 | 94,356 | ||||||
|
| |||||||
283,994 | ||||||||
Spain — 1.0% | ||||||||
Inmobiliaria Colonial SOCIMI SA | 68,324 | 383,317 | ||||||
Lar Espana Real Estate SOCIMI SA | 13,158 | 76,295 | ||||||
Merlin Properties SOCIMI SA | 72,221 | 602,163 | ||||||
|
| |||||||
1,061,775 | ||||||||
Sweden — 4.3% | ||||||||
Atrium Ljungberg AB, Class B | 9,614 | 147,842 | ||||||
Castellum AB | 92,284 | 884,427 | ||||||
Catena AB | 7,263 | 240,596 | ||||||
Cibus Nordic Real Estate AB | 12,284 | 115,284 | ||||||
Corem Property Group AB, Class B | 142,907 | 92,255 | ||||||
Dios Fastigheter AB | 19,043 | 103,088 | ||||||
Fabege AB | 54,617 | 407,501 | ||||||
Fastighets AB Balder, Class B(a)(b) | 134,885 | 573,100 |
20 | 2 0 2 3 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, 2023 | iShares® International Developed Real Estate ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Sweden (continued) | ||||||||
Hufvudstaden AB, Class A | 22,998 | $ | 245,192 | |||||
NP3 Fastigheter AB | 6,364 | 85,044 | ||||||
Nyfosa AB | 38,926 | 188,373 | ||||||
Pandox AB, Class B | 19,226 | 189,242 | ||||||
Platzer Fastigheter Holding AB, Class B | 11,843 | 62,067 | ||||||
Sagax AB, Class B | 38,547 | 697,813 | ||||||
Samhallsbyggnadsbolaget i Norden AB(b) | 243,252 | 70,756 | ||||||
Wallenstam AB, Class B | 72,768 | 246,120 | ||||||
Wihlborgs Fastigheter AB | 57,053 | 369,820 | ||||||
|
| |||||||
4,718,520 | ||||||||
Switzerland — 3.5% | ||||||||
Allreal Holding AG, Registered | 3,147 | 504,985 | ||||||
Hiag Immobilien Holding AG | 989 | 85,074 | ||||||
Intershop Holding AG | 233 | 154,603 | ||||||
Mobimo Holding AG, Registered | 1,548 | 427,577 | ||||||
Peach Property Group AG(a)(b) | 2,620 | 34,390 | ||||||
PSP Swiss Property AG, Registered | 9,755 | 1,200,247 | ||||||
Swiss Prime Site AG, Registered | 16,390 | 1,523,416 | ||||||
|
| |||||||
3,930,292 | ||||||||
United Kingdom — 10.8% | ||||||||
Aberdeen Standard European Logistics Income PLC(c) | 84,547 | 52,472 | ||||||
Abrdn Property Income Trust | 84,940 | 48,110 | ||||||
AEW U.K. REIT PLC | 34,481 | 39,270 | ||||||
Assura PLC | 634,074 | 315,518 | ||||||
Balanced Commercial Property Trust Ltd. | 116,511 | 89,579 | ||||||
Big Yellow Group PLC | 36,844 | 428,499 | ||||||
British Land Co. PLC (The) | 199,972 | 724,954 | ||||||
Capital & Counties Properties PLC | 293,583 | 372,173 | ||||||
CLS Holdings PLC | 35,464 | 37,463 | ||||||
Custodian Reit PLC | 88,753 | 88,745 | ||||||
Derwent London PLC | 24,026 | 533,953 | ||||||
Empiric Student Property PLC | 125,405 | 128,798 | ||||||
Grainger PLC | 157,131 | 434,299 | ||||||
Great Portland Estates PLC | 46,851 | 222,086 | ||||||
Hammerson PLC | 845,602 | 226,524 | ||||||
Helical PLC | 21,952 | 51,229 | ||||||
Home Reit PLC(d) | 191,393 | 66,099 | ||||||
Impact Healthcare Reit PLC, Class B | 68,320 | 68,900 | ||||||
Land Securities Group PLC | 159,433 | 1,105,142 | ||||||
Life Science Reit PLC | 77,583 | 57,899 | ||||||
LondonMetric Property PLC | 227,886 | 459,224 | ||||||
LXI REIT PLC | 328,036 | 341,895 | ||||||
NewRiver REIT PLC | 67,582 | 64,071 | ||||||
Phoenix Spree Deutschland Ltd.(a) | 19,717 | 37,385 | ||||||
Picton Property Income Ltd. | 119,846 | 94,683 | ||||||
Primary Health Properties PLC | 283,613 | 309,384 | ||||||
PRS REIT PLC (The) | 110,327 | 96,837 |
Security | Shares | Value | ||||||
United Kingdom (continued) | ||||||||
Regional REIT Ltd.(c) | 94,675 | $ | 32,393 | |||||
Residential Secure Income PLC, NVS(c) | 39,636 | 25,822 | ||||||
Safestore Holdings PLC | 45,820 | 381,291 | ||||||
Schroder REIT Ltd. | 100,113 | 49,351 | ||||||
Segro PLC | 264,890 | 2,302,461 | ||||||
Sirius Real Estate Ltd. | 251,265 | 244,141 | ||||||
Supermarket Income Reit PLC | 270,899 | 239,046 | ||||||
Target Healthcare REIT PLC | 133,486 | 116,979 | ||||||
Triple Point Social Housing REIT PLC(c) | 77,849 | 51,389 | ||||||
Tritax Big Box REIT PLC | 403,852 | 672,380 | ||||||
Tritax EuroBox PLC(c) | 176,670 | 96,630 | ||||||
UK Commercial Property REIT Ltd. | 159,897 | 102,568 | ||||||
UNITE Group PLC (The) | 74,875 | 792,366 | ||||||
Urban Logistics REIT PLC | 99,557 | 126,089 | ||||||
Warehouse REIT PLC | 84,582 | 74,534 | ||||||
Workspace Group PLC | 30,611 | 179,914 | ||||||
|
| |||||||
11,982,545 | ||||||||
|
| |||||||
Total Long-Term Investments — 99.2% | 109,840,845 | |||||||
|
| |||||||
Short-Term Securities | ||||||||
Money Market Funds — 1.5% | ||||||||
BlackRock Cash Funds: Institutional, | 1,613,472 | 1,614,117 | ||||||
BlackRock Cash Funds: Treasury, | 40,000 | 40,000 | ||||||
|
| |||||||
Total Short-Term Securities — 1.5% | 1,654,117 | |||||||
|
| |||||||
Total Investments — 100.7% | 111,494,962 | |||||||
Liabilities in Excess of Other Assets — (0.7)% |
| (792,424 | ) | |||||
|
| |||||||
Net Assets — 100.0% | $ | 110,702,538 | ||||||
|
|
(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) | Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. |
(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 the cash collateral from loaned securities. |
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, 2023 | iShares® International Developed Real Estate ETF |
Affiliates
Investments in issuers considered to be affiliate(s) of the Fund during the six months ended October 31, 2023 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
Affiliated Issuer | | Value at 04/30/23 | | | Purchases at Cost | | | Proceeds from Sale | | Net Realized Gain (Loss) | | Change in Unrealized Appreciation (Depreciation) | | Value at 10/31/23 | | | Shares Held at 10/31/23 | Income | | Capital Gain Distributions from Underlying Funds | ||||||||||||||||
BlackRock Cash Funds: Institutional, | $ | 2,371,728 | $ | — | $ | (757,742 | )(a) | $ | (266 | ) | $ | 397 | $ | 1,614,117 | 1,613,472 | $ | 23,603 | (b) | $ | — | ||||||||||||||||
BlackRock Cash Funds: Treasury, | 50,000 | — | (10,000 | )(a) | — | — | 40,000 | 40,000 | 2,528 | — | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
$ | (266 | ) | $ | 397 | $ | 1,654,117 | $ | 26,131 | $ | — | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(a) | Represents net amount purchased (sold). |
(b) | All or a portion represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities. |
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
Description | Number of Contracts | Expiration Date | Notional Amount (000) | Value/ Unrealized Appreciation (Depreciation) | ||||||||||
Long Contracts | ||||||||||||||
MSCI Singapore Index | 9 | 11/29/23 | $ 179 | $ | (1,511 | ) | ||||||||
TOPIX Index | 1 | 12/07/23 | 151 | (4,427 | ) | |||||||||
Dow Jones U.S. Real Estate Index | 13 | 12/15/23 | 379 | (26,193 | ) | |||||||||
Euro STOXX 50 Index | 3 | 12/15/23 | 129 | (1,240 | ) | |||||||||
|
| |||||||||||||
$ | (33,371 | ) | ||||||||||||
|
|
Derivative Financial Instruments Categorized by Risk Exposure
As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:
Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Currency Exchange Contracts | Interest Rate Contracts | Other Contracts | Total | ||||||||||||||||||||||
Liabilities — Derivative Financial Instruments | ||||||||||||||||||||||||||||
Futures contracts | ||||||||||||||||||||||||||||
Unrealized depreciation on futures contracts(a) | $ | — | $ | — | $ | 33,371 | $ | — | $ | — | $ | — | $ | 33,371 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) | Net cumulative unrealized appreciation (depreciation) on futures contracts are reported in the Schedule of Investments. In the Statements of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss). |
For the period ended October 31, 2023, the effect of derivative financial instruments in the Statements of Operations was as follows:
| ||||||||||||||||||||||||||||
Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Currency Exchange Contracts | Interest Rate Contracts | Other Contracts | Total | ||||||||||||||||||||||
| ||||||||||||||||||||||||||||
Net Realized Gain (Loss) from | ||||||||||||||||||||||||||||
Futures contracts | $ | — | $ | — | $ | 3,496 | $ | — | $ | — | $ | — | $ | 3,496 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on | ||||||||||||||||||||||||||||
Futures contracts | $ | — | $ | — | $ | (60,358 | ) | $ | — | $ | — | $ | — | $ | (60,358 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22 | 2 0 2 3 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, 2023 | iShares® International Developed Real Estate ETF |
Average Quarterly Balances of Outstanding Derivative Financial Instruments
| ||||
Futures contracts: | ||||
Average notional value of contracts — long | $ | 928,679 | ||
|
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of financial instruments. For a 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 Fund’s financial instruments categorized in the fair value hierarchy. The breakdown of the Fund’s financial instruments into major categories is disclosed in the Schedule of Investments above.
| ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| ||||||||||||||||
Assets | ||||||||||||||||
Investments | ||||||||||||||||
Long-Term Investments | ||||||||||||||||
Common Stocks | $ | 12,761,917 | $ | 97,012,829 | $ | 66,099 | $ | 109,840,845 | ||||||||
Short-Term Securities | ||||||||||||||||
Money Market Funds | 1,654,117 | — | — | 1,654,117 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 14,416,034 | $ | 97,012,829 | $ | 66,099 | $ | 111,494,962 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Derivative Financial Instruments(a) | ||||||||||||||||
Liabilities | ||||||||||||||||
Equity Contracts | $ | (26,193 | ) | $ | (7,178 | ) | $ | — | $ | (33,371 | ) | |||||
|
|
|
|
|
|
|
|
(a) | Derivative financial instruments are futures contracts. Futures contracts are valued at the unrealized appreciation (depreciation) on the instrument. |
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 |
Statements of Assets and Liabilities (unaudited)
October 31, 2023
iShares Environmentally Aware Real Estate ETF | iShares Global REIT ETF | iShares International Developed Real Estate ETF | ||||||||||
| ||||||||||||
ASSETS | ||||||||||||
Investments, at value — unaffiliated(a)(b) | $ | 7,879,469 | $ | 2,856,934,935 | $ | 109,840,845 | ||||||
Investments, at value — affiliated(c) | 46,987 | 11,107,802 | 1,654,117 | |||||||||
Cash | 746 | 31,590 | 7,367 | |||||||||
Cash pledged for futures contracts | 3,000 | 707,000 | 31,000 | |||||||||
Foreign currency collateral pledged for futures contracts(d) | — | 103,399 | 25,015 | |||||||||
Foreign currency, at value(e) | 9,255 | 1,319,751 | 194,037 | |||||||||
Receivables: | ||||||||||||
Investments sold | 4,151 | 30,400 | — | |||||||||
Securities lending income — affiliated | 56 | 5,866 | 2,844 | |||||||||
Capital shares sold | — | 15,036 | — | |||||||||
Dividends — unaffiliated | 13,624 | 4,693,493 | 435,585 | |||||||||
Dividends — affiliated | 20 | 45,100 | 380 | |||||||||
Tax reclaims | 159 | 753,479 | 162,825 | |||||||||
Variation margin on futures contracts | 528 | 170,134 | 11,990 | |||||||||
|
|
|
|
|
| |||||||
Total assets | 7,957,995 | 2,875,917,985 | 112,366,005 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Collateral on securities loaned, at value | 36,974 | 5,727,238 | 1,617,612 | |||||||||
Payables: | ||||||||||||
Investments purchased | 4,917 | 15,034 | — | |||||||||
Investment advisory fees | 2,053 | 343,588 | 45,855 | |||||||||
|
|
|
|
|
| |||||||
Total liabilities | 43,944 | 6,085,860 | 1,663,467 | |||||||||
|
|
|
|
|
| |||||||
Commitments and contingent liabilities | ||||||||||||
NET ASSETS | $ | 7,914,051 | $ | 2,869,832,125 | $ | 110,702,538 | ||||||
|
|
|
|
|
| |||||||
NET ASSETS CONSIST OF | ||||||||||||
Paid-in capital | $ | 8,978,314 | $ | 3,748,637,983 | $ | 284,253,552 | ||||||
Accumulated loss | (1,064,263 | ) | (878,805,858 | ) | (173,551,014 | ) | ||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 7,914,051 | $ | 2,869,832,125 | $ | 110,702,538 | ||||||
|
|
|
|
|
| |||||||
NET ASSET VALUE | ||||||||||||
Shares outstanding | 360,000 | 142,200,000 | 6,100,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value | $ | 21.98 | $ | 20.18 | $ | 18.15 | ||||||
|
|
|
|
|
| |||||||
Shares authorized | Unlimited | Unlimited | Unlimited | |||||||||
|
|
|
|
|
| |||||||
Par value | None | None | None | |||||||||
|
|
|
|
|
| |||||||
(a) Investments, at cost — unaffiliated | $ | 9,039,936 | $ | 3,562,263,652 | $ | 179,969,473 | ||||||
(b) Securities loaned, at value | $ | 35,684 | $ | 5,533,712 | $ | 1,573,544 | ||||||
(c) Investments, at cost — affiliated | $ | 46,982 | $ | 11,106,136 | $ | 1,654,051 | ||||||
(d) Foreign currency collateral pledged, at cost | $ | — | $ | 108,758 | $ | 25,852 | ||||||
(e) Foreign currency, at cost | $ | 9,368 | $ | 1,342,225 | $ | 195,702 |
See notes to financial statements.
24 | 2 0 2 3 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, 2023
iShares Environmentally Aware Real Estate ETF | iShares Global REIT ETF | iShares International Developed Real Estate ETF | ||||||||||
| ||||||||||||
INVESTMENT INCOME | ||||||||||||
Dividends — unaffiliated | $ | 187,424 | $ | 70,396,196 | $ | 2,960,775 | ||||||
Dividends — affiliated | 172 | 224,600 | 2,528 | |||||||||
Interest — unaffiliated | 195 | 36,513 | 1,499 | |||||||||
Securities lending income — affiliated — net | 355 | 46,651 | 23,603 | |||||||||
Foreign taxes withheld | (7,714 | ) | (2,531,149 | ) | (259,326 | ) | ||||||
|
|
|
|
|
| |||||||
Total investment income | 180,432 | 68,172,811 | 2,729,079 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory | 13,097 | 2,151,939 | 311,230 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 13,097 | 2,151,939 | 311,230 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 167,335 | 66,020,872 | 2,417,849 | |||||||||
|
|
|
|
|
| |||||||
REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliated | (6,903 | ) | (22,329,408 | ) | (2,952,297 | ) | ||||||
Investments — affiliated | 8 | (3,693 | ) | (266 | ) | |||||||
Foreign currency transactions | (1,362 | ) | (281,926 | ) | (40,537 | ) | ||||||
Futures contracts | (3,324 | ) | (1,579,535 | ) | 3,496 | |||||||
In-kind redemptions — unaffiliated(a) | — | 4,442,068 | (4,096,559 | ) | ||||||||
|
|
|
|
|
| |||||||
(11,581 | ) | (19,752,494 | ) | (7,086,163 | ) | |||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||
Investments — unaffiliated | (1,158,354 | ) | (413,029,278 | ) | (14,279,355 | ) | ||||||
Investments — affiliated | 5 | 2,411 | 397 | |||||||||
Foreign currency translations | (289 | ) | (122,214 | ) | (13,402 | ) | ||||||
Futures contracts | (2,029 | ) | (686,868 | ) | (60,358 | ) | ||||||
|
|
|
|
|
| |||||||
(1,160,667 | ) | (413,835,949 | ) | (14,352,718 | ) | |||||||
|
|
|
|
|
| |||||||
Net realized and unrealized loss | (1,172,248 | ) | (433,588,443 | ) | (21,438,881 | ) | ||||||
|
|
|
|
|
| |||||||
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (1,004,913 | ) | $ | (367,567,571 | ) | $ | (19,021,032 | ) | |||
|
|
|
|
|
|
(a) | See Note 2 of the Notes to Financial Statements. |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S | 25 |
Statements of Changes in Net Assets
iShares Environmentally Aware Real Estate ETF | iShares Global REIT ETF | |||||||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||
| Six Months Ended 10/31/23 (unaudited) |
| | Period From 11/15/22 to 04/30/23 | (a)
| | Six Months Ended 10/31/23 (unaudited) |
|
| Year Ended 04/30/23 |
| |||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||||||||||||||||||||
OPERATIONS | ||||||||||||||||||||||||||||||||||
Net investment income | $ | 167,335 | $ | 157,427 | $ | 66,020,872 | $ | 116,427,785 | ||||||||||||||||||||||||||
Net realized gain (loss) | (11,581 | ) | (8,617 | ) | (19,752,494 | ) | 7,324,697 | |||||||||||||||||||||||||||
Net change in unrealized appreciation (depreciation) | (1,160,667 | ) | (1,273 | ) | (413,835,949 | ) | (584,908,292 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | (1,004,913 | ) | 147,537 | (367,567,571 | ) | (461,155,810 | ) | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS(b) | ||||||||||||||||||||||||||||||||||
Decrease in net assets resulting from distributions to shareholders | (150,090 | ) | (56,797 | ) | (54,294,587 | ) | (69,453,870 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
CAPITAL SHARE TRANSACTIONS | ||||||||||||||||||||||||||||||||||
Net increase in net assets derived from capital share transactions | — | 8,978,314 | 293,791,384 | 66,934,776 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
NET ASSETS | ||||||||||||||||||||||||||||||||||
Total increase (decrease) in net assets | (1,155,003 | ) | 9,069,054 | (128,070,774 | ) | (463,674,904 | ) | |||||||||||||||||||||||||||
Beginning of period | 9,069,054 | — | 2,997,902,899 | 3,461,577,803 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
End of period | $ | 7,914,051 | $ | 9,069,054 | $ | 2,869,832,125 | $ | 2,997,902,899 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Commencement of operations. |
(b) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
See notes to financial statements.
26 | 2 0 2 3 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 10/31/23 (unaudited) | Year Ended 04/30/23 | |||||||
| ||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||
OPERATIONS | ||||||||
Net investment income | $ | 2,417,849 | $ | 6,482,421 | ||||
Net realized loss | (7,086,163 | ) | (15,189,405 | ) | ||||
Net change in unrealized appreciation (depreciation) | (14,352,718 | ) | (20,445,849 | ) | ||||
|
|
|
| |||||
Net decrease in net assets resulting from operations | (19,021,032 | ) | (29,152,833 | ) | ||||
|
|
|
| |||||
DISTRIBUTIONS TO SHAREHOLDERS(a) | ||||||||
Decrease in net assets resulting from distributions to shareholders | (2,513,698 | )(b) | (3,488,984 | ) | ||||
|
|
|
| |||||
CAPITAL SHARE TRANSACTIONS | ||||||||
Net decrease in net assets derived from capital share transactions | (16,272,148 | ) | (31,833,293 | ) | ||||
|
|
|
| |||||
NET ASSETS | ||||||||
Total decrease in net assets | (37,806,878 | ) | (64,475,110 | ) | ||||
Beginning of period | 148,509,416 | 212,984,526 | ||||||
|
|
|
| |||||
End of period | $ | 110,702,538 | $ | 148,509,416 | ||||
|
|
|
|
(a) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
(b) | A portion of the distributions from net investment income may be deemed a return of capital or net realized gain at fiscal year-end. |
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 |
(For a share outstanding throughout each period)
iShares Environmentally Aware Real Estate ETF | ||||||||||||||||||
|
| |||||||||||||||||
| Six Months Ended 10/31/23 (unaudited) |
| | |
| | Period From 11/15/22 to 04/30/23 | (a)
| ||||||||||
| ||||||||||||||||||
Net asset value, beginning of period | $ | 25.19 | $ | 24.94 | ||||||||||||||
|
|
|
| |||||||||||||||
Net investment income(b) | 0.46 | 0.44 | ||||||||||||||||
Net realized and unrealized loss(c) | (3.25 | ) | (0.03 | ) | ||||||||||||||
|
|
|
| |||||||||||||||
Net increase (decrease) from investment operations | (2.79 | ) | 0.41 | |||||||||||||||
|
|
|
| |||||||||||||||
Distributions from net investment income(d) | (0.42 | ) | (0.16 | ) | ||||||||||||||
|
|
|
| |||||||||||||||
Net asset value, end of period | $ | 21.98 | $ | 25.19 | ||||||||||||||
|
|
|
| |||||||||||||||
Total Return(e) | ||||||||||||||||||
Based on net asset value | (11.26 | )%(f) | 1.64 | %(f) | ||||||||||||||
|
|
|
| |||||||||||||||
Ratios to Average Net Assets(g) | ||||||||||||||||||
Total expenses | 0.30 | %(h) | 0.30 | %(h) | ||||||||||||||
|
|
|
| |||||||||||||||
Net investment income | 3.83 | %(h) | 3.82 | %(h) | ||||||||||||||
|
|
|
| |||||||||||||||
Supplemental Data | ||||||||||||||||||
Net assets, end of period (000) | $ | 7,914 | $ | 9,069 | ||||||||||||||
|
|
|
| |||||||||||||||
Portfolio turnover rate(i) | 2 | % | 4 | % | ||||||||||||||
|
|
|
|
(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) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
(e) | Where applicable, assumes the reinvestment of distributions. |
(f) | Not annualized. |
(g) | Excludes fees and expenses incurred indirectly as a result of investments in underlying funds. |
(h) | Annualized. |
(i) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
28 | 2 0 2 3 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 10/31/23 (unaudited) |
| | Year Ended 04/30/23 | | | Year Ended 04/30/22 | | | Year Ended 04/30/21 | | | Year Ended 04/30/20 | | | Year Ended 04/30/19 | | ||||||||||
| ||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 23.25 | $ | 27.77 | $ | 27.22 | $ | 20.42 | $ | 26.53 | $ | 24.82 | ||||||||||||||
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Net investment income(a) | 0.48 | 0.94 | 0.68 | 0.66 | 0.88 | 0.98 | ||||||||||||||||||||
Net realized and unrealized gain (loss)(b) | (3.15 | ) | (4.89 | ) | 0.74 | 6.75 | (5.54 | ) | 2.08 | |||||||||||||||||
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Net increase (decrease) from investment operations | (2.67 | ) | (3.95 | ) | 1.42 | 7.41 | (4.66 | ) | 3.06 | |||||||||||||||||
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Distributions from net investment income(c) | (0.40 | ) | (0.57 | ) | (0.87 | ) | (0.61 | ) | (1.45 | ) | (1.35 | ) | ||||||||||||||
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Net asset value, end of period | $ | 20.18 | $ | 23.25 | $ | 27.77 | $ | 27.22 | $ | 20.42 | $ | 26.53 | ||||||||||||||
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Total Return(d) | ||||||||||||||||||||||||||
Based on net asset value | (11.59 | )%(e) | (14.12 | )% | 5.14 | % | 36.95 | % | (18.47 | )% | 12.77 | % | ||||||||||||||
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Ratios to Average Net Assets(f) | ||||||||||||||||||||||||||
Total expenses | 0.14 | %(g) | 0.14 | % | 0.14 | % | 0.14 | % | 0.14 | % | 0.14 | % | ||||||||||||||
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Net investment income | 4.30 | %(g) | 3.95 | % | 2.36 | % | 2.91 | % | 3.36 | % | 3.85 | % | ||||||||||||||
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Supplemental Data | ||||||||||||||||||||||||||
Net assets, end of period (000) | $ | 2,869,832 | $ | 2,997,903 | $ | 3,461,578 | $ | 3,083,221 | $ | 1,900,334 | $ | 1,637,157 | ||||||||||||||
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Portfolio turnover rate(h) | 2 | % | 7 | % | 13 | % | 6 | % | 8 | % | 9 | % | ||||||||||||||
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(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) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
(d) | Where applicable, assumes the reinvestment of distributions. |
(e) | Not annualized. |
(f) | Excludes fees and expenses incurred indirectly as a result of investments in underlying funds. |
(g) | Annualized. |
(h) | 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 | 29 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares International Developed Real Estate ETF | ||||||||||||||||||||||||||
| ||||||||||||||||||||||||||
Six Months Ended 10/31/23 (unaudited) |
| | Year Ended 04/30/23 | | | Year Ended 04/30/22 | | | Year Ended 04/30/21 | | | Year Ended 04/30/20 | | | Year Ended 04/30/19 | | ||||||||||
| ||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 21.52 | $ | 25.36 | $ | 28.82 | $ | 22.75 | $ | 29.65 | $ | 30.40 | ||||||||||||||
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Net investment income(a) | 0.38 | 0.83 | 0.79 | (b) | 0.78 | 0.86 | 0.93 | |||||||||||||||||||
Net realized and unrealized gain (loss)(c) | (3.35 | ) | (4.25 | ) | (3.35 | ) | 5.86 | (5.47 | ) | (0.55 | ) | |||||||||||||||
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Net increase (decrease) from investment operations | (2.97 | ) | (3.42 | ) | (2.56 | ) | 6.64 | (4.61 | ) | 0.38 | ||||||||||||||||
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Distributions from net investment income(d) | (0.40 | )(e) | (0.42 | ) | (0.90 | ) | (0.57 | ) | (2.29 | ) | (1.13 | ) | ||||||||||||||
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Net asset value, end of period | $ | 18.15 | $ | 21.52 | $ | 25.36 | $ | 28.82 | $ | 22.75 | $ | 29.65 | ||||||||||||||
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Total Return(f) | ||||||||||||||||||||||||||
Based on net asset value | (13.98 | )%(g) | (13.44 | )% | (9.24 | )%(b) | 29.62 | % | (16.93 | )% | 1.39 | % | ||||||||||||||
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Ratios to Average Net Assets(h) | ||||||||||||||||||||||||||
Total expenses | 0.48 | %(i) | 0.48 | % | 0.50 | % | 0.48 | % | 0.48 | % | 0.48 | % | ||||||||||||||
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Total expenses excluding professional fees for foreign withholding tax claims | N/A | N/A | 0.48 | % | 0.48 | % | N/A | 0.48 | % | |||||||||||||||||
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Net investment income | 3.73 | %(i) | 3.82 | % | 2.75 | %(b) | 3.08 | % | 2.99 | % | 3.20 | % | ||||||||||||||
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Supplemental Data | ||||||||||||||||||||||||||
Net assets, end of period (000) | $ | 110,703 | $ | 148,509 | $ | 212,985 | $ | 256,514 | $ | 259,384 | $ | 477,332 | ||||||||||||||
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Portfolio turnover rate(j) | 5 | % | 9 | % | 16 | % | 9 | % | 10 | % | 8 | % | ||||||||||||||
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(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 for the year ended April 30, 2022: |
• | Net investment income per share by $0.04. |
• | Total return by 0.17%. |
• | Ratio of net investment income to average net assets by 0.15%. |
(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) | Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
(e) | A portion of the distributions from net investment income may be deemed a return of capital or net realized gain at fiscal year-end. |
(f) | Where applicable, assumes the reinvestment of distributions. |
(g) | Not annualized. |
(h) | Excludes fees and expenses incurred indirectly as a result of investments in underlying funds. |
(i) | Annualized. |
(j) | Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
30 | 2 0 2 3 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 | |||
Environmentally Aware Real Estate | Non-Diversified | |||
Global REIT | Diversified | |||
International Developed Real Estate | Diversified |
2. | SIGNIFICANT ACCOUNTING POLICIES |
The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure 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. Below is a summary of significant accounting policies:
Investment Transactions and Income Recognition: For financial reporting purposes, investment transactions are recorded on the dates the transactions are executed. Realized gains and losses on investment transactions are determined using the specific identification method. Dividend income and capital gain distributions, if any, are recorded on the ex-dividend date. Non-cash dividends, if any, are recorded on the ex-dividend date at fair value. Dividends from foreign securities where the ex-dividend date may have passed are subsequently recorded when the Funds are informed of the ex-dividend date. Under the applicable foreign tax laws, a withholding tax at various rates may be imposed on capital gains, dividends and interest. Upon notification from issuers or as estimated by management, a portion of the dividend income received from a real estate investment trust may be redesignated as a reduction of cost of the related investment and/or realized gain. Interest income, including amortization and accretion of premiums and discounts on debt securities, is recognized daily on an accrual basis.
Foreign Currency Translation: Each Fund’s books and records are maintained in U.S. dollars. Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using prevailing market rates as quoted by one or more data service providers. Purchases and sales of investments are recorded at the rates of exchange prevailing on the respective dates of such transactions. Generally, when the U.S. dollar rises in value against a foreign currency, the investments denominated in that currency will lose value; the opposite effect occurs if the U.S. dollar falls in relative value.
Each Fund does not isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of investments for financial reporting purposes. Accordingly, the effects of changes in exchange rates on investments are not segregated in the Statements of Operations from the effects of changes in market prices of those investments, but are included as a component of net realized and unrealized gain (loss) from investments. Each Fund reports realized currency gains (losses) on foreign currency related transactions as components of net realized gain (loss) for financial reporting purposes, whereas such components are generally treated as ordinary income for U.S. federal income tax purposes.
Collateralization: If required by an exchange or counterparty agreement, the Funds may be required to deliver/deposit cash and/or securities to/with an exchange, or broker-dealer or custodian as collateral for certain investments.
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 (“NAV”) 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.
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. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Board of Trustees of the Trust (the “Board”) of each Fund has approved the designation of BlackRock Fund Advisors (“BFA”), the Funds’ investment adviser, as the valuation designee for each Fund. Each Fund determines the fair values of its financial instruments using various independent dealers or pricing services under BFA’s policies. If a security’s market price is not readily available or does not
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 | 31 |
Notes to Financial Statements (unaudited) (continued)
otherwise accurately represent the fair value of the security, the security will be valued in accordance with BFA’s policies and procedures as reflecting fair value. BFA has formed a committee (the “Valuation Committee”) to develop pricing policies and procedures and to oversee the pricing function for all financial instruments, with assistance from other BlackRock pricing committees.
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 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 NAV. |
• | Futures contracts are valued based on that day’s last reported settlement or trade price on the exchange where the contract is traded. |
Generally, trading in foreign instruments is substantially completed each day at various times prior to the close of trading on the New York Stock Exchange (“NYSE”). Each business day, the Funds use current market factors supplied by independent pricing services to value certain foreign instruments (“Systematic Fair Value Price”). The Systematic Fair Value Price is designed to value such foreign securities at fair value as of the close of trading on the NYSE, which follows the close of the local markets.
If events (e.g., market volatility, company announcement or a natural disaster) occur that are expected to materially affect the value of such 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 Valuation Committee, in accordance with BFA’s policies and procedures as reflecting fair value (“Fair Valued Investments”). The fair valuation approaches that may be used by the Valuation Committee include market approach, income approach and cost approach. Valuation techniques such as discounted cash flow, use of market comparables and matrix pricing are types of valuation approaches and are typically used in determining fair value. When determining the price for Fair Valued Investments, the Valuation Committee seeks to determine the price that each Fund might reasonably expect to receive or pay from the current sale or purchase of that asset or liability in an arm’s-length transaction. Fair value determinations shall be based upon all available factors that the Valuation Committee deems relevant and consistent with the principles of fair value measurement.
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/exchanges for identical assets or liabilities that each Fund has the ability to access; |
• | Level 2 – Other observable inputs (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 active, inputs other than quoted prices that are observable for the assets or liabilities (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 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 judgment 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. Investments classified within Level 3 have significant unobservable inputs used by the Valuation Committee in determining the price for Fair Valued Investments. Level 3 investments include equity or debt issued by privately held companies or funds that may not have a secondary market and/or may have a limited number of investors. 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 period end, any securities on loan were collateralized by cash and/or U.S. Government obligations. Cash collateral invested in money market funds managed by BFA, or its affiliates is disclosed in the Schedule 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, if any, are also disclosed in each Fund’s Schedule of Investments. The market value of any securities on loan and the value of any related cash collateral are disclosed in the Statements of Assets and Liabilities.
32 | 2 0 2 3 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 lending transactions are entered into by the Funds 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 Funds, as lender, would offset the market value of the collateral received against the market value of the securities loaned. When the value of the collateral is greater than that of the market value of the securities loaned, the lender is left 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 Funds can reinvest cash collateral received in connection with loaned securities. Upon an event of default, the parties’ obligations to return the securities or collateral to the other party are extinguished, and the parties can resell or re-pledge the loaned securities or the collateral received in connection with the loaned securities in order to satisfy the defaulting party’s net payment obligation for all transactions under the MSLA. The defaulting party remains liable for any deficiency.
As of period end, the following table is a summary of the securities on loan by counterparty which are subject to offset under an MSLA:
| ||||||||||||||||
iShares ETF and Counterparty | | Securities Loaned at Value | | | Cash Collateral Received | (a) | | Non-Cash Collateral Received, at Fair Value | (a) | Net Amount | ||||||
| ||||||||||||||||
Environmentally Aware Real Estate | ||||||||||||||||
BofA Securities, Inc. | $ | 20,188 | $ | (20,188 | ) | $ | — | $ | — | |||||||
Goldman Sachs & Co. LLC | 15,496 | (15,496 | ) | — | — | |||||||||||
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| |||||||||
$ | 35,684 | $ | (35,684 | ) | $ | — | $ | — | ||||||||
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| |||||||||
Global REIT | ||||||||||||||||
BofA Securities, Inc. | $ | 2,558,102 | $ | (2,558,102 | ) | $ | — | $ | — | |||||||
Goldman Sachs & Co. LLC | 485,799 | (485,799 | ) | — | — | |||||||||||
HSBC Bank PLC | 32,875 | (32,875 | ) | — | — | |||||||||||
J.P. Morgan Securities LLC | 171,643 | (171,643 | ) | — | — | |||||||||||
Jefferies LLC | 535,642 | (535,642 | ) | — | — | |||||||||||
National Financial Services LLC | 760,168 | (760,168 | ) | — | — | |||||||||||
UBS AG | 989,483 | (989,483 | ) | — | — | |||||||||||
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| |||||||||
$ | 5,533,712 | $ | (5,533,712 | ) | $ | — | $ | — | ||||||||
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International Developed Real Estate | ||||||||||||||||
Barclays Capital, Inc. | $ | 43,612 | $ | (43,612 | ) | $ | — | $ | — | |||||||
BofA Securities, Inc. | 55,847 | (55,847 | ) | — | — | |||||||||||
Goldman Sachs & Co. LLC | 683,355 | (675,426 | ) | — | 7,929 | (b) | ||||||||||
HSBC Bank PLC | 88,586 | (88,586 | ) | — | — | |||||||||||
J.P. Morgan Securities LLC | 692,840 | (692,840 | ) | — | — | |||||||||||
Morgan Stanley | 3,980 | (3,823 | ) | — | 157 | (b) | ||||||||||
SG Americas Securities LLC | 2,741 | (2,741 | ) | — | — | |||||||||||
UBS AG | 2,583 | (2,583 | ) | — | — | |||||||||||
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| |||||||||
$ | 1,573,544 | $ | (1,565,458 | ) | $ | — | $ | 8,086 | ||||||||
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(a) | Collateral received, if any, 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 Statements of Assets and Liabilities. |
(b) | The market value of the loaned securities is determined as of October 31, 2023. Additional collateral is delivered to the Fund on the next business day in accordance with the MSLA. The net amount would be subject to the borrower default indemnity in the event of default by a counterparty. |
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 to the extent 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: Futures contracts are purchased or sold to gain exposure to, or manage exposure to, changes in interest rates (interest rate risk) and changes in the value of equity securities (equity risk) or foreign currencies (foreign currency exchange rate risk).
Futures contracts are exchange-traded agreements between the Funds and a counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and on a specified date. Depending on the terms of a contract, it 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, the Funds are required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on a contract’s size and risk profile. The initial margin deposit must then be maintained at an established level over the life of the contract. Amounts pledged, which are considered restricted, are included in cash pledged for futures contracts in the Statements of Assets and Liabilities.
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 | 33 |
Notes to Financial Statements (unaudited) (continued)
Securities deposited as initial margin are designated in the Schedule of Investments and cash deposited, if any, are shown as cash pledged for futures contracts in the Statements of Assets and Liabilities. Pursuant to the contract, the Funds agree 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 (depreciation) and, if any, shown as variation margin receivable (or payable) on futures contracts in the Statements of Assets and Liabilities. When the contract is closed, a realized gain or loss is recorded in the Statements 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. The use of futures contracts involves the risk of an imperfect correlation in the movements in the price of futures contracts and interest rates, foreign currency exchange rates or underlying assets.
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, BFAis 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 Fees | |
Environmentally Aware Real Estate | 0.30% | |
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, including any custodial costs. Each Fund is responsible for fees in connection with the investment of cash collateral received for securities on loan (the “collateral investment fees”). The cash collateral is invested in a money market fund, BlackRock Cash Funds: Institutional or BlackRock Cash Funds: Treasury, 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 SL Agency Shares of such money market fund will not be subject to a sales load, distribution fee or service fee. The money market fund in which the cash collateral has been invested may, under certain circumstances, impose a liquidity fee of up to 2% of the value redeemed or temporarily restrict redemptions for up to 10 business days during a 90 day period, in the event that the money market fund’s weekly liquid assets fall below certain thresholds.
Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment fees. 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 the current securities lending agreement, the iShares Global REIT ETF(the “Group 1 Funds”), retains 81% 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.
Pursuant to the current securities lending agreement, each of the iShares Environmentally Aware Real Estate ETF and iShares International Developed Real Estate ETF (the “Group 2 Fund”), retains 82% 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 a specified threshold: (1) the Group 1 Fund, pursuant to the securities lending agreement, will retain for the remainder of that calendar year 81% 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, and (2) each Group 2 Fund will retain for the remainder of that calendar year 85% 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.
34 | 2 0 2 3 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 share of securities lending income earned by each Fund is shown as securities lending income – affiliated – net in its Statements of Operations. For the six months ended October 31, 2023, the Funds paid BTC the following amounts for securities lending agent services:
iShares ETF | Amounts | |||
Environmentally Aware Real Estate | $ | 82 | ||
Global REIT | 8,952 | |||
International Developed Real Estate | 5,332 |
Officers and Trustees: Certain officers and/or trustees of the Trust are officers and/or trustees of BlackRock or its affiliates.
Other Transactions: 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, 2023, transactions executed by the Funds pursuant to Rule 17a-7 under the 1940 Act were as follows:
iShares ETF | Purchases | Sales | Net Realized Gain (Loss) | |||||||||
Global REIT | $ | 9,509,811 | $ | 18,751,959 | $ | (3,534,108 | ) | |||||
International Developed Real Estate | 136,591 | 360,495 | (113,115 | ) |
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 Statements 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, 2023, purchases and sales of investments, excluding short-term securities and in-kind transactions, were as follows:
iShares ETF | Purchases | Sales | ||||||
Environmentally Aware Real Estate | $ | 234,874 | $ | 215,361 | ||||
Global REIT | 114,622,684 | 70,395,389 | ||||||
International Developed Real Estate | 6,355,886 | 7,061,078 |
For the six months ended October 31, 2023, in-kind transactions were as follows:
iShares ETF | In-kind Purchases | In-kind Sales | ||||||
Global REIT | $ | 287,835,570 | $ | 23,216,166 | ||||
International Developed Real Estate | — | 15,374,423 |
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 each Fund’s policy to comply with the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies, and to distribute substantially all of its taxable income to its shareholders. Therefore, no U.S. federal income tax provision is required.
Management has analyzed tax laws and regulations and their application to the Funds as of October 31, 2023, 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, 2023, the Funds had non-expiring capital loss carryforwards available to offset future realized capital gains and qualified late-year losses as follows:
iShares ETF | Non-Expiring Capital Loss Carryforwards | |||
Environmentally Aware Real Estate | $ | (6,160 | ) | |
Global REIT | (118,241,339 | ) | ||
International Developed Real Estate | (92,810,171 | ) |
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 | 35 |
Notes to Financial Statements (unaudited) (continued)
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, 2023, 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) | ||||||||||||
Environmentally Aware Real Estate | $ | 9,133,801 | $ | 156,728 | $ | (1,365,251 | ) | $ | (1,208,523 | ) | ||||||
Global REIT | 3,635,836,065 | 76,098,762 | (844,180,990 | ) | (768,082,228 | ) | ||||||||||
International Developed Real Estate | 184,979,547 | 516,137 | (74,034,093 | ) | (73,517,956 | ) |
9. | LINE OF CREDIT |
The iShares Environmentally Aware Real Estate ETF, along with certain other iShares funds (“Participating Funds”), is a party to a $800 million credit agreement (“Syndicated Credit Agreement”) with a group of lenders, which expires on October 16, 2024. The line of credit may be used for temporary or emergency purposes, including redemptions, settlement of trades and rebalancing of portfolio holdings in certain target markets. The Funds may borrow up to the aggregate commitment amount subject to asset coverage and other limitations as specified in the Syndicated Credit Agreement. The Syndicated Credit Agreement has the following terms: a commitment fee of 0.15% per annum on the unused portion of the credit agreement and interest at a rate equal to the higher of (a) Daily Simple Secured Overnight Financing Rate (“SOFR”) plus 0.10% and 1.00% per annum or (b) the U.S. Federal Funds rate plus 1.00% per annum on amounts borrowed. The commitment fee is generally allocated to each Participating Fund based on the lesser of a Participating Fund’s relative exposure to certain target markets or a Participating Fund’s maximum borrowing amount as set forth by the terms of the Syndicated Credit Agreement.
During the six months ended October 31, 2023, the Fund did not borrow under the Syndicated Credit Agreement.
10. | 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. Local, regional or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues, recessions, or other events could have a significant impact on the Funds and their investments. 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.
The Funds may be exposed to additional risks when reinvesting cash collateral in money market funds that do not seek to maintain a stable NAV per share of $1.00, which may be subject to redemption gates or liquidity fees under certain circumstances.
Infectious Illness Risk: An outbreak of an infectious illness, such as the COVID-19 pandemic, may adversely impact the economies of many nations and the global economy, and may impact individual issuers and capital markets in ways that cannot be foreseen. An infectious illness outbreak may result in, among other things, closed international borders, prolonged quarantines, supply chain disruptions, market volatility or disruptions and other significant economic, social and political impacts.
Valuation Risk: The market values of equities, such as common stocks and preferred securities or equity related investments, such as futures and options, may decline due to general market conditions which are not specifically related to a particular company. They may also decline due to factors which affect a particular industry or industries. A fund may invest in illiquid investments. An illiquid investment is any investment that a fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. A fund may experience difficulty in selling illiquid investments in a timely manner at the price that it believes the investments are worth. Prices may fluctuate widely over short or extended periods in response to company, market or economic news. Markets also tend to move in cycles, with periods of rising and falling prices. This volatility may cause a fund’s NAV to experience significant increases or decreases over short periods of time. If there is a general decline in the securities and other markets, the NAV of a fund may lose value, regardless of the individual results of the securities and other instruments in which a fund invests.
The price each Fund could receive upon the sale of any particular portfolio investment may differ from each Fund’s valuation of the investment, particularly for securities that trade in thin or volatile markets or that are valued using a fair valuation technique or a price provided by an independent pricing service. Changes to significant unobservable inputs and assumptions (i.e., publicly traded company multiples, growth rate, time to exit) due to the lack of observable inputs may significantly impact the resulting fair value and therefore each Fund’s results of operations. As a result, the price received upon the sale of an investment may be less than the value ascribed by each Fund, and each Fund could realize a greater than expected loss or lesser than expected gain upon the sale of the investment. Each Fund’s ability to value its investments may also be impacted by technological issues and/or errors by pricing services or other third-party service providers.
36 | 2 0 2 3 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)
Counterparty Credit Risk: The Funds may be exposed to counterparty credit risk, or the risk that an entity may fail to or be unable to perform on its commitments related to unsettled or open transactions, including making timely interest and/or principal payments or otherwise honoring its obligations. The Funds manage counterparty credit risk by entering into transactions only with counterparties that BFA believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Funds to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Funds’ exposure to market, issuer and counterparty credit risks with respect to these financial assets is approximately their value recorded in the Statements of Assets and Liabilities, less any collateral held by the Funds.
A derivative contract may suffer a mark-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform under the contract.
With exchange-traded futures, there is less counterparty credit risk to the Funds since the exchange or clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, credit risk is limited to failure of the clearinghouse. While offset rights may exist under applicable law, a fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency). Additionally, credit risk exists in exchange-traded futures with respect to initial and variation margin that is held in a clearing broker’s customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Funds.
Geographic/Asset Class 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.
Certain Funds invest a significant portion of their assets in issuers located in a single country or a limited number of countries. When a fund concentrates its investments in this manner, 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. Unanticipated or sudden political or social developments may cause uncertainty in the markets and as a result adversely affect the Fund’s investments. Foreign issuers may not be subject to the same uniform accounting, auditing and financial reporting standards and practices as used in the United States. Foreign securities markets may also be more volatile and less liquid than U.S. securities and may be less subject to governmental supervision not typically associated with investing in U.S. securities. Investment percentages in specific countries are presented in the Schedule of Investments.
The Funds invest a significant portion of their assets in securities of issuers located in the United States. A decrease in imports or exports, changes in trade regulations, inflation and/or an economic recession in the United States may have a material adverse effect on the U.S. economy and the securities listed on U.S. exchanges. Proposed and adopted policy and legislative changes in the United States may also have a significant effect on U.S. markets generally, as well as on the value of certain securities. Governmental agencies project that the United States will continue to maintain elevated public debt levels for the foreseeable future which may constrain future economic growth. Circumstances could arise that could prevent the timely payment of interest or principal on U.S. government debt, such as reaching the legislative “debt ceiling.” Such non-payment would result in substantial negative consequences for the U.S. economy and the global financial system. If U.S. relations with certain countries deteriorate, it could adversely affect issuers that rely on the United States for trade. The United States has also experienced increased internal unrest and discord. If these trends were to continue, they may have an adverse impact on the U.S. economy and the issuers in which the the Funds invest.
Certain Funds invest a significant portion of their assets in securities of issuers located in Europe or with significant exposure to European issuers or countries. The European financial markets have recently experienced volatility and adverse trends due to concerns about economic downturns in, or rising government debt levels of, several European countries as well as acts of war in the region. These events may spread to other countries in Europe and may affect the value and liquidity of certain of the Funds’ investments.
Responses to the financial problems by European governments, central banks and others, including austerity measures and reforms, may not work, may result in social unrest and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets and asset valuations around the world. The United Kingdom has withdrawn from the European Union, and one or more other countries may withdraw from the European Union and/or abandon the Euro, the common currency of the European Union. These events and actions have adversely affected, and may in the future adversely affect, the value and exchange rate of the Euro and may continue to significantly affect the economies of every country in Europe, including countries that do not use the Euro and non-European Union member states. The impact of these actions, especially if they occur in a disorderly fashion, is not clear but could be significant and far reaching. In addition, Russia launched a large-scale invasion of Ukraine on February 24, 2022. The extent and duration of the military action, resulting sanctions and resulting future market disruptions in the region are impossible to predict, but have been, and may continue to be significant and have a severe adverse effect on the region, including significant negative impacts on the economy and the markets for certain securities and commodities, such as oil and natural gas, as well as other sectors.
Certain Funds invest a significant portion of their assets in securities of issuers located in Asia or with significant exposure to Asian issuers or countries. The Asian financial markets have recently experienced volatility and adverse trends due to concerns in several Asian countries regarding monetary policy, government intervention in the markets, rising government debt levels or economic downturns. These events may spread to other countries in Asia and may affect the value and liquidity of certain of the Funds’ investments.
Certain Funds invest a significant portion of their assets in securities within a single or limited number of market sectors. When a fund concentrates its investments in this manner, 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. Investment percentages in specific sectors are presented in the Schedule of Investments.
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 | 37 |
Notes to Financial Statements (unaudited) (continued)
Significant Shareholder Redemption Risk: Certain shareholders may own or manage a substantial amount of fund shares and/or hold their fund investments for a limited period of time. Large redemptions of fund shares by these shareholders may force a fund to sell portfolio securities, which may negatively impact the fund’s NAV, increase the fund’s brokerage costs, and/or accelerate the realization of taxable income/gains and cause the fund to make additional taxable distributions to shareholders.
11. | 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:
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Six Months Ended 10/31/23
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Period Ended 04/30/23
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iShares ETF |
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Environmentally Aware Real Estate(a) | ||||||||||||||||||||
Shares sold | — | $ | — | 360,000 | $ | 8,978,314 | ||||||||||||||
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Six Months Ended 10/31/23
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Year Ended 04/30/23
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Amount | ||||||||||||||||
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Global REIT | ||||||||||||||||||||
Shares sold | 14,350,000 | $ | 318,678,783 | 14,400,000 | $ | 325,705,239 | ||||||||||||||
Shares redeemed | (1,100,000 | ) | (24,887,399 | ) | (10,100,000 | ) | (258,770,463 | ) | ||||||||||||
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13,250,000 | $ | 293,791,384 | 4,300,000 | $ | 66,934,776 | |||||||||||||||
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International Developed Real Estate | ||||||||||||||||||||
Shares sold | — | $ | 260 | 200,000 | $ | 4,481,991 | ||||||||||||||
Shares redeemed | (800,000 | ) | (16,272,408 | ) | (1,700,000 | ) | (36,315,284 | ) | ||||||||||||
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(800,000 | ) | $ | (16,272,148 | ) | (1,500,000 | ) | $ | (31,833,293 | ) | |||||||||||
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(a) | The Fund commenced operations on November 15, 2022. |
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 Statements of Assets and Liabilities.
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.
38 | 2 0 2 3 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
iShares Environmentally Aware Real Estate ETF, iShares Global REIT ETF (each the “Fund”)
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 Board Members who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Board Members”), is required annually to consider the approval of the Investment Advisory Agreement between the Trust and BFA (the “Advisory Agreement”) on behalf of the Fund. The Board’s consideration entails a year-long process whereby the Board and its committees (composed solely of Independent Board Members) assess BlackRock’s services to the Fund, including investment management; fund accounting; administrative and shareholder services; oversight of the Fund’s service providers; risk management and oversight; legal and compliance services; and ability to meet applicable legal and regulatory requirements. The Independent Board Members requested, and BFA provided, such information as the Independent Board Members, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Agreement. At meetings on May 2, 2023 and May 15, 2023, a committee composed of all of the Independent Board Members (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 its independent counsel, and requested certain additional information, which management agreed to provide. At a meeting held on June 7-8, 2023, the Board, including the Independent Board Members, reviewed the additional information provided by management in response to these requests.
After extensive discussions and deliberations, the Board, including all of the Independent Board Members, approved the continuance of the Advisory Agreement for the Fund, based on a review of qualitative and quantitative information provided by BFA and their cumulative experience as Board Members. 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 Board Members were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the continuance of the Advisory Agreement for the Fund, the Board, including the Independent Board Members, 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) potential economies of scale and the sharing of related benefits; (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, none of which was controlling, and conclusions that formed the basis for the Board, including the Independent Board Members, to approve the continuance of the Advisory Agreement 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 other fund(s) in which the Fund invests (if applicable), and waivers/reimbursements (if applicable) of the Fund in comparison with the same information for other ETFs, objectively selected by Broadridge as comprising the Fund’s applicable expense 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 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 any waivers and reimbursements) for the Fund were lower than the median of the investment advisory fee rates and overall expenses (net of any 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-year, three-year, five-year, ten-year, and since inception periods, as applicable, and for the quarter ended December 31, 2022, to that of such 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 Agreement for the coming year.
Nature, Extent and Quality of Services Provided: Based on management’s representations, including information about ongoing enhancements and initiatives with respect 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 Agreement for the coming year as compared with 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 and have made significant investments into the iShares business. The Board also considered BFA’s compliance program and its compliance record with respect to the Fund, including related programs implemented pursuant to regulatory requirements. 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 May 2, 2023 meeting and throughout the year, and matters related to BFA’s portfolio compliance program and other compliance programs and services.
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 Agreement supported the Board’s approval of the continuance of the Advisory Agreement for the coming year.
Costs of Services Provided to the Fund and Profits Realized by BFA and its Affiliates: The Board reviewed information about the estimated profitability to BlackRock in managing the Fund, based on the fees payable to BFA and its affiliates (including fees under the Advisory Agreement), 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 methodology for calculating estimated profitability of the iShares funds, noting that the 15(c) Committee and the Board had focused on the methodology and profitability presentation. The Board recognized that profitability may be affected by numerous factors, including, among other things, fee waivers by BFA, the types of funds managed, expense allocations and business mix. The Board thus recognized that calculating and comparing profitability at individual fund levels is challenging. The Board discussed with management the sources of direct and ancillary revenue, including the revenues to BTC, a BlackRock affiliate, from securities lending by the Fund. The Board also discussed BFA’s estimated profit margin as reflected in the Fund’s profitability analysis and reviewed information regarding potential economies of scale (as discussed below).
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Board Review and Approval of Investment Advisory Contract (continued)
Based on this review, the Board concluded that the information considered with respect to the profits realized by BFA and its affiliates under the Advisory Agreement and from other relationships between the Fund and BFA and/or its affiliates, if any, as well as the other factors considered at the meeting, supported the Board’s approval of the continuance of the Advisory Agreement for the coming year.
Economies of Scale: The Board reviewed information and considered the extent to which economies of scale might be realized as the assets of the Fund increase, noting that the issue of potential 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 estimated profitability (as discussed above), including BFA’s and its affiliates’ estimated costs in providing services. The estimated cost information distinguished, among other things, between fixed and variable costs, and showed how the level and nature of fixed and variable costs may impact the existence or size of scale benefits, with the Board recognizing that potential economies of scale are difficult to measure. 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 Agreement 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 it would continue to assess the appropriateness of adding breakpoints in the future.
The Board concluded that this review of potential economies of scale and the sharing of related benefits, as well as the other factors considered at the meeting, supported the Board’s approval of the continuance of the Advisory Agreement 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”). The Board acknowledged BFA’s representation that the iShares funds are fundamentally different investment vehicles from the Other Accounts.
The Board received detailed information regarding how the Other Accounts generally differ from the Fund, including in terms of the types of services 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 investment vehicle, as compared to the Other Accounts, particularly those that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. 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 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 considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund’s expenses borne by BFA under this arrangement and noted that the investment advisory fee rate under the Advisory Agreement 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 other benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Fund by BFA, both direct and indirect, including, but not limited to, payment of revenue to BTC, the Fund’s securities lending agent, for loaning portfolio securities, as applicable (which was included in the profit margins reviewed by the Board pursuant to BFA’s estimated profitability methodology), payment of advisory fees or other 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 or other services, and BlackRock’s profile in the investment community. The Board further considered other direct benefits that might accrue to BFA, including the potential for reduction in the Fund’s expenses that are borne by BFA under the “all-inclusive” management fee arrangement, due in part to the size and scope of BFA’s investment operations servicing the Fund (and other funds in the iShares complex) as well as in response to a changing market environment. The Board also reviewed and considered information provided by BFA concerning authorized participant primary market order processing services that are provided by BlackRock Investments, LLC (“BRIL”), an affiliate of BFA, and paid for by authorized participants under the ETF Servicing Platform. 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 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 Agreement 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 Board Members, determined that the Fund’s investment advisory fee rate under the Advisory Agreement 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 Agreement for the coming year.
iShares International Developed Real Estate ETF (the “Fund”)
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 Board Members who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Board Members”), is required annually to consider the approval of the Investment Advisory Agreement between the Trust and BFA (the “Advisory Agreement”) on behalf of the Fund. The Board’s consideration entails a year-long process whereby the Board and its committees (composed solely of Independent Board Members) assess BlackRock’s services to the Fund, including investment management; fund accounting; administrative and shareholder services; oversight of the Fund’s service providers; risk management and oversight; legal and compliance services; and ability to meet applicable legal and regulatory requirements. The Independent Board Members requested, and BFA provided, such information as the Independent Board Members, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Agreement. At meetings on May 2, 2023 and May 15, 2023, a committee composed of all of the Independent Board Members (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 its independent counsel, and requested certain additional information, which management agreed to provide. At a meeting held on June 7-8, 2023, the Board, including the Independent Board Members, reviewed the additional information provided by management in response to these requests.
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Board Review and Approval of Investment Advisory Contract (continued)
After extensive discussions and deliberations, the Board, including all of the Independent Board Members, approved the continuance of the Advisory Agreement for the Fund, based on a review of qualitative and quantitative information provided by BFA and their cumulative experience as Board Members. 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 Board Members were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the continuance of the Advisory Agreement for the Fund, the Board, including the Independent Board Members, 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) potential economies of scale and the sharing of related benefits; (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, none of which was controlling, and conclusions that formed the basis for the Board, including the Independent Board Members, to approve the continuance of the Advisory Agreement 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 other fund(s) in which the Fund invests (if applicable), and waivers/reimbursements (if applicable) of the Fund in comparison with the same information for other ETFs, objectively selected by Broadridge as comprising the Fund’s applicable expense 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 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 any waivers and reimbursements) for the Fund were within range of the median of the investment advisory fee rates and overall expenses (net of any 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-year, three-year, five-year, ten-year, and since inception periods, as applicable, and for the quarter ended December 31, 2022, to that of such 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 Agreement for the coming year.
Nature, Extent and Quality of Services Provided: Based on management’s representations, including information about ongoing enhancements and initiatives with respect 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 Agreement for the coming year as compared with 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 and have made significant investments into the iShares business. The Board also considered BFA’s compliance program and its compliance record with respect to the Fund, including related programs implemented pursuant to regulatory requirements. 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 May 2, 2023 meeting and throughout the year, and matters related to BFA’s portfolio compliance program and other compliance programs and services.
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 Agreement supported the Board’s approval of the continuance of the Advisory Agreement for the coming year.
Costs of Services Provided to the Fund and Profits Realized by BFA and its Affiliates: The Board reviewed information about the estimated profitability to BlackRock in managing the Fund, based on the fees payable to BFA and its affiliates (including fees under the Advisory Agreement), 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 methodology for calculating estimated profitability of the iShares funds, noting that the 15(c) Committee and the Board had focused on the methodology and profitability presentation. The Board recognized that profitability may be affected by numerous factors, including, among other things, fee waivers by BFA, the types of funds managed, expense allocations and business mix. The Board thus recognized that calculating and comparing profitability at individual fund levels is challenging. The Board discussed with management the sources of direct and ancillary revenue, including the revenues to BTC, a BlackRock affiliate, from securities lending by the Fund. The Board also discussed BFA’s estimated 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 information considered with respect to the profits realized by BFA and its affiliates under the Advisory Agreement and from other relationships between the Fund and BFA and/or its affiliates, if any, as well as the other factors considered at the meeting, supported the Board’s approval of the continuance of the Advisory Agreement for the coming year.
Economies of Scale: The Board reviewed information and considered the extent to which economies of scale might be realized as the assets of the Fund increase, noting that the issue of potential 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 estimated profitability (as discussed above), including BFA’s and its affiliates’ estimated costs in providing services. The estimated cost information distinguished, among other things, between fixed and variable costs, and showed how the level and nature of fixed and variable costs may impact the existence or size of scale benefits, with the Board recognizing that potential economies of scale are difficult to measure. 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 Agreement 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 it would continue to assess the appropriateness of adding breakpoints in the future.
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 | 41 |
Board Review and Approval of Investment Advisory Contract (continued)
The Board concluded that this review of potential economies of scale and the sharing of related benefits, as well as the other factors considered at the meeting, supported the Board’s approval of the continuance of the Advisory Agreement 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”). The Board acknowledged BFA’s representation that the iShares funds are fundamentally different investment vehicles from the Other Accounts.
The Board received detailed information regarding how the Other Accounts generally differ from the Fund, including in terms of the types of services 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 investment vehicle, as compared to the Other Accounts, particularly those that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. 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 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 considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund’s expenses borne by BFA under this arrangement and noted that the investment advisory fee rate under the Advisory Agreement 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 other benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Fund by BFA, both direct and indirect, including, but not limited to, payment of revenue to BTC, the Fund’s securities lending agent, for loaning portfolio securities, as applicable (which was included in the profit margins reviewed by the Board pursuant to BFA’s estimated profitability methodology), payment of advisory fees or other 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 or other services, and BlackRock’s profile in the investment community. The Board further considered other direct benefits that might accrue to BFA, including the potential for reduction in the Fund’s expenses that are borne by BFA under the “all-inclusive” management fee arrangement, due in part to the size and scope of BFA’s investment operations servicing the Fund (and other funds in the iShares complex) as well as in response to a changing market environment. The Board also reviewed and considered information provided by BFA concerning authorized participant primary market order processing services that are provided by BlackRock Investments, LLC (“BRIL”), an affiliate of BFA, and paid for by authorized participants under the ETF Servicing Platform. 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 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 Agreement 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 Board Members, determined that the Fund’s investment advisory fee rate under the Advisory Agreement 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 Agreement for the coming year.
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Supplemental Information (unaudited) |
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Section 19(a) Notices
The amounts and sources of distributions reported are estimates and are being provided pursuant to regulatory requirements and are not being provided for tax reporting purposes. The actual amounts and sources for tax reporting purposes will depend upon each Fund’s investment experience during the year and may be subject to changes based on tax regulations. Shareholders will receive a Form 1099-DIV each calendar year that will inform them how to report these distributions for federal income tax purposes.
October 31, 2023
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 | ||||||||||||||||||||||||||||
International Developed Real Estate(a) | $ | 0.333337 | $ | — | $ | 0.062831 | $ | 0.396168 | 84 | % | — | % | 16 | % | 100 | % |
(a) | The Fund estimates that it has distributed more than its net investment income and net realized capital 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. |
Tailored Shareholder Reports for Open-End Mutual Funds and ETFs
Effective January 24, 2023, the SEC adopted rule and form amendments to require open-end mutual funds and ETFs to transmit concise and visually engaging streamlined annual and semiannual reports to shareholders that highlight key information. Other information, including financial statements, will no longer appear in a streamlined shareholder report but must be available online, delivered free of charge upon request, and filed on a semiannual basis on Form N-CSR. The rule and form amendments have a compliance date of July 24, 2024. At this time, management is evaluating the impact of these amendments on the shareholder reports for the Funds.
S U P P L E M E N T A L I N F O R M A T I O N | 43 |
General Information |
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Electronic Delivery
Shareholders can sign up for e-mail notifications announcing that the shareholder report or prospectus has been posted on the iShares website at 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 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 and Rule 30e-3 notices 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 Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to their reports on Form N-PORT. The Funds’ Forms N-PORT are available on the SEC’s website at sec.gov. Additionally, each Fund makes its portfolio holdings for the first and third quarters of each fiscal year available at iShares.com/fundreports.
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 iShares.com; and (3) on the SEC website at sec.gov.
A description of the Trust’s policies and procedures with respect to the disclosure of the Fund’s portfolio securities is available in the Fund Prospectus. The Fund discloses its portfolio holdings daily and provides information regarding its top holdings in Fund fact sheets at iShares.com.
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Glossary of Terms Used in this Report
Portfolio Abbreviation
NVS | Non-Voting Shares | |
REIT | Real Estate Investment Trust |
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 | 45 |
Want to know more?
iShares.com | 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 FTSE International Limited, 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.
©2023 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc. or its subsidiaries. All other marks are the property of their respective owners.
iS-SAR-405-1023
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(b) Not Applicable
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. | Recovery of Erroneously Awarded Compensation. |
Not applicable
Item 14. | Exhibits. |
(a) (1) Not applicable to this semi-annual report.
(a) (2) Section 302 Certifications are attached.
(a) (3) Any written solicitation to purchase securities under Rule 23c-1 – Not Applicable
(a) (4) Change in Registrant’s independent public accountant – 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/ Dominik Rohe �� | |||
Dominik Rohe, President (Principal Executive Officer) |
Date: December 21, 2023
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/ Dominik Rohe | |||
Dominik Rohe, President (Principal Executive Officer) |
Date: December 21, 2023
By: | /s/ Trent Walker | |||
Trent Walker, Treasurer and Chief Financial Officer (Principal Financial Officer) |
Date: December 21, 2023