Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-09102
iShares, Inc.
(Exact name of registrant as specified in charter)
c/o: State Street Bank and Trust Company 200 Clarendon Street, Boston, MA 02116 |
(Address of principal executive offices) (Zip code) |
The Corporation Trust Incorporated
351 West Camden Street, Baltimore, MD 21201
(Name and address of agent for service)
Registrant’s telephone number, including area code: 415-670-2000
Date of fiscal year end: October 31, 2012
Date of reporting period: October 31, 2012
Table of Contents
Item 1. Reports to Stockholders.
| October 31, 2012 |
2012 Annual Report
iShares, Inc.
iShares Emerging Markets Corporate Bond Fund | CEMB | BATS
iShares Emerging Markets High Yield Bond Fund | EMHY | BATS
iShares Emerging Markets Local Currency Bond Fund | LEMB | NYSE Arca
iShares Global ex USD High Yield Corporate Bond Fund | HYXU | BATS
iShares Global High Yield Corporate Bond Fund | GHYG | BATS
Table of Contents
5 | ||||
20 | ||||
22 | ||||
22 | ||||
27 | ||||
31 | ||||
33 | ||||
38 | ||||
48 | ||||
55 | ||||
60 | ||||
69 | ||||
70 | ||||
Board Review and Approval of Investment Advisory Contract (Unaudited) | 71 | |||
74 | ||||
77 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® EMERGING MARKETS CORPORATE BOND FUND
Performance as of October 31, 2012
Cumulative Total Returns | ||||||||||
Inception to 10/31/12 | ||||||||||
NAV | MARKET | INDEX | ||||||||
7.75% | 8.79% | 8.09% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
“Cumulative Total Returns” represent the total change in value of an investment over the period indicated and are calculated from an inception date of 4/17/12.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did 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 (4/19/12), 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 in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. 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. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 5 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® EMERGING MARKETS CORPORATE BOND FUND
PORTFOLIO ALLOCATION As of 10/31/12
Sector/Investment Type | Percentage of Net Assets |
Foreign Agency Obligations | 35.84 | % | ||
Financial | 22.61 | |||
Energy | 9.42 | |||
Basic Materials | 9.29 | |||
Communications | 6.97 | |||
Utilities | 4.62 | |||
Industrial | 3.93 | |||
Diversified | 3.38 | |||
Consumer Non-Cyclical | 1.57 | |||
Consumer Cyclical | 0.52 | |||
Short-Term and Other Net Assets | 1.85 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 10/31/12
Security | Percentage of Net Assets |
CNOOC Finance 2012 Ltd., 5.00%, 05/02/42 (China) | 2.19 | % | ||
MDC-GMTN BV, 3.75%, 04/20/16 (United Arab Emirates) | 2.00 | |||
America Movil SAB de CV, 3.13%, 07/16/22 (Mexico) | 1.95 | |||
Petrobras International Finance Co., 5.75%, 01/20/20 (Brazil) | 1.91 | |||
Taqa Abu Dhabi National Energy Co., 4.75%, 09/15/14 (United Arab Emirates) | 1.50 | |||
Petroleos de Venezuela SA, 9.00%,11/17/21 (Venezuela) | 1.37 | |||
IPIC GMTN Ltd., 5.00%, 11/15/20 (United Arab Emirates) | 1.31 | |||
Majapahit Holding BV, 7.75%, 01/20/20 (Indonesia) | 1.31 | |||
Gazprom OAO Via Gaz Capital SA, 4.95%, 05/23/16 (Russia) | 1.30 | |||
KazMunaiGaz National Co., 9.13%, 07/02/18 (Kazakhstan) | 1.23 | |||
|
| |||
TOTAL | 16.07 | % | ||
|
|
The iShares Emerging Markets Corporate Bond Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Morningstar® Emerging Markets Corporate Bond IndexSM (the “Index”). The Index measures the performance of the U.S. dollar-denominated emerging market corporate bond market. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the period from April 17, 2012 (inception date of the Fund) through October 31, 2012 (the “reporting period”), the total return for the Fund was 7.75%, net of fees, while the total return for the Index was 8.09%.
As represented by the Index, corporate bonds in emerging markets posted strong gains for the reporting period despite a general slowdown in growth rates in many emerging economies. Larger countries such as China, India, and Brazil — among the most rapidly growing economies in the world over the past decade — saw their economic growth rates fall during the reporting period. One factor behind this trend was the continuing sovereign debt crisis in Europe, which had a negative impact on financial institutions around the globe and led to a meaningful slowdown in European economic growth, including recessions for the most fiscally challenged countries in the region. Exports to developed regions of the world are an important component of emerging market economies. For example, exports comprise approximately 40% of the Chinese economy, and the European Union is its largest trading partner. A marked decline in exports to Europe weighed on economic activity in many emerging markets.
In addition, central banks in many emerging markets raised short-term interest rates in 2011 to curb rising inflation, and this had a negative impact on domestic economic growth in 2012. Central banks in Brazil and South Korea — the two largest country weightings in the Index as of October 31, 2012 — raised interest rates in 2011 to combat runaway inflation, as did China’s central bank. Although the central banks were successful in lowering the inflation rate, higher borrowing costs put downward pressure on their respective domestic economies.
6 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® EMERGING MARKETS CORPORATE BOND FUND
On the positive side, economic growth rates in emerging markets remained higher than growth levels in developed countries. This was especially true during the reporting period amid recessions in southern Europe and slowing, below-trend growth in the U.S. and Japan. Emerging market economies have also become more diversified, and government debt levels in most emerging markets are lower than those in the developed regions of the world. Furthermore, central banks in many emerging markets (such as Brazil, South Korea, China, and India) began lowering short-term interest rates by mid-2012 to bolster their respective economies.
Another factor contributing to the strong performance of the Index was increased global demand for yield. With government bond yields in the U.S. and other developed nations hovering near historically low levels, investors sought out higher yields elsewhere, and emerging market corporate bonds benefited from this trend. Corporate debt issuers in emerging markets also tend to have stronger balance sheets and lower debt levels than their counterparts in the U.S.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 7 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® EMERGING MARKETS HIGH YIELD BOND FUND
Performance as of October 31, 2012
Cumulative Total Returns | ||||||||||
Inception to 10/31/12 | ||||||||||
NAV | MARKET | INDEX | ||||||||
10.21% | 11.76% | 10.68% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
“Cumulative Total Returns” represent the total change in value of an investment over the period indicated and are calculated from an inception date of 4/3/12.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did 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 (4/3/12), 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 in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. 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. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
8 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® EMERGING MARKETS HIGH YIELD BOND FUND
BOND CREDIT QUALITY
As of 10/31/12
Moody’s Credit Rating | Percentage of Total Investments* |
Baa3 | 1.13 | % | ||
Ba1 | 36.29 | |||
Ba2 | 3.29 | |||
Ba3 | 7.07 | |||
B1 | 8.61 | |||
B2 | 20.45 | |||
B3 | 2.74 | |||
Caa1 | 0.48 | |||
Not Rated | 19.94 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
* | Excludes money market funds. |
TEN LARGEST FUND HOLDINGS
As of 10/31/12
Security | Percentage of Net Assets |
Philippines (Republic of the), 6.50%,01/20/20 | 2.23 | % | ||
Vimpel Communications Via VIP Finance Ireland Ltd. OJSC, 9.13%, 04/30/18 (Russia) | 2.18 | |||
OGX Austria GmbH, 8.50%, 06/01/18 (Brazil) | 2.13 | |||
Turkey (Republic of), 7.00%, 06/05/20 | 2.07 | |||
Turkey (Republic of), 6.25%, 09/26/22 | 2.04 | |||
Petroleos de Venezuela SA, Series 2015 5.00%, 10/28/15 (Venezuela) | 1.84 | |||
Petroleos de Venezuela SA, 12.75%, 02/17/22 (Venezuela) | 1.84 | |||
Turkey (Republic of), 6.75%, 05/30/40 | 1.80 | |||
Venezuela (Bolivarian Republic of), 9.00%, 05/07/23 | 1.73 | |||
Venezuela (Bolivarian Republic of), 9.25%, 05/07/28 | 1.70 | |||
|
| |||
TOTAL | 19.56 | % | ||
|
|
The iShares Emerging Markets High Yield Bond Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Morningstar® Emerging Markets High Yield Bond IndexSM (the “Index”). The Index measures the performance of the below-investment-grade U.S. dollar-denominated emerging market sovereign and corporate high yield bond market. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the period from April 3, 2012 (inception date of the Fund) through October 31, 2012 (the “reporting period”), the total return for the Fund was 10.21%, net of fees, while the total return for the Index was 10.68%.
As represented by the Index, high yield bonds in emerging markets posted double-digit gains for the reporting period despite a general slowdown in growth rates in many emerging market economies. Larger countries such as China, India, and Brazil — among the most rapidly growing economies in the world over the past decade — saw their economic growth rates fall during the reporting period. One factor behind this trend was the continuing sovereign debt crisis in Europe, which had a negative impact on financial institutions around the globe and led to a meaningful slowdown in European economic growth, including recessions for the most fiscally challenged countries in the region. Exports to developed regions of the world are an important component of emerging economies. For example, in Turkey (the largest country weighting in the Index as of October 31, 2012) comprised approximately 21% of the country’s economy for 2011, and the European Union is its largest trading partner. A marked decline in exports to Europe weighed on economic activity in many emerging markets.
In addition, central banks in many emerging markets raised short-term interest rates in 2011 to curb rising inflation, and this had a negative impact on domestic economic growth in 2012. Central banks in countries such as Brazil, China, and South Korea raised interest rates in 2011 to combat runaway inflation. Although the central banks were successful in lowering the inflation rate, higher borrowing costs put downward pressure on their respective domestic economies.
On the positive side, economic growth rates in emerging markets remained higher than growth levels in developed countries. This was especially true during the reporting period amid recessions in southern Europe and slowing, below-trend growth in the U.S. and Japan. Emerging market economies have also become more diversified, and government debt levels in most emerging markets are lower than
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 9 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® EMERGING MARKETS HIGH YIELD BOND FUND
those in the developed regions of the world. Furthermore, central banks in many emerging markets (such as Brazil, South Korea, China, and India) began lowering short-term interest rates by mid-2012 to bolster their respective economies.
The most important factor contributing to the strong performance of the Index, however, was increased global demand for yield. With government bond yields in the U.S. and other developed nations hovering near historically low levels, investors sought out higher yields elsewhere, and emerging market high yield bonds benefited from this trend.
10 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® EMERGING MARKETS LOCAL CURRENCY BOND FUND
Performance as of October 31, 2012
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||
Year Ended 10/31/12 | Inception to 10/31/12 | Inception to 10/31/12 | ||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | NAV | MARKET | INDEX | ||||||||
5.53% | 7.09% | 5.57% | 7.92% | 9.32% | 8.05% | 8.24% | 9.69% | 8.35% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
Total returns for the period since inception are calculated from the inception date of the Fund (10/18/11). “Average Annual Total Returns” represent the average annual change in value of an investment over the periods indicated. “Cumulative Total Returns” represent the total change in value of an investment over the periods indicated.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did 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 (10/20/11), 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 in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. 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. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 11 |
Table of Contents
Management’s Discussion of Fund Performance (continued)
iSHARES® EMERGING MARKETS LOCAL CURRENCY BOND FUND
BOND CREDIT QUALITY
As of 10/31/12
Moody’s Credit Rating | Percentage of Total Investments* |
Aa3 | 21.78 | % | ||
A1 | 4.52 | |||
A2 | 6.45 | |||
A3 | 4.56 | |||
Baa1 | 20.58 | |||
Baa2 | 13.17 | |||
Baa3 | 8.81 | |||
Ba1 | 8.95 | |||
Not Rated | 11.18 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
* | Excludes money market funds. |
TEN LARGEST FUND HOLDING
As of 10/31/12
Security | Percentage of Net Assets |
Korea (Republic of), 5.25%, 09/10/15 | 5.50 | % | ||
Korea (Republic of), 3.75%, 06/10/13 | 4.80 | |||
Brazil (Federative Republic of), 9.76%, 01/01/13 | 4.76 | |||
Russian Federation (The), 7.85%, 03/10/18 | 4.19 | |||
Korea (Republic of), 3.00%, 12/10/13 | 4.16 | |||
Brazil (Federative Republic of), 9.76%, 01/01/21 | 3.67 | |||
Turkey (Republic of), 9.00%, 01/27/16 | 3.33 | |||
Brazil (Federative Republic of) , 0.00% 01/01/15 | 3.32 | |||
Malaysia (Federation of), 5.73%, 07/30/19 | 3.27 | |||
Hungary (Republic of), 5.50%, 02/12/16 | 3.11 | |||
|
| |||
TOTAL | 40.11 | % | ||
|
|
The iShares Emerging Markets Local Currency Bond Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Barclays Emerging Markets Broad Local Currency Bond Index (the “Index”). The Index measures the performance of local currency-denominated sovereign bond markets of emerging market countries. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month period ended October 31, 2012 (the “reporting period”), the total return for the Fund was 5.48%, net of fees, while the total return for the Index was 5.57%.
As represented by the Index, emerging markets sovereign debt issued in local currencies posted solid gains for the reporting period. Many emerging market economies experienced a slowdown in their growth rates during the reporting period. Countries such as Brazil, South Korea, and Mexico — the three largest country weightings in the Index at the end of the reporting period — saw their economic growth rates decline. One factor behind this trend was the continuing sovereign debt crisis in Europe, which had a negative impact on financial institutions around the globe and led to a meaningful slowdown in European economic growth, including recessions for the most fiscally challenged countries in the region. Exports to developed regions of the world are an important component of emerging economies. For example, exports are the backbone of the South Korean economy, and the European Union is the country’s second-largest trading partner (after China). A marked decline in exports to Europe weighed on economic activity in many emerging markets.
In addition, central banks in many emerging markets raised short-term interest rates in 2011 to curb rising inflation, and this had a negative impact on domestic economic growth in 2012. Central banks in Brazil and South Korea raised interest rates in 2011 to combat runaway inflation, as did smaller emerging markets such as Poland, Malaysia, and Thailand. Although the central banks were successful in lowering the inflation rate in their countries, higher borrowing costs put downward pressure on their respective domestic economies. By the spring of 2012, many of these central banks began lowering short-term interest rates to bolster their economies.
The key factor contributing to the strong performance of the Index was increased global demand for yield. With government bond yields in the U.S. and other developed nations hovering near historically low levels, investors sought out higher yields elsewhere, and emerging markets sovereign debt benefited from this trend.
12 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® EMERGING MARKETS LOCAL CURRENCY BOND FUND
Currency fluctuations had a mixed but slightly negative overall impact on Index performance. A stronger U.S. dollar reduces returns on non-U.S. investments for U.S. investors, and the U.S. dollar appreciated by 20% against the Brazilian real, 10% against the South African rand, and approximately 9% versus both the Czech koruna and the Indonesian rupiah. Bonds denominated in these currencies comprised approximately 25% of the Index as of October 31, 2012. The U.S. dollar also declined against several currencies represented in the Index, but to a notably lesser extent — 3% versus the Philippine peso, 2% against the South Korean won and Colombian peso, and 1% against the Malaysian ringgit.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 13 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® GLOBAL EX USD HIGH YIELD CORPORATE BOND FUND
Performance as of October 31, 2012
Cumulative Total Returns | ||||||||||
Inception to 10/31/12 | ||||||||||
NAV | MARKET | INDEX | ||||||||
6.49% | 6.74% | 6.44% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
“Cumulative Total Returns” represent the total change in value of an investment over the period indicated and are calculated from an inception date of 4/3/12.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did 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 (4/3/12), 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 in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. 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. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
14 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® GLOBAL EX USD HIGH YIELD CORPORATE BOND FUND
PORTFOLIO ALLOCATION
As of 10/31/12
Sector | Percentage of Net Assets |
Industrial | 20.70 | % | ||
Financial | 19.69 | |||
Communications | 16.39 | |||
Consumer Cyclical | 16.19 | |||
Consumer Non-Cyclical | 9.06 | |||
Basic Materials | 5.55 | |||
Utilities | 4.04 | |||
Diversified | 3.18 | |||
Energy | 1.86 | |||
Short-Term and Other Net Assets | 3.34 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 10/31/12
Security | Percentage of Net Assets |
Lafarge SA, 5.38%, 06/26/17 (France) | 2.94 | % | ||
HeidelbergCement Finance BV, 8.00%, 01/31/17 (Netherlands) | 2.89 | |||
Fiat Industrial Finance Europe SA, 5.25%, 03/11/15 (Luxembourg) | 2.86 | |||
Fiat Finance & Trade SA, 6.38%, 04/01/16 (Luxembourg) | 2.74 | |||
Renault SA, 5.63%, 06/30/15 (France) | 2.63 | |||
Caixa Geral de Depositos SA, 5.13%, 02/19/14 (Portugal) | 2.01 | |||
Banco Espirito Santo SA, 5.63%, 06/05/14 (Portugal) | 2.00 | |||
Wind Acquisition Finance SA, 11.75%, 07/15/17 (Italy) | 1.93 | |||
Edison SpA, 4.25%, 07/22/14 (Italy) | 1.83 | |||
Banco Comercial Portugues SA, 5.63%, 04/23/14 (Portugal) | 1.75 | |||
|
| |||
TOTAL | 23.58 | % | ||
|
|
The iShares Global ex USD High Yield Corporate Bond Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Markit iBoxx Global Developed Markets ex-US High Yield Index (the “Index”). The Index is designed to provide a broad representation of the global ex-U.S. dollar high yield corporate bond market and consists of high yield corporate bonds denominated in Euros, British pounds sterling and Canadian dollars. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the period from April 3, 2012 (inception date of the Fund) through October 31, 2012 (the “reporting period”), the total return for the Fund was 6.49%, net of fees, while the total return for the Index was 6.44%.
As represented by the Index, international high yield corporate bonds posted solid returns for the reporting period. Much of the reporting period was characterized by a broad deceleration in global economic activity. One factor behind this trend was the continuing sovereign debt crisis in Europe, which led to a meaningful slowdown in European economic growth, including recessions in the most fiscally challenged countries in the region. Economic growth in China and other emerging market economies also slowed during the reporting period.
In response to slowing global economic conditions, many of the world’s central banks took steps to bolster their respective economies. In the U.S., the Federal Reserve Bank extended its existing economic stimulus programs and enacted a third round of quantitative easing measures to help sustain the economy’s momentum. At around the same time, the European Central Bank cut interest rates to all-time lows and pledged more liquidity to support troubled debt markets on the Continent. Central banks in England, Japan, and China also took actions to stimulate economic activity, ranging from interest rate cuts to quantitative easing programs.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 15 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® GLOBAL EX USD HIGH YIELD CORPORATE BOND FUND
Despite the slowing economic environment, the actions taken by central banks around the globe provided a favorable backdrop for high yield corporate bonds. However, the most important factor contributing to the strong performance of the Index was increased global demand for yield. With government bond yields in the U.S. and other developed nations hovering near historically low levels, investors sought out higher yields elsewhere, and high yield corporate bonds were significant beneficiaries of this trend.
Currency fluctuations had a modestly negative impact on Index performance for the reporting period. A stronger U.S. dollar reduces returns on non-U.S. investments for U.S. investors, and the U.S. dollar appreciated by approximately 3% versus the euro during the reporting period. High yield securities denominated in euros comprised more than 85% of the Index as of the end of the reporting period. Among the other major currencies represented in the Index, the U.S. dollar rose by 1% against the Canadian dollar and declined by about 1% against the British pound for the reporting period.
16 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® GLOBAL HIGH YIELD CORPORATE BOND FUND
Performance as of October 31, 2012
Cumulative Total Returns | ||||||||||
Inception to 10/31/12 | ||||||||||
NAV | MARKET | INDEX | ||||||||
6.53% | 7.01% | 6.78% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
“Cumulative Total Returns” represent the total change in value of an investment over the period indicated and are calculated from an inception date of 4/3/12.
The Fund’s per share net asset value or “NAV” is the value of one share of the Fund as calculated in accordance with the standard formula for valuing mutual fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Since shares of the Fund did 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 (4/5/12), 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 in the Fund at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. 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. The performance shown above assumes reinvestment of all dividends and capital gain distributions and does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption or sale of fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund’s past performance is no guarantee of future results.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 17 |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® GLOBAL HIGH YIELD CORPORATE BOND FUND
PORTFOLIO ALLOCATION
As of 10/31/12
Sector | Percentage of Net Assets |
Communications | 21.27 | % | ||
Consumer Non-Cyclical | 14.16 | |||
Financial | 13.32 | |||
Consumer Cyclical | 12.81 | |||
Energy | 10.84 | |||
Industrial | 10.05 | |||
Basic Materials | 5.44 | |||
Utilities | 5.07 | |||
Technology | 3.58 | |||
Diversified | 0.95 | |||
Short-Term and Other Net Assets | 2.51 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST FUND HOLDINGS
As of 10/31/12
Security | Percentage of Net Assets |
HeidelbergCement Finance BV, 8.00%, 01/31/17 (Netherlands) | 1.25 | % | ||
HCA Inc., 6.50%, 02/15/20 | 1.22 | |||
Calpine Corp., 7.50%, 02/15/21 | 1.05 | |||
Reynolds Group Issuer Inc./Reynolds Group Issuer LLC, 7.13%, 04/15/19 | 1.03 | |||
Lafarge SA, 5.38%, 06/26/17 (France) | 0.96 | |||
Fiat Finance & Trade SA, 6.38%, 04/01/16 (Luxembourg) | 0.90 | |||
Ally Financial Inc., 8.00%, 03/15/20 | 0.82 | |||
AES Corp. (The), 8.00%, 10/15/17 | 0.79 | |||
NRG Energy Inc., 7.63%, 05/15/19 | 0.73 | |||
FMG Resources (August 2006) Pty Ltd., 6.88%, 02/01/18 (Australia) | 0.67 | |||
|
| |||
TOTAL | 9.42 | % | ||
|
|
The iShares Global High Yield Corporate Bond Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Markit iBoxx Global Developed Markets High Yield Index (the “Index”). The Index is designed to provide a broad representation of the global high yield corporate bond market and consists of high yield corporate bonds denominated in U.S. dollars, Euros, British pounds sterling and Canadian dollars. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the period from April 3, 2012 (inception date of the Fund) through October 31, 2012 (the “reporting period”), the total return for the Fund was 6.53%, net of fees, while the total return for the Index was 6.78%.
As represented by the Index, global high yield corporate bonds posted solid returns for the reporting period. Much of the reporting period was characterized by a broad deceleration in global economic activity. One factor behind this trend was the continuing sovereign debt crisis in Europe, which led to a meaningful slowdown in European economic growth, including recessions in the most fiscally challenged countries in the region. Economic growth in China and other emerging economies also slowed during the reporting period. In the U.S., uncertainty over the outcome of the U.S. presidential election and a resolution of the “fiscal cliff” (the expiration of certain federal tax cuts and the implementation of automatic government spending reductions set to take place at the end of 2012) weighed on the economy.
In response to slowing global economic conditions, many of the world’s central banks took steps to bolster their respective economies. In the U.S., the Federal Reserve Bank (the “Fed”) extended its existing economic stimulus programs, including a plan to maintain a near-zero interest rate policy until 2015. The Fed also enacted a third round of quantitative easing measures, which involved buying mortgage-backed securities to keep long-term interest rates low and support the housing market, to help sustain the economy’s momentum. At around the same time, the European Central Bank pledged more liquidity to support troubled debt markets on the Continent, and central banks in England, Japan, and China also took actions to stimulate economic activity.
18 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® GLOBAL HIGH YIELD CORPORATE BOND FUND
Despite the slowing economic environment, the actions taken by central banks around the globe provided a favorable backdrop for global high yield corporate bonds. However, the most important factor contributing to the strong performance of the Index was increased global demand for yield. With government bond yields in the U.S. and other developed nations hovering near historically low levels, investors sought out higher yields elsewhere, and high yield corporate bonds were significant beneficiaries of this trend.
Currency fluctuations had a modestly negative impact on Index performance for the reporting period. A stronger U.S. dollar reduces returns on non-U.S. investments for U.S. investors, and the U.S. dollar appreciated by approximately 3% versus the euro and 1% against the Canadian dollar, though it fell by about 1% against the British pound. High yield securities denominated in non-U.S. currencies comprised approximately one-quarter of the Index as of the end of the reporting period, the majority of which were denominated in the euro.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 19 |
Table of Contents
Shareholder Expenses (Unaudited)
iSHARES®, INC.
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares and (2) ongoing costs, including management fees and other Fund expenses. The following Example is intended to help you understand your ongoing costs (in dollars and cents) of investing in a Fund and to compare these costs with the ongoing costs of investing in other funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from May 1, 2012 to October 31, 2012.
ACTUAL EXPENSES
The first line under each Fund in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line for your Fund under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line under each Fund in the table below provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of Fund shares. Therefore, the second line under each Fund in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
iShares Bond Fund | Beginning Account Value (5/1/12) | Ending Account Value (10/31/12) | Annualized Expense Ratio | Expenses Paid During Period a | ||||||||||||
Emerging Markets Corporate | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,067.40 | 0.60 | % | $ | 3.13 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.20 | 0.60 | 3.06 | ||||||||||||
Emerging Markets High Yield | ||||||||||||||||
Actual | 1,000.00 | 1,085.10 | 0.65 | 3.42 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,021.90 | 0.65 | 3.31 | ||||||||||||
Emerging Markets Local Currency | ||||||||||||||||
Actual | 1,000.00 | 1,038.50 | 0.60 | 3.08 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,022.20 | 0.60 | 3.06 | ||||||||||||
Global ex USD High Yield Corporate | ||||||||||||||||
Actual | 1,000.00 | 1,071.40 | 0.40 | 2.09 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,023.20 | 0.40 | 2.04 |
20 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Shareholder Expenses (Unaudited) (Continued)
iSHARES®, INC.
iShares Bond Fund | Beginning Account Value (5/1/12) | Ending Account Value (10/31/12) | Annualized Expense Ratio | Expenses Paid During Period a | ||||||||||||
Global High Yield Corporate | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,058.70 | 0.40 | % | $ | 2.08 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,023.20 | 0.40 | 2.04 |
a | Expenses are calculated using each Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). |
SHAREHOLDER EXPENSES | 21 |
Table of Contents
iSHARES® EMERGING MARKETS CORPORATE BOND FUND
October 31, 2012
Security | Principal (000s) | Value | ||||||
CORPORATE BONDS & NOTESa — 62.31% |
| |||||||
BRAZIL — 13.05% |
| |||||||
Banco Bradesco SA | ||||||||
4.50%, 01/12/17b | $ | 200 | $ | 215,000 | ||||
Banco Santander (Brasil) SA | ||||||||
4.50%, 04/06/15b | 100 | 103,250 | ||||||
Banco Votorantim SA | ||||||||
7.38%, 01/21/20b | 200 | 231,000 | ||||||
Braskem Finance Ltd. | ||||||||
7.00%, 05/07/20b | 100 | 117,750 | ||||||
Fibria Overseas Finance Ltd. | ||||||||
7.50%, 05/04/20 (Call 05/04/15)b | 100 | 110,750 | ||||||
Gerdau Trade Inc. | ||||||||
5.75%, 01/30/21b | 100 | 111,550 | ||||||
GTL Trade Finance Inc. | ||||||||
7.25%, 10/20/17b | 200 | 232,000 | ||||||
Itau Unibanco Holding SA | ||||||||
5.50%, 08/06/22b | 200 | 210,000 | ||||||
6.20%, 04/15/20b | 100 | 110,250 | ||||||
JBS USA LLC | ||||||||
7.25%, 06/01/21 (Call 06/01/15)b | 46 | 44,988 | ||||||
Odebrecht Drilling Norbe VIII/IX Ltd. | ||||||||
6.35%, 06/30/21 (Call 06/30/20)b | 99 | 114,028 | ||||||
Odebrecht Finance Ltd. | ||||||||
7.00%, 04/21/20 (Call 04/21/15)b | 100 | 115,750 | ||||||
OGX Austria GmbH | ||||||||
8.50%, 06/01/18 (Call 06/01/15)b | 200 | 174,500 | ||||||
Telemar Norte Leste SA | ||||||||
5.50%, 10/23/20b | 100 | 107,500 | ||||||
Vale Overseas Ltd. | ||||||||
4.38%, 01/11/22 | 200 | 212,890 | ||||||
4.63%, 09/15/20 | 175 | 188,721 | ||||||
6.88%, 11/21/36 | 119 | 146,474 | ||||||
6.88%, 11/10/39 | 50 | 62,216 | ||||||
Vale SA | ||||||||
5.63%, 09/11/42 | 35 | 37,496 | ||||||
Voto Votorantim Overseas Trading Co. | ||||||||
6.63%, 09/25/19b | 100 | 117,500 | ||||||
|
| |||||||
2,763,613 |
Security | Principal (000s) | Value | ||||||
CHILE — 1.48% | ||||||||
Banco del Estado de Chile | ||||||||
4.13%, 10/07/20b | $ | 150 | $ | 165,309 | ||||
Celulosa Arauco y Constitucion SA | ||||||||
4.75%, 01/11/22 | 37 | 39,359 | ||||||
Empresa Nacional del Petroleo | ||||||||
4.75%, 12/06/21b | 100 | 109,361 | ||||||
|
| |||||||
314,029 | ||||||||
CHINA — 4.16% | ||||||||
Agile Property Holdings Ltd. | ||||||||
8.88%, 04/28/17 (Call 04/28/14)b | 100 | 104,380 | ||||||
CNOOC Finance 2012 Ltd. | ||||||||
5.00%, 05/02/42b | 400 | 464,000 | ||||||
CNPC (HK) Overseas Capital Ltd. | ||||||||
3.13%, 04/28/16b | 200 | 208,798 | ||||||
Evergrande Real Estate Group Ltd. | ||||||||
13.00%, 01/27/15b | 100 | 103,250 | ||||||
|
| |||||||
880,428 | ||||||||
COLOMBIA — 0.78% | ||||||||
Bancolombia SA | ||||||||
6.13%, 07/26/20 | 147 | 164,640 | ||||||
|
| |||||||
164,640 | ||||||||
HONG KONG — 5.45% | ||||||||
Bank of China Hong Kong Ltd. | ||||||||
5.55%, 02/11/20b | 100 | 113,969 | ||||||
Hongkong Land Finance Co. Ltd. | ||||||||
4.50%, 10/07/25 | 200 | 213,352 | ||||||
Hutchison Whampoa Finance (CI) Ltd. | ||||||||
7.45%, 08/01/17b | 100 | 124,443 | ||||||
Hutchison Whampoa International Ltd. | ||||||||
4.63%, 09/11/15b | 100 | 108,729 | ||||||
7.63%, 04/09/19b | 200 | 257,270 | ||||||
Li & Fung Ltd. | ||||||||
5.25%, 05/13/20 | 100 | 110,354 | ||||||
Noble Group Ltd. | ||||||||
6.75%, 01/29/20b | 100 | 108,000 | ||||||
Swire Pacific MTN Financing Ltd. | ||||||||
5.50%, 08/19/19 | 100 | 116,905 | ||||||
|
| |||||||
1,153,022 |
22 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® EMERGING MARKETS CORPORATE BOND FUND
October 31, 2012
Security | Principal (000s) | Value | ||||||
INDIA — 2.60% | ||||||||
Axis Bank Ltd. | ||||||||
4.75%, 05/02/16b | $ | 100 | $ | 103,526 | ||||
ICICI Bank Ltd. | ||||||||
5.00%, 01/15/16b | 116 | 121,693 | ||||||
5.75%, 11/16/20b | 200 | 217,589 | ||||||
Vedanta Resources PLC | ||||||||
9.50%, 07/18/18b | 100 | 108,250 | ||||||
|
| |||||||
551,058 | ||||||||
INDONESIA — 1.03% | ||||||||
PT Pertamina (Persero) Tbk | ||||||||
4.88%, 05/03/22b | 200 | 217,500 | ||||||
|
| |||||||
217,500 | ||||||||
ISRAEL — 1.35% | ||||||||
Israel Electric Corp. Ltd. | ||||||||
6.70%, 02/10/17b | 200 | 219,000 | ||||||
Teva Pharmaceutical Finance LLC | ||||||||
6.15%, 02/01/36 | 50 | 66,955 | ||||||
|
| |||||||
285,955 | ||||||||
JAMAICA — 0.52% | ||||||||
Digicel Ltd. | ||||||||
12.00%, 04/01/14 (Call 11/29/12)b | 100 | 110,500 | ||||||
|
| |||||||
110,500 | ||||||||
KAZAKHSTAN — 0.50% | ||||||||
Halyk Savings Bank of Kazakhstan JSC | ||||||||
7.25%, 05/03/17b | 100 | 105,750 | ||||||
|
| |||||||
105,750 | ||||||||
MEXICO — 6.43% | ||||||||
America Movil SAB de CV | ||||||||
3.13%, 07/16/22 | 400 | 412,475 | ||||||
5.00%, 03/30/20 | 100 | 117,640 | ||||||
6.13%, 03/30/40 | 100 | 132,064 | ||||||
BBVA Bancomer SA Texas Agency | ||||||||
4.50%, 03/10/16b | 158 | 167,677 | ||||||
Cemex Espana SA (Luxembourg) | ||||||||
9.88%, 04/30/19 (Call 04/30/16)b | 150 | 161,625 | ||||||
Cemex Finance LLC | ||||||||
9.50%, 12/14/16 (Call 12/14/13)b | 100 | 106,125 | ||||||
Grupo Bimbo SAB de CV | ||||||||
4.50%, 01/25/22b | 100 | 110,005 |
Security | Principal (000s) | Value | ||||||
Grupo Televisa SAB | ||||||||
6.63%, 01/15/40 | $ | 41 | $ | 55,109 | ||||
NII Capital Corp. | ||||||||
10.00%, 08/15/16 (Call 08/15/13) | 100 | 99,250 | ||||||
|
| |||||||
1,361,970 | ||||||||
PERU — 0.79% | ||||||||
Banco de Credito del Peru | ||||||||
5.38%, 09/16/20b | 100 | 110,500 | ||||||
Southern Copper Corp. | ||||||||
6.75%, 04/16/40 | 48 | 56,954 | ||||||
|
| |||||||
167,454 | ||||||||
QATAR — 2.69% | ||||||||
Qatari Diar Finance QSC | ||||||||
5.00%, 07/21/20b | 100 | 116,500 | ||||||
Qtel International Finance Ltd. | ||||||||
5.00%, 10/19/25b | 200 | 227,000 | ||||||
Ras Laffan Liquefied Natural Gas Co. Ltd. II | ||||||||
5.30%, 09/30/20b | 199 | 224,795 | ||||||
|
| |||||||
568,295 | ||||||||
RUSSIA — 6.49% | ||||||||
Alfa Bank OJSC Via Alfa Bond Issuance PLC | ||||||||
7.88%, 09/25/17b | 200 | 218,000 | ||||||
ALROSA Finance SA | ||||||||
8.88%, 11/17/14b | 100 | 110,880 | ||||||
Evraz Group SA | ||||||||
9.50%, 04/24/18b | 100 | 112,809 | ||||||
LUKOIL International Finance BV | ||||||||
6.38%, 11/05/14b | 100 | 108,552 | ||||||
6.66%, 06/07/22b | 120 | 144,948 | ||||||
Sberbank of Russia Via SB Capital SA | ||||||||
6.13%, 02/07/22b | 200 | 223,806 | ||||||
Severstal OAO Via Steel Capital SA | ||||||||
6.70%, 10/25/17b | 100 | 106,985 | ||||||
TNK-BP Finance SA | ||||||||
6.63%, 03/20/17b | 119 | 134,045 | ||||||
Vimpel Communications Via VIP Finance Ireland Ltd. OJSC | ||||||||
6.49%, 02/02/16b | 200 | 213,510 | ||||||
|
| |||||||
1,373,535 |
SCHEDULESOF INVESTMENTS | 23 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® EMERGING MARKETS CORPORATE BOND FUND
October 31, 2012
Security | Principal (000s) | Value | ||||||
SINGAPORE — 1.98% | ||||||||
DBS Bank Ltd. | ||||||||
2.35%, 02/28/17b | $ | 200 | $ | 206,104 | ||||
Oversea-Chinese Banking Corp. Ltd. | ||||||||
3.75%, 11/15/22 (Call 11/15/17)c | 100 | 103,759 | ||||||
PSA International Pte Ltd. | ||||||||
3.88%, 02/11/21b | 100 | 108,765 | ||||||
|
| |||||||
418,628 | ||||||||
SOUTH KOREA — 7.13% | ||||||||
Hana Bank | ||||||||
4.00%, 11/03/16b | 200 | 215,163 | ||||||
Hyundai Capital Services Inc. | ||||||||
6.00%, 05/05/15b | 200 | 220,630 | ||||||
Korea Gas Corp. | ||||||||
6.00%, 07/15/14b | 100 | 107,700 | ||||||
Korea Hydro & Nuclear Power Co. Ltd. | ||||||||
6.25%, 06/17/14b | 200 | 215,498 | ||||||
Korea National Oil Corp. | ||||||||
2.88%, 11/09/15b | �� | 200 | 208,457 | |||||
POSCO | ||||||||
8.75%, 03/26/14b | 100 | 109,815 | ||||||
Shinhan Bank | ||||||||
4.38%, 09/15/15b | 200 | 215,399 | ||||||
Woori Bank Co. Ltd. | ||||||||
4.75%, 01/20/16b | 200 | 217,557 | ||||||
|
| |||||||
1,510,219 | ||||||||
UKRAINE — 0.48% | ||||||||
Metinvest BV | ||||||||
10.25%, 05/20/15b | 100 | 102,090 | ||||||
|
| |||||||
102,090 | ||||||||
UNITED ARAB EMIRATES — 5.40% | ||||||||
Dolphin Energy Ltd. | ||||||||
5.89%, 06/15/19b | 94 | 107,198 | ||||||
DP World Ltd. | ||||||||
6.85%, 07/02/37b | 100 | 109,625 | ||||||
Dubai Electricity & Water Authority | ||||||||
7.38%, 10/21/20b | 100 | 118,500 | ||||||
IPIC GMTN Ltd. | ||||||||
5.00%, 11/15/20b | 250 | 278,125 |
Security | Principal (000s) | Value | ||||||
National Bank of Abu Dhabi PJSC | ||||||||
4.25%, 03/25/15b | $ | 200 | $ | 212,300 | ||||
Taqa Abu Dhabi National Energy Co. | ||||||||
4.75%, 09/15/14b | 300 | 316,950 | ||||||
|
| |||||||
1,142,698 | ||||||||
|
| |||||||
TOTAL CORPORATE BONDS & NOTES |
| |||||||
(Cost: $12,820,931) |
| 13,191,384 | ||||||
FOREIGN AGENCY OBLIGATIONSa — 35.84% |
| |||||||
BRAZIL — 7.07% |
| |||||||
Banco do Brasil SA | ||||||||
4.50%, 01/22/15b | 200 | 210,000 | ||||||
Banco Nacional de Desenvolvimento Economico e Social | ||||||||
6.50%, 06/10/19b | 100 | 124,750 | ||||||
Centrais Eletricas Brasileiras SA | ||||||||
6.88%, 07/30/19b | 100 | 118,250 | ||||||
Petrobras International Finance Co. | ||||||||
5.38%, 01/27/21 | 200 | 226,811 | ||||||
5.75%, 01/20/20 | 350 | 403,718 | ||||||
6.75%, 01/27/41 | 50 | 63,931 | ||||||
6.88%, 01/20/40 | 75 | 96,934 | ||||||
7.88%, 03/15/19 | 200 | 253,206 | ||||||
|
| |||||||
1,497,600 | ||||||||
CHILE — 0.96% | ||||||||
Corporacion Nacional del Cobre de Chile | ||||||||
4.25%, 07/17/42b | 200 | 203,248 | ||||||
|
| |||||||
203,248 | ||||||||
CHINA — 0.51% | ||||||||
Sinochem Overseas Capital Co. Ltd. | ||||||||
4.50%, 11/12/20b | 100 | 107,766 | ||||||
|
| |||||||
107,766 | ||||||||
COLOMBIA — 0.23% | ||||||||
Ecopetrol SA | ||||||||
7.63%, 07/23/19 | 37 | 47,915 | ||||||
|
| |||||||
47,915 | ||||||||
INDIA — 1.47% | ||||||||
Indian Oil Corp. Ltd. | ||||||||
4.75%, 01/22/15b | 100 | 104,631 |
24 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® EMERGING MARKETS CORPORATE BOND FUND
October 31, 2012
Security | Principal (000s) | Value | ||||||
State Bank of India | ||||||||
4.50%, 10/23/14 | $ | 200 | $ | 207,285 | ||||
|
| |||||||
311,916 | ||||||||
INDONESIA — 1.31% | ||||||||
Majapahit Holding BV | ||||||||
7.75%, 01/20/20b | 220 | 276,650 | ||||||
|
| |||||||
276,650 | ||||||||
KAZAKHSTAN — 1.23% | ||||||||
KazMunaiGaz National Co. | ||||||||
9.13%, 07/02/18b | 200 | 260,756 | ||||||
|
| |||||||
260,756 | ||||||||
MALAYSIA — 1.78% | ||||||||
Penerbangan Malaysia Bhd | ||||||||
5.63%, 03/15/16b | 100 | 112,715 | ||||||
Petronas Capital Ltd. | ||||||||
5.25%, 08/12/19b | 100 | 119,736 | ||||||
7.88%, 05/22/22b | 100 | 144,174 | ||||||
|
| |||||||
376,625 | ||||||||
MEXICO — 4.82% | ||||||||
Pemex Project Funding Master Trust | ||||||||
5.75%, 03/01/18 | 200 | 233,000 | ||||||
6.63%, 06/15/35 | 200 | 249,500 | ||||||
Petroleos Mexicanos | ||||||||
4.88%, 03/15/15 | 150 | 160,500 | ||||||
5.50%, 01/21/21 | 100 | 116,750 | ||||||
6.50%, 06/02/41 | 210 | 260,662 | ||||||
|
| |||||||
1,020,412 | ||||||||
PHILIPPINES — 0.56% | ||||||||
Power Sector Assets & Liabilities Management Corp. | ||||||||
6.88%, 11/02/16b | 100 | 118,250 | ||||||
|
| |||||||
118,250 | ||||||||
RUSSIA — 5.00% | ||||||||
Gazprom OAO Via Gaz Capital SA | ||||||||
4.95%, 05/23/16b | 259 | 276,260 | ||||||
7.29%, 08/16/37b | 100 | 129,500 | ||||||
Russian Agricultural Bank OJSC Via RSHB Capital SA | ||||||||
6.30%, 05/15/17b | 200 | 221,770 |
Security | Principal (000s) | Value | ||||||
Transneft OJSC Via TransCapitalInvest Ltd. | ||||||||
8.70%, 08/07/18b | $ | 100 | $ | 129,092 | ||||
Vnesheconombank Via VEB Finance PLC | ||||||||
5.45%, 11/22/17b | 100 | 109,367 | ||||||
VTB Bank OJSC Via VTB Capital SA | ||||||||
6.47%, 03/04/15b | 180 | 191,763 | ||||||
|
| |||||||
1,057,752 | ||||||||
SOUTH AFRICA — 1.04% | ||||||||
Eskom Holdings Ltd. | ||||||||
5.75%, 01/26/21b | 200 | 221,000 | ||||||
|
| |||||||
221,000 | ||||||||
SOUTH KOREA — 3.22% | ||||||||
Export-Import Bank of Korea (The) | ||||||||
4.38%, 09/15/21 | 200 | 224,796 | ||||||
8.13%, 01/21/14 | 125 | 135,238 | ||||||
Korea Development Bank | ||||||||
3.25%, 03/09/16 | 100 | 105,134 | ||||||
3.88%, 05/04/17 | 200 | 216,994 | ||||||
|
| |||||||
682,162 | ||||||||
UKRAINE — 0.48% | ||||||||
Naftogaz of Ukraine | ||||||||
9.50%, 09/30/14 | 100 | 101,880 | ||||||
|
| |||||||
101,880 | ||||||||
UNITED ARAB EMIRATES — 2.01% | ||||||||
MDC-GMTN BV | ||||||||
3.75%, 04/20/16b | 400 | 424,446 | ||||||
|
| |||||||
424,446 | ||||||||
VENEZUELA — 4.15% | ||||||||
Petroleos de Venezuela SA | ||||||||
8.50%, 11/02/17b | 220 | 197,450 | ||||||
9.00%, 11/17/21b | 350 | 289,625 | ||||||
12.75%, 02/17/22b | 200 | 205,500 | ||||||
Series 2014 | ||||||||
4.90%, 10/28/14 | 200 | 185,500 | ||||||
|
| |||||||
878,075 | ||||||||
|
| |||||||
TOTAL FOREIGN AGENCY OBLIGATIONS |
| |||||||
(Cost: $7,383,450) |
| 7,586,453 |
SCHEDULESOF INVESTMENTS | 25 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® EMERGING MARKETS CORPORATE BOND FUND
October 31, 2012
Security | Shares | Value | ||||||
SHORT-TERM INVESTMENTS — 0.45% |
| |||||||
MONEY MARKET FUNDS — 0.45% |
| |||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | ||||||||
0.08%d,e | 95,563 | $ | 95,563 | |||||
|
| |||||||
95,563 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $95,563) |
| 95,563 | ||||||
|
| |||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $20,299,944) |
| 20,873,400 | ||||||
Other Assets, Less Liabilities — 1.40% |
| 296,835 | ||||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 21,170,235 | |||||
|
|
a | Investments are denominated in U.S. dollars. |
b | This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933. |
c | Variable rate security. Rate shown is as of report date. |
d | Affiliated issuer. See Note 2. |
e | The rate quoted is the annualized seven-day yield of the fund at period end. |
See notes to financial statements.
26 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
iSHARES® EMERGING MARKETS HIGH YIELD BOND FUND
October 31, 2012
Security | Principal (000s) | Value | ||||||
CORPORATE BONDS & NOTESa — 25.95% |
| |||||||
BRAZIL — 4.17% | ||||||||
Fibria Overseas Finance Ltd. | ||||||||
6.75%, 03/03/21 (Call 03/03/16)b | $ | 300 | $ | 331,500 | ||||
7.50%, 05/04/20 (Call 05/04/15)b | 1,100 | 1,218,250 | ||||||
JBS USA LLC | ||||||||
7.25%, 06/01/21 (Call 06/01/15)b | 50 | 48,900 | ||||||
8.25%, 02/01/20 (Call 02/01/15)b | 1,080 | 1,115,100 | ||||||
11.63%, 05/01/14 | 600 | 672,000 | ||||||
OGX Austria GmbH | ||||||||
8.50%, 06/01/18 (Call 06/01/15)b | 4,060 | 3,542,350 | ||||||
|
| |||||||
6,928,100 | ||||||||
CHINA — 4.45% | ||||||||
Agile Property Holdings Ltd. | ||||||||
8.88%, 04/28/17 (Call 04/28/14)b | 1,600 | 1,670,080 | ||||||
CITIC Pacific Ltd. | ||||||||
6.63%, 04/15/21b | 1,500 | 1,538,023 | ||||||
CITIC Resources Finance 2007 Ltd. | ||||||||
6.75%, 05/15/14b | 600 | 628,350 | ||||||
Country Garden Holdings Co. Ltd. | ||||||||
11.25%, 04/22/17 (Call 04/22/14)b | 1,250 | 1,390,625 | ||||||
Evergrande Real Estate Group Ltd. | ||||||||
13.00%, 01/27/15b | 1,800 | 1,858,500 | ||||||
Shimao Property Holdings Ltd. | ||||||||
9.65%, 08/03/17 (Call 08/03/14)b | 300 | 318,103 | ||||||
|
| |||||||
7,403,681 | ||||||||
INDIA — 1.50% | ||||||||
ICICI Bank Ltd. | ||||||||
6.38%, 04/30/22 (Call 04/30/17)b,c | 454 | 458,540 | ||||||
Vedanta Resources PLC | ||||||||
8.25%, 06/07/21b | 200 | 205,500 |
Security | Principal (000s) | Value | ||||||
8.75%, 01/15/14b | $ | 350 | $ | 367,500 | ||||
9.50%, 07/18/18b | 1,350 | 1,461,375 | ||||||
|
| |||||||
2,492,915 | ||||||||
JAMAICA — 1.12% | ||||||||
Digicel Group Ltd. | ||||||||
10.50%, 04/15/18 (Call 04/15/14)b | 100 | 110,500 | ||||||
Digicel Ltd. | ||||||||
8.25%, 09/01/17 (Call 09/01/13)b | 1,630 | 1,752,250 | ||||||
|
| |||||||
1,862,750 | ||||||||
KAZAKHSTAN — 0.25% | ||||||||
Halyk Savings Bank of Kazakhstan JSC | ||||||||
7.25%, 05/03/17b | 200 | 211,500 | ||||||
7.25%, 01/28/21b | 200 | 208,440 | ||||||
|
| |||||||
419,940 | ||||||||
MEXICO — 4.50% |
| |||||||
Cemex Espana SA (Luxembourg) | ||||||||
9.25%, 05/12/20 (Call 05/12/15)b | 1,210 | 1,258,400 | ||||||
9.88%, 04/30/19 (Call 04/30/16)b | 2,250 | 2,424,375 | ||||||
Cemex Finance LLC | ||||||||
9.50%, 12/14/16 (Call 12/14/13)b | 1,200 | 1,273,500 | ||||||
Cemex SAB de CV | ||||||||
9.00%, 01/11/18 (Call 01/11/15)b | 397 | 411,888 | ||||||
NII Capital Corp. | ||||||||
10.00%, 08/15/16 (Call 08/15/13) | 2,120 | 2,104,100 | ||||||
|
| |||||||
7,472,263 | ||||||||
RUSSIA — 7.47% | ||||||||
Alfa Bank OJSC Via Alfa Bond Issuance PLC | ||||||||
7.75%, 04/28/21b | 400 | 435,520 | ||||||
7.88%, 09/25/17b | 1,200 | 1,308,000 | ||||||
ALROSA Finance SA | ||||||||
7.75%, 11/03/20b | 200 | 228,760 | ||||||
8.88%, 11/17/14b | 1,616 | 1,791,821 |
SCHEDULESOF INVESTMENTS | 27 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® EMERGING MARKETS HIGH YIELD BOND FUND
October 31, 2012
Security | Principal (000s) | Value | ||||||
Evraz Group SA | ||||||||
8.25%, 11/10/15b | $ | 400 | $ | 433,780 | ||||
9.50%, 04/24/18b | 1,640 | 1,850,067 | ||||||
Severstal OAO Via Steel Capital SA | ||||||||
6.70%, 10/25/17b | 1,500 | 1,604,775 | ||||||
Vimpel Communications Via VIP Finance Ireland Ltd. OJSC | ||||||||
7.75%, 02/02/21b | 200 | 220,000 | ||||||
9.13%, 04/30/18b | 3,100 | 3,630,193 | ||||||
VimpelCom Holdings BV | ||||||||
7.50%, 03/01/22b | 850 | 918,000 | ||||||
|
| |||||||
12,420,916 | ||||||||
SOUTH KOREA — 0.32% | ||||||||
Woori Bank Co. Ltd. | ||||||||
6.21%, 05/02/37 (Call 05/02/17)b,c | 500 | 528,750 | ||||||
|
| |||||||
528,750 | ||||||||
UKRAINE — 1.11% | ||||||||
Metinvest BV | ||||||||
10.25%, 05/20/15b | 1,600 | 1,633,440 | ||||||
Ukreximbank Via Biz Finance PLC | ||||||||
8.38%, 04/27/15b | 220 | 215,875 | ||||||
|
| |||||||
1,849,315 | ||||||||
UNITED ARAB EMIRATES — 1.06% | ||||||||
Atlantic Finance Ltd. | ||||||||
10.75%, 05/27/14b,d | 1,600 | 1,768,000 | ||||||
|
| |||||||
1,768,000 | ||||||||
|
| |||||||
TOTAL CORPORATE BONDS & NOTES | 43,146,630 | |||||||
FOREIGN AGENCY OBLIGATIONSa — 9.01% |
| |||||||
PHILIPPINES — 1.31% | ||||||||
Power Sector Assets & Liabilities Management Corp. | ||||||||
7.25%, 05/27/19b | 160 | 207,600 | ||||||
7.39%, 12/02/24b | 1,400 | 1,963,500 | ||||||
|
| |||||||
2,171,100 |
Security | Principal (000s) | Value | ||||||
TURKEY — 0.13% |
| |||||||
Export Credit Bank of Turkey | ||||||||
5.88%, 04/24/19b | $ | 200 | $ | 218,800 | ||||
|
| |||||||
218,800 | ||||||||
UKRAINE — 1.20% | ||||||||
Naftogaz of Ukraine | ||||||||
9.50%, 09/30/14 | 1,961 | 1,997,867 | ||||||
|
| |||||||
1,997,867 | ||||||||
VENEZUELA — 6.37% | ||||||||
Petroleos de Venezuela SA | ||||||||
5.38%, 04/12/27 | 2,270 | 1,418,750 | ||||||
5.50%, 04/12/37b | 400 | 245,000 | ||||||
8.50%, 11/02/17b | 200 | 179,500 | ||||||
9.00%, 11/17/21b | 2,950 | 2,441,125 | ||||||
12.75%, 02/17/22b | 2,970 | 3,051,675 | ||||||
Series 2014 | ||||||||
4.90%, 10/28/14 | 200 | 185,500 | ||||||
Series 2015 | ||||||||
5.00%, 10/28/15 | 3,500 | 3,062,500 | ||||||
|
| |||||||
10,584,050 | ||||||||
|
| |||||||
TOTAL FOREIGN AGENCY OBLIGATIONS |
| 14,971,817 | ||||||
FOREIGN GOVERNMENT OBLIGATIONSa — 60.90% |
| |||||||
ARGENTINA — 3.03% | ||||||||
Argentina (Republic of) | ||||||||
2.50%, 12/31/38d | 5,840 | 1,898,000 | ||||||
8.28%, 12/31/33 | 2,742 | 1,869,025 | ||||||
8.75%, 06/02/17 | 1,500 | 1,275,000 | ||||||
|
| |||||||
5,042,025 | ||||||||
BELARUS — 0.78% | ||||||||
Belarus (Republic of) | ||||||||
8.75%, 08/03/15b | 1,200 | 1,200,000 | ||||||
8.95%, 01/26/18b | 100 | 99,750 | ||||||
|
| |||||||
1,299,750 |
28 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® EMERGING MARKETS HIGH YIELD BOND FUND
October 31, 2012
Security | Principal (000s) | Value | ||||||
DOMINICAN REPUBLIC — 0.95% | ||||||||
Dominican Republic | ||||||||
7.50%, 05/06/21b | $ | 300 | $ | 352,500 | ||||
9.04%, 01/23/18b | 1,060 | 1,219,216 | ||||||
|
| |||||||
1,571,716 | ||||||||
ECUADOR — 0.12% | ||||||||
Ecuador (Republic of) | ||||||||
9.38%, 12/15/15b | 200 | 204,500 | ||||||
|
| |||||||
204,500 | ||||||||
EGYPT — 1.11% | ||||||||
Egypt (Arab Republic of) | ||||||||
5.75%, 04/29/20b | 1,600 | 1,644,000 | ||||||
6.88%, 04/30/40b | 200 | 199,500 | ||||||
|
| |||||||
1,843,500 | ||||||||
EL SALVADOR — 1.83% | ||||||||
El Salvador (Republic of) | ||||||||
7.63%, 02/01/41b | 150 | 174,375 | ||||||
7.65%, 06/15/35b | 985 | 1,145,062 | ||||||
7.75%, 01/24/23b | 200 | 239,000 | ||||||
7.75%, 01/24/23b | 520 | 621,400 | ||||||
8.25%, 04/10/32b | 50 | 61,250 | ||||||
8.25%, 04/10/32b | 650 | 796,250 | ||||||
|
| |||||||
3,037,337 | ||||||||
GUATEMALA — 0.14% | ||||||||
Guatemala (Republic of) | ||||||||
5.75%, 06/06/22b | 200 | 228,000 | ||||||
|
| |||||||
228,000 | ||||||||
HUNGARY — 4.86% | ||||||||
Hungary (Republic of) | ||||||||
4.75%, 02/03/15 | 2,095 | 2,144,756 | ||||||
6.25%, 01/29/20 | 1,300 | 1,440,140 | ||||||
6.38%, 03/29/21 | 2,420 | 2,695,396 | ||||||
7.63%, 03/29/41 | 1,510 | �� | 1,793,880 | |||||
|
| |||||||
8,074,172 | ||||||||
JAMAICA — 0.78% | ||||||||
Jamaica (Government of) | ||||||||
8.00%, 06/24/19 | 1,200 | 1,200,000 | ||||||
8.00%, 03/15/39 | 100 | 90,250 | ||||||
|
| |||||||
1,290,250 |
Security | Principal (000s) | Value | ||||||
LEBANON — 3.86% | ||||||||
Lebanon (Republic of) | ||||||||
4.75%, 11/02/16b | $ | 910 | $ | 907,725 | ||||
5.15%, 06/12/18 | 200 | 195,101 | ||||||
5.15%, 11/12/18 | 2,350 | 2,326,500 | ||||||
7.38%, 04/14/14b | 100 | 107,000 | ||||||
8.50%, 01/19/16b | 250 | 278,750 | ||||||
9.00%, 03/20/17 | 2,260 | 2,599,000 | ||||||
|
| |||||||
6,414,076 | ||||||||
PAKISTAN — 0.27% | ||||||||
Pakistan (Islamic Republic of) | ||||||||
6.88%, 06/01/17b | 400 | 360,000 | ||||||
7.13%, 03/31/16b | 100 | 93,000 | ||||||
|
| |||||||
453,000 | ||||||||
PHILIPPINES — 10.03% | ||||||||
Philippines (Republic of the) | ||||||||
4.00%, 01/15/21 | 1,420 | 1,592,175 | ||||||
5.00%, 01/13/37 | 460 | 547,975 | ||||||
5.50%, 03/30/26 | 200 | 253,000 | ||||||
6.38%, 01/15/32 | 100 | 136,875 | ||||||
6.38%, 10/23/34 | 1,300 | 1,807,000 | ||||||
6.50%, 01/20/20 | 2,900 | 3,708,375 | ||||||
7.75%, 01/14/31 | 1,300 | 2,008,500 | ||||||
8.00%, 01/15/16 | 100 | 120,625 | ||||||
8.38%, 06/17/19 | 1,200 | 1,656,000 | ||||||
9.38%, 01/18/17 | 50 | 66,000 | ||||||
9.50%, 02/02/30 | 1,573 | 2,748,817 | ||||||
9.88%, 01/15/19 | 1,400 | 2,030,000 | ||||||
|
| |||||||
16,675,342 | ||||||||
ROMANIA — 1.08% | ||||||||
Romania (Republic of) | ||||||||
6.75%, 02/07/22b | 1,560 | 1,801,800 | ||||||
|
| |||||||
1,801,800 | ||||||||
SERBIA — 0.71% | ||||||||
Serbia (Republic of) | ||||||||
6.75%, 11/01/24 (Call 05/01/13)b,d | 983 | 973,500 | ||||||
7.25%, 09/28/21b | 200 | 213,000 | ||||||
|
| |||||||
1,186,500 |
SCHEDULESOF INVESTMENTS | 29 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® EMERGING MARKETS HIGH YIELD BOND FUND
October 31, 2012
Security | Principal (000s) | Value | ||||||
SRI LANKA — 2.17% | ||||||||
Sri Lanka (Democratic Socialist Republic of) | ||||||||
6.25%, 10/04/20b | $ | 1,350 | $ | 1,512,000 | ||||
7.40%, 01/22/15b | 1,910 | 2,096,225 | ||||||
|
| |||||||
3,608,225 | ||||||||
TURKEY — 14.18% | ||||||||
Turkey (Republic of) | ||||||||
5.13%, 03/25/22 | 642 | 720,645 | ||||||
5.63%, 03/30/21 | 400 | 465,000 | ||||||
6.00%, 01/14/41 | 400 | 470,000 | ||||||
6.25%, 09/26/22 | 2,800 | 3,392,200 | ||||||
6.75%, 04/03/18 | 1,250 | 1,488,125 | ||||||
6.75%, 05/30/40 | 2,330 | 2,990,555 | ||||||
6.88%, 03/17/36 | 1,320 | 1,698,576 | ||||||
7.00%, 09/26/16 | 200 | 232,500 | ||||||
7.00%, 03/11/19 | 1,100 | 1,349,150 | ||||||
7.00%, 06/05/20 | 2,750 | 3,433,375 | ||||||
7.25%, 03/15/15 | 900 | 1,004,850 | ||||||
7.25%, 03/05/38 | 10 | 13,500 | ||||||
7.38%, 02/05/25 | 1,520 | 1,987,400 | ||||||
7.50%, 07/14/17 | 1,200 | 1,448,160 | ||||||
7.50%, 11/07/19 | 150 | 190,425 | ||||||
8.00%, 02/14/34 | 343 | 490,490 | ||||||
9.50%, 01/15/14 | 696 | 758,640 | ||||||
11.88%, 01/15/30 | 760 | 1,442,100 | ||||||
|
| |||||||
23,575,691 | ||||||||
UKRAINE — 3.62% | ||||||||
Ukraine (Government of) | ||||||||
6.25%, 06/17/16b | 200 | 197,364 | ||||||
6.58%, 11/21/16b | 2,580 | 2,553,065 | ||||||
6.75%, 11/14/17b | 1,100 | 1,088,340 | ||||||
7.75%, 09/23/20b | 1,477 | 1,541,427 | ||||||
7.95%, 02/23/21b | 600 | 635,364 | ||||||
|
| |||||||
6,015,560 | ||||||||
VENEZUELA — 10.16% |
| |||||||
Venezuela (Bolivarian Republic of) | ||||||||
5.75%, 02/26/16b | 885 | 816,412 | ||||||
7.00%, 12/01/18b | 2,800 | 2,408,000 | ||||||
7.65%, 04/21/25 | 1,650 | 1,299,375 |
Security | Principal (000s) or Shares | Value | ||||||
7.75%, 10/13/19b | $ | 1,850 | $ | 1,609,500 | ||||
8.25%, 10/13/24b | 650 | 536,250 | ||||||
8.50%, 10/08/14 | 990 | 1,004,850 | ||||||
9.00%, 05/07/23b | 3,280 | 2,878,200 | ||||||
9.25%, 09/15/27 | 140 | 126,350 | ||||||
9.25%, 05/07/28b | 3,200 | 2,824,000 | ||||||
9.38%, 01/13/34 | 1,010 | 896,375 | ||||||
11.95%, 08/05/31b | 340 | 347,650 | ||||||
12.75%, 08/23/22b | 2,000 | 2,145,000 | ||||||
|
| |||||||
16,891,962 | ||||||||
VIETNAM — 1.22% | ||||||||
Vietnam (Socialist Republic of) | ||||||||
6.75%, 01/29/20b | 1,640 | 1,914,700 | ||||||
6.88%, 01/15/16b | 100 | 110,500 | ||||||
|
| |||||||
2,025,200 | ||||||||
|
| |||||||
TOTAL FOREIGN GOVERNMENT OBLIGATIONS |
| 101,238,606 | ||||||
SHORT-TERM INVESTMENTS — 1.06% |
| |||||||
MONEY MARKET FUNDS — 1.06% |
| |||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | ||||||||
0.08%e,f | 1,763,512 | 1,763,512 | ||||||
|
| |||||||
1,763,512 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS | ||||||||
(Cost: $1,763,512) | 1,763,512 | |||||||
|
| |||||||
TOTAL INVESTMENTS | ||||||||
(Cost: $161,602,189) | 161,120,565 | |||||||
Other Assets, Less Liabilities — 3.08% |
| 5,110,471 | ||||||
|
| |||||||
NET ASSETS — 100.00% | $ | 166,231,036 | ||||||
|
|
a | Investments are denominated in U.S. dollars. |
b | This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933. |
c | Variable rate security. Rate shown is as of report date. |
d | Step coupon security. Coupon rate will either increase (step-up bond) or decrease (step-down bond) at regular intervals until maturity. Interest rate shown reflects the rate currently in effect. |
e | Affiliated issuer. See Note 2. |
f | The rate quoted is the annualized seven-day yield of the fund at period end. |
See notes to financial statements.
30 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
iSHARES® EMERGING MARKETS LOCAL CURRENCY BOND FUND
October 31, 2012
Security | Principal (000s) | Value | ||||||||||
FOREIGN GOVERNMENT OBLIGATIONS — 97.51% |
| |||||||||||
BRAZIL — 11.75% | ||||||||||||
Brazil (Federative Republic of) | ||||||||||||
0.00%, 01/01/15 | BRL | 16,504 | $ | 6,896,114 | ||||||||
9.76%, 01/01/13 | BRL | 19,994 | 9,890,791 | |||||||||
9.76%, 01/01/21 | BRL | 14,716 | 7,628,767 | |||||||||
|
| |||||||||||
24,415,672 | ||||||||||||
CHILE — 0.11% | ||||||||||||
Chile (Republic of) | ||||||||||||
5.50%, 08/05/20 | CLP | 100,000 | 225,163 | |||||||||
|
| |||||||||||
225,163 | ||||||||||||
COLOMBIA — 4.23% | ||||||||||||
Colombia (Republic of) | ||||||||||||
7.50%, 08/26/26 | COP | 1,000,000 | 603,648 | |||||||||
9.25%, 05/14/14 | COP | 10,000,000 | 5,798,384 | |||||||||
9.85%, 06/28/27 | COP | 2,802,000 | 2,383,199 | |||||||||
|
| |||||||||||
8,785,231 | ||||||||||||
CZECH REPUBLIC — 4.41% | ||||||||||||
Czech (Republic of) | ||||||||||||
2.80%, 09/16/13 | CZK | 57,400 | 3,025,754 | |||||||||
4.60%, 08/18/18 | CZK | 64,610 | 3,937,917 | |||||||||
5.70%, 05/25/24 | CZK | 31,870 | 2,196,654 | |||||||||
|
| |||||||||||
9,160,325 | ||||||||||||
EGYPT — 2.07% | ||||||||||||
Egypt (Arab Republic of) | ||||||||||||
16.15%, 01/17/15 | EGP | 13,000 | 2,212,839 | |||||||||
16.15%, 07/03/15 | EGP | 12,500 | 2,080,593 | |||||||||
|
| |||||||||||
4,293,432 | ||||||||||||
HUNGARY — 4.26% | ||||||||||||
Hungary (Republic of) | ||||||||||||
5.50%, 02/12/16 | HUF | 1,447,000 | 6,459,569 | |||||||||
6.00%, 11/24/23 | HUF | 265,200 | 1,113,521 | |||||||||
6.75%, 02/12/13 | HUF | 281,000 | 1,284,198 | |||||||||
|
| |||||||||||
8,857,288 | ||||||||||||
INDONESIA — 4.36% | ||||||||||||
Indonesia (Republic of) | ||||||||||||
9.50%, 06/15/15 | IDR | 3,096,000 | 354,849 | |||||||||
9.50%, 07/15/31 | IDR | 40,488,000 | 5,580,389 | |||||||||
10.00%, 07/15/17 | IDR | 20,752,000 | 2,564,109 |
Security | Principal (000s) | Value | ||||||||||
10.00%, 09/15/24 | IDR | 3,168,000 | $ | 439,001 | ||||||||
11.00%, 09/15/25 | IDR | 840,000 | 124,857 | |||||||||
|
| |||||||||||
9,063,205 | ||||||||||||
ISRAEL — 4.43% | ||||||||||||
Israel (State of) | ||||||||||||
3.50%, 09/30/13 | ILS | 11,572 | 3,018,578 | |||||||||
6.00%, 02/28/19 | ILS | 20,794 | 6,179,652 | |||||||||
|
| |||||||||||
9,198,230 | ||||||||||||
MALAYSIA — 4.45% | ||||||||||||
Malaysia (Federation of) | ||||||||||||
3.70%, 02/25/13 | MYR | 7,470 | 2,457,252 | |||||||||
5.73%, 07/30/19 | MYR | 18,090 | 6,781,553 | |||||||||
|
| |||||||||||
9,238,805 | ||||||||||||
MEXICO — 7.27% | ||||||||||||
United Mexican States | ||||||||||||
6.25%, 06/16/16 | MXN | 20,756 | 1,645,133 | |||||||||
6.50%, 06/10/21 | MXN | 12,887 | 1,049,869 | |||||||||
6.50%, 06/09/22 | MXN | 40,945 | 3,349,168 | |||||||||
7.25%, 12/15/16 | MXN | 49,368 | 4,068,666 | |||||||||
7.75%, 11/13/42 | MXN | 14,189 | 1,236,583 | |||||||||
8.50%, 11/18/38 | MXN | 14,330 | 1,355,059 | |||||||||
9.00%, 06/20/13 | MXN | 30,546 | 2,394,513 | |||||||||
|
| |||||||||||
15,098,991 | ||||||||||||
PERU — 1.09% | ||||||||||||
Peru (Republic of) | ||||||||||||
8.20%, 08/12/26 | PEN | 4,300 | 2,267,559 | |||||||||
|
| |||||||||||
2,267,559 | ||||||||||||
PHILIPPINES — 4.46% | ||||||||||||
Philippines (Republic of the) | ||||||||||||
4.95%, 01/15/21 | PHP | 100,000 | 2,669,814 | |||||||||
7.00%, 01/27/16 | PHP | 88,380 | 2,356,793 | |||||||||
8.13%, 12/16/35 | PHP | 136,400 | 4,247,820 | |||||||||
|
| |||||||||||
9,274,427 | ||||||||||||
POLAND — 6.29% | ||||||||||||
Poland (Republic of) | ||||||||||||
0.00%, 01/25/14 | PLN | 19,230 | 5,748,384 | |||||||||
5.25%, 04/25/13 | PLN | 4,503 | 1,416,547 | |||||||||
5.75%, 04/25/14 | PLN | 2,394 | 768,988 | |||||||||
5.75%, 09/23/22 | PLN | 14,977 | 5,134,771 | |||||||||
|
| |||||||||||
13,068,690 |
SCHEDULESOF INVESTMENTS | 31 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® EMERGING MARKETS LOCAL CURRENCY BOND FUND
October 31, 2012
Security | Principal (000s) | Value | ||||||||||
RUSSIA — 4.19% | ||||||||||||
Russian Federation (The) | ||||||||||||
7.85%, 03/10/18a | RUB | 255,000 | $ | 8,707,644 | ||||||||
|
| |||||||||||
8,707,644 | ||||||||||||
SOUTH AFRICA — 4.13% | ||||||||||||
South Africa (Republic of) | ||||||||||||
6.25%, 03/31/36 | ZAR | 7,312 | 648,996 | |||||||||
6.50%, 02/28/41 | ZAR | 20,500 | 1,845,853 | |||||||||
8.25%, 09/15/17 | ZAR | 48,185 | 6,094,966 | |||||||||
|
| |||||||||||
8,589,815 | ||||||||||||
SOUTH KOREA — 21.13% | ||||||||||||
Korea (Republic of) | ||||||||||||
3.00%, 12/10/13 | KRW | 9,410,000 | 8,649,331 | |||||||||
3.75%, 06/10/13 | KRW | 10,801,680 | 9,963,188 | |||||||||
4.00%, 12/10/31 | KRW | 2,384,120 | 2,500,134 | |||||||||
4.25%, 12/10/12 | KRW | 2,146,290 | 1,970,792 | |||||||||
4.75%, 09/17/13 | KRW | 1,396,960 | 1,302,885 | |||||||||
4.75%, 12/10/30 | KRW | 525,000 | 597,545 | |||||||||
5.25%, 09/10/15 | KRW | 11,702,460 | 11,434,525 | |||||||||
5.50%, 09/10/17 | KRW | 481,600 | 494,075 | |||||||||
5.50%, 12/10/29 | KRW | 5,259,930 | 6,421,928 | |||||||||
5.75%, 09/10/13 | KRW | 600,300 | 564,185 | |||||||||
|
| |||||||||||
43,898,588 | ||||||||||||
THAILAND — 4.47% | ||||||||||||
Thailand (Kingdom of) | ||||||||||||
3.13%, 12/11/15 | THB | 108,300 | 3,545,526 | |||||||||
3.63%, 05/22/15 | THB | 77,731 | 2,576,865 | |||||||||
5.67%, 03/13/28 | THB | 52,626 | 2,129,902 | |||||||||
6.15%, 07/07/26 | THB | 25,029 | 1,038,422 | |||||||||
|
| |||||||||||
9,290,715 | ||||||||||||
TURKEY — 4.41% | ||||||||||||
Turkey (Republic of) | ||||||||||||
9.00%, 01/27/16 | TRY | 11,810 | 6,910,281 | |||||||||
10.00%, 01/09/13 | TRY | 3,993 | 2,244,046 | |||||||||
|
| |||||||||||
9,154,327 | ||||||||||||
|
| |||||||||||
TOTAL FOREIGN GOVERNMENT OBLIGATIONS (Cost: $200,551,110) |
| 202,588,107 |
Security | Shares | Value | ||||||||
SHORT-TERM INVESTMENTS — 0.47% |
| |||||||||
MONEY MARKET FUNDS — 0.47% |
| |||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | ||||||||||
0.08%b,c | 980,191 | $ | 980,191 | |||||||
|
| |||||||||
980,191 | ||||||||||
|
| |||||||||
TOTAL SHORT-TERM INVESTMENTS (Cost: $980,191) |
| 980,191 | ||||||||
|
| |||||||||
TOTAL INVESTMENTS |
| 203,568,298 | ||||||||
Other Assets, Less Liabilities — 2.02% |
| 4,185,186 | ||||||||
|
| |||||||||
NET ASSETS — 100.00% |
| $ | 207,753,484 | |||||||
|
|
BRL — Brazilian Real
CLP — Chilean Peso
COP — Colombian Peso
CZK — Czech Koruna
EGP — Egyptian Pound
HUF — Hungarian Forint
IDR — Indonesian Rupiah
ILS — Israeli Shekel
KRW — South Korean Won
MXN — Mexican Peso
MYR — Malaysian Ringgit
PEN — Peru Nuevo
PHP — Philippine Peso
PLN — Polish Zloty
RUB — New Russian Ruble
THB — Thai Baht
TRY — Turkish Lira
ZAR — South African Rand
a | This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933. |
b | Affiliated issuer. See Note 2. |
c | The rate quoted is the annualized seven-day yield of the fund at period end. |
See notes to financial statements.
32 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
iSHARES® GLOBAL EX USD HIGH YIELD CORPORATE BOND FUND
October 31, 2012
Security | Principal (000s) | Value | ||||||||||
CORPORATE BONDS & NOTES — 96.66% |
| |||||||||||
AUSTRALIA — 0.52% |
| |||||||||||
Santos Finance Ltd. |
| |||||||||||
8.25%, 09/22/70 (Call 09/22/17)a | EUR | 100 | $ | 135,411 | ||||||||
|
| |||||||||||
135,411 | ||||||||||||
CANADA — 4.30% | ||||||||||||
Air Canada | ||||||||||||
10.13%, 08/01/15 (Call 11/29/12)b | CAD | 150 | 155,783 | |||||||||
Bombardier Inc. | ||||||||||||
6.13%, 05/15/21c | EUR | 200 | 273,420 | |||||||||
Connacher Oil and Gas Ltd. | ||||||||||||
8.75%, 08/01/18 (Call 08/01/15)b | CAD | 100 | 83,987 | |||||||||
Gateway Casinos & Entertainment Ltd. | ||||||||||||
8.88%, 11/15/17 (Call 11/15/13)b | CAD | 100 | 105,553 | |||||||||
Great Canadian Gaming Corp. | ||||||||||||
6.63%, 07/25/22 (Call 07/25/17)b | CAD | 25 | 25,888 | |||||||||
Paramount Resources Ltd. | ||||||||||||
8.25%, 12/13/17 | CAD | 150 | 158,329 | |||||||||
Quebecor Media Inc. | ||||||||||||
7.38%, 01/15/21 (Call 01/15/16)b | CAD | 150 | 161,330 | |||||||||
Vermilion Energy Inc. | ||||||||||||
6.50%, 02/10/16 | CAD | 100 | 106,303 | |||||||||
Yellow Media Inc. | ||||||||||||
7.75%, 03/02/20 | CAD | 75 | 47,649 | |||||||||
|
| |||||||||||
1,118,242 | ||||||||||||
FINLAND — 1.52% | ||||||||||||
Nokia OYJ | ||||||||||||
5.50%, 02/04/14c | EUR | 200 | 264,252 | |||||||||
Stora Enso OYJ | ||||||||||||
5.50%, 03/07/19c | EUR | 100 | 131,796 | |||||||||
|
| |||||||||||
396,048 |
Security | Principal (000s) | Value | ||||||||||
FRANCE — 14.42% | ||||||||||||
Alcatel-Lucent | ||||||||||||
8.50%, 01/15/16 | EUR | 100 | $ | 119,743 | ||||||||
Cegedim SA | ||||||||||||
7.00%, 07/27/15 | EUR | 50 | 61,308 | |||||||||
CMA CGM SA | ||||||||||||
8.88%, 04/15/19 (Call 04/15/15)c | EUR | 100 | 94,490 | |||||||||
Crown European Holdings SA | ||||||||||||
7.13%, 08/15/18 (Call 08/15/14)c | EUR | 100 | 140,999 | |||||||||
Faurecia SA | ||||||||||||
9.38%, 12/15/16c | EUR | 100 | 141,255 | |||||||||
Groupama SA | ||||||||||||
7.88%, 10/27/39 (Call 10/27/19)a | EUR | 150 | 141,573 | |||||||||
Labco SAS | ||||||||||||
8.50%, 01/15/18 (Call 01/15/14)c | EUR | 125 | 161,235 | |||||||||
Lafarge SA | ||||||||||||
5.38%, 06/26/17c | EUR | 550 | 765,548 | |||||||||
Nexans SA | ||||||||||||
5.75%, 05/02/17 | EUR | 100 | 134,660 | |||||||||
PagesJaunes Finance & Co. | ||||||||||||
8.88%, 06/01/18 (Call 06/01/14)c | EUR | 100 | 103,346 | |||||||||
Peugeot SA | ||||||||||||
5.63%, 07/11/17 | EUR | 300 | 374,569 | |||||||||
Renault SA | ||||||||||||
5.63%, 06/30/15 | EUR | 500 | 682,924 | |||||||||
Rexel SA | ||||||||||||
8.25%, 12/15/16 | EUR | 250 | 354,308 | |||||||||
Wendel SA | ||||||||||||
4.38%, 08/09/17 | EUR | 150 | 197,130 | |||||||||
4.88%, 09/21/15 | EUR | 100 | 134,847 | |||||||||
6.75%, 04/20/18 | EUR | 100 | 140,775 | |||||||||
|
| |||||||||||
3,748,710 |
SCHEDULESOF INVESTMENTS | 33 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® GLOBAL EX USD HIGH YIELD CORPORATE BOND FUND
October 31, 2012
Security | Principal (000s) | Value | ||||||||||
GERMANY — 12.41% | ||||||||||||
ATU Auto-Teile-Unger Handels GmbH & Co. KG | ||||||||||||
11.00%, 05/15/14c | EUR | 100 | $ | 125,697 | ||||||||
Beverage Packaging Holdings (Luxembourg) II SA | ||||||||||||
9.50%, 06/15/17 (Call 11/29/12)c | EUR | 150 | 193,074 | |||||||||
Deutsche Lufthansa AG | ||||||||||||
6.75%, 03/24/14 | EUR | 150 | 208,350 | |||||||||
FMC Finance VIII SA | ||||||||||||
6.50%, 09/15/18c | EUR | 250 | 374,810 | |||||||||
Franz Haniel & Cie GmbH | ||||||||||||
5.88%, 02/01/17 | EUR | 250 | 354,272 | |||||||||
Hapag-Lloyd AG | ||||||||||||
9.00%, 10/15/15 (Call 10/15/13)c | EUR | 100 | 135,767 | |||||||||
Heckler & Koch GmbH | ||||||||||||
9.50%, 05/15/18 (Call 05/15/14)c | EUR | 100 | 111,455 | |||||||||
Heidelberger Druckmaschinen AG | ||||||||||||
9.25%, 04/15/18 (Call 04/15/14)c | EUR | 50 | 53,865 | |||||||||
Kabel Deutschland Vertrieb und Service GmbH | ||||||||||||
6.50%, 06/29/18 (Call 06/30/14)c | EUR | 100 | 138,327 | |||||||||
Kinove German Bondco GmbH | ||||||||||||
10.00%, 06/15/18 (Call 06/15/14)c | EUR | 90 | 126,636 | |||||||||
Styrolution Group GmbH | ||||||||||||
7.63%, 05/15/16 (Call 05/15/13)c | EUR | 125 | 155,091 | |||||||||
ThyssenKrupp AG | ||||||||||||
4.38%, 02/28/17 | EUR | 250 | 343,079 | |||||||||
Unitymedia Hessen GmbH & Co. KG/Unitymedia NRW GmbH | ||||||||||||
7.50%, 03/15/19 (Call 03/15/15)c | EUR | 100 | 141,573 | |||||||||
8.13%, 12/01/17 (Call 12/01/12)c | EUR | 300 | 418,887 |
Security | Principal (000s) | Value | ||||||||||
Unitymedia KabelBW GmbH | ||||||||||||
9.50%, 03/15/21 (Call 03/15/16)c | EUR | 100 | $ | 146,432 | ||||||||
UPCB Finance II Ltd. | ||||||||||||
6.38%, 07/01/20 (Call 07/01/15)c | EUR | 150 | 200,717 | |||||||||
|
| |||||||||||
3,228,032 | ||||||||||||
GREECE — 0.87% | ||||||||||||
OTE PLC | ||||||||||||
7.25%, 02/12/15c,d | EUR | 200 | 226,990 | |||||||||
|
| |||||||||||
226,990 | ||||||||||||
IRELAND — 2.64% | ||||||||||||
Ardagh Glass Finance PLC | ||||||||||||
7.13%, 06/15/17 (Call 06/15/13)c | EUR | 150 | 195,964 | |||||||||
Ardagh Packaging Finance PLC | ||||||||||||
7.38%, 10/15/17 (Call 10/15/14)c | EUR | 150 | 205,313 | |||||||||
Smurfit Kappa Acquisitions | ||||||||||||
7.75%, 11/15/19 (Call 11/15/14)c | EUR | 200 | 284,644 | |||||||||
|
| |||||||||||
685,921 | ||||||||||||
ITALY — 6.68% | ||||||||||||
Banca Monte dei Paschi di Siena SpA | ||||||||||||
4.88%, 05/31/16 | EUR | 150 | 185,380 | |||||||||
Banca Popolare di Milano Scarl | ||||||||||||
7.13%, 03/01/21c | EUR | 100 | 127,223 | |||||||||
Banco Popolare | ||||||||||||
6.00%, 11/05/20 | EUR | 150 | 186,117 | |||||||||
Edison SpA | ||||||||||||
4.25%, 07/22/14c | EUR | 350 | 474,984 | |||||||||
Italcementi Finance SA | ||||||||||||
6.63%, 03/19/20d | EUR | 150 | 194,451 | |||||||||
Lottomatica Group SpA | ||||||||||||
8.25%, 03/31/66 (Call 03/31/16a,c | EUR | 50 | 64,924 | |||||||||
Wind Acquisition Finance SA | ||||||||||||
11.75%, 07/15/17 (Call 07/15/13)c | EUR | 400 | 503,030 | |||||||||
|
| |||||||||||
1,736,109 |
34 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® GLOBAL EX USD HIGH YIELD CORPORATE BOND FUND
October 31, 2012
Security | Principal (000s) | Value | ||||||||||
JAPAN — 0.75% | ||||||||||||
Tokyo Electric Power Co. Inc. | ||||||||||||
4.50%, 03/24/14 | EUR | 150 | $ | 196,374 | ||||||||
|
| |||||||||||
196,374 | ||||||||||||
LUXEMBOURG — 10.11% | ||||||||||||
Capsugel FinanceCo SCA | ||||||||||||
9.88%, 08/01/19 (Call 08/01/14)c | EUR | 100 | 146,270 | |||||||||
ConvaTec Healthcare E SA | ||||||||||||
7.38%, 12/15/17 (Call 12/15/13)c | EUR | 150 | 208,144 | |||||||||
Fiat Finance & Trade SA | ||||||||||||
6.38%, 04/01/16c | EUR | 550 | 712,690 | |||||||||
Fiat Industrial Finance Europe SA | ||||||||||||
5.25%, 03/11/15c | EUR | 550 | 742,980 | |||||||||
KION Finance SA | ||||||||||||
7.88%, 04/15/18 (Call 04/15/14)c | EUR | 100 | 136,279 | |||||||||
Numericable Finance & Co. | ||||||||||||
12.38%, 02/15/19 (Call 02/15/16)c | EUR | 100 | 149,453 | |||||||||
Ontex IV SA | ||||||||||||
7.50%, 04/15/18 (Call 04/15/14)c | EUR | 100 | 135,249 | |||||||||
Telenet Finance III Luxembourg SCA | ||||||||||||
6.63%, 02/15/21 (Call 02/15/16)c | EUR | 100 | 134,925 | |||||||||
Xefin Lux SCA | ||||||||||||
8.00%, 06/01/18 (Call 06/01/14)c | EUR | 100 | 132,577 | |||||||||
Zinc Capital SA | ||||||||||||
8.88%, 05/15/18 (Call 05/15/14)c | EUR | 100 | 129,386 | |||||||||
|
| |||||||||||
2,627,953 | ||||||||||||
NETHERLANDS — 10.59% | ||||||||||||
Conti-Gummi Finance BV | ||||||||||||
7.50%, 09/15/17 (Call 09/15/13)c | EUR | 300 | 416,684 |
Security | Principal (000s) | Value | ||||||||||
Goodyear Dunlop Tires Europe BV | ||||||||||||
6.75%, 04/15/19 (Call 04/15/15)c | EUR | 100 | $ | 136,700 | ||||||||
HeidelbergCement Finance BV | ||||||||||||
8.00%, 01/31/17c | EUR | 500 | 752,558 | |||||||||
OI European Group BV | ||||||||||||
6.75%, 09/15/20c | EUR | 100 | 144,175 | |||||||||
Phoenix PIB Finance BV | ||||||||||||
9.63%, 07/15/14c | EUR | 125 | 180,000 | |||||||||
Refresco Group BV | ||||||||||||
7.38%, 05/15/18 (Call 05/15/14)c | EUR | 100 | 127,528 | |||||||||
Schaeffler Finance BV | ||||||||||||
7.75%, 02/15/17c | EUR | 250 | 356,952 | |||||||||
UPC Holding BV | ||||||||||||
8.38%, 08/15/20 (Call 08/15/15)c | EUR | 200 | 282,815 | |||||||||
Ziggo Bond Co. BV | ||||||||||||
8.00%, 05/15/18 (Call 05/15/14)c | EUR | 250 | 355,298 | |||||||||
|
| |||||||||||
2,752,710 | ||||||||||||
NORWAY — 0.37% | ||||||||||||
Norske Skogindustrier ASA | ||||||||||||
7.00%, 06/26/17 | EUR | 100 | 96,127 | |||||||||
|
| |||||||||||
96,127 | ||||||||||||
PORTUGAL — 8.19% | ||||||||||||
Banco Comercial Portugues SA | ||||||||||||
5.63%, 04/23/14 | EUR | 350 | 454,093 | |||||||||
Banco Espirito Santo SA | ||||||||||||
5.63%, 06/05/14 | EUR | 400 | 519,702 | |||||||||
Caixa Geral de Depositos SA | ||||||||||||
5.13%, 02/19/14 | EUR | 400 | 522,553 | |||||||||
Espirito Santo Financial Group SA | ||||||||||||
6.88%, 10/21/19 | EUR | 100 | 108,523 | |||||||||
Portugal Telecom International Finance BV | ||||||||||||
4.38%, 03/24/17 | EUR | 250 | 320,802 | |||||||||
REN — Redes Energeticas Nacionais SA | ||||||||||||
7.88%, 12/10/13c | EUR | 150 | 203,700 | |||||||||
|
| |||||||||||
2,129,373 |
SCHEDULESOF INVESTMENTS | 35 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® GLOBAL EX USD HIGH YIELD CORPORATE BOND FUND
October 31, 2012
Security | Principal (000s) | Value | ||||||||||
SPAIN — 5.06% | ||||||||||||
Abengoa SA | ||||||||||||
9.63%, 02/25/15c | EUR | 200 | $ | 269,682 | ||||||||
Banco Sabadell SA | ||||||||||||
6.25%, 04/26/20 | EUR | 50 | 53,452 | |||||||||
Campofrio Food Group SA | ||||||||||||
8.25%, 10/31/16 (Call 10/31/13)c | EUR | 125 | 167,852 | |||||||||
Cirsa Funding Luxembourg SA | ||||||||||||
8.75%, 05/15/18 (Call 05/15/14)c | EUR | 150 | 185,380 | |||||||||
Inaer Aviation Finance Ltd. | ||||||||||||
9.50%, 08/01/17 (Call 08/01/13)c | EUR | 100 | 120,840 | |||||||||
Nara Cable Funding Ltd. | ||||||||||||
8.88%, 12/01/18 (Call 12/01/13)c | EUR | 200 | 244,744 | |||||||||
Obrascon Huarte Lain SA | ||||||||||||
7.38%, 04/28/15 | EUR | 100 | 137,601 | |||||||||
8.75%, 03/15/18 | EUR | 100 | 136,383 | |||||||||
|
| |||||||||||
1,315,934 | ||||||||||||
SWEDEN — 0.79% | ||||||||||||
Verisure Holding AB | ||||||||||||
8.75%, 09/01/18 (Call 09/01/14)c | EUR | 150 | 206,039 | |||||||||
|
| |||||||||||
206,039 | ||||||||||||
SWITZERLAND — 1.08% | ||||||||||||
Sunrise Communications Holdings SA | ||||||||||||
8.50%, 12/31/18 (Call 12/31/14)c | EUR | 200 | 280,541 | |||||||||
|
| |||||||||||
280,541 | ||||||||||||
UNITED KINGDOM — 14.48% | ||||||||||||
Anglian Water Osprey Financing PLC | ||||||||||||
7.00%, 01/31/18 | GBP | 100 | 174,839 | |||||||||
BAA (SH) PLC | ||||||||||||
7.13%, 03/01/17 | GBP | 50 | 87,735 | |||||||||
Bakkavor Finance (2) PLC | ||||||||||||
8.25%, 02/15/18 (Call 02/15/15)b | GBP | 100 | 154,258 |
Security | Principal (000s) | Value | ||||||||||
Boparan Finance PLC | ||||||||||||
9.75%, 04/30/18 (Call 04/30/14)c | EUR | 100 | $ | 143,024 | ||||||||
EC Finance PLC | ||||||||||||
9.75%, 08/01/17 (Call 08/01/14)c | EUR | 200 | 277,958 | |||||||||
Gala Group Finance PLC | ||||||||||||
8.88%, 09/01/18 (Call 06/01/14)b | GBP | 150 | 239,241 | |||||||||
GKN Holdings PLC | ||||||||||||
5.38%, 09/19/22 | GBP | 100 | 163,153 | |||||||||
HBOS PLC | ||||||||||||
4.88%, 03/20/15 | EUR | 250 | 329,228 | |||||||||
Ineos Group Holdings SA | ||||||||||||
7.88%, 02/15/16 (Call 11/29/12)c | EUR | 150 | 185,623 | |||||||||
Investec Bank PLC | ||||||||||||
9.63%, 02/17/22c | GBP | 125 | 215,413 | |||||||||
Jaguar Land Rover PLC | ||||||||||||
8.13%, 05/15/18 (Call 05/15/14)b | GBP | 125 | 217,995 | |||||||||
Kerling PLC | ||||||||||||
10.63%, 02/01/17 (Call 02/01/14)c | EUR | 100 | 119,970 | |||||||||
Matalan Finance PLC | ||||||||||||
8.88%, 04/29/16 (Call 04/30/13)b | GBP | 100 | 160,702 | |||||||||
Phones4u Finance PLC | ||||||||||||
9.50%, 04/01/18 (Call 04/01/14)b | GBP | 100 | 170,304 | |||||||||
Priory Group No. 3 PLC | ||||||||||||
7.00%, 02/15/18 (Call 02/15/14)b | GBP | 150 | 256,761 | |||||||||
R & R Ice Cream PLC | ||||||||||||
8.38%, 11/15/17 (Call 11/15/13)c | EUR | 100 | 139,033 | |||||||||
Rexam PLC | ||||||||||||
6.75%, 06/29/67 (Call 06/29/17)a | EUR | 150 | 200,697 |
36 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® GLOBAL EX USD HIGH YIELD CORPORATE BOND FUND
October 31, 2012
Security | Principal (000s) or Shares | Value | ||||||||||
Royal Bank of Scotland Group PLC | ||||||||||||
4.63%, 09/22/21 (Call 09/22/16)a | EUR | 150 | $ | 179,306 | ||||||||
Thames Water Kemble Finance PLC | ||||||||||||
7.75%, 04/01/19c | GBP | 100 | 174,182 | |||||||||
Thomas Cook Group PLC | ||||||||||||
6.75%, 06/22/15 | EUR | 100 | 87,065 | |||||||||
William Hill PLC | ||||||||||||
7.13%, 11/11/16 | GBP | 50 | 88,315 | |||||||||
|
| |||||||||||
3,764,802 | ||||||||||||
UNITED STATES — 1.88% | ||||||||||||
GMAC International Finance BV | ||||||||||||
7.50%, 04/21/15 | EUR | 250 | 352,576 | |||||||||
Levi Strauss & Co. | ||||||||||||
7.75%, 05/15/18 (Call 05/15/14) | EUR | 100 | 137,679 | |||||||||
|
| |||||||||||
490,255 | ||||||||||||
|
| |||||||||||
TOTAL CORPORATE BONDS & NOTES | 25,135,571 | |||||||||||
SHORT-TERM INVESTMENTS — 0.01% |
| |||||||||||
MONEY MARKET FUNDS — 0.01% |
| |||||||||||
BlackRock Cash Funds: Treasury, |
| |||||||||||
0.08e,f | 3,463 | 3,463 | ||||||||||
|
| |||||||||||
3,463 | ||||||||||||
|
| |||||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||||||
(Cost: $3,463) |
| 3,463 | ||||||||||
|
| |||||||||||
TOTAL INVESTMENTS |
| |||||||||||
(Cost: $24,423,816) |
| 25,139,034 | ||||||||||
Other Assets, Less Liabilities — 3.33% |
| 865,168 | ||||||||||
|
| |||||||||||
NET ASSETS — 100.00% |
| $ | 26,004,202 | |||||||||
|
|
CAD | — Canadian Dollar | |
EUR | — Euro | |
GBP | — British Pound |
a | Variable rate security. Rate shown is as of report date. |
b | This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933. |
c | This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933. |
d | Step coupon security. Coupon rate will either increase (step-up bond) or decrease (step-down bond) at regular intervals until maturity. Interest rate shown reflects the rate currently in effect. |
e | Affiliated issuer. See Note 2. |
f | The rate quoted is the annualized seven-day yield of the fund at period end. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 37 |
Table of Contents
Schedule of Investments
iSHARES® GLOBAL HIGH YIELD CORPORATE BOND FUND
October 31, 2012
Security | Principal (000s) | Value | ||||||||||
CORPORATE BONDS & NOTES — 97.49% |
| |||||||||||
AUSTRALIA — 0.95% |
| |||||||||||
FMG Resources (August 2006) Pty Ltd. |
| |||||||||||
6.88%, 02/01/18 (Call 02/01/14)a | USD | 250 | $ | 240,625 | ||||||||
7.00%, 11/01/15 (Call 11/30/12)a,b | USD | 100 | 101,208 | |||||||||
|
| |||||||||||
341,833 | ||||||||||||
CANADA — 3.21% |
| |||||||||||
Air Canada | ||||||||||||
10.13%, 08/01/15 (Call 11/29/12)a | CAD | 50 | 51,928 | |||||||||
Bombardier Inc. | ||||||||||||
6.13%, 05/15/21c | EUR | 100 | 136,710 | |||||||||
7.75%, 03/15/20a,b | USD | 150 | 173,250 | |||||||||
Great Canadian Gaming Corp. | ||||||||||||
6.63%, 07/25/22 (Call 07/25/17)a | CAD | 50 | 51,776 | |||||||||
Inmet Mining Corp. | ||||||||||||
8.75%, 06/01/20 (Call 06/01/16)a | USD | 100 | 103,250 | |||||||||
MEG Energy Corp. | ||||||||||||
6.38%, 01/30/23 (Call 07/30/17)a | USD | 100 | 107,000 | |||||||||
Novelis Inc. | ||||||||||||
8.75%, 12/15/20 (Call 12/15/15) | USD | 150 | 166,147 | |||||||||
Paramount Resources Ltd. | ||||||||||||
8.25%, 12/13/17 (Call 12/13/13) | CAD | 50 | 52,776 | |||||||||
Precision Drilling Corp. | ||||||||||||
6.63%, 11/15/20 (Call 11/15/15) | USD | 100 | 107,000 | |||||||||
Quebecor Media Inc. | ||||||||||||
7.38%, 01/15/21 (Call 01/15/16)a | CAD | 100 | 107,554 | |||||||||
Videotron Ltee | ||||||||||||
5.00%, 07/15/22 | USD | 100 | 103,750 | |||||||||
|
| |||||||||||
1,161,141 |
Security | Principal (000s) | Value | ||||||||||
CAYMAN ISLANDS — 0.14% |
| |||||||||||
Offshore Group Investments Ltd. | ||||||||||||
7.50%, 11/01/19 (Call 11/01/15)a | USD | 50 | $ | 49,250 | ||||||||
|
| |||||||||||
49,250 | ||||||||||||
FINLAND — 0.34% |
| |||||||||||
Nokia OYJ | ||||||||||||
6.75%, 02/04/19 | EUR | 100 | 124,403 | |||||||||
|
| |||||||||||
124,403 | ||||||||||||
FRANCE — 4.29% |
| |||||||||||
Credit Agricole SA | ||||||||||||
6.64%, 12/31/49 (Call 05/31/17)a,d | USD | 100 | 83,250 | |||||||||
Faurecia SA | ||||||||||||
9.38%, 12/15/16c | EUR | 100 | 141,255 | |||||||||
Groupama SA | ||||||||||||
7.88%, 10/27/39 (Call 10/27/19)d | EUR | 50 | 47,191 | |||||||||
Lafarge SA | ||||||||||||
5.38%, 06/26/17c | EUR | 250 | 347,977 | |||||||||
6.63%, 11/29/18 | EUR | 100 | 140,789 | |||||||||
Peugeot SA | ||||||||||||
5.63%, 06/29/15 | EUR | 75 | 97,307 | |||||||||
5.63%, 07/11/17 | EUR | 50 | 62,428 | |||||||||
Renault SA | ||||||||||||
5.63%, 06/30/15 | EUR | 150 | 204,877 | |||||||||
Rexel SA | ||||||||||||
8.25%, 12/15/16 (Call 12/15/13) | EUR | 100 | 141,723 | |||||||||
Societe Generale SA | ||||||||||||
5.92%, 12/31/49 (Call 04/05/17)a,d | USD | 100 | 82,840 | |||||||||
Wendel SA | ||||||||||||
4.38%, 08/09/17 | EUR | 50 | 65,710 | |||||||||
4.88%, 11/04/14 | EUR | 100 | 134,683 | |||||||||
|
| |||||||||||
1,550,030 | ||||||||||||
GERMANY — 3.03% |
| |||||||||||
ATU Auto-Teile-Unger Handels GmbH & Co. KG | ||||||||||||
11.00%, 05/15/14c | EUR | 100 | 125,697 |
38 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® GLOBAL HIGH YIELD CORPORATE BOND FUND
October 31, 2012
Security | Principal (000s) | Value | ||||||||||
Beverage Packaging Holdings (Luxembourg) II SA | ||||||||||||
9.50%, 06/15/17 (Call 11/29/12)c | EUR | 100 | $ | 128,716 | ||||||||
FMC Finance VI SA | ||||||||||||
5.50%, 07/15/16c | EUR | 100 | 143,143 | |||||||||
Franz Haniel & Cie GmbH | ||||||||||||
5.88%, 02/01/17 | EUR | 100 | 141,709 | |||||||||
Kabel Deutschland Vertrieb und Service GmbH | ||||||||||||
6.50%, 06/29/18 (Call 06/30/14)c | EUR | 100 | 138,326 | |||||||||
ThyssenKrupp AG | ||||||||||||
4.38%, 02/28/17 | EUR | 100 | 137,232 | |||||||||
Unitymedia Hessen GmbH & Co. KG/Unitymedia NRW GmbH | ||||||||||||
7.50%, 03/15/19 (Call 03/15/15)c | EUR | 100 | 141,572 | |||||||||
UPCB Finance Ltd. | ||||||||||||
7.63%, 01/15/20 (Call 01/15/15)c | EUR | 100 | 140,614 | |||||||||
|
| |||||||||||
1,097,009 | ||||||||||||
GREECE — 0.31% |
| |||||||||||
OTE PLC | ||||||||||||
7.25%, 02/12/15c,e | EUR | 100 | 113,495 | |||||||||
|
| |||||||||||
113,495 | ||||||||||||
IRELAND — 0.96% |
| |||||||||||
Ardagh Packaging Finance PLC | ||||||||||||
7.38%, 10/15/17 (Call 10/15/14)c | EUR | 150 | 205,313 | |||||||||
Smurfit Kappa Acquisitions | ||||||||||||
7.75%, 11/15/19 (Call 11/15/14)c | EUR | 100 | 142,322 | |||||||||
|
| |||||||||||
347,635 | ||||||||||||
ITALY — 2.48% |
| |||||||||||
Banca Monte dei Paschi di Siena SpA | ||||||||||||
5.00%, 04/21/20 | EUR | 100 | 118,578 | |||||||||
Banco Popolare | ||||||||||||
6.00%, 11/05/20 | EUR | 50 | 62,039 |
Security | Principal (000s) | Value | ||||||||||
Fiat Finance & Trade SA | ||||||||||||
7.63%, 09/15/14 | EUR | 150 | $ | 205,838 | ||||||||
Italcementi Finance SA | ||||||||||||
6.63%, 03/19/20e | EUR | 50 | 64,817 | |||||||||
Lottomatica Group SpA | ||||||||||||
8.25%, 03/31/66 (Call 03/31/16)c,d | EUR | 50 | 64,924 | |||||||||
Wind Acquisition Finance SA | ||||||||||||
7.25%, 02/15/18 (Call 11/15/13)a | USD | 200 | 192,500 | |||||||||
11.75%, 07/15/17 (Call 07/15/13)c | EUR | 150 | 188,636 | |||||||||
|
| |||||||||||
897,332 | ||||||||||||
JAMAICA — 0.30% | ||||||||||||
Digicel Group Ltd. | ||||||||||||
10.50%, 04/15/18 (Call 04/15/14)a | USD | 100 | 110,250 | |||||||||
|
| |||||||||||
110,250 | ||||||||||||
JAPAN — 0.18% | ||||||||||||
Tokyo Electric Power Co. Inc. | ||||||||||||
4.50%, 03/24/14 | EUR | 50 | 65,458 | |||||||||
|
| |||||||||||
65,458 | ||||||||||||
LUXEMBOURG — 3.71% | ||||||||||||
CHC Helicopter SA | ||||||||||||
9.25%, 10/15/20 (Call 10/15/15) | USD | 100 | 102,250 | |||||||||
ConvaTec Healthcare E SA | ||||||||||||
7.38%, 12/15/17 (Call 12/15/13)c | EUR | 100 | 138,763 | |||||||||
Fiat Finance & Trade SA | ||||||||||||
6.38%, 04/01/16c | EUR | 250 | 323,950 | |||||||||
Fiat Industrial Finance Europe SA | ||||||||||||
5.25%, 03/11/15c | EUR | 100 | 135,087 | |||||||||
Intelsat (Luxembourg) SA | ||||||||||||
11.25%, 02/04/17 (Call 02/15/13) | USD | 150 | 158,203 | |||||||||
Intelsat Jackson Holdings SA | ||||||||||||
7.25%, 04/01/19 (Call 04/01/15) | USD | 200 | 214,171 |
SCHEDULESOF INVESTMENTS | 39 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® GLOBAL HIGH YIELD CORPORATE BOND FUND
October 31, 2012
Security | Principal (000s) | Value | ||||||||||
Ontex IV SA | ||||||||||||
7.50%, 04/15/18 (Call 04/15/14)c | EUR | 100 | $ | 135,249 | ||||||||
Telenet Finance V Luxembourg SCA | ||||||||||||
6.25%, 08/15/22 (Call 08/15/17)c | EUR | 100 | 133,256 | |||||||||
|
| |||||||||||
1,340,929 | ||||||||||||
MEXICO — 0.22% | ||||||||||||
NII Capital Corp. | ||||||||||||
7.63%, 04/01/21 (Call 04/01/16) | USD | 100 | 78,667 | |||||||||
|
| |||||||||||
78,667 | ||||||||||||
NETHERLANDS — 4.46% | ||||||||||||
Conti-Gummi Finance BV | ||||||||||||
7.50%, 09/15/17 (Call 09/15/13)c | EUR | 100 | 138,895 | |||||||||
Fresenius Finance BV | ||||||||||||
4.25%, 04/15/19c | EUR | 100 | 138,813 | |||||||||
HeidelbergCement Finance BV | ||||||||||||
8.00%, 01/31/17c | EUR | 300 | 451,534 | |||||||||
InterGen NV | ||||||||||||
9.00%, 06/30/17 (Call 11/30/12)a | USD | 75 | 71,438 | |||||||||
LyondellBasell Industries NV | ||||||||||||
5.00%, 04/15/19 (Call 01/15/19) | USD | 100 | 108,133 | |||||||||
6.00%, 11/15/21 (Call 08/17/21) | USD | 200 | 232,000 | |||||||||
NXP BV/NXP Funding LLC | ||||||||||||
9.75%, 08/01/18 (Call 08/01/14)a | USD | 100 | 116,583 | |||||||||
Schaeffler Finance BV | ||||||||||||
7.75%, 02/15/17c | EUR | 100 | 142,781 | |||||||||
UPC Holding BV | ||||||||||||
8.38%, 08/15/20 (Call 08/15/15)c | EUR | 50 | 70,704 | |||||||||
Ziggo Bond Co. BV | ||||||||||||
8.00%, 05/15/18 (Call 05/15/14)c | EUR | 100 | 142,119 | |||||||||
|
| |||||||||||
1,613,000 |
Security | Principal (000s) | Value | ||||||||||
NORWAY — 0.13% | ||||||||||||
Norske Skogindustrier ASA | ||||||||||||
7.00%, 06/26/17 | EUR | 50 | $ | 48,063 | ||||||||
|
| |||||||||||
48,063 | ||||||||||||
PORTUGAL — 1.42% | ||||||||||||
Banco Comercial Portugues SA | ||||||||||||
5.63%, 04/23/14 | EUR | 100 | 129,741 | |||||||||
Banco Espirito Santo SA | ||||||||||||
5.63%, 06/05/14 | EUR | 150 | 194,888 | |||||||||
Portugal Telecom International Finance BV | ||||||||||||
4.38%, 03/24/17 | EUR | 50 | 64,161 | |||||||||
5.00%, 11/04/19 | EUR | 100 | 123,753 | |||||||||
|
| |||||||||||
512,543 | ||||||||||||
SPAIN — 1.45% | ||||||||||||
Abengoa SA | ||||||||||||
9.63%, 02/25/15c | EUR | 50 | 67,421 | |||||||||
Campofrio Food Group SA | ||||||||||||
8.25%, 10/31/16 (Call 10/31/13)c | EUR | 100 | 134,282 | |||||||||
Cirsa Funding Luxembourg SA | ||||||||||||
8.75%, 05/15/18 (Call 05/15/14)c | EUR | 50 | 61,793 | |||||||||
Nara Cable Funding Ltd. | ||||||||||||
8.88%, 12/01/18 (Call 12/01/13)c | EUR | 100 | 122,372 | |||||||||
Obrascon Huarte Lain SA | ||||||||||||
7.38%, 04/28/15 | EUR | 100 | 137,601 | |||||||||
|
| |||||||||||
523,469 | ||||||||||||
SWEDEN — 0.38% | ||||||||||||
Verisure Holding AB | ||||||||||||
8.75%, 09/01/18 (Call 09/01/14)c | EUR | 100 | 137,359 | |||||||||
|
| |||||||||||
137,359 | ||||||||||||
UNITED KINGDOM — 5.47% | ||||||||||||
Boparan Finance PLC | ||||||||||||
9.75%, 04/30/18 (Call 04/30/14)c | EUR | 100 | 143,024 | |||||||||
9.88%, 04/30/18 (Call 04/30/14)a | GBP | 100 | 176,346 |
40 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® GLOBAL HIGH YIELD CORPORATE BOND FUND
October 31, 2012
Security | Principal (000s) | Value | ||||||||||
CEVA Group PLC | ||||||||||||
11.50%, 04/01/18 (Call 04/01/14)a | USD | 100 | $ | 87,000 | ||||||||
EC Finance PLC | ||||||||||||
9.75%, 08/01/17 (Call 08/01/14)c | EUR | 100 | 138,979 | |||||||||
HBOS PLC | ||||||||||||
4.88%, 03/20/15 | EUR | 100 | 131,691 | |||||||||
6.75%, 05/21/18a | USD | 200 | 209,000 | |||||||||
Ineos Finance PLC | ||||||||||||
9.00%, 05/15/15 (Call 05/15/13)a | USD | 100 | 105,958 | |||||||||
9.25%, 05/15/15 (Call 05/15/13)c | EUR | 50 | 69,570 | |||||||||
Ineos Group Holdings SA | ||||||||||||
7.88%, 02/15/16 (Call 11/29/12)c | EUR | 50 | 61,874 | |||||||||
Investec Bank PLC | ||||||||||||
9.63%, 02/17/22c | GBP | 100 | 172,331 | |||||||||
Jaguar Land Rover PLC | ||||||||||||
8.25%, 03/15/20 (Call 03/15/16)c | GBP | 100 | 174,799 | |||||||||
Royal Bank of Scotland Group PLC | ||||||||||||
4.63%, 09/22/21 (Call 09/22/16)d | EUR | 100 | 119,538 | |||||||||
5.05%, 01/08/15 | USD | 100 | 103,250 | |||||||||
Thames Water Kemble Finance PLC | ||||||||||||
7.75%, 04/01/19c | GBP | 100 | 174,181 | |||||||||
Virgin Media Finance PLC Series 1 | ||||||||||||
9.50%, 08/15/16 (Call 11/29/12) | USD | 100 | 111,450 | |||||||||
|
| |||||||||||
1,978,991 | ||||||||||||
UNITED STATES — 64.06% | ||||||||||||
Advanced Micro Devices Inc. | ||||||||||||
8.13%, 12/15/17 (Call 12/15/13)b | USD | 100 | 91,167 | |||||||||
AES Corp. (The) | ||||||||||||
8.00%, 10/15/17 | USD | 250 | 286,979 | |||||||||
Ally Financial Inc. | ||||||||||||
4.63%, 06/26/15 | USD | 100 | 103,749 | |||||||||
5.50%, 02/15/17 | USD | 100 | 105,854 |
Security | Principal (000s) | Value | ||||||||||
6.75%, 12/01/14 | USD | 100 | $ | 108,500 | ||||||||
8.00%, 03/15/20 | USD | 250 | 297,504 | |||||||||
Alpha Natural Resources Inc. | ||||||||||||
6.00%, 06/01/19 (Call 06/01/14)b | USD | 100 | 87,625 | |||||||||
AMC Entertainment Inc. | ||||||||||||
9.75%, 12/01/20 (Call 12/01/15) | USD | 100 | 112,250 | |||||||||
AmeriGas Finance LLC/AmeriGas Finance Corp. | ||||||||||||
6.75%, 05/20/20 (Call 05/20/16)b | USD | 100 | 107,500 | |||||||||
Arch Coal Inc. | ||||||||||||
7.00%, 06/15/19 (Call 06/15/15) | USD | 200 | 178,055 | |||||||||
Avaya Inc. | ||||||||||||
9.75%, 11/01/15 (Call 11/30/12)b | USD | 100 | 89,083 | |||||||||
Ball Corp. | ||||||||||||
5.75%, 05/15/21 (Call 11/15/15)b | USD | 100 | 107,417 | |||||||||
Berry Plastics Corp. | ||||||||||||
9.50%, 05/15/18 (Call 05/15/14) | USD | 100 | 108,875 | |||||||||
Bill Barrett Corp. | ||||||||||||
7.00%, 10/15/22 (Call 10/15/17) | USD | 100 | 102,281 | |||||||||
Biomet Inc. | ||||||||||||
6.50%, 08/01/20 (Call 08/01/15)a | USD | 50 | 52,000 | |||||||||
11.63%, 10/15/17 (Call 11/01/12) | USD | 86 | 91,436 | |||||||||
Boyd Gaming Corp. | ||||||||||||
9.13%, 12/01/18 (Call 12/01/14) | USD | 100 | 103,125 | |||||||||
Cablevision Systems Corp. | ||||||||||||
7.75%, 04/15/18 | USD | 150 | 166,687 | |||||||||
Caesars Entertainment Operating Co. Inc. | ||||||||||||
12.75%, 04/15/18 (Call 04/15/14)b | USD | 50 | 35,817 |
SCHEDULESOF INVESTMENTS | 41 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® GLOBAL HIGH YIELD CORPORATE BOND FUND
October 31, 2012
Security | Principal (000s) | Value | ||||||||||
Calpine Corp. | ||||||||||||
7.50%, 02/15/21 (Call 11/01/15)a | USD | 350 | $ | 380,917 | ||||||||
Case New Holland Inc. | ||||||||||||
7.88%, 12/01/17 | USD | 100 | 117,458 | |||||||||
CCO Holdings LLC/CCO Holdings Capital Corp. | ||||||||||||
6.50%, 04/30/21 (Call 04/30/15) | USD | 150 | 159,750 | |||||||||
7.00%, 01/15/19 (Call 01/15/14) | USD | 100 | 107,500 | |||||||||
7.88%, 04/30/18 (Call 04/30/13) | USD | 150 | 162,750 | |||||||||
CDW LLC/CDW Finance Corp. | ||||||||||||
8.50%, 04/01/19 (Call 04/01/15) | USD | 100 | 106,583 | |||||||||
Cengage Learning Acquisitions Inc. | ||||||||||||
12.00%, 06/30/19 (Call 06/30/15)a | USD | 50 | 47,500 | |||||||||
CenturyLink Inc. | ||||||||||||
6.45%, 06/15/21 | USD | 150 | 163,724 | |||||||||
Cequel Communications Holdings I LLC/Cequel Capital Corp. | ||||||||||||
8.63%, 11/15/17 (Call 12/05/12)a | USD | 100 | 106,896 | |||||||||
Ceridian Corp. | ||||||||||||
11.25%, 11/15/15 (Call 11/30/12) | USD | 100 | 98,000 | |||||||||
Chaparral Energy Inc. | ||||||||||||
7.63%, 11/15/22 (Call 04/15/17)a | USD | 100 | 105,929 | |||||||||
Chesapeake Energy Corp. | ||||||||||||
6.63%, 08/15/20b | USD | 200 | 209,450 | |||||||||
6.78%, 03/15/19 (Call 11/30/12) | USD | 100 | 100,780 | |||||||||
Chrysler Group LLC/CG Co-Issuer Inc. | ||||||||||||
8.00%, 06/15/19 (Call 06/15/15)b | USD | 200 | 213,375 |
Security | Principal (000s) | Value | ||||||||||
Cincinnati Bell Inc. | ||||||||||||
8.38%, 10/15/20 (Call 10/15/15) | USD | 100 | $ | 107,375 | ||||||||
CIT Group Inc. | ||||||||||||
5.00%, 05/15/17 | USD | 100 | 105,556 | |||||||||
5.25%, 03/15/18 | USD | 150 | 159,958 | |||||||||
5.50%, 02/15/19a,b | USD | 150 | 160,695 | |||||||||
CityCenter Holdings LLC/CityCenter Finance Corp. | ||||||||||||
7.63%, 01/15/16 (Call 01/15/14) | USD | 100 | 106,469 | |||||||||
Claire’s Stores Inc. Series 144a | ||||||||||||
9.00%, 03/15/19 (Call 03/15/15)a | USD | 100 | 104,854 | |||||||||
Clear Channel Communications Inc. | ||||||||||||
9.00%, 12/15/19 (Call 07/15/15)a | USD | 25 | 22,531 | |||||||||
9.00%, 03/01/21 (Call 03/01/16) | USD | 100 | 87,500 | |||||||||
Clear Channel Worldwide Holdings Inc. | ||||||||||||
Series B | ||||||||||||
7.63%, 03/15/20 (Call 03/15/15)b | USD | 125 | 119,687 | |||||||||
9.25%, 12/15/17 (Call 12/15/12) | USD | 150 | 161,125 | |||||||||
Clearwire Communications LLC/Clearwire Finance Inc. | ||||||||||||
12.00%, 12/01/15 (Call 12/01/12)a | USD | 150 | 159,453 | |||||||||
CommScope Inc. | ||||||||||||
8.25%, 01/15/19 (Call 01/15/15)a | USD | 100 | 106,700 | |||||||||
Community Health Systems Inc. | ||||||||||||
7.13%, 07/15/20 (Call 07/15/16)b | USD | 100 | 105,219 | |||||||||
8.00%, 11/15/19 (Call 11/15/15) | USD | 100 | 108,125 | |||||||||
Concho Resources Inc. | ||||||||||||
6.50%, 01/15/22 (Call 01/15/17) | USD | 100 | 109,625 |
42 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® GLOBAL HIGH YIELD CORPORATE BOND FUND
October 31, 2012
Security | Principal (000s) | Value | ||||||||||
CONSOL Energy Inc. | ||||||||||||
8.00%, 04/01/17 (Call 04/01/14) | USD | 150 | $ | 158,812 | ||||||||
Continental Airlines Inc. | ||||||||||||
6.75%, 09/15/15 (Call 11/30/12)a | USD | 100 | 104,938 | |||||||||
Continental Resources Inc. | ||||||||||||
5.00%, 09/15/22 (Call 03/15/17)a | USD | 100 | 105,000 | |||||||||
Cricket Communications Inc. | ||||||||||||
7.75%, 10/15/20 (Call 10/15/15)b | USD | 100 | 102,750 | |||||||||
Crown Castle International Corp. | ||||||||||||
5.25%, 01/15/23a | USD | 50 | 51,625 | |||||||||
DaVita Inc. | ||||||||||||
6.38%, 11/01/18 (Call 11/01/13) | USD | 100 | 106,625 | |||||||||
Del Monte Corp. | ||||||||||||
7.63%, 02/15/19 (Call 02/15/14) | USD | 100 | 103,038 | |||||||||
Denbury Resources Inc. | ||||||||||||
8.25%, 02/15/20 (Call 02/15/15) | USD | 100 | 113,000 | |||||||||
DISH DBS Corp. | ||||||||||||
4.63%, 07/15/17 | USD | 100 | 102,833 | |||||||||
5.88%, 07/15/22 | USD | 150 | 157,312 | |||||||||
6.75%, 06/01/21 | USD | 150 | 166,625 | |||||||||
7.88%, 09/01/19 | USD | 150 | 175,875 | |||||||||
DPL Inc. | ||||||||||||
7.25%, 10/15/21 (Call 07/15/21) | USD | 100 | 113,000 | |||||||||
E*Trade Financial Corp. | ||||||||||||
12.50%, 11/30/17 (Call 11/30/12) | USD | 150 | 169,875 | |||||||||
Edison Mission Energy | ||||||||||||
7.00%, 05/15/17b | USD | 100 | 48,625 | |||||||||
El Paso Corp. | ||||||||||||
7.00%, 06/15/17 | USD | 100 | 114,000 | |||||||||
Endo Health Solutions Inc. | ||||||||||||
7.00%, 07/15/19 (Call 07/15/15)b | USD | 100 | 107,871 |
Security | Principal (000s) | Value | ||||||||||
Energy Future Holdings Corp. | ||||||||||||
10.00%, 01/15/20 (Call 01/15/15) | USD | 150 | $ | 163,312 | ||||||||
Energy Future Intermediate Holding Co. LLC/EFIH Finance Inc. | ||||||||||||
11.75%, 03/01/22 (Call 03/01/17)a | USD | 50 | 51,750 | |||||||||
Energy Transfer Equity LP | ||||||||||||
7.50%, 10/15/20 | USD | 150 | 170,125 | |||||||||
Energy XXI Gulf Coast Inc. | ||||||||||||
9.25%, 12/15/17 (Call 12/15/14) | USD | 100 | 112,583 | |||||||||
EP Energy LLC/EP Energy Finance Inc. | ||||||||||||
9.38%, 05/01/20 (Call 05/01/16)a | USD | 100 | 110,458 | |||||||||
Equinix Inc. | ||||||||||||
7.00%, 07/15/21 (Call 07/15/16) | USD | 100 | 110,750 | |||||||||
First Data Corp. | ||||||||||||
7.38%, 06/15/19 (Call 06/15/15)a | USD | 150 | 154,875 | |||||||||
8.25%, 01/15/21 (Call 01/15/16)a | USD | 100 | 99,833 | |||||||||
11.25%, 03/31/16 (Call 11/30/12)b | USD | 100 | 97,000 | |||||||||
12.63%, 01/15/21 (Call 01/15/16) | USD | 150 | 155,062 | |||||||||
Freescale Semiconductor Inc. | ||||||||||||
9.25%, 04/15/18 (Call 04/15/14)a | USD | 200 | 212,250 | |||||||||
Fresenius Medical Care US Finance II Inc. | ||||||||||||
5.63%, 07/31/19a | USD | 200 | 210,500 | |||||||||
Frontier Communications Corp. | ||||||||||||
8.25%, 04/15/17 | USD | 200 | 230,800 | |||||||||
8.50%, 04/15/20 | USD | 100 | 115,333 | |||||||||
GenOn Energy Inc. | ||||||||||||
9.50%, 10/15/18 | USD | 100 | 114,350 |
SCHEDULESOF INVESTMENTS | 43 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® GLOBAL HIGH YIELD CORPORATE BOND FUND
October 31, 2012
Security | Principal (000s) | Value | ||||||||||
Goodyear Tire & Rubber Co. (The) | ||||||||||||
8.25%, 08/15/20 (Call 08/15/15) | USD | 100 | $ | 108,750 | ||||||||
Hanesbrands Inc. | ||||||||||||
6.38%, 12/15/20 (Call 12/15/15) | USD | 100 | 108,514 | |||||||||
Harrah’s Operating Co. Inc. | ||||||||||||
10.00%, 12/15/18 (Call 12/15/13) | USD | 250 | 158,333 | |||||||||
11.25%, 06/01/17 (Call 06/01/13) | USD | 150 | 161,531 | |||||||||
HCA Holdings Inc. | ||||||||||||
7.75%, 05/15/21 (Call 11/15/15) | USD | 100 | 107,550 | |||||||||
HCA Inc. | ||||||||||||
5.88%, 05/01/23 | USD | 100 | 101,179 | |||||||||
6.50%, 02/15/20 | USD | 400 | 441,750 | |||||||||
8.50%, 04/15/19 (Call 04/15/14) | USD | 150 | 168,460 | |||||||||
HD Supply Inc. | ||||||||||||
11.00%, 04/15/20 (Call 04/15/16)a | USD | 100 | 113,625 | |||||||||
Health Management Associates Inc. | ||||||||||||
7.38%, 01/15/20 (Call 01/15/16) | USD | 100 | 107,625 | |||||||||
Hertz Corp. (The) | ||||||||||||
6.75%, 04/15/19 (Call 04/15/15) | USD | 150 | 159,750 | |||||||||
Hexion U.S. Finance Corp./Hexion Nova Scotia Finance ULC | ||||||||||||
9.00%, 11/15/20 (Call 11/15/15)b | USD | 100 | 89,750 | |||||||||
Host Hotels & Resorts LP | ||||||||||||
5.88%, 06/15/19 (Call 06/15/15)b | USD | 100 | 109,417 | |||||||||
Hughes Satellite Systems Corp. | ||||||||||||
7.63%, 06/15/21 | USD | 100 | 111,000 | |||||||||
Huntsman International LLC | ||||||||||||
5.50%, 06/30/16 (Call 11/30/12)b | USD | 100 | 100,125 |
Security | Principal (000s) | Value | ||||||||||
Icahn Enterprises LP/Icahn Enterprises Finance Corp. | ||||||||||||
7.75%, 01/15/16 (Call 01/15/13)b | USD | 100 | $ | 104,620 | ||||||||
8.00%, 01/15/18 (Call 01/15/14) | USD | 100 | 107,500 | |||||||||
Infor US Inc. | ||||||||||||
9.38%, 04/01/19 (Call 04/01/15) | USD | 100 | 110,000 | |||||||||
International Lease Finance Corp. | ||||||||||||
4.88%, 04/01/15 | USD | 200 | 207,125 | |||||||||
5.65%, 06/01/14 | USD | 100 | 104,592 | |||||||||
8.25%, 12/15/20 | USD | 200 | 235,500 | |||||||||
8.75%, 03/15/17 | USD | 200 | 233,000 | |||||||||
iStar Financial Inc. | ||||||||||||
5.95%, 10/15/13 | USD | 25 | 25,500 | |||||||||
Jabil Circuit Inc. | ||||||||||||
4.70%, 09/15/22 | USD | 100 | 99,792 | |||||||||
Kinetic Concepts Inc./KCI USA Inc. | ||||||||||||
10.50%, 11/01/18 (Call 11/01/15)a | USD | 100 | 106,350 | |||||||||
Lennar Corp. | ||||||||||||
4.75%, 12/15/17a | USD | 100 | 104,313 | |||||||||
Level 3 Financing Inc. | ||||||||||||
8.13%, 07/01/19 (Call 07/01/15) | USD | 200 | 215,500 | |||||||||
Limited Brands Inc. | ||||||||||||
6.90%, 07/15/17 | USD | 200 | 229,000 | |||||||||
Linn Energy LLC/Linn Energy Finance Corp. | ||||||||||||
6.25%, 11/01/19 (Call 11/01/15)a | USD | 200 | 200,500 | |||||||||
MarkWest Energy Partners LP/MarkWest Energy Finance Corp. | ||||||||||||
6.75%, 11/01/20 (Call 11/01/15) | USD | 150 | 163,000 | |||||||||
Masco Corp. | ||||||||||||
6.13%, 10/03/16 | USD | 150 | 165,375 | |||||||||
McClatchy Co. (The) | ||||||||||||
11.50%, 02/15/17 (Call 02/15/13) | USD | 100 | 107,438 |
44 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® GLOBAL HIGH YIELD CORPORATE BOND FUND
October 31, 2012
Security | Principal (000s) | Value | ||||||||||
MetroPCS Wireless Inc. | ||||||||||||
7.88%, 09/01/18 (Call 09/01/14) | USD | 100 | $ | 109,333 | ||||||||
MGM Resorts International | ||||||||||||
7.50%, 06/01/16 | USD | 100 | 106,417 | |||||||||
8.63%, 02/01/19a,b | USD | 150 | 162,375 | |||||||||
9.00%, 03/15/20 (Call 03/15/14) | USD | 100 | 111,550 | |||||||||
MPM Escrow LLC/MPM Finance Escrow Corp. | ||||||||||||
8.88%, 10/15/20 (Call 10/15/15)a | USD | 50 | 48,875 | |||||||||
Mylan Inc. | ||||||||||||
6.00%, 11/15/18 (Call 11/15/14)a | USD | 200 | 213,667 | |||||||||
Newfield Exploration Co. | ||||||||||||
5.75%, 01/30/22 | USD | 100 | 107,938 | |||||||||
Nielsen Finance LLC / Nielsen Finance Co. | ||||||||||||
4.50%, 10/01/20 (Call 10/01/16)a | USD | 50 | 49,490 | |||||||||
NRG Energy Inc. | ||||||||||||
7.63%, 05/15/19 (Call 05/15/14) | USD | 250 | 264,375 | |||||||||
8.25%, 09/01/20 (Call 09/01/15)b | USD | 50 | 55,000 | |||||||||
Nuveen Investments Inc. | ||||||||||||
9.50%, 10/15/20 (Call 10/15/16)a | USD | 50 | 50,284 | |||||||||
Oasis Petroleum Inc. | ||||||||||||
7.25%, 02/01/19 (Call 02/01/15) | USD | 100 | 107,000 | |||||||||
Offshore Group Investments Ltd. | ||||||||||||
11.50%, 08/01/15 (Call 02/01/13) | USD | 46 | 50,744 | |||||||||
Peabody Energy Corp. | ||||||||||||
6.00%, 11/15/18 | USD | 150 | 156,187 | |||||||||
Pinnacle Foods Finance LLC | ||||||||||||
9.25%, 04/01/15 (Call 11/30/12) | USD | 113 | 115,401 |
Security | Principal (000s) | Value | ||||||||||
Plains Exploration & Production Co. | ||||||||||||
6.63%, 05/01/21 (Call 05/01/16)b | USD | 100 | $ | 100,300 | ||||||||
Post Holdings Inc. | ||||||||||||
7.38%, 02/15/22 (Call 02/15/17)a | USD | 50 | 53,150 | |||||||||
Quicksilver Resources Inc. | ||||||||||||
8.25%, 08/01/15 (Call 11/30/12) | USD | 100 | 97,250 | |||||||||
R.R. Donnelley & Sons Co. | ||||||||||||
8.25%, 03/15/19 | USD | 100 | 102,792 | |||||||||
Range Resources Corp. | ||||||||||||
5.00%, 08/15/22 (Call 02/15/17)b | USD | 100 | 104,417 | |||||||||
RBS Global Inc./Rexnord LLC | ||||||||||||
8.50%, 05/01/18 (Call 05/01/14) | USD | 100 | 110,000 | |||||||||
Realogy Corp. | ||||||||||||
7.88%, 02/15/19 (Call 02/15/15)a | USD | 100 | 106,750 | |||||||||
Regency Energy Partners LP/Regency Energy Finance Corp. | ||||||||||||
6.88%, 12/01/18 (Call 12/01/14) | USD | 100 | 107,650 | |||||||||
Reynolds Group Issuer Inc./Reynolds Group Issuer LLC | ||||||||||||
7.13%, 04/15/19 (Call 10/15/14) | USD | 350 | 372,531 | |||||||||
9.88%, 08/15/19 (Call 08/15/15) | USD | 150 | 156,937 | |||||||||
Rite Aid Corp. | ||||||||||||
9.50%, 06/15/17 (Call 11/30/12) | USD | 150 | 153,281 | |||||||||
Sabine Pass LNG LP | ||||||||||||
7.50%, 11/30/16 | USD | 100 | 108,875 | |||||||||
Samson Investment Co. | ||||||||||||
9.75%, 02/15/20 (Call 02/15/16)a | USD | 150 | 158,156 |
SCHEDULESOF INVESTMENTS | 45 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® GLOBAL HIGH YIELD CORPORATE BOND FUND
October 31, 2012
Security | Principal (000s) | Value | ||||||||||
SandRidge Energy Inc. | ||||||||||||
7.50%, 03/15/21 (Call 03/15/16) | USD | 100 | $ | 104,500 | ||||||||
8.00%, 06/01/18 (Call 06/01/13)a | USD | 200 | 209,250 | |||||||||
Seagate HDD Cayman | ||||||||||||
7.75%, 12/15/18 (Call 12/15/14) | USD | 100 | 108,687 | |||||||||
Sealed Air Corp. | ||||||||||||
8.13%, 09/15/19 (Call 09/15/15)a | USD | 100 | 109,500 | |||||||||
Sears Holdings Corp. | ||||||||||||
6.63%, 10/15/18 | USD | 100 | 93,875 | |||||||||
ServiceMaster Co. | ||||||||||||
8.00%, 02/15/20 (Call 02/15/15) | USD | 50 | 52,625 | |||||||||
Smithfield Foods Inc. | ||||||||||||
6.63%, 08/15/22 (Call 08/15/17)b | USD | 100 | 104,400 | |||||||||
Springleaf Finance Corp. | ||||||||||||
6.90%, 12/15/17 | USD | 150 | 132,125 | |||||||||
Sprint Nextel Corp. | ||||||||||||
7.00%, 08/15/20 | USD | 50 | 55,063 | |||||||||
9.00%, 11/15/18a | USD | 150 | 185,625 | |||||||||
9.13%, 03/01/17 | USD | 150 | 176,250 | |||||||||
11.50%, 11/15/21 | USD | 100 | 132,875 | |||||||||
Standard Pacific Corp. | ||||||||||||
8.38%, 05/15/18 | USD | 100 | 116,000 | |||||||||
Suburban Propane Partners LP/Suburban Energy Finance Corp. | ||||||||||||
7.50%, 10/01/18 (Call 10/01/14)a | USD | 84 | 90,090 | |||||||||
SunGard Data Systems Inc. | ||||||||||||
6.63%, 11/01/19 (Call 11/01/15)a | USD | 50 | 50,438 | |||||||||
7.38%, 11/15/18 (Call 11/15/13) | USD | 100 | 107,469 | |||||||||
SUPERVALU Inc. | ||||||||||||
8.00%, 05/01/16b | USD | 50 | 47,688 |
Security | Principal (000s) | Value | ||||||||||
Tenet Healthcare Corp. | ||||||||||||
8.88%, 07/01/19 (Call 07/01/14) | USD | 150 | $ | 168,500 | ||||||||
Terex Corp. | ||||||||||||
8.00%, 11/15/17 (Call 11/30/12) | USD | 100 | 104,208 | |||||||||
Tesoro Corp. | ||||||||||||
5.38%, 10/01/22 (Call 10/01/17) | USD | 50 | 52,000 | |||||||||
Texas Competitive Electric Holdings Co. LLC/TCEH Finance Inc. | ||||||||||||
11.50%, 10/01/20 (Call 04/01/16)a,b | USD | 150 | 111,500 | |||||||||
Toys R Us Property Co. I LLC | ||||||||||||
10.75%, 07/15/17 (Call 07/15/13) | USD | 100 | 108,350 | |||||||||
TransDigm Inc. | ||||||||||||
7.75%, 12/15/18 (Call 12/15/14) | USD | 150 | 165,141 | |||||||||
United Rentals (North America) Inc. | ||||||||||||
8.38%, 09/15/20 (Call 09/15/15)b | USD | 100 | 109,083 | |||||||||
United States Steel Corp. | ||||||||||||
7.38%, 04/01/20b | USD | 100 | 100,500 | |||||||||
Univision Communications Inc. | ||||||||||||
6.88%, 05/15/19 (Call 05/15/15)a | USD | 150 | 153,094 | |||||||||
UPCB Finance III Ltd. | ||||||||||||
6.63%, 07/01/20 (Call 07/01/15)a | USD | 150 | 159,844 | |||||||||
UR Financing Escrow Corp. | ||||||||||||
7.38%, 05/15/20 (Call 05/15/16)a | USD | 150 | 162,750 | |||||||||
USG Corp. | ||||||||||||
6.30%, 11/15/16 | USD | 100 | 101,917 | |||||||||
Valeant Pharmaceuticals International Inc. | ||||||||||||
6.88%, 12/01/18 (Call 12/01/14)a,b | USD | 200 | 213,625 |
46 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® GLOBAL HIGH YIELD CORPORATE BOND FUND
October 31, 2012
Security | Principal (000s) | Value | ||||||||||
Vanguard Health Holding Co. II LLC/Vanguard Holding Co. II Inc. | ||||||||||||
8.00%, 02/01/18 (Call 02/01/14) | USD | 100 | $ | 103,667 | ||||||||
Vulcan Materials Co. | ||||||||||||
7.50%, 06/15/21 | USD | 100 | 113,083 | |||||||||
West Corp. | ||||||||||||
8.63%, 10/01/18 (Call 10/01/14) | USD | 100 | 104,750 | |||||||||
WideOpenWest Finance LLC/WideOpenWest Capital Corp. | ||||||||||||
10.25%, 07/15/19 (Call 07/15/15)a | USD | 75 | 78,563 | |||||||||
Windstream Corp. | ||||||||||||
7.75%, 10/15/20 (Call 10/15/15) | USD | 200 | 215,917 | |||||||||
WMG Acquisition Corp. | ||||||||||||
9.50%, 06/15/16 (Call 06/15/13) | USD | 100 | 109,979 | |||||||||
WPX Energy Inc. | ||||||||||||
6.00%, 01/15/22 (Call 10/15/21) | USD | 100 | 107,250 | |||||||||
Wynn Las Vegas LLC | ||||||||||||
7.75%, 08/15/20 (Call 08/15/15) | USD | 100 | 112,000 | |||||||||
XM Satellite Radio Inc. | ||||||||||||
7.63%, 11/01/18 (Call 11/01/14)a | USD | 150 | 165,625 | |||||||||
Zayo Group LLC/Zayo Capital Inc. | ||||||||||||
10.13%, 07/01/20 (Call 07/01/16) | USD | 100 | 111,625 | |||||||||
|
| |||||||||||
23,168,793 | ||||||||||||
|
| |||||||||||
TOTAL CORPORATE BONDS & NOTES (Cost: $34,492,557) |
| 35,259,650 |
Security | Shares | Value | ||||||||
SHORT-TERM INVESTMENTS — 8.62% |
| |||||||||
MONEY MARKET FUNDS — 8.62% | ||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares | ||||||||||
0.27%f,g,h | 2,410,453 | $ | 2,410,453 | |||||||
BlackRock Cash Funds: Prime, SL Agency Shares | ||||||||||
0.25%f,g,h | 219,817 | 219,817 | ||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | ||||||||||
0.08%f,g | 489,164 | 489,164 | ||||||||
|
| |||||||||
3,119,434 | ||||||||||
|
| |||||||||
TOTAL SHORT-TERM INVESTMENTS (Cost: $3,119,434) |
| 3,119,434 | ||||||||
|
| |||||||||
TOTAL INVESTMENTS |
| 38,379,084 | ||||||||
Other Assets, Less Liabilities — (6.11)% |
| (2,209,651 | ) | |||||||
|
| |||||||||
NET ASSETS — 100.00% |
| $ | 36,169,433 | |||||||
|
|
CAD — Canadian Dollar
EUR — Euro
GBP — British Pound
USD — United States Dollar
a | This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933. |
b | All or a portion of this security represents a security on loan. See Note 5. |
c | This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933. |
d | Variable rate security. Rate shown is as of report date. |
e | Step coupon security. Coupon rate will either increase (step-up bond) or decrease (step-down bond) at regular intervals until maturity. Interest rate shown reflects the rate currently in effect. |
f | Affiliated issuer. See Note 2. |
g | The rate quoted is the annualized seven-day yield of the fund at period end. |
h | All or a portion of this security represents an investment of securities lending collateral. See Note 5. |
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 47 |
Table of Contents
Statements of Assets and Liabilities
iSHARES®, INC.
October 31, 2012
iShares Emerging Markets Corporate Bond Fund | iShares Emerging Markets High Yield Bond Fund | iShares Bond Fund | ||||||||||
ASSETS | ||||||||||||
Investments, at cost: | ||||||||||||
Unaffiliated | $ | 20,204,381 | $ | 159,838,677 | $ | 200,551,110 | ||||||
Affiliated (Note 2) | 95,563 | 1,763,512 | 980,191 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments | $ | 20,299,944 | $ | 161,602,189 | $ | 201,531,301 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (Note 1): | ||||||||||||
Unaffiliated | $ | 20,777,837 | $ | 159,357,053 | $ | 202,588,107 | ||||||
Affiliated (Note 2) | 95,563 | 1,763,512 | 980,191 | |||||||||
|
|
|
|
|
| |||||||
Total fair value of investments | 20,873,400 | 161,120,565 | 203,568,298 | |||||||||
Foreign currencies, at valuea | — | — | 630,029 | |||||||||
Cash | 8,764 | 64,786 | — | |||||||||
Receivables: | ||||||||||||
Investment securities sold | — | 1,846,260 | — | |||||||||
Due from custodian (Note 4) | — | 28,715,161 | — | |||||||||
Interest | 298,799 | 3,233,295 | 3,646,867 | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 21,180,963 | 194,980,067 | 207,845,194 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | — | 28,715,161 | — | |||||||||
Due to custodian | — | — | 57 | |||||||||
Deferred foreign capital gains taxes (Note 1) | — | — | 16,030 | |||||||||
Investment advisory fees (Note 2) | 10,728 | 33,870 | 75,623 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 10,728 | 28,749,031 | 91,710 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 21,170,235 | $ | 166,231,036 | $ | 207,753,484 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 20,532,606 | $ | 166,529,529 | $ | 206,065,597 | ||||||
Undistributed net investment income | 59,562 | 206,711 | — | |||||||||
Undistributed net realized gain (accumulated net realized loss) | 4,611 | (23,580 | ) | (327,335 | ) | |||||||
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies | 573,456 | (481,624 | ) | 2,015,222 | ||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 21,170,235 | $ | 166,231,036 | $ | 207,753,484 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingb | 400,000 | 3,100,000 | 4,000,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 52.93 | $ | 53.62 | $ | 51.94 | ||||||
|
|
|
|
|
|
a | Cost of foreign currencies: $ —, $ — and $635,052, respectively. |
b | $0.001 par value, number of shares authorized: 500 million, 500 million and 500 million, respectively. |
See notes to financial statements.
48 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Assets and Liabilities (Continued)
iSHARES®, INC.
October 31, 2012
iShares Global ex USD High Yield Corporate Bond Fund | iShares Global High Yield Corporate Bond Fund | |||||||
ASSETS | ||||||||
Investments, at cost: | ||||||||
Unaffiliated | $ | 24,420,353 | $ | 34,492,557 | ||||
Affiliated (Note 2) | 3,463 | 3,119,434 | ||||||
|
|
|
| |||||
Total cost of investments | $ | 24,423,816 | $ | 37,611,991 | ||||
|
|
|
| |||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||
Unaffiliated | $ | 25,135,571 | $ | 35,259,650 | ||||
Affiliated (Note 2) | 3,463 | 3,119,434 | ||||||
|
|
|
| |||||
Total fair value of investments | 25,139,034 | 38,379,084 | ||||||
Foreign currencies, at valueb | 180,090 | 163,225 | ||||||
Receivables: | ||||||||
Investment securities sold | 293,113 | — | ||||||
Interest | 636,476 | 741,854 | ||||||
|
|
|
| |||||
Total Assets | 26,248,713 | 39,284,163 | ||||||
|
|
|
| |||||
LIABILITIES | ||||||||
Payables: | ||||||||
Investment securities purchased | 235,756 | 472,230 | ||||||
Collateral for securities on loan (Note 5) | — | 2,630,270 | ||||||
Investment advisory fees (Note 2) | 8,755 | 12,230 | ||||||
|
|
|
| |||||
Total Liabilities | 244,511 | 3,114,730 | ||||||
|
|
|
| |||||
NET ASSETS | $ | 26,004,202 | $ | 36,169,433 | ||||
|
|
|
| |||||
Net assets consist of: | ||||||||
Paid-in capital | $ | 25,186,470 | $ | 35,247,464 | ||||
Undistributed net investment income | 165,707 | 187,869 | ||||||
Accumulated net realized loss | (75,095 | ) | (36,747 | ) | ||||
Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies | 727,120 | 770,847 | ||||||
|
|
|
| |||||
NET ASSETS | $ | 26,004,202 | $ | 36,169,433 | ||||
|
|
|
| |||||
Shares outstandingc | 500,000 | 700,000 | ||||||
|
|
|
| |||||
Net asset value per share | $ | 52.01 | $ | 51.67 | ||||
|
|
|
|
a | Securities on loan with values of $ — and $2,513,040, respectively. See Note 5. |
b | Cost of foreign currencies: $180,421 and $163,735, respectively. |
c | $0.001 par value, number of shares authorized: 500 million and 500 million, respectively. |
See notes to financial statements.
FINANCIAL STATEMENTS | 49 |
Table of Contents
Statements of Operations
iSHARES®, INC.
Period ended October 31, 2012
iShares Emerging Markets Corporate Bond Funda | iShares Emerging Markets High Yield Bond Fundb | iShares Bond Fund | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Interest — unaffiliatedc | $ | 307,160 | $ | 758,109 | $ | 2,484,564 | ||||||
Interest — affiliated (Note 2) | 35 | 230 | 462 | |||||||||
|
|
|
|
|
| |||||||
307,195 | 758,339 | 2,485,026 | ||||||||||
Less: Other foreign taxes (Note 1) | — | — | (31 | ) | ||||||||
|
|
|
|
|
| |||||||
Total investment income | 307,195 | 758,339 | 2,484,995 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 41,205 | 82,350 | 288,363 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 41,205 | 82,350 | 288,363 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 265,990 | 675,989 | 2,196,632 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) |
| |||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliatedd | 4,611 | (23,580 | ) | (373,949 | ) | |||||||
Foreign currency transactions | — | — | (1,507,755 | ) | ||||||||
|
|
|
|
|
| |||||||
Net realized gain (loss) | 4,611 | (23,580 | ) | (1,881,704 | ) | |||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: | ||||||||||||
Investmentse | 573,456 | (481,624 | ) | 1,319,339 | ||||||||
Translation of assets and liabilities in foreign currencies | — | — | (20,565 | ) | ||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | 573,456 | (481,624 | ) | 1,298,774 | ||||||||
|
|
|
|
|
| |||||||
Net realized and unrealized gain (loss) | 578,067 | (505,204 | ) | (582,930 | ) | |||||||
|
|
|
|
|
| |||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 844,057 | $ | 170,785 | $ | 1,613,702 | ||||||
|
|
|
|
|
|
a | For the period from April 17, 2012 (commencement of operations) to October 31, 2012. |
b | For the period from April 3, 2012 (commencement of operations) to October 31, 2012. |
c | Net of foreign withholding tax of $ —, $ — and $114,297, respectively. |
d | Net of foreign capital gains taxes of $ —, $ — and $378, respectively. |
e | Net of deferred foreign capital gains taxes of $ —, $ — and $15,195, respectively. |
See notes to financial statements.
50 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Operations (Continued)
iSHARES®, INC.
Period ended October 31, 2012
iShares Global ex USD High Yield Corporate Bond Funda | iShares Global High Yield Corporate Bond Funda | |||||||
NET INVESTMENT INCOME | ||||||||
Interest — unaffiliated | $ | 1,026,953 | $ | 1,092,148 | ||||
Interest — affiliated (Note 2) | 21 | 239 | ||||||
Securities lending income — affiliated (Note 2) | — | 3,497 | ||||||
|
|
|
| |||||
Total investment income | 1,026,974 | 1,095,884 | ||||||
|
|
|
| |||||
EXPENSES | ||||||||
Investment advisory fees (Note 2) | 77,202 | 90,198 | ||||||
|
|
|
| |||||
Total expenses | 77,202 | 90,198 | ||||||
Less investment advisory fees waived (Note 2) | (21,055 | ) | (24,599 | ) | ||||
|
|
|
| |||||
Net expenses | 56,147 | 65,599 | ||||||
|
|
|
| |||||
Net investment income | 970,827 | 1,030,285 | ||||||
|
|
|
| |||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||
Net realized gain (loss) from: | ||||||||
Investments — unaffiliated | (238,599 | ) | (42,665 | ) | ||||
Foreign currency transactions | (15,901 | ) | 11,845 | |||||
|
|
|
| |||||
Net realized loss | (254,500 | ) | (30,820 | ) | ||||
|
|
|
| |||||
Net change in unrealized appreciation/depreciation on: | ||||||||
Investments | 715,218 | 767,093 | ||||||
Translation of assets and liabilities in foreign currencies | 11,902 | 3,754 | ||||||
|
|
|
| |||||
Net change in unrealized appreciation/depreciation | 727,120 | 770,847 | ||||||
|
|
|
| |||||
Net realized and unrealized gain | 472,620 | 740,027 | ||||||
|
|
|
| |||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 1,443,447 | $ | 1,770,312 | ||||
|
|
|
|
a | For the period from April 3, 2012 (commencement of operations) to October 31, 2012. |
See notes to financial statements.
FINANCIAL STATEMENTS | 51 |
Table of Contents
Statements of Changes in Net Assets
iSHARES®, INC.
iShares Emerging Markets Corporate Bond Fund | iShares Emerging Markets High Yield Bond Fund | |||||||
Period from to October 31, 2012 | Period from to October 31, 2012 | |||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||
OPERATIONS: | ||||||||
Net investment income | $ | 265,990 | $ | 675,989 | ||||
Net realized gain (loss) | 4,611 | (23,580 | ) | |||||
Net change in unrealized appreciation/depreciation | 573,456 | (481,624 | ) | |||||
|
|
|
| |||||
Net increase in net assets resulting from operations | 844,057 | 170,785 | ||||||
|
|
|
| |||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||
From net investment income | (206,428 | ) | (469,278 | ) | ||||
|
|
|
| |||||
Total distributions to shareholders | (206,428 | ) | (469,278 | ) | ||||
|
|
|
| |||||
CAPITAL SHARE TRANSACTIONS: | ||||||||
Proceeds from shares sold | 20,532,606 | 166,529,529 | ||||||
|
|
|
| |||||
Net increase in net assets from capital share transactions | 20,532,606 | 166,529,529 | ||||||
|
|
|
| |||||
INCREASE IN NET ASSETS | 21,170,235 | 166,231,036 | ||||||
NET ASSETS | ||||||||
Beginning of period | — | — | ||||||
|
|
|
| |||||
End of period | $ | 21,170,235 | $ | 166,231,036 | ||||
|
|
|
| |||||
Undistributed net investment income included in net assets at end of period | $ | 59,562 | $ | 206,711 | ||||
|
|
|
| |||||
SHARES ISSUED | ||||||||
Shares sold | 400,000 | 3,100,000 | ||||||
|
|
|
| |||||
Net increase in shares outstanding | 400,000 | 3,100,000 | ||||||
|
|
|
|
a | Commencement of operations. |
See notes to financial statements.
52 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares Emerging Markets Local Currency Bond Fund | iShares Global ex USD High Yield Corporate Bond Fund | |||||||||||
Year ended October 31, 2012 | Period from to October 31, 2011 | Period from to October 31, 2012 | ||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||
OPERATIONS: | ||||||||||||
Net investment income | $ | 2,196,632 | $ | 13,024 | $ | 970,827 | ||||||
Net realized loss | (1,881,704 | ) | (301,685 | ) | (254,500 | ) | ||||||
Net change in unrealized appreciation/depreciation | 1,298,774 | 716,448 | 727,120 | |||||||||
|
|
|
|
|
| |||||||
Net increase in net assets resulting from operations | 1,613,702 | 427,787 | 1,443,447 | |||||||||
|
|
|
|
|
| |||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||
From net investment income | (642,268 | ) | — | (625,715 | ) | |||||||
Return of capital | (867,033 | ) | — | — | ||||||||
|
|
|
|
|
| |||||||
Total distributions to shareholders | (1,509,301 | ) | — | (625,715 | ) | |||||||
|
|
|
|
|
| |||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||
Proceeds from shares sold | 176,968,127 | 30,253,169 | 25,186,470 | |||||||||
|
|
|
|
|
| |||||||
Net increase in net assets from capital share transactions | 176,968,127 | 30,253,169 | 25,186,470 | |||||||||
|
|
|
|
|
| |||||||
INCREASE IN NET ASSETS | 177,072,528 | 30,680,956 | 26,004,202 | |||||||||
NET ASSETS | ||||||||||||
Beginning of period | 30,680,956 | — | — | |||||||||
|
|
|
|
|
| |||||||
End of period | $ | 207,753,484 | $ | 30,680,956 | $ | 26,004,202 | ||||||
|
|
|
|
|
| |||||||
Undistributed net investment income included in net assets at end of period | $ | — | $ | 5 | $ | 165,707 | ||||||
|
|
|
|
|
| |||||||
SHARES ISSUED | ||||||||||||
Shares sold | 3,400,000 | 600,000 | 500,000 | |||||||||
|
|
|
|
|
| |||||||
Net increase in shares outstanding | 3,400,000 | 600,000 | 500,000 | |||||||||
|
|
|
|
|
|
a | Commencement of operations. |
See notes to financial statements.
FINANCIAL STATEMENTS | 53 |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares Global High Yield Corporate Bond Fund | ||||
Period from to October 31, 2012 | ||||
INCREASE (DECREASE) IN NET ASSETS | ||||
OPERATIONS: | ||||
Net investment income | $ | 1,030,285 | ||
Net realized loss | (30,820 | ) | ||
Net change in unrealized appreciation/depreciation | 770,847 | |||
|
| |||
Net increase in net assets resulting from operations | 1,770,312 | |||
|
| |||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||
From net investment income | (848,343 | ) | ||
|
| |||
Total distributions to shareholders | (848,343 | ) | ||
|
| |||
CAPITAL SHARE TRANSACTIONS: | ||||
Proceeds from shares sold | 35,247,464 | |||
|
| |||
Net increase in net assets from capital share transactions | 35,247,464 | |||
|
| |||
INCREASE IN NET ASSETS | 36,169,433 | |||
NET ASSETS | ||||
Beginning of period | — | |||
|
| |||
End of period | $ | 36,169,433 | ||
|
| |||
Undistributed net investment income included in net assets at end of period | $ | 187,869 | ||
|
| |||
SHARES ISSUED | ||||
Shares sold | 700,000 | |||
|
| |||
Net increase in shares outstanding | 700,000 | |||
|
|
a | Commencement of operations. |
See notes to financial statements.
54 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES®, INC.
(For a share outstanding throughout the period)
iShares Emerging Markets Corporate Bond Fund
Period from to Oct. 31, 2012 | ||||
Net asset value, beginning of period | $ | 50.00 | ||
|
| |||
Income from investment operations: | ||||
Net investment incomeb | 1.07 | |||
Net realized and unrealized gainc | 2.76 | |||
|
| |||
Total from investment operations | 3.83 | |||
|
| |||
Less distributions from: | ||||
Net investment income | (0.90 | ) | ||
|
| |||
Total distributions | (0.90 | ) | ||
|
| |||
Net asset value, end of period | $ | 52.93 | ||
|
| |||
Total return | 7.75 | %d | ||
|
| |||
Ratios/Supplemental data: | ||||
Net assets, end of period (000s) | $ | 21,170 | ||
Ratio of expenses to average net assetse | 0.60 | % | ||
Ratio of net investment income to average net assetse | 3.87 | % | ||
Portfolio turnover ratef | 29 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout the period. |
c | The amount reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
d | Not annualized. |
e | Annualized for periods of less than one year. |
f | Portfolio turnover rate excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 55 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout the period)
iShares Emerging Markets High Yield Bond Fund
Period from to Oct. 31, 2012 | ||||
Net asset value, beginning of period | $ | 50.02 | ||
|
| |||
Income from investment operations: | ||||
Net investment incomeb | 1.60 | |||
Net realized and unrealized gainc | 3.40 | |||
|
| |||
Total from investment operations | 5.00 | |||
|
| |||
Less distributions from: | ||||
Net investment income | (1.40 | ) | ||
|
| |||
Total distributions | (1.40 | ) | ||
|
| |||
Net asset value, end of period | $ | 53.62 | ||
|
| |||
Total return | 10.21 | %d | ||
|
| |||
Ratios/Supplemental data: | ||||
Net assets, end of period (000s) | $ | 166,231 | ||
Ratio of expenses to average net assetse | 0.65 | % | ||
Ratio of net investment income to average net assetse | 5.34 | % | ||
Portfolio turnover ratef | 40 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout the period. |
c | The amount reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
d | Not annualized. |
e | Annualized for periods of less than one year. |
f | Portfolio turnover rate excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
56 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares Emerging Markets Local Currency Bond Fund
Year ended Oct. 31, 2012 | Period from to Oct. 31, 2011 | |||||||
Net asset value, beginning of period | $ | 51.13 | $ | 49.85 | ||||
|
|
|
| |||||
Income from investment operations: | ||||||||
Net investment incomeb | 2.31 | 0.02 | ||||||
Net realized and unrealized gainc | 0.41 | 1.26 | ||||||
|
|
|
| |||||
Total from investment operations | 2.72 | 1.28 | ||||||
|
|
|
| |||||
Less distributions from: | ||||||||
Net investment income | (0.81 | ) | — | |||||
Return of capital | (1.10 | ) | — | |||||
|
|
|
| |||||
Total distributions | (1.91 | ) | — | |||||
|
|
|
| |||||
Net asset value, end of period | $ | 51.94 | $ | 51.13 | ||||
|
|
|
| |||||
Total return | 5.48 | % | 2.57 | %d | ||||
|
|
|
| |||||
Ratios/Supplemental data: | ||||||||
Net assets, end of period (000s) | $ | 207,753 | $ | 30,681 | ||||
Ratio of expenses to average net assetse | 0.60 | % | 0.60 | % | ||||
Ratio of net investment income to average net assetse | 4.57 | % | 1.21 | % | ||||
Portfolio turnover ratef | 61 | % | 0 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout each period. |
c | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
d | Not annualized. |
e | Annualized for periods of less than one year. |
f | Portfolio turnover rates exclude portfolio securities received or delivered in Creation Units but include portfolio transactions that are executed as a result of the Fund processing capital share transactions in Creation Units partially for cash in U.S. dollars. Excluding such cash transactions, the portfolio turnover rate for the year ended October 31, 2012 is 61%. See Note 4. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 57 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout the period)
iShares Global ex USD High Yield Corporate Bond Fund
Period from to Oct. 31, 2012 | ||||
Net asset value, beginning of period | $ | 50.14 | ||
|
| |||
Income from investment operations: | ||||
Net investment incomeb | 1.94 | |||
Net realized and unrealized gainc | 1.18 | |||
|
| |||
Total from investment operations | 3.12 | |||
|
| |||
Less distributions from: | ||||
Net investment income | (1.25 | ) | ||
|
| |||
Total distributions | (1.25 | ) | ||
|
| |||
Net asset value, end of period | $ | 52.01 | ||
|
| |||
Total return | 6.49 | %d | ||
|
| |||
Ratios/Supplemental data: | ||||
Net assets, end of period (000s) | $ | 26,004 | ||
Ratio of expenses to average net assetse | 0.40 | % | ||
Ratio of expenses to average net assets prior to waived feese | 0.55 | % | ||
Ratio of net investment income to average net assetse | 6.92 | % | ||
Portfolio turnover ratef | 18 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout the period. |
c | The amount reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
d | Not annualized. |
e | Annualized for periods of less than one year. |
f | Portfolio turnover rate excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
58 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout the period)
iShares Global High Yield Corporate Bond Fund
Period from to Oct. 31, 2012 | ||||
Net asset value, beginning of period | $ | 50.00 | ||
|
| |||
Income from investment operations: | ||||
Net investment incomeb | 1.82 | |||
Net realized and unrealized gainc | 1.35 | |||
|
| |||
Total from investment operations | 3.17 | |||
|
| |||
Less distributions from: | ||||
Net investment income | (1.50 | ) | ||
|
| |||
Total distributions | (1.50 | ) | ||
|
| |||
Net asset value, end of period | $ | 51.67 | ||
|
| |||
Total return | 6.53 | %d | ||
|
| |||
Ratios/Supplemental data: | ||||
Net assets, end of period (000s) | $ | 36,169 | ||
Ratio of expenses to average net assetse | 0.40 | % | ||
Ratio of expenses to average net assets prior to waived feese | 0.55 | % | ||
Ratio of net investment income to average net assetse | 6.28 | % | ||
Portfolio turnover ratef | 10 | % |
a | Commencement of operations. |
b | Based on average shares outstanding throughout the period. |
c | The amount reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
d | Not annualized. |
e | Annualized for periods of less than one year. |
f | Portfolio turnover rate excludes portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 59 |
Table of Contents
iSHARES®, INC.
iShares, Inc. (the “Company”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Company was incorporated under the laws of the State of Maryland on September 1, 1994 pursuant to amended and restated Articles of Incorporation.
These financial statements relate only to the following funds (each, a “Fund,” and collectively, the “Funds”):
iShares Bond Fund | Diversification Classification | |
Emerging Markets Corporatea | Non-diversified | |
Emerging Markets High Yieldb | Non-diversified | |
Emerging Markets Local Currency | Non-diversified | |
Global ex USD High Yield Corporateb | Non-diversified | |
Global High Yield Corporateb | Non-diversified |
a | Fund commenced operations on April 17, 2012. |
b | Fund commenced operations on April 3, 2012. |
Non-diversified funds generally hold securities of fewer issuers than diversified funds and may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers.
The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index. The investment adviser uses a “passive” or index approach to try to achieve each Fund’s investment objective.
Each Fund may invest in securities of non-U.S. issuers that may trade in non-U.S. markets. This may involve certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: generally less liquid and less efficient securities markets; generally greater price volatility; exchange rate fluctuations and exchange controls; imposition of restrictions on the expatriation of funds or other assets of the Funds; less publicly available information about issuers; the imposition of withholding or other taxes; higher transaction and custody costs; settlement delays and risk of loss attendant in settlement procedures; difficulties in enforcing contractual obligations; less regulation of securities markets; different accounting, disclosure and reporting requirements; more substantial governmental involvement in the economy; higher inflation rates; greater social, economic and political uncertainties; the risk of nationalization or expropriation of assets; and the risk of war.
Pursuant to the Company’s organizational documents, the Funds’ officers and directors are indemnified against certain liabilities that may arise out of the performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred.
1. | SIGNIFICANT ACCOUNTING POLICIES |
The following significant accounting policies are consistently followed by the Funds in the preparation of their financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
60 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
SECURITY VALUATION
Each Fund’s investments are valued at fair value each day that the Fund’s listing exchange is open. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) provides oversight of the valuation of investments for the Funds. The investments of each Fund are valued pursuant to policies and procedures developed by the Global Valuation Committee and approved by the Board of Directors of the Company (the “Board”).
• | Fixed income investments are valued at the last available bid price received from independent pricing services. In determining the value of a fixed income investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrixes, market transactions in comparable investments, various relationships observed in the market between investments, and calculated yield measures. |
• | Open-end U.S. mutual funds are valued at that day’s published net asset value (NAV). |
In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the fair value of such investment or if a price is not available, the investment will be valued based upon other available factors deemed relevant by the Global Valuation Committee, in accordance with policies approved by the Board. These factors include but are not limited to (i) attributes specific to the investment; (ii) the principal market for the investment; (iii) the customary participants in the principal market for the investment; (iv) data assumptions by market participants for the investment, if reasonably available; (v) quoted prices for similar investments in active markets; and (vi) other factors, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and/or other default rates. Valuations based on such factors are reported to the Board on a quarterly basis.
The Global Valuation Committee employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the Company’s pricing vendors, a regular review of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices and large movements in market values, and reviews of market related activity.
Fair value pricing could result in a difference between the prices used to calculate a Fund’s net asset value and the prices used by the Fund’s underlying index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s underlying index.
Various inputs are used in determining the fair value of financial instruments. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes. The level of a value determined for a financial instrument within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The categorization of a value determined for a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and does not necessarily correspond to the Funds’ perceived risk of that instrument. The three levels of the fair value hierarchy are as follows:
• | Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities; |
• | Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability (such as exchange rates, financing terms, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs; and |
NOTESTO FINANCIAL STATEMENTS | 61 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
• | Level 3 — Unobservable inputs for the asset or liability, including the Funds’ assumptions used in determining the fair value of investments. |
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. In accordance with the Company’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period.
The following table summarizes the value of each of the Funds’ investments according to the fair value hierarchy as of October 31, 2012. The breakdown of each Fund’s investments into major categories is disclosed in its respective Schedule of Investments.
iShares Bond Fund and
| Investments | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Emerging Markets Corporate | ||||||||||||||||
Assets: | ||||||||||||||||
Corporate Bonds & Notes | $ | — | $ | 13,191,384 | $ | — | $ | 13,191,384 | ||||||||
Foreign Agency Obligations | — | 7,586,453 | — | 7,586,453 | ||||||||||||
Short-Term Investments | 95,563 | — | — | 95,563 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 95,563 | $ | 20,777,837 | $ | — | $ | 20,873,400 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Emerging Markets High Yield | ||||||||||||||||
Assets: | ||||||||||||||||
Corporate Bonds & Notes | $ | — | $ | 43,146,630 | $ | — | $ | 43,146,630 | ||||||||
Foreign Agency Obligations | — | 14,971,817 | — | 14,971,817 | ||||||||||||
Foreign Government Obligations | — | 101,238,606 | — | 101,238,606 | ||||||||||||
Short-Term Investments | 1,763,512 | — | — | 1,763,512 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 1,763,512 | $ | 159,357,053 | $ | — | $ | 161,120,565 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Emerging Markets Local Currency | ||||||||||||||||
Assets: | ||||||||||||||||
Foreign Government Obligations | $ | — | $ | 202,588,107 | $ | — | $ | 202,588,107 | ||||||||
Short-Term Investments | 980,191 | — | — | 980,191 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 980,191 | $ | 202,588,107 | $ | — | $ | 203,568,298 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Global ex USD High Yield Corporate | ||||||||||||||||
Assets: | ||||||||||||||||
Corporate Bonds & Notes | $ | — | $ | 25,135,571 | $ | — | $ | 25,135,571 | ||||||||
Short-Term Investments | 3,463 | — | — | 3,463 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 3,463 | $ | 25,135,571 | $ | — | $ | 25,139,034 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Global High Yield Corporate | ||||||||||||||||
Assets: | ||||||||||||||||
Corporate Bonds & Notes | $ | — | $ | 35,259,650 | $ | — | $ | 35,259,650 | ||||||||
Short-Term Investments | 3,119,434 | — | — | 3,119,434 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 3,119,434 | $ | 35,259,650 | $ | — | $ | 38,379,084 | |||||||||
|
|
|
|
|
|
|
| |||||||||
62 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are accounted for on trade date. Realized gains and losses on investment transactions are determined using the specific identification method. Interest income, including amortization and accretion of premiums and discounts on debt securities, is recognized daily on the accrual basis.
FOREIGN CURRENCY TRANSLATION
The accounting records of the Funds are maintained in U.S. dollars. Foreign currencies, as well as investment securities and other assets and liabilities denominated in foreign currencies, are translated into U.S. dollars using exchange rates deemed appropriate by the investment adviser. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars on the respective dates of such transactions.
Each Fund does not isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of securities. Such fluctuations are reflected by the Funds as a component of realized and unrealized gains and losses from investments for financial reporting purposes.
FOREIGN TAXES
The Funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, capital gains on investments, certain foreign currency transactions or other corporate events. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the Funds invest. These foreign taxes, if any, are paid by the Funds and are reflected in their Statements of Operations as follows: foreign taxes withheld at source are presented as a reduction of income, foreign taxes on securities lending income are presented as a reduction of securities lending income, foreign taxes on capital gains from sales of investments and foreign currency transactions are included in their respective net realized gain (loss) categories, and foreign taxes on other corporate events are reflected in “Other foreign taxes.” Foreign taxes payable as of October 31, 2012, if any, are disclosed in the Funds’ Statements of Assets and Liabilities.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends and distributions paid by each Fund are recorded on the ex-dividend dates. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds.
FEDERAL INCOME TAXES
Each Fund is treated as an entity separate from the Company’s other funds for federal income tax purposes. It is the policy of each Fund to qualify as a regulated investment company by complying with the provisions applicable to regulated investment companies, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, and to annually distribute substantially all of its ordinary income and any net capital gains (taking into account any capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Accordingly, no provision for federal income taxes is required.
NOTESTO FINANCIAL STATEMENTS | 63 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
RECENT ACCOUNTING STANDARD
In December 2011, the Financial Accounting Standards Board issued guidance to enhance current disclosure requirements on offsetting of certain assets and liabilities and enable financial statement users to compare financial statements prepared under U.S. GAAP and International Financial Reporting Standards (IFRS). The new disclosures are required for investments and derivative financial instruments subject to master netting agreements or similar agreements and require an entity to disclose both gross and net information about such investments and transactions eligible for offset in the statement of assets and liabilities. In addition, the standard requires disclosure of collateral received and posted in connection with master netting agreements or similar agreements. The guidance is effective for financial statements for fiscal years beginning after January 1, 2013, and interim periods within those fiscal years. Management is evaluating the impact of this guidance on the Funds’ financial statements and disclosures.
2. | INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES |
Pursuant to an Investment Advisory Agreement with the Company, BlackRock Fund Advisors (“BFA”) manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock, Inc. (“BlackRock”). Under the Investment Advisory Agreement, BFA is responsible for substantially all expenses of the Funds, except interest, taxes, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution fees, litigation expenses and any extraordinary expenses.
BFA has entered into a sub-advisory agreement with BlackRock International Limited (the “Sub-Advisor”), an affiliate of BFA, under which BFA pays the Sub-Advisor for services it provides to the iShares Emerging Markets Local Currency Bond Fund, iShares Global ex USD High Yield Corporate Bond Fund and iShares Global High Yield Corporate Bond Fund.
For its investment advisory services to each Fund, BFA is entitled to an annual investment advisory fee based on the average daily net assets of each Fund as follows:
iShares Bond Fund | Investment Advisory Fee | |||
Emerging Markets Corporate | 0.60 | % | ||
Emerging Markets High Yield | 0.65 | |||
Emerging Markets Local Currency | 0.60 | |||
Global ex USD High Yield Corporate | 0.55 | |||
Global High Yield Corporate | 0.55 |
BFA has contractually agreed to waive a portion of its investment advisory fees for the iShares Global ex USD High Yield Corporate Bond Fund and the iShares Global High Yield Corporate Bond Fund through December 31, 2014 in order to limit total annual operating expenses to 0.40% of average daily net assets.
The U.S. Securities and Exchange Commission has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (“BTC”) to serve as securities lending agent for the Funds, subject to applicable conditions. BTC is an affiliate of BFA. Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, and any fees or other payments to and from borrowers of securities. Each Fund retains 65% of securities lending income and pays a fee to BTC equal to 35% of such income. As securities lending agent, BTC is responsible for all transaction fees and all other operational costs relating to securities lending activities, other than extraordinary expenses. BTC is also responsible for fees and expenses incurred by each Fund as a result of the investment of cash collateral received for securities on loan in a money market fund managed by BFA or an affiliate.
64 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
For the period ended October 31, 2012, BTC earned securities lending agent fees from the Funds as follows:
iShares Bond Fund | Securities Lending Agent Fees | |||
Global High Yield Corporate | $ | 1,883 |
At a special meeting of the Board held on January 5, 2012, the directors approved a new distribution agreement with BlackRock Investments, LLC (“BRIL”). BRIL is an affiliate of BFA. Effective April 1, 2012, BRIL replaced SEI Investments Distribution Co. as the distributor for each Fund. Pursuant to the new distribution agreement, BFA is responsible for any fees or expenses for distribution services provided to the Funds.
Each Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is included in “Interest — affiliated” in the Statements of Operations.
The PNC Financial Services Group, Inc. is the largest stockholder of BlackRock and is considered to be an affiliate of the Funds for 1940 Act purposes.
Certain directors and officers of the Company are also officers of BTC and/or BFA.
3. | INVESTMENT PORTFOLIO TRANSACTIONS |
Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the period ended October 31, 2012 were as follows:
iShares Bond Fund | Purchases | Sales | ||||||
Emerging Markets Corporate | $ | 14,189,930 | $ | 3,594,721 | ||||
Emerging Markets High Yield | 22,550,007 | 13,237,916 | ||||||
Emerging Markets Local Currency | 203,777,517 | 31,882,462 | ||||||
Global ex USD High Yield Corporate | 11,093,661 | 4,199,187 | ||||||
Global High Yield Corporate | 20,344,642 | 2,809,944 |
In-kind transactions (see Note 4) for the period ended October 31, 2012 were as follows:
iShares Bond Fund | In-kind Purchases | |||
Emerging Markets Corporate | $ | 9,673,628 | ||
Emerging Markets High Yield | 150,593,662 | |||
Global ex USD High Yield Corporate | 17,728,325 | |||
Global High Yield Corporate | 17,061,262 |
NOTESTO FINANCIAL STATEMENTS | 65 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
4. | CAPITAL SHARE TRANSACTIONS |
Capital shares are issued and redeemed by each Fund only in aggregations of a specified number of shares or multiples thereof (“Creation Units”) at net asset value. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the Statements of Changes in Net Assets.
The consideration for the purchase of Creation Units of a fund in the Company generally consists of the in-kind deposit of a designated portfolio of securities, which constitutes an optimized representation of the securities of that fund’s underlying index, and a specified amount of cash. Certain funds in the Company 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 Company’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.
From time to time, settlement of securities related to in-kind contributions or in-kind redemptions may be delayed. In such cases, securities related to in-kind contributions are reflected as “Due from custodian” and securities related to in-kind redemptions are reflected as “Securities related to in-kind transactions” in the Statements of Assets and Liabilities.
5. | LOANS OF PORTFOLIO SECURITIES |
Each Fund may lend its investment securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. government. The initial collateral received by each Fund is required to have a value of at least 102% of the current value of the loaned securities plus the interest accrued on such securities, if any, 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 plus accrued interest, if any. 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. Any securities lending cash collateral may be reinvested in certain short-term instruments either directly on behalf of a fund or through one or more joint accounts or money market funds, including those managed by BFA or its affiliates. Each Fund could suffer a loss if the value of an investment purchased with cash collateral falls below the value of the cash collateral received.
As of October 31, 2012, any securities on loan were collateralized by cash. The cash collateral received was invested in money market funds managed by BFA. The value of the securities on loan as of October 31, 2012 and the value of the related collateral are disclosed in the Statements of Assets and Liabilities. Securities lending income, as disclosed in the Statements of Operations, represents the income earned from the investment of the cash collateral, net of fees and other payments to and from borrowers, and less the fees paid to BTC as securities lending agent.
66 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
6. | INCOME TAX INFORMATION |
U.S. GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset values per share. The following permanent differences as of October 31, 2012, attributable to foreign currency transactions, were reclassified to the following accounts:
iShares Bond Fund | Undistributed Net Investment in Excess of Net Investment Income | Undistributed Net Realized Gain/Accumulated Net Realized Loss | ||||||
Emerging Markets Local Currency | (1,554,369 | ) | 1,554,369 | |||||
Global ex USD High Yield Corporate | (179,405 | ) | 179,405 | |||||
Global High Yield Corporate | 5,927 | (5,927 | ) |
The tax character of distibutions paid during the period ended October 31, 2012 was as follows:
iShares Bond Fund | 2012 | |||
Emerging Markets Corporate | ||||
Ordinary income | $ | 206,428 | ||
|
| |||
Emerging Markets High Yield | ||||
Ordinary income | $ | 469,278 | ||
|
| |||
Emerging Markets Local Currency | ||||
Ordinary income | $ | 642,268 | ||
Return of capital | 867,033 | |||
|
| |||
$ | 1,509,301 | |||
|
| |||
Global ex USD High Yield Corporate | ||||
Ordinary income | $ | 625,715 | ||
|
| |||
Global High Yield Corporate | ||||
Ordinary income | $ | 848,343 | ||
|
| |||
NOTESTO FINANCIAL STATEMENTS | 67 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
As of October 31, 2012, the tax components of accumulated net earnings (losses) were as follows:
iShares Bond Fund | Undistributed Ordinary Income | Undistributed Long-Term Capital Gains | Capital Loss Carryforwards | Net Unrealized Gains (Losses) a | Total | |||||||||||||||
Emerging Markets Corporate | $ | 66,860 | $ | — | $ | — | $ | 570,769 | $ | 637,629 | ||||||||||
Emerging Markets High Yield | 206,711 | — | (11,104 | ) | (494,100 | ) | (298,493 | ) | ||||||||||||
Emerging Markets Local Currency | — | — | (123,087 | ) | 1,810,974 | 1,687,887 | ||||||||||||||
Global ex USD High Yield Corporate | 165,707 | — | (75,095 | ) | 727,120 | 817,732 | ||||||||||||||
Global High Yield Corporate | 187,869 | — | (36,747 | ) | 770,847 | 921,969 |
a | The difference between book-basis and tax-basis unrealized gains (losses) was attributable primarily to the tax deferral of losses on wash sale. |
As of October 31, 2012, the Funds had non-expiring capital loss carryforwards available to offset future realized capital gains as follows:
iShares Bond Fund | Non- Expiring | |||
Emerging Markets Corporate | $ | — | ||
Emerging Markets High Yield | 11,104 | |||
Emerging Markets Local Currency | 123,087 | |||
Global ex USD High Yield Corporate | 75,095 | |||
Global High Yield Corporate | 36,747 |
As of October 31, 2012, gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes were as follows:
iShares Bond Fund | Tax Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation (Depreciation) | ||||||||||||
Emerging Markets Corporate | $ | 20,302,631 | $ | 584,982 | $ | (14,213 | ) | $ | 570,769 | |||||||
Emerging Markets High Yield | 161,614,665 | 824,783 | (1,318,883 | ) | (494,100 | ) | ||||||||||
Emerging Markets Local Currency | 201,735,549 | 2,955,159 | (1,122,410 | ) | 1,832,749 | |||||||||||
Global ex USD High Yield Corporate | 24,423,816 | 905,544 | (190,326 | ) | 715,218 | |||||||||||
Global High Yield Corporate | 37,611,991 | 1,009,589 | (242,496 | ) | 767,093 |
Management has reviewed the tax positions as of October 31, 2012, inclusive of the open tax return years, and has determined that no provision for income tax is required in the Funds’ financial statements.
7. | SUBSEQUENT EVENTS |
Management has evaluated the impact of all subsequent events on the Funds through the date the financial statements were available to be issued and has determined that there were no subsequent events requiring adjustment or disclosure in the financial statements.
68 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of
iShares, Inc.:
In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the iShares Emerging Markets Corporate Bond Fund, iShares Emerging Markets High Yield Bond Fund, iShares Emerging Markets Local Currency Bond Fund, iShares Global ex USD High Yield Corporate Bond Fund and iShares Global High Yield Corporate Bond Fund (the “Funds”), at October 31, 2012, the results of each of their operations, the changes in each of their net assets and their financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2012 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
December 19, 2012
REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 69 |
Table of Contents
iSHARES®, INC.
For the fiscal year ended October 31, 2012, the iShares Emerging Markets Local Currency Bond Fund earned foreign source income of $2,598,861 and paid foreign taxes of $114,297 which it intends to pass through to its shareholders pursuant to Section 853 of the Internal Revenue Code.
70 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Board Review and Approval of Investment Advisory
Contract (Unaudited)
iSHARES®, INC.
iShares Emerging Markets Local Currency Bond Fund
Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Company’s Board of Directors (the “Board”), including a majority of Directors who are not “interested persons” of the Company (as that term is defined in the 1940 Act) (the “Independent Directors”), is required annually to consider the Investment Advisory Contract between the Company and BFA (the “Advisory Contract”) on behalf of the Fund. The Independent Directors requested, and BFA provided, such information as the Independent Directors, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Contract. A committee of Independent Directors (the “15(c) Committee”), with independent counsel, met with management on April 19, 2012, April 27, 2012, and May 16, 2012, to discuss the types of information the Independent Directors required and the manner in which management would organize and present such information. At a meeting held on May 17, 2012, management presented information to the Board relating to the continuance of the Advisory Contract, and the Board, including the Independent Directors, reviewed and discussed such information at length. The Independent Directors requested from management certain additional information, and the 15(c) Committee met with management on June 8, 2012, to discuss the additional requests. At a meeting held on June 20-21, 2012, the Board, including the Independent Directors, reviewed additional information provided by management in response to these requests. The Board, including a majority of the Independent Directors, approved the continuance of the Advisory Contract for the Fund, based on a review of qualitative and quantitative information provided by BFA, including a review of supplemental information management provided at the request of the Independent Directors. The Board noted its satisfaction with the extent and quality of information, and detailed responses, provided by BFA. The Independent Directors were advised by their independent counsel throughout the process. In approving the Advisory Contract for the Fund, the Board, including the Independent Directors, considered the following factors, no one of which was controlling, and made the following conclusions:
Expenses and Performance of the Fund — The Board reviewed statistical information prepared by Lipper Inc. (“Lipper”), an independent provider of investment company data, regarding the expense ratio components, including actual advisory fees, waivers/reimbursements, and gross and net total expenses of the Fund in comparison with the same information for other registered investment companies objectively selected by Lipper as comprising the Fund’s applicable peer group pursuant to Lipper’s proprietary methodology, and any registered funds that would otherwise have been excluded from Lipper’s comparison group because of their size, sponsor, inception date, or other differentiating factors, but that were nonetheless included at the request of BFA (the “Lipper Group”). Because there are few, if any, exchange traded funds or index funds that track indexes similar to those tracked by the Fund, the Lipper Group included in part mutual funds, closed-end funds, exchange traded funds, or funds with differing investment objective classifications, investment focuses and other characteristics (e.g., actively managed funds), as applicable. In support of its review of the statistical information, the Board was provided with a detailed description of the methodology used by Lipper to determine the applicable Lipper Groups and to prepare this information.
The Board also received a detailed explanation from BFA regarding its rationale for including funds that had been excluded from Lipper’s consideration due to Lipper’s methodology parameters, as well as information showing the effect of including these additional funds in the analysis. The Board further noted that due to the limitations in providing comparable funds in the various Lipper Groups, the statistical information may or may not provide meaningful direct comparisons to the Fund.
The Board also noted that the investment advisory fees and overall expenses for the Fund compared favorably to the investment advisory fee rates and overall expenses of the funds in the Lipper Group.
In addition, the Board reviewed statistical information prepared by Lipper regarding the performance of the Fund for the one-, three-, five-, ten-year, and since inception periods, as applicable, and the “last quarter” period ended December 31, 2011, and a comparison of the Fund’s performance to its performance benchmark index for the same periods. To the extent that any of the comparison funds included in the Lipper Group track the same index as the Fund, Lipper also provided, and the Board reviewed, a comparison of the Fund’s performance to that of such relevant comparison funds for the same periods. The Board noted that the Fund generally performed in line with its
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 71 |
Table of Contents
Board Review and Approval of Investment Advisory
Contract (Unaudited) (Continued)
iSHARES®, INC.
performance benchmark index over the relevant periods. In considering this information, the Board noted that the Lipper Group includes funds that may have different investment objectives and/or benchmarks from the Fund. In addition, the Board noted that the Fund seeks to track its benchmark index and that, during the prior year, the Board received periodic reports on the Fund’s performance in comparison with its benchmark index. Such periodic comparative performance information was also considered by the Board.
Based on this review, the other factors considered at the meeting, and their general knowledge of mutual fund pricing, the Board concluded that the investment advisory fees and expense levels and the historical performance of the Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA over prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the Fund and its shareholders. The Board noted that BFA became an indirect wholly-owned subsidiary of BlackRock, Inc. (“BlackRock”) in December 2009. The Board acknowledged that additional resources to support the Fund and its shareholders have been added or enhanced since then, including in such areas as investor education, product management, customized portfolio consulting support, and capital markets support. The Board also considered BFA’s compliance program and its compliance record with respect to the Fund. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Fund. In addition to the above considerations, the Board reviewed and considered BFA’s investment and risk management processes and strategies, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that the Fund had met its investment objective consistently since its inception date.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Fund under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Costs of Services Provided to Fund and Profits Realized by BFA and Affiliates — The Board reviewed information about the profitability to BFA of the Fund based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and all other sources of revenue and expense to BFA and its affiliates from the Fund’s operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, noting that the 15(c) Committee had focused on the methodology and proposed presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC from securities lending by the Fund. The Board also discussed BFA’s profit margin as reflected in the Fund’s profitability analysis and reviewed information regarding economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Fund and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.
Economies of Scale — The Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Fund’s assets, noting that the issue of economies of scale had been focused on extensively by the 15(c) Committee during its meetings and addressed by management. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through breakpoints, waivers, or other fee reductions, as well as through additional investment in the iShares
72 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Board Review and Approval of Investment Advisory
Contract (Unaudited) (Continued)
iSHARES®, INC.
business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BFA’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished between fixed and variable costs, and explained how the nature of such costs may impact the existence of scale benefits. The Board noted that the Advisory Contract for the Fund did not provide for any breakpoints in the Fund’s investment advisory fee rates as the assets of the Fund increase. However, the Board noted that should material economies of scale exist in the future, a breakpoint structure for the Fund may be appropriate. Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider this issue at least annually, concluded that the investment advisory fee rate incorporates potential economies of scale and supported the approval of the continuance of the Advisory Contract for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end and closed-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds and institutional separate accounts (together, the “Other Accounts”). The Board noted that BFA and its affiliates do not manage Other Accounts with a substantially similar investment objective and strategy as the Fund. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Fund, including in terms of the different generally more extensive services provided, as well as other significant differences in the approach of BFA and its affiliates to the Fund, on one hand, and Other Accounts, on the other. 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 of managing and providing other services to the Fund, as a publicly traded exchange traded fund, as compared to the Other Accounts that are institutional clients in light of differing regulatory requirements and client-imposed mandates. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rates under the Advisory Contract for the Fund were generally higher than the investment advisory/management fee rates for the Other Accounts that are institutional clients of BFA (or its affiliates) and concluded that the differences appeared to be consistent with the factors discussed.
Other Benefits to BFA and/or its Affiliates — The Board reviewed ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Fund by BFA, such as payment of revenue to BTC, the Fund’s securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Fund in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Fund. The Board further noted that any portfolio transactions on behalf of the Fund placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Fund’s shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.
Based on the considerations described above, the Board determined that the investment advisory fee rates under the Advisory Contract do not constitute fees that are so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded that it is in the best interest of the Fund and its shareholders to approve the continuance of the Advisory Contract for the coming year.
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 73 |
Table of Contents
Supplemental Information (Unaudited)
iSHARES®, INC.
Section 19(a) Notices
The amounts and sources of distributions reported are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon each Fund’s investment experience during the year and may be subject to changes based on the tax regulations. Shareholders will receive a Form 1099-DIV each calendar year that will inform them how to report distributions for federal income tax purposes.
Total Cumulative Distributions for the Fiscal Year | % Breakdown of the Total Cumulative Distributions for the Fiscal Year | |||||||||||||||||||||||||||||||
iShares Bond Fund | 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 | ||||||||||||||||||||||||
Emerging Markets Corporate | $ | 0.88771 | $ | — | $ | 0.01197 | $ | 0.89968 | 99 | % | — | % | 1 | % | 100 | % | ||||||||||||||||
Emerging Markets High Yield | 1.38656 | — | 0.01736 | 1.40392 | 99 | — | 1 | 100 | ||||||||||||||||||||||||
Emerging Markets Local Currency | 1.91202 | — | — | 1.91202 | 100 | — | — | 100 | ||||||||||||||||||||||||
Global ex USD High Yield Corporate | 1.25143 | — | — | 1.25143 | 100 | — | — | 100 | ||||||||||||||||||||||||
Global High Yield Corporate | 1.50361 | — | 0.00028 | 1.50389 | 100 | — | 0 | a | 100 |
a | Rounds to less than 1%. |
Premium/Discount Information
The tables that follow present information about the differences between the daily market price on secondary markets for shares of a Fund and that Fund’s net asset value. Net asset value, or “NAV,” is the price per share at which each Fund issues and redeems shares. It is calculated in accordance with the standard formula for valuing mutual fund shares. The “Market Price” of each Fund generally is determined using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of such Fund are listed for trading, as of the time that the Fund’s NAV is calculated. Each Fund’s Market Price may be at, above or below its NAV. The NAV of each Fund will fluctuate with changes in the fair value of its portfolio holdings. The Market Price of each Fund will fluctuate in accordance with changes in its NAV, as well as market supply and demand.
Premiums or discounts are the differences (expressed as a percentage) between the NAV and Market Price of a Fund on a given day, generally at the time NAV is calculated. A premium is the amount that a Fund is trading above the reported NAV, expressed as a percentage of the NAV. A discount is the amount that a Fund is trading below the reported NAV, expressed as a percentage of the NAV.
The following information shows the frequency distributions of premiums and discounts for each of the Funds included in this report. The information shown for each Fund is for five calendar years (or for each full calendar quarter completed after the inception date of such Fund if less than five years) through the date of the most recent calendar quarter-end. The specific periods covered for each Fund are disclosed in the table for such Fund.
74 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
Each line in the table shows the number of trading days in which the Fund traded within the premium/discount range indicated. The number of trading days in each premium/discount range is also shown as a percentage of the total number of trading days in the period covered by each table. All data presented here represents past performance, which cannot be used to predict future results.
iShares Emerging Markets Corporate Bond Fund
Period Covered: July 1, 2012 through September 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 3.0% and Less than 3.5% | 1 | 1.59 | % | |||||
Greater than 2.5% and Less than 3.0% | 4 | 6.35 | ||||||
Greater than 2.0% and Less than 2.5% | 6 | 9.52 | ||||||
Greater than 1.5% and Less than 2.0% | 4 | 6.35 | ||||||
Greater than 1.0% and Less than 1.5% | 16 | 25.40 | ||||||
Greater than 0.5% and Less than 1.0% | 26 | 41.27 | ||||||
Between 0.5% and –0.5% | 6 | 9.52 | ||||||
|
|
|
| |||||
63 | 100.00 | % | ||||||
|
|
|
|
iShares Emerging Markets High Yield Bond Fund
Period Covered: July 1, 2012 through September 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 1.0% and Less than 1.5% | 20 | 31.75 | % | |||||
Greater than 0.5% and Less than 1.0% | 41 | 65.08 | ||||||
Between 0.5% and –0.5% | 2 | 3.17 | ||||||
|
|
|
| |||||
63 | 100.00 | % | ||||||
|
|
|
|
SUPPLEMENTAL INFORMATION | 75 |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES®, INC.
iShares Emerging Markets Local Currency Bond Fund
Period Covered: January 1, 2012 through September 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 4.5% and Less than 5.0% | 1 | 0.53 | % | |||||
Greater than 4.0% and Less than 4.5% | 1 | 0.53 | ||||||
Greater than 3.5% and Less than 4.0% | 3 | 1.60 | ||||||
Greater than 3.0% and Less than 3.5% | 1 | 0.53 | ||||||
Greater than 2.5% and Less than 3.0% | 2 | 1.06 | ||||||
Greater than 2.0% and Less than 2.5% | 20 | 10.64 | ||||||
Greater than 1.5% and Less than 2.0% | 41 | 21.81 | ||||||
Greater than 1.0% and Less than 1.5% | 81 | 43.09 | ||||||
Greater than 0.5% and Less than 1.0% | 32 | 17.02 | ||||||
Between 0.5% and –0.5% | 6 | 3.19 | ||||||
|
|
|
| |||||
188 | 100.00 | % | ||||||
|
|
|
|
iShares Global ex USD High Yield Corporate Bond Fund
Period Covered: July 1, 2012 through September 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 1.0% and Less than 1.5% | 4 | 6.35 | % | |||||
Greater than 0.5% and Less than 1.0% | 26 | 41.27 | ||||||
Between 0.5% and –0.5% | 33 | 52.38 | ||||||
|
|
|
| |||||
63 | 100.00 | % | ||||||
|
|
|
|
iShares Global High Yield Corporate Bond Fund
Period Covered: July 1, 2012 through September 30, 2012
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 2.0% and Less than 2.5% | 2 | 3.17 | % | |||||
Greater than 1.5% and Less than 2.0% | 1 | 1.59 | ||||||
Greater than 1.0% and Less than 1.5% | 11 | 17.46 | ||||||
Greater than 0.5% and Less than 1.0% | 33 | 52.38 | ||||||
Between 0.5% and –0.5% | 16 | 25.40 | ||||||
|
|
|
| |||||
63 | 100.00 | % | ||||||
|
|
|
|
76 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Director and Officer Information (Unaudited)
iSHARES®, INC.
The Board of Directors has responsibility for the overall management and operations of the Company, including general supervision of the duties performed by BFA and other service providers. Each Director serves until he or she resigns, is removed, dies, retires or becomes incapacitated. The President, Treasurer and Secretary shall each hold office until their successors are chosen and qualified, and all other officers shall hold office until he or she resigns or is removed. Directors who are not interested persons of the Company (as defined in the 1940 Act) are referred to as Independent Directors.
The registered investment companies advised by BFA or its affiliates are organized into one complex of closed-end funds, two complexes of open-end funds and one complex of exchange-traded funds (“Exchange-Traded Fund Complex”) (each, a “BlackRock Fund Complex”). Each Fund is included in the BlackRock Fund Complex referred to as the Exchange-Traded Fund Complex. Each Director of iShares, Inc. also serves as a Trustee of iShares Trust, a Director of iShares MSCI Russia Capped Index Fund, Inc. and a Trustee of iShares U.S. ETF Trust and, as a result, oversees a total of 276 funds (as of October 31, 2012) within the Exchange-Traded Fund Complex. With the exception of Robert S. Kapito, the address of each Director and Officer is c/o BlackRock, Inc., 400 Howard Street, San Francisco, CA 94105. The address of Mr. Kapito is c/o BlackRock, Inc., Park Avenue Plaza, 55 East 52nd Street, New York, NY 10055. The Board has designated Robert H. Silver as its Independent Chairman. Additional information about the Funds’ Directors and Officers may be found in the Funds’ combined Statement of Additional Information, which is available without charge, upon request, by calling toll-free 1-800-iShares (1-800-474-2737).
Interested Directors and Officers
Name (Age) | Position(s) (Length of Service) | Principal Occupation(s) During the Past 5 Years | Other Directorships Held | |||
Robert S. Kapitoa (55) | Director (since 2009). | President and Director, BlackRock, Inc. (since 2006 and 2007, respectively); Vice Chairman of BlackRock, Inc. and Head of BlackRock’s Portfolio Management Group (since its formation in 1998) and BlackRock’s predecessor entities (since 1988); Trustee, University of Pennsylvania (since 2009); President of Board of Directors, Hope & Heroes Children’s Cancer Fund (since 2002); President of the Board of Directors, Periwinkle Theatre for Youth (since 1983). | Director of BlackRock, Inc. (since 2007); Trustee of iShares Trust (since 2009); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). | |||
Michael Lathamb (47) | Director (since 2010); President (since 2007). | Chairman of iShares, BlackRock (since 2011); Global Chief Executive Officer of iShares, BlackRock (2010-2011); Managing Director, BlackRock (since 2009); Head of Americas iShares, Barclays Global Investors (“BGI”) (2007-2009); Director and Chief Financial Officer of Barclays Global Investors International, Inc. (2005-2009); Chief Operating Officer of the Intermediary Investor and Exchange-Traded Products Business, BGI (2003-2007). | Trustee of iShares Trust (since 2010); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). |
a | Robert S. Kapito is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BlackRock, Inc. |
b | Michael Latham is deemed to be an “interested person” (as defined in the 1940 Act) of the Company due to his affiliations with BlackRock, Inc. and its affiliates. |
DIRECTORAND OFFICER INFORMATION | 77 |
Table of Contents
Director and Officer Information (Unaudited) (Continued)
iSHARES®, INC.
Independent Directors
Name (Age) | Position(s) (Length of Service) | Principal Occupation(s) During the Past 5 Years | Other Directorships Held | |||
Robert H. Silver (57) | Director (since 2007); Independent Chairman (since 2012). | President and Co-Founder of The Bravitas Group, Inc. (since 2006); Director and Vice Chairman of the YMCA of Greater NYC (2001-2011); Broadway Producer (2006-2011); Co-Founder and Vice President of Parentgiving Inc. (since 2008); Director and Member of the Audit and Compensation Committee of EPAM Systems, Inc. (2006-2009); President and Chief Operating Officer of UBS Financial Services Inc. (formerly Pain Webber Inc.) (2004-2005) and various executive positions with UBS and its affiliates (1988-2005); CPA and Audit Manager of KPMG, LLP (formerly Peat Marwick Mitchell) (1977-1983). | Trustee of iShares Trust (since 2007); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Independent Chairman of iShares, Trust, iShares MSCI Russia Capped Index Fund, Inc. and iShares U.S. ETF Trust (since 2012). | |||
Cecilia H. Herbert (63) | Director (since 2005); Nominating and Governance Committee Chair and Equity Plus Committee Chair (since 2012). | Director (since 1998) and President (2007-2011) of the Board of Directors, Catholic Charities CYO; Trustee (since 2002) and Chair of the Finance Committee (2006-2009) and Investment Committee (since 2006), The Thacher School; Trustee of Pacific Select Funds (2004-2005); Member (since 1994) and Chair (1994-2005) of the Investment Committee, Archdiocese of San Francisco. | Trustee of iShares Trust (since 2005); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of Forward Funds (35 portfolios) (since 2009). | |||
Charles A. Hurty (69) | Director (since 2005); Audit Committee Chair (since 2006). | Retired; Partner, KPMG LLP (1968-2001). | Trustee of iShares Trust (since 2005); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of GMAM Absolute Return Strategy Fund (1 portfolio) (since 2002); Director of SkyBridge Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (1 portfolio) (since 2002). | |||
John E. Kerrigan (57) | Director (since 2005); Fixed Income Plus Committee Chair (since 2012). | Chief Investment Officer, Santa Clara University (since 2002). | Trustee of iShares Trust (since 2005); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). |
78 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Director and Officer Information (Unaudited) (Continued)
iSHARES®, INC.
Independent Directors (Continued)
Name (Age) | Position(s) (Length of Service) | Principal Occupation(s) During the Past 5 Years | Other Directorships Held | |||
John E. Martinez (51) | Director (since 2003); Securities Lending Committee Chair (since 2012). | Director of FirstREX Agreement Corp. (formerly EquityRock, Inc.) (since 2005). | Trustee of iShares Trust (since 2003); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011). | |||
George G.C. Parker (73) | Director (since 2002). | Dean Witter Distinguished Professor of Finance, Emeritus, Stanford University Graduate School of Business (Professor since 1973; Emeritus since 2006). | Trustee of iShares Trust (since 2000); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2010); Trustee of iShares U.S. ETF Trust (since 2011); Director of Tejon Ranch Company (since 1999); Director of Threshold Pharmaceuticals (since 2004); Director of Colony Financial, Inc. (since 2009); Director of First Republic Bank (since 2010). | |||
Madhav V. Rajan (48) | Director (since 2011); 15(c) Committee Chair (since 2012). | Robert K. Jaedicke Professor of Accounting and Senior Associate Dean for Academic Affairs and Head of MBA Program, Stanford University Graduate School of Business (since 2001); Professor of Law (by courtesy), Stanford Law School (since 2005); Visiting Professor, University of Chicago (Winter 2007-2008). | Trustee of iShares Trust (since 2011); Director of iShares MSCI Russia Capped Index Fund, Inc. (since 2011); Trustee of iShares U.S. ETF Trust (since 2011). |
DIRECTORAND OFFICER INFORMATION | 79 |
Table of Contents
Director and Officer Information (Unaudited) (Continued)
iSHARES®, INC.
Officers
Name (Age) | Position(s) (Length of Service) | Principal Occupation(s) During the Past 5 Years | ||
Edward B. Baer (44) | Vice President and Chief Legal Officer (since 2012). | Managing Director, BlackRock (since 2006). | ||
Eilleen M. Clavere (60) | Secretary (since 2007). | Director, BlackRock (since 2009); Director of Legal Administration of Intermediary Investor Business, BGI (2006-2009). | ||
Jack Gee (53) | Treasurer and Chief Financial Officer (since 2008). | Managing Director, BlackRock (since 2009); Senior Director of Fund Administration of Intermediary Investor Business, BGI (2009); Director of Fund Administration of Intermediary Investor Business, BGI (2004-2009). | ||
Scott Radell (44) | Executive Vice President (since 2012). | Managing Director, BlackRock (since 2009); Head of Portfolio Solutions, BGI (2007-2009); Credit Portfolio Manager, BGI (2005-2007). |
Amy Schioldager (50) | Executive Vice President (since 2007). | Managing Director, BlackRock (since 2009); Global Head of Index Equity, BGI (2008-2009); Global Head of U.S. Indexing, BGI (2006-2008). | ||
Ira P. Shapiro (49) | Vice President (since 2007). | Managing Director, BlackRock (since 2009); Chief Legal Officer, Exchange- Traded Funds Complex (2007-2012); Associate General Counsel, BGI (2004-2009). |
80 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes:
NOTES | 81 |
Table of Contents
Notes:
82 | 2012 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
For more information visit www.iShares.com
or call 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 Markit Indices Limited or Morningstar, Inc., nor are they sponsored, endorsed or issued by Barclays Capital Inc. None of these companies make any representation regarding the advisability of investing in the iShares Funds. BlackRock is not affiliated with the companies listed above.
A description of the policies that the Funds uses to determine how to vote proxies relating to portfolio securities and information about how the Funds voted proxies relating to portfolio securities during the most recent twelve-month period ending June 30 is available without charge, upon request, by calling toll-free 1-800-474-2737; on the Funds’ website at www.iShares.com; and on the U.S. Securities and Exchange Commission (SEC) website at www.sec.gov.
The Funds file their complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website or may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Funds also disclose their complete schedules of portfolio holdings on a daily and monthly basis on the Funds’ website.
©2012 BlackRock. All rights reserved. iShares® and BlackRock® are registered trademarks of BlackRock. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.
Go paperless. . . | ||
It’s Fast, Convenient, and Timely! | ||
To sign up today, go to www.icsdelivery.com |
iS-AR-102-1012
Table of Contents
Item 2. Code of Ethics.
iShares, Inc. (the “Registrant”) adopted a new code of ethics on July 1, 2011 that applies to persons appointed by the Registrant’s Board of Directors as the President and/or Chief Financial Officer, and any persons performing similar functions. For the fiscal year ended October 31, 2012, there were no amendments to any provision of the former and new codes of ethics, nor were there any waivers granted from any provision of the former and new codes of ethics. A copy of the new code of ethics is filed with this Form N-CSR under Item 12(a)(1).
Item 3. Audit Committee Financial Expert.
The Registrant’s Board of Directors has determined that the Registrant has more than one audit committee financial expert, as that term is defined under Item 3(b) and 3(c), serving on its audit committee. The audit committee financial experts serving on the Registrant’s audit committee are Charles A. Hurty, John E. Kerrigan, George G.C. Parker, Robert H. Silver and Madhav V. Rajan, all of whom are independent, as that term is defined under Item 3(a)(2).
Item 4. Principal Accountant Fees and Services.
The principal accountant fees disclosed in items 4(a), 4(b), 4(c), 4(d) and 4(g) are for the five series of the Registrant for which the fiscal year-end is October 31, 2012 (the “Funds”), and whose annual financial statements are reported in Item 1.
(a) | Audit Fees – The aggregate fees billed for professional services rendered by the principal accountant for the audit of the Registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements, were $12,320 for the fiscal period from the commencement of operations on October 18, 2011 through October 31, 2011 and $54,000 for the fiscal year ended October 31, 2012. |
(b) | Audit-Related Fees – There were no fees billed for the fiscal period from the commencement of operations on October 18, 2011 through October 31, 2011 and for the fiscal year ended October 31, 2012 for assurance and related services by the principal accountant that were reasonably related to the performance of the audit of the Registrant’s financial statements and are not reported under (a) of this Item. |
(c) | Tax Fees – There were no fees billed for the fiscal period from the commencement of operations on October 18, 2011 through October 31, 2011. For the fiscal year ended October 31, 2012, $3,511 were billed for professional services rendered by the principal accountant for the review of the Registrant’s tax returns and excise tax calculations. |
(d) | All Other Fees – There were no other fees billed for the fiscal period from the commencement of operations on October 18, 2011 through October 31, 2011 and for the fiscal year ended October 31, 2012 for products and services provided by the principal accountant, other than the services reported in (a) through (c) of this Item. |
(e) | (1) The Registrant’s audit committee charter, as amended, provides that the audit committee is responsible for the approval, prior to appointment, of the engagement of the principal accountant to annually audit and provide their opinion on the Registrant’s financial statements. The audit committee must also approve, prior to appointment, the engagement of the principal accountant to provide non-audit services to the Registrant or to any entity controlling, controlled by or under common control with the Registrant’s investment adviser (“Adviser Affiliate”) that provides ongoing services to the Registrant, if the engagement relates directly to the operations and financial reporting of the Registrant. |
(2) There were no services described in (b) through (d) above (including services required by the audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X) that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) | None of the hours expended on the principal accountant’s engagement to audit the Registrant’s financial statements for the fiscal year ended October 31, 2012 were attributable to work performed by persons other than the principal accountant’s full-time, permanent employees. |
(g) | There were no non-audit fees billed for the fiscal period from the commencement of operations on October 18, 2011 through October 31, 2011. For the fiscal year ended October 31, 2012, $3,740,131 were billed by the Registrant’s principal accountant for services rendered to the Registrant’s, and rendered to the Registrant’s investment adviser, and any Adviser Affiliate that provides ongoing services to the Registrant. |
(h) | The Registrant’s audit committee has considered whether the provision of non-audit services rendered to the Registrant’s investment adviser and any Adviser Affiliate that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, if any, are compatible with maintaining the principal accountant’s independence, and has determined that the provision of these services do not compromise the principal accountant’s independence. |
Table of Contents
Item 5. Audit Committee of Listed Registrants.
The Registrant is a listed issuer as defined in Rule 10A-3 under the Exchange Act and has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Registrant’s audit committee members are George G.C. Parker, Cecilia H. Herbert, Charles A. Hurty, John E. Kerrigan, Robert H. Silver, John E. Martinez and Madhav V. Rajan.
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 Directors.
Item 11. Controls and Procedures.
(a) | The President (the Registrant’s Principal Executive Officer) and Chief Financial Officer (the Registrant’s Principal Financial Officer) have concluded that, based on their evaluation as of a date within 90 days of the filing date of this report, the disclosure controls and procedures of the Registrant (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are reasonably designed to achieve the purposes described in Section 4(a) of the attached certification. |
(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 second fiscal quarter of 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. Exhibits.
(a) (1) Code of Ethics for Senior Officers that is the subject of Item 2 is attached.
(a) (2) Section 302 Certifications are attached.
(a) (3) Not applicable to the Registrant.
(b) Section 906 Certifications are attached.
Table of Contents
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, Inc.
By: | /s/ Michael Latham | |
Michael Latham, President (Principal Executive Officer) | ||
Date: | December 19, 2012 |
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/ Michael Latham | |
Michael Latham, President (Principal Executive Officer) | ||
Date: | December 19, 2012 | |
By: | /s/ Jack Gee | |
Jack Gee, Treasurer and Chief Financial Officer (Principal Financial Officer) | ||
Date: | December 19, 2012 |