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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
1 Iron Street, Boston, MA 02210
(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, 2017
Date of reporting period: October 31, 2017
Explanatory Note:
The Registrant is filing this amendment to its Form N-CSR for the period ended October 31, 2017, filed with the Securities and Exchange Commission on January 9, 2018 (Accession Number 0001193125-18-007063). The sole purpose of this amendment is to correct the fund market total returns presented in the Management’s Discussion of Fund Performance and the premium/discount range presented within the Supplemental Information section for the iShares Emerging Markets High Yield Bond ETF, iShares J.P. Morgan EM Corporate Bond ETF, iShares US & Intl High Yield Corp Bond ETF, and iShares International High Yield Bond ETF within Item 1, Reports to Stockholders. Except as set forth above, this amendment does not amend, update or change any other items or disclosures found in the original Form N-CSR filing.
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Item 1. | Reports to Stockholders. |
Table of Contents
OCTOBER 31, 2017
2017 ANNUAL REPORT |
iShares, Inc.
Ø | iShares Emerging Markets High Yield Bond ETF | EMHY | Cboe BZX |
Ø | iShares J.P. Morgan EM Corporate Bond ETF | CEMB | Cboe BZX |
Ø | iShares J.P. Morgan EM Local Currency Bond ETF | LEMB | NYSE Arca |
Ø | iShares US & Intl High Yield Corp Bond ETF | GHYG | Cboe BZX |
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Table of Contents
Management’s Discussion of Fund Performance
iSHARES®, INC.
GLOBAL BOND MARKET OVERVIEW
Global investment-grade bonds posted modestly positive returns for the 12 months ended October 31, 2017 (“reporting period”), reflecting improving economic growth and rising interest rates in virtually all major bond markets. The Bloomberg Barclays Global Aggregate Index, a broad measure of global bond market performance, returned 1.18% in U.S. dollar terms for the reporting period.
Regionally, European bond markets posted the strongest returns among developed markets for the reporting period. European corporate bonds performed particularly well, benefiting from better economic conditions and stronger corporate earnings throughout Europe. The Eurozone economy expanded for the 12 months ended September 2017, its fastest growth rate in more than six years, and the jobless rate in September 2017 was the lowest since February 2009. The European Central Bank (“ECB”) elected to keep interest rates at historically low levels throughout the reporting period, though the ECB announced late in the reporting period that it plans to taper its quantitative easing program beginning in 2018. Currency fluctuations also contributed meaningfully to European bond performance in U.S. dollar terms as the euro appreciated by approximately 6% against the U.S. dollar during the reporting period.
In the U.S. bond market, economically sensitive corporate bonds performed well during the reporting period, benefiting from improving growth, healthy corporate profits, and strong investor demand for their comparatively higher yields. In contrast, U.S. Treasury securities declined and were the weakest performers among the broad market segments. The poor performance of U.S. Treasury bonds reflected concerns about the expected effect of the new presidential administration’s proposed tax cuts and fiscal stimulus policies. In addition, the U.S. Federal Reserve Bank (“Fed”) increased short-term interest rates by a quarter percentage point three times during the reporting period, from 0.5% to 1.25%, which contributed to higher short-term U.S. Treasury yields. The Fed also started reducing the amount of U.S. Treasury bonds and mortgage-backed securities on its balance sheet in October 2017. These actions were made possible by improvement in the U.S. economy, led by strength in the job market, where the unemployment rate reached its lowest level in more than 16 years.
Bond markets in the Asia-Pacific region rose modestly in U.S. dollar terms for the reporting period, reflecting modest economic growth, low inflation, and accommodative monetary policies in many countries. In fundamental terms, however, conditions were generally supportive of Japanese bond performance, as Japanese economic growth was 1.4% for the year ended in June, while consumer prices rose just 0.7% for the 12 months ended in September 2017. In that environment, the Bank of Japan (“BOJ”) maintained its economic stimulus measures, targeting negative short-term interest rates and zero percent yields on longer-term bonds. However, Japanese bond market performance was hindered by a decline in the Japanese yen, which depreciated by approximately 8% against the U.S. dollar.
The performance of inflation-linked securities during the reporting period was also noteworthy. U.S. Treasury inflation-indexed bonds declined as interest rates rose and inflation was generally modest — the U.S. consumer price index rose 2.2% for the 12 months ended September 2017, well below the long-term historical average. In contrast, European government inflation-linked bonds were among the strongest performers in global bond markets for the reporting period. This reflected a surge in U.K. inflation, where consumer prices rose at their fastest rate in more than five years.
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 5 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® EMERGING MARKETS HIGH YIELD BOND ETF
Performance as of October 31, 2017
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 7.60% | 7.79% | 8.04% | 7.60% | 7.79% | 8.04% | ||||||||||||||||||||||
5 Years | 5.02% | 4.78% | 5.33% | 27.74% | 26.31% | 29.63% | ||||||||||||||||||||||
Since Inception | 6.32% | 6.37% | 6.69% | 40.77% | 41.16% | 43.47% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was 4/3/12. The first day of secondary market trading was 4/3/12.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 14 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,030.80 | $ | 2.56 | $ | 1,000.00 | $ | 1,022.70 | $ | 2.55 | 0.50% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 14 for more information. |
6 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® EMERGING MARKETS HIGH YIELD BOND ETF
The iShares Emerging Markets High Yield Bond ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. dollar-denominated, emerging market high yield sovereign and corporate bonds, as represented by the Morningstar® Emerging Markets High Yield Bond IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month reporting period ended October 31, 2017, the total return for the Fund was 7.60%, net of fees, while the total return for the Index was 8.04%.
Latin American high-yield bonds, which represented approximately 47% of the Index on average during the reporting period, made the largest contribution to the Index’s return. Brazilian bonds were the most significant contributors to performance, supported by a strong balance of trade, the anticipation of interest rate cuts by Brazil’s central bank, and lower inflation, which declined to its lowest level in more than a decade. President Michel Temer’s progress in stabilizing the country’s economy also benefited the Brazilian bond market.
Another key contributor was Argentina, where President Mauricio Macri made strides in his dual pledges to reduce inflation and stimulate economic growth. Argentina issued its first 100-year bond during the reporting period, which was met with strong demand for its 7.9% yield in an environment of low global bond yields.
Europe was another source of strength as the Russian Federation made a significant contribution to the Index’s performance. Russian bonds benefited from lower inflation and anticipation of an interest rate decrease by the Russian central bank. Following months of uncertainty, resolution of sanctions against the country over interference in the 2016 U.S. presidential election also helped the Russian bond market rebound. Turkey and Ukraine were other meaningful contributors in Europe.
Indonesia contributed the most to the Index’s performance among Asian fixed-income markets, while the Middle East’s largest contributor to performance for the reporting period was Lebanon.
By sector, sovereign bonds contributed the most to the Index’s return, followed by corporate bonds issued by industrial companies and government agency bonds.
ALLOCATION BY CREDIT QUALITY
As of 10/31/17
Moody’s Credit Rating 1 | Percentage of Total Investments 2 | |||
Baa | 6.08 | % | ||
Ba | 53.63 | |||
B | 24.08 | |||
Caa | 6.66 | |||
Not Rated | 9.55 | |||
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| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST COUNTRIES
As of 10/31/17
Country | Percentage of Total Investments 2 | |||
Brazil | 23.56 | % | ||
Turkey | 12.93 | |||
Russia | 9.33 | |||
Argentina | 8.45 | |||
South Africa | 4.25 | |||
Lebanon | 3.89 | |||
Venezuela | 3.68 | |||
China | 3.31 | |||
Ukraine | 2.38 | |||
Dominican Republic | 2.16 | |||
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| |||
TOTAL | 73.94 | % | ||
|
|
1 | Credit quality ratings shown reflect the ratings assigned by Moody’s Investors Service (“Moody’s”), a widely used independent, nationally recognized statistical rating organization. Moody’s credit ratings are opinions of the credit quality of individual obligations or of an issuer’s general creditworthiness. Investment grade ratings are credit ratings of Baa or higher. Below investment grade ratings are credit ratings of Ba or lower. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change. |
2 | Excludes money market funds. |
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 7 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® J.P. MORGAN EM CORPORATE BOND ETF
Performance as of October 31, 2017
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
1 Year | 5 Years | Since Inception | 1 Year | 5 Years | Since Inception | |||||||||||||||||||||||
Fund NAV | 6.14% | 3.59% | 4.63% | 6.14% | 19.27% | 28.51% | ||||||||||||||||||||||
Fund Market | 5.84% | 3.42% | 4.66% | 5.84% | 18.34% | 28.74% | ||||||||||||||||||||||
Indexa | 6.55% | 4.14% | 5.20% | 6.55% | 22.51% | 32.42% | ||||||||||||||||||||||
Morningstar Emerging Markets Corporate Bond Index | 6.29% | 4.09% | 5.16% | 6.29% | 22.21% | 32.11% | ||||||||||||||||||||||
J.P. Morgan CEMBI Broad Diversified Core Indexb | N/A | N/A | N/A | N/A | N/A | N/A |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was 4/17/12. The first day of secondary market trading was 4/19/12.
a | Index Performance through May 31, 2017 reflects the performance of the Morningstar® Emerging Markets Corporate Bond IndexSM. Index performance beginning on June 1, 2017 reflects the performance of the J.P. Morgan CEMBI Broad Diversified Core Index, which effective as of June 1, 2017, replaced the Morningstar® Emerging Markets Corporate Bond IndexSM as the underlying index of the fund. |
b | The inception date of the J.P. Morgan CEMBI Broad Diversified Core Index was April 13, 2017. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 14 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,031.70 | $ | 2.56 | $ | 1,000.00 | $ | 1,022.70 | $ | 2.55 | 0.50% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 14 for more information. |
8 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® J.P. MORGAN EM CORPORATE BOND ETF
The iShares J.P. Morgan EM Corporate Bond ETF (the “Fund”) (formerly the iShares Emerging Markets Corporate Bond ETF) seeks to track the investment results of an index composed of U.S. dollar-denominated, emerging market corporate bonds, as represented by the J.P. Morgan CEMBI Broad Diversified Core Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month reporting period ended October 31, 2017, the total return for the Fund was 6.14%, net of fees, while the total return for the Index was 6.55%.
Latin American corporate bonds, which represented approximately 33% of the Index on average during the reporting period, made the most significant contribution to the Index’s return. Bonds from Brazil were the largest contributors to the Index’s performance, benefiting from the country’s strong balance of trade, the anticipation of interest rate cuts by Brazil’s central bank, and lower inflation, which declined during the reporting period to its lowest level in more than a decade. President Michel Temer’s progress in stabilizing the country’s economy also benefited Brazil’s bond market.
Mexico’s corporate bond market contributed meaningfully to the Index’s performance. Although the U.S. presidential election and Donald Trump’s proposed trade policies initially drove Mexican bond yields up and the Mexican peso down, slow progress and softer rhetoric on trade alleviated concerns and helped Mexican bonds rebound.
Within Europe, Russian corporate bonds contributed significantly to the Index’s return. Russian bonds benefited from lower inflation, which declined from 5.8% to 2.7% during the reporting period, as well as expectations of a decrease in interest rates by the central bank. Resolution of sanctions against the country over interference in the 2016 U.S. presidential election also helped Russian bonds rebound. China and India were the leading contributors to the Index’s return among Asian corporate bond markets for the reporting period.
ALLOCATION BY CREDIT QUALITY
As of 10/31/17
Moody’s Credit Rating1 | Percentage of Total Investments 2 | |||
Aa | 3.98 | % | ||
A | 17.96 | |||
Baa | 30.31 | |||
Ba | 21.80 | |||
B | 10.50 | |||
Caa | 1.22 | |||
Not Rated | 14.23 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST COUNTRIES
As of 10/31/17
Country | Percentage of Total Investments 2 |
China | 8.80 | % | ||
Brazil | 8.19 | |||
Russia | 5.94 | |||
Mexico | 5.90 | |||
Hong Kong | 5.66 | |||
India | 5.32 | |||
United Arab Emirates | 5.32 | |||
South Korea | 4.75 | |||
Turkey | 4.57 | |||
Israel | 4.48 | |||
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| |||
TOTAL | 58.93 | % | ||
|
|
1 | Credit quality ratings shown reflect the ratings assigned by Moody’s Investors Service (“Moody’s”), a widely used independent, nationally recognized statistical rating organization. Moody’s credit ratings are opinions of the credit quality of individual obligations or of an issuer’s general creditworthiness. Investment grade ratings are credit ratings of Baa or higher. Below investment grade ratings are credit ratings of Ba or lower. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change. |
2 | Excludes money market funds. |
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 9 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® J.P. MORGAN EM LOCAL CURRENCY BOND ETF
Performance as of October 31, 2017
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
1 Year | 5 Years | Since Inception | 1 Year | 5 Years | Since Inception | |||||||||||||||||||||||
Fund NAV | 3.79% | (0.71)% | 0.73% | 3.79% | (3.48)% | 4.47% | ||||||||||||||||||||||
Fund Market | 4.00% | (0.99)% | 0.71% | 4.00% | (4.84)% | 4.38% | ||||||||||||||||||||||
Indexa | 4.54% | (0.18)% | 1.19% | 4.54% | (0.88)% | 7.39% | ||||||||||||||||||||||
Bloomberg Barclays Emerging Markets Broad Local Currency Bond Index | 4.28% | (0.22)% | 1.15% | 4.28% | (1.12)% | 7.13% | ||||||||||||||||||||||
J.P. Morgan GBI-EM Global Diversified 15% Cap 4.5% Floor Indexb | n/a | n/a | n/a | n/a | n/a | n/a |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was 10/18/11. The first day of secondary market trading was 10/20/11.
a | Index Performance through May 31, 2017 reflects the performance of the Bloomberg Barclays Emerging Markets Broad Local Currency Bond Index. Index performance beginning on June 1, 2017 reflects the performance of the J.P. Morgan GBI-EM Global Diversified 15% Cap 4.5% Floor Index, which effective as of June 1, 2017, replaced the Bloomberg Barclays Emerging Markets Broad Local Currency Bond Index as the underlying index of the fund. |
b | The inception date of the J.P. Morgan GBI-EM Global Diversified 15% Cap 4.5% Floor Index was March 27, 2017. |
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 14 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period | Annualized Expense Ratio a | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,027.00 | $ | 2.55 | $ | 1,000.00 | $ | 1,022.70 | $ | 2.55 | 0.50% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 14 for more information. |
10 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® J.P. MORGAN EM LOCAL CURRENCY BOND ETF
The iShares J.P. Morgan EM Local Currency Bond ETF (the “Fund”) (formerly the iShares Emerging Markets Local Currency Bond ETF) seeks to track the investment results of an index composed of local currency denominated, emerging market sovereign bonds, as represented by the J.P. Morgan GBI-EM Global Diversified 15% Cap 4.5% Floor Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month reporting period ended October 31, 2017, the total return for the Fund was 3.79%, net of fees, while the total return for the Index was 4.54%.
Latin American sovereign bonds represented approximately 40% of the Index on average during the reporting period and made the largest regional contribution to the Index’s return. Brazil was the most significant contributor to the Index’s performance. Declining inflation, which dropped to its lowest level in more than a decade during the reporting period, a strong balance of trade, and the expectation of future interest rate cuts by Brazil’s central bank supported the country’s fixed-income market. Investor optimism that government reforms would boost economic growth also benefited Brazil’s bond market, despite ongoing political crises. Sovereign bonds from Colombia and Peru were also meaningful contributors to the Index’s return.
Among European bond markets, Russian Federation bonds were strong contributors to the Index’s return. Anticipation of a decrease in interest rates by the Russian central bank drove up bond demand, while rising oil prices helped the Russian ruble. Following months of uncertainty, resolution of sanctions against the country over interference in the 2016 U.S. presidential election also helped its bond and currency markets rebound. Polish and Hungarian government bonds were notable contributors to the Index’s return, while Turkish bonds detracted from the Index’s performance as political strain between Turkey and the U.S. weighed on bond markets and caused a sharp decline in the Turkish lira.
In Asia, Indonesian sovereign bonds contributed to the Index’s performance during the reporting period, while Israel contributed to the Index’s return in the Middle East. The African region, which represented only 6% of the Index on average during the reporting period, detracted slightly from the Index’s return.
ALLOCATION BY CREDIT QUALITY
As of 10/31/17
Moody’s Credit Rating1 | Percentage of Total Investments 2 | |||
Aa | 4.57 | % | ||
A | 33.29 | |||
Baa | 33.35 | |||
Ba | 22.84 | |||
B | 4.22 | |||
Not Rated | 1.73 | |||
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| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST COUNTRIES
As of 10/31/17
Country | Percentage of Total Investments 2 |
Brazil | 15.19 | % | ||
Mexico | 11.69 | |||
Indonesia | 8.53 | |||
Poland | 7.92 | |||
South Africa | 6.24 | |||
Thailand | 5.12 | |||
Russia | 4.84 | |||
Chile | 4.57 | |||
Czech Republic | 4.57 | |||
Malaysia | 4.56 | |||
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| |||
TOTAL | 73.23 | % | ||
|
|
1 | Credit quality ratings shown reflect the ratings assigned by Moody’s Investors Service (“Moody’s”), a widely used independent, nationally recognized statistical rating organization. Moody’s credit ratings are opinions of the credit quality of individual obligations or of an issuer’s general creditworthiness. Investment grade ratings are credit ratings of Baa or higher. Below investment grade ratings are credit ratings of Ba or lower. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change. |
2 | Excludes money market funds. |
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 11 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® US & INTL HIGH YIELD CORP BOND ETF
Performance as of October 31, 2017
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 9.58% | 9.49% | 9.66% | 9.58% | 9.49% | 9.66% | ||||||||||||||||||||||
5 Years | 4.76% | 4.72% | 4.91% | 26.19% | 25.94% | 27.07% | ||||||||||||||||||||||
Since Inception | 5.44% | 5.49% | 5.63% | 34.43% | 34.77% | 35.69% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was 4/3/12. The first day of secondary market trading was 4/5/12.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 14 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,048.80 | $ | 2.07 | $ | 1,000.00 | $ | 1,023.20 | $ | 2.04 | 0.40% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 14 for more information. |
12 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® US & INTL HIGH YIELD CORP BOND ETF
The iShares US & Intl High Yield Corp Bond ETF (the “Fund”) (formerly the iShares Global High Yield Corporate Bond ETF) seeks to track the investment results of an index composed of U.S. dollar, euro, British pound sterling and Canadian dollar-denominated, high yield corporate bonds, as represented by the Markit iBoxx® Global Developed Markets High Yield Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month reporting period ended October 31, 2017, the total return for the Fund was 9.58%, net of fees, while the total return for the Index was 9.66%.
High-yield corporate bonds were among the world’s top-performing fixed-income assets for the reporting period. High-yield bonds tend to perform well during periods of strong economic growth, investor optimism, and low default rates, which neatly summarizes the global investment environment during the reporting period. Although interest rates rose in the U.S. and Europe, interest rates remained low by historical standards, which continued to drive strong investor demand for high-yield corporate bonds.
The U.S. dollar weakened compared to most major currencies during the reporting period, depreciating 9% against the British pound, 6% against the euro, and 4% relative to the Canadian dollar. Nevertheless, the U.S. dollar denominated bonds were the largest contributor to the Index’s return and its largest currency weight, at nearly 75% of the Index on average for the reporting period. The U.S. high-yield market moved higher due to a number of catalysts, including initial progress toward corporate tax reform, strong economic growth, and improving corporate earnings. Nearly every European country in the Index contributed to the Index’s return, reflecting the Eurozone’s widespread economic expansion and relatively stable political climate. The Euro-denominated bonds, which comprised about 22% of the Index on average, benefited from low interest rates, low volatility, and robust demand from investors seeking higher yields than those of European government bonds. Among them, Italy, the U.K., and France were the primary drivers of the Index’s performance.
From a sector perspective, industrial bonds contributed the most to the Index’s return, led by communications-related bonds. Several high-profile merger-and-acquisition deals in the communications industry, particularly among cable and satellite operators and wireless companies, were expected to be financed with high-yield debt. The financial sector, led by the banking industry, was another area of strength.
ALLOCATION BY CREDIT QUALITY
As of 10/31/17
Moody’s Credit Rating1 | Percentage of Total Investments 2 | |||
Baa | 0.70 | % | ||
Ba | 45.52 | |||
B | 39.59 | |||
Caa | 9.58 | |||
Ca | 0.27 | |||
Not Rated | 4.34 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST COUNTRIES
As of 10/31/17
Country | Percentage of Total Investments 2 | |||
United States | 65.47 | % | ||
Italy | 6.22 | |||
United Kingdom | 5.11 | |||
France | 4.00 | |||
Canada | 3.56 | |||
Luxembourg | 3.38 | |||
Germany | 2.80 | |||
Netherlands | 2.05 | |||
Ireland | 1.68 | |||
Spain | 1.63 | |||
|
| |||
TOTAL | 95.90 | % | ||
|
|
1 | Credit quality ratings shown reflect the ratings assigned by Moody’s Investors Service (“Moody’s”), a widely used independent, nationally recognized statistical rating organization. Moody’s credit ratings are opinions of the credit quality of individual obligations or of an issuer’s general creditworthiness. Investment grade ratings are credit ratings of Baa or higher. Below investment grade ratings are credit ratings of Ba or lower. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change. |
2 | Excludes money market funds. |
MANAGEMENT’S DISCUSSIONSOF FUND PERFORMANCE | 13 |
Table of Contents
Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.ishares.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are redeemed or sold in the market. Performance for certain funds may reflect a waiver of a portion of investment advisory fees. Without such a waiver, performance would have been lower.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Certain funds may have a NAV which is determined prior to the opening of regular trading on its listed exchange and their market returns are calculated using the midpoint of the bid/ask spread as of the opening of regular trading on the exchange. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower.
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of fund shares and (2) ongoing costs, including management fees and other fund expenses. The expense example, which is based on an investment of $1,000 invested on May 1, 2017 and held through October 31, 2017, is intended to help you understand your ongoing costs (in dollars and cents) of investing in a Fund and to compare these costs with the ongoing costs of investing in other funds.
Actual Expenses — The table provides information about actual account values and actual expenses. Annualized expense ratios reflect contractual and voluntary fee waivers, if any. To estimate the expenses that you paid on your account over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number[corresponding to your Fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Example for Comparison Purposes — The table also provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of fund shares. Therefore, the hypothetical examples are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
14 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® EMERGING MARKETS HIGH YIELD BOND ETF
October 31, 2017
Security | Principal | Value | ||||||
CORPORATE BONDS & NOTESa — 41.17% |
| |||||||
ARGENTINA — 1.14% |
| |||||||
Pampa Energia SA | ||||||||
7.50%, 01/24/27 (Call 01/24/22)b | $ | 800 | $ | 872,160 | ||||
YPF SA | ||||||||
6.95%, 07/21/27b | 1,000 | 1,071,270 | ||||||
8.50%, 03/23/21b | 1,000 | 1,131,250 | ||||||
8.50%, 07/28/25b | 1,485 | 1,723,714 | ||||||
8.75%, 04/04/24b | 1,828 | 2,117,738 | ||||||
8.88%, 12/19/18b | 187 | 199,170 | ||||||
|
| |||||||
7,115,302 | ||||||||
AZERBAIJAN — 0.60% | ||||||||
Southern Gas Corridor CJSC | ||||||||
6.88%, 03/24/26b | 1,900 | 2,148,330 | ||||||
State Oil Co. of the Azerbaijan Republic | ||||||||
4.75%, 03/13/23b | 1,600 | 1,605,592 | ||||||
|
| |||||||
3,753,922 | ||||||||
BRAZIL — 16.65% | ||||||||
Banco Bradesco SA/Cayman Islands | ||||||||
5.75%, 03/01/22b | 1,200 | 1,284,840 | ||||||
5.90%, 01/16/21 | 1,790 | 1,895,162 | ||||||
6.75%, 09/29/19 | 200 | 213,250 | ||||||
Banco BTG Pactual SA/Cayman Islands | ||||||||
4.00%, 01/16/20b | 900 | 878,850 | ||||||
5.75%, 09/28/22b | 800 | 776,000 | ||||||
Banco do Brasil SA/Cayman Islands | ||||||||
3.88%, 10/10/22 | 2,000 | 1,992,500 | ||||||
5.38%, 01/15/21b | 1,200 | 1,246,500 | ||||||
5.88%, 01/26/22b | 1,700 | 1,791,460 | ||||||
5.88%, 01/19/23b | 600 | 636,750 | ||||||
6.00%, 01/22/20b | 400 | 425,000 | ||||||
Banco Votorantim SA | ||||||||
7.38%, 01/21/20b | 892 | 952,210 | ||||||
Braskem Finance Ltd. | ||||||||
5.38%, 05/02/22b | 200 | 215,560 | ||||||
5.75%, 04/15/21b | 1,600 | 1,724,480 | ||||||
6.45%, 02/03/24 | 600 | 683,190 | ||||||
BRF SA | ||||||||
3.95%, 05/22/23b | 400 | 399,500 | ||||||
4.75%, 05/22/24b | 600 | 615,930 |
Security | Principal | Value | ||||||
Caixa Economica Federal | ||||||||
3.50%, 11/07/22b | $ | 450 | $ | 441,532 | ||||
4.25%, 05/13/19b | 2,420 | 2,462,767 | ||||||
VRN, (5 year CMT + 5.551%) | ||||||||
7.25%, 07/23/24 (Call 07/23/19)b,c | 800 | 832,905 | ||||||
Centrais Eletricas Brasileiras SA | ||||||||
5.75%, 10/27/21b | 2,300 | 2,416,380 | ||||||
6.88%, 07/30/19b | 750 | 795,938 | ||||||
CSN Resources SA | ||||||||
6.50%, 07/21/20b | 1,300 | 1,202,760 | ||||||
Embraer Netherlands Finance BV |
| |||||||
5.05%, 06/15/25 | 2,120 | 2,241,264 | ||||||
Embraer Overseas Ltd. | ||||||||
5.70%, 09/16/23b | 550 | 601,590 | ||||||
Fibria Overseas Finance Ltd. | ||||||||
5.25%, 05/12/24 | 200 | 215,000 | ||||||
Gerdau Trade Inc. | ||||||||
4.75%, 04/15/23b | 800 | 827,200 | ||||||
GTL Trade Finance Inc. | ||||||||
5.89%, 04/29/24 (Call 01/29/24)b | 1,150 | 1,242,747 | ||||||
7.25%, 04/16/44 (Call 10/16/43)b | 600 | 657,180 | ||||||
Itau Unibanco Holding SA/Cayman Islands | ||||||||
5.13%, 05/13/23b | 820 | 845,830 | ||||||
5.50%, 08/06/22b | 2,100 | 2,215,500 | ||||||
5.65%, 03/19/22b | 2,000 | 2,115,000 | ||||||
5.75%, 01/22/21b | 1,850 | 1,954,155 | ||||||
6.20%, 04/15/20b | 700 | 741,300 | ||||||
6.20%, 12/21/21b | 800 | 866,000 | ||||||
JBS Investments GmbH | ||||||||
7.25%, 04/03/24 (Call 04/03/19)b | 600 | 594,180 | ||||||
7.75%, 10/28/20 (Call 11/30/17)b | 1,600 | 1,627,280 | ||||||
JBS USA LUX SA/JBS USA Finance Inc. | ||||||||
5.75%, 06/15/25 (Call 06/15/20)b | 850 | 827,688 | ||||||
5.88%, 07/15/24 (Call 07/15/19)b | 725 | 714,125 | ||||||
7.25%, 06/01/21 (Call 11/30/17)b | 1,500 | 1,529,220 | ||||||
8.25%, 02/01/20 (Call 11/30/17)b | 300 | 303,750 | ||||||
Klabin Finance SA | ||||||||
5.25%, 07/16/24b | 500 | 521,875 | ||||||
Marfrig Holdings Europe BV | ||||||||
6.88%, 06/24/19 (Call 11/30/17)b | 400 | 413,500 | ||||||
8.00%, 06/08/23 (Call 06/08/19)b | 800 | 834,700 |
SCHEDULESOF INVESTMENTS | 15 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® EMERGING MARKETS HIGH YIELD BOND ETF
October 31, 2017
Security | Principal | Value | ||||||
Minerva Luxembourg SA | ||||||||
6.50%, 09/20/26 (Call 09/20/21)b | $ | 1,200 | $ | 1,244,400 | ||||
Odebrecht Finance Ltd. | ||||||||
4.38%, 04/25/25b | 500 | 190,000 | ||||||
5.25%, 06/27/29b | 600 | 222,000 | ||||||
7.13%, 06/26/42 (Call 12/26/41)b | 820 | 307,500 | ||||||
Petrobras Global Finance BV | ||||||||
4.38%, 05/20/23 | 3,565 | 3,534,911 | ||||||
5.30%, 01/27/25d | 369 | 370,482 | ||||||
5.38%, 01/27/21 | 3,135 | 3,295,669 | ||||||
5.63%, 05/20/43 | 1,800 | 1,622,700 | ||||||
5.75%, 01/20/20 | 850 | 893,562 | ||||||
6.00%, 01/27/28d | 326 | 329,986 | ||||||
6.13%, 01/17/22 | 3,300 | 3,567,300 | ||||||
6.25%, 03/17/24 | 1,900 | 2,039,365 | ||||||
6.75%, 01/27/41 | 1,850 | 1,868,500 | ||||||
6.85%, 12/31/99 | 2,400 | 2,279,160 | ||||||
6.88%, 01/20/40 | 1,400 | 1,423,555 | ||||||
7.25%, 03/17/44 | 2,200 | 2,303,510 | ||||||
7.38%, 01/17/27 | 4,250 | 4,711,550 | ||||||
8.38%, 05/23/21 | 3,550 | 4,087,115 | ||||||
8.75%, 05/23/26 | 4,475 | 5,406,673 | ||||||
Rio Oil Finance Trust | ||||||||
Series 2014-1 | ||||||||
9.25%, 07/06/24b | 537 | 582,178 | ||||||
Suzano Austria GmbH | ||||||||
5.75%, 07/14/26b | 600 | 645,000 | ||||||
7.00%, 03/16/47 (Call 09/16/46)b | 600 | 670,200 | ||||||
Vale Overseas Ltd. | ||||||||
4.38%, 01/11/22 | 2,016 | 2,094,443 | ||||||
5.88%, 06/10/21 | 3,100 | 3,398,375 | ||||||
6.25%, 08/10/26 | 2,000 | 2,304,500 | ||||||
6.88%, 11/21/36 | 3,045 | 3,626,899 | ||||||
6.88%, 11/10/39 | 1,650 | 1,956,817 | ||||||
8.25%, 01/17/34 | 450 | 579,454 | ||||||
Vale SA | ||||||||
5.63%, 09/11/42 | 1,300 | 1,363,050 | ||||||
Votorantim Cimentos SA | ||||||||
7.25%, 04/05/41b | 1,250 | 1,335,937 | ||||||
|
| |||||||
104,027,339 | ||||||||
CHILE — 0.24% | ||||||||
VTR Finance BV | ||||||||
6.88%, 01/15/24 (Call 01/15/19)b | 1,400 | 1,478,750 | ||||||
|
| |||||||
1,478,750 |
Security | Principal | Value | ||||||
CHINA — 3.22% | ||||||||
Agile Group Holdings Ltd. | ||||||||
9.00%, 05/21/20 (Call 05/21/18)b | $ | 400 | $ | 429,000 | ||||
China Evergrande Group | ||||||||
6.25%, 06/28/21b | 500 | 502,175 | ||||||
7.50%, 06/28/23 (Call 06/28/20)b | 2,000 | 2,020,816 | ||||||
8.25%, 03/23/22 (Call 03/23/20)b | 1,700 | 1,788,648 | ||||||
8.75%, 06/28/25 (Call 06/28/21)b | 4,766 | 4,946,380 | ||||||
9.50%, 03/29/24 (Call 03/29/21)b | 600 | 646,565 | ||||||
Country Garden Holdings Co. Ltd. | ||||||||
4.75%, 07/25/22 (Call 07/25/20)b | 400 | 408,979 | ||||||
4.75%, 09/28/23 (Call 09/28/20)b | 900 | 911,250 | ||||||
7.25%, 04/04/21 (Call 11/30/17)b | 700 | 725,375 | ||||||
7.50%, 03/09/20 (Call 03/09/18)b | 600 | 630,000 | ||||||
7.50%, 01/10/23 (Call 01/10/18)b | 1,000 | 1,041,250 | ||||||
Fantasia Holdings Group Co. Ltd. | ||||||||
7.38%, 10/04/21 (Call 10/04/19)b | 600 | 599,373 | ||||||
Fortune Star BVI Ltd. | ||||||||
5.25%, 03/23/22 (Call 03/23/20)b | 1,200 | 1,204,638 | ||||||
Greenland Global Investment Ltd. | ||||||||
5.88%, 07/03/24b | 1,200 | 1,220,449 | ||||||
KWG Property Holding Ltd. | ||||||||
8.98%, 01/14/19 (Call 11/30/17)b | 625 | 645,071 | ||||||
Shimao Property Holdings Ltd. | ||||||||
4.75%, 07/03/22 (Call 07/03/20)b | 600 | 615,687 | ||||||
8.13%, 01/22/21 (Call 01/22/18)b | 400 | 420,000 | ||||||
8.38%, 02/10/22 (Call 02/10/19)b | 1,225 | 1,345,712 | ||||||
|
| |||||||
20,101,368 | ||||||||
COLOMBIA — 1.12% | ||||||||
Banco Davivienda SA | ||||||||
5.88%, 07/09/22b | 400 | 430,000 | ||||||
Banco de Bogota SA | ||||||||
5.38%, 02/19/23b | 400 | 422,400 | ||||||
6.25%, 05/12/26b | 1,678 | 1,818,533 | ||||||
Bancolombia SA | ||||||||
5.13%, 09/11/22 | 1,463 | 1,529,347 | ||||||
Colombia Telecomunicaciones SA ESP | ||||||||
5.38%, 09/27/22 (Call 11/30/17)b | 1,006 | 1,026,120 | ||||||
Grupo Aval Ltd. | ||||||||
4.75%, 09/26/22b | 600 | 612,000 |
16 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® EMERGING MARKETS HIGH YIELD BOND ETF
October 31, 2017
Security | Principal | Value | ||||||
Millicom International Cellular SA | ||||||||
6.00%, 03/15/25 (Call 03/15/20)b | $ | 1,100 | $ | 1,163,250 | ||||
|
| |||||||
7,001,650 | ||||||||
COSTA RICA — 0.18% | ||||||||
Banco Nacional de Costa Rica | ||||||||
5.88%, 04/25/21b | 1,050 | 1,092,405 | ||||||
|
| |||||||
1,092,405 | ||||||||
INDIA — 1.15% | ||||||||
ABJA Investment Co. Pte Ltd. | ||||||||
4.85%, 01/31/20b | 600 | 617,533 | ||||||
5.95%, 07/31/24b | 925 | 987,474 | ||||||
Bank of India/London | ||||||||
6.25%, 02/16/21b | 650 | 706,349 | ||||||
Greenko Dutch BV | ||||||||
5.25%, 07/24/24 (Call 07/24/20)b | 600 | 611,411 | ||||||
IDBI Bank Ltd. | ||||||||
3.75%, 01/25/19b | 200 | 201,366 | ||||||
JSW Steel Ltd. | ||||||||
5.25%, 04/13/22b | 800 | 824,865 | ||||||
Vedanta Resources PLC | ||||||||
6.38%, 07/30/22b | 800 | 836,000 | ||||||
7.13%, 05/31/23b | 1,310 | 1,411,525 | ||||||
8.25%, 06/07/21b | 900 | 1,005,750 | ||||||
|
| |||||||
7,202,273 | ||||||||
INDONESIA — 0.95% | ||||||||
Majapahit Holding BV | ||||||||
7.75%, 01/20/20b | 2,300 | 2,541,868 | ||||||
7.88%, 06/29/37b | 300 | 406,517 | ||||||
8.00%, 08/07/19 | 900 | 988,347 | ||||||
Perusahaan Listrik Negara PT | ||||||||
5.25%, 10/24/42b | 1,300 | 1,367,210 | ||||||
5.50%, 11/22/21b | 600 | 655,500 | ||||||
|
| |||||||
5,959,442 | ||||||||
JAMAICA — 0.84% | ||||||||
Digicel Group Ltd. | ||||||||
7.13%, 04/01/22 (Call 11/30/17)b | 1,150 | 1,084,105 | ||||||
8.25%, 09/30/20 (Call 11/30/17)b | 1,400 | 1,383,025 | ||||||
Digicel Ltd. | ||||||||
6.00%, 04/15/21 (Call 11/30/17)b | 1,650 | 1,623,188 | ||||||
6.75%, 03/01/23 (Call 03/01/18)b | 1,200 | 1,183,500 | ||||||
|
| |||||||
5,273,818 |
Security | Principal | Value | ||||||
KAZAKHSTAN — 1.49% | ||||||||
Development Bank of Kazakhstan JSC | ||||||||
4.13%, 12/10/22b | $ | 1,050 | $ | 1,067,062 | ||||
Kazakhstan Temir Zholy Finance BV | ||||||||
6.95%, 07/10/42b | 1,200 | 1,344,000 | ||||||
Kazkommertsbank JSC | ||||||||
5.50%, 12/21/22 (Call 11/30/17)b | 900 | 891,000 | ||||||
KazMunayGas National Co. JSC | ||||||||
3.88%, 04/19/22b | 400 | 404,594 | ||||||
4.75%, 04/19/27b | 1,000 | 1,022,777 | ||||||
5.75%, 04/30/43b | 200 | 203,642 | ||||||
5.75%, 04/19/47b | 1,700 | 1,711,759 | ||||||
6.38%, 04/09/21b | 1,100 | 1,202,795 | ||||||
7.00%, 05/05/20b | 1,350 | 1,471,500 | ||||||
|
| |||||||
9,319,129 | ||||||||
MEXICO — 1.12% | ||||||||
BBVA Bancomer SA/Texas | ||||||||
7.25%, 04/22/20 | 1,500 | 1,628,925 | ||||||
Cemex Finance LLC | ||||||||
6.00%, 04/01/24 (Call 04/01/19)b | 1,050 | 1,110,375 | ||||||
Cemex SAB de CV | ||||||||
5.70%, 01/11/25 (Call 01/11/20)b | 1,200 | 1,263,000 | ||||||
6.13%, 05/05/25 (Call 05/05/20)b | 800 | 853,600 | ||||||
7.75%, 04/16/26 (Call 04/16/21)b | 1,900 | 2,151,940 | ||||||
|
| |||||||
7,007,840 | ||||||||
OMAN — 0.29% | ||||||||
Bank Muscat SAOG | ||||||||
3.75%, 05/03/21b | 600 | 605,250 | ||||||
Lamar Funding Ltd. | ||||||||
3.96%, 05/07/25b | 1,300 | 1,217,125 | ||||||
|
| |||||||
1,822,375 | ||||||||
RUSSIA — 4.26% | ||||||||
Alfa Bank AO Via Alfa Bond Issuance PLC | ||||||||
7.50%, 09/26/19b | 400 | 427,100 | ||||||
7.75%, 04/28/21b | 950 | 1,072,313 | ||||||
ALROSA Finance SA | ||||||||
7.75%, 11/03/20b | 1,100 | 1,234,750 | ||||||
Credit Bank of Moscow Via CBOM Finance PLC | ||||||||
5.88%, 11/07/21b | 200 | 207,000 |
SCHEDULESOF INVESTMENTS | 17 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® EMERGING MARKETS HIGH YIELD BOND ETF
October 31, 2017
Security | Principal | Value | ||||||
VRN, (5 year USD Swap + 5.416%) | ||||||||
7.50%, 10/05/27 (Call 10/05/22)b,c | $ | 900 | $ | 830,250 | ||||
Evraz Group SA | ||||||||
5.38%, 03/20/23b | 800 | 825,000 | ||||||
6.50%, 04/22/20b | 1,150 | 1,221,875 | ||||||
6.75%, 01/31/22b | 600 | 651,750 | ||||||
8.25%, 01/28/21b | 650 | 732,875 | ||||||
Gazprom OAO Via Gaz Capital SA | ||||||||
4.95%, 02/06/28b | 600 | 614,250 | ||||||
Gazprombank OAO Via GPB Eurobond Finance PLC | ||||||||
VRN, (5 year CMT + 6.024%) | ||||||||
7.50%, 12/28/23 (Call 12/28/18)b,c | 200 | 207,500 | ||||||
GTLK Europe DAC | ||||||||
5.13%, 05/31/24b | 800 | 815,668 | ||||||
Metalloinvest Finance DAC | ||||||||
4.85%, 05/02/24b | 600 | 611,040 | ||||||
MMC Norilsk Nickel OJSC via MMC Finance DAC | ||||||||
5.55%, 10/28/20b | 1,000 | 1,063,750 | ||||||
6.63%, 10/14/22b | 1,200 | 1,350,000 | ||||||
Novolipetsk Steel via Steel Funding DAC | ||||||||
4.50%, 06/15/23b | 600 | 620,250 | ||||||
Phosagro OAO via Phosagro Bond Funding DAC | ||||||||
3.95%, 11/03/21b | 700 | 709,257 | ||||||
Polyus Finance PLC | ||||||||
5.25%, 02/07/23b | 1,000 | 1,046,250 | ||||||
Polyus Gold International Ltd. | ||||||||
4.70%, 03/28/22b | 400 | 409,000 | ||||||
5.63%, 04/29/20b | 800 | 840,000 | ||||||
Rusal Capital DAC | ||||||||
5.13%, 02/02/22b | 2,000 | 2,035,000 | ||||||
Russian Railways via RZD Capital PLC | ||||||||
3.45%, 10/06/20b | 200 | 201,121 | ||||||
4.38%, 03/01/24b | 1,600 | 1,630,206 | ||||||
Sberbank of Russia Via SB Capital SA | ||||||||
5.13%, 10/29/22b | 1,600 | 1,668,000 |
Security | Principal | Value | ||||||
Severstal OAO Via Steel Capital SA | ||||||||
5.90%, 10/17/22b | $ | 400 | $ | 444,000 | ||||
VEON Holdings BV | ||||||||
3.95%, 06/16/21 (Call 03/16/21)b | 400 | 402,323 | ||||||
4.95%, 06/16/24 (Call 03/16/24)b | 600 | 614,495 | ||||||
5.20%, 02/13/19b | 400 | 411,030 | ||||||
5.95%, 02/13/23b | 1,400 | 1,515,500 | ||||||
7.50%, 03/01/22b | 600 | 690,750 | ||||||
VTB Bank OJSC Via VTB Capital SA | ||||||||
6.95%, 10/17/22b | 1,400 | 1,522,500 | ||||||
|
| |||||||
26,624,803 | ||||||||
SOUTH AFRICA — 1.38% | ||||||||
AngloGold Ashanti Holdings PLC | ||||||||
5.13%, 08/01/22 | 645 | 676,444 | ||||||
5.38%, 04/15/20 | 1,538 | 1,612,977 | ||||||
Eskom Holdings SOC Ltd. | ||||||||
5.75%, 01/26/21b | 1,800 | 1,818,000 | ||||||
6.75%, 08/06/23b | 1,017 | 1,039,883 | ||||||
7.13%, 02/11/25b | 1,460 | 1,494,675 | ||||||
Gold Fields Orogen Holding BVI Ltd. | ||||||||
4.88%, 10/07/20b | 800 | 820,000 | ||||||
MTN Mauritius Investment Ltd. | ||||||||
4.76%, 11/11/24b | 600 | 594,750 | ||||||
Transnet SOC Ltd. | ||||||||
4.00%, 07/26/22b | 600 | 585,600 | ||||||
|
| |||||||
8,642,329 | ||||||||
SOUTH KOREA — 0.27% | ||||||||
Woori Bank | ||||||||
4.75%, 04/30/24b | 1,000 | 1,048,390 | ||||||
VRN, (5 year CMT + 3.328%) | ||||||||
5.00%, 06/10/45 (Call 06/10/20)b,c | 600 | 614,838 | ||||||
|
| |||||||
1,663,228 | ||||||||
THAILAND — 0.07% | ||||||||
Krung Thai Bank PCL/Cayman Islands | ||||||||
VRN, (5 year CMT + 3.535%) | ||||||||
5.20%, 12/26/24 (Call 12/26/19)b,c | 400 | 415,353 | ||||||
|
| |||||||
415,353 | ||||||||
TRINIDAD AND TOBAGO — 0.21% | ||||||||
Consolidated Energy Finance SA | ||||||||
6.88%, 06/15/25 | 450 | 475,784 |
18 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® EMERGING MARKETS HIGH YIELD BOND ETF
October 31, 2017
Security | Principal | Value | ||||||
Petroleum Co. of Trinidad & Tobago Ltd. | ||||||||
9.75%, 08/14/19b | $ | 800 | $ | 852,554 | ||||
|
| |||||||
1,328,338 | ||||||||
TURKEY — 3.83% | ||||||||
Akbank Turk AS | ||||||||
4.00%, 01/24/20b | 200 | 199,000 | ||||||
5.00%, 10/24/22 | 150 | 149,747 | ||||||
5.13%, 03/31/25b | 200 | 193,750 | ||||||
VRN, (5 year USD Swap + 5.026%) | ||||||||
7.20%, 03/16/27 (Call 03/16/22)b,c | 1,100 | 1,134,375 | ||||||
Finansbank AS/Turkey | ||||||||
4.88%, 05/19/22b | 1,800 | 1,777,943 | ||||||
TC Ziraat Bankasi AS | ||||||||
4.25%, 07/03/19b | 200 | 200,054 | ||||||
4.75%, 04/29/21b | 200 | 199,375 | ||||||
5.13%, 05/03/22b | 1,700 | 1,693,751 | ||||||
Turkiye Garanti Bankasi AS | ||||||||
4.75%, 10/17/19b | 600 | 609,000 | ||||||
5.25%, 09/13/22b | 200 | 202,750 | ||||||
5.88%, 03/16/23b | 900 | 925,875 | ||||||
6.25%, 04/20/21b | 200 | 210,500 | ||||||
VRN, (5 year USD Swap + 4.220%) | ||||||||
6.13%, 05/24/27 (Call 05/24/22)b,c | 1,700 | 1,679,486 | ||||||
Turkiye Halk Bankasi AS | ||||||||
3.88%, 02/05/20b | 500 | 481,875 | ||||||
4.75%, 06/04/19b | 200 | 198,500 | ||||||
4.75%, 02/11/21b | 500 | 486,250 | ||||||
5.00%, 07/13/21b | 900 | 876,375 | ||||||
Turkiye Is Bankasi | ||||||||
5.00%, 04/30/20b | 600 | 603,000 | ||||||
5.00%, 06/25/21b | 1,450 | 1,440,937 | ||||||
5.38%, 10/06/21b | 1,000 | 1,000,000 | ||||||
5.50%, 04/21/19b | 200 | 203,522 | ||||||
5.50%, 04/21/22b | 1,100 | 1,098,625 | ||||||
6.00%, 10/24/22b | 850 | 846,813 | ||||||
6.13%, 04/25/24b | 900 | 897,817 | ||||||
Turkiye Vakiflar Bankasi TAO | ||||||||
5.50%, 10/27/21b | 800 | 801,000 | ||||||
6.00%, 11/01/22b | 200 | 197,000 | ||||||
VRN, (5 year USD Swap + 5.439%) | ||||||||
6.88%, 02/03/25 (Call 02/03/20)b,c | 1,000 | 1,003,750 |
Security | Principal | Value | ||||||
Yapi ve Kredi Bankasi AS | ||||||||
4.00%, 01/22/20b | $ | 1,000 | $ | 988,750 | ||||
5.13%, 10/22/19b | 1,050 | 1,065,750 | ||||||
5.25%, 12/03/18b | 200 | 203,071 | ||||||
5.50%, 12/06/22b | 400 | 387,500 | ||||||
5.75%, 02/24/22b | 950 | 958,312 | ||||||
5.85%, 06/21/24b | 600 | 592,959 | ||||||
VRN, (5 year USD Swap + 7.400%) | ||||||||
8.50%, 03/09/26 (Call 03/09/21)b,c | 400 | 424,000 | ||||||
|
| |||||||
23,931,412 | ||||||||
UKRAINE — 0.04% | ||||||||
MHP SE | ||||||||
7.75%, 05/10/24b | 200 | 216,278 | ||||||
|
| |||||||
216,278 | ||||||||
UNITED ARAB EMIRATES — 0.29% |
| |||||||
DAE Funding LLC | ||||||||
4.50%, 08/01/22 (Call 08/01/19)b | 600 | 607,210 | ||||||
5.00%, 08/01/24 (Call 08/01/20)b | 1,200 | 1,225,461 | ||||||
|
| |||||||
1,832,671 | ||||||||
UNITED KINGDOM — 0.21% | ||||||||
Sable International Finance Ltd. | ||||||||
6.88%, 08/01/22 (Call 08/01/18)b | 450 | 483,188 | ||||||
Sunac China Holdings Ltd. | ||||||||
7.95%, 08/08/22 (Call 08/08/20)b | 600 | 610,500 | ||||||
Tullow Oil PLC | ||||||||
6.00%, 11/01/20 (Call 11/10/17)b | 200 | 200,000 | ||||||
|
| |||||||
1,293,688 | ||||||||
VENEZUELA — 1.62% | ||||||||
Petroleos de Venezuela SA | ||||||||
5.38%, 04/12/27b | 3,270 | 936,855 | ||||||
5.50%, 04/12/37b | 1,439 | 413,713 | ||||||
6.00%, 05/16/24b | 5,510 | 1,556,575 | ||||||
6.00%, 11/15/26b | 5,300 | 1,457,500 | ||||||
8.50%, 10/27/20b | 2,475 | 2,045,587 | ||||||
9.00%, 11/17/21b | 2,755 | 1,208,756 | ||||||
9.75%, 05/17/35b | 2,912 | 1,048,320 | ||||||
12.75%, 02/17/22b | 3,238 | 1,460,338 | ||||||
|
| |||||||
10,127,644 | ||||||||
TOTAL CORPORATE BONDS & NOTES |
| |||||||
(Cost: $253,123,505) | 257,231,357 |
SCHEDULESOF INVESTMENTS | 19 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® EMERGING MARKETS HIGH YIELD BOND ETF
October 31, 2017
Security | Principal | Value | ||||||
FOREIGN GOVERNMENT OBLIGATIONSa — 56.01% |
| |||||||
ARGENTINA — 7.07% |
| |||||||
Argentine Republic Government International Bond | ||||||||
2.50%, 12/31/38e | $ | 644 | $ | 462,070 | ||||
2.50%, 12/31/38e | 6,213 | 4,457,828 | ||||||
5.63%, 01/26/22 | 4,570 | 4,798,500 | ||||||
6.25%, 04/22/19 | 1,900 | 1,992,082 | ||||||
6.63%, 07/06/28 | 1,080 | 1,146,420 | ||||||
6.88%, 04/22/21 | 6,075 | 6,630,863 | ||||||
6.88%, 01/26/27 | 4,200 | 4,580,100 | ||||||
7.13%, 07/06/36 | 1,820 | 1,957,410 | ||||||
7.13%, 06/28/49b | 2,400 | 2,461,461 | ||||||
7.50%, 04/22/26 | 6,242 | 7,053,460 | ||||||
7.63%, 04/22/46 | 2,400 | 2,691,600 | ||||||
8.28%, 12/31/33 | 1,444 | 1,655,299 | ||||||
8.28%, 12/31/33 | 477 | 555,824 | ||||||
8.28%, 12/31/33 | 3,213 | 3,746,907 | ||||||
|
| |||||||
44,189,824 | ||||||||
AZERBAIJAN — 0.11% | ||||||||
State Oil Co. of the Azerbaijan Republic | ||||||||
6.95%, 03/18/30b | 600 | 660,386 | ||||||
|
| |||||||
660,386 | ||||||||
BAHRAIN — 1.93% |
| |||||||
Bahrain Government International Bond | ||||||||
5.50%, 03/31/20b | 783 | 811,594 | ||||||
5.88%, 01/26/21b | 650 | 680,743 | ||||||
6.00%, 09/19/44b | 400 | 342,999 | ||||||
6.13%, 07/05/22b | 1,200 | 1,272,269 | ||||||
6.13%, 08/01/23b | 1,400 | 1,482,339 | ||||||
6.75%, 09/20/29b | 1,400 | 1,396,500 | ||||||
7.00%, 01/26/26b | 2,200 | 2,330,765 | ||||||
7.00%, 10/12/28b | 2,706 | 2,783,310 | ||||||
7.50%, 09/20/47b | 1,000 | 974,094 | ||||||
|
| |||||||
12,074,613 | ||||||||
BRAZIL — 6.24% | ||||||||
Banco Nacional de Desenvolvimento Economico e Social | ||||||||
4.00%, 04/14/19b | 400 | 405,664 | ||||||
4.75%, 05/09/24b | 2,300 | 2,325,463 |
Security | Principal | Value | ||||||
5.50%, 07/12/20b | $ | 450 | $ | 474,647 | ||||
5.75%, 09/26/23b | 900 | 973,125 | ||||||
6.50%, 06/10/19b | 600 | 635,106 | ||||||
Brazilian Government International Bond | ||||||||
2.63%, 01/05/23 | 2,200 | 2,128,500 | ||||||
4.25%, 01/07/25 | 5,468 | 5,563,690 | ||||||
4.88%, 01/22/21 | 3,811 | 4,073,006 | ||||||
5.00%, 01/27/45 | 5,200 | 4,838,600 | ||||||
5.63%, 01/07/41 | 2,750 | 2,795,375 | ||||||
5.63%, 02/21/47 | 1,400 | 1,423,800 | ||||||
5.88%, 01/15/19 | 900 | 940,312 | ||||||
6.00%, 04/07/26 | 3,892 | 4,324,985 | ||||||
7.13%, 01/20/37 | 1,710 | 2,043,450 | ||||||
8.25%, 01/20/34 | 1,650 | 2,151,188 | ||||||
8.75%, 02/04/25 | 500 | 649,222 | ||||||
8.88%, 10/14/19 | 300 | 340,810 | ||||||
8.88%, 04/15/24 | 1,350 | 1,728,000 | ||||||
10.13%, 05/15/27 | 600 | 865,500 | ||||||
10.13%, 05/15/27 | 225 | 324,563 | ||||||
|
| |||||||
39,005,006 | ||||||||
COSTA RICA — 0.57% | ||||||||
Costa Rica Government International Bond | ||||||||
4.25%, 01/26/23 | 400 | 394,500 | ||||||
4.38%, 04/30/25b | 400 | 392,778 | ||||||
5.63%, 04/30/43 | 200 | 180,686 | ||||||
7.00%, 04/04/44b | 1,662 | 1,730,557 | ||||||
7.16%, 03/12/45b | 800 | 850,000 | ||||||
|
| |||||||
3,548,521 | ||||||||
CROATIA — 1.37% | ||||||||
Croatia Government International Bond | ||||||||
5.50%, 04/04/23b | 1,300 | 1,434,875 | ||||||
6.00%, 01/26/24b | 1,400 | 1,592,500 | ||||||
6.38%, 03/24/21b | 2,400 | 2,646,000 | ||||||
6.63%, 07/14/20b | 1,350 | 1,476,563 | ||||||
6.75%, 11/05/19b | 1,300 | 1,399,125 | ||||||
|
| |||||||
8,549,063 | ||||||||
DOMINICAN REPUBLIC — 2.10% |
| |||||||
Dominican Republic International Bond | ||||||||
5.50%, 01/27/25b | 700 | 740,250 |
20 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® EMERGING MARKETS HIGH YIELD BOND ETF
October 31, 2017
Security | Principal | Value | ||||||
5.88%, 04/18/24b | $ | 1,240 | $ | 1,348,500 | ||||
5.95%, 01/25/27b | 1,075 | 1,155,625 | ||||||
6.60%, 01/28/24b | 1,692 | 1,907,927 | ||||||
6.85%, 01/27/45b | 2,490 | 2,770,125 | ||||||
6.88%, 01/29/26b | 1,700 | 1,942,250 | ||||||
7.45%, 04/30/44b | 1,350 | 1,601,438 | ||||||
7.50%, 05/06/21b | 1,500 | 1,655,625 | ||||||
|
| |||||||
13,121,740 | ||||||||
ECUADOR — 1.62% | ||||||||
Ecuador Government International Bond | ||||||||
7.95%, 06/20/24b | 1,065 | 1,074,319 | ||||||
8.75%, 06/02/23b | 1,500 | 1,575,505 | ||||||
9.63%, 06/02/27b | 800 | 857,961 | ||||||
9.65%, 12/13/26b | 2,600 | 2,801,500 | ||||||
10.50%, 03/24/20b | 1,300 | 1,410,500 | ||||||
10.75%, 03/28/22b | 2,100 | 2,375,625 | ||||||
|
| |||||||
10,095,410 | ||||||||
EGYPT — 1.80% | ||||||||
Egypt Government International Bond | ||||||||
5.75%, 04/29/20b | 760 | 788,500 | ||||||
5.88%, 06/11/25b | 2,590 | 2,645,038 | ||||||
6.13%, 01/31/22b | 2,200 | 2,296,250 | ||||||
6.88%, 04/30/40b | 800 | 796,257 | ||||||
7.50%, 01/31/27b | 2,100 | 2,323,125 | ||||||
8.50%, 01/31/47b | 2,100 | 2,370,375 | ||||||
|
| |||||||
11,219,545 | ||||||||
EL SALVADOR — 1.01% | ||||||||
El Salvador Government International Bond | ||||||||
5.88%, 01/30/25b | 750 | 740,645 | ||||||
6.38%, 01/18/27b | 900 | 895,348 | ||||||
7.38%, 12/01/19b | 250 | 259,861 | ||||||
7.63%, 02/01/41b | 500 | 520,044 | ||||||
7.65%, 06/15/35b | 880 | 915,200 | ||||||
7.75%, 01/24/23b | 1,325 | 1,430,402 | ||||||
8.25%, 04/10/32b | 400 | 445,207 | ||||||
8.63%, 02/28/29b | 1,000 | 1,131,795 | ||||||
|
| |||||||
6,338,502 | ||||||||
GHANA — 0.73% | ||||||||
Ghana Government International Bond | ||||||||
7.88%, 08/07/23b | 1,000 | 1,080,000 |
Security | Principal | Value | ||||||
8.13%, 01/18/26b | $ | 1,500 | $ | 1,625,625 | ||||
8.13%, 01/18/26b | 200 | 216,750 | ||||||
9.25%, 09/15/22b | 400 | 452,018 | ||||||
10.75%, 10/14/30b | 900 | 1,200,009 | ||||||
|
| |||||||
4,574,402 | ||||||||
GUATEMALA — 0.45% |
| |||||||
Guatemala Government Bond | ||||||||
4.50%, 05/03/26b | 1,000 | 1,008,088 | ||||||
4.88%, 02/13/28b | 1,150 | 1,186,074 | ||||||
5.75%, 06/06/22b | 600 | 651,700 | ||||||
|
| |||||||
2,845,862 | ||||||||
IVORY COAST — 0.47% |
| |||||||
Ivory Coast Government International Bond | ||||||||
5.38%, 07/23/24b | 400 | 404,528 | ||||||
6.13%, 06/15/33b | 1,600 | 1,581,218 | ||||||
6.38%, 03/03/28b | 900 | 933,750 | ||||||
|
| |||||||
2,919,496 | ||||||||
JAMAICA — 0.99% | ||||||||
Jamaica Government International Bond | ||||||||
6.75%, 04/28/28 | 2,400 | 2,778,000 | ||||||
7.63%, 07/09/25 | 500 | 605,482 | ||||||
7.88%, 07/28/45 | 1,200 | 1,490,635 | ||||||
8.00%, 03/15/39 | 1,043 | 1,297,231 | ||||||
|
| |||||||
6,171,348 | ||||||||
JORDAN — 0.41% | ||||||||
Jordan Government International Bond | ||||||||
5.75%, 01/31/27b | 1,500 | 1,498,125 | ||||||
6.13%, 01/29/26b | 1,000 | 1,035,479 | ||||||
|
| |||||||
2,533,604 | ||||||||
LEBANON — 3.78% | ||||||||
Lebanon Government International Bond | ||||||||
5.45%, 11/28/19b | 300 | 300,676 | ||||||
5.50%, 04/23/19 | 200 | 201,031 | ||||||
5.80%, 04/14/20b | 1,165 | 1,166,337 | ||||||
6.00%, 05/20/19b | 300 | 303,814 | ||||||
6.00%, 01/27/23b | 550 | 534,875 | ||||||
6.10%, 10/04/22b | 1,600 | 1,578,000 | ||||||
6.15%, 06/19/20 | 350 | 351,736 |
SCHEDULESOF INVESTMENTS | 21 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® EMERGING MARKETS HIGH YIELD BOND ETF
October 31, 2017
Security | Principal | Value | ||||||
6.20%, 02/26/25b | $ | 700 | $ | 667,605 | ||||
6.25%, 05/27/22 | 300 | 298,447 | ||||||
6.25%, 11/04/24b | 823 | 794,456 | ||||||
6.38%, 03/09/20 | 1,800 | 1,824,750 | ||||||
6.40%, 05/26/23 | 2,750 | 2,713,923 | ||||||
6.60%, 11/27/26b | 850 | 818,125 | ||||||
6.65%, 04/22/24b | 1,020 | 1,008,996 | ||||||
6.65%, 11/03/28b | 1,115 | 1,061,177 | ||||||
6.65%, 02/26/30b | 1,740 | 1,633,425 | ||||||
6.75%, 11/29/27b | 817 | 786,363 | ||||||
6.85%, 03/23/27b | 800 | 781,009 | ||||||
6.85%, 05/25/29 | 400 | 382,278 | ||||||
7.00%, 03/23/32b | 1,890 | 1,801,524 | ||||||
7.05%, 11/02/35b | 100 | 94,902 | ||||||
7.25%, 03/23/37b | 800 | 763,400 | ||||||
8.25%, 04/12/21b | 3,564 | 3,777,840 | ||||||
|
| |||||||
23,644,689 | ||||||||
MOROCCO — 0.38% |
| |||||||
Morocco Government International Bond | ||||||||
4.25%, 12/11/22b | 1,600 | 1,680,000 | ||||||
5.50%, 12/11/42b | 600 | 670,659 | ||||||
|
| |||||||
2,350,659 | ||||||||
NIGERIA — 0.47% | ||||||||
Nigeria Government International Bond | ||||||||
6.38%, 07/12/23b | 700 | 733,455 | ||||||
6.75%, 01/28/21b | 400 | 425,977 | ||||||
7.88%, 02/16/32b | 1,642 | 1,800,043 | ||||||
|
| |||||||
2,959,475 | ||||||||
PAKISTAN — 0.48% | ||||||||
Pakistan Government International Bond | ||||||||
7.25%, 04/15/19b | 600 | 625,456 | ||||||
8.25%, 04/15/24b | 1,925 | 2,143,353 | ||||||
8.25%, 09/30/25b | 200 | 224,385 | ||||||
|
| |||||||
2,993,194 | ||||||||
RUSSIA — 4.81% |
| |||||||
Russian Foreign Bond-Eurobond | ||||||||
3.50%, 01/16/19b | 800 | 810,776 | ||||||
4.50%, 04/04/22b | 2,400 | 2,556,000 | ||||||
4.88%, 09/16/23b | 3,800 | 4,137,250 |
Security | Principal | Value | ||||||
5.00%, 04/29/20b | $ | 4,000 | $ | 4,225,000 | ||||
5.63%, 04/04/42b | 3,200 | 3,531,200 | ||||||
5.88%, 09/16/43b | 1,600 | 1,826,000 | ||||||
7.50%, 03/31/30 b,e | 7,822 | 9,200,640 | ||||||
12.75%, 06/24/28b | 2,150 | 3,767,875 | ||||||
|
| |||||||
30,054,741 | ||||||||
SENEGAL — 0.32% | ||||||||
Senegal Government International Bond | ||||||||
6.25%, 07/30/24b | 400 | 429,209 | ||||||
6.25%, 05/23/33b | 1,100 | 1,137,887 | ||||||
8.75%, 05/13/21b | 400 | 463,492 | ||||||
|
| |||||||
2,030,588 | ||||||||
SERBIA — 0.85% | ||||||||
Serbia International Bond | ||||||||
4.88%, 02/25/20b | 2,400 | 2,501,784 | ||||||
5.88%, 12/03/18b | 200 | 206,916 | ||||||
7.25%, 09/28/21b | 2,250 | 2,587,500 | ||||||
|
| |||||||
5,296,200 | ||||||||
SOUTH AFRICA — 2.74% | ||||||||
Republic of South Africa Government International Bond | ||||||||
4.30%, 10/12/28 | 1,000 | 922,500 | ||||||
4.67%, 01/17/24 | 2,000 | 2,025,000 | ||||||
4.88%, 04/14/26 | 1,500 | 1,488,750 | ||||||
5.00%, 10/12/46 | 1,100 | 976,250 | ||||||
5.50%, 03/09/20 | 3,068 | 3,236,740 | ||||||
5.65%, 09/27/47 | 1,900 | 1,824,611 | ||||||
5.88%, 05/30/22 | 1,050 | 1,145,812 | ||||||
5.88%, 09/16/25 | 3,310 | 3,525,150 | ||||||
6.25%, 03/08/41 | 1,901 | 1,997,633 | ||||||
|
| |||||||
17,142,446 | ||||||||
SRI LANKA — 1.71% | ||||||||
Sri Lanka Government International Bond | ||||||||
5.13%, 04/11/19b | 200 | 204,997 | ||||||
5.75%, 01/18/22 | 600 | 636,637 | ||||||
5.88%, 07/25/22b | 2,109 | 2,251,357 | ||||||
6.00%, 01/14/19b | 400 | 412,945 | ||||||
6.13%, 06/03/25b | 500 | 533,538 | ||||||
6.20%, 05/11/27b | 580 | 615,650 | ||||||
6.25%, 10/04/20b | 300 | 320,250 |
22 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® EMERGING MARKETS HIGH YIELD BOND ETF
October 31, 2017
Security | Principal | Value | ||||||
6.25%, 07/27/21b | $ | 2,700 | $ | 2,912,625 | ||||
6.83%, 07/18/26b | 1,050 | 1,163,820 | ||||||
6.85%, 11/03/25b | 1,500 | 1,665,270 | ||||||
|
| |||||||
10,717,089 | ||||||||
TRINIDAD AND TOBAGO — 0.26% | ||||||||
Trinidad & Tobago Government International Bond | ||||||||
4.38%, 01/16/24b | 400 | 407,410 | ||||||
4.50%, 08/04/26b | 1,200 | 1,210,500 | ||||||
|
| |||||||
1,617,910 | ||||||||
TURKEY — 8.74% | ||||||||
Export Credit Bank of Turkey | ||||||||
5.00%, 09/23/21b | 450 | 455,711 | ||||||
5.38%, 02/08/21b | 400 | 410,883 | ||||||
5.38%, 10/24/23b | 600 | 604,715 | ||||||
Turkey Government International Bond | ||||||||
3.25%, 03/23/23 | 1,700 | 1,604,375 | ||||||
4.25%, 04/14/26 | 900 | 849,375 | ||||||
4.88%, 10/09/26 | 5,060 | 4,939,825 | ||||||
4.88%, 04/16/43 | 4,500 | 3,881,250 | ||||||
5.13%, 03/25/22 | 949 | 984,587 | ||||||
5.63%, 03/30/21 | 2,050 | 2,162,750 | ||||||
5.75%, 03/22/24 | 2,300 | 2,426,500 | ||||||
5.75%, 05/11/47 | 3,400 | 3,243,167 | ||||||
5.88%, 04/24/19b | 650 | 670,466 | ||||||
6.00%, 03/25/27 | 4,329 | 4,561,684 | ||||||
6.00%, 01/14/41 | 2,816 | 2,816,000 | ||||||
6.25%, 09/26/22 | 3,200 | 3,480,000 | ||||||
6.63%, 02/17/45 | 3,050 | 3,255,875 | ||||||
6.75%, 05/30/40 | 1,975 | 2,147,812 | ||||||
6.88%, 03/17/36 | 2,020 | 2,222,000 | ||||||
7.00%, 03/11/19 | 800 | 843,155 | ||||||
7.00%, 06/05/20 | 2,100 | 2,273,250 | ||||||
7.25%, 03/05/38 | 1,300 | 1,495,000 | ||||||
7.38%, 02/05/25 | 2,570 | 2,952,287 | ||||||
7.50%, 11/07/19 | 2,200 | 2,378,750 | ||||||
8.00%, 02/14/34 | 1,263 | 1,540,860 | ||||||
11.88%, 01/15/30 | 1,550 | 2,410,250 | ||||||
|
| |||||||
54,610,527 | ||||||||
UKRAINE — 2.28% |
| |||||||
Ukraine Government International Bond | ||||||||
7.75%, 09/01/20b | 2,526 | 2,690,190 |
Security | Principal or Shares | Value | ||||||
7.75%, 09/01/21b | $ | 850 | $ | 906,313 | ||||
7.75%, 09/01/22b | 1,514 | 1,618,466 | ||||||
7.75%, 09/01/23b | 1,325 | 1,407,813 | ||||||
7.75%, 09/01/24b | 2,313 | 2,422,867 | ||||||
7.75%, 09/01/25b | 936 | 973,440 | ||||||
7.75%, 09/01/26b | 1,252 | 1,289,560 | ||||||
7.75%, 09/01/27b | 2,150 | 2,214,500 | ||||||
Ukreximbank Via Biz Finance PLC | ||||||||
9.75%, 01/22/25b | 650 | 710,438 | ||||||
|
| |||||||
14,233,587 | ||||||||
VENEZUELA — 1.95% | ||||||||
Venezuela Government International Bond | ||||||||
6.00%, 12/09/20b | 1,780 | 694,206 | ||||||
7.00%, 12/01/18b | 800 | 500,000 | ||||||
7.00%, 03/31/38b | 1,000 | 320,000 | ||||||
7.65%, 04/21/25b | 1,558 | 510,252 | ||||||
7.75%, 10/13/19b | 2,979 | 1,366,919 | ||||||
8.25%, 10/13/24b | 2,700 | 897,735 | ||||||
9.00%, 05/07/23b | 2,037 | 687,487 | ||||||
9.25%, 09/15/27 | 4,552 | 1,672,869 | ||||||
9.25%, 05/07/28b | 2,192 | 723,360 | ||||||
9.38%, 01/13/34 | 1,410 | 475,883 | ||||||
11.75%, 10/21/26b | 3,035 | 1,236,767 | ||||||
11.95%, 08/05/31b | 4,600 | 1,835,400 | ||||||
12.75%, 08/23/22b | 2,900 | 1,265,578 | ||||||
|
| |||||||
12,186,456 | ||||||||
VIETNAM — 0.37% | ||||||||
Vietnam Government International Bond | ||||||||
4.80%, 11/19/24b | 1,000 | 1,071,500 | ||||||
6.75%, 01/29/20b | 1,150 | 1,253,393 | ||||||
|
| |||||||
2,324,893 | ||||||||
|
| |||||||
TOTAL FOREIGN GOVERNMENT OBLIGATIONS |
| |||||||
(Cost: $348,209,283) | 350,009,776 | |||||||
SHORT-TERM INVESTMENTS — 1.68% |
| |||||||
MONEY MARKET FUNDS — 1.68% |
| |||||||
BlackRock Cash Funds: Treasury, | ||||||||
1.00%f,g | 10,477 | 10,476,733 | ||||||
|
| |||||||
10,476,733 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $10,476,733) |
| 10,476,733 | ||||||
|
|
SCHEDULESOF INVESTMENTS | 23 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® EMERGING MARKETS HIGH YIELD BOND ETF
October 31, 2017
Value | ||||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $611,809,521)h |
| $ | 617,717,866 | |||||
Other Assets, Less Liabilities — 1.14% |
| 7,149,406 | ||||||
|
| |||||||
NET ASSETS — 100.00% | $ | 624,867,272 | ||||||
|
|
CMT — Constant Maturity Treasury
VRN — Variable Rate Note
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. Security may be issued at a fixed coupon rate, which converts to a variable rate at a specified date. Rate shown is the rate in effect as of period end. |
d | This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933. |
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 Schedule 1. |
g | The rate quoted is the annualized seven-day yield of the fund at period end. |
h | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $612,830,130. Net unrealized appreciation was $4,887,736, of which $14,248,187 represented gross unrealized appreciation on investments and $9,360,451 represented gross unrealized depreciation on investments. |
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the year ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares (000s) | Shares (000s) | Shares (000s) | Shares (000s) | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: | 246 | 10,231 | b | — | 10,477 | $ | 10,476,733 | $ | 16 | $ | — | $ | 22,768 | |||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
Schedule 2 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: | ||||||||||||||||
Assets: | ||||||||||||||||
Corporate bonds & notes | $ | — | $ | 257,231,357 | $ | — | $ | 257,231,357 | ||||||||
Foreign government obligations | — | 350,009,776 | — | 350,009,776 | ||||||||||||
Money market funds | 10,476,733 | — | — | 10,476,733 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 10,476,733 | $ | 607,241,133 | $ | — | $ | 617,717,866 | ||||||||
|
|
|
|
|
|
|
| |||||||||
See notes to financial statements.
24 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
iSHARES® J.P. MORGAN EM CORPORATE BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||
CORPORATE BONDS & NOTES — 95.92% |
| |||||||
ARGENTINA — 2.31% |
| |||||||
Cablevision SA | ||||||||
6.50%, 06/15/21 (Call 06/15/19)a | $ | 300 | $ | 320,250 | ||||
Pampa Energia SA | ||||||||
7.38%, 07/21/23 (Call 07/21/20)a | 200 | 218,750 | ||||||
7.50%, 01/24/27 (Call 01/24/22)a | 150 | 163,530 | ||||||
Stoneway Capital Corp. | ||||||||
10.00%, 03/01/27 (Call 03/01/22)a | 150 | 159,750 | ||||||
YPF SA | ||||||||
6.95%, 07/21/27a | 100 | 107,127 | ||||||
8.50%, 03/23/21a | 200 | 226,250 | ||||||
8.50%, 07/28/25a | 125 | 145,094 | ||||||
8.75%, 04/04/24a | 580 | 671,930 | ||||||
|
| |||||||
2,012,681 | ||||||||
BRAZIL — 7.94% |
| |||||||
Banco Bradesco SA/Cayman Islands | ||||||||
5.75%, 03/01/22a | 200 | 214,140 | ||||||
Banco BTG Pactual SA/Cayman Islands | ||||||||
4.00%, 01/16/20a | 200 | 195,300 | ||||||
Banco do Brasil SA/Cayman Islands | ||||||||
5.88%, 01/26/22a | 200 | 210,760 | ||||||
5.88%, 01/19/23a | 200 | 212,250 | ||||||
VRN, (10 year CMT + 4.398%) | ||||||||
6.25%, (Call 04/15/24)a,b,c | 200 | 188,500 | ||||||
VRN, (10 year CMT + 7.327%) | ||||||||
9.25%, (Call 04/15/23)a,b,c | 200 | 225,490 | ||||||
Banco Votorantim SA | ||||||||
7.38%, 01/21/20a | 100 | 106,750 | ||||||
Braskem Finance Ltd. | ||||||||
5.38%, 05/02/22a | 200 | 215,560 | ||||||
BRF SA | ||||||||
3.95%, 05/22/23a | 200 | 199,750 | ||||||
Centrais Eletricas Brasileiras SA | ||||||||
5.75%, 10/27/21a | 200 | 210,120 | ||||||
CSN Resources SA | ||||||||
6.50%, 07/21/20a | 100 | 92,520 | ||||||
Embraer Netherlands Finance BV | ||||||||
5.05%, 06/15/25 | 100 | 105,720 | ||||||
5.40%, 02/01/27 | 150 | 160,725 | ||||||
Fibria Overseas Finance Ltd. | ||||||||
5.25%, 05/12/24 | 50 | 53,750 |
Security | Principal (000s) | Value | ||||||
GTL Trade Finance Inc. | ||||||||
5.89%, 04/29/24 (Call 01/29/24)a | $ | 150 | $ | 162,097 | ||||
Itau Unibanco Holding SA/Cayman Islands | ||||||||
5.13%, 05/13/23a | 200 | 206,300 | ||||||
5.65%, 03/19/22a | 200 | 211,500 | ||||||
JBS Investments GmbH | ||||||||
7.75%, 10/28/20 (Call 11/30/17)a | 200 | 203,410 | ||||||
JBS USA LUX SA/JBS USA Finance Inc. | ||||||||
7.25%, 06/01/21 (Call 11/30/17)a | 100 | 101,948 | ||||||
Marfrig Holdings Europe BV | ||||||||
8.00%, 06/08/23 (Call 06/08/19)a | 200 | 208,675 | ||||||
Odebrecht Finance Ltd. | ||||||||
4.38%, 04/25/25a | 200 | 76,000 | ||||||
Petrobras Global Finance BV | ||||||||
5.30%, 01/27/25d | 158 | 158,635 | ||||||
5.63%, 05/20/43 | 150 | 135,225 | ||||||
5.75%, 01/20/20 | 100 | 105,125 | ||||||
6.13%, 01/17/22 | 200 | 216,200 | ||||||
6.25%, 03/17/24 | 225 | 241,504 | ||||||
6.75%, 01/27/41 | 145 | 146,450 | ||||||
6.85%, 12/31/99 | 100 | 94,965 | ||||||
6.88%, 01/20/40 | 175 | 177,944 | ||||||
7.25%, 03/17/44 | 150 | 157,058 | ||||||
7.38%, 01/17/27 | 200 | 221,720 | ||||||
8.38%, 05/23/21 | 400 | 460,520 | ||||||
8.75%, 05/23/26 | 250 | 302,049 | ||||||
St. Marys Cement Inc. Canada | ||||||||
5.75%, 01/28/27 (Call 10/28/26)a | 200 | 211,040 | ||||||
Vale Overseas Ltd. | ||||||||
5.88%, 06/10/21e | 100 | 109,625 | ||||||
6.25%, 08/10/26 | 200 | 230,450 | ||||||
6.88%, 11/10/39 | 200 | 237,190 | ||||||
8.25%, 01/17/34 | 125 | 160,959 | ||||||
|
| |||||||
6,927,924 | ||||||||
CHILE — 4.32% |
| |||||||
Celulosa Arauco y Constitucion SA | ||||||||
4.50%, 08/01/24 (Call 05/01/24) | 200 | 211,250 | ||||||
4.75%, 01/11/22 (Call 10/11/21) | 37 | 39,266 | ||||||
Cencosud SA | ||||||||
4.38%, 07/17/27 (Call 04/17/27)a | 400 | 400,192 | ||||||
5.15%, 02/12/25 (Call 11/12/24)a | 200 | 214,250 |
SCHEDULESOF INVESTMENTS | 25 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® J.P. MORGAN EM CORPORATE BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||
Colbun SA | ||||||||
4.50%, 07/10/24 (Call 04/11/24)a | $ | 200 | $ | 209,500 | ||||
Empresa Electrica Angamos SA | ||||||||
4.88%, 05/25/29a | 400 | 401,280 | ||||||
Empresa Nacional de Telecomunicaciones SA | ||||||||
4.75%, 08/01/26 (Call 05/03/26)a | 200 | 207,600 | ||||||
4.88%, 10/30/24a | 200 | 209,760 | ||||||
Enel Americas SA | ||||||||
4.00%, 10/25/26 (Call 07/25/26) | 200 | 203,500 | ||||||
GNL Quintero SA | ||||||||
4.63%, 07/31/29a,e | 400 | 416,520 | ||||||
Inversiones CMPC SA | ||||||||
4.38%, 05/15/23a | 400 | 412,400 | ||||||
4.75%, 09/15/24 (Call 06/15/24)a | 200 | 210,250 | ||||||
LATAM Airlines Group SA | ||||||||
7.25%, 06/09/20a | 400 | 426,400 | ||||||
VTR Finance BV | ||||||||
6.88%, 01/15/24 (Call 01/15/19)a | 200 | 211,250 | ||||||
|
| |||||||
3,773,418 | ||||||||
CHINA — 8.53% |
| |||||||
Agile Group Holdings Ltd. | ||||||||
9.00%, 05/21/20 (Call 05/21/18)a | 200 | 214,500 | ||||||
Alibaba Group Holding Ltd. | ||||||||
3.60%, 11/28/24 (Call 08/28/24) | 200 | 206,698 | ||||||
Azure Nova International Finance Ltd. | ||||||||
3.50%, 03/21/22a | 200 | 202,976 | ||||||
Baidu Inc. | ||||||||
4.13%, 06/30/25 | 200 | 210,399 | ||||||
Bank of China Ltd./Hong Kong | ||||||||
3.88%, 06/30/25a | 200 | 208,308 | ||||||
Bank of Communications Co. Ltd. | ||||||||
VRN, (5 year CMT + 2.850%) | ||||||||
4.50%, 10/03/24 (Call 10/03/19)a,b | 200 | 205,000 | ||||||
China Cinda Finance 2015 I Ltd. | ||||||||
4.25%, 04/23/25a | 400 | 414,392 | ||||||
China Construction Bank Corp. | ||||||||
VRN, (5 year CMT + 2.425%) | ||||||||
3.88%, 05/13/25 (Call 05/13/20)a,b | 200 | 203,484 | ||||||
China Evergrande Group | ||||||||
7.50%, 06/28/23 (Call 06/28/20)a | 200 | 202,082 | ||||||
8.75%, 06/28/25 (Call 06/28/21)a | 200 | 207,570 |
Security | Principal (000s) | Value | ||||||
China Overseas Finance Cayman II Ltd. | ||||||||
5.50%, 11/10/20a | $ | 100 | $ | 108,000 | ||||
China Overseas Finance Cayman VI Ltd. | ||||||||
5.95%, 05/08/24a | 200 | 228,589 | ||||||
CITIC Ltd. | ||||||||
3.13%, 02/28/22a | 400 | 400,752 | ||||||
6.63%, 04/15/21a | 100 | 111,592 | ||||||
CMBLEMTN 1 Ltd. | ||||||||
3.25%, 11/29/21a | 200 | 200,066 | ||||||
CNOOC Finance 2012 Ltd. | ||||||||
5.00%, 05/02/42a | 200 | 226,447 | ||||||
CNOOC Finance 2015 Australia Pty Ltd. | ||||||||
2.63%, 05/05/20 | 200 | 200,500 | ||||||
CNOOC Nexen Finance 2014 ULC | ||||||||
4.25%, 04/30/24 | 200 | 213,080 | ||||||
CNPC General Capital Ltd. | ||||||||
3.40%, 04/16/23a | 200 | 203,685 | ||||||
Country Garden Holdings Co. Ltd. | ||||||||
7.50%, 03/09/20 (Call 03/09/18)a | 200 | 210,000 | ||||||
Fortune Star BVI Ltd. | ||||||||
5.25%, 03/23/22 (Call 03/23/20)a | 200 | 200,773 | ||||||
Greenland Global Investment Ltd. | ||||||||
5.88%, 07/03/24a | 200 | 203,408 | ||||||
Huarong Finance 2017 Co. Ltd. | ||||||||
4.75%, 04/27/27a | 200 | 208,935 | ||||||
Huarong Finance II Co. Ltd. | ||||||||
4.50%, 01/16/20a | 200 | 205,904 | ||||||
5.50%, 01/16/25a | 200 | 217,702 | ||||||
Industrial & Commercial Bank of China Ltd./New York | ||||||||
2.91%, 11/13/20 | 250 | 251,096 | ||||||
Industrial & Commercial Bank of China Ltd./Singapore | ||||||||
FRN, (3 mo. LIBOR US + 0.950%) | ||||||||
2.26%, 04/24/22a,f | 400 | 401,500 | ||||||
JD.com Inc. | ||||||||
3.88%, 04/29/26 | 200 | 203,123 | ||||||
Kaisa Group Holdings Ltd. | ||||||||
8.50%, 06/30/22 (Call 06/30/20)a | 200 | 200,278 | ||||||
Nexen Energy ULC | ||||||||
7.50%, 07/30/39 | 100 | 147,250 |
26 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® J.P. MORGAN EM CORPORATE BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||
Proven Honour Capital Ltd. | ||||||||
4.13%, 05/19/25a | $ | 400 | $ | 416,199 | ||||
Shimao Property Holdings Ltd. | ||||||||
8.13%, 01/22/21 (Call 01/22/18)a | 200 | 210,000 | ||||||
Tencent Holdings Ltd. | ||||||||
2.88%, 02/11/20a | 200 | 202,500 | ||||||
|
| |||||||
7,446,788 | ||||||||
COLOMBIA — 4.37% |
| |||||||
Avianca Holdings SA/Avianca Leasing LLC/Grupo Taca Holdings Ltd. | ||||||||
8.38%, 05/10/20 (Call 11/30/17)a | 200 | 203,620 | ||||||
Banco de Bogota SA | ||||||||
5.38%, 02/19/23a | 200 | 211,200 | ||||||
6.25%, 05/12/26a | 200 | 216,750 | ||||||
Bancolombia SA | ||||||||
5.13%, 09/11/22 | 87 | 90,945 | ||||||
5.95%, 06/03/21 | 400 | 435,720 | ||||||
Colombia Telecomunicaciones SA ESP | ||||||||
5.38%, 09/27/22 (Call 11/30/17)a | 200 | 204,000 | ||||||
8.50%a,c | 100 | 106,250 | ||||||
Ecopetrol SA | ||||||||
4.13%, 01/16/25 | 300 | 301,125 | ||||||
5.38%, 06/26/26 (Call 03/26/26)e | 325 | 347,263 | ||||||
5.88%, 09/18/23 | 200 | 225,500 | ||||||
5.88%, 05/28/45 | 400 | 397,000 | ||||||
7.38%, 09/18/43 | 200 | 231,500 | ||||||
Grupo Aval Ltd. | ||||||||
4.75%, 09/26/22a | 200 | 204,000 | ||||||
GrupoSura Finance SA | ||||||||
5.50%, 04/29/26 (Call 01/29/26)a | 200 | 217,000 | ||||||
Millicom International Cellular SA | ||||||||
6.00%, 03/15/25 (Call 03/15/20)a | 200 | 211,500 | ||||||
SUAM Finance BV | ||||||||
4.88%, 04/17/24a | 200 | 213,750 | ||||||
|
| |||||||
3,817,123 | ||||||||
GHANA — 0.23% |
| |||||||
Tullow Oil PLC | ||||||||
6.25%, 04/15/22 (Call 11/30/17)a | 200 | 199,250 | ||||||
|
| |||||||
199,250 |
Security | Principal (000s) | Value | ||||||
GUATEMALA — 0.48% |
| |||||||
Comcel Trust via Comunicaciones Celulares SA | ||||||||
6.88%, 02/06/24 (Call 02/06/19)a | $ | 400 | $ | 421,506 | ||||
|
| |||||||
421,506 | ||||||||
HONG KONG — 5.49% |
| |||||||
AIA Group Ltd. | ||||||||
3.20%, 03/11/25 (Call 12/11/24)a | 200 | 199,252 | ||||||
4.50%, 03/16/46 (Call 09/16/45)a | 200 | 217,816 | ||||||
Bank of China Hong Kong Ltd. | ||||||||
5.55%, 02/11/20a | 400 | 425,000 | ||||||
Bank of East Asia Ltd. (The) | ||||||||
VRN, (5 year CMT + 2.700%) | ||||||||
4.00%, 11/03/26 (Call 11/03/21)a,b | 200 | 201,836 | ||||||
CK Hutchison International 16 Ltd. | ||||||||
2.75%, 10/03/26a | 600 | 576,052 | ||||||
HKT Capital No. 4 Ltd. | ||||||||
3.00%, 07/14/26a | 200 | 191,872 | ||||||
Hongkong Electric Finance Ltd. | ||||||||
2.88%, 05/03/26a | 200 | 193,502 | ||||||
Hutchison Whampoa International 11 Ltd. | ||||||||
4.63%, 01/13/22a | 400 | 429,183 | ||||||
Li & Fung Ltd. | ||||||||
5.25%, (Call 11/03/21)a,c | 200 | 188,000 | ||||||
Noble Group Ltd. | ||||||||
6.75%, 01/29/20a | 200 | 82,500 | ||||||
NWD Finance BVI Ltd. | ||||||||
5.75%, (Call 10/05/21)a,c | 200 | 202,300 | ||||||
NWD MTN Ltd. | ||||||||
5.25%, 02/26/21a | 400 | 425,710 | ||||||
OVPH Ltd. | ||||||||
5.88%, (Call 03/01/21)a,c | 200 | 209,652 | ||||||
PCPD Capital Ltd. | ||||||||
4.75%, 03/09/22a | 200 | 204,052 | ||||||
Radiant Access Ltd. | ||||||||
4.60%, (Call 05/18/20)a,c | 200 | 195,389 | ||||||
Sun Hung Kai Properties Capital Market Ltd. | ||||||||
4.50%, 02/14/22a | 200 | 213,703 | ||||||
Swire Pacific MTN Financing Ltd. | ||||||||
4.50%, 10/09/23a | 400 | 431,250 |
SCHEDULESOF INVESTMENTS | 27 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® J.P. MORGAN EM CORPORATE BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||
TVB Finance Ltd. | ||||||||
3.63%, 10/11/21a | $ | 200 | $ | 199,432 | ||||
|
| |||||||
4,786,501 | ||||||||
INDIA — 5.16% |
| |||||||
ABJA Investment Co. Pte Ltd. | ||||||||
5.95%, 07/31/24a | 200 | 213,508 | ||||||
Adani Ports & Special Economic Zone Ltd. | ||||||||
3.50%, 07/29/20a | 200 | 203,489 | ||||||
Axis Bank Ltd./Dubai | ||||||||
3.25%, 05/21/20a | 200 | 202,284 | ||||||
Bharat Petroleum Corp. Ltd. | ||||||||
4.00%, 05/08/25a | 200 | 205,103 | ||||||
Bharti Airtel International Netherlands BV | ||||||||
5.13%, 03/11/23a | 400 | 428,847 | ||||||
Delhi International Airport Ltd. | ||||||||
6.13%, 10/31/26a | 200 | 215,060 | ||||||
Greenko Dutch BV | ||||||||
5.25%, 07/24/24 (Call 07/24/20)a | 200 | 203,804 | ||||||
ICICI Bank Ltd./Dubai | ||||||||
3.13%, 08/12/20a | 200 | 201,500 | ||||||
3.50%, 03/18/20a | 200 | 203,273 | ||||||
ICICI Bank Ltd./Hong Kong | ||||||||
5.75%, 11/16/20a | 100 | 108,526 | ||||||
Indian Oil Corp. Ltd. | ||||||||
5.75%, 08/01/23a | 200 | 225,218 | ||||||
JSW Steel Ltd. | ||||||||
5.25%, 04/13/22a | 200 | 206,216 | ||||||
NTPC Ltd. | ||||||||
4.38%, 11/26/24a | 200 | 212,680 | ||||||
Oil India Ltd. | ||||||||
5.38%, 04/17/24a | 200 | 222,982 | ||||||
ONGC Videsh Ltd. | ||||||||
4.63%, 07/15/24a | 200 | 214,324 | ||||||
Reliance Holdings USA Inc. | ||||||||
5.40%, 02/14/22a | 250 | 274,245 | ||||||
Reliance Industries Ltd. | ||||||||
4.13%, 01/28/25a | 500 | 522,109 | ||||||
Vedanta Resources PLC | ||||||||
7.13%, 05/31/23a | 200 | 215,500 | ||||||
8.25%, 06/07/21a | 200 | 223,500 | ||||||
|
| |||||||
4,502,168 |
Security | Principal (000s) | Value | ||||||
INDONESIA — 1.19% |
| |||||||
Indo Energy Finance II BV | ||||||||
6.38%, 01/24/23 (Call 01/24/18)a | $ | 200 | $ | 201,588 | ||||
Listrindo Capital BV | ||||||||
4.95%, 09/14/26 (Call 09/14/21)a | 200 | 202,991 | ||||||
Minejesa Capital BV | ||||||||
4.63%, 08/10/30d | 200 | 204,277 | ||||||
5.63%, 08/10/37d,e | 200 | 212,751 | ||||||
Perusahaan Gas Negara Persero Tbk | ||||||||
5.13%, 05/16/24a | 200 | 217,250 | ||||||
|
| |||||||
1,038,857 | ||||||||
ISRAEL — 4.34% |
| |||||||
Altice Financing SA | ||||||||
6.63%, 02/15/23 (Call 02/15/18)a | 400 | 419,640 | ||||||
7.50%, 05/15/26 (Call 05/15/21)a | 600 | 657,000 | ||||||
Israel Electric Corp. Ltd. | ||||||||
6.88%, 06/21/23a | 200 | 233,000 | ||||||
Series 6 | ||||||||
5.00%, 11/12/24d | 200 | 214,750 | ||||||
Teva Pharmaceutical Finance Co. BV | ||||||||
2.95%, 12/18/22 | 200 | 187,650 | ||||||
Series 2 | ||||||||
3.65%, 11/10/21 | 500 | 491,875 | ||||||
Teva Pharmaceutical Finance Co. LLC | ||||||||
6.15%, 02/01/36e | 200 | 204,450 | ||||||
Teva Pharmaceutical Finance Netherlands III BV | ||||||||
2.20%, 07/21/21 | 300 | 282,000 | ||||||
2.80%, 07/21/23e | 400 | 368,006 | ||||||
3.15%, 10/01/26e | 600 | 530,958 | ||||||
4.10%, 10/01/46e | 250 | 198,997 | ||||||
|
| |||||||
3,788,326 | ||||||||
JAMAICA — 1.35% |
| |||||||
Digicel Group Ltd. | ||||||||
7.13%, 04/01/22 (Call 11/30/17)a,e | 200 | 188,540 | ||||||
8.25%, 09/30/20 (Call 11/30/17)a | 400 | 395,150 | ||||||
Digicel Ltd. | ||||||||
6.00%, 04/15/21 (Call 11/30/17)a | 200 | 196,750 | ||||||
6.75%, 03/01/23 (Call 03/01/18)a,e | 400 | 394,500 | ||||||
|
| |||||||
1,174,940 | ||||||||
KAZAKHSTAN — 0.69% |
| |||||||
Kazkommertsbank JSC | ||||||||
5.50%, 12/21/22 (Call 11/30/17)a | 200 | 198,000 |
28 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® J.P. MORGAN EM CORPORATE BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||
Nostrum Oil & Gas Finance BV | ||||||||
8.00%, 07/25/22 (Call 07/25/19)a | $ | 200 | $ | 208,323 | ||||
Tengizchevroil Finance Co. International Ltd. | ||||||||
4.00%, 08/15/26a | 200 | 196,250 | ||||||
|
| |||||||
602,573 | ||||||||
KUWAIT — 2.07% |
| |||||||
Burgan Senior SPC Ltd. | ||||||||
3.13%, 09/14/21a | 400 | 400,000 | ||||||
Equate Petrochemical BV | ||||||||
3.00%, 03/03/22a | 400 | 396,200 | ||||||
4.25%, 11/03/26a | 200 | 205,625 | ||||||
Kuwait Projects Co. SPC Ltd. | ||||||||
4.50%, 02/23/27a | 200 | 200,500 | ||||||
5.00%, 03/15/23a | 200 | 211,500 | ||||||
NBK SPC Ltd. | ||||||||
2.75%, 05/30/22a | 400 | 395,003 | ||||||
|
| |||||||
1,808,828 | ||||||||
MACAU — 1.17% |
| |||||||
Bank of China Ltd./Macau | ||||||||
2.88%, 04/20/22a | 200 | 200,567 | ||||||
Melco Resorts Finance Ltd. | ||||||||
4.88%, 06/06/25 (Call 06/06/20)a | 200 | 202,329 | ||||||
Studio City Co. Ltd. | ||||||||
7.25%, 11/30/21 (Call 11/30/18)a | 200 | 213,500 | ||||||
Wynn Macau Ltd. | ||||||||
4.88%, 10/01/24 (Call 10/01/20)a | 400 | 406,520 | ||||||
|
| |||||||
1,022,916 | ||||||||
MALAYSIA — 1.41% |
| |||||||
Axiata SPV2 Bhd | ||||||||
4.36%, 03/24/26a | 200 | 212,079 | ||||||
Gohl Capital Ltd. | ||||||||
4.25%, 01/24/27a | 400 | 414,033 | ||||||
Malayan Banking Bhd | ||||||||
VRN, (5 year USD Swap + 2.542%) | ||||||||
3.91%, 10/29/26 (Call 10/29/21)a,b | 200 | 206,146 | ||||||
RHB Bank Bhd | ||||||||
2.50%, 10/06/21a | 200 | 197,504 | ||||||
TNB Global Ventures Capital Bhd | ||||||||
3.24%, 10/19/26a | 200 | 195,796 | ||||||
|
| |||||||
1,225,558 | ||||||||
MEXICO — 5.72% |
| |||||||
Alfa SAB de CV | ||||||||
5.25%, 03/25/24 (Call 12/25/23)a | 200 | 212,250 |
Security | Principal (000s) | Value | ||||||
America Movil SAB de CV | ||||||||
3.13%, 07/16/22 | $ | 200 | $ | 204,253 | ||||
5.00%, 03/30/20 | 200 | 212,460 | ||||||
6.13%, 03/30/40e | 200 | 248,200 | ||||||
6.38%, 03/01/35 | 200 | 249,120 | ||||||
Banco Inbursa SA Institucion de Banca Multiple | ||||||||
4.13%, 06/06/24a | 150 | 150,405 | ||||||
Banco Mercantil del Norte SA/Grand Cayman | ||||||||
VRN, (10 year CMT + 5.353%) | ||||||||
7.63%, (Call 01/06/28)a,b,c | 200 | 217,400 | ||||||
Banco Santander Mexico SA | ||||||||
4.13%, 11/09/22a | 150 | 155,438 | ||||||
BBVA Bancomer SA/Texas | ||||||||
4.38%, 04/10/24a | 150 | 157,500 | ||||||
6.75%, 09/30/22a | 300 | 339,390 | ||||||
Cemex SAB de CV | ||||||||
6.13%, 05/05/25 (Call 05/05/20)a | 200 | 213,400 | ||||||
7.75%, 04/16/26 (Call 04/16/21)a | 200 | 226,520 | ||||||
Coca-Cola Femsa SAB de CV | ||||||||
3.88%, 11/26/23 | 150 | 157,459 | ||||||
4.63%, 02/15/20 | 100 | 105,000 | ||||||
El Puerto de Liverpool SAB de CV | ||||||||
3.88%, 10/06/26a | 200 | 196,750 | ||||||
Fomento Economico Mexicano SAB de CV | ||||||||
4.38%, 05/10/43e | 150 | 152,130 | ||||||
Grupo Bimbo SAB de CV | ||||||||
4.50%, 01/25/22a | 100 | 105,750 | ||||||
4.88%, 06/27/44a | 200 | 200,774 | ||||||
Grupo Televisa SAB | ||||||||
5.00%, 05/13/45 (Call 11/13/44) | 200 | 199,700 | ||||||
6.63%, 01/15/40 | 100 | 121,125 | ||||||
Mexichem SAB de CV | ||||||||
4.88%, 09/19/22a | 200 | 213,000 | ||||||
Sigma Alimentos SA de CV | ||||||||
4.13%, 05/02/26 (Call 02/02/26)a | 200 | 199,875 | ||||||
Southern Copper Corp. | ||||||||
5.25%, 11/08/42 | 100 | 108,555 | ||||||
5.88%, 04/23/45 | 150 | 175,335 | ||||||
6.75%, 04/16/40 | 100 | 125,500 | ||||||
7.50%, 07/27/35 | 100 | 132,250 |
SCHEDULESOF INVESTMENTS | 29 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® J.P. MORGAN EM CORPORATE BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||
Trust F/1401 | ||||||||
5.25%, 01/30/26 (Call 10/30/25)a | $ | 200 | $ | 213,260 | ||||
|
| |||||||
4,992,799 | ||||||||
MOROCCO — 0.73% |
| |||||||
OCP SA | ||||||||
4.50%, 10/22/25a | 200 | 199,750 | ||||||
5.63%, 04/25/24a | 200 | 214,750 | ||||||
6.88%, 04/25/44a | 200 | 225,500 | ||||||
|
| |||||||
640,000 | ||||||||
NIGERIA — 0.48% |
| |||||||
IHS Netherlands Holdco BV | ||||||||
9.50%, 10/27/21 (Call 10/27/18)a | 200 | 212,000 | ||||||
Zenith Bank PLC | ||||||||
7.38%, 05/30/22a | 200 | 207,875 | ||||||
|
| |||||||
419,875 | ||||||||
PANAMA — 0.72% |
| |||||||
Banco Internacional del Peru SAA/Panama | ||||||||
5.75%, 10/07/20a | 200 | 218,000 | ||||||
C&W Senior Financing Designated Activity Co. | ||||||||
6.88%, 09/15/27 (Call 09/15/22)a | 200 | 209,022 | ||||||
Global Bank Corp. | ||||||||
4.50%, 10/20/21a | 200 | 204,750 | ||||||
|
| |||||||
631,772 | ||||||||
PERU — 2.23% |
| |||||||
Banco de Credito del Peru | ||||||||
4.25%, 04/01/23a | 600 | 634,500 | ||||||
Banco de Credito del Peru/Panama | ||||||||
5.38%, 09/16/20a | 100 | 108,125 | ||||||
BBVA Banco Continental SA | ||||||||
5.00%, 08/26/22a | 150 | 163,125 | ||||||
Lima Metro Line 2 Finance Ltd. | ||||||||
5.88%, 07/05/34a | 200 | 220,000 | ||||||
Nexa Resources SA | ||||||||
5.38%, 05/04/27 (Call 02/04/27)a,e | 200 | 211,506 | ||||||
Orazul Energy Egenor S en C por A | ||||||||
5.63%, 04/28/27a | 200 | 196,240 | ||||||
Transportadora de Gas del Peru SA | ||||||||
4.25%, 04/30/28a | 400 | 412,500 | ||||||
|
| |||||||
1,945,996 |
Security | Principal (000s) | Value | ||||||
PHILIPPINES — 0.48% |
| |||||||
JGSH Philippines Ltd. | ||||||||
4.38%, 01/23/23a | $ | 400 | $ | 416,000 | ||||
|
| |||||||
416,000 | ||||||||
QATAR — 2.78% |
| |||||||
ABQ Finance Ltd. | ||||||||
3.50%, 02/22/22a | 200 | 197,250 | ||||||
CBQ Finance Ltd. | ||||||||
3.25%, 06/13/21a | 200 | 198,000 | ||||||
Nakilat Inc. | ||||||||
6.07%, 12/31/33a | 200 | 233,500 | ||||||
Ooredoo International Finance Ltd. | ||||||||
3.25%, 02/21/23a | 200 | 198,000 | ||||||
3.88%, 01/31/28a | 200 | 199,700 | ||||||
5.00%, 10/19/25a | 400 | 433,000 | ||||||
QNB Finance Ltd. | ||||||||
2.13%, 09/07/21a | 200 | 191,000 | ||||||
2.88%, 04/29/20a | 200 | 198,250 | ||||||
Ras Laffan Liquefied Natural Gas Co. Ltd. III | ||||||||
5.84%, 09/30/27a | 250 | 283,750 | ||||||
6.33%, 09/30/27a | 250 | 288,500 | ||||||
|
| |||||||
2,420,950 | ||||||||
RUSSIA — 5.76% |
| |||||||
Alfa Bank AO Via Alfa Bond Issuance PLC | ||||||||
7.75%, 04/28/21a | 200 | 225,750 | ||||||
ALROSA Finance SA | ||||||||
7.75%, 11/03/20a | 200 | 224,500 | ||||||
Credit Bank of Moscow Via CBOM Finance PLC | ||||||||
VRN, (5 year USD Swap + 5.416%) | ||||||||
7.50%, 10/05/27 (Call 10/05/22)a,b | 200 | 184,500 | ||||||
Evraz Group SA | ||||||||
8.25%, 01/28/21a | 200 | 225,500 | ||||||
Gazprom Neft OAO Via GPN Capital SA | ||||||||
6.00%, 11/27/23a | 200 | 221,060 | ||||||
Gazprom OAO Via Gaz Capital SA | ||||||||
4.95%, 07/19/22a | 200 | 209,250 | ||||||
4.95%, 02/06/28a | 200 | 204,750 | ||||||
6.51%, 03/07/22a | 100 | 110,625 |
30 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® J.P. MORGAN EM CORPORATE BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||
7.29%, 08/16/37a | $ | 100 | $ | 121,375 | ||||
8.63%, 04/28/34a | 150 | 202,688 | ||||||
Lukoil International Finance BV | ||||||||
4.56%, 04/24/23a | 200 | 208,000 | ||||||
6.66%, 06/07/22a | 120 | 135,150 | ||||||
MMC Norilsk Nickel OJSC via MMC Finance DAC | ||||||||
4.10%, 04/11/23a | 200 | 201,500 | ||||||
Novolipetsk Steel via Steel Funding DAC | ||||||||
4.50%, 06/15/23a | 200 | 206,750 | ||||||
Polyus Finance PLC | ||||||||
5.25%, 02/07/23a | 200 | 209,250 | ||||||
Rosneft Finance SA | ||||||||
7.25%, 02/02/20a | 100 | 108,625 | ||||||
Rusal Capital DAC | ||||||||
5.30%, 05/03/23a | 200 | 205,106 | ||||||
Sberbank of Russia Via SB Capital SA | ||||||||
5.13%, 10/29/22a | 200 | 208,500 | ||||||
6.13%, 02/07/22a | 200 | 218,750 | ||||||
VRN, (5 year CMT + 4.023%) | ||||||||
5.50%, 02/26/24 (Call 02/26/19)a,b | 200 | 204,500 | ||||||
Severstal OAO Via Steel Capital SA | ||||||||
5.90%, 10/17/22a | 200 | 222,000 | ||||||
VEON Holdings BV | ||||||||
4.95%, 06/16/24 (Call 03/16/24)a | 200 | 204,832 | ||||||
5.95%, 02/13/23a | 200 | 216,500 | ||||||
VTB Bank OJSC Via VTB Capital SA | ||||||||
6.55%, 10/13/20a | 100 | 109,000 | ||||||
6.95%, 10/17/22a | 400 | 435,000 | ||||||
|
| |||||||
5,023,461 | ||||||||
SAUDI ARABIA — 1.69% |
| |||||||
Acwa Power Management And Investments One Ltd. | ||||||||
5.95%, 12/15/39a | 200 | 207,021 | ||||||
Saudi Electricity Global Sukuk Co. 3 | ||||||||
4.00%, 04/08/24a | 800 | 831,000 | ||||||
5.50%, 04/08/44a | 400 | 436,500 | ||||||
|
| |||||||
1,474,521 | ||||||||
SINGAPORE — 3.17% |
| |||||||
DBS Group Holdings Ltd. | ||||||||
VRN, (5 year USD Swap + 2.390%) | ||||||||
3.60%, (Call 09/07/21)a,b,c | 200 | 200,796 |
Security | Principal (000s) | Value | ||||||
Flex Ltd. | ||||||||
4.75%, 06/15/25 (Call 03/15/25) | $ | 400 | $ | 429,922 | ||||
Global Logistic Properties Ltd. | ||||||||
3.88%, 06/04/25a | 200 | 194,296 | ||||||
Olam International Ltd. | ||||||||
VRN, (5 year CMT + 6.290%) | ||||||||
5.35%, (Call 07/20/21)a,b,c | 200 | 203,250 | ||||||
Oversea-Chinese Banking Corp. Ltd. | ||||||||
4.25%, 06/19/24a | 400 | 417,617 | ||||||
VRN, (5 year USD Swap + 2.279%) | ||||||||
3.15%, 03/11/23 (Call 03/11/18)a,b | 200 | 200,497 | ||||||
SingTel Group Treasury Pte Ltd. | ||||||||
3.25%, 06/30/25a | 500 | 508,571 | ||||||
United Overseas Bank Ltd. | ||||||||
VRN, (5 year USD Swap + 2.236%) | ||||||||
3.50%, 09/16/26 (Call 09/16/21)a,b | 600 | 610,418 | ||||||
|
| |||||||
2,765,367 | ||||||||
SOUTH AFRICA — 2.75% |
| |||||||
AngloGold Ashanti Holdings PLC | ||||||||
5.13%, 08/01/22 | 100 | 104,875 | ||||||
5.38%, 04/15/20 | 400 | 419,500 | ||||||
Liquid Telecommunications Financing PLC | ||||||||
8.50%, 07/13/22 (Call 07/13/20)d | 200 | 210,898 | ||||||
MTN Mauritius Investment Ltd. | ||||||||
4.76%, 11/11/24a | 200 | 198,250 | ||||||
5.37%, 02/13/22a | 400 | 411,500 | ||||||
Myriad International Holdings BV | ||||||||
5.50%, 07/21/25 (Call 04/21/25)a | 400 | 434,000 | ||||||
6.00%, 07/18/20a | 200 | 215,000 | ||||||
Sasol Financing International Ltd. | ||||||||
4.50%, 11/14/22 | 200 | 200,500 | ||||||
Stillwater Mining Co. | ||||||||
7.13%, 06/27/25 (Call 06/27/21)d | 200 | 205,681 | ||||||
|
| |||||||
2,400,204 | ||||||||
SOUTH KOREA — 4.29% |
| |||||||
Hyundai Capital America | ||||||||
3.00%, 10/30/20a | 300 | 301,248 | ||||||
Hyundai Capital Services Inc. | ||||||||
3.00%, 03/06/22a | 400 | 396,808 | ||||||
Korea East-West Power Company Ltd. | ||||||||
2.63%, 06/19/22a | 200 | 197,644 |
SCHEDULESOF INVESTMENTS | 31 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® J.P. MORGAN EM CORPORATE BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||
Korea Gas Corp. | ||||||||
3.50%, 07/21/25a | $ | 200 | $ | 202,845 | ||||
3.50%, 07/02/26a | 400 | 404,590 | ||||||
4.25%, 11/02/20a | 100 | 104,194 | ||||||
Korea Hydro & Nuclear Power Co. Ltd. | ||||||||
3.00%, 09/19/22a | 200 | 200,350 | ||||||
NongHyup Bank | ||||||||
2.88%, 07/17/22a | 200 | 198,668 | ||||||
POSCO | ||||||||
4.25%, 10/28/20a | 100 | 104,179 | ||||||
5.25%, 04/14/21a | 200 | 215,248 | ||||||
Shinhan Bank Co. Ltd. | ||||||||
2.25%, 04/15/20a | 200 | 197,488 | ||||||
2.88%, 03/28/22a | 400 | 398,312 | ||||||
Woori Bank | ||||||||
2.63%, 07/20/21a | 200 | 197,885 | ||||||
4.75%, 04/30/24a | 400 | 419,356 | ||||||
VRN, (5 year CMT + 3.328%) | ||||||||
5.00%, 06/10/45 (Call 06/10/20)a,b | 200 | 204,946 | ||||||
|
| |||||||
3,743,761 | ||||||||
TAIWAN — 0.23% |
| |||||||
Formosa Group Cayman Ltd. |
| |||||||
3.38%, 04/22/25a | 200 | 201,140 | ||||||
|
| |||||||
201,140 | ||||||||
THAILAND — 1.80% |
| |||||||
Bangkok Bank PCL/Hong Kong |
| |||||||
4.80%, 10/18/20a | 300 | 318,928 | ||||||
5.00%, 10/03/23a | 200 | 221,076 | ||||||
PTT Global Chemical PCL | ||||||||
4.25%, 09/19/22a | 200 | 211,445 | ||||||
PTT PCL | ||||||||
3.38%, 10/25/22a | 200 | 204,275 | ||||||
4.50%, 10/25/42a | 200 | 203,700 | ||||||
PTTEP Treasury Center Co. Ltd. | ||||||||
VRN, (5 year CMT + 2.724%) | ||||||||
4.60%, (Call 07/17/22)a,b,c | 200 | 203,750 | ||||||
Thai Oil PCL | ||||||||
3.63%, 01/23/23a | 200 | 205,306 | ||||||
|
| |||||||
1,568,480 | ||||||||
TURKEY — 4.43% |
| |||||||
Akbank Turk AS |
| |||||||
5.00%, 10/24/22a | 150 | 149,747 |
Security | Principal (000s) | Value | ||||||
5.13%, 03/31/25a | $ | 200 | $ | 193,750 | ||||
Finansbank AS/Turkey | ||||||||
4.88%, 05/19/22a | 200 | 197,549 | ||||||
KOC Holding AS | ||||||||
3.50%, 04/24/20a | 200 | 201,000 | ||||||
Turk Telekomunikasyon AS | ||||||||
4.88%, 06/19/24a | 200 | 202,300 | ||||||
Turkiye Garanti Bankasi AS | ||||||||
5.88%, 03/16/23a | 400 | 411,500 | ||||||
6.25%, 04/20/21a | 200 | 210,500 | ||||||
Turkiye Halk Bankasi AS | ||||||||
4.75%, 02/11/21a | 200 | 194,500 | ||||||
Turkiye Is Bankasi | ||||||||
5.00%, 04/30/20a | 200 | 201,000 | ||||||
5.00%, 06/25/21a | 200 | 198,750 | ||||||
5.38%, 10/06/21a | 200 | 200,000 | ||||||
5.50%, 04/21/22a | 200 | 199,750 | ||||||
VRN, (5 year USD Swap + 5.117%) | ||||||||
7.00%, 06/29/28 (Call 06/29/23)a,b | 200 | 196,324 | ||||||
Turkiye Vakiflar Bankasi TAO | ||||||||
6.00%, 11/01/22a | 200 | 197,000 | ||||||
VRN, (5 year USD Swap + 5.439%) | ||||||||
6.88%, 02/03/25 (Call 02/03/20)a,b | 200 | 200,750 | ||||||
Yapi ve Kredi Bankasi AS | ||||||||
4.00%, 01/22/20a | 200 | 197,750 | ||||||
5.50%, 12/06/22a | 200 | 193,750 | ||||||
VRN, (5 year USD Swap + 7.400%) | ||||||||
8.50%, 03/09/26 (Call 03/09/21)a,b | 300 | 318,000 | ||||||
|
| |||||||
3,863,920 | ||||||||
UKRAINE — 0.80% |
| |||||||
DTEK Finance PLC |
| |||||||
5.50% (10.75% PIK), 12/31/24 (Call 12/01/17)g | 257 | 264,952 | ||||||
MHP SE |
| |||||||
8.25%, 04/02/20a | 400 | 432,000 | ||||||
|
| |||||||
696,952 | ||||||||
UNITED ARAB EMIRATES — 5.15% |
| |||||||
Abu Dhabi National Energy Co. PJSC |
| |||||||
3.63%, 06/22/21a | 200 | 203,600 | ||||||
3.63%, 01/12/23a | 200 | 202,500 | ||||||
4.38%, 06/22/26a | 400 | 412,500 | ||||||
6.50%, 10/27/36a | 100 | 126,000 |
32 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® J.P. MORGAN EM CORPORATE BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||
ADCB Finance Cayman Ltd. |
| |||||||
4.50%, 03/06/23a | $ | 200 | $ | 210,000 | ||||
BOS Funding Ltd. |
| |||||||
4.23%, 03/07/22a | 400 | 408,462 | ||||||
DIB Sukuk Ltd. |
| |||||||
3.66%, 02/14/22a | 200 | 203,000 | ||||||
Dolphin Energy Ltd. |
| |||||||
5.50%, 12/15/21a | 200 | 218,250 | ||||||
DP World Crescent Ltd. |
| |||||||
3.91%, 05/31/23a | 400 | 409,500 | ||||||
DP World Ltd. |
| |||||||
6.85%, 07/02/37a | 200 | 247,922 | ||||||
Emaar Sukuk Ltd. |
| |||||||
3.64%, 09/15/26a | 200 | 196,750 | ||||||
EMG SUKUK Ltd. |
| |||||||
4.56%, 06/18/24a | 200 | 208,500 | ||||||
Emirates NBD Tier 1 Ltd. |
| |||||||
VRN, (6 year USD Swap + 4.513%) |
| |||||||
5.75%, 05/29/49 (Call 05/30/19)a,b,c | 400 | 405,500 | ||||||
First Abu Dhabi Bank PJSC |
| |||||||
2.25%, 02/11/20a | 200 | 198,500 | ||||||
3.00%, 03/30/22a | 400 | 400,600 | ||||||
MAF Global Securities Ltd. |
| |||||||
4.75%, 05/07/24a | 200 | 211,750 | ||||||
Ruwais Power Co. PJSC |
| |||||||
6.00%, 08/31/36a | 200 | 234,250 | ||||||
|
| |||||||
4,497,584 | ||||||||
UNITED KINGDOM — 0.46% |
| |||||||
Petra Diamonds U.S. Treasury PLC |
| |||||||
7.25%, 05/01/22 (Call 05/01/19)a,e | 200 | 198,000 | ||||||
Saka Energi Indonesia PT |
| |||||||
4.45%, 05/05/24a | 200 | 203,766 | ||||||
|
| |||||||
401,766 | ||||||||
ZAMBIA — 1.20% |
| |||||||
First Quantum Minerals Ltd. |
| |||||||
7.00%, 02/15/21 (Call 02/15/18)a | 400 | 415,300 | ||||||
7.25%, 04/01/23 (Call 10/01/19)a | 600 | 635,250 | ||||||
|
| |||||||
1,050,550 | ||||||||
|
| |||||||
TOTAL CORPORATE BONDS & NOTES |
| |||||||
(Cost: $82,282,712) |
| 83,704,455 |
Security | Principal or Shares (000s) | Value | ||||||
FOREIGN GOVERNMENT OBLIGATIONSh — 1.02% |
| |||||||
NIGERIA — 0.23% |
| |||||||
Africa Finance Corp. |
| |||||||
3.88%, 04/13/24a | $ | 200 | $ | 202,250 | ||||
|
| |||||||
202,250 | ||||||||
SOUTH KOREA — 0.32% |
| |||||||
Korea Gas Corp. |
| |||||||
6.25%, 01/20/42a | 200 | 279,750 | ||||||
|
| |||||||
279,750 | ||||||||
SUPRANATIONAL — 0.47% |
| |||||||
African Export-Import Bank (The) |
| |||||||
4.00%, 05/24/21a | 400 | 410,000 | ||||||
|
| |||||||
410,000 | ||||||||
|
| |||||||
TOTAL FOREIGN GOVERNMENT OBLIGATIONS |
| |||||||
(Cost: $893,034) |
| 892,000 | ||||||
SHORT-TERM INVESTMENTS — 6.92% |
| |||||||
MONEY MARKET FUNDS — 6.92% |
| |||||||
BlackRock Cash Funds: Institutional, |
| |||||||
1.31%i,j,k | 3,412 | 3,412,856 | ||||||
BlackRock Cash Funds: Treasury, |
| |||||||
1.00%i,j | 2,623 | 2,623,000 | ||||||
|
| |||||||
6,035,856 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $6,035,673) |
| 6,035,856 | ||||||
|
|
SCHEDULESOF INVESTMENTS | 33 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® J.P. MORGAN EM CORPORATE BOND ETF
October 31, 2017
Value | ||||||||
TOTAL INVESTMENTS |
| |||||||
(Cost: $89,211,419)l | $ | 90,632,311 | ||||||
Other Assets, Less Liabilities — (3.86)% |
| (3,363,721 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% |
| $ | 87,268,590 | |||||
|
|
CMT | — Constant Maturity Treasury | |
FRN | — Floating Rate Note | |
VRN | — Variable Rate Note |
a | This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933. |
b | Variable rate security. Security may be issued at a fixed coupon rate, which converts to a variable rate at a specified date. Rate shown is the rate in effect as of period end. |
c | Security is perpetual in nature with no stated maturity date. |
d | This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933. |
e | All or a portion of this security represents a security on loan. See Note 1. |
f | Floating rate security. Rate shown is the rate in effect as of period end. |
g | Payment-in-kind (“PIK”) bond which gives the issuer an option to make coupon payments in cash or in the form of additional bonds. Stated interest rate represents the cash coupon rate. |
h | Investments are denominated in U.S. dollars. |
i | Affiliated issuer. See Schedule 1. |
j | The rate quoted is the annualized seven-day yield of the fund at period end. |
k | All or a portion of this security represents an investment of securities lending collateral. See Note 1. |
l | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $89,231,448. Net unrealized appreciation was $1,400,863, of which $1,887,268 represented gross unrealized appreciation on investments and $486,405 represented gross unrealized depreciation on investments. |
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the year ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares (000s) | Shares (000s) | Shares (000s) | Shares (000s) | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, | 1,149 | | 2,263 | b | — | 3,412 | $ | 3,412,856 | $ | 225 | $ | 105 | $ | — | c | |||||||||||||||||
BlackRock Cash Funds: Treasury, | 339 | 2,284 | b | — | 2,623 | 2,623,000 | 43 | — | 11,668 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 6,035,856 | $ | 268 | $ | 105 | $ | 11,668 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
c | Does not include income earned on the investment of securities lending cash collateral which is not direct income of the Fund and is reflected as a component of securities lending income in the statement of operations. |
Schedule 2 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: |
| |||||||||||||||
Assets: |
| |||||||||||||||
Corporate bonds & notes | $ | — | $ | 83,704,455 | $ | — | $ | 83,704,455 | ||||||||
Foreign government obligations | — | 892,000 | — | 892,000 | ||||||||||||
Money market funds | 6,035,856 | — | — | 6,035,856 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 6,035,856 | $ | 84,596,455 | $ | — | $ | 90,632,311 | ||||||||
|
|
|
|
|
|
|
| |||||||||
See notes to financial statements.
34 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
iSHARES® J.P. MORGAN EM LOCAL CURRENCY BOND ETF
October 31, 2017
Security | | Value | ||||||||||
FOREIGN GOVERNMENT OBLIGATIONS — 96.63% |
| |||||||||||
ARGENTINA — 4.08% |
| |||||||||||
Argentine Bonos del Tesoro | ||||||||||||
15.50%, 10/17/26 | ARS | 83,600 | $ | 4,935,510 | ||||||||
16.00%, 10/17/23 | ARS | 60,440 | 3,447,820 | |||||||||
18.20%, 10/03/21 | ARS | 73,200 | 4,240,596 | |||||||||
|
| |||||||||||
12,623,926 | ||||||||||||
BRAZIL — 14.68% |
| |||||||||||
Brazil Letras do Tesouro Nacional | ||||||||||||
0.00%, 01/01/19 | BRL | 20,093 | 5,665,491 | |||||||||
0.00%, 04/01/19 | BRL | 18,700 | 5,164,574 | |||||||||
0.00%, 07/01/19 | BRL | 20,000 | 5,400,619 | |||||||||
0.00%, 01/01/20 | BRL | 13,571 | 3,487,315 | |||||||||
0.00%, 07/01/20 | BRL | 7,850 | 1,918,750 | |||||||||
Brazil Notas do Tesouro Nacional | ||||||||||||
Series F | ||||||||||||
10.00%, 01/01/18 | BRL | 389 | 119,394 | |||||||||
10.00%, 01/01/19 | BRL | 6,862 | 2,158,216 | |||||||||
10.00%, 01/01/21 | BRL | 11,148 | 3,496,421 | |||||||||
10.00%, 01/01/23 | BRL | 26,884 | 8,353,900 | |||||||||
10.00%, 01/01/25 | BRL | 14,215 | 4,391,497 | |||||||||
10.00%, 01/01/27 | BRL | 13,123 | 4,044,630 | |||||||||
Brazilian Government International Bond | ||||||||||||
8.50%, 01/05/24 | BRL | 500 | 154,753 | |||||||||
10.25%, 01/10/28 | BRL | 1,420 | 468,797 | |||||||||
12.50%, 01/05/22 | BRL | 1,633 | 562,828 | |||||||||
|
| |||||||||||
45,387,185 | ||||||||||||
CHILE — 4.42% |
| |||||||||||
Bonos de la Tesoreria de la Republica en pesos | ||||||||||||
4.50%, 02/28/21 | CLP | 970,000 | 1,564,780 | |||||||||
4.50%, 03/01/21 | CLP | 955,000 | 1,539,505 | |||||||||
4.50%, 03/01/26 | CLP | 3,365,000 | 5,309,351 | |||||||||
5.00%, 03/01/35 | CLP | 2,300,000 | 3,685,112 | |||||||||
6.00%, 01/01/43 | CLP | 515,000 | 915,372 | |||||||||
Chile Government International Bond | ||||||||||||
5.50%, 08/05/20 | CLP | 390,000 | 647,649 | |||||||||
|
| |||||||||||
13,661,769 |
Security | | Value | ||||||||||
COLOMBIA — 4.31% |
| |||||||||||
Colombia Government International Bond | ||||||||||||
7.75%, 04/14/21 | COP | 496,000 | $ | 172,328 | ||||||||
9.85%, 06/28/27 | COP | 2,058,000 | 845,623 | |||||||||
Colombian TES | ||||||||||||
5.00%, 11/21/18 | COP | 1,300,000 | 427,393 | |||||||||
6.00%, 04/28/28 | COP | 4,535,000 | 1,404,268 | |||||||||
7.00%, 09/11/19 | COP | 2,508,000 | 850,015 | |||||||||
7.00%, 05/04/22 | COP | 9,074,200 | 3,095,213 | |||||||||
7.00%, 06/30/32 | COP | 500,000 | 163,781 | |||||||||
7.50%, 08/26/26 | COP | 5,432,800 | 1,883,552 | |||||||||
7.75%, 09/18/30 | COP | 2,580,000 | 916,064 | |||||||||
10.00%, 07/24/24 | COP | 6,692,300 | 2,629,280 | |||||||||
11.00%, 07/24/20 | COP | 2,525,300 | 940,832 | |||||||||
|
| |||||||||||
13,328,349 | ||||||||||||
CZECH REPUBLIC — 4.41% |
| |||||||||||
Czech Republic Government Bond | ||||||||||||
0.95%, 05/15/30a | CZK | 20,560 | 841,828 | |||||||||
1.50%, 10/29/19a | CZK | 68,270 | 3,171,510 | |||||||||
2.50%, 08/25/28a | CZK | 25,700 | 1,262,602 | |||||||||
3.75%, 09/12/20a | CZK | 10,840 | 536,804 | |||||||||
3.85%, 09/29/21a | CZK | 15,810 | 806,493 | |||||||||
4.20%, 12/04/36a | CZK | 10,870 | 654,318 | |||||||||
4.70%, 09/12/22a | CZK | 44,030 | 2,377,368 | |||||||||
5.70%, 05/25/24a | CZK | 67,610 | 3,992,913 | |||||||||
|
| |||||||||||
13,643,836 | ||||||||||||
HUNGARY — 4.35% |
| |||||||||||
Hungary Government Bond | ||||||||||||
2.50%, 10/27/21 | HUF | 353,000 | 1,401,633 | |||||||||
3.00%, 06/26/24 | HUF | 504,000 | 2,025,667 | |||||||||
3.50%, 06/24/20 | HUF | 364,330 | 1,475,379 | |||||||||
5.50%, 06/24/25 | HUF | 646,050 | 2,982,424 | |||||||||
6.00%, 11/24/23 | HUF | 58,850 | 278,330 | |||||||||
6.50%, 06/24/19 | HUF | 348,980 | 1,442,892 | |||||||||
7.00%, 06/24/22 | HUF | 377,160 | 1,784,235 | |||||||||
7.50%, 11/12/20 | HUF | 454,400 | 2,049,144 | |||||||||
|
| |||||||||||
13,439,704 | ||||||||||||
INDONESIA — 8.24% |
| |||||||||||
Indonesia Treasury Bond | ||||||||||||
5.63%, 05/15/23 | IDR | 35,164,000 | 2,469,504 |
SCHEDULESOF INVESTMENTS | 35 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® J.P. MORGAN EM LOCAL CURRENCY BOND ETF
October 31, 2017
Security | | Value | ||||||||||
6.13%, 05/15/28 | IDR | 44,000,000 | $ | 3,010,910 | ||||||||
6.63%, 05/15/33 | IDR | 2,000,000 | 137,106 | |||||||||
7.00%, 05/15/22 | IDR | 14,846,000 | 1,119,169 | |||||||||
7.88%, 04/15/19 | IDR | 18,697,000 | 1,412,647 | |||||||||
8.25%, 07/15/21 | IDR | 11,750,000 | 917,491 | |||||||||
8.25%, 06/15/32 | IDR | 22,819,000 | 1,813,299 | |||||||||
8.38%, 03/15/24 | IDR | 25,819,000 | 2,058,190 | |||||||||
8.38%, 09/15/26 | IDR | 34,783,000 | 2,816,365 | |||||||||
8.38%, 03/15/34 | IDR | 29,332,000 | 2,330,340 | |||||||||
8.75%, 05/15/31 | IDR | 24,600,000 | 2,036,852 | |||||||||
9.00%, 03/15/29 | IDR | 22,480,000 | 1,873,427 | |||||||||
9.50%, 07/15/31 | IDR | 13,698,000 | 1,190,862 | |||||||||
10.00%, 09/15/24 | IDR | 3,560,000 | 307,332 | |||||||||
10.00%, 02/15/28 | IDR | 9,815,000 | 878,544 | |||||||||
11.00%, 11/15/20 | IDR | 1,748,000 | 145,279 | |||||||||
11.00%, 09/15/25 | IDR | 10,435,000 | 958,419 | |||||||||
|
| |||||||||||
25,475,736 | ||||||||||||
MALAYSIA — 4.40% |
| |||||||||||
Malaysia Government Bond | ||||||||||||
3.48%, 03/15/23 | MYR | 859 | 197,896 | |||||||||
3.49%, 03/31/20 | MYR | 17,037 | 4,026,491 | |||||||||
3.50%, 05/31/27 | MYR | 640 | 141,930 | |||||||||
3.58%, 09/28/18 | MYR | 2,760 | 655,016 | |||||||||
4.05%, 09/30/21 | MYR | 16,322 | 3,901,014 | |||||||||
4.23%, 06/30/31 | MYR | 1,300 | 297,542 | |||||||||
4.50%, 04/15/30 | MYR | 1,840 | 436,994 | |||||||||
4.94%, 09/30/43 | MYR | 3,095 | 726,749 | |||||||||
Malaysia Government Investment Issue | ||||||||||||
4.07%, 09/30/26 | MYR | 13,966 | 3,232,821 | |||||||||
|
| |||||||||||
13,616,453 | ||||||||||||
MEXICO — 11.29% |
| |||||||||||
Mexican Bonos | ||||||||||||
5.00%, 12/11/19 | MXN | 40,018 | 2,009,385 | |||||||||
5.75%, 03/05/26 | MXN | 34,362 | 1,633,092 | |||||||||
6.50%, 06/10/21 | MXN | 97,620 | 5,008,747 | |||||||||
6.50%, 06/09/22 | MXN | 40,209 | 2,053,849 | |||||||||
7.50%, 06/03/27 | MXN | 126,304 | 6,701,002 | |||||||||
7.75%, 05/29/31 | MXN | 19,399 | 1,044,259 | |||||||||
7.75%, 11/13/42 | MXN | 49,259 | 2,621,249 | |||||||||
8.00%, 06/11/20 | MXN | 18,742 | 1,002,347 | |||||||||
8.00%, 12/07/23 | MXN | 9,446 | 515,546 |
Security | | Value | ||||||||||
8.00%, 11/07/47 | MXN | 5,749 | $ | 314,384 | ||||||||
8.50%, 12/13/18 | MXN | 92,539 | 4,905,476 | |||||||||
8.50%, 11/18/38 | MXN | 20,225 | 1,163,247 | |||||||||
10.00%, 12/05/24 | MXN | 45,516 | 2,756,717 | |||||||||
10.00%, 11/20/36 | MXN | 49,004 | 3,200,899 | |||||||||
|
| |||||||||||
34,930,199 | ||||||||||||
PERU — 4.40% |
| |||||||||||
Peru Government Bond | ||||||||||||
5.70%, 08/12/24 | PEN | 1,545 | 504,133 | |||||||||
6.15%, 08/12/32b | PEN | 700 | 224,732 | |||||||||
6.35%, 08/12/28 | PEN | 4,200 | 1,391,067 | |||||||||
6.90%, 08/12/37 | PEN | 3,971 | 1,333,533 | |||||||||
6.95%, 08/12/31 | PEN | 11,900 | 4,091,662 | |||||||||
8.20%, 08/12/26 | PEN | 16,237 | 6,065,950 | |||||||||
|
| |||||||||||
13,611,077 | ||||||||||||
POLAND — 7.66% |
| |||||||||||
Republic of Poland Government Bond | ||||||||||||
0.00%, 04/25/19 | PLN | 2,690 | 724,245 | |||||||||
1.50%, 04/25/20 | PLN | 13,010 | 3,542,270 | |||||||||
1.75%, 07/25/21 | PLN | 10,836 | 2,912,232 | |||||||||
2.50%, 07/25/26 | PLN | 9,991 | 2,566,933 | |||||||||
2.50%, 07/25/27 | PLN | 7,300 | 1,852,078 | |||||||||
3.25%, 07/25/19 | PLN | 4,877 | 1,379,944 | |||||||||
3.25%, 07/25/25 | PLN | 5,617 | 1,542,554 | |||||||||
4.00%, 10/25/23 | PLN | 6,866 | 1,996,600 | |||||||||
5.25%, 10/25/20 | PLN | 3,121 | 935,918 | |||||||||
5.50%, 10/25/19 | PLN | 3,477 | 1,027,004 | |||||||||
5.75%, 10/25/21 | PLN | 5,900 | 1,823,271 | |||||||||
5.75%, 09/23/22 | PLN | 10,778 | 3,375,143 | |||||||||
|
| |||||||||||
23,678,192 | ||||||||||||
ROMANIA — 4.35% |
| |||||||||||
Romania Government Bond | ||||||||||||
3.25%, 03/22/21 | RON | 14,515 | 3,710,344 | |||||||||
3.50%, 12/19/22 | RON | 19,645 | 4,970,916 | |||||||||
4.75%, 06/24/19 | RON | 7,115 | 1,873,977 | |||||||||
5.80%, 07/26/27 | RON | 3,750 | 1,056,596 | |||||||||
5.85%, 04/26/23 | RON | 6,520 | 1,832,779 | |||||||||
|
| |||||||||||
13,444,612 | ||||||||||||
RUSSIA — 4.68% |
| |||||||||||
Russian Federal Bond — OFZ | ||||||||||||
6.70%, 05/15/19 | RUB | 45,757 | 776,327 | |||||||||
6.80%, 12/11/19 | RUB | 43,838 | 743,724 |
36 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® J.P. MORGAN EM LOCAL CURRENCY BOND ETF
October 31, 2017
Security | | Value | ||||||||||
7.00%, 01/25/23 | RUB | 274,246 | $ | 4,630,708 | ||||||||
7.05%, 01/19/28 | RUB | 60,500 | 1,005,982 | |||||||||
7.50%, 02/27/19 | RUB | 6,927 | 118,911 | |||||||||
7.50%, 08/18/21 | RUB | 75,350 | 1,297,137 | |||||||||
7.60%, 04/14/21 | RUB | 93,910 | 1,622,390 | |||||||||
7.70%, 03/23/33 | RUB | 24,000 | 412,741 | |||||||||
8.15%, 02/03/27 | RUB | 155,934 | 2,789,329 | |||||||||
8.50%, 09/17/31 | RUB | 58,000 | 1,074,516 | |||||||||
|
| |||||||||||
14,471,765 | ||||||||||||
SOUTH AFRICA — 6.03% |
| |||||||||||
Republic of South Africa Government Bond | ||||||||||||
6.25%, 03/31/36 | ZAR | 17,469 | 855,564 | |||||||||
6.50%, 02/28/41 | ZAR | 18,685 | 902,847 | |||||||||
6.75%, 03/31/21 | ZAR | 1,000 | 67,999 | |||||||||
7.25%, 01/15/20 | ZAR | 3,528 | 246,628 | |||||||||
8.00%, 12/21/18 | ZAR | 3,471 | 246,954 | |||||||||
8.00%, 01/31/30 | ZAR | 108,381 | 6,779,478 | |||||||||
8.50%, 01/31/37 | ZAR | 26,080 | 1,604,346 | |||||||||
8.75%, 01/31/44 | ZAR | 20,000 | 1,233,786 | |||||||||
8.75%, 02/28/48 | ZAR | 13,832 | 854,354 | |||||||||
8.88%, 02/28/35 | ZAR | 35,000 | 2,254,425 | |||||||||
10.50%, 12/21/26 | ZAR | 46,950 | 3,601,398 | |||||||||
|
| |||||||||||
18,647,779 | ||||||||||||
THAILAND — 4.95% |
| |||||||||||
Thailand Government Bond | ||||||||||||
2.55%, 06/26/20 | THB | 66,000 | 2,039,072 | |||||||||
3.40%, 06/17/36 | THB | 21,600 | 700,083 | |||||||||
3.58%, 12/17/27 | THB | 8,886 | 293,386 | |||||||||
3.63%, 06/16/23 | THB | 58,228 | 1,908,519 | |||||||||
3.65%, 12/17/21 | THB | 85,490 | 2,774,431 | |||||||||
3.78%, 06/25/32 | THB | 13,638 | 456,804 | |||||||||
3.85%, 12/12/25 | THB | 52,949 | 1,779,713 | |||||||||
3.88%, 06/13/19 | THB | 46,650 | 1,458,715 | |||||||||
4.26%, 12/12/37a | THB | 970 | 34,024 | |||||||||
4.88%, 06/22/29 | THB | 104,500 | 3,861,164 | |||||||||
|
| |||||||||||
15,305,911 | ||||||||||||
TURKEY — 4.38% |
| |||||||||||
Turkey Government Bond | ||||||||||||
8.00%, 03/12/25 | TRY | 2,652 | 577,693 | |||||||||
8.50%, 07/10/19 | TRY | 9,408 | 2,331,835 | |||||||||
8.50%, 09/14/22 | TRY | 6,549 | 1,518,851 | |||||||||
8.80%, 09/27/23 | TRY | 7,980 | 1,844,957 | |||||||||
9.00%, 07/24/24 | TRY | 5,629 | 1,309,190 |
Security | Principal or Shares (000s) | Value | ||||||||||
9.50%, 01/12/22 | TRY | 10,280 | $ | 2,493,135 | ||||||||
10.50%, 01/15/20 | TRY | 4,503 | 1,143,971 | |||||||||
10.60%, 02/11/26 | TRY | 3,000 | 750,682 | |||||||||
10.70%, 02/17/21 | TRY | 4,500 | 1,139,357 | |||||||||
11.00%, 02/24/27 | TRY | 1,700 | 434,075 | |||||||||
|
| |||||||||||
13,543,746 | ||||||||||||
TOTAL FOREIGN GOVERNMENT OBLIGATIONS |
| |||||||||||
(Cost: $305,932,851) |
| 298,810,239 | ||||||||||
SHORT-TERM INVESTMENTS — 0.16% |
| |||||||||||
MONEY MARKET FUNDS — 0.16% |
| |||||||||||
BlackRock Cash Funds: Treasury, |
| |||||||||||
1.00%c,d | 490 | 490,410 | ||||||||||
|
| |||||||||||
490,410 | ||||||||||||
|
| |||||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||||||
(Cost: $490,410) |
| 490,410 | ||||||||||
|
| |||||||||||
TOTAL INVESTMENTS |
| |||||||||||
(Cost: $306,423,261)e |
| 299,300,649 | ||||||||||
Other Assets, Less Liabilities — 3.21% |
| 9,916,250 | ||||||||||
|
| |||||||||||
NET ASSETS — 100.00% | $ | 309,216,899 | ||||||||||
|
|
Currency abbreviations:
ARS | — Argentina Peso | |
BRL | — Brazilian Real | |
CLP | — Chilean Peso | |
COP | — Colombian Peso | |
CZK | — Czech Koruna | |
HUF | — Hungarian Forint | |
IDR | — Indonesian Rupiah | |
MXN | — Mexican Peso | |
MYR | — Malaysian Ringgit | |
PEN | — Peru Nuevo Sol | |
PLN | — Polish Zloty | |
RON | — Romanian Leu | |
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 | This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933. |
c | Affiliated issuer. See Schedule 1. |
d | The rate quoted is the annualized seven-day yield of the fund at period end. |
e | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $310,800,930. Net unrealized depreciation was $11,500,281, of which $7,978,420 represented gross unrealized appreciation on investments and $19,478,701 represented gross unrealized depreciation on investments. |
SCHEDULESOF INVESTMENTS | 37 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® J.P. MORGAN EM LOCAL CURRENCY BOND ETF
October 31, 2017
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the year ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares (000s) | Shares (000s) | Shares (000s) | Shares (000s) | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Treasury, | 600 | — | (110 | )b | 490 | $ | 490,410 | $ | 33 | $ | — | $ | 5,624 | |||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
Schedule 2 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: |
| |||||||||||||||
Assets: |
| |||||||||||||||
Foreign government obligations | $ | — | $ | 298,810,239 | $ | — | $ | 298,810,239 | ||||||||
Money market funds | 490,410 | — | — | 490,410 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 490,410 | $ | 298,810,239 | $ | — | $ | 299,300,649 | ||||||||
|
|
|
|
|
|
|
| |||||||||
See notes to financial statements.
38 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments
iSHARES® US & INTL HIGH YIELD CORP BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||||||
CORPORATE BONDS & NOTES — 98.06% |
| |||||||||||
AUSTRALIA — 0.18% |
| |||||||||||
FMG Resources August 2006 Pty Ltd. | ||||||||||||
4.75%, 05/15/22 (Call 02/15/22)a | USD | 130 | $ | 132,425 | ||||||||
5.13%, 05/15/24 (Call 02/15/24)a | USD | 135 | 138,619 | |||||||||
Origin Energy Finance Ltd. | ||||||||||||
VRN, (5 year EUR | ||||||||||||
4.00%, 09/16/74 (Call 09/16/19)b,c | EUR | 100 | 122,093 | |||||||||
|
| |||||||||||
393,137 | ||||||||||||
AUSTRIA — 0.25% |
| |||||||||||
Raiffeisen Bank International AG | ||||||||||||
6.00%, 10/16/23c | EUR | 200 | 283,370 | |||||||||
VRN, (5 year EUR | ||||||||||||
4.50%, 02/21/25 (Call 02/21/20)b,c | EUR | 100 | 124,814 | |||||||||
Raiffeisenlandesbank Niederoesterreich-Wien AG | ||||||||||||
5.88%, 11/27/23c | EUR | 100 | 131,482 | |||||||||
|
| |||||||||||
539,666 | ||||||||||||
BELGIUM — 0.24% |
| |||||||||||
Barry Callebaut Services NV | ||||||||||||
5.63%, 06/15/21c | EUR | 100 | 138,299 | |||||||||
Ethias SA | ||||||||||||
5.00%, 01/14/26c | EUR | 100 | 132,641 | |||||||||
Nyrstar Netherlands Holdings BV | ||||||||||||
6.88%, 03/15/24 (Call 03/15/20)c | EUR | 100 | 124,490 | |||||||||
8.50%, 09/15/19c | EUR | 100 | 130,161 | |||||||||
|
| |||||||||||
525,591 | ||||||||||||
BERMUDA — 0.07% |
| |||||||||||
Weatherford International Ltd. | ||||||||||||
9.88%, 02/15/24 (Call 11/15/23)d | USD | 150 | 160,500 | |||||||||
|
| |||||||||||
160,500 | ||||||||||||
CANADA — 3.49% |
| |||||||||||
1011778 BC ULC/New Red Finance Inc. | ||||||||||||
4.25%, 05/15/24 (Call 05/15/20)a,d | USD | 275 | 277,337 | |||||||||
4.63%, 01/15/22 (Call 12/01/17)a | USD | 225 | 230,242 | |||||||||
5.00%, 10/15/25 (Call 10/15/20)a,d | USD | 225 | 228,937 | |||||||||
Series OCT | ||||||||||||
5.00%, 10/15/25 (Call 10/15/20)a | USD | 250 | 254,375 |
Security | Principal (000s) | Value | ||||||||||
Air Canada | ||||||||||||
4.75%, 10/06/23 (Call 10/06/19)a | CAD | 25 | $ | 20,004 | ||||||||
7.75%, 04/15/21a | USD | 75 | 85,613 | |||||||||
Baytex Energy Corp. | ||||||||||||
6.63%, 07/19/22 (Call 11/30/17) | CAD | 50 | 37,817 | |||||||||
Bombardier Inc. | ||||||||||||
4.75%, 04/15/19a | USD | 50 | 50,855 | |||||||||
5.75%, 03/15/22a | USD | 150 | 149,106 | |||||||||
6.00%, 10/15/22 (Call 12/01/17)a | USD | 200 | 197,750 | |||||||||
6.13%, 05/15/21c | EUR | 100 | 125,866 | |||||||||
6.13%, 01/15/23a | USD | 225 | 224,647 | |||||||||
7.50%, 03/15/25 (Call 03/15/20)a | USD | 225 | 232,290 | |||||||||
7.75%, 03/15/20 a,d | USD | 175 | 187,687 | |||||||||
8.75%, 12/01/21a | USD | 250 | 277,332 | |||||||||
Brookfield Residential Properties Inc. | ||||||||||||
6.13%, 05/15/23 (Call 05/15/18)a | CAD | 50 | 40,295 | |||||||||
6.50%, 12/15/20 (Call 12/01/17)a | USD | 50 | 51,019 | |||||||||
Brookfield Residential Properties Inc./Brookfield Residential U.S. Corp. | ||||||||||||
6.13%, 07/01/22 (Call 12/01/17)a,d | USD | 75 | 78,469 | |||||||||
Cascades Inc. | ||||||||||||
5.50%, 07/15/21 (Call 11/30/17)a | CAD | 25 | 20,139 | |||||||||
CES Energy Solutions Corp. | ||||||||||||
7.38%, 04/17/20 (Call 11/18/17) | CAD | 25 | 20,140 | |||||||||
Concordia International Corp. | ||||||||||||
7.00%, 04/15/23 (Call 04/15/18)a,e | USD | 13 | 1,398 | |||||||||
9.50%, 10/21/22 (Call 12/15/18)a | USD | 75 | 7,950 | |||||||||
Cott Beverages Inc. | ||||||||||||
5.38%, 07/01/22 (Call 12/01/17) | USD | 125 | 130,156 | |||||||||
Cott Corp. | ||||||||||||
5.50%, 07/01/24 (Call 07/01/19)c | EUR | 100 | 127,943 | |||||||||
Cott Holdings Inc. | ||||||||||||
5.50%, 04/01/25 (Call 04/01/20)a | USD | 125 | 128,906 | |||||||||
Crew Energy Inc. | ||||||||||||
6.50%, 03/14/24 (Call 03/14/20)a | CAD | 50 | 37,696 | |||||||||
Gibson Energy Inc. | ||||||||||||
5.38%, 07/15/22 (Call 11/30/17)a | CAD | 50 | 39,453 | |||||||||
Great Canadian Gaming Corp. | ||||||||||||
6.63%, 07/25/22 (Call 11/30/17)a | CAD | 50 | 40,178 | |||||||||
Iron Mountain Canada Operations ULC | ||||||||||||
5.38%, 09/15/23 (Call 09/15/19)a | CAD | 25 | 20,275 |
SCHEDULESOF INVESTMENTS | 39 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® US & INTL HIGH YIELD CORP BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||||||
Jupiter Resources Inc. | ||||||||||||
8.50%, 10/01/22 (Call 12/01/17)a | USD | 175 | $ | 125,125 | ||||||||
Kinross Gold Corp. | ||||||||||||
4.50%, 07/15/27 (Call 04/15/27)a | USD | 105 | 106,006 | |||||||||
5.13%, 09/01/21 (Call 06/01/21) | USD | 50 | 53,345 | |||||||||
5.95%, 03/15/24 (Call 12/15/23) | USD | 105 | 116,290 | |||||||||
Lundin Mining Corp. | ||||||||||||
7.50%, 11/01/20 (Call 11/20/17)a | USD | 50 | 51,953 | |||||||||
7.88%, 11/01/22 (Call 11/01/18)a | USD | 75 | 81,181 | |||||||||
MEG Energy Corp. | ||||||||||||
6.38%, 01/30/23 (Call 12/01/17)a | USD | 150 | 136,955 | |||||||||
6.50%, 01/15/25 (Call 01/15/20)a,d | USD | 125 | 124,375 | |||||||||
7.00%, 03/31/24 (Call 09/30/18)a,d | USD | 175 | 158,812 | |||||||||
Newalta Corp. | ||||||||||||
Series 2 | ||||||||||||
7.75%, 11/14/19 (Call 11/30/17) | CAD | 22 | 16,051 | |||||||||
NOVA Chemicals Corp. | ||||||||||||
4.88%, 06/01/24 (Call 03/03/24)a | USD | 165 | 168,094 | |||||||||
5.00%, 05/01/25 (Call 01/31/25)a | USD | 50 | 50,693 | |||||||||
5.25%, 08/01/23 (Call 08/01/18)a | USD | 125 | 128,750 | |||||||||
5.25%, 06/01/27 (Call 03/03/27)a | USD | 225 | 229,286 | |||||||||
Open Text Corp. | ||||||||||||
5.63%, 01/15/23 (Call 01/15/18)a | USD | 50 | 52,277 | |||||||||
5.88%, 06/01/26 (Call 06/01/21)a | USD | 180 | 195,075 | |||||||||
Parkland Fuel Corp. | ||||||||||||
5.63%, 05/09/25 (Call 05/09/20) | CAD | 100 | 77,743 | |||||||||
5.75%, 09/16/24 (Call 09/16/19)a | CAD | 25 | 19,775 | |||||||||
5.75%, 09/16/24 (Call 09/16/19) | CAD | 50 | 39,550 | |||||||||
6.00%, 11/21/22 (Call 11/30/17) | CAD | 50 | 40,290 | |||||||||
Precision Drilling Corp. | ||||||||||||
5.25%, 11/15/24 (Call 05/15/19)d | USD | 75 | 70,148 | |||||||||
Quebecor Media Inc. | ||||||||||||
5.75%, 01/15/23 | USD | 225 | 243,562 | |||||||||
6.63%, 01/15/23a | CAD | 160 | 136,064 | |||||||||
Russel Metals Inc. | ||||||||||||
6.00%, 04/19/22 (Call 11/30/17)a | CAD | 25 | 19,999 | |||||||||
Seven Generations Energy Ltd. | ||||||||||||
5.38%, 09/30/25 (Call 09/30/20)a | USD | 110 | 111,238 | |||||||||
6.75%, 05/01/23 (Call 05/01/18)a | USD | 75 | 79,373 | |||||||||
6.88%, 06/30/23 (Call 06/30/18)a,d | USD | 125 | 132,969 | |||||||||
Superior Plus LP | ||||||||||||
5.25%, 02/27/24 (Call 02/27/20) | CAD | 50 | 39,684 | |||||||||
6.50%, 12/09/21 (Call 12/09/17) | CAD | 25 | 20,399 |
Security | Principal (000s) | Value | ||||||||||
Teck Resources Ltd. | ||||||||||||
3.75%, 02/01/23 (Call 11/01/22)d | USD | 125 | $ | 126,103 | ||||||||
4.75%, 01/15/22 (Call 10/15/21) | USD | 150 | 158,438 | |||||||||
8.50%, 06/01/24 (Call 06/01/19)a | USD | 100 | 114,500 | |||||||||
Trilogy Energy Corp. | ||||||||||||
7.25%, 12/13/19 (Call 11/30/17) | CAD | 25 | 19,733 | |||||||||
Valeant Pharmaceuticals International Inc. | ||||||||||||
5.63%, 12/01/21 (Call 12/01/17)a | USD | 175 | 159,766 | |||||||||
7.50%, 07/15/21 (Call 12/01/17)a | USD | 300 | 295,500 | |||||||||
Videotron Ltd. | ||||||||||||
5.00%, 07/15/22 | USD | 125 | 135,000 | |||||||||
5.13%, 04/15/27 (Call 04/15/22)a | USD | 135 | 141,342 | |||||||||
5.38%, 06/15/24 (Call 03/15/24)a,d | USD | 50 | 54,010 | |||||||||
5.63%, 06/15/25 (Call 03/15/25) | CAD | 50 | 41,575 | |||||||||
5.75%, 01/15/26 (Call 09/15/20)c | CAD | 75 | 62,344 | |||||||||
Yellow Pages Digital & Media Solutions Ltd. | ||||||||||||
9.25%, 11/30/18 (Call 11/18/17) | CAD | 26 | 20,258 | |||||||||
|
| |||||||||||
7,477,506 | ||||||||||||
DENMARK — 0.17% |
| |||||||||||
Nassa Topco AS | ||||||||||||
2.88%, 04/06/24 (Call 01/06/24)c | EUR | 100 | 118,634 | |||||||||
Norican A/S | ||||||||||||
4.50%, 05/15/23 (Call 11/15/19)c | EUR | 100 | 118,238 | |||||||||
TDC A/S | ||||||||||||
VRN, (5 year EUR | ||||||||||||
3.50%, 02/26/49 (Call 02/26/21)b,c | EUR | 100 | 121,667 | |||||||||
|
| |||||||||||
358,539 | ||||||||||||
FINLAND — 0.48% |
| |||||||||||
Nokia OYJ | ||||||||||||
1.00%, 03/15/21 (Call 02/15/21)c | EUR | 100 | 117,786 | |||||||||
2.00%, 03/15/24 (Call 12/15/23)c | EUR | 125 | 148,744 | |||||||||
3.38%, 06/12/22 | USD | 125 | 124,375 | |||||||||
4.38%, 06/12/27 | USD | 80 | 80,200 | |||||||||
5.38%, 05/15/19 | USD | 73 | 75,991 | |||||||||
Stora Enso OYJ | ||||||||||||
2.13%, 06/16/23 (Call 03/16/23)c | EUR | 100 | 122,468 | |||||||||
Teollisuuden Voima OYJ | ||||||||||||
2.13%, 02/04/25 (Call 11/04/24)c | EUR | 100 | 116,552 | |||||||||
2.50%, 03/17/21c | EUR | 100 | 122,403 | |||||||||
2.63%, 01/13/23c | EUR | 100 | 122,509 | |||||||||
|
| |||||||||||
1,031,028 |
40 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® US & INTL HIGH YIELD CORP BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||||||
FRANCE — 3.92% |
| |||||||||||
Areva SA | ||||||||||||
3.25%, 09/04/20c | EUR | 100 | $ | 123,604 | ||||||||
3.50%, 03/22/21 | EUR | 200 | 249,341 | |||||||||
Autodis SA | ||||||||||||
4.38%, 05/01/22 (Call 05/01/18)c | EUR | 100 | 120,317 | |||||||||
Banijay Group SAS | ||||||||||||
4.00%, 07/01/22 (Call 07/01/19)c | EUR | 100 | 122,205 | |||||||||
Burger King France SAS | ||||||||||||
6.00%, 05/01/24 (Call 05/01/20)c | EUR | 100 | 126,267 | |||||||||
Casino Guichard Perrachon SA | ||||||||||||
1.87%, 06/13/22 (Call 03/13/22)c | EUR | 100 | 119,630 | |||||||||
3.58%, 02/07/25 (Call 11/07/24)c | EUR | 100 | 123,968 | |||||||||
4.05%, 08/05/26 (Call 05/05/26)c | EUR | 100 | 127,278 | |||||||||
4.41%, 08/06/19c | EUR | 100 | 125,266 | |||||||||
4.50%, 03/07/24 (Call 12/07/23)c | EUR | 200 | 263,091 | |||||||||
4.56%, 01/25/23c | EUR | 100 | 132,559 | |||||||||
5.24%, 03/09/20 | EUR | 100 | 130,044 | |||||||||
5.98%, 05/26/21c | EUR | 200 | 274,051 | |||||||||
CMA CGM SA | ||||||||||||
5.25%, 01/15/25 (Call 10/15/20)c | EUR | 100 | 118,825 | |||||||||
6.50%, 07/15/22 (Call 07/15/19)c | EUR | 100 | 125,172 | |||||||||
ContourGlobal Power Holdings SA | ||||||||||||
5.13%, 06/15/21 (Call 06/15/18)c | EUR | 100 | 122,311 | |||||||||
Elis SA | ||||||||||||
3.00%, 04/30/22 (Call 04/30/18)c | EUR | 100 | 119,474 | |||||||||
Faurecia | ||||||||||||
3.13%, 06/15/22 (Call 06/15/18)c | EUR | 100 | 120,054 | |||||||||
3.63%, 06/15/23 (Call 06/15/19)c | EUR | 100 | 123,027 | |||||||||
Groupe Fnac SA | ||||||||||||
3.25%, 09/30/23 (Call 09/30/19)c | EUR | 100 | 122,890 | |||||||||
La Financiere Atalian SAS | ||||||||||||
4.00%, 05/15/24 (Call 05/15/20)c | EUR | 100 | 122,252 | |||||||||
Loxam SAS | ||||||||||||
4.88%, 07/23/21 (Call 11/10/17)c | EUR | 73 | 87,388 | |||||||||
6.00%, 04/15/25 (Call 04/15/20)c | EUR | 100 | 127,277 | |||||||||
Mobilux Finance SAS | ||||||||||||
5.50%, 11/15/24 (Call 11/15/19)c | EUR | 100 | 125,343 | |||||||||
NEW Areva Holding SA | ||||||||||||
3.13%, 03/20/23 (Call 12/20/22)c | EUR | 200 | 244,626 | |||||||||
4.88%, 09/23/24 | EUR | 100 | 131,252 | |||||||||
Nexans SA | ||||||||||||
3.25%, 05/26/21 (Call 02/26/21)c | EUR | 100 | 126,204 |
Security | Principal (000s) | Value | ||||||||||
Novafives SAS | ||||||||||||
4.50%, 06/30/21 (Call 11/10/17)c | EUR | 100 | $ | 118,707 | ||||||||
Paprec Holding | ||||||||||||
5.25%, 04/01/22 (Call 04/01/18)c | EUR | 125 | 151,803 | |||||||||
Peugeot SA | ||||||||||||
2.00%, 03/23/24c | EUR | 100 | 120,337 | |||||||||
2.38%, 04/14/23c | EUR | 100 | 123,750 | |||||||||
6.50%, 01/18/19c | EUR | 100 | 125,558 | |||||||||
Rexel SA | ||||||||||||
2.63%, 06/15/24 (Call 03/15/20)c | EUR | 125 | 149,623 | |||||||||
3.25%, 06/15/22 (Call 06/15/18)c | EUR | 100 | 120,092 | |||||||||
3.50%, 06/15/23 (Call 06/15/19)c | EUR | 100 | 122,520 | |||||||||
SFR Group SA | ||||||||||||
5.38%, 05/15/22 (Call 11/30/17)c | EUR | 200 | 243,341 | |||||||||
5.63%, 05/15/24 (Call 05/15/19)c | EUR | 200 | 253,303 | |||||||||
6.00%, 05/15/22 (Call 12/01/17)a | USD | 600 | 625,500 | |||||||||
6.25%, 05/15/24 (Call 05/15/19)a,d | USD | 200 | 209,578 | |||||||||
7.38%, 05/01/26 (Call 05/01/21)a,d | USD | 1,000 | 1,074,474 | |||||||||
SMCP Group SAS | ||||||||||||
5.88%, 05/01/23 (Call 05/01/19)c | EUR | 60 | 75,907 | |||||||||
SPCM SA | ||||||||||||
2.88%, 06/15/23 (Call 06/15/18)c | EUR | 100 | 119,319 | |||||||||
SPIE SA | ||||||||||||
3.13%, 03/22/24 (Call 09/22/23)c | EUR | 100 | 121,837 | |||||||||
Synlab Bondco PLC | ||||||||||||
6.25%, 07/01/22 (Call 07/01/18)c | EUR | 150 | 185,938 | |||||||||
Tereos Finance Groupe I SA | ||||||||||||
4.13%, 06/16/23 (Call 03/16/23)c | EUR | 100 | 123,376 | |||||||||
Vallourec SA | ||||||||||||
2.25%, 09/30/24c | EUR | 100 | 95,824 | |||||||||
3.25%, 08/02/19c | EUR | 100 | 120,607 | |||||||||
Verallia Packaging SASU | ||||||||||||
5.13%, 08/01/22 (Call 08/01/18)c | EUR | 100 | 122,988 | |||||||||
WFS Global Holding SAS | ||||||||||||
9.50%, 07/15/22 (Call 07/15/18)c | EUR | 100 | 127,071 | |||||||||
|
| |||||||||||
8,385,169 | ||||||||||||
GERMANY — 2.75% |
| |||||||||||
Bilfinger SE | ||||||||||||
2.38%, 12/07/19c | EUR | 100 | 120,633 | |||||||||
BMBG Bond Finance SCA | ||||||||||||
3.00%, 06/15/21 (Call 06/15/18)c | EUR | 100 | 119,678 |
SCHEDULESOF INVESTMENTS | 41 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® US & INTL HIGH YIELD CORP BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||||||
DEMIRE Deutsche Mittelstand Real Estate AG | ||||||||||||
2.88%, 07/15/22 (Call 07/15/19)c | EUR | 100 | $ | 119,285 | ||||||||
Deutsche Lufthansa AG | ||||||||||||
VRN, (5 year EUR | ||||||||||||
5.13%, 08/12/75 (Call 02/12/21)b,c | EUR | 100 | 128,448 | |||||||||
Douglas GmbH | ||||||||||||
6.25%, 07/15/22 (Call 07/15/18)c | EUR | 100 | 124,663 | |||||||||
Hapag-Lloyd AG | ||||||||||||
5.13%, 07/15/24 (Call 07/15/20)c | EUR | 100 | 122,584 | |||||||||
6.75%, 02/01/22 (Call 02/01/19)c | EUR | 100 | 126,742 | |||||||||
HP Pelzer Holding GmbH | ||||||||||||
4.13%, 04/01/24 (Call 04/01/20)c | EUR | 100 | 121,377 | |||||||||
K+S AG | ||||||||||||
2.63%, 04/06/23 (Call 01/06/23)c | EUR | 100 | 121,852 | |||||||||
3.00%, 06/20/22c | EUR | 100 | 123,843 | |||||||||
4.13%, 12/06/21c | EUR | 100 | 131,135 | |||||||||
LANXESS AG | ||||||||||||
VRN, (5 year EUR | ||||||||||||
4.50%, 12/06/76 (Call 06/06/23)b,c | EUR | 100 | 129,369 | |||||||||
Nidda Healthcare Holding AG | ||||||||||||
3.50%, 09/30/24 (Call 09/30/20)c | EUR | 100 | 119,244 | |||||||||
Norddeutsche Landesbank Girozentrale | ||||||||||||
6.00%, 06/29/20 | EUR | 50 | 63,790 | |||||||||
Phoenix PIB Dutch Finance BV | ||||||||||||
3.13%, 05/27/20c | EUR | 100 | 124,375 | |||||||||
PrestigeBidCo GmbH | ||||||||||||
6.25%, 12/15/23 (Call 12/15/19)c | EUR | 100 | 126,449 | |||||||||
ProGroup AG | ||||||||||||
5.13%, 05/01/22 (Call 05/01/18)c | EUR | 100 | 121,865 | |||||||||
RWE AG |
| |||||||||||
VRN, (5 year EUR | ||||||||||||
2.75%, 04/21/75 (Call 10/21/20)b,c | EUR | 100 | 120,987 | |||||||||
VRN, (5 year EUR | ||||||||||||
3.50%, 04/21/75 (Call 04/21/25)b,c | EUR | 100 | 122,333 | |||||||||
Senvion Holding GmbH | ||||||||||||
3.88%, 10/25/22 (Call 05/01/19)c | EUR | 100 | 119,547 |
Security | Principal (000s) | Value | ||||||||||
thyssenkrupp AG | ||||||||||||
1.38%, 03/03/22 (Call 12/03/21)c | EUR | 150 | $ | 178,832 | ||||||||
1.75%, 11/25/20 (Call 08/25/20)c | EUR | �� | 100 | 121,141 | ||||||||
2.50%, 02/25/25c | EUR | 100 | 126,239 | |||||||||
2.75%, 03/08/21 (Call 12/08/20)c | EUR | 400 | 497,917 | |||||||||
TUI AG | ||||||||||||
2.13%, 10/26/21 (Call 07/26/21)c | EUR | 100 | 122,813 | |||||||||
Unitymedia GmbH | ||||||||||||
3.75%, 01/15/27 (Call 01/15/21)c | EUR | 100 | 121,210 | |||||||||
6.13%, 01/15/25 (Call 01/15/20)a,d | USD | 200 | 213,580 | |||||||||
Unitymedia Hessen GmbH & Co. KG/Unitymedia NRW GmbH | ||||||||||||
3.50%, 01/15/27 (Call 01/15/21)c | EUR | 100 | 122,533 | |||||||||
4.00%, 01/15/25 (Call 01/15/20)c | EUR | 200 | 248,041 | |||||||||
4.63%, 02/15/26 (Call 02/15/21)c | EUR | 100 | 127,561 | |||||||||
5.13%, 01/21/23 (Call 01/21/18)c | EUR | 73 | 87,914 | |||||||||
5.50%, 01/15/23 (Call 01/15/18)a | USD | 180 | 185,021 | |||||||||
5.63%, 04/15/23 (Call 04/15/18)c | EUR | 70 | 85,732 | |||||||||
WEPA Hygieneprodukte GmbH | ||||||||||||
3.75%, 05/15/24 (Call 05/15/19)c | EUR | 100 | 121,632 | |||||||||
ZF North America Capital Inc. | ||||||||||||
2.25%, 04/26/19c | EUR | 200 | 240,237 | |||||||||
2.75%, 04/27/23c | EUR | 200 | 251,746 | |||||||||
4.00%, 04/29/20a | USD | 150 | 154,644 | |||||||||
4.50%, 04/29/22a | USD | 150 | 156,937 | |||||||||
4.75%, 04/29/25 a,d | USD | 300 | 314,850 | |||||||||
|
| |||||||||||
5,886,779 | ||||||||||||
GREECE — 0.28% |
| |||||||||||
Intralot Capital Luxembourg SA | ||||||||||||
6.75%, 09/15/21 (Call 09/15/18)c | EUR | 100 | 124,916 | |||||||||
OTE PLC | ||||||||||||
3.50%, 07/09/20c | EUR | 200 | 246,148 | |||||||||
PPC Finance PLC | ||||||||||||
5.50%, 05/01/19 (Call 11/10/17)c | EUR | 100 | 107,648 | |||||||||
Titan Global Finance PLC | ||||||||||||
3.50%, 06/17/21c | EUR | 100 | 124,970 | |||||||||
|
| |||||||||||
603,682 | ||||||||||||
HONG KONG — 0.04% |
| |||||||||||
Noble Group Ltd. | ||||||||||||
6.75%, 01/29/20a | USD | 200 | 82,563 | |||||||||
|
| |||||||||||
82,563 |
42 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® US & INTL HIGH YIELD CORP BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||||||
IRELAND — 1.64% |
| |||||||||||
Allied Irish Banks PLC | ||||||||||||
VRN, (5 year EUR | ||||||||||||
4.13%, 11/26/25 (Call 11/26/20)b,c | EUR | 100 | $ | 125,741 | ||||||||
Ardagh Packaging Finance PLC/Ardagh Holdings USA Inc. | ||||||||||||
2.75%, 03/15/24 (Call 03/15/20)c | EUR | 150 | 180,141 | |||||||||
4.13%, 05/15/23 (Call 05/15/19)c | EUR | 100 | 123,916 | |||||||||
4.25%, 09/15/22 (Call 03/15/19)a,d | USD | 200 | 205,500 | |||||||||
4.63%, 05/15/23 (Call 05/15/19)a | USD | 200 | 205,703 | |||||||||
4.75%, 07/15/27 (Call 07/15/22)c | GBP | 100 | 135,299 | |||||||||
6.00%, 02/15/25 (Call 02/15/20)a | USD | 200 | 211,969 | |||||||||
6.75%, 05/15/24 (Call 05/15/19)c | EUR | 100 | 130,158 | |||||||||
7.25%, 05/15/24 (Call 05/15/19)a | USD | 400 | 439,281 | |||||||||
Bank of Ireland | ||||||||||||
VRN, (5 year EUR | ||||||||||||
4.25%, 06/11/24 (Call 06/11/19)b,c | EUR | 200 | 245,807 | |||||||||
C&W Senior Financing Designated Activity Co. | ||||||||||||
6.88%, 09/15/27 (Call 09/15/22)a | USD | 200 | 208,779 | |||||||||
eircom Finance DAC | ||||||||||||
4.50%, 05/31/22 (Call 05/31/18)c | EUR | 100 | 121,254 | |||||||||
Europcar Drive Designated | ||||||||||||
4.13%, 11/15/24 (Call 11/15/20)c | EUR | 100 | 119,505 | |||||||||
Park Aerospace Holdings Ltd. | ||||||||||||
4.50%, 03/15/23 (Call 02/15/23)a | USD | 155 | 155,091 | |||||||||
5.25%, 08/15/22 a,d | USD | 310 | 322,400 | |||||||||
5.50%, 02/15/24a | USD | 210 | 218,138 | |||||||||
Smurfit Kappa Acquisitions ULC | ||||||||||||
2.38%, 02/01/24 (Call 11/01/23)c | EUR | 100 | 122,155 | |||||||||
3.25%, 06/01/21 (Call 03/10/21)c | EUR | 100 | 126,429 | |||||||||
4.13%, 01/30/20c | EUR | 100 | 126,743 | |||||||||
|
| |||||||||||
3,524,009 | ||||||||||||
ITALY — 6.10% |
| |||||||||||
Autostrada Brescia Verona Vicenza Padova SpA | ||||||||||||
2.38%, 03/20/20c | EUR | 100 | 123,021 | |||||||||
Banca IFIS SpA | ||||||||||||
VRN, (5 year EUR | EUR | 100 | 118,972 |
Security | Principal (000s) | Value | ||||||||||
Banca Monte dei Paschi di Siena SpA | ||||||||||||
3.63%, 04/01/19c | EUR | 100 | $ | 120,963 | ||||||||
Banca Popolare di Milano Scarl | ||||||||||||
7.13%, 03/01/21c | EUR | 100 | 131,003 | |||||||||
Banco BPM SpA | ||||||||||||
2.75%, 07/27/20c | EUR | 200 | 244,621 | |||||||||
VRN, (5 year EUR | ||||||||||||
4.38%, 09/21/27 (Call 09/21/22)b,c | EUR | 175 | 208,959 | |||||||||
Banco Popolare SC | ||||||||||||
3.50%, 03/14/19c | EUR | 300 | 363,756 | |||||||||
6.00%, 11/05/20c | EUR | 100 | 127,182 | |||||||||
BPER Banca | ||||||||||||
VRN, (5 year EUR | ||||||||||||
5.13%, 05/31/27 (Call 05/31/22)b,c | EUR | 100 | 121,078 | |||||||||
Buzzi Unicem SpA | ||||||||||||
2.13%, 04/28/23 (Call 01/28/23)c | EUR | 100 | 123,696 | |||||||||
CMF SpA | ||||||||||||
9.00%, 06/15/22 (Call 06/15/20)c | EUR | 100 | 120,005 | |||||||||
Cooperativa Muratori & Cementisti-CMC di Ravenna SC | ||||||||||||
6.88%, 08/01/22 (Call 08/01/19)c | EUR | 100 | 121,269 | |||||||||
Enel SpA |
| |||||||||||
VRN, (5 year EUR | ||||||||||||
5.00%, 01/15/75 (Call 01/15/20)b,c | EUR | 200 | 254,027 | |||||||||
VRN, (5 year EUR | ||||||||||||
6.50%, 01/10/74 (Call 01/10/19)b,c | EUR | 200 | 249,462 | |||||||||
VRN, (5 year USD | ||||||||||||
8.75%, 09/24/73 (Call 09/24/23)a,b | USD | 200 | 245,418 | |||||||||
Fiat Chrysler Finance Europe SA | ||||||||||||
4.75%, 03/22/21c | EUR | 300 | 391,966 | |||||||||
4.75%, 07/15/22c | EUR | 200 | 267,513 | |||||||||
6.75%, 10/14/19c | EUR | 200 | 261,801 | |||||||||
Iccrea Banca SpA |
| |||||||||||
1.50%, 02/21/20c | EUR | 100 | 118,174 | |||||||||
1.50%, 10/11/22c | EUR | 150 | 175,682 | |||||||||
1.88%, 11/25/19c | EUR | 100 | 119,314 | |||||||||
International Game Technology PLC | ||||||||||||
4.13%, 02/15/20 (Call 11/15/19)c | EUR | 100 | 124,876 |
SCHEDULESOF INVESTMENTS | 43 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® US & INTL HIGH YIELD CORP BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||||||
Intesa Sanpaolo SpA | ||||||||||||
2.86%, 04/23/25c | EUR | 100 | $ | 120,957 | ||||||||
3.93%, 09/15/26c | EUR | 100 | 128,995 | |||||||||
5.00%, 09/23/19c | EUR | 150 | 189,564 | |||||||||
5.15%, 07/16/20 | EUR | 300 | 391,548 | |||||||||
6.63%, 09/13/23c | EUR | 200 | 294,110 | |||||||||
Leonardo SpA | ||||||||||||
1.50%, 06/07/24 (Call 03/07/24)c | EUR | 150 | 178,819 | |||||||||
4.50%, 01/19/21 | EUR | 100 | 132,298 | |||||||||
5.25%, 01/21/22 | EUR | 100 | 139,201 | |||||||||
8.00%, 12/16/19 | GBP | 100 | 151,026 | |||||||||
Mediobanca SpA | ||||||||||||
5.00%, 11/15/20 | EUR | 100 | 130,900 | |||||||||
5.75%, 04/18/23 | EUR | 100 | 135,928 | |||||||||
N&W Global Vending SpA | ||||||||||||
7.00%, 10/15/23 (Call 10/15/19)c | EUR | 100 | 124,974 | |||||||||
Saipem Finance International BV | ||||||||||||
3.00%, 03/08/21c | EUR | 100 | 124,111 | |||||||||
3.75%, 09/08/23c | EUR | 100 | 125,864 | |||||||||
Salini Impregilo SpA | ||||||||||||
3.75%, 06/24/21c | EUR | 100 | 128,444 | |||||||||
Schumann SpA | ||||||||||||
7.00%, 07/31/23 (Call 07/31/19)c | EUR | 100 | 119,082 | |||||||||
Snaitech SpA | ||||||||||||
6.38%, 11/07/21 (Call 11/07/18)c | EUR | 100 | 125,467 | |||||||||
Telecom Italia Capital SA | ||||||||||||
7.18%, 06/18/19 | USD | 100 | 107,605 | |||||||||
Telecom Italia SpA | ||||||||||||
2.38%, 10/12/27 (Call 07/12/27)c | EUR | 200 | 237,602 | |||||||||
4.00%, 01/21/20c | EUR | 200 | 253,068 | |||||||||
4.88%, 09/25/20c | EUR | 100 | 132,313 | |||||||||
5.25%, 02/10/22c | EUR | 150 | 209,096 | |||||||||
Telecom Italia SpA/Milano | ||||||||||||
2.50%, 07/19/23c | EUR | 400 | 502,630 | |||||||||
3.00%, 09/30/25c | EUR | 200 | 255,705 | |||||||||
3.25%, 01/16/23c | EUR | 100 | 130,137 | |||||||||
3.63%, 01/19/24c | EUR | 100 | 132,612 | |||||||||
3.63%, 05/25/26c | EUR | 100 | 133,227 | |||||||||
4.50%, 01/25/21c | EUR | 100 | 132,494 | |||||||||
5.30%, 05/30/24a | USD | 200 | 215,141 | |||||||||
6.38%, 06/24/19 | GBP | 100 | 143,650 | |||||||||
UniCredit SpA | ||||||||||||
6.95%, 10/31/22c | EUR | 300 | 435,808 |
Security | Principal (000s) | Value | ||||||||||
VRN, (5 year EUR | ||||||||||||
5.75%, 10/28/25 (Call 10/28/20)b,c | EUR | 300 | $ | 392,290 | ||||||||
VRN, (5 year EUR | ||||||||||||
4.38%, 01/03/27 (Call 01/03/22)b,c | EUR | 100 | 127,073 | |||||||||
VRN, (5 year USD ICE | ||||||||||||
5.86%, 06/19/32 (Call 06/19/27)a,b | USD | 200 | 213,165 | |||||||||
Unione di Banche Italiane SpA | ||||||||||||
VRN, (5 year EUR | ||||||||||||
4.25%, 05/05/26 (Call 05/05/21)b,c | EUR | 100 | 121,696 | |||||||||
VRN, (5 year EUR | ||||||||||||
4.45%, 09/15/27 (Call 09/15/22)b,c | EUR | 100 | 122,898 | |||||||||
Unipol Gruppo Finanziario SpA | ||||||||||||
3.00%, 03/18/25c | EUR | 115 | 137,438 | |||||||||
4.38%, 03/05/21c | EUR | 100 | 128,820 | |||||||||
Wind Acquisition Finance SA | ||||||||||||
4.00%, 07/15/20 (Call 11/10/17)c | EUR | 400 | 470,486 | |||||||||
4.75%, 07/15/20 (Call 11/03/17)a | USD | 400 | 404,760 | |||||||||
7.00%, 04/23/21 (Call 11/30/17)c | EUR | 300 | 362,219 | |||||||||
7.38%, 04/23/21 (Call 12/01/17)a | USD | 400 | 415,520 | |||||||||
Wind Tre SpA | ||||||||||||
2.63%, 01/20/23 (Call 11/03/19)c | EUR | 125 | 146,274 | |||||||||
3.13%, 01/20/25 (Call 11/03/20)c | EUR | 100 | 116,844 | |||||||||
|
| |||||||||||
13,054,617 | ||||||||||||
JAPAN — 0.70% |
| |||||||||||
SoftBank Group Corp. | ||||||||||||
3.13%, 09/19/25 (Call 06/21/25)c | EUR | 250 | 294,267 | |||||||||
4.00%, 07/30/22 (Call 04/30/22)c | EUR | 200 | 254,729 | |||||||||
4.00%, 09/19/29 (Call 06/21/29)c | EUR | 125 | 145,516 | |||||||||
4.50%, 04/15/20a | USD | 400 | 412,207 | |||||||||
4.75%, 07/30/25 (Call 04/30/25)c | EUR | 200 | 261,634 | |||||||||
5.25%, 07/30/27 (Call 04/30/27)c | EUR | 100 | 133,081 | |||||||||
|
| |||||||||||
1,501,434 | ||||||||||||
LUXEMBOURG — 3.32% |
| |||||||||||
Altice Financing SA | ||||||||||||
5.25%, 02/15/23 (Call 02/15/18)c | EUR | 100 | 122,406 | |||||||||
6.50%, 01/15/22 (Call 12/01/17)a | USD | 200 | 207,246 | |||||||||
6.63%, 02/15/23 (Call 02/15/18)a | USD | 400 | 421,375 | |||||||||
7.50%, 05/15/26 (Call 05/15/21)a | USD | 400 | 438,913 |
44 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® US & INTL HIGH YIELD CORP BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||||||
Altice Finco SA | ||||||||||||
4.75%, 01/15/28 (Call 10/15/22)c | EUR | 100 | $ | 117,492 | ||||||||
9.00%, 06/15/23 (Call 06/15/18)c | EUR | 100 | 127,737 | |||||||||
Altice Luxembourg SA | ||||||||||||
6.25%, 02/15/25 (Call 02/15/20)c | EUR | 100 | 128,718 | |||||||||
7.25%, 05/15/22 (Call 11/30/17)c | EUR | 400 | 496,227 | |||||||||
7.63%, 02/15/25 (Call 02/15/20)a,d | USD | 200 | 216,846 | |||||||||
7.75%, 05/15/22 (Call 12/01/17)a | USD | 400 | 423,500 | |||||||||
ArcelorMittal | ||||||||||||
2.88%, 07/06/20c | EUR | 100 | 124,827 | |||||||||
3.13%, 01/14/22c | EUR | 300 | 385,881 | |||||||||
5.75%, 08/05/20d | USD | 150 | 162,750 | |||||||||
6.00%, 03/01/21 | USD | 150 | 163,924 | |||||||||
6.13%, 06/01/25d | USD | 75 | 86,569 | |||||||||
6.75%, 02/25/22 | USD | 100 | 114,833 | |||||||||
B&M European Value Retail SA | ||||||||||||
4.13%, 02/01/22 (Call 02/01/19)c | GBP | 100 | 137,576 | |||||||||
DEA Finance SA | ||||||||||||
7.50%, 10/15/22 (Call 04/15/19)c | EUR | 100 | 129,140 | |||||||||
Garfunkelux Holdco 3 SA | ||||||||||||
8.50%, 11/01/22 (Call 11/01/18)c | GBP | 100 | 143,248 | |||||||||
VRN, (3mo. LIBOR GBP + 3.5000%), | EUR | 125 | 145,728 | |||||||||
INEOS Group Holdings SA | ||||||||||||
5.38%, 08/01/24 (Call 08/01/19)c | EUR | 100 | 126,271 | |||||||||
Intelsat Connect Finance SA | ||||||||||||
12.50%, 04/01/22 (Call 06/01/18)a | USD | 125 | 118,477 | |||||||||
Intelsat Jackson Holdings SA | ||||||||||||
5.50%, 08/01/23 (Call 08/01/18) | USD | 350 | 297,062 | |||||||||
7.25%, 10/15/20 (Call 12/01/17) | USD | 450 | 431,966 | |||||||||
7.50%, 04/01/21 (Call 12/01/17) | USD | 200 | 190,000 | |||||||||
8.00%, 02/15/24 (Call 02/15/19)a | USD | 250 | 265,789 | |||||||||
9.50%, 09/30/22a | USD | 100 | 117,348 | |||||||||
9.75%, 07/15/25 (Call 07/15/21)a | USD | 255 | 256,594 | |||||||||
Intelsat Luxembourg SA | ||||||||||||
7.75%, 06/01/21 (Call 12/01/17) | USD | 275 | 173,766 | |||||||||
8.13%, 06/01/23 (Call 06/01/18) | USD | 150 | 91,392 | |||||||||
Matterhorn Telecom Holding SA | ||||||||||||
4.88%, 05/01/23 (Call 05/01/18)c | EUR | 100 | 120,249 | |||||||||
Matterhorn Telecom SA | ||||||||||||
3.88%, 05/01/22 (Call 05/01/18)c | EUR | 100 | 120,182 | |||||||||
Picard Bondco SA | ||||||||||||
7.75%, 02/01/20 (Call 11/30/17)c | EUR | 100 | 121,224 |
Security | Principal (000s) | Value | ||||||||||
Swissport Financing Sarl | ||||||||||||
6.75%, 12/15/21 (Call 06/15/18)c | EUR | 100 | $ | 124,462 | ||||||||
Swissport Investments SA | ||||||||||||
6.75%, 12/15/21 (Call 06/15/18)c | EUR | 100 | 124,067 | |||||||||
Telenet Finance VI | ||||||||||||
4.88%, 07/15/27 (Call 07/15/21)c | EUR | 100 | 128,770 | |||||||||
|
| |||||||||||
7,102,555 | ||||||||||||
NETHERLANDS — 2.01% |
| |||||||||||
Constellium NV | ||||||||||||
4.63%, 05/15/21 (Call 11/30/17)c | EUR | 100 | 118,963 | |||||||||
5.75%, 05/15/24 (Call 05/15/19)a | USD | 250 | 251,875 | |||||||||
CSC Holdings LLC | ||||||||||||
6.63%, 10/15/25 (Call 10/15/20)a | USD | 200 | 218,583 | |||||||||
InterXion Holding NV | ||||||||||||
6.00%, 07/15/20 (Call 11/10/17)c | EUR | 100 | 120,303 | |||||||||
IPD 3 BV | ||||||||||||
4.50%, 07/15/22 (Call 07/15/19)c | EUR | 100 | 122,349 | |||||||||
Maxeda DIY Holding BV | ||||||||||||
6.13%, 07/15/22 (Call 07/15/19)c | EUR | 100 | 122,616 | |||||||||
NXP BV/NXP Funding LLC | ||||||||||||
3.88%, 09/01/22a | USD | 200 | 207,775 | |||||||||
4.13%, 06/15/20a | USD | 200 | 208,500 | |||||||||
4.13%, 06/01/21a | USD | 200 | 208,250 | |||||||||
4.63%, 06/01/23a | USD | 200 | 214,667 | |||||||||
Samvardhana Motherson Automotive System Group BV | ||||||||||||
1.80%, 07/06/24c | EUR | 100 | 114,083 | |||||||||
Sensata Technologies BV | ||||||||||||
4.88%, 10/15/23a | USD | 125 | 131,441 | |||||||||
5.00%, 10/01/25a | USD | 150 | 159,348 | |||||||||
5.63%, 11/01/24a | USD | 100 | 110,844 | |||||||||
United Group BV | ||||||||||||
4.38%, 07/01/22 (Call 07/01/19)c | EUR | 100 | 121,952 | |||||||||
4.88%, 07/01/24 (Call 07/01/20)c | EUR | 100 | 122,004 | |||||||||
UPC Holding BV | ||||||||||||
3.88%, 06/15/29 (Call 06/15/22)c | EUR | 100 | 112,520 | |||||||||
UPCB Finance IV Ltd. | ||||||||||||
4.00%, 01/15/27 (Call 01/15/21)c | EUR | 100 | 123,967 | |||||||||
5.38%, 01/15/25 (Call 01/15/20)a | USD | 200 | 204,500 | |||||||||
UPCB Finance VII Ltd. | ||||||||||||
3.63%, 06/15/29 (Call 06/15/22)c | EUR | 150 | 175,366 |
SCHEDULESOF INVESTMENTS | 45 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® US & INTL HIGH YIELD CORP BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||||||
Ziggo Bond Co. BV | ||||||||||||
7.13%, 05/15/24 (Call 05/15/19)c | EUR | 100 | $ | 131,060 | ||||||||
Ziggo Bond Finance BV | ||||||||||||
4.63%, 01/15/25 (Call 01/15/20)c | EUR | 100 | 124,320 | |||||||||
6.00%, 01/15/27 (Call 01/15/22)a | USD | 150 | 152,396 | |||||||||
Ziggo Secured Finance BV | ||||||||||||
3.75%, 01/15/25 (Call 01/15/20)c | EUR | 200 | 244,940 | |||||||||
4.25%, 01/15/27 (Call 01/15/22)c | EUR | 100 | 124,486 | |||||||||
5.50%, 01/15/27 (Call 01/15/22)a | USD | 350 | 357,000 | |||||||||
|
| |||||||||||
4,304,108 | ||||||||||||
NEW ZEALAND — 0.23% |
| |||||||||||
Reynolds Group Issuer Inc./Reynolds Group Issuer LLC | ||||||||||||
5.13%, 07/15/23 (Call 07/15/19)a | USD | 345 | 357,937 | |||||||||
7.00%, 07/15/24 (Call 07/15/19)a,d | USD | 125 | 133,750 | |||||||||
|
| |||||||||||
491,687 | ||||||||||||
NORWAY — 0.06% |
| |||||||||||
Silk Bidco AS | ||||||||||||
7.50%, 02/01/22 (Call 02/01/18)c | EUR | 100 | 121,756 | |||||||||
|
| |||||||||||
121,756 | ||||||||||||
PORTUGAL — 0.06% |
| |||||||||||
EDP — Energias de Portugal SA | ||||||||||||
VRN, (5 year EUR | ||||||||||||
5.38%, 09/16/75 (Call 03/16/21)b,c | EUR | 100 | 130,192 | |||||||||
|
| |||||||||||
130,192 | ||||||||||||
SINGAPORE — 0.31% |
| |||||||||||
Lincoln Finance Ltd. | ||||||||||||
6.88%, 04/15/21 (Call 04/15/18)c | EUR | 200 | 245,950 | |||||||||
Puma International Financing SA | ||||||||||||
5.13%, 10/06/24 (Call 10/06/20)a | USD | 200 | 204,433 | |||||||||
6.75%, 02/01/21 (Call 12/01/17)a | USD | 200 | 204,970 | |||||||||
|
| |||||||||||
655,353 | ||||||||||||
SOUTH KOREA — 0.06% |
| |||||||||||
Kronos International Inc. | ||||||||||||
3.75%, 09/15/25 (Call 09/15/20)c | EUR | 100 | 121,599 | |||||||||
|
| |||||||||||
121,599 | ||||||||||||
SPAIN — 1.60% |
| |||||||||||
Banco de Sabadell SA | ||||||||||||
5.63%, 05/06/26c | EUR | 200 | 270,909 |
Security | Principal (000s) | Value | ||||||||||
Bankia SA | ||||||||||||
VRN, (5 year EUR | ||||||||||||
4.00%, 05/22/24 (Call 05/22/19)b,c | EUR | 200 | $ | 242,853 | ||||||||
VRN, (5 year EUR | ||||||||||||
3.38%, 03/15/27 (Call 03/15/22)b,c | EUR | 100 | 122,383 | |||||||||
Bankinter SA | ||||||||||||
VRN, (5 year EUR | ||||||||||||
2.50%, 04/06/27 (Call 04/06/22)b,c | EUR | 100 | 120,045 | |||||||||
CaixaBank SA | ||||||||||||
VRN, (5 year EUR | ||||||||||||
2.75%, 07/14/28 (Call 07/14/23)b,c | EUR | 200 | 238,286 | |||||||||
VRN, (5 year EUR | ||||||||||||
3.50%, 02/15/27 (Call 02/15/22)b,c | EUR | 200 | 247,254 | |||||||||
VRN, (5 year EUR | ||||||||||||
5.00%, 11/14/23 (Call 11/14/18)b,c | EUR | 100 | 121,475 | |||||||||
Campofrio Food Group SA | ||||||||||||
3.38%, 03/15/22 (Call 03/15/18)c | EUR | 80 | 95,687 | |||||||||
Cellnex Telecom SA | ||||||||||||
2.38%, 01/16/24 (Call 10/16/23)c | EUR | 100 | 121,484 | |||||||||
2.88%, 04/18/25 (Call 01/18/25)c | EUR | 100 | 123,668 | |||||||||
3.13%, 07/27/22c | EUR | 100 | 128,535 | |||||||||
Cirsa Funding Luxembourg SA | ||||||||||||
5.88%, 05/15/23 (Call 05/15/18)c | EUR | 100 | 122,711 | |||||||||
Codere Finance 2 Luxembourg SA | ||||||||||||
6.75%, 11/01/21 (Call 10/31/18)c | EUR | 100 | 121,584 | |||||||||
eDreams ODIGEO SA | ||||||||||||
8.50%, 08/01/21 (Call 08/01/18)c | EUR | 98 | 123,280 | |||||||||
Gestamp Funding Luxembourg SA | ||||||||||||
3.50%, 05/15/23 (Call 05/15/19)c | EUR | 100 | 121,989 | |||||||||
Grifols SA | ||||||||||||
3.20%, 05/01/25 (Call 05/01/20)c | EUR | 200 | 236,576 | |||||||||
Grupo Antolin Dutch BV | ||||||||||||
5.13%, 06/30/22 (Call 06/30/18)c | EUR | 100 | 122,874 | |||||||||
Grupo Isolux Corsan SA | ||||||||||||
0.25%, 12/30/21 (Call 11/30/17)e,f | EUR | — | 1 | |||||||||
3.00%, 12/30/21 (Call 11/30/17)e,f | EUR | 28 | 493 |
46 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® US & INTL HIGH YIELD CORP BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||||||
Grupo-Antolin Irausa SA | ||||||||||||
3.25%, 04/30/24 (Call 04/30/20)c | EUR | 100 | $ | 120,898 | ||||||||
Ibercaja Banco SA | ||||||||||||
VRN, (5 year EUR | ||||||||||||
5.00%, 07/28/25 (Call 07/28/20)b,c | EUR | 100 | 119,282 | |||||||||
NH Hotel Group SA | ||||||||||||
3.75%, 10/01/23 (Call 10/01/19)c | EUR | 100 | 123,383 | |||||||||
Obrascon Huarte Lain SA | ||||||||||||
4.75%, 03/15/22 (Call 03/15/18)c | EUR | 100 | 115,330 | |||||||||
Repsol International Finance BV | ||||||||||||
VRN, (10 year EUR | ||||||||||||
4.50%, 03/25/75 (Call 03/25/25)b,c | EUR | 200 | 259,526 | |||||||||
|
| |||||||||||
3,420,506 | ||||||||||||
SWAZILAND — 0.05% |
| |||||||||||
Transocean Inc. | ||||||||||||
7.50%, 01/15/26 (Call 01/15/21)a | USD | 100 | 102,950 | |||||||||
|
| |||||||||||
102,950 | ||||||||||||
SWEDEN — 0.54% |
| |||||||||||
Intrum Justitia AB | ||||||||||||
2.75%, 07/15/22 (Call 07/15/19)c | EUR | 225 | 268,227 | |||||||||
3.13%, 07/15/24 (Call 07/15/20)c | EUR | 200 | 238,715 | |||||||||
Telefonaktiebolaget LM Ericsson | ||||||||||||
4.13%, 05/15/22 | USD | 175 | 176,230 | |||||||||
Series 7Y | ||||||||||||
1.88%, 03/01/24c | EUR | 100 | 114,409 | |||||||||
Unilabs Subholding AB | ||||||||||||
5.75%, 05/15/25 (Call 05/15/20)c | EUR | 100 | 120,074 | |||||||||
Verisure Holding AB | ||||||||||||
6.00%, 11/01/22 (Call 11/01/18)c | EUR | 90 | 112,951 | |||||||||
Volvo Car AB | ||||||||||||
3.25%, 05/18/21c | EUR | 100 | 126,555 | |||||||||
|
| |||||||||||
1,157,161 | ||||||||||||
SWITZERLAND — 0.30% |
| |||||||||||
Dufry Finance SCA | ||||||||||||
4.50%, 07/15/22 (Call 11/30/17)c | EUR | 100 | 120,618 | |||||||||
4.50%, 08/01/23 (Call 08/01/18)c | EUR | 100 | 123,783 | |||||||||
Dufry One BV | ||||||||||||
2.50%, 10/15/24 (Call 10/15/20)c | EUR | 125 | 148,895 | |||||||||
Selecta Group BV | ||||||||||||
6.50%, 06/15/20 (Call 11/30/17)c | EUR | 100 | 118,642 |
Security | Principal (000s) | Value | ||||||||||
SIG Combibloc Holdings SCA | ||||||||||||
7.75%, 02/15/23 (Call 02/15/18)c | EUR | 100 | $ | 122,903 | ||||||||
|
| |||||||||||
634,841 | ||||||||||||
UNITED KINGDOM — 5.01% |
| |||||||||||
Algeco Scotsman Global Finance PLC | ||||||||||||
8.50%, 10/15/18 (Call 12/01/17)a | USD | 200 | 196,000 | |||||||||
Alliance Automotive Finance PLC | ||||||||||||
6.25%, 12/01/21 (Call 11/02/17)c | EUR | 100 | 120,237 | |||||||||
Amigo Luxembourg SA | ||||||||||||
7.63%, 01/15/24 (Call 01/15/20)c | GBP | 100 | 139,813 | |||||||||
Arqiva Broadcast Finance PLC | ||||||||||||
9.50%, 03/31/20 (Call 03/31/18)c | GBP | 100 | 139,951 | |||||||||
Ashtead Capital Inc. | ||||||||||||
4.38%, 08/15/27 (Call 08/15/22)a | USD | 200 | 202,735 | |||||||||
Boparan Finance PLC | ||||||||||||
5.50%, 07/15/21 (Call 11/10/17)c | GBP | 100 | 125,455 | |||||||||
Cabot Financial Luxembourg SA | ||||||||||||
7.50%, 10/01/23 (Call 10/01/19)c | GBP | 100 | 145,461 | |||||||||
CNH Industrial Finance Europe SA | ||||||||||||
1.38%, 05/23/22 (Call 02/23/22)c | EUR | 100 | 120,707 | |||||||||
1.75%, 09/12/25 (Call 06/12/25)c | EUR | 100 | 120,842 | |||||||||
2.88%, 05/17/23c | EUR | 100 | 129,802 | |||||||||
CNH Industrial NV | ||||||||||||
4.50%, 08/15/23 | USD | 75 | 79,367 | |||||||||
EC Finance PLC | ||||||||||||
5.13%, 07/15/21 (Call 11/02/17)c | EUR | 100 | 119,449 | |||||||||
Fiat Chrysler Automobiles NV | ||||||||||||
3.75%, 03/29/24c | EUR | 100 | 128,129 | |||||||||
4.50%, 04/15/20 | USD | 200 | 207,811 | |||||||||
5.25%, 04/15/23d | USD | 200 | 212,191 | |||||||||
Heathrow Finance PLC | ||||||||||||
3.88%, 03/01/27c | GBP | 100 | 131,369 | |||||||||
Iceland Bondco PLC | ||||||||||||
4.63%, 03/15/25c | GBP | 100 | 128,653 | |||||||||
IDH Finance PLC | ||||||||||||
6.25%, 08/15/22 (Call 08/15/18)c | GBP | 100 | 123,550 | |||||||||
Ineos Finance PLC | ||||||||||||
4.00%, 05/01/23 (Call 05/01/18)c | EUR | 100 | 120,436 | |||||||||
Inmarsat Finance PLC | ||||||||||||
4.88%, 05/15/22 (Call 12/01/17)a | USD | 300 | 306,060 | |||||||||
International Personal Finance PLC | ||||||||||||
5.75%, 04/07/21c | EUR | 100 | 108,832 |
SCHEDULESOF INVESTMENTS | 47 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® US & INTL HIGH YIELD CORP BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||||||
Iron Mountain Europe PLC | ||||||||||||
6.13%, 09/15/22 (Call 11/10/17)c | GBP | 100 | $ | 138,577 | ||||||||
Jaguar Land Rover Automotive PLC | ||||||||||||
2.20%, 01/15/24c | EUR | 100 | 118,400 | |||||||||
2.75%, 01/24/21c | GBP | 100 | 134,809 | |||||||||
3.50%, 03/15/20 (Call 12/15/19)a | USD | 200 | 201,596 | |||||||||
3.88%, 03/01/23c | GBP | 100 | 139,028 | |||||||||
4.13%, 12/15/18a | USD | 200 | 204,000 | |||||||||
Jerrold Finco PLC | ||||||||||||
6.25%, 09/15/21 (Call 09/15/18)c | GBP | 100 | 138,935 | |||||||||
Lecta SA | ||||||||||||
6.50%, 08/01/23 (Call 08/01/19)c | EUR | 100 | 123,234 | |||||||||
Merlin Entertainments PLC | ||||||||||||
2.75%, 03/15/22 (Call 12/15/21)c | EUR | 100 | 122,043 | |||||||||
Miller Homes Group Holdings PLC | ||||||||||||
5.50%, 10/15/24 (Call 10/15/20)c | GBP | 100 | 136,792 | |||||||||
Nemean Bondco PLC | ||||||||||||
7.38%, 02/01/24 (Call 02/01/20)c | GBP | 100 | 126,062 | |||||||||
New Look Secured Issuer PLC | ||||||||||||
6.50%, 07/01/22 (Call 06/24/18)c | GBP | 100 | 80,041 | |||||||||
Noble Holding International Ltd. | ||||||||||||
7.75%, 01/15/24 (Call 10/15/23) | USD | 155 | 138,353 | |||||||||
Ocado Group PLC | ||||||||||||
4.00%, 06/15/24 (Call 06/15/20)c | GBP | 100 | 130,126 | |||||||||
Pizzaexpress Financing 2 PLC | ||||||||||||
6.63%, 08/01/21 (Call 11/10/17)c | GBP | 100 | 129,074 | |||||||||
Premier Foods Finance PLC | ||||||||||||
6.50%, 03/15/21 (Call 11/30/17)c | GBP | 100 | 135,650 | |||||||||
Royal Bank of Scotland Group PLC | ||||||||||||
5.13%, 05/28/24d | USD | 400 | 427,363 | |||||||||
6.00%, 12/19/23 | USD | 375 | 417,589 | |||||||||
6.10%, 06/10/23 | USD | 175 | 194,613 | |||||||||
6.13%, 12/15/22 | USD | 400 | 443,965 | |||||||||
VRN, (5 year EUR | ||||||||||||
3.63%, 03/25/24 (Call 03/25/19)b,c | EUR | 200 | 241,140 | |||||||||
Stonegate Pub Co. Financing PLC | ||||||||||||
4.88%, 03/15/22 (Call 03/15/19)c | GBP | 150 | 201,385 | |||||||||
Tesco Corporate Treasury | ||||||||||||
1.38%, 07/01/19c | EUR | 100 | 119,164 | |||||||||
2.13%, 11/12/20 (Call 08/12/20)c | EUR | 200 | 245,880 | |||||||||
2.50%, 07/01/24c | EUR | 200 | 251,148 |
Security | Principal (000s) | Value | ||||||||||
Tesco PLC | ||||||||||||
6.13%, 02/24/22 | GBP | 100 | $ | 153,625 | ||||||||
Thomas Cook Finance PLC | ||||||||||||
6.75%, 06/15/21 (Call 01/15/18)c | EUR | 100 | 121,697 | |||||||||
Thomas Cook Group PLC | ||||||||||||
6.25%, 06/15/22 (Call 06/15/19)c | EUR | 100 | 127,289 | |||||||||
Travelex Financing PLC | ||||||||||||
8.00%, 05/15/22 (Call 05/15/20)c | EUR | 100 | 119,157 | |||||||||
Travis Perkins PLC | ||||||||||||
4.38%, 09/15/21c | GBP | 100 | 140,016 | |||||||||
Virgin Media Finance PLC | ||||||||||||
4.50%, 01/15/25 (Call 01/15/20)c | EUR | 100 | 123,054 | |||||||||
5.75%, 01/15/25 (Call 01/15/20)a | USD | 200 | 207,019 | |||||||||
6.38%, 04/15/23 (Call 04/15/18)a | USD | 200 | 209,000 | |||||||||
Virgin Media Receivables Financing Notes I DAC | ||||||||||||
5.50%, 09/15/24 (Call 09/15/19)c | GBP | 100 | 138,181 | |||||||||
Series SEP | ||||||||||||
5.50%, 09/15/24 (Call 09/15/19)c | GBP | 200 | 276,420 | |||||||||
Virgin Media Secured Finance PLC | ||||||||||||
4.88%, 01/15/27 (Call 01/15/21)c | GBP | 100 | 137,907 | |||||||||
5.00%, 04/15/27 (Call 04/15/22)c | GBP | 100 | 137,936 | |||||||||
5.25%, 01/15/26 (Call 01/15/20)a,d | USD | 200 | 207,540 | |||||||||
5.50%, 01/15/25 (Call 01/15/19)c | GBP | 90 | 125,867 | |||||||||
5.50%, 08/15/26 (Call 08/15/21)a | USD | 200 | 209,476 | |||||||||
6.25%, 03/28/29 (Call 01/15/21)c | GBP | 100 | 144,778 | |||||||||
Viridian Group FinanceCo PLC/Viridian Power and Energy | ||||||||||||
4.00%, 09/15/25 (Call 09/15/20)c | EUR | 150 | 176,149 | |||||||||
Worldpay Finance PLC | ||||||||||||
3.75%, 11/15/22 (Call 08/15/22)c | EUR | 100 | 129,515 | |||||||||
|
| |||||||||||
10,730,443 | ||||||||||||
UNITED STATES — 64.20% |
| |||||||||||
Acadia Healthcare Co. Inc. | ||||||||||||
5.63%, 02/15/23 (Call 02/15/18) | USD | 150 | 153,916 | |||||||||
Adient Global Holdings Ltd. | ||||||||||||
3.50%, 08/15/24 (Call 05/15/24)c | EUR | 200 | 245,885 | |||||||||
ADT Corp. (The) | ||||||||||||
3.50%, 07/15/22 | USD | 200 | 199,385 | |||||||||
4.13%, 06/15/23 | USD | 100 | 101,625 | |||||||||
6.25%, 10/15/21 | USD | 175 | 194,054 | |||||||||
AECOM | ||||||||||||
5.13%, 03/15/27 (Call 12/15/26) | USD | 175 | 180,131 |
48 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® US & INTL HIGH YIELD CORP BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||||||
5.75%, 10/15/22 (Call 12/01/17) | USD | 125 | $ | 130,938 | ||||||||
5.88%, 10/15/24 (Call 07/15/24) | USD | 150 | 165,712 | |||||||||
AES Corp./VA | ||||||||||||
4.88%, 05/15/23 (Call 05/15/18) | USD | 200 | 204,673 | |||||||||
5.13%, 09/01/27 (Call 09/01/22) | USD | 70 | 71,815 | |||||||||
5.50%, 03/15/24 (Call 03/15/19) | USD | 150 | 156,522 | |||||||||
5.50%, 04/15/25 (Call 04/15/20)d | USD | 150 | 158,135 | |||||||||
6.00%, 05/15/26 (Call 05/15/21) | USD | 25 | 26,943 | |||||||||
7.38%, 07/01/21 (Call 06/01/21) | USD | 175 | 199,062 | |||||||||
Aircastle Ltd. | ||||||||||||
4.13%, 05/01/24 (Call 02/01/24)d | USD | 75 | 76,594 | |||||||||
4.63%, 12/15/18d | USD | 75 | 76,969 | |||||||||
5.00%, 04/01/23 | USD | 100 | 106,080 | |||||||||
5.13%, 03/15/21 | USD | 75 | 79,609 | |||||||||
5.50%, 02/15/22 | USD | 100 | 107,487 | |||||||||
6.25%, 12/01/19d | USD | 100 | 107,250 | |||||||||
AK Steel Corp. | ||||||||||||
7.00%, 03/15/27 (Call 03/15/22)d | USD | 75 | 74,786 | |||||||||
7.63%, 10/01/21 (Call 12/01/17)d | USD | 75 | 77,802 | |||||||||
Albertsons Companies LLC/Safeway Inc./New Albertson’s Inc./Albertson’s LLC | ||||||||||||
5.75%, 03/15/25 (Call 09/15/19) | USD | 220 | 193,812 | |||||||||
6.63%, 06/15/24 (Call 06/15/19)d | USD | 210 | 196,602 | |||||||||
Alcoa Nederland Holding BV | ||||||||||||
6.75%, 09/30/24 (Call 09/30/19)a | USD | 200 | 220,640 | |||||||||
Alere Inc. | ||||||||||||
6.50%, 06/15/20 (Call 11/02/17) | USD | 100 | 101,531 | |||||||||
7.25%, 07/01/18 (Call 11/02/17) | USD | 50 | 50,000 | |||||||||
Aleris International Inc. | ||||||||||||
7.88%, 11/01/20 (Call 12/01/17) | USD | 50 | 49,914 | |||||||||
9.50%, 04/01/21 (Call 04/01/18)a | USD | 195 | 207,621 | |||||||||
Allegheny Technologies Inc. | ||||||||||||
5.95%, 01/15/21 (Call 10/15/20)d | USD | 100 | 103,018 | |||||||||
7.88%, 08/15/23 (Call 05/15/23)d | USD | 75 | 82,219 | |||||||||
Allison Transmission Inc. | ||||||||||||
4.75%, 10/01/27 (Call 10/01/22)a | USD | 75 | 75,750 | |||||||||
5.00%, 10/01/24 (Call 10/01/19)a,d | USD | 175 | 182,077 | |||||||||
Ally Financial Inc. | ||||||||||||
3.25%, 11/05/18 | USD | 100 | 100,755 | |||||||||
3.50%, 01/27/19d | USD | 200 | 202,440 | |||||||||
3.75%, 11/18/19 | USD | 200 | 204,007 | |||||||||
4.13%, 03/30/20 | USD | 100 | 103,375 |
Security | Principal (000s) | Value | ||||||||||
4.13%, 02/13/22 | USD | 125 | $ | 129,666 | ||||||||
4.25%, 04/15/21 | USD | 150 | 156,516 | |||||||||
4.63%, 05/19/22 | USD | 75 | 79,158 | |||||||||
4.63%, 03/30/25d | USD | 100 | 106,321 | |||||||||
5.13%, 09/30/24 | USD | 125 | 136,875 | |||||||||
5.75%, 11/20/25 (Call 10/20/25)d | USD | 180 | 199,125 | |||||||||
7.50%, 09/15/20 | USD | 25 | 28,148 | |||||||||
8.00%, 12/31/18 | USD | 150 | 159,094 | |||||||||
8.00%, 03/15/20 | USD | 100 | 112,313 | |||||||||
Altice U.S. Finance I Corp. | ||||||||||||
5.38%, 07/15/23 (Call 07/15/18)a | USD | 200 | 208,773 | |||||||||
5.50%, 05/15/26 (Call 05/15/21)a | USD | 200 | 207,738 | |||||||||
AMC Entertainment Holdings Inc. | ||||||||||||
5.75%, 06/15/25 (Call 06/15/20) | USD | 175 | 170,844 | |||||||||
5.88%, 11/15/26 (Call 11/15/21)d | USD | 90 | 88,008 | |||||||||
6.13%, 05/15/27 (Call 05/15/22)d | USD | 50 | 49,442 | |||||||||
6.38%, 11/15/24 (Call 11/15/19) | GBP | 100 | 136,165 | |||||||||
AMC Networks Inc. | ||||||||||||
4.75%, 12/15/22 (Call 12/15/17) | USD | 100 | 102,625 | |||||||||
4.75%, 08/01/25 (Call 08/01/21) | USD | 170 | 169,787 | |||||||||
5.00%, 04/01/24 (Call 04/01/20) | USD | 160 | 163,000 | |||||||||
American Airlines Group Inc. | ||||||||||||
4.63%, 03/01/20a | USD | 100 | 103,250 | |||||||||
5.50%, 10/01/19a | USD | 100 | 104,138 | |||||||||
American Axle & Manufacturing Inc. | ||||||||||||
6.25%, 03/15/21 (Call 12/01/17)d | USD | 25 | 25,669 | |||||||||
6.25%, 04/01/25 (Call 04/01/20)a,d | USD | 110 | 112,518 | |||||||||
6.50%, 04/01/27 (Call 04/01/22)a,d | USD | 75 | 76,594 | |||||||||
6.63%, 10/15/22 (Call 12/01/17)d | USD | 150 | 155,123 | |||||||||
AmeriGas Partners LP/AmeriGas Finance Corp. | ||||||||||||
5.50%, 05/20/25 (Call 02/20/25) | USD | 125 | 127,665 | |||||||||
5.63%, 05/20/24 (Call 03/20/24)d | USD | 95 | 100,344 | |||||||||
5.75%, 05/20/27 (Call 02/20/27) | USD | 100 | 102,375 | |||||||||
5.88%, 08/20/26 (Call 05/20/26) | USD | 145 | 150,438 | |||||||||
Andeavor Logistics LP/Tesoro Logistics Finance Corp. | ||||||||||||
5.25%, 01/15/25 (Call 01/15/21) | USD | 175 | 187,814 | |||||||||
5.50%, 10/15/19 (Call 09/15/19) | USD | 100 | 105,075 | |||||||||
5.88%, 10/01/20 (Call 12/01/17)d | USD | 50 | 50,834 | |||||||||
6.13%, 10/15/21 (Call 11/16/17) | USD | 100 | 103,250 | |||||||||
6.25%, 10/15/22 (Call 10/15/18) | USD | 175 | 186,156 | |||||||||
6.38%, 05/01/24 (Call 05/01/19) | USD | 75 | 81,964 |
SCHEDULESOF INVESTMENTS | 49 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® US & INTL HIGH YIELD CORP BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||||||
Anixter Inc. | ||||||||||||
5.13%, 10/01/21 | USD | 50 | $ | 53,438 | ||||||||
Antero Resources Corp. | ||||||||||||
5.00%, 03/01/25 (Call 03/01/20) | USD | 125 | 127,102 | |||||||||
5.13%, 12/01/22 (Call 12/01/17) | USD | 200 | 204,879 | |||||||||
5.38%, 11/01/21 (Call 12/01/17)d | USD | 125 | 128,122 | |||||||||
5.63%, 06/01/23 (Call 06/01/18)d | USD | 125 | 130,938 | |||||||||
APX Group Inc. | ||||||||||||
6.38%, 12/01/19 (Call 12/01/17) | USD | 48 | 48,840 | |||||||||
7.63%, 09/01/23 (Call 09/01/19) | USD | 58 | 61,045 | |||||||||
7.88%, 12/01/22 (Call 12/01/18) | USD | 100 | 108,000 | |||||||||
8.75%, 12/01/20 (Call 12/01/17)d | USD | 175 | 178,878 | |||||||||
Aramark International Finance Sarl | ||||||||||||
3.13%, 04/01/25 (Call 04/01/20)c | EUR | 100 | 121,581 | |||||||||
Aramark Services Inc. | ||||||||||||
4.75%, 06/01/26 (Call 06/01/21) | USD | 125 | 130,766 | |||||||||
5.00%, 04/01/25 (Call 04/01/20)a | USD | 75 | 79,950 | |||||||||
5.13%, 01/15/24 (Call 01/15/19) | USD | 75 | 79,406 | |||||||||
Arconic Inc. | ||||||||||||
5.13%, 10/01/24 (Call 07/01/24) | USD | 225 | 241,057 | |||||||||
5.40%, 04/15/21 (Call 01/15/21) | USD | 250 | 267,812 | |||||||||
5.87%, 02/23/22 | USD | 100 | 109,153 | |||||||||
6.15%, 08/15/20 | USD | 200 | 217,411 | |||||||||
Ascent Resources Utica Holdings LLC/ARU Finance Corp. | ||||||||||||
10.00%, 04/01/22 (Call 04/01/20)a,d | USD | 275 | 298,375 | |||||||||
Ashland LLC | ||||||||||||
4.75%, 08/15/22 (Call 05/15/22) | USD | 200 | 210,896 | |||||||||
Avantor Inc. | ||||||||||||
4.75%, 10/01/24 (Call 10/01/20)c | EUR | 100 | 118,626 | |||||||||
6.00%, 10/01/24 (Call 10/01/20)a | USD | 260 | 264,686 | |||||||||
9.00%, 10/01/25 (Call 10/01/20)a,d | USD | 350 | 353,587 | |||||||||
Avis Budget Car Rental LLC/Avis Budget Finance Inc. | ||||||||||||
5.13%, 06/01/22 (Call 12/01/17)a,d | USD | 75 | 75,609 | |||||||||
5.50%, 04/01/23 (Call 04/01/18)d | USD | 125 | 126,869 | |||||||||
Avis Budget Finance PLC | ||||||||||||
4.13%, 11/15/24 (Call 11/15/19)c | EUR | 100 | 118,852 | |||||||||
Avon International Operations Inc. | ||||||||||||
7.88%, 08/15/22 (Call 08/15/19)a | USD | 100 | 101,513 | |||||||||
Avon Products Inc. | ||||||||||||
6.60%, 03/15/20 | USD | 75 | 73,858 | |||||||||
7.00%, 03/15/23 | USD | 75 | 62,438 |
Security | Principal (000s) | Value | ||||||||||
Axalta Coating Systems Dutch Holding B BV | ||||||||||||
3.75%, 01/15/25 (Call 01/15/20)c | EUR | 125 | $ | 156,185 | ||||||||
B&G Foods Inc. | ||||||||||||
4.63%, 06/01/21 (Call 12/01/17) | USD | 100 | 101,846 | |||||||||
5.25%, 04/01/25 (Call 04/01/20) | USD | 90 | 91,776 | |||||||||
Ball Corp. | ||||||||||||
3.50%, 12/15/20 | EUR | 100 | 127,858 | |||||||||
4.00%, 11/15/23 | USD | 175 | 180,031 | |||||||||
4.38%, 12/15/20 | USD | 150 | 157,192 | |||||||||
4.38%, 12/15/23 | EUR | 100 | 133,576 | |||||||||
5.00%, 03/15/22 | USD | 200 | 215,325 | |||||||||
5.25%, 07/01/25 | USD | 175 | 192,281 | |||||||||
Beacon Escrow Corp. | ||||||||||||
4.88%, 11/01/25 (Call 11/01/20)a,g | USD | 210 | 212,562 | |||||||||
Beazer Homes USA Inc. | ||||||||||||
5.88%, 10/15/27 (Call 10/15/22)a | USD | 14 | 13,942 | |||||||||
8.75%, 03/15/22 (Call 03/15/19) | USD | 85 | 93,917 | |||||||||
Belden Inc. | ||||||||||||
3.38%, 07/15/27 (Call 07/15/22)c | EUR | 100 | 118,879 | |||||||||
5.50%, 04/15/23 (Call 04/15/18)c | EUR | 100 | 122,308 | |||||||||
Berry Global Inc. | ||||||||||||
5.13%, 07/15/23 (Call 07/15/18)d | USD | 150 | 157,154 | |||||||||
5.50%, 05/15/22 (Call 12/01/17) | USD | 50 | 52,000 | |||||||||
6.00%, 10/15/22 (Call 10/15/18) | USD | 40 | 42,344 | |||||||||
Blue Cube Spinco Inc. | ||||||||||||
9.75%, 10/15/23 (Call 10/15/20) | USD | 100 | 119,652 | |||||||||
10.00%, 10/15/25 (Call 10/15/20) | USD | 75 | 91,098 | |||||||||
BlueLine Rental Finance | ||||||||||||
9.25%, 03/15/24 (Call 03/15/20)a,d | USD | 200 | 217,000 | |||||||||
BMC Software Finance Inc. | ||||||||||||
8.13%, 07/15/21 (Call 12/01/17)a | USD | 275 | 281,832 | |||||||||
Boyd Gaming Corp. | ||||||||||||
6.38%, 04/01/26 (Call 04/01/21)d | USD | 125 | 136,849 | |||||||||
6.88%, 05/15/23 (Call 05/15/18)d | USD | 125 | 134,219 | |||||||||
Brand Industrial Services Inc. | ||||||||||||
8.50%, 07/15/25 (Call 07/15/20)a | USD | 200 | 211,500 | |||||||||
Builders FirstSource Inc. | ||||||||||||
5.63%, 09/01/24 (Call 09/01/19)a | USD | 150 | 158,233 | |||||||||
BWAY Holding Co. |
| |||||||||||
5.50%, 04/15/24 (Call 04/15/20)a | USD | 325 | 338,812 | |||||||||
7.25%, 04/15/25 (Call 04/15/20)a,d | USD | 225 | 233,153 |
50 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® US & INTL HIGH YIELD CORP BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||||||
Cablevision Systems Corp. | ||||||||||||
5.88%, 09/15/22d | USD | 150 | $ | 154,183 | ||||||||
8.00%, 04/15/20 | USD | 75 | 82,793 | |||||||||
Caesars Entertainment Resort Properties LLC/Caesars Entertainment Resort Properties | ||||||||||||
8.00%, 10/01/20 (Call 12/01/17) | USD | 75 | 77,063 | |||||||||
11.00%, 10/01/21 (Call 12/01/17) | USD | 100 | 106,042 | |||||||||
CalAtlantic Group Inc. | ||||||||||||
5.25%, 06/01/26 (Call 12/01/25) | USD | 75 | 79,969 | |||||||||
5.88%, 11/15/24 (Call 05/15/24) | USD | 75 | 83,184 | |||||||||
8.38%, 01/15/21d | USD | 100 | 116,375 | |||||||||
California Resources Corp. | ||||||||||||
8.00%, 12/15/22 (Call 12/15/18)a | USD | 380 | 250,325 | |||||||||
Calpine Corp. | ||||||||||||
5.25%, 06/01/26 (Call 06/01/21)a | USD | 150 | 149,790 | |||||||||
5.38%, 01/15/23 (Call 10/15/18)d | USD | 225 | 218,531 | |||||||||
5.50%, 02/01/24 (Call 02/01/19)d | USD | 100 | 95,791 | |||||||||
5.75%, 01/15/25 (Call 10/15/19)d | USD | 250 | 236,850 | |||||||||
5.88%, 01/15/24 (Call 11/01/18)a,d | USD | 75 | 77,625 | |||||||||
6.00%, 01/15/22 (Call 12/01/17)a,d | USD | 175 | 180,611 | |||||||||
Calumet Specialty Products Partners LP/Calumet Finance Corp. | ||||||||||||
6.50%, 04/15/21 (Call 12/01/17) | USD | 175 | 171,321 | |||||||||
11.50%, 01/15/21 (Call 04/15/18)a | USD | 75 | 86,270 | |||||||||
Carrizo Oil & Gas Inc. | ||||||||||||
6.25%, 04/15/23 (Call 04/15/18)d | USD | 130 | 132,090 | |||||||||
7.50%, 09/15/20 (Call 12/01/17)d | USD | 25 | 25,456 | |||||||||
Catalent Pharma Solutions Inc. | ||||||||||||
4.75%, 12/15/24 (Call 12/15/19)c | EUR | 100 | 125,629 | |||||||||
CBS Radio Inc. | ||||||||||||
7.25%, 11/01/24 (Call 11/01/19)a,d | USD | 100 | 104,982 | |||||||||
CCO Holdings LLC/CCO Holdings Capital Corp. | ||||||||||||
5.00%, 02/01/28 (Call 08/01/22)a | USD | 410 | 406,043 | |||||||||
5.13%, 02/15/23 (Call 02/15/18) | USD | 150 | 155,362 | |||||||||
5.13%, 05/01/23 (Call 05/01/18)a | USD | 225 | 234,562 | |||||||||
5.13%, 05/01/27 (Call 05/01/22)a | USD | 575 | 580,031 | |||||||||
5.25%, 03/15/21 (Call 12/01/17)d | USD | 50 | 51,207 | |||||||||
5.25%, 09/30/22 (Call 12/01/17) | USD | 300 | 309,000 | |||||||||
5.38%, 05/01/25 (Call 05/01/20)a | USD | 150 | 155,104 | |||||||||
5.50%, 05/01/26 (Call 05/01/21)a | USD | 275 | 281,733 |
Security | Principal (000s) | Value | ||||||||||
5.75%, 09/01/23 (Call 03/01/18) | USD | 50 | $ | 51,710 | ||||||||
5.75%, 01/15/24 (Call 07/15/18) | USD | 175 | 181,903 | |||||||||
5.75%, 02/15/26 (Call 02/15/21)a | USD | 475 | 496,612 | |||||||||
5.88%, 04/01/24 (Call 04/01/19)a,d | USD | 300 | 318,995 | |||||||||
5.88%, 05/01/27 (Call 05/01/21)a | USD | 125 | 130,489 | |||||||||
CDK Global Inc. | ||||||||||||
4.88%, 06/01/27 (Call 06/01/22)a | USD | 105 | 109,397 | |||||||||
5.00%, 10/15/24 (Call 07/15/24) | USD | 100 | 106,895 | |||||||||
CDW LLC/CDW Finance Corp. | ||||||||||||
5.00%, 09/01/23 (Call 03/01/18) | USD | 100 | 104,333 | |||||||||
5.00%, 09/01/25 (Call 03/01/20) | USD | 180 | 188,100 | |||||||||
5.50%, 12/01/24 (Call 06/01/24) | USD | 75 | 82,969 | |||||||||
Centene Corp. | ||||||||||||
4.75%, 05/15/22 (Call 05/15/19) | USD | 175 | 182,797 | |||||||||
4.75%, 01/15/25 (Call 01/15/20) | USD | 185 | 190,819 | |||||||||
5.63%, 02/15/21 (Call 02/15/18) | USD | 280 | 290,500 | |||||||||
6.13%, 02/15/24 (Call 02/15/19) | USD | 225 | 241,794 | |||||||||
CenturyLink Inc. | ||||||||||||
5.63%, 04/01/25 (Call 01/01/25)d | USD | 100 | 97,057 | |||||||||
5.80%, 03/15/22 | USD | 250 | 254,062 | |||||||||
6.45%, 06/15/21 | USD | 225 | 236,250 | |||||||||
Series V | ||||||||||||
5.63%, 04/01/20 | USD | 225 | 234,476 | |||||||||
Series W | ||||||||||||
6.75%, 12/01/23 | USD | 125 | 129,777 | |||||||||
Series Y | ||||||||||||
7.50%, 04/01/24 (Call 01/01/24)d | USD | 175 | 185,721 | |||||||||
Cequel Communications Holdings I LLC/Cequel Capital Corp. | ||||||||||||
5.13%, 12/15/21 (Call 12/01/17)a | USD | 250 | 255,075 | |||||||||
6.38%, 09/15/20 (Call 12/01/17)a | USD | 140 | 142,594 | |||||||||
7.75%, 07/15/25 (Call 07/15/20)a | USD | 200 | 218,339 | |||||||||
CF Industries Inc. | ||||||||||||
3.45%, 06/01/23d | USD | 100 | 98,594 | |||||||||
7.13%, 05/01/20 | USD | 200 | 220,000 | |||||||||
Change Healthcare Holdings LLC/Change Healthcare Finance Inc. | ||||||||||||
5.75%, 03/01/25 (Call 03/01/20)a,d | USD | 165 | 168,712 | |||||||||
Chemours Co. (The) | ||||||||||||
5.38%, 05/15/27 (Call 02/15/27) | USD | 75 | 79,838 | |||||||||
6.13%, 05/15/23 (Call 05/15/18) | EUR | 100 | 124,468 | |||||||||
6.63%, 05/15/23 (Call 05/15/18) | USD | 200 | 212,500 | |||||||||
7.00%, 05/15/25 (Call 05/15/20)d | USD | 200 | 223,158 |
SCHEDULESOF INVESTMENTS | 51 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® US & INTL HIGH YIELD CORP BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||||||
Cheniere Corpus Christi Holdings LLC | ||||||||||||
5.13%, 06/30/27 (Call 01/01/27)a | USD | 305 | $ | 314,246 | ||||||||
5.88%, 03/31/25 (Call 10/02/24)d | USD | 230 | 249,262 | |||||||||
7.00%, 06/30/24 (Call 01/01/24) | USD | 200 | 228,250 | |||||||||
Cheniere Energy Partners LP | ||||||||||||
5.25%, 10/01/25 (Call 10/01/20)a | USD | 200 | 206,000 | |||||||||
Chesapeake Energy Corp. | ||||||||||||
4.88%, 04/15/22 (Call 12/01/17)d | USD | 75 | 69,563 | |||||||||
6.13%, 02/15/21d | USD | 75 | 75,750 | |||||||||
6.63%, 08/15/20 | USD | 75 | 77,401 | |||||||||
8.00%, 12/15/22 (Call 12/15/18)a | USD | 220 | 237,050 | |||||||||
8.00%, 01/15/25 (Call 01/15/20)a,d | USD | 160 | 159,564 | |||||||||
8.00%, 06/15/27 (Call 06/15/22)a,d | USD | 235 | 227,362 | |||||||||
CHS/Community Health Systems Inc. | ||||||||||||
5.13%, 08/01/21 (Call 12/01/17)d | USD | 175 | 169,846 | |||||||||
6.25%, 03/31/23 (Call 03/31/20) | USD | 555 | 534,187 | |||||||||
6.88%, 02/01/22 (Call 02/01/18)d | USD | 525 | 381,281 | |||||||||
7.13%, 07/15/20 (Call 12/01/17)d | USD | 250 | 216,875 | |||||||||
8.00%, 11/15/19 (Call 12/01/17)d | USD | 350 | 332,500 | |||||||||
Cinemark USA Inc. | ||||||||||||
4.88%, 06/01/23 (Call 06/01/18) | USD | 150 | 152,438 | |||||||||
5.13%, 12/15/22 (Call 12/15/17)d | USD | 75 | 76,791 | |||||||||
CIT Group Inc. | ||||||||||||
3.88%, 02/19/19 | USD | 150 | 152,250 | |||||||||
5.00%, 08/15/22 | USD | 200 | 215,231 | |||||||||
5.00%, 08/01/23 | USD | 100 | 108,073 | |||||||||
5.38%, 05/15/20 | USD | 200 | 213,705 | |||||||||
Citgo Holding Inc. | ||||||||||||
10.75%, 02/15/20a | USD | 225 | 242,859 | |||||||||
Claire’s Stores Inc. |
| |||||||||||
9.00%, 03/15/19 (Call 12/01/17)a | USD | 100 | 61,516 | |||||||||
Clean Harbors Inc. | ||||||||||||
5.13%, 06/01/21 (Call 12/01/17) | USD | 200 | 202,606 | |||||||||
5.25%, 08/01/20 (Call 12/01/17) | USD | 40 | 40,530 | |||||||||
Clear Channel Worldwide Holdings Inc. | ||||||||||||
6.50%, 11/15/22 (Call 12/01/17) | USD | 100 | 103,000 | |||||||||
6.50%, 11/15/22 (Call 12/01/17)d | USD | 400 | 413,500 | |||||||||
Series B | ||||||||||||
7.63%, 03/15/20 (Call 12/01/17) | USD | 300 | 300,000 |
Security | Principal (000s) | Value | ||||||||||
Cleveland-Cliffs Inc. | ||||||||||||
5.75%, 03/01/25 (Call 03/01/20)a | USD | 210 | $ | 203,700 | ||||||||
CNH Industrial Finance Europe SA | ||||||||||||
2.75%, 03/18/19c | EUR | 100 | 120,947 | |||||||||
2.88%, 09/27/21c | EUR | 100 | 128,589 | |||||||||
Colfax Corp. | ||||||||||||
3.25%, 05/15/25 (Call 05/15/20)c | EUR | 125 | 152,416 | |||||||||
CommScope Inc. | ||||||||||||
5.00%, 06/15/21 (Call 12/01/17)a | USD | 100 | 102,221 | |||||||||
5.50%, 06/15/24 (Call 06/15/19)a | USD | 125 | 130,385 | |||||||||
CommScope Technologies LLC | ||||||||||||
5.00%, 03/15/27 (Call 03/15/22)a | USD | 200 | 195,042 | |||||||||
6.00%, 06/15/25 (Call 06/15/20)a | USD | 230 | 243,225 | |||||||||
CONSOL Energy Inc. | ||||||||||||
5.88%, 04/15/22 (Call 12/01/17)d | USD | 300 | 307,080 | |||||||||
8.00%, 04/01/23 (Call 04/01/18) | USD | 100 | 107,083 | |||||||||
Continental Resources Inc./OK | ||||||||||||
3.80%, 06/01/24 (Call 03/01/24)d | USD | 150 | 145,857 | |||||||||
4.50%, 04/15/23 (Call 01/15/23) | USD | 300 | 303,577 | |||||||||
5.00%, 09/15/22 (Call 12/01/17)d | USD | 325 | 329,062 | |||||||||
Covanta Holding Corp. | ||||||||||||
5.88%, 03/01/24 (Call 03/01/19)d | USD | 75 | 74,813 | |||||||||
5.88%, 07/01/25 (Call 07/01/20) | USD | 50 | 49,500 | |||||||||
6.38%, 10/01/22 (Call 12/01/17) | USD | 75 | 77,048 | |||||||||
CRC Escrow Issuer LLC/CRC Finco Inc. | ||||||||||||
5.25%, 10/15/25 (Call 10/15/20)a,g | USD | 300 | 301,875 | |||||||||
Crestwood Midstream Partners LP/Crestwood Midstream Finance Corp. | ||||||||||||
5.75%, 04/01/25 (Call 04/01/20) | USD | 100 | 102,500 | |||||||||
6.25%, 04/01/23 (Call 04/01/18)d | USD | 125 | 130,161 | |||||||||
Crown Americas LLC/Crown Americas Capital Corp. IV | ||||||||||||
4.50%, 01/15/23 | USD | 225 | 233,966 | |||||||||
Crown Americas LLC/Crown Americas Capital Corp. V | ||||||||||||
4.25%, 09/30/26 (Call 03/31/26) | USD | 50 | 50,063 | |||||||||
Crown European Holdings SA | ||||||||||||
2.63%, 09/30/24 (Call 03/31/24)c | EUR | 100 | 120,813 | |||||||||
3.38%, 05/15/25 (Call 11/15/24)c | EUR | 100 | 124,174 | |||||||||
4.00%, 07/15/22 (Call 04/15/22)c | EUR | 100 | 130,673 |
52 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® US & INTL HIGH YIELD CORP BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||||||
CrownRock LP/CrownRock Finance Inc. | ||||||||||||
5.63%, 10/15/25 (Call 10/15/20)a | USD | 175 | $ | 177,625 | ||||||||
CSC Holdings LLC | ||||||||||||
5.25%, 06/01/24 | USD | 125 | 124,556 | |||||||||
5.50%, 04/15/27 (Call 04/15/22)a,d | USD | 200 | 205,802 | |||||||||
6.75%, 11/15/21 | USD | 175 | 192,533 | |||||||||
8.63%, 02/15/19 | USD | 75 | 80,344 | |||||||||
10.13%, 01/15/23 (Call 01/15/19)a | USD | 400 | 456,598 | |||||||||
10.88%, 10/15/25 (Call 10/15/20)a | USD | 336 | 411,782 | |||||||||
Dana Financing Luxembourg Sarl | ||||||||||||
5.75%, 04/15/25 (Call 04/15/20)a | USD | 75 | 79,477 | |||||||||
Dana Inc. | ||||||||||||
5.50%, 12/15/24 (Call 12/15/19)d | USD | 75 | 79,183 | |||||||||
Darling Global Finance BV | ||||||||||||
4.75%, 05/30/22 (Call 05/30/18)c | EUR | 100 | 121,717 | |||||||||
DaVita Inc. | ||||||||||||
5.00%, 05/01/25 (Call 05/01/20) | USD | 320 | 315,829 | |||||||||
5.13%, 07/15/24 (Call 07/15/19)d | USD | 275 | 276,564 | |||||||||
5.75%, 08/15/22 (Call 12/01/17) | USD | 200 | 205,891 | |||||||||
DCP Midstream Operating LP | ||||||||||||
3.88%, 03/15/23 (Call 12/15/22)d | USD | 100 | 98,864 | |||||||||
4.75%, 09/30/21 (Call 06/30/21)a | USD | 50 | 51,307 | |||||||||
5.35%, 03/15/20a | USD | 150 | 156,040 | |||||||||
VRN, (3 mo. LIBOR | ||||||||||||
5.85%, 05/21/43 (Call 05/21/23)a,b | USD | 125 | 118,906 | |||||||||
Dell Inc. | ||||||||||||
4.63%, 04/01/21d | USD | 75 | 77,738 | |||||||||
5.88%, 06/15/19 | USD | 150 | 157,012 | |||||||||
Dell International LLC/EMC Corp. | ||||||||||||
5.88%, 06/15/21 (Call 06/15/18)a,d | USD | 275 | 287,327 | |||||||||
7.13%, 06/15/24 (Call 06/15/19)a,d | USD | 250 | 275,547 | |||||||||
Denbury Resources Inc. | ||||||||||||
4.63%, 07/15/23 (Call 01/15/18) | USD | 125 | 71,250 | |||||||||
5.50%, 05/01/22 (Call 12/01/17) | USD | 125 | 77,500 | |||||||||
9.00%, 05/15/21 (Call 12/15/18)a,d | USD | 100 | 97,425 | |||||||||
Diamond BC BV | ||||||||||||
5.63%, 08/15/25 (Call 08/15/20)c | EUR | 100 | 120,572 | |||||||||
Diamond Offshore Drilling Inc. | ||||||||||||
7.88%, 08/15/25 (Call 05/15/25)d | USD | 80 | 85,109 | |||||||||
Diamond Resorts International Inc. |
| |||||||||||
7.75%, 09/01/23 (Call 09/01/19)a | USD | 100 | 108,153 | |||||||||
10.75%, 09/01/24 (Call 09/01/19)a,d | USD | 100 | 107,175 |
Security | Principal (000s) | Value | ||||||||||
Diamondback Energy Inc. | ||||||||||||
4.75%, 11/01/24 (Call 11/01/19)d | USD | 150 | $ | 153,000 | ||||||||
5.38%, 05/31/25 (Call 05/31/20) | USD | 60 | 62,256 | |||||||||
DISH DBS Corp. | ||||||||||||
5.00%, 03/15/23d | USD | 250 | 242,214 | |||||||||
5.13%, 05/01/20 | USD | 175 | 179,276 | |||||||||
5.88%, 07/15/22d | USD | 400 | 403,197 | |||||||||
5.88%, 11/15/24d | USD | 350 | 350,437 | |||||||||
6.75%, 06/01/21 | USD | 300 | 315,000 | |||||||||
7.75%, 07/01/26 | USD | 350 | 383,250 | |||||||||
7.88%, 09/01/19 | USD | 250 | 270,125 | |||||||||
DJO Finco Inc./DJO Finance LLC/DJO Finance Corp. | ||||||||||||
8.13%, 06/15/21 (Call 06/15/18)a | USD | 150 | 142,717 | |||||||||
Dollar Tree Inc. | ||||||||||||
5.25%, 03/01/20 (Call 12/01/17) | USD | 150 | 153,212 | |||||||||
5.75%, 03/01/23 (Call 03/01/18) | USD | 400 | 420,103 | |||||||||
DPL Inc. | ||||||||||||
7.25%, 10/15/21 (Call 07/15/21)d | USD | 50 | 55,200 | |||||||||
Dynegy Inc. | ||||||||||||
5.88%, 06/01/23 (Call 06/01/18) | USD | 100 | 103,185 | |||||||||
7.38%, 11/01/22 (Call 11/01/18) | USD | 275 | 295,281 | |||||||||
7.63%, 11/01/24 (Call 11/01/19)d | USD | 225 | 245,812 | |||||||||
8.00%, 01/15/25 (Call 01/15/20)a,d | USD | 150 | 164,437 | |||||||||
8.13%, 01/30/26 (Call 07/30/20)a | USD | 150 | 166,406 | |||||||||
Edgewell Personal Care Co. | ||||||||||||
4.70%, 05/19/21 | USD | 150 | 158,106 | |||||||||
4.70%, 05/24/22d | USD | 50 | 53,088 | |||||||||
Eldorado Resorts Inc. | ||||||||||||
6.00%, 04/01/25 (Call 04/01/20) | USD | 110 | 116,325 | |||||||||
EMC Corp. | ||||||||||||
2.65%, 06/01/20 | USD | 375 | 370,303 | |||||||||
3.38%, 06/01/23 (Call 03/01/23) | USD | 200 | 192,683 | |||||||||
Endo Dac/Endo Finance LLC/Endo Finco Inc. | ||||||||||||
6.00%, 07/15/23 (Call 07/15/18)a | USD | 200 | 162,000 | |||||||||
6.00%, 02/01/25 (Call 02/01/20)a | USD | 200 | 158,036 | |||||||||
Endo Finance LLC | ||||||||||||
5.75%, 01/15/22 (Call 12/01/17)a | USD | 125 | 109,427 | |||||||||
Endo Finance LLC/Endo Finco Inc. | ||||||||||||
5.38%, 01/15/23 (Call 12/01/17)a,d | USD | 200 | 160,898 | |||||||||
Energy Transfer Equity LP | ||||||||||||
4.25%, 03/15/23 (Call 12/15/22) | USD | 175 | 178,064 | |||||||||
5.50%, 06/01/27 (Call 03/01/27) | USD | 175 | 185,105 |
SCHEDULESOF INVESTMENTS | 53 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® US & INTL HIGH YIELD CORP BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||||||
5.88%, 01/15/24 (Call 10/15/23) | USD | 200 | $ | 217,375 | ||||||||
7.50%, 10/15/20 | USD | 200 | 225,000 | |||||||||
Ensco PLC | ||||||||||||
4.50%, 10/01/24 (Call 07/01/24)d | USD | 100 | 81,916 | |||||||||
5.20%, 03/15/25 (Call 12/15/24) | USD | 75 | 62,941 | |||||||||
Envision Healthcare Corp. | ||||||||||||
5.13%, 07/01/22 (Call 12/01/17)a | USD | 50 | 50,734 | |||||||||
5.63%, 07/15/22 (Call 12/01/17) | USD | 225 | 229,641 | |||||||||
6.25%, 12/01/24 (Call 12/01/19)a,d | USD | 135 | 140,888 | |||||||||
EP Energy LLC/Everest Acquisition Finance Inc. | ||||||||||||
6.38%, 06/15/23 (Call 06/15/18) | USD | 75 | 44,344 | |||||||||
8.00%, 11/29/24 (Call 11/30/19)a,d | USD | 75 | 76,144 | |||||||||
8.00%, 02/15/25 (Call 02/15/20)a,d | USD | 180 | 133,200 | |||||||||
9.38%, 05/01/20 (Call 12/01/17) | USD | 250 | 210,547 | |||||||||
Equinix Inc. | ||||||||||||
2.88%, 10/01/25 (Call 10/01/20) | EUR | 150 | 179,159 | |||||||||
5.38%, 01/01/22 (Call 01/01/18) | USD | 180 | 188,294 | |||||||||
5.38%, 04/01/23 (Call 04/01/18) | USD | 180 | 186,244 | |||||||||
5.38%, 05/15/27 (Call 05/15/22) | USD | 230 | 246,962 | |||||||||
5.75%, 01/01/25 (Call 01/01/20) | USD | 150 | 160,672 | |||||||||
5.88%, 01/15/26 (Call 01/15/21) | USD | 175 | 189,656 | |||||||||
ESH Hospitality Inc. | ||||||||||||
5.25%, 05/01/25 (Call 05/01/20)a | USD | 255 | 263,606 | |||||||||
Exela Intermediate LLC/Exela Finance Inc. | ||||||||||||
10.00%, 07/15/23 (Call 07/15/20)a | USD | 200 | 191,571 | |||||||||
Federal-Mogul Holdings LLC | ||||||||||||
4.88%, 04/15/22 (Call 04/15/19)c | EUR | 175 | 208,057 | |||||||||
Ferrellgas LP/Ferrellgas Finance Corp. | ||||||||||||
6.50%, 05/01/21 (Call 12/01/17)d | USD | 100 | 95,000 | |||||||||
6.75%, 01/15/22 (Call 12/01/17)d | USD | 100 | 94,750 | |||||||||
6.75%, 06/15/23 (Call 06/15/19)d | USD | 75 | 69,938 | |||||||||
Fifth Third Bancorp. | ||||||||||||
VRN, (3 mo. LIBOR | ||||||||||||
5.10%, (Call 06/30/23)b,h | USD | 100 | 102,375 | |||||||||
First Data Corp. | ||||||||||||
5.00%, 01/15/24 (Call 01/15/19)a | USD | 290 | 301,600 | |||||||||
5.38%, 08/15/23 (Call 08/15/18)a | USD | 200 | 208,297 | |||||||||
5.75%, 01/15/24 (Call 01/15/19)a | USD | 385 | 402,238 | |||||||||
7.00%, 12/01/23 (Call 12/01/18)a | USD | 575 | 615,288 |
Security | Principal (000s) | Value | ||||||||||
First Quality Finance Co. Inc. | ||||||||||||
4.63%, 05/15/21 (Call 12/01/17)a | USD | 150 | $ | 151,333 | ||||||||
5.00%, 07/01/25 (Call 07/01/20)a | USD | 45 | 46,197 | |||||||||
Freeport-McMoRan Inc. | ||||||||||||
3.10%, 03/15/20 | USD | 181 | 181,679 | |||||||||
3.55%, 03/01/22 (Call 12/01/21) | USD | 325 | 320,951 | |||||||||
3.88%, 03/15/23 (Call 12/15/22)d | USD | 350 | 345,187 | |||||||||
4.00%, 11/14/21 | USD | 100 | 100,658 | |||||||||
4.55%, 11/14/24 (Call 08/14/24)d | USD | 125 | 124,751 | |||||||||
6.50%, 11/15/20 (Call 12/01/17) | USD | 150 | 152,893 | |||||||||
6.88%, 02/15/23 (Call 02/15/20) | USD | 150 | 163,604 | |||||||||
Frontier Communications Corp. | ||||||||||||
6.25%, 09/15/21 (Call 06/15/21)d | USD | 125 | 102,417 | |||||||||
6.88%, 01/15/25 (Call 10/15/24)d | USD | 150 | 111,111 | |||||||||
7.13%, 03/15/19 | USD | 50 | 50,112 | |||||||||
7.13%, 01/15/23 | USD | 150 | 114,865 | |||||||||
7.63%, 04/15/24 | USD | 100 | 76,313 | |||||||||
8.50%, 04/15/20 | USD | 150 | 147,938 | |||||||||
8.75%, 04/15/22 | USD | 75 | 61,875 | |||||||||
9.25%, 07/01/21 | USD | 150 | 133,576 | |||||||||
10.50%, 09/15/22 (Call 06/15/22) | USD | 375 | 327,802 | |||||||||
11.00%, 09/15/25 (Call 06/15/25) | USD | 625 | 528,906 | |||||||||
Gates Global LLC/Gates Global Co. | ||||||||||||
6.00%, 07/15/22 (Call 11/16/17)a,d | USD | 175 | 180,031 | |||||||||
Genesis Energy LP/Genesis Energy Finance Corp. | ||||||||||||
6.00%, 05/15/23 (Call 05/15/18) | USD | 50 | 50,215 | |||||||||
6.50%, 10/01/25 (Call 10/01/20) | USD | 110 | 111,368 | |||||||||
6.75%, 08/01/22 (Call 08/01/18) | USD | 150 | 155,250 | |||||||||
Genworth Holdings Inc. | ||||||||||||
4.80%, 02/15/24 | USD | 50 | 42,563 | |||||||||
4.90%, 08/15/23 | USD | 75 | 63,797 | |||||||||
7.20%, 02/15/21 | USD | 49 | 46,713 | |||||||||
7.63%, 09/24/21 | USD | 150 | 144,521 | |||||||||
7.70%, 06/15/20d | USD | 50 | 49,105 | |||||||||
GLP Capital LP/GLP Financing II Inc. | ||||||||||||
4.38%, 11/01/18 (Call 08/01/18) | USD | 100 | 101,025 | |||||||||
4.38%, 04/15/21 | USD | 50 | 52,241 | |||||||||
4.88%, 11/01/20 (Call 08/01/20) | USD | 175 | 184,438 | |||||||||
5.38%, 11/01/23 (Call 08/01/23) | USD | 100 | 108,750 | |||||||||
5.38%, 04/15/26 | USD | 175 | 189,219 |
54 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® US & INTL HIGH YIELD CORP BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||||||
Golden Nugget Inc. | ||||||||||||
6.75%, 10/15/24 (Call 10/15/19)a | USD | 250 | $ | 253,945 | ||||||||
8.75%, 10/01/25 (Call 10/01/20)a | USD | 150 | 154,142 | |||||||||
Goodyear Dunlop Tires Europe BV | ||||||||||||
3.75%, 12/15/23 (Call 12/15/18)c | EUR | 100 | 122,066 | |||||||||
Goodyear Tire & Rubber Co. (The) | ||||||||||||
4.88%, 03/15/27 (Call 12/15/26)d | USD | 125 | 127,031 | |||||||||
5.00%, 05/31/26 (Call 05/31/21)d | USD | 150 | 153,562 | |||||||||
5.13%, 11/15/23 (Call 11/15/18) | USD | 175 | 180,250 | |||||||||
Gray Television Inc. | ||||||||||||
5.13%, 10/15/24 (Call 10/15/19)a,d | USD | 100 | 99,720 | |||||||||
5.88%, 07/15/26 (Call 07/15/21)a,d | USD | 105 | 107,408 | |||||||||
Gulfport Energy Corp. | ||||||||||||
6.00%, 10/15/24 (Call 10/15/19) | USD | 75 | 75,422 | |||||||||
6.38%, 05/15/25 (Call 05/15/20)d | USD | 135 | 136,493 | |||||||||
6.38%, 01/15/26 (Call 01/15/21)a | USD | 70 | 70,613 | |||||||||
Hanesbrands Finance Luxembourg SCA | ||||||||||||
3.50%, 06/15/24 (Call 03/15/24)c | EUR | 100 | 125,911 | |||||||||
Hanesbrands Inc. | ||||||||||||
4.63%, 05/15/24 (Call 02/15/24)a,d | USD | 175 | 179,758 | |||||||||
4.88%, 05/15/26 (Call 02/15/26)a | USD | 125 | 128,594 | |||||||||
Harland Clarke Holdings Corp. | ||||||||||||
8.38%, 08/15/22 (Call 02/15/19)a | USD | 140 | 147,175 | |||||||||
9.25%, 03/01/21 (Call 12/01/17)a | USD | 125 | 127,502 | |||||||||
HCA Healthcare Inc. | ||||||||||||
6.25%, 02/15/21 | USD | 175 | 188,096 | |||||||||
HCA Inc. | ||||||||||||
3.75%, 03/15/19 | USD | 250 | 253,878 | |||||||||
4.25%, 10/15/19 | USD | 150 | 154,372 | |||||||||
4.50%, 02/15/27 (Call 08/15/26) | USD | 180 | 181,394 | |||||||||
4.75%, 05/01/23 | USD | 175 | 183,190 | |||||||||
5.00%, 03/15/24 | USD | 300 | 315,924 | |||||||||
5.25%, 04/15/25 | USD | 300 | 319,875 | |||||||||
5.25%, 06/15/26 (Call 12/15/25) | USD | 290 | 307,562 | |||||||||
5.38%, 02/01/25 | USD | 475 | 488,841 | |||||||||
5.88%, 03/15/22 | USD | 200 | 218,432 | |||||||||
5.88%, 05/01/23d | USD | 200 | 213,668 | |||||||||
5.88%, 02/15/26 (Call 08/15/25)d | USD | 325 | 341,565 | |||||||||
6.50%, 02/15/20 | USD | 500 | 538,651 | |||||||||
7.50%, 02/15/22d | USD | 325 | 368,875 | |||||||||
HD Supply Inc. | ||||||||||||
5.75%, 04/15/24 (Call 04/15/19)a | USD | 200 | 215,750 |
Security | Principal (000s) | Value | ||||||||||
HealthSouth Corp. | ||||||||||||
5.75%, 11/01/24 (Call 12/01/17) | USD | 175 | $ | 179,000 | ||||||||
Herc Rentals Inc. | ||||||||||||
7.50%, 06/01/22 (Call 06/01/19)a | USD | 80 | 86,584 | |||||||||
7.75%, 06/01/24 (Call 06/01/19)a,d | USD | 80 | 87,610 | |||||||||
Hertz Corp. (The) | ||||||||||||
5.50%, 10/15/24 (Call 10/15/19)a,d | USD | 125 | 112,715 | |||||||||
5.88%, 10/15/20 (Call 12/01/17)d | USD | 125 | 124,103 | |||||||||
6.25%, 10/15/22 (Call 12/01/17)d | USD | 100 | 95,750 | |||||||||
6.75%, 04/15/19 (Call 12/01/17) | USD | 104 | 104,325 | |||||||||
7.38%, 01/15/21 (Call 12/01/17)d | USD | 100 | 100,583 | |||||||||
7.63%, 06/01/22 (Call 06/01/19)a,d | USD | 200 | 208,540 | |||||||||
Hertz Holdings Netherlands BV | ||||||||||||
4.38%, 01/15/19c | EUR | 100 | 118,105 | |||||||||
Hexion Inc. | ||||||||||||
6.63%, 04/15/20 (Call 12/01/17) | USD | 275 | 244,750 | |||||||||
10.38%, 02/01/22 (Call 02/01/19)a,d | USD | 105 | 98,555 | |||||||||
Hexion Inc./Hexion Nova Scotia Finance ULC | ||||||||||||
9.00%, 11/15/20 (Call 12/01/17) | USD | 100 | 71,067 | |||||||||
Hilcorp Energy I LP/Hilcorp Finance Co. | ||||||||||||
5.00%, 12/01/24 (Call 06/01/19)a | USD | 100 | 99,215 | |||||||||
5.75%, 10/01/25 (Call 04/01/20)a | USD | 100 | 102,071 | |||||||||
Hilton Domestic Operating Co. Inc. | ||||||||||||
4.25%, 09/01/24 (Call 09/01/19) | USD | 175 | 178,597 | |||||||||
Hilton Worldwide Finance LLC/Hilton Worldwide Finance Corp. | ||||||||||||
4.63%, 04/01/25 (Call 04/01/20) | USD | 170 | 175,171 | |||||||||
4.88%, 04/01/27 (Call 04/01/22) | USD | 75 | 78,863 | |||||||||
Hologic Inc. | ||||||||||||
5.25%, 07/15/22 (Call 07/15/18)a | USD | 200 | 208,876 | |||||||||
Howard Hughes Corp. (The) | ||||||||||||
5.38%, 03/15/25 (Call 03/15/20)a | USD | 175 | 179,812 | |||||||||
HRG Group Inc. | ||||||||||||
7.75%, 01/15/22 (Call 12/01/17) | USD | 175 | 182,962 | |||||||||
7.88%, 07/15/19 (Call 12/01/17) | USD | 50 | 50,552 | |||||||||
HUB International Ltd. | ||||||||||||
7.88%, 10/01/21 (Call 12/01/17)a | USD | 200 | 208,000 | |||||||||
Hughes Satellite Systems Corp. | ||||||||||||
5.25%, 08/01/26 | USD | 135 | 137,880 | |||||||||
6.50%, 06/15/19 | USD | 140 | 148,066 | |||||||||
6.63%, 08/01/26 | USD | 140 | 148,050 | |||||||||
7.63%, 06/15/21 | USD | 175 | 196,437 |
SCHEDULESOF INVESTMENTS | 55 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® US & INTL HIGH YIELD CORP BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||||||
Huntsman International LLC | ||||||||||||
4.88%, 11/15/20 (Call 08/15/20) | USD | 125 | $ | 131,042 | ||||||||
5.13%, 04/15/21 (Call 01/15/21) | EUR | 100 | 131,014 | |||||||||
5.13%, 11/15/22 (Call 08/15/22) | USD | 100 | 107,148 | |||||||||
Icahn Enterprises LP/Icahn Enterprises Finance Corp. | ||||||||||||
4.88%, 03/15/19 (Call 12/01/17) | USD | 250 | 251,037 | |||||||||
5.88%, 02/01/22 (Call 12/01/17) | USD | 250 | 257,778 | |||||||||
6.00%, 08/01/20 (Call 12/01/17) | USD | 325 | 334,898 | |||||||||
6.25%, 02/01/22 (Call 02/01/19) | USD | 125 | 130,729 | |||||||||
6.75%, 02/01/24 (Call 02/01/20) | USD | 100 | 106,036 | |||||||||
iHeartCommunications Inc. | ||||||||||||
9.00%, 12/15/19 (Call 12/01/17) | USD | 225 | 165,937 | |||||||||
9.00%, 03/01/21 (Call 12/01/17) | USD | 250 | 180,113 | |||||||||
9.00%, 09/15/22 (Call 12/01/17) | USD | 150 | 107,990 | |||||||||
10.63%, 03/15/23 (Call 03/15/18) | USD | 125 | 89,720 | |||||||||
11.25%, 03/01/21 (Call 12/01/17)a | USD | 75 | 53,063 | |||||||||
11.25%, 03/01/21 (Call 12/01/17) | USD | 100 | 72,000 | |||||||||
Infor U.S. Inc. | ||||||||||||
5.75%, 08/15/20 (Call 11/16/17)a | USD | 100 | 102,827 | |||||||||
5.75%, 05/15/22 (Call 05/15/18) | EUR | 100 | 121,263 | |||||||||
6.50%, 05/15/22 (Call 05/15/18) | USD | 300 | 312,478 | |||||||||
Ingram Micro Inc. | ||||||||||||
5.45%, 12/15/24 (Call 09/15/24)d | USD | 100 | 102,275 | |||||||||
International Game Technology PLC | ||||||||||||
4.75%, 03/05/20c | EUR | 100 | 127,745 | |||||||||
4.75%, 02/15/23 (Call 08/15/22)c | EUR | 100 | 131,191 | |||||||||
6.25%, 02/15/22 (Call 08/15/21)a | USD | 250 | 274,665 | |||||||||
6.50%, 02/15/25 (Call 08/15/24)a | USD | 200 | 225,000 | |||||||||
IPALCO Enterprises Inc. | ||||||||||||
3.45%, 07/15/20 (Call 06/15/20) | USD | 100 | 101,406 | |||||||||
3.70%, 09/01/24 (Call 07/01/24)a | USD | 80 | 80,058 | |||||||||
Iron Mountain Inc. | ||||||||||||
3.00%, 01/15/25 (Call 06/15/20)c | EUR | 100 | 118,339 | |||||||||
4.88%, 09/15/27 (Call 09/15/22)a | USD | 125 | 126,641 | |||||||||
5.75%, 08/15/24 (Call 12/01/17)d | USD | 200 | 205,750 | |||||||||
6.00%, 08/15/23 (Call 08/15/18) | USD | 150 | 157,637 | |||||||||
iStar Inc. | ||||||||||||
4.63%, 09/15/20 (Call 06/15/20) | USD | 75 | 76,517 | |||||||||
5.00%, 07/01/19 (Call 12/01/17) | USD | 100 | 101,010 | |||||||||
5.25%, 09/15/22 (Call 09/15/19) | USD | 75 | 76,875 | |||||||||
Jack Ohio Finance LLC/Jack Ohio Finance 1 Corp. | ||||||||||||
6.75%, 11/15/21 (Call 11/15/18)a,d | USD | 150 | 158,881 |
Security | Principal (000s) | Value | ||||||||||
Jaguar Holding Co. II/Pharmaceutical Product Development LLC | ||||||||||||
6.38%, 08/01/23 (Call 08/01/18)a | USD | 200 | $ | 209,167 | ||||||||
JC Penney Corp. Inc. | ||||||||||||
5.65%, 06/01/20d | USD | 75 | 65,625 | |||||||||
5.88%, 07/01/23 (Call 07/01/19)a,d | USD | 50 | 47,433 | |||||||||
8.13%, 10/01/19 | USD | 25 | 24,938 | |||||||||
Jefferies Finance LLC/JFIN Co-Issuer Corp. | ||||||||||||
6.88%, 04/15/22 (Call 12/01/17)a | USD | 200 | 202,656 | |||||||||
K Hovnanian Enterprises Inc. | ||||||||||||
10.00%, 07/15/22 (Call 07/15/19)a | USD | 75 | 82,031 | |||||||||
10.50%, 07/15/24 (Call 07/15/20)a,d | USD | 105 | 117,075 | |||||||||
KB Home | ||||||||||||
4.75%, 05/15/19 (Call 02/15/19) | USD | 75 | 76,781 | |||||||||
7.00%, 12/15/21 (Call 09/15/21)d | USD | 50 | 56,355 | |||||||||
KFC Holding Co./Pizza Hut Holdings LLC/Taco Bell of America LLC | ||||||||||||
4.75%, 06/01/27 (Call 06/01/22)a | USD | 125 | 128,281 | |||||||||
5.00%, 06/01/24 (Call 06/01/19)a | USD | 200 | 211,000 | |||||||||
5.25%, 06/01/26 (Call 06/01/21)a | USD | 200 | 212,000 | |||||||||
Kindred Healthcare Inc. | ||||||||||||
6.38%, 04/15/22 (Call 12/01/17) | USD | 100 | 92,259 | |||||||||
8.00%, 01/15/20 | USD | 125 | 126,146 | |||||||||
8.75%, 01/15/23 (Call 01/15/18)d | USD | 100 | 97,469 | |||||||||
Kinetic Concepts Inc./KCI USA Inc. | ||||||||||||
7.88%, 02/15/21 (Call 02/15/18)a | USD | 150 | 157,125 | |||||||||
12.50%, 11/01/21 (Call 05/01/19)a | USD | 75 | 83,408 | |||||||||
KLX Inc. | ||||||||||||
5.88%, 12/01/22 (Call 12/01/17)a | USD | 225 | 235,209 | |||||||||
Kronos Acquisition Holdings Inc. | ||||||||||||
9.00%, 08/15/23 (Call 08/15/18)a | USD | 165 | 157,958 | |||||||||
L Brands Inc. | ||||||||||||
5.63%, 02/15/22d | USD | 175 | 187,381 | |||||||||
5.63%, 10/15/23d | USD | 100 | 106,713 | |||||||||
6.63%, 04/01/21 | USD | 175 | 192,719 | |||||||||
7.00%, 05/01/20 | USD | 25 | 27,594 | |||||||||
8.50%, 06/15/19 | USD | 50 | 54,609 | |||||||||
Ladder Capital Finance Holdings LLLP/Ladder Capital Finance Corp. | ||||||||||||
5.25%, 10/01/25 (Call 10/01/20)a | USD | 85 | 84,637 |
56 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® US & INTL HIGH YIELD CORP BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||||||
Lamar Media Corp. | ||||||||||||
5.00%, 05/01/23 (Call 05/01/18) | USD | 150 | $ | 155,062 | ||||||||
5.38%, 01/15/24 (Call 01/15/19) | USD | 50 | 52,500 | |||||||||
5.75%, 02/01/26 (Call 02/01/21) | USD | 75 | 80,755 | |||||||||
5.88%, 02/01/22 (Call 12/01/17) | USD | 75 | 76,969 | |||||||||
Lamb Weston Holdings Inc. | ||||||||||||
4.63%, 11/01/24 (Call 11/01/21)a | USD | 150 | 156,750 | |||||||||
4.88%, 11/01/26 (Call 11/01/21)a | USD | 150 | 157,500 | |||||||||
Laredo Petroleum Inc. | ||||||||||||
5.63%, 01/15/22 (Call 12/01/17) | USD | 125 | 127,500 | |||||||||
7.38%, 05/01/22 (Call 11/29/17) | USD | 100 | 104,125 | |||||||||
Leidos Holdings Inc. | ||||||||||||
4.45%, 12/01/20 (Call 09/01/20) | USD | 50 | 52,392 | |||||||||
Lennar Corp. | ||||||||||||
4.13%, 01/15/22 (Call 10/15/21) | USD | 155 | 160,425 | |||||||||
4.50%, 06/15/19 (Call 04/16/19) | USD | 25 | 25,725 | |||||||||
4.50%, 11/15/19 (Call 08/15/19) | USD | 150 | 155,062 | |||||||||
4.50%, 04/30/24 (Call 01/31/24)d | USD | 125 | 128,712 | |||||||||
4.75%, 04/01/21 (Call 02/01/21)d | USD | 140 | 146,810 | |||||||||
4.75%, 11/15/22 (Call 08/15/22) | USD | 100 | 105,500 | |||||||||
4.75%, 05/30/25 (Call 02/28/25) | USD | 50 | 52,125 | |||||||||
4.88%, 12/15/23 (Call 09/15/23) | USD | 80 | 84,429 | |||||||||
Leucadia National Corp. | ||||||||||||
5.50%, 10/18/23 (Call 01/18/23) | USD | 125 | 134,890 | |||||||||
Level 3 Communications Inc. | ||||||||||||
5.75%, 12/01/22 (Call 12/01/17) | USD | 150 | 154,380 | |||||||||
Level 3 Financing Inc. | ||||||||||||
5.13%, 05/01/23 (Call 05/01/18) | USD | 125 | 127,859 | |||||||||
5.25%, 03/15/26 (Call 03/15/21) | USD | 130 | 134,086 | |||||||||
5.38%, 08/15/22 (Call 12/01/17) | USD | 175 | 180,299 | |||||||||
5.38%, 01/15/24 (Call 01/15/19) | USD | 175 | 181,125 | |||||||||
5.38%, 05/01/25 (Call 05/01/20)d | USD | 150 | 156,147 | |||||||||
5.63%, 02/01/23 (Call 02/01/18) | USD | 150 | 154,697 | |||||||||
6.13%, 01/15/21 (Call 12/01/17) | USD | 50 | 51,006 | |||||||||
Levi Strauss & Co. | ||||||||||||
3.38%, 03/15/27 (Call 03/15/22) | EUR | 100 | 122,509 | |||||||||
LifePoint Health Inc. | ||||||||||||
5.38%, 05/01/24 (Call 05/01/19) | USD | 75 | 75,375 | |||||||||
5.50%, 12/01/21 (Call 12/01/17) | USD | 225 | 229,781 | |||||||||
5.88%, 12/01/23 (Call 12/01/18)d | USD | 65 | 66,801 | |||||||||
LIN Television Corp. | ||||||||||||
5.88%, 11/15/22 (Call 11/15/17) | USD | 75 | 78,085 | |||||||||
LKQ Italia Bondco SpA | ||||||||||||
3.88%, 04/01/24 (Call 01/01/24)c | EUR | 100 | 128,795 |
Security | Principal (000s) | Value | ||||||||||
Mallinckrodt International | ||||||||||||
4.75%, 04/15/23d | USD | 100 | $ | 84,500 | ||||||||
Mallinckrodt International Finance SA/Mallinckrodt CB LLC | ||||||||||||
4.88%, 04/15/20 (Call 12/01/17)a | USD | 150 | 149,457 | |||||||||
5.50%, 04/15/25 (Call 04/15/20)a,d | USD | 100 | 89,520 | |||||||||
5.63%, 10/15/23 (Call 10/15/18)a,d | USD | 150 | 139,962 | |||||||||
5.75%, 08/01/22 (Call 12/01/17)a,d | USD | 150 | 146,227 | |||||||||
MGM Growth Properties Operating Partnership LP/MGP Finance Co-Issuer Inc. | ||||||||||||
4.50%, 09/01/26 (Call 06/01/26)d | USD | 75 | 75,307 | |||||||||
5.63%, 05/01/24 (Call 02/01/24)d | USD | 200 | 215,820 | |||||||||
MGM Resorts International | ||||||||||||
4.63%, 09/01/26 (Call 06/01/26) | USD | 100 | 100,000 | |||||||||
5.25%, 03/31/20 | USD | 100 | 105,185 | |||||||||
6.00%, 03/15/23 | USD | 225 | 246,402 | |||||||||
6.63%, 12/15/21 | USD | 225 | 251,437 | |||||||||
6.75%, 10/01/20 | USD | 200 | 220,040 | |||||||||
7.75%, 03/15/22 | USD | 175 | 203,119 | |||||||||
8.63%, 02/01/19 | USD | 150 | 160,891 | |||||||||
Micron Technology Inc. | ||||||||||||
5.25%, 08/01/23 (Call 02/01/18)a | USD | 200 | 209,320 | |||||||||
5.25%, 01/15/24 (Call 05/01/18)a | USD | 100 | 105,125 | |||||||||
5.50%, 02/01/25 (Call 08/01/19) | USD | 90 | 95,695 | |||||||||
Molina Healthcare Inc. | ||||||||||||
5.38%, 11/15/22 (Call 08/15/22) | USD | 100 | 103,975 | |||||||||
MPH Acquisition Holdings LLC | ||||||||||||
7.13%, 06/01/24 (Call 06/01/19)a | USD | 250 | 268,864 | |||||||||
MPT Operating Partnership LP/MPT Finance Corp. | ||||||||||||
4.00%, 08/19/22 (Call 05/19/22) | EUR | 200 | 258,847 | |||||||||
5.00%, 10/15/27 (Call 10/15/22) | USD | 175 | 179,500 | |||||||||
5.25%, 08/01/26 (Call 08/01/21) | USD | 100 | 104,118 | |||||||||
6.38%, 03/01/24 (Call 03/01/19) | USD | 100 | 108,205 | |||||||||
MSCI Inc. | ||||||||||||
4.75%, 08/01/26 (Call 08/01/21)a | USD | 100 | 104,750 | |||||||||
5.25%, 11/15/24 (Call 11/15/19)a | USD | 125 | 132,471 | |||||||||
5.75%, 08/15/25 (Call 08/15/20)a | USD | 175 | 189,219 | |||||||||
Murphy Oil Corp. | ||||||||||||
4.00%, 06/01/22 (Call 03/01/22) | USD | 75 | 74,591 | |||||||||
4.70%, 12/01/22 (Call 09/01/22)d | USD | 100 | 100,240 |
SCHEDULESOF INVESTMENTS | 57 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® US & INTL HIGH YIELD CORP BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||||||
5.75%, 08/15/25 (Call 08/15/20)d | USD | 120 | $ | 124,064 | ||||||||
6.88%, 08/15/24 (Call 08/15/19) | USD | 100 | 107,418 | |||||||||
Murray Energy Corp. | ||||||||||||
11.25%, 04/15/21 (Call 04/15/18)a,d | USD | 150 | 82,500 | |||||||||
Nabors Industries Inc. | ||||||||||||
4.63%, 09/15/21 | USD | 100 | 96,663 | |||||||||
5.00%, 09/15/20 | USD | 150 | 151,500 | |||||||||
5.50%, 01/15/23 (Call 11/15/22)d | USD | 100 | 96,250 | |||||||||
Nationstar Mortgage LLC/Nationstar Capital Corp. | ||||||||||||
6.50%, 08/01/18 (Call 12/01/17) | USD | 50 | 50,099 | |||||||||
6.50%, 07/01/21 (Call 12/01/17) | USD | 75 | 76,149 | |||||||||
7.88%, 10/01/20 (Call 12/01/17) | USD | 50 | 51,042 | |||||||||
Navient Corp. | ||||||||||||
4.88%, 06/17/19 | USD | 200 | 205,406 | |||||||||
5.00%, 10/26/20 | USD | 150 | 154,500 | |||||||||
5.50%, 01/15/19 | USD | 200 | 206,100 | |||||||||
5.50%, 01/25/23 | USD | 175 | 176,986 | |||||||||
5.88%, 03/25/21 | USD | 50 | 52,563 | |||||||||
5.88%, 10/25/24d | USD | 100 | 101,750 | |||||||||
6.13%, 03/25/24d | USD | 175 | 179,944 | |||||||||
6.50%, 06/15/22 | USD | 100 | 106,500 | |||||||||
6.63%, 07/26/21 | USD | 150 | 160,687 | |||||||||
6.75%, 06/25/25d | USD | 100 | 104,500 | |||||||||
7.25%, 01/25/22 | USD | 125 | 136,250 | |||||||||
7.25%, 09/25/23 | USD | 50 | 54,243 | |||||||||
8.00%, 03/25/20 | USD | 275 | 303,531 | |||||||||
Navios Maritime Holdings Inc./Navios Maritime Finance II U.S. Inc. | ||||||||||||
7.38%, 01/15/22 (Call 12/04/17)a | USD | 100 | 81,875 | |||||||||
Navistar International Corp. | ||||||||||||
8.25%, 11/01/21 (Call 12/01/17) | USD | 200 | 200,780 | |||||||||
NCR Corp. | ||||||||||||
4.63%, 02/15/21 (Call 12/01/17) | USD | 150 | 152,207 | |||||||||
5.00%, 07/15/22 (Call 12/01/17)d | USD | 100 | 102,112 | |||||||||
5.88%, 12/15/21 (Call 12/15/17) | USD | 75 | 77,531 | |||||||||
6.38%, 12/15/23 (Call 12/15/18)d | USD | 100 | 106,143 | |||||||||
Neiman Marcus Group Ltd. LLC | ||||||||||||
8.00%, 10/15/21 (Call 12/01/17)a | USD | 125 | 73,750 | |||||||||
Netflix Inc. | ||||||||||||
3.63%, 05/15/27c | EUR | 200 | 238,983 | |||||||||
4.38%, 11/15/26a,d | USD | 240 | 235,036 |
Security | Principal (000s) | Value | ||||||||||
4.88%, 04/15/28a | USD | 270 | $ | 268,366 | ||||||||
5.38%, 02/01/21 | USD | 100 | 106,688 | |||||||||
5.50%, 02/15/22 | USD | 125 | 134,033 | |||||||||
5.75%, 03/01/24 | USD | 50 | 53,546 | |||||||||
5.88%, 02/15/25 | USD | 125 | 134,794 | |||||||||
Newfield Exploration Co. | ||||||||||||
5.38%, 01/01/26 (Call 10/01/25) | USD | 125 | 132,813 | |||||||||
5.63%, 07/01/24d | USD | 175 | 188,820 | |||||||||
5.75%, 01/30/22 | USD | 150 | 161,180 | |||||||||
Nexstar Broadcasting Inc. | ||||||||||||
5.63%, 08/01/24 (Call 08/01/19)a,d | USD | 125 | 128,125 | |||||||||
NextEra Energy Operating Partners LP | ||||||||||||
4.25%, 09/15/24 (Call 07/15/24)a,d | USD | 75 | 75,750 | |||||||||
4.50%, 09/15/27 (Call 06/15/27)a | USD | 75 | 75,361 | |||||||||
NGL Energy Partners LP/NGL Energy Finance Corp. | ||||||||||||
6.13%, 03/01/25 (Call 03/01/20)d | USD | 100 | 94,603 | |||||||||
7.50%, 11/01/23 (Call 11/01/19) | USD | 100 | 99,750 | |||||||||
NGPL PipeCo LLC | ||||||||||||
4.38%, 08/15/22 (Call 05/15/22)a | USD | 90 | 92,250 | |||||||||
4.88%, 08/15/27 (Call 02/15/27)a | USD | 130 | 135,040 | |||||||||
Nielsen Co. Luxembourg Sarl (The) | ||||||||||||
5.00%, 02/01/25 (Call 02/01/20)a,d | USD | 75 | 77,719 | |||||||||
5.50%, 10/01/21 (Call 12/01/17)a,d | USD | 150 | 154,500 | |||||||||
Nielsen Finance LLC/Nielsen Finance Co. | ||||||||||||
4.50%, 10/01/20 (Call 12/01/17) | USD | 75 | 76,125 | |||||||||
5.00%, 04/15/22 (Call 12/01/17)a | USD | 350 | 360,069 | |||||||||
Noble Holding International Ltd. | ||||||||||||
7.70%, 04/01/25 (Call 01/01/25) | USD | 100 | 87,250 | |||||||||
Novelis Corp. | ||||||||||||
5.88%, 09/30/26 (Call 09/30/21)a | USD | 300 | 309,186 | |||||||||
6.25%, 08/15/24 (Call 08/15/19)a | USD | 200 | 210,784 | |||||||||
NRG Energy Inc. | ||||||||||||
6.25%, 07/15/22 (Call 07/15/18) | USD | 175 | 184,187 | |||||||||
6.25%, 05/01/24 (Call 05/01/19) | USD | 125 | 132,352 | |||||||||
6.63%, 03/15/23 (Call 12/01/17) | USD | 175 | 181,125 | |||||||||
6.63%, 01/15/27 (Call 07/15/21) | USD | 225 | 239,660 | |||||||||
7.25%, 05/15/26 (Call 05/15/21)d | USD | 160 | 173,549 | |||||||||
Nuance Communications Inc. | ||||||||||||
5.38%, 08/15/20 (Call 12/01/17)a | USD | 43 | 43,742 | |||||||||
5.63%, 12/15/26 (Call 12/15/21)a | USD | 100 | 106,250 |
58 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® US & INTL HIGH YIELD CORP BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||||||
NuStar Logistics LP | ||||||||||||
4.80%, 09/01/20 | USD | 50 | $ | 51,985 | ||||||||
5.63%, 04/28/27 (Call 01/28/27)d | USD | 100 | 105,094 | |||||||||
Oasis Petroleum Inc. | ||||||||||||
6.88%, 03/15/22 (Call 12/01/17)d | USD | 200 | 205,250 | |||||||||
OI European Group BV | ||||||||||||
3.13%, 11/15/24 (Call 08/15/24)c | EUR | 200 | 243,701 | |||||||||
6.75%, 09/15/20c | EUR | 100 | 137,597 | |||||||||
Olin Corp. | ||||||||||||
5.13%, 09/15/27 (Call 03/15/22) | USD | 100 | 105,125 | |||||||||
OneMain Financial Holdings LLC | ||||||||||||
6.75%, 12/15/19 (Call 12/01/17)a | USD | 75 | 77,750 | |||||||||
7.25%, 12/15/21 (Call 12/15/17)a | USD | 125 | 129,949 | |||||||||
Ortho-Clinical Diagnostics Inc./Ortho-Clinical Diagnostics SA | ||||||||||||
6.63%, 05/15/22 (Call 12/01/17)a | USD | 250 | 251,250 | |||||||||
Outfront Media Capital LLC/Outfront Media Capital Corp. | ||||||||||||
5.25%, 02/15/22 (Call 12/01/17) | USD | 100 | 103,500 | |||||||||
5.63%, 02/15/24 (Call 02/15/19) | USD | 100 | 105,750 | |||||||||
5.88%, 03/15/25 (Call 09/15/19) | USD | 100 | 105,951 | |||||||||
Owens-Brockway Glass Container Inc. | ||||||||||||
5.00%, 01/15/22a | USD | 150 | 158,625 | |||||||||
5.88%, 08/15/23a | USD | 100 | 109,962 | |||||||||
Pacific Drilling SA | ||||||||||||
5.38%, 06/01/20 (Call 12/01/17)a,d | USD | 100 | 34,560 | |||||||||
Parsley Energy LLC/Parsley Finance Corp. | ||||||||||||
5.25%, 08/15/25 (Call 08/15/20)a | USD | 75 | 75,673 | |||||||||
5.38%, 01/15/25 (Call 01/15/20)a | USD | 85 | 86,275 | |||||||||
5.63%, 10/15/27 (Call 10/15/22)a | USD | 125 | 129,063 | |||||||||
6.25%, 06/01/24 (Call 06/01/19)a | USD | 100 | 105,903 | |||||||||
PBF Holding Co. LLC/PBF Finance Corp. | ||||||||||||
7.00%, 11/15/23 (Call 11/15/18)d | USD | 115 | 119,313 | |||||||||
7.25%, 06/15/25 (Call 06/15/20)a | USD | 125 | 129,219 | |||||||||
Peabody Energy Corp. | ||||||||||||
6.00%, 03/31/22 (Call 03/31/19)a | USD | 100 | 102,977 | |||||||||
6.38%, 03/31/25 (Call 03/31/20)a | USD | 75 | 77,181 | |||||||||
Penske Automotive Group Inc. | ||||||||||||
5.50%, 05/15/26 (Call 05/15/21) | USD | 110 | 113,300 | |||||||||
5.75%, 10/01/22 (Call 12/01/17) | USD | 100 | 103,095 |
Security | Principal (000s) | Value | ||||||||||
PetSmart Inc. | ||||||||||||
5.88%, 06/01/25 (Call 06/01/20)a,d | USD | 260 | $ | 226,637 | ||||||||
7.13%, 03/15/23 (Call 03/15/18)a,d | USD | 325 | 249,437 | |||||||||
8.88%, 06/01/25 (Call 06/01/20)a | USD | 100 | 78,725 | |||||||||
Pilgrim’s Pride Corp. | ||||||||||||
5.75%, 03/15/25 (Call 03/15/20)a | USD | 30 | 31,676 | |||||||||
5.88%, 09/30/27 (Call 09/30/22)a | USD | 135 | 140,252 | |||||||||
Platform Specialty Products Corp. | ||||||||||||
6.50%, 02/01/22 (Call 02/01/18)a,d | USD | 200 | 207,250 | |||||||||
10.38%, 05/01/21 (Call 05/01/18)a | USD | 50 | 54,215 | |||||||||
Post Holdings Inc. | ||||||||||||
5.00%, 08/15/26 (Call 08/15/21)a | USD | 300 | 301,578 | |||||||||
5.50%, 03/01/25 (Call 03/01/20)a,d | USD | 185 | 191,966 | |||||||||
5.75%, 03/01/27 (Call 03/01/22)a | USD | 275 | 286,275 | |||||||||
6.00%, 12/15/22 (Call 06/15/18)a | USD | 100 | 104,785 | |||||||||
Postmedia Network Inc. | ||||||||||||
8.25%, 07/15/21 (Call 11/30/17)a | CAD | 1 | 426 | |||||||||
Pride International LLC | ||||||||||||
6.88%, 08/15/20 | USD | 150 | 154,740 | |||||||||
Prime Security Services Borrower LLC/Prime Finance Inc. | ||||||||||||
9.25%, 05/15/23 (Call 05/15/19)a | USD | 590 | 655,431 | |||||||||
PSPC Escrow Corp. | ||||||||||||
6.00%, 02/01/23 (Call 02/01/18)c,g | EUR | 100 | 122,438 | |||||||||
PulteGroup Inc. | ||||||||||||
4.25%, 03/01/21 (Call 02/01/21) | USD | 100 | 104,000 | |||||||||
5.00%, 01/15/27 (Call 10/15/26) | USD | 125 | 131,146 | |||||||||
5.50%, 03/01/26 (Call 12/01/25) | USD | 105 | 115,106 | |||||||||
PVH Corp. | ||||||||||||
3.63%, 07/15/24 (Call 04/15/24)c | EUR | 100 | 128,648 | |||||||||
QEP Resources Inc. | ||||||||||||
5.25%, 05/01/23 (Call 02/01/23)d | USD | 100 | 98,463 | |||||||||
5.38%, 10/01/22 (Call 07/01/22) | USD | 100 | 99,313 | |||||||||
6.88%, 03/01/21d | USD | 125 | 132,803 | |||||||||
Qorvo Inc. | ||||||||||||
6.75%, 12/01/23 (Call 12/01/18) | USD | 75 | 81,246 | |||||||||
7.00%, 12/01/25 (Call 12/01/20) | USD | 100 | 114,155 | |||||||||
Quicken Loans Inc. | ||||||||||||
5.75%, 05/01/25 (Call 05/01/20)a | USD | 235 | 248,542 | |||||||||
Quintiles IMS Inc. | ||||||||||||
3.25%, 03/15/25 (Call 03/15/20)c | EUR | 200 | 241,199 | |||||||||
3.50%, 10/15/24 (Call 10/15/19)c | EUR | 200 | 244,933 | |||||||||
4.88%, 05/15/23 (Call 05/15/18)a | USD | 150 | 156,562 | |||||||||
5.00%, 10/15/26 (Call 10/15/21)a | USD | 200 | 212,500 |
SCHEDULESOF INVESTMENTS | 59 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® US & INTL HIGH YIELD CORP BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||||||
QVC Inc. | ||||||||||||
3.13%, 04/01/19 | USD | 75 | $ | 75,847 | ||||||||
4.38%, 03/15/23 | USD | 150 | 155,724 | |||||||||
4.45%, 02/15/25 (Call 11/15/24)d | USD | 50 | 51,165 | |||||||||
4.85%, 04/01/24 | USD | 125 | 131,545 | |||||||||
5.13%, 07/02/22d | USD | 100 | 107,315 | |||||||||
Rackspace Hosting Inc. | ||||||||||||
8.63%, 11/15/24 (Call 11/15/19)a,d | USD | 225 | 236,954 | |||||||||
Radian Group Inc. | ||||||||||||
4.50%, 10/01/24 (Call 07/01/24) | USD | 75 | 76,875 | |||||||||
Range Resources Corp. | ||||||||||||
4.88%, 05/15/25 (Call 02/15/25) | USD | 100 | 96,500 | |||||||||
5.00%, 08/15/22 (Call 05/15/22)d | USD | 100 | 98,875 | |||||||||
5.00%, 03/15/23 (Call 12/15/22)d | USD | 150 | 148,309 | |||||||||
5.75%, 06/01/21 (Call 03/01/21) | USD | 150 | 154,708 | |||||||||
Realogy Group LLC/Realogy Co-Issuer Corp. | ||||||||||||
4.50%, 04/15/19a | USD | 75 | 77,031 | |||||||||
4.88%, 06/01/23 (Call 03/01/23)a | USD | 100 | 102,970 | |||||||||
5.25%, 12/01/21 (Call 12/01/17)a | USD | 75 | 77,946 | |||||||||
Regal Entertainment Group | ||||||||||||
5.75%, 03/15/22 (Call 12/01/17) | USD | 125 | 129,531 | |||||||||
Reynolds Group Issuer Inc./Reynolds Group Issuer LLC | ||||||||||||
5.75%, 10/15/20 (Call 12/01/17) | USD | 400 | 407,000 | |||||||||
6.88%, 02/15/21 (Call 12/01/17) | USD | 65 | 66,348 | |||||||||
Rice Energy Inc. | ||||||||||||
6.25%, 05/01/22 (Call 11/11/17) | USD | 100 | 104,640 | |||||||||
Rite Aid Corp. | ||||||||||||
6.13%, 04/01/23 (Call 04/01/18)a,d | USD | 300 | 279,013 | |||||||||
6.75%, 06/15/21 (Call 12/01/17) | USD | 75 | 74,303 | |||||||||
9.25%, 03/15/20 (Call 12/01/17)d | USD | 50 | 50,847 | |||||||||
Rockies Express Pipeline LLC | ||||||||||||
5.63%, 04/15/20a | USD | 125 | 132,500 | |||||||||
6.00%, 01/15/19a | USD | 150 | 154,962 | |||||||||
Rowan Companies Inc. | ||||||||||||
4.88%, 06/01/22 (Call 03/01/22) | USD | 125 | 117,734 | |||||||||
7.38%, 06/15/25 (Call 03/15/25)d | USD | 100 | 100,998 | |||||||||
RR Donnelley & Sons Co. | ||||||||||||
7.88%, 03/15/21 | USD | 100 | 105,500 | |||||||||
RSP Permian Inc. | ||||||||||||
5.25%, 01/15/25 (Call 01/15/20)a | USD | 50 | 50,879 | |||||||||
6.63%, 10/01/22 (Call 12/01/17) | USD | 150 | 157,631 |
Security | Principal (000s) | Value | ||||||||||
Sabre GLBL Inc. | ||||||||||||
5.25%, 11/15/23 (Call 11/15/18)a,d | USD | 100 | $ | 104,419 | ||||||||
Sanchez Energy Corp. | ||||||||||||
6.13%, 01/15/23 (Call 07/15/18)d | USD | 175 | 146,490 | |||||||||
7.75%, 06/15/21 (Call 12/01/17)d | USD | 125 | 116,156 | |||||||||
SBA Communications Corp. | ||||||||||||
4.00%, 10/01/22 (Call 10/01/19)a | USD | 125 | 126,719 | |||||||||
4.88%, 07/15/22 (Call 12/01/17) | USD | 75 | 77,458 | |||||||||
4.88%, 09/01/24 (Call 09/01/19) | USD | 195 | 200,850 | |||||||||
Scientific Games International Inc. | ||||||||||||
7.00%, 01/01/22 (Call 01/01/18)a,d | USD | 400 | 422,500 | |||||||||
10.00%, 12/01/22 (Call 12/01/18) | USD | 425 | 468,847 | |||||||||
Sealed Air Corp. | ||||||||||||
4.50%, 09/15/23 (Call 06/15/23)c | EUR | 100 | 133,367 | |||||||||
4.88%, 12/01/22 (Call 09/01/22)a | USD | 100 | 106,135 | |||||||||
5.13%, 12/01/24 (Call 09/01/24)a | USD | 75 | 80,530 | |||||||||
5.25%, 04/01/23 (Call 01/01/23)a | USD | 50 | 53,716 | |||||||||
5.50%, 09/15/25 (Call 06/15/25)a | USD | 75 | 82,473 | |||||||||
6.50%, 12/01/20 (Call 09/01/20)a | USD | 50 | 55,292 | |||||||||
SemGroup Corp./Rose Rock Finance Corp. | ||||||||||||
5.63%, 07/15/22 (Call 11/16/17) | USD | 50 | 49,205 | |||||||||
Service Corp. International/U.S. | ||||||||||||
5.38%, 01/15/22 (Call 12/01/17) | USD | 50 | 51,375 | |||||||||
5.38%, 05/15/24 (Call 05/15/19) | USD | 150 | 158,417 | |||||||||
ServiceMaster Co. LLC (The) | ||||||||||||
5.13%, 11/15/24 (Call 11/15/19)a | USD | 175 | 180,250 | |||||||||
SESI LLC | ||||||||||||
7.13%, 12/15/21 (Call 12/01/17)d | USD | 125 | 127,712 | |||||||||
7.75%, 09/15/24 (Call 09/15/20)a | USD | 50 | 51,688 | |||||||||
Silgan Holdings Inc. | ||||||||||||
3.25%, 03/15/25 (Call 03/15/20)c | EUR | 100 | 120,924 | |||||||||
Sinclair Television Group Inc. | ||||||||||||
5.13%, 02/15/27 (Call 08/15/21)a,d | USD | 100 | 94,900 | |||||||||
5.38%, 04/01/21 (Call 11/16/17) | USD | 50 | 51,250 | |||||||||
5.63%, 08/01/24 (Call 08/01/19)a,d | USD | 100 | 101,500 | |||||||||
6.13%, 10/01/22 (Call 11/16/17)d | USD | 150 | 154,612 | |||||||||
Sirius XM Radio Inc. | ||||||||||||
3.88%, 08/01/22 (Call 08/01/20)a | USD | 120 | 122,250 | |||||||||
4.63%, 05/15/23 (Call 05/15/18)a | USD | 150 | 153,825 | |||||||||
5.00%, 08/01/27 (Call 08/01/22)a | USD | 285 | 288,206 | |||||||||
5.38%, 04/15/25 (Call 04/15/20)a | USD | 200 | 210,750 | |||||||||
5.38%, 07/15/26 (Call 07/15/21)a | USD | 175 | 183,868 | |||||||||
6.00%, 07/15/24 (Call 07/15/19)a | USD | 225 | 240,471 |
60 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® US & INTL HIGH YIELD CORP BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||||||
Six Flags Entertainment Corp. | ||||||||||||
4.88%, 07/31/24 (Call 07/31/19)a | USD | 185 | $ | 190,319 | ||||||||
5.50%, 04/15/27 (Call 04/15/22)a,d | USD | 90 | 93,851 | |||||||||
SM Energy Co. | ||||||||||||
5.00%, 01/15/24 (Call 07/15/18)d | USD | 100 | 95,360 | |||||||||
5.63%, 06/01/25 (Call 06/01/20)d | USD | 100 | 97,250 | |||||||||
6.13%, 11/15/22 (Call 11/15/18)d | USD | 100 | 101,125 | |||||||||
6.75%, 09/15/26 (Call 09/15/21)d | USD | 75 | 76,969 | |||||||||
Solera LLC/Solera Finance Inc. | ||||||||||||
10.50%, 03/01/24 (Call 03/01/19)a | USD | 330 | 375,413 | |||||||||
Southwestern Energy Co. | ||||||||||||
4.10%, 03/15/22 (Call 12/15/21)d | USD | 200 | 196,099 | |||||||||
6.70%, 01/23/25 (Call 10/23/24) | USD | 175 | 178,654 | |||||||||
7.50%, 04/01/26 (Call 04/01/21)d | USD | 100 | 103,709 | |||||||||
7.75%, 10/01/27 (Call 10/01/22) | USD | 75 | 77,792 | |||||||||
Spectrum Brands Inc. | ||||||||||||
4.00%, 10/01/26 (Call 10/01/21)c | EUR | 100 | 123,454 | |||||||||
5.75%, 07/15/25 (Call 07/15/20) | USD | 225 | 239,051 | |||||||||
6.63%, 11/15/22 (Call 12/01/17) | USD | 50 | 51,977 | |||||||||
Springleaf Finance Corp. | ||||||||||||
5.25%, 12/15/19 | USD | 125 | 129,004 | |||||||||
6.13%, 05/15/22 | USD | 200 | 211,750 | |||||||||
7.75%, 10/01/21d | USD | 125 | 140,625 | |||||||||
8.25%, 12/15/20 | USD | 175 | 197,312 | |||||||||
Sprint Communications Inc. | ||||||||||||
6.00%, 11/15/22 | USD | 375 | 393,750 | |||||||||
7.00%, 03/01/20a | USD | 200 | 217,000 | |||||||||
7.00%, 08/15/20 | USD | 300 | 323,289 | |||||||||
9.00%, 11/15/18a | USD | 275 | 291,500 | |||||||||
11.50%, 11/15/21 | USD | 200 | 249,056 | |||||||||
Sprint Corp. | ||||||||||||
7.13%, 06/15/24 | USD | 450 | 486,562 | |||||||||
7.25%, 09/15/21 | USD | 400 | 435,302 | |||||||||
7.63%, 02/15/25 (Call 11/15/24)d | USD | 250 | 275,402 | |||||||||
7.88%, 09/15/23 | USD | 775 | 866,062 | |||||||||
Standard Industries Inc./NJ | ||||||||||||
5.00%, 02/15/27 (Call 02/15/22)a | USD | 100 | 104,118 | |||||||||
5.13%, 02/15/21 (Call 02/15/18)a | USD | 100 | 103,125 | |||||||||
5.38%, 11/15/24 (Call 11/15/19)a | USD | 200 | 210,846 | |||||||||
5.50%, 02/15/23 (Call 02/15/19)a | USD | 100 | 105,538 | |||||||||
6.00%, 10/15/25 (Call 10/15/20)a,d | USD | 200 | 216,436 | |||||||||
Staples Inc. | ||||||||||||
8.50%, 09/15/25 (Call 09/15/20)a,d | USD | 180 | 158,044 |
Security | Principal (000s) | Value | ||||||||||
Steel Dynamics Inc. | ||||||||||||
5.00%, 12/15/26 (Call 12/15/21)d | USD | 125 | $ | 132,478 | ||||||||
5.13%, 10/01/21 (Call 12/01/17) | USD | 50 | 51,375 | |||||||||
5.25%, 04/15/23 (Call 04/15/18) | USD | 50 | 51,793 | |||||||||
5.50%, 10/01/24 (Call 10/01/19)d | USD | 100 | 106,727 | |||||||||
Suburban Propane Partners LP/Suburban Energy Finance Corp. | ||||||||||||
5.50%, 06/01/24 (Call 06/01/19) | USD | 100 | 99,844 | |||||||||
Sunoco LP/Sunoco Finance Corp. | ||||||||||||
5.50%, 08/01/20 (Call 11/09/17) | USD | 50 | 51,375 | |||||||||
6.25%, 04/15/21 (Call 04/15/18) | USD | 175 | 183,356 | |||||||||
6.38%, 04/01/23 (Call 04/01/18) | USD | 150 | 159,375 | |||||||||
Symantec Corp. | ||||||||||||
3.95%, 06/15/22 (Call 03/15/22) | USD | 50 | 51,395 | |||||||||
4.20%, 09/15/20d | USD | 100 | 103,729 | |||||||||
5.00%, 04/15/25 (Call 04/15/20)a | USD | 225 | 235,125 | |||||||||
T-Mobile USA Inc. | ||||||||||||
4.00%, 04/15/22 (Call 03/16/22)d | USD | 100 | 103,390 | |||||||||
5.13%, 04/15/25 (Call 04/15/20) | USD | 100 | 104,625 | |||||||||
5.38%, 04/15/27 (Call 04/15/22)d | USD | 75 | 80,841 | |||||||||
6.00%, 03/01/23 (Call 09/01/18) | USD | 225 | 236,854 | |||||||||
6.00%, 04/15/24 (Call 04/15/19) | USD | 200 | 214,000 | |||||||||
6.13%, 01/15/22 (Call 01/15/18) | USD | 200 | 207,630 | |||||||||
6.38%, 03/01/25 (Call 09/01/19) | USD | 250 | 269,571 | |||||||||
6.50%, 01/15/24 (Call 01/15/19) | USD | 175 | 186,812 | |||||||||
6.50%, 01/15/26 (Call 01/15/21)d | USD | 350 | 387,159 | |||||||||
6.63%, 04/01/23 (Call 04/01/18) | USD | 350 | 366,625 | |||||||||
6.84%, 04/28/23 (Call 04/28/18) | USD | 100 | 105,409 | |||||||||
TA MFG. Ltd. | ||||||||||||
3.63%, 04/15/23 (Call 04/15/18)c | EUR | 100 | 120,160 | |||||||||
Talen Energy Supply LLC | ||||||||||||
4.60%, 12/15/21 (Call 09/15/21) | USD | 100 | 91,250 | |||||||||
6.50%, 06/01/25 (Call 06/01/20) | USD | 100 | 87,000 | |||||||||
9.50%, 07/15/22 (Call 07/15/20)a | USD | 100 | 103,272 | |||||||||
Tallgrass Energy Partners LP/Tallgrass Energy Finance Corp. | ||||||||||||
5.50%, 09/15/24 (Call 09/15/19)a,d | USD | 50 | 51,578 | |||||||||
5.50%, 01/15/28 (Call 01/15/23)a | USD | 95 | 97,375 | |||||||||
Targa Resources Partners LP/Targa Resources Partners | ||||||||||||
4.13%, 11/15/19 (Call 12/01/17) | USD | 100 | 101,012 |
SCHEDULESOF INVESTMENTS | 61 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® US & INTL HIGH YIELD CORP BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||||||
4.25%, 11/15/23 (Call 05/15/18) | USD | 100 | $ | 99,320 | ||||||||
5.00%, 01/15/28 (Call 01/15/23)a | USD | 50 | 50,250 | |||||||||
5.13%, 02/01/25 (Call 02/01/20) | USD | 95 | 97,758 | |||||||||
5.25%, 05/01/23 (Call 12/01/17) | USD | 125 | 128,594 | |||||||||
5.38%, 02/01/27 (Call 02/01/22)d | USD | 75 | 77,906 | |||||||||
6.75%, 03/15/24 (Call 09/15/19) | USD | 150 | 161,607 | |||||||||
TEGNA Inc. | ||||||||||||
5.13%, 10/15/19 (Call 12/01/17) | USD | 67 | 68,126 | |||||||||
5.13%, 07/15/20 (Call 12/01/17) | USD | 150 | 153,828 | |||||||||
6.38%, 10/15/23 (Call 10/15/18) | USD | 75 | 79,781 | |||||||||
Tempur Sealy International Inc. | ||||||||||||
5.50%, 06/15/26 (Call 06/15/21)d | USD | 125 | 128,750 | |||||||||
5.63%, 10/15/23 (Call 10/15/18) | USD | 50 | 52,749 | |||||||||
Tenet Healthcare Corp. | ||||||||||||
4.38%, 10/01/21 | USD | 200 | 200,169 | |||||||||
4.50%, 04/01/21 | USD | 175 | 177,187 | |||||||||
4.63%, 07/15/24 (Call 07/15/20)a | USD | 475 | 467,875 | |||||||||
5.13%, 05/01/25 (Call 05/01/20)a,d | USD | 195 | 189,311 | |||||||||
5.50%, 03/01/19 | USD | 50 | 50,708 | |||||||||
6.00%, 10/01/20 | USD | 300 | 315,724 | |||||||||
6.75%, 06/15/23d | USD | 275 | 258,156 | |||||||||
7.00%, 08/01/25 (Call 08/01/20)a,d | USD | 155 | 141,429 | |||||||||
7.50%, 01/01/22 (Call 01/01/19)a | USD | 125 | 131,875 | |||||||||
8.13%, 04/01/22 | USD | 475 | 477,375 | |||||||||
TerraForm Power Operating LLC | ||||||||||||
6.38%, 02/01/23 (Call 02/01/18)a,f | USD | 175 | 183,969 | |||||||||
Tesla Inc. | ||||||||||||
5.30%, 08/15/25 (Call 08/15/20)a,d | USD | 300 | 289,500 | |||||||||
Toll Brothers Finance Corp. | ||||||||||||
4.88%, 03/15/27 (Call 12/15/26) | USD | 85 | 89,197 | |||||||||
5.88%, 02/15/22 (Call 11/15/21) | USD | 100 | 110,805 | |||||||||
TransDigm Inc. | ||||||||||||
5.50%, 10/15/20 (Call 12/01/17) | USD | 75 | 76,125 | |||||||||
6.00%, 07/15/22 (Call 12/01/17)d | USD | 200 | 207,891 | |||||||||
6.38%, 06/15/26 (Call 06/15/21)d | USD | 200 | 203,852 | |||||||||
6.50%, 07/15/24 (Call 07/15/19) | USD | 200 | 206,500 | |||||||||
6.50%, 05/15/25 (Call 05/15/20) | USD | 125 | 128,682 | |||||||||
Transocean Inc. | ||||||||||||
5.80%, 10/15/22 (Call 07/15/22)d | USD | 100 | 97,515 | |||||||||
9.00%, 07/15/23 (Call 07/15/20)a | USD | 200 | 217,500 | |||||||||
Transocean Phoenix 2 Ltd. | ||||||||||||
7.75%, 10/15/24 (Call 10/15/20)a | USD | 90 | 97,054 | |||||||||
Transocean Proteus Ltd. | ||||||||||||
6.25%, 12/01/24 (Call 12/01/20)a | USD | 95 | 99,599 |
Security | Principal (000s) | Value | ||||||||||
TreeHouse Foods Inc. | ||||||||||||
4.88%, 03/15/22 (Call 12/01/17) | USD | 50 | $ | 51,547 | ||||||||
6.00%, 02/15/24 (Call 02/15/19)a | USD | 100 | 106,958 | |||||||||
TRI Pointe Group Inc./TRI Pointe Homes Inc. | ||||||||||||
4.38%, 06/15/19 | USD | 50 | 51,169 | |||||||||
5.88%, 06/15/24 | USD | 100 | 108,250 | |||||||||
Tribune Media Co. | ||||||||||||
5.88%, 07/15/22 (Call 07/15/18)d | USD | 200 | 208,000 | |||||||||
Triumph Group Inc. | ||||||||||||
7.75%, 08/15/25 (Call 08/15/20)a,d | USD | 17 | 18,160 | |||||||||
Tronox Finance PLC | ||||||||||||
5.75%, 10/01/25 (Call 10/01/20)a,d | USD | 25 | 26,125 | |||||||||
7.50%, 03/15/22 (Call 03/15/18)a,d | USD | 150 | 157,875 | |||||||||
U.S. Steel Corp. | ||||||||||||
6.88%, 08/15/25 (Call 08/15/20) | USD | 150 | 152,638 | |||||||||
7.38%, 04/01/20 | USD | 24 | 26,103 | |||||||||
8.38%, 07/01/21 (Call 07/01/18)a | USD | 175 | 191,567 | |||||||||
Ultra Resources Inc. | ||||||||||||
6.88%, 04/15/22 (Call 04/15/19)a | USD | 125 | 126,320 | |||||||||
7.13%, 04/15/25 (Call 04/15/20)a,d | USD | 115 | 114,738 | |||||||||
United Continental Holdings Inc. | ||||||||||||
4.25%, 10/01/22 | USD | 50 | 50,188 | |||||||||
United Rentals North America Inc. | ||||||||||||
4.63%, 07/15/23 (Call 07/15/18) | USD | 125 | 130,341 | |||||||||
4.63%, 10/15/25 (Call 10/15/20)d | USD | 130 | 132,925 | |||||||||
4.88%, 01/15/28 (Call 01/15/23) | 294 | 294,735 | ||||||||||
5.50%, 07/15/25 (Call 07/15/20)d | USD | 150 | 160,536 | |||||||||
5.50%, 05/15/27 (Call 05/15/22) | USD | 180 | 192,672 | |||||||||
5.75%, 11/15/24 (Call 05/15/19) | USD | 175 | 185,570 | |||||||||
5.88%, 09/15/26 (Call 09/15/21) | USD | 150 | 163,336 | |||||||||
Uniti Group LP/Uniti Fiber Holdings Inc./CSL Capital LLC | ||||||||||||
7.13%, 12/15/24 (Call 12/15/19)a | USD | 125 | 114,375 | |||||||||
Uniti Group LP/Uniti Group Finance Inc./CSL Capital LLC | ||||||||||||
6.00%, 04/15/23 (Call 04/15/18)a | USD | 75 | 75,000 | |||||||||
8.25%, 10/15/23 (Call 04/15/19) | USD | 200 | 192,500 | |||||||||
Univision Communications Inc. | ||||||||||||
5.13%, 05/15/23 (Call 05/15/18)a | USD | 200 | 201,981 | |||||||||
5.13%, 02/15/25 (Call 02/15/20)a | USD | 275 | 273,109 | |||||||||
6.75%, 09/15/22 (Call 12/01/17)a,d | USD | 122 | 126,423 | |||||||||
Valeant Pharmaceuticals International Inc. | ||||||||||||
4.50%, 05/15/23 (Call 05/15/18)c | EUR | 225 | 221,362 |
62 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® US & INTL HIGH YIELD CORP BOND ETF
October 31, 2017
Security | Principal (000s) | Value | ||||||||||
5.38%, 03/15/20 (Call 12/01/17)a | USD | 350 | $ | 344,312 | ||||||||
5.50%, 03/01/23 (Call 03/01/18)a | USD | 250 | 210,442 | |||||||||
5.50%, 11/01/25 (Call 11/01/20)a | USD | 126 | 128,835 | |||||||||
5.88%, 05/15/23 (Call 05/15/18)a,d | USD | 525 | 443,521 | |||||||||
6.13%, 04/15/25 (Call 04/15/20)a | USD | 550 | 462,000 | |||||||||
6.38%, 10/15/20 (Call 12/01/17)a | USD | 260 | 257,709 | |||||||||
6.50%, 03/15/22 (Call 03/15/19)a | USD | 250 | 265,312 | |||||||||
6.75%, 08/15/21 (Call 12/01/17)a | USD | 100 | 96,875 | |||||||||
7.00%, 03/15/24 (Call 03/15/20)a,d | USD | 350 | 378,875 | |||||||||
7.25%, 07/15/22 (Call 12/01/17)a | USD | 50 | 48,037 | |||||||||
VeriSign Inc. | ||||||||||||
4.63%, 05/01/23 (Call 05/01/18) | USD | 200 | 206,194 | |||||||||
4.75%, 07/15/27 (Call 07/15/22)d | USD | 100 | 103,238 | |||||||||
5.25%, 04/01/25 (Call 01/01/25) | USD | 50 | 54,212 | |||||||||
Veritas U.S. Inc./Veritas | ||||||||||||
7.50%, 02/01/23 (Call 02/01/19)a | USD | 200 | 212,628 | |||||||||
Vertiv Group Corp. | ||||||||||||
9.25%, 10/15/24 (Call 10/15/19)a | USD | 150 | 164,552 | |||||||||
Viacom Inc. |
| |||||||||||
VRN, (3 mo. LIBOR | ||||||||||||
5.88%, 02/28/57 (Call 02/28/22)b,d | USD | 125 | 123,444 | |||||||||
VRN, (3 mo. LIBOR | ||||||||||||
6.25%, 02/28/57 (Call 02/28/27)b,d | USD | 100 | 98,800 | |||||||||
Voya Financial Inc. | ||||||||||||
VRN, (3 mo. LIBOR | ||||||||||||
5.65%, 05/15/53 (Call 05/15/23)b | USD | 100 | 105,750 | |||||||||
VWR Funding Inc. | ||||||||||||
4.63%, 04/15/22 (Call 04/15/18)c | EUR | 100 | 120,931 | |||||||||
Weatherford International Ltd. | ||||||||||||
4.50%, 04/15/22 (Call 01/15/22)d | USD | 105 | 94,894 | |||||||||
7.75%, 06/15/21 (Call 05/15/21) | USD | 145 | 149,441 | |||||||||
8.25%, 06/15/23 (Call 03/15/23) | USD | 120 | 120,531 | |||||||||
9.63%, 03/01/19 | USD | 100 | 106,547 | |||||||||
WellCare Health Plans Inc. | ||||||||||||
5.25%, 04/01/25 (Call 04/01/20) | USD | 235 | 247,827 | |||||||||
West Corp. | ||||||||||||
8.50%, 10/15/25 (Call 10/15/20)a | USD | 141 | 137,123 | |||||||||
Western Digital Corp. | ||||||||||||
10.50%, 04/01/24 (Call 04/01/19) | USD | 525 | 615,956 |
Security | Principal (000s) | Value | ||||||||||
Whiting Petroleum Corp. | ||||||||||||
5.00%, 03/15/19 (Call 12/15/18)d | USD | 175 | $ | 176,410 | ||||||||
5.75%, 03/15/21 (Call 12/15/20)d | USD | 150 | 150,445 | |||||||||
6.25%, 04/01/23 (Call 01/01/23) | USD | 75 | 74,795 | |||||||||
Williams Companies Inc. (The) | ||||||||||||
3.70%, 01/15/23 (Call 10/15/22) | USD | 100 | 100,812 | |||||||||
4.55%, 06/24/24 (Call 03/24/24)d | USD | 225 | 235,267 | |||||||||
Windstream Services LLC | ||||||||||||
6.38%, 08/01/23 (Call 02/01/18)d | USD | 125 | 91,211 | |||||||||
7.50%, 06/01/22 (Call 12/01/17)d | USD | 100 | 74,667 | |||||||||
7.75%, 10/15/20 (Call 12/01/17)d | USD | 100 | 89,875 | |||||||||
7.75%, 10/01/21 (Call 12/01/17)d | USD | 125 | 94,361 | |||||||||
WMG Acquisition Corp. | ||||||||||||
4.13%, 11/01/24 (Call 11/01/19)c | EUR | 100 | 123,551 | |||||||||
6.75%, 04/15/22 (Call 12/01/17)a | USD | 75 | 78,842 | |||||||||
WPX Energy Inc. | ||||||||||||
5.25%, 09/15/24 (Call 06/15/24) | USD | 150 | 150,375 | |||||||||
6.00%, 01/15/22 (Call 10/15/21) | USD | 175 | 181,897 | |||||||||
8.25%, 08/01/23 (Call 06/01/23) | USD | 75 | 84,469 | |||||||||
WR Grace & Co.-Conn | ||||||||||||
5.13%, 10/01/21a | USD | 125 | 134,233 | |||||||||
Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp. | ||||||||||||
4.25%, 05/30/23 (Call 02/28/23)a,d | USD | 75 | 77,746 | |||||||||
5.25%, 05/15/27 (Call 02/15/27)a | USD | 175 | 178,402 | |||||||||
5.50%, 03/01/25 (Call 12/01/24)a | USD | 325 | 340,979 | |||||||||
XPO Logistics Inc. | ||||||||||||
5.75%, 06/15/21 (Call 12/15/17)c | EUR | 100 | 120,222 | |||||||||
6.13%, 09/01/23 (Call 09/01/19)a,d | USD | 75 | 78,844 | |||||||||
6.50%, 06/15/22 (Call 06/15/18)a | USD | 300 | 314,541 | |||||||||
Zayo Group LLC/Zayo | ||||||||||||
5.75%, 01/15/27 (Call 01/15/22)a | USD | 280 | 294,901 | |||||||||
6.00%, 04/01/23 (Call 04/01/18) | USD | 225 | 236,704 | |||||||||
6.38%, 05/15/25 (Call 05/15/20) | USD | 155 | 166,836 | |||||||||
|
| |||||||||||
137,454,120 | ||||||||||||
|
| |||||||||||
TOTAL CORPORATE BONDS & NOTES |
| |||||||||||
(Cost: $205,295,621) | 209,951,491 |
SCHEDULESOF INVESTMENTS | 63 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® US & INTL HIGH YIELD CORP BOND ETF
October 31, 2017
Security | Shares (000s) | Value | ||||||
SHORT-TERM INVESTMENTS — 17.13% |
| |||||||
MONEY MARKET FUNDS — 17.13% |
| |||||||
BlackRock Cash Funds: Institutional, | ||||||||
1.31%i,j,k | 35,102 | $ | 35,109,498 | |||||
BlackRock Cash Funds: Treasury, | ||||||||
1.00%i,j | 1,574 | 1,574,493 | ||||||
|
| |||||||
36,683,991 | ||||||||
|
| |||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||
(Cost: $36,681,151) |
| 36,683,991 | ||||||
|
| |||||||
TOTAL INVESTMENTS | ||||||||
(Cost: $241,976,772)l | 246,635,482 | |||||||
Other Assets, Less Liabilities — (15.19)% |
| (32,532,859 | ) | |||||
|
| |||||||
NET ASSETS — 100.00% | $ | 214,102,623 | ||||||
|
|
VRN — Variable Rate Note
Currency abbreviations:
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 | Variable rate security. Security may be issued at a fixed coupon rate, which converts to a variable rate at a specified date. Rate shown is the rate in effect as of period end. |
c | This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933. |
d | All or a portion of this security represents a security on loan. See Note 1. |
e | Issuer is in default of interest payments. |
f | 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. |
g | Non-income earning security. |
h | Security is perpetual in nature with no stated maturity date. |
i | Affiliated issuer. See Schedule 1. |
j | The rate quoted is the annualized seven-day yield of the fund at period end. |
k | All or a portion of this security represents an investment of securities lending collateral. See Note 1. |
l | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $242,045,686. Net unrealized appreciation was $4,589,796, of which $7,473,377 represented gross unrealized appreciation on investments and $2,883,581 represented gross unrealized depreciation on investments. |
64 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® US & INTL HIGH YIELD CORP BOND ETF
October 31, 2017
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the year ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at 10/31/16 (000s) | Shares purchased (000s) | Shares sold (000s) | Shares held at 10/31/17 (000s) | Value at 10/31/17 | Net realized gain (loss)a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, | 21,623 | 13,479b | — | 35,102 | $ | 35,109,498 | $ | 248 | $ | 683 | $ | —c | ||||||||||||||||||||
BlackRock Cash Funds: Treasury, | 1,271 | 303b | — | 1,574 | 1,574,493 | 62 | — | 10,728 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 36,683,991 | $ | 310 | $ | 683 | $ | 10,728 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
c | Does not include income earned on the investment of securities lending cash collateral which is not direct income of the Fund and is is reflected as a component of securities lending income in the statement of operations. |
Schedule 2 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: | ||||||||||||||||
Assets: | ||||||||||||||||
Corporate bonds & notes | $ | — | $ | 209,951,491 | $ | — | $ | 209,951,491 | ||||||||
Money market funds | 36,683,991 | — | — | 36,683,991 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 36,683,991 | $ | 209,951,491 | $ | — | $ | 246,635,482 | ||||||||
|
|
|
|
|
|
|
| |||||||||
See notes to financial statements.
SCHEDULESOF INVESTMENTS | 65 |
Table of Contents
Statements of Assets and Liabilities
iSHARES®, INC.
October 31, 2017
iShares High Yield Bond ETF | iShares J.P. Morgan EM Corporate Bond ETF | iShares Bond ETF | ||||||||||
ASSETS | ||||||||||||
Investments in securities, at cost: | ||||||||||||
Unaffiliated | $ | 601,332,788 | $ | 83,175,746 | $ | 305,932,851 | ||||||
Affiliated (Note 2) | 10,476,733 | 6,035,673 | 490,410 | |||||||||
|
|
|
|
|
| |||||||
Total cost of investments in securities | $ | 611,809,521 | $ | 89,211,419 | $ | 306,423,261 | ||||||
|
|
|
|
|
| |||||||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||||||||||
Unaffiliated | $ | 607,241,133 | $ | 84,596,455 | $ | 298,810,239 | ||||||
Affiliated (Note 2) | 10,476,733 | 6,035,856 | 490,410 | |||||||||
Foreign currency, at valueb | — | — | 4,824,909 | |||||||||
Cash | 5,400 | — | — | |||||||||
Receivables: | ||||||||||||
Investment securities sold | 7,042,443 | 831,620 | 9,947,005 | |||||||||
Due from custodian (Note 4) | 5,846,544 | — | 624,791 | |||||||||
Dividends and interest | 9,304,316 | 950,650 | 5,085,851 | |||||||||
Capital shares sold | 15,553 | — | — | |||||||||
|
|
|
|
|
| |||||||
Total Assets | 639,932,122 | 92,414,581 | 319,783,205 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 14,772,256 | 1,687,831 | 10,356,423 | |||||||||
Collateral for securities on loan (Note 1) | — | 3,412,448 | — | |||||||||
Due to custodian | — | — | 4,658 | |||||||||
Deferred foreign capital gains taxes (Note 1) | 40,799 | 9,938 | 72,630 | |||||||||
Investment advisory fees (Note 2) | 251,795 | 35,774 | 132,595 | |||||||||
|
|
|
|
|
| |||||||
Total Liabilities | 15,064,850 | 5,145,991 | 10,566,306 | |||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 624,867,272 | $ | 87,268,590 | $ | 309,216,899 | ||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 635,050,096 | $ | 85,605,163 | $ | 330,123,586 | ||||||
Undistributed net investment income (accumulated net investment loss) | 1,549,867 | 238,159 | (1,874 | ) | ||||||||
Undistributed net realized gain (accumulated net realized loss) | (17,600,237 | ) | 14,314 | (13,483,575 | ) | |||||||
Net unrealized appreciation (depreciation) | 5,867,546 | 1,410,954 | (7,421,238 | ) | ||||||||
|
|
|
|
|
| |||||||
NET ASSETS | $ | 624,867,272 | $ | 87,268,590 | $ | 309,216,899 | ||||||
|
|
|
|
|
| |||||||
Shares outstandingc | 12,350,000 | 1,700,000 | 6,600,000 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share | $ | 50.60 | $ | 51.33 | $ | 46.85 | ||||||
|
|
|
|
|
|
a | Securities on loan with values of $ —, $3,293,806 and $ —, respectively. See Note 1. |
b | Cost of foreign currency: $ —, $ — and $4,920,271, respectively. |
c | $0.001 par value, number of shares authorized: 500 million, 500 million and 500 million, respectively. |
See notes to financial statements.
66 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Assets and Liabilities (Continued)
iSHARES®, INC.
October 31, 2017
iShares US & Intl High Yield Corp Bond ETF | ||||
ASSETS | ||||
Investments in securities, at cost: | ||||
Unaffiliated | $ | 205,295,621 | ||
Affiliated (Note 2) | 36,681,151 | |||
|
| |||
Total cost of investments in securities | $ | 241,976,772 | ||
|
| |||
Investments in securities, at fair value (including securities on loana) (Note 1): | ||||
Unaffiliated | $ | 209,951,491 | ||
Affiliated (Note 2) | 36,683,991 | |||
Foreign currency, at valueb | 1,579,205 | |||
Cash | 10,344 | |||
Receivables: |
| |||
Investment securities sold | 1,574,511 | |||
Dividends and interest | 3,181,045 | |||
|
| |||
Total Assets | 252,980,587 | |||
|
| |||
LIABILITIES | ||||
Payables: | ||||
Investment securities purchased | 3,698,833 | |||
Collateral for securities on loan (Note 1) | 35,106,351 | |||
Investment advisory fees (Note 2) | 72,780 | |||
|
| |||
Total Liabilities | 38,877,964 | |||
|
| |||
NET ASSETS | $ | 214,102,623 | ||
|
| |||
Net assets consist of: |
| |||
Paid-in capital | $ | 210,702,142 | ||
Undistributed net investment income | 1,939,840 | |||
Accumulated net realized loss | (3,218,961 | ) | ||
Net unrealized appreciation | 4,679,602 | |||
|
| |||
NET ASSETS | $ | 214,102,623 | ||
|
| |||
Shares outstandingc | 4,200,000 | |||
|
| |||
Net asset value per share | $ | 50.98 | ||
|
|
a | Securities on loan with a value of $33,763,311. See Note 1. |
b | Cost of foreign currency: $1,568,026. |
c | $0.001 par value, number of shares authorized: 500 million. |
See notes to financial statements.
FINANCIAL STATEMENTS | 67 |
Table of Contents
Statements of Operations
iSHARES®, INC.
Year ended October 31, 2017
iShares High Yield Bond ETF | iShares J.P. Morgan EM Corporate Bond ETF | iShares Bond ETF | ||||||||||
NET INVESTMENT INCOME | ||||||||||||
Dividends — affiliated (Note 2) | $ | 22,768 | $ | 11,668 | $ | 5,624 | ||||||
Interest — unaffiliateda | 18,300,061 | 3,192,868 | 16,485,313 | |||||||||
Securities lending income — affiliated — net (Note 2) | — | 12,688 | — | |||||||||
Miscellaneous income | — | — | 44,763 | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 18,322,829 | 3,217,224 | 16,535,700 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Investment advisory fees (Note 2) | 1,471,158 | 344,993 | 1,492,677 | |||||||||
Proxy fees | 5,492 | 1,586 | 5,351 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 1,476,650 | 346,579 | 1,498,028 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 16,846,179 | 2,870,645 | 15,037,672 | |||||||||
|
|
|
|
|
| |||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments — unaffiliatedb | 116,546 | 704,643 | (14,491,062 | ) | ||||||||
Investments — affiliated (Note 2) | — | 225 | — | |||||||||
In-kind redemptions — unaffiliated | 435,466 | 19,503 | (4,072,287 | ) | ||||||||
Foreign currency transactions | — | — | (208,296 | ) | ||||||||
Realized gain distributions from affiliated funds | 16 | 43 | 33 | |||||||||
|
|
|
|
|
| |||||||
Net realized gain (loss) | 552,028 | 724,414 | (18,771,612 | ) | ||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation on: |
| |||||||||||
Investments — unaffiliatedc | 5,173,447 | 1,272,915 | 7,714,572 | |||||||||
Investments — affiliated (Note 2) | — | 105 | — | |||||||||
Translation of assets and liabilities in foreign currencies | — | — | (319,763 | ) | ||||||||
|
|
|
|
|
| |||||||
Net change in unrealized appreciation/depreciation | 5,173,447 | 1,273,020 | 7,394,809 | |||||||||
|
|
|
|
|
| |||||||
Net realized and unrealized gain (loss) | 5,725,475 | 1,997,434 | (11,376,803 | ) | ||||||||
|
|
|
|
|
| |||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 22,571,654 | $ | 4,868,079 | $ | 3,660,869 | ||||||
|
|
|
|
|
|
a | Net of foreign withholding tax of $ —, $ — and $417,892, respectively. |
b | Net of foreign capital gains taxes of $ —, $ — and $83,830, respectively. |
c | Net of deferred foreign capital gains taxes of $40,799, $9,938 and $72,795, respectively. |
See notes to financial statements.
68 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Operations (Continued)
iSHARES®, INC.
Year ended October 31, 2017
iShares US & Intl Bond ETF | ||||
NET INVESTMENT INCOME | ||||
Dividends — affiliated (Note 2) | $ | 10,728 | ||
Interest — unaffiliated | 9,040,996 | |||
Securities lending income — affiliated — net (Note 2) | 191,478 | |||
|
| |||
Total investment income | 9,243,202 | |||
|
| |||
EXPENSES | ||||
Investment advisory fees (Note 2) | 693,810 | |||
Proxy fees | 4,063 | |||
|
| |||
Total expenses | 697,873 | |||
|
| |||
Net investment income | 8,545,329 | |||
|
| |||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||
Net realized gain (loss) from: | ||||
Investments — unaffiliated | 414,708 | |||
Investments — affiliated (Note 2) | 248 | |||
In-kind redemptions — unaffiliated | 679,954 | |||
Foreign currency transactions | 2,805 | |||
Realized gain distributions from affiliated funds | 62 | |||
|
| |||
Net realized gain | 1,097,777 | |||
|
| |||
Net change in unrealized appreciation/depreciation on: | ||||
Investments — unaffiliated | 6,256,590 | |||
Investments — affiliated (Note 2) | 683 | |||
Translation of assets and liabilities in foreign currencies | 47,711 | |||
|
| |||
Net change in unrealized appreciation/depreciation | 6,304,984 | |||
|
| |||
Net realized and unrealized gain | 7,402,761 | |||
|
| |||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 15,948,090 | ||
|
|
See notes to financial statements.
FINANCIAL STATEMENTS | 69 |
Table of Contents
Statements of Changes in Net Assets
iSHARES®, INC.
iShares Emerging Markets High Yield Bond ETF | iShares J.P. Morgan EM Corporate Bond ETF | |||||||||||||||
Year ended October 31, 2017 | Year ended October 31, 2016 | Year ended October 31, 2017 | Year ended October 31, 2016 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 16,846,179 | $ | 4,458,156 | $ | 2,870,645 | $ | 1,129,020 | ||||||||
Net realized gain (loss) | 552,028 | (9,426,759 | ) | 724,414 | (885,163 | ) | ||||||||||
Net change in unrealized appreciation/depreciation | 5,173,447 | 13,084,861 | 1,273,020 | 1,653,164 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 22,571,654 | 8,116,258 | 4,868,079 | 1,897,021 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (16,158,680 | ) | (4,977,922 | ) | (2,731,913 | ) | (1,132,294 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | (16,158,680 | ) | (4,977,922 | ) | (2,731,913 | ) | (1,132,294 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 537,703,198 | 59,002,370 | 54,867,601 | 12,468,983 | ||||||||||||
Cost of shares redeemed | (26,679,639 | ) | (113,909,444 | ) | (2,493,366 | ) | (9,404,316 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | 511,023,559 | (54,907,074 | ) | 52,374,235 | 3,064,667 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | 517,436,533 | (51,768,738 | ) | 54,510,401 | 3,829,394 | |||||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 107,430,739 | 159,199,477 | 32,758,189 | 28,928,795 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year | $ | 624,867,272 | $ | 107,430,739 | $ | 87,268,590 | $ | 32,758,189 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed net investment income included in net assets at end of year | $ | 1,549,867 | $ | 862,352 | $ | 238,159 | $ | 99,385 | ||||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 10,750,000 | 1,200,000 | 1,100,000 | 250,000 | ||||||||||||
Shares redeemed | (550,000 | ) | (2,450,000 | ) | (50,000 | ) | (200,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | 10,200,000 | (1,250,000 | ) | 1,050,000 | 50,000 | |||||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
70 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statements of Changes in Net Assets (Continued)
iSHARES®, INC.
iShares J.P. Morgan EM Local Currency Bond ETF | iShares US & Intl High Yield Corp Bond ETF | |||||||||||||||
Year ended October 31, 2017 | Year ended October 31, 2016 | Year ended October 31, 2017 | Year ended October 31, 2016 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 15,037,672 | $ | 20,092,446 | $ | 8,545,329 | $ | 5,362,631 | ||||||||
Net realized gain (loss) | (18,771,612 | ) | (65,625,259 | ) | 1,097,777 | (5,141,727 | ) | |||||||||
Net change in unrealized appreciation/depreciation | 7,394,809 | 74,309,131 | 6,304,984 | 5,170,998 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 3,660,869 | 28,776,318 | 15,948,090 | 5,391,902 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | — | — | (7,410,092 | ) | (4,092,928 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions to shareholders | — | — | (7,410,092 | ) | (4,092,928 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
CAPITAL SHARE TRANSACTIONS: | ||||||||||||||||
Proceeds from shares sold | 84,085,442 | 157,898,478 | 127,668,202 | 18,646,272 | ||||||||||||
Cost of shares redeemed | (229,939,836 | ) | (255,796,504 | ) | (19,650,421 | ) | (41,329,406 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | (145,854,394 | ) | (97,898,026 | ) | 108,017,781 | (22,683,134 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
INCREASE (DECREASE) IN NET ASSETS | (142,193,525 | ) | (69,121,708 | ) | 116,555,779 | (21,384,160 | ) | |||||||||
NET ASSETS | ||||||||||||||||
Beginning of year | 451,410,424 | 520,532,132 | 97,546,844 | 118,931,004 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of year | $ | 309,216,899 | $ | 451,410,424 | $ | 214,102,623 | $ | 97,546,844 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Undistributed net investment income (accumulated net investment loss) included in net assets at end of year | $ | (1,874 | ) | $ | (8,889 | ) | $ | 1,939,840 | $ | 913,435 | ||||||
|
|
|
|
|
|
|
| |||||||||
SHARES ISSUED AND REDEEMED | ||||||||||||||||
Shares sold | 1,800,000 | 3,600,000 | 2,600,000 | 400,000 | ||||||||||||
Shares redeemed | (5,200,000 | ) | (6,200,000 | ) | (400,000 | ) | (900,000 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in shares outstanding | (3,400,000 | ) | (2,600,000 | ) | 2,200,000 | (500,000 | ) | |||||||||
|
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|
|
|
|
|
|
See notes to financial statements.
FINANCIAL STATEMENTS | 71 |
Table of Contents
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares Emerging Markets High Yield Bond ETF | ||||||||||||||||||||
Year ended Oct. 31, 2017 | Year ended Oct. 31, 2016 | Year ended Oct. 31, 2015 | Year ended Oct. 31, 2014 | Year ended Oct. 31, 2013 | ||||||||||||||||
Net asset value, beginning of year | $ | 49.97 | $ | 46.82 | $ | 51.03 | $ | 50.90 | $ | 53.62 | ||||||||||
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|
|
|
|
|
| |||||||||||
Income from investment operations: |
| |||||||||||||||||||
Net investment incomea | 2.87 | 3.03 | 2.99 | 2.93 | 2.97 | |||||||||||||||
Net realized and unrealized gain (loss)b | 0.77 | 3.25 | (4.11 | ) | 0.15 | (2.91 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 3.64 | 6.28 | (1.12 | ) | 3.08 | 0.06 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (3.01 | ) | (3.13 | ) | (3.09 | ) | (2.95 | ) | (2.78 | ) | ||||||||||
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|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (3.01 | ) | (3.13 | ) | (3.09 | ) | (2.95 | ) | (2.78 | ) | ||||||||||
|
|
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| |||||||||||
Net asset value, end of year | $ | 50.60 | $ | 49.97 | $ | 46.82 | $ | 51.03 | $ | 50.90 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 7.60 | % | 14.02 | % | (2.13 | )% | 6.24 | % | 0.14 | % | ||||||||||
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|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 624,867 | $ | 107,431 | $ | 159,199 | $ | 199,005 | $ | 203,604 | ||||||||||
Ratio of expenses to average net assets | 0.50 | % | 0.50 | % | 0.55 | % | 0.65 | % | 0.65 | % | ||||||||||
Ratio of net investment income to average net assets | 5.73 | % | 6.35 | % | 6.29 | % | 5.78 | % | 5.64 | % | ||||||||||
Portfolio turnover ratec | 25 | % | 29 | % | 39 | % | 24 | % | 57 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
72 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares J.P. Morgan EM Corporate Bond ETF | ||||||||||||||||||||
Year ended Oct. 31, 2017 | Year ended Oct. 31, 2016 | Year ended Oct. 31, 2015 | Year ended Oct. 31, 2014 | Year ended Oct. 31, 2013 | ||||||||||||||||
Net asset value, beginning of year | $ | 50.40 | $ | 48.21 | $ | 51.18 | $ | 50.48 | $ | 52.93 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: |
| |||||||||||||||||||
Net investment incomea | 2.10 | 2.19 | 2.19 | 2.01 | 1.92 | |||||||||||||||
Net realized and unrealized gain (loss)b | 0.90 | 2.18 | (3.02 | ) | 0.75 | (2.49 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 3.00 | 4.37 | (0.83 | ) | 2.76 | (0.57 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (2.07 | ) | (2.18 | ) | (2.14 | ) | (2.06 | ) | (1.88 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (2.07 | ) | (2.18 | ) | (2.14 | ) | (2.06 | ) | (1.88 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 51.33 | $ | 50.40 | $ | 48.21 | $ | 51.18 | $ | 50.48 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 6.14 | % | 9.33 | % | (1.62 | )% | 5.61 | % | (1.07 | )% | ||||||||||
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|
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| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 87,269 | $ | 32,758 | $ | 28,929 | $ | 25,591 | $ | 35,338 | ||||||||||
Ratio of expenses to average net assets | 0.50 | % | 0.50 | % | 0.53 | % | 0.60 | % | 0.60 | % | ||||||||||
Ratio of net investment income to average net assets | 4.16 | % | 4.51 | % | 4.47 | % | 3.99 | % | 3.74 | % | ||||||||||
Portfolio turnover ratec | 62 | % | 22 | % | 11 | % | 20 | % | 33 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 73 |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares J.P. Morgan EM Local Currency Bond ETF | ||||||||||||||||||||
Year ended Oct. 31, 2017 | Year ended Oct. 31, 2016 | Year ended Oct. 31, 2015 | Year ended Oct. 31, 2014 | Year ended Oct. 31, 2013 | ||||||||||||||||
Net asset value, beginning of year | $ | 45.14 | $ | 41.31 | $ | 48.74 | $ | 50.66 | $ | 51.94 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: |
| |||||||||||||||||||
Net investment incomea | 2.29 | 1.94 | 2.03 | 2.26 | 2.07 | |||||||||||||||
Net realized and unrealized gain (loss)b | (0.58 | ) | 1.89 | (8.87 | ) | (2.84 | ) | (1.92 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 1.71 | 3.83 | (6.84 | ) | (0.58 | ) | 0.15 | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | — | — | — | (1.31 | ) | (1.39 | ) | |||||||||||||
Return of capital | — | — | (0.59 | ) | (0.03 | ) | (0.04 | ) | ||||||||||||
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|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | — | — | (0.59 | ) | (1.34 | ) | (1.43 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 46.85 | $ | 45.14 | $ | 41.31 | $ | 48.74 | $ | 50.66 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 3.79 | % | 9.06 | %c | (13.99 | )%c | (1.14 | )% | 0.28 | % | ||||||||||
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|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 309,217 | $ | 451,410 | $ | 520,532 | $ | 584,857 | $ | 638,342 | ||||||||||
Ratio of expenses to average net assets | 0.50 | % | 0.50 | % | 0.50 | % | 0.59 | % | 0.60 | % | ||||||||||
Ratio of expenses to average net assets prior to waived fees | n/a | n/a | 0.53 | % | 0.60 | % | n/a | % | ||||||||||||
Ratio of net investment income to average net assets | 5.04 | % | 4.56 | % | 4.63 | % | 4.56 | % | 4.04 | % | ||||||||||
Portfolio turnover rated | 97 | % | 59 | % | 46 | % | 43 | % | 41 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | The total return disclosed is based on the net asset value (“NAV”) calculated daily for the creation and redemption of shares in the Fund, which may differ from the NAV calculated for financial reporting purposes. Based on the NAV calculated for financial reporting purposes, the total return for the years ended October 31, 2016 and October 31, 2015 were 9.27% and –14.16%, respectively. |
d | 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 rates for the years ended October 31, 2017, October 31, 2016, October 31, 2015, October 31, 2014, October 31, 2013, were 94%, 33%, 32%, 36%, and 39%, respectively. See Note 4. |
See notes to financial statements.
74 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Financial Highlights (Continued)
iSHARES®, INC.
(For a share outstanding throughout each period)
iShares US & Intl High Yield Corp Bond ETF | ||||||||||||||||||||
Year ended Oct. 31, 2017 | Year ended Oct. 31, 2016 | Year ended Oct. 31, 2015 | Year ended Oct. 31, 2014 | Year ended Oct. 31, 2013 | ||||||||||||||||
Net asset value, beginning of year | $ | 48.77 | $ | 47.57 | $ | 52.00 | $ | 53.50 | $ | 51.67 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: |
| |||||||||||||||||||
Net investment incomea | 2.45 | 2.55 | 2.56 | 2.84 | 3.05 | |||||||||||||||
Net realized and unrealized gain (loss)b | 2.08 | 0.57 | (4.76 | ) | (1.28 | ) | 1.70 | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 4.53 | 3.12 | (2.20 | ) | 1.56 | 4.75 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income | (2.32 | ) | (1.92 | ) | (2.23 | ) | (3.06 | ) | (2.92 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total distributions | (2.32 | ) | (1.92 | ) | (2.23 | ) | (3.06 | ) | (2.92 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value, end of year | $ | 50.98 | $ | 48.77 | $ | 47.57 | $ | 52.00 | $ | 53.50 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total return | 9.58 | % | 6.82 | % | (4.32 | )% | 2.91 | % | 9.50 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 214,103 | $ | 97,547 | $ | 118,931 | $ | 104,002 | $ | 74,893 | ||||||||||
Ratio of expenses to average net assets | 0.40 | % | 0.40 | % | 0.40 | % | 0.40 | % | 0.40 | % | ||||||||||
Ratio of expenses to average net assets prior to waived fees | n/a | 0.51 | % | 0.55 | % | 0.55 | % | 0.55 | % | |||||||||||
Ratio of net investment income to average net assets | 4.93 | % | 5.44 | % | 5.18 | % | 5.31 | % | 5.82 | % | ||||||||||
Portfolio turnover ratec | 22 | % | 24 | % | 21 | % | 21 | % | 20 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 75 |
Table of Contents
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 Articles of Incorporation as subsequently amended and restated.
These financial statements relate only to the following funds (each, a “Fund,” and collectively, the “Funds”):
iShares ETF | Diversification Classification | |
Emerging Markets High Yield Bond | Non-diversified | |
J.P. Morgan EM Corporate Bonda | Diversified | |
J.P. Morgan EM Local Currency Bondb | Non-diversified | |
US & Intl High Yield Corp Bondc | Diversified |
a | Formerly the iShares Emerging Markets Corporate Bond ETF. |
b | Formerly the iShares Emerging Markets Local Currency Bond ETF. |
c | Formerly the iShares Global High Yield Corporate Bond ETF. |
The investment objective of each Fund is to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of its underlying index. The investment adviser uses a “passive” or index approach to try to achieve each Fund’s investment objective.
Pursuant to the 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 each Fund in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies.
SECURITY VALUATION
Each Fund’s investments are valued at fair value each day that the Fund’s listing exchange is open and, for financial reporting purposes, as of the report date should the reporting period end on a day that the Fund’s listing exchange is not open. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) provides oversight of the valuation of investments for the Funds. The investments of each Fund are valued pursuant to policies and procedures developed by the Global Valuation Committee and approved by the Board of Directors of the Company (the “Board”).
• | Fixed income investments are valued using the last available bid price or current market quotations provided by dealers or prices (including evaluated prices) supplied by approved independent third-party pricing services. The pricing services may |
76 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
use matrix pricing or valuation models that utilize certain inputs and assumptions to derive values, including transaction data, credit quality information, perceived market movements, news, and other relevant information and by other methods, which may include consideration of: yields or prices of securities of comparable quality, coupon, maturity and type; indications as to values from dealers; general market conditions; and/or other factors and assumptions. Pricing services generally value fixed income securities assuming orderly transactions of an institutional round lot size, but a fund may hold or transact in such securities in smaller odd lot sizes. Odd lots may trade at lower prices than institutional round lots. |
• | Open-end U.S. mutual funds (including money market funds) are valued at that day’s published net asset value (“NAV”). |
In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the fair value of such investment or if a price is not available, the investment will be valued by the Global Valuation Committee, in accordance with policies approved by the Board. The fair valuation approaches that may be utilized by the Global Valuation Committee to determine fair value include market approach, income approach and the cost approach. The valuation techniques used under these approaches take into consideration inputs that include but are not limited to (i) attributes specific to the investment; (ii) the principal market for the investment; (iii) the customary participants in the principal market for the investment; (iv) data assumptions by market participants for the investment, if reasonably available; (v) quoted prices for similar investments in active markets; and (vi) other inputs, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and/or default rates. Valuations based on such inputs are reported to the Board on a quarterly basis.
The Global Valuation Committee employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the 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, reviews of large movements in market values, and reviews of market related activity.
Fair value pricing could result in a difference between the prices used to calculate a Fund’s NAV and the prices used by the Fund’s underlying index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s underlying index.
Various inputs are used in determining the fair value of financial instruments. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs to valuation techniques are categorized into a fair value hierarchy consisting of three broad levels for financial reporting purposes as follows:
• | Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities; |
• | Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability (such as exchange rates, financing terms, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs; and |
• | Level 3 — Unobservable inputs for the asset or liability based on the best information available in the circumstances, to the extent observable inputs are not available, including the Global Valuation Committee’s assumptions used in determining the fair value of investments. |
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgement exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may
NOTESTO FINANCIAL STATEMENTS | 77 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The fair value hierarchy for each Fund’s investments is included in its schedule of investments.
Changes in valuation techniques may result in transfers in or out of an assigned level within the fair value hierarchy. In accordance with the 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 categorization of values determined for financial instruments are based on the pricing transparency of the financial instruments and are not necessarily an indication of the risks associated with investing in those securities.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are accounted for on trade date. Realized gains and losses on investment transactions are determined using the specific identification method. Interest income, including amortization and accretion of premiums and discounts on debt securities, and payment-in-kind interest income, are recognized daily on the accrual basis. Dividend income and capital gain distributions, if any, are recognized on the ex-dividend date, net of any foreign taxes withheld at source.
FOREIGN CURRENCY TRANSLATION
The accounting records of the Funds are maintained in U.S. dollars. Foreign currencies, as well as investment securities and other assets and liabilities denominated in foreign currencies, are translated into U.S. dollars using exchange rates deemed appropriate by the investment adviser. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars on the respective dates of such transactions.
Each Fund does not isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of securities. Such fluctuations are reflected by the Funds as a component of realized and unrealized gains and losses from investments for financial reporting purposes. Each Fund reports realized currency gains (losses) on foreign currency related transactions as components of net realized gain (loss) for financial reporting purposes, whereas such components are generally treated as ordinary income for U.S. federal income tax purposes.
FOREIGN TAXES
The Funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, capital gains on investments, or certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the Funds invest. These foreign taxes, if any, are paid by the Funds and are reflected in their statements of operations as follows: foreign taxes withheld at source are presented as a reduction of income, foreign taxes on securities lending income are presented as a reduction of securities lending income, foreign taxes on stock dividends are presented as “other foreign taxes”, and foreign taxes on capital gains from sales of investments and foreign taxes on foreign currency transactions are included in their respective net realized gain (loss) categories. Foreign taxes payable or deferred as of October 31, 2017, if any, are disclosed in the Funds’ statements of assets and liabilities.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends and distributions paid by each Fund are recorded on the ex-dividend dates. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds.
78 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
LOANS OF PORTFOLIO SECURITIES
Each Fund may lend its investment securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by an approved bank, or securities issued or guaranteed by the U.S. government. The initial collateral received by each Fund is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Funds. Any additional required collateral is delivered to the Funds and any excess collateral is returned by the Funds on the next business day. During the term of the loan, each Fund is entitled to all distributions made on or in respect of the loaned securities but does not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.
Cash received as collateral for securities on loan may be reinvested in certain short-term instruments either directly on behalf of a fund or through one or more joint accounts or money market funds, including those managed by BlackRock Fund Advisors (“BFA”), the Funds’ investment adviser, or its affiliates. As of October 31, 2017, any securities on loan were collateralized by cash and/or U.S. government obligations. Cash collateral received was invested in money market funds managed by BFA and is disclosed in the schedules of investments. Any non-cash collateral received cannot be sold, re-invested or pledged by the Fund, except in the event of borrower default. The securities on loan for each Fund are also disclosed in its schedule of investments. The total value of any securities on loan as of October 31, 2017 and the total value of the related cash collateral are disclosed in the statements of assets and liabilities. Income earned by the Funds from securities lending is disclosed in the statements of operations.
The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Funds benefit from a borrower default indemnity provided by BlackRock, Inc. (“BlackRock”). BlackRock’s indemnity allows for full replacement of securities loaned if the collateral received does not cover the value of the securities loaned in the event of borrower default. Each Fund could incur a loss if the value of an investment purchased with cash collateral falls below the value of the loaned securities or if the value of an investment purchased with cash collateral falls below the value of the original cash collateral received.
Securities lending transactions are entered into by the Funds under Master Securities Lending Agreements (“MSLA”) which provide the right, in the event of default (including bankruptcy or insolvency) for the non-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, a Fund, as lender, would offset the market value of the collateral received against the market value of the securities loaned. The value of the collateral is typically greater than that of the market value of the securities loaned, leaving the lender with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, the borrower can resell or re-pledge the loaned securities, and a Fund can reinvest cash collateral, or, upon an event of default, resell or re-pledge the collateral.
NOTESTO FINANCIAL STATEMENTS | 79 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
The following table is a summary of securities lending agreements which are subject to offset under an MSLA as of October 31, 2017:
iShares ETF and Counterparty | Market Value of Securities on Loan | Cash Collateral Received a | Net Amount | |||||||||
J.P. Morgan EM Corporate Bond | ||||||||||||
Barclays Capital Inc. | $ | 1,138,066 | $ | 1,138,066 | $ | — | ||||||
Citigroup Global Markets Inc. | 953,100 | 953,100 | — | |||||||||
Jefferies LLC | 757,190 | 757,190 | — | |||||||||
JPMorgan Securities LLC | 248,200 | 248,200 | — | |||||||||
Nomura Securities International Inc. | 197,250 | 197,250 | — | |||||||||
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| |||||||
$ | 3,293,806 | $ | 3,293,806 | $ | — | |||||||
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| |||||||
US & Intl High Yield Corp Bond | ||||||||||||
Barclays Capital Inc. | $ | 7,275,983 | $ | 7,275,983 | $ | — | ||||||
BMO Capital Markets | 376,935 | 376,935 | — | |||||||||
BNP Paribas New York Branch | 421,860 | 421,860 | — | |||||||||
BNP Paribas Prime Brokerage Inc. | 166,072 | 166,072 | — | |||||||||
BNP Paribas Prime Brokerage International Ltd. | 158,579 | 158,579 | — | |||||||||
Citigroup Global Markets Inc. | 3,653,782 | 3,653,782 | — | |||||||||
Credit Suisse Securities (USA) LLC | 3,489,381 | 3,489,381 | — | |||||||||
Deutsche Bank Securities Inc. | 4,498,042 | 4,498,042 | — | |||||||||
Goldman Sachs & Co. | 5,687,940 | 5,687,940 | — | |||||||||
HSBC Securities (USA) Inc. | 945,191 | 945,191 | — | |||||||||
Jefferies LLC | 1,192,268 | 1,192,268 | — | |||||||||
JPMorgan Securities LLC | 3,418,224 | 3,418,224 | — | |||||||||
Merrill Lynch, Pierce, Fenner & Smith | 804,633 | 804,633 | — | |||||||||
Morgan Stanley & Co. LLC | 996,370 | 996,370 | — | |||||||||
SG Americas Securities LLC | 304,112 | 304,112 | — | |||||||||
State Street Bank & Trust Company | 158,537 | 158,537 | — | |||||||||
UBS Securities LLC | 215,402 | 215,402 | — | |||||||||
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| |||||||
$ | 33,763,311 | $ | 33,763,311 | $ | — | |||||||
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a | Collateral received in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by each Fund is disclosed in the Fund’s statement of assets and liabilities. |
RECENT ACCOUNTING STANDARD
In March 2017, the Financial Accounting Standards Board issued Accounting Standards Update “Premium Amortization on Purchase Callable Debt Securities” which amends the amortization period for certain purchased callable debt securities. Under the new guidance, premium amortization of purchased callable debt securities that have explicit, non-contingent call features and are callable at fixed prices will be amortized to the earliest call date. The guidance will be applied on a modified retrospective basis and is effective for fiscal years, and their interim periods, beginning after December 15, 2018. Management is currently evaluating the impact of this guidance to the Funds.
80 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
2. | INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES |
Pursuant to an Investment Advisory Agreement with the Company, BFA manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock. Under the Investment Advisory Agreement, BFA is responsible for substantially all expenses of the Funds, except (i) interest and taxes; (ii) brokerage commissions and other expenses connected with the execution of portfolio transactions; (iii) distribution fees; (iv) the advisory fee payable to BFA; and (v) litigation expenses and any extraordinary expenses (in each case as determined by a majority of the independent directors).
BFA has entered into a sub-advisory agreement with BlackRock International Limited (the “Sub-Adviser”), an affiliate of BFA, under which BFA pays the Sub-Adviser for services it provides to the iShares J.P. Morgan EM Local Currency Bond ETF and iShares US & Intl High Yield Corp Bond ETF.
For its investment advisory services to each Fund, BFA is entitled to an annual investment advisory fee, accrued daily and paid monthly by the Funds, based on the average daily net assets of each Fund as follows:
iShares ETF | Investment Advisory Fee | |||
Emerging Markets High Yield Bond | 0.50 | % | ||
J.P. Morgan EM Corporate Bond | 0.50 | |||
J.P. Morgan EM Local Currency Bond | 0.50 | |||
US & Intl High Yield Corp Bond | 0.40 |
The U.S. Securities and Exchange Commission has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (“BTC”), an affiliate of BFA, to serve as securities lending agent for the Funds, subject to applicable conditions. As securities lending agent, BTC bears all operational costs directly related to securities lending. Each Fund is responsible for fees in connection with the investment of cash collateral received for securities on loan in a money market fund managed by BFA, however, BTC has agreed to reduce the amount of securities lending income it receives in order to effectively limit the collateral investment fees each Fund bears to an annual rate of 0.04% (the “collateral investment fees”). Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment fees. The Funds retain a portion of securities lending income and remit the remaining portion to BTC as compensation for its services as securities lending agent.
Pursuant to a securities lending agreement, each Fund retains 80% of securities lending income and the amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees. In addition, commencing the business day following the date that the aggregate securities lending income plus the collateral investment fees generated across all 1940 Act iShares exchange-traded funds (the “iShares ETF Complex”) in a given calendar year exceeds the aggregate securities lending income generated across the iShares ETF Complex in the calendar year 2013, each Fund, pursuant to a securities lending agreement, will retain for the remainder of that calendar year 85% of securities lending income and the amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees.
For the year ended October 31, 2017, the total of securities lending agent services and collateral investment fees paid were as follows:
iShares ETF | Fees Paid to BTC | |||
J.P. Morgan EM Corporate Bond | $ | 3,948 | ||
US & Intl High Yield Corp Bond | 56,550 |
NOTESTO FINANCIAL STATEMENTS | 81 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
BlackRock Investments, LLC, an affiliate of BFA, is the distributor for each Fund. Pursuant to the distribution agreement, BFA is responsible for any fees or expenses for distribution services provided to the Funds.
Cross trading is the buying or selling of portfolio securities between funds to which BFA (or an affiliate) serves as investment adviser. At its regularly scheduled quarterly meetings, the Board reviews such transactions as of the most recent calendar quarter for compliance with the requirements and restrictions set forth by Rule 17a-7.
For the year ended October 31, 2017, transactions executed by the Funds pursuant to Rule 17a-7 under the 1940 Act were as follows:
iShares ETF | Purchases | Sales | ||||||
Emerging Markets High Yield Bond | $ | 1,915,565 | $ | 5,961,943 | ||||
J.P. Morgan EM Corporate Bond | 470,346 | 2,828,076 | ||||||
J.P. Morgan EM Local Currency Bond | 902,728 | — | ||||||
US & Intl High Yield Corp Bond | 440,389 | 975,979 |
Each Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is included in “Dividends — affiliated” in the statements of operations.
The PNC Financial Services Group, Inc. is the largest stockholder of BlackRock and is considered to be an affiliate of the Funds for 1940 Act purposes.
Certain 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 year ended October 31, 2017 were as follows:
iShares ETF | Purchases | Sales | ||||||
Emerging Markets High Yield Bond | $ | 90,126,115 | $ | 72,674,705 | ||||
J.P. Morgan EM Corporate Bond | 60,045,511 | 40,984,784 | ||||||
J.P. Morgan EM Local Currency Bond | 275,669,881 | 309,158,181 | ||||||
US & Intl High Yield Corp Bond | 88,454,351 | 37,759,422 |
In-kind transactions (see Note 4) for the year ended October 31, 2017 were as follows:
iShares ETF | In-kind Purchases | In-kind Sales | ||||||
Emerging Markets High Yield Bond | $ | 505,242,353 | $ | 26,083,497 | ||||
J.P. Morgan EM Corporate Bond | 34,045,596 | 2,359,777 | ||||||
J.P. Morgan EM Local Currency Bond | 9,443,343 | 70,636,094 | ||||||
US & Intl High Yield Corp Bond | 74,660,478 | 16,901,442 |
82 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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 NAV. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the statements of changes in net assets.
The consideration for the purchase of Creation Units of a fund in the Company generally consists of the in-kind deposit of a designated portfolio of securities 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. Such variable charges, if any, are included in “Proceeds from shares sold” in the statements of changes in net assets.
From time to time, settlement of securities related to in-kind contributions or in-kind redemptions may be delayed. In such cases, securities related to in-kind contributions are reflected as “Due from custodian” and securities related to in-kind redemptions are reflected as “Securities related to in-kind transactions” in the statements of assets and liabilities.
5. | PRINCIPAL RISKS |
In the normal course of business, each Fund invests in securities or other instruments and may enter into certain transactions, and such activities subject the Fund to various risks, including, among others, fluctuations in the market (market risk) or failure of an issuer to meet all of its obligations. The value of securities or other instruments may also be affected by various factors, including, without limitation: (i) the general economy; (ii) the overall market as well as local, regional or global political and/or social instability; (iii) regulation, taxation or international tax treaties between various countries; or (iv) currency, interest rate or price fluctuations. Each Fund’s prospectus provides details of the risks to which the Fund is subject.
BFA uses a “passive” or index approach to try to achieve each Fund’s investment objective following the securities included in its underlying index during upturns as well as downturns. BFA does not take steps to reduce market exposure or to lessen the effects of a declining market. Divergence from the underlying index and the composition of the portfolio is monitored by BFA.
MARKET RISK
Market risk arises mainly from uncertainty about future values of financial instruments influenced by price, currency and interest rate movements. It represents the potential loss a fund may suffer through holding market positions in the face of market movements. A fund is exposed to market risk by its investment in equity, fixed income and/or financial derivative instruments or by its investment in underlying funds. The fair value of securities held by a fund may decline due to general market conditions, economic trends or events that are not specifically related to the issuers of the securities including local, regional or global political, social or economic instability or to factors that affect a particular industry or group of industries. The extent of a fund’s exposure to market risk is the market value of the investments held as shown in the fund’s schedule of investments.
A diversified portfolio, where this is appropriate and consistent with a fund’s objectives, minimizes the risk that a price change of a particular investment will have a material impact on the NAV of a fund. The investment concentrations within each Fund’s portfolio are disclosed in its schedule of investments.
NOTESTO FINANCIAL STATEMENTS | 83 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
Investing in the securities of non-U.S. issuers involves certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: differences in accounting, auditing and financial reporting standards; more substantial governmental involvement in the economy; higher inflation rates, greater social, economic and political uncertainties; possible nationalization or expropriation of assets; less availability of public information about issuers; imposition of withholding or other taxes; higher transaction and custody costs and delays in settlement procedures; and lower level of regulation of the securities markets and issuers. Non-U.S. securities may be less liquid, more difficult to value, and have greater price volatility due to exchange rate fluctuations. These and other risks are heightened for investments in issuers from countries with less developed capital markets.
The economies and markets of European countries are often closely connected and interdependent, and events in one country in Europe can have an adverse impact on other European countries. The European financial markets have experienced volatility and adverse trends in recent years due to concerns about economic downturns or rising government debt levels in several European countries. These events have adversely affected the exchange rate of the euro and may continue to significantly affect European countries. The occurrence of terrorist incidents throughout Europe also could impact financial markets. In addition, the United Kingdom has voted to withdraw from the European Union. The referendum may introduce significant new uncertainties and instability in the financial markets as the United Kingdom negotiates its exit from the European Union.
The United States and the European Union, along with the regulatory bodies of a number of countries including Japan, Australia, Norway, Switzerland and Canada, have imposed economic sanctions, which consist of asset freezes and sectorial sanctions, on certain Russian individuals and Russian corporate entities. Broader sanctions on Russia could also be instituted. These sanctions, or even the threat of further sanctions, may result in the decline of the value and liquidity of Russian securities, a weakening of the ruble or other adverse consequences to the Russian economy. Current or future sanctions may result in Russia taking counter measures or retaliatory actions, which may further impair the value and liquidity of Russian securities. These retaliatory measures may include the immediate freeze of Russian assets held by a fund.
Changes in market interest rates or economic conditions may affect the value and/or liquidity of fixed income investments. Interest rate risk is the risk that prices of bonds and other fixed-income securities will decrease as interest rates rise and increase as interest rates fall. Securities with longer durations tend to be more sensitive to interest rate changes, usually making their prices more volatile than those of securities with shorter durations. Given the environment of historically low interest rates, a fund may be subject to a greater risk of price losses if interest rates rise.
CREDIT RISK
Credit risk is the risk that an issuer or guarantor of debt instruments or the counterparty to a financial transaction, including derivatives contracts, repurchase agreements or loans of portfolio securities, is unable or unwilling to make timely interest and/or principal payments or to otherwise honor its obligations. BFA and its affiliates manage counterparty credit risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose a fund to issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of a fund’s exposure to credit and counterparty risks with respect to those financial assets is approximated by their value recorded in its statement of assets and liabilities.
High yield securities that are rated below investment-grade (commonly referred to as “junk bonds”) or are unrated may be deemed speculative, involve greater levels of risk than higher-rated securities of similar maturity and are more likely to default. High yield securities may be issued by less creditworthy issuers, and issuers of high yield securities may be unable to meet their interest or principal payment obligations. High yield securities are subject to extreme price fluctuations, may be less liquid than higher rated fixed-income securities, even under normal economic conditions, and frequently have redemption features.
84 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
6. | INCOME TAX INFORMATION |
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.
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 NAV per share. The following permanent differences as of October 31, 2017, attributable to net investment loss, the characterization of expenses, foreign currency transactions and realized gains (losses) from in-kind redemptions, were reclassified to the following accounts:
iShares ETF | Paid-in Capital | Undistributed Net Investment Income/Distributions in Excess of Net Investment Income | Undistributed Net Realized Gain/Accumulated Net Realized Loss | |||||||||
Emerging Markets High Yield Bond | $ | 411,015 | $ | 16 | $ | (411,031 | ) | |||||
J.P. Morgan EM Corporate Bond | 9,088 | 42 | (9,130 | ) | ||||||||
J.P. Morgan EM Local Currency Bond | (7,268,404 | ) | (15,030,657 | ) | 22,299,061 | |||||||
US & Intl High Yield Corp Bond | 677,583 | (108,832 | ) | (568,751 | ) |
The tax character of distributions paid during the years ended October 31, 2017 and October 31, 2016 was as follows:
iShares ETF | 2017 | 2016 | ||||||
Emerging Markets High Yield Bond | ||||||||
Ordinary income | $ | 16,158,680 | $ | 4,977,922 | ||||
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| |||||
J.P. Morgan EM Corporate Bond | ||||||||
Ordinary income | $ | 2,731,913 | $ | 1,132,294 | ||||
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| |||||
US & Intl High Yield Corp Bond | ||||||||
Ordinary income | $ | 7,410,092 | $ | 4,092,928 | ||||
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NOTESTO FINANCIAL STATEMENTS | 85 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES®, INC.
As of October 31, 2017, the tax components of accumulated net earnings (losses) were as follows:
iShares ETF | Undistributed Ordinary Income | Capital Loss | Net Unrealized | Total | ||||||||||||
Emerging Markets High Yield Bond | $ | 1,549,867 | $ | (16,579,628 | ) | $ | 4,846,937 | $ | (10,182,824 | ) | ||||||
J.P. Morgan EM Corporate Bond | 272,502 | — | 1,390,925 | 1,663,427 | ||||||||||||
J.P. Morgan EM Local Currency Bond | — | (9,107,825 | ) | (11,798,862 | ) | (20,906,687 | ) | |||||||||
US & Intl High Yield Corp Bond | 1,939,840 | (3,150,047 | ) | 4,610,688 | 3,400,481 |
a | The difference between book-basis and tax-basis unrealized gains (losses) was attributable primarily to the tax deferral of losses on wash sales and amortization methods for premiums and discounts on fixed income securities. |
As of October 31, 2017, the Funds had non-expiring capital loss carryforwards available to offset future realized capital gains as follows:
iShares ETF | Non-Expiring | |||
Emerging Markets High Yield Bond | $ | 16,579,628 | ||
J.P. Morgan EM Local Currency Bond | 9,107,825 | |||
US & Intl High Yield Corp Bond | 3,150,047 |
For the year ended October 31, 2017, the Funds utilized their capital loss carryforwards as follows:
iShares ETF | Utilized | |||
Emerging Markets High Yield Bond | $ | 1,003,671 | ||
J.P. Morgan EM Corporate Bond | 679,122 | |||
J.P. Morgan EM Local Currency Bond | 1,104,215 | |||
US & Intl High Yield Corp Bond | 573,764 |
Management has analyzed tax laws and regulations and their application to the Funds as of October 31, 2017, inclusive of the open tax return years, and does not believe there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.
7. | LEGAL PROCEEDINGS |
On June 16, 2016, investors (the “Plaintiffs”) in certain iShares funds (iShares Core S&P Small-Cap ETF, iShares Russell 1000 Growth ETF, iShares Core S&P 500 ETF, iShares Russell Mid-Cap Growth ETF, iShares Russell Mid-Cap ETF, iShares Russell Mid-Cap Value ETF, iShares Select Dividend ETF, iShares Morningstar Mid-Cap ETF, iShares Morningstar Large-Cap ETF, iShares U.S. Aerospace & Defense ETF and iShares U.S. Preferred Stock ETF) filed a putative class action lawsuit against iShares Trust, BlackRock, Inc. and certain of its advisory affiliates, and certain directors/trustees and officers of the Funds (collectively, “Defendants”). The lawsuit alleges the Defendants violated federal securities laws by failing to adequately disclose in the prospectuses issued by the funds noted above the risks of using stop-loss orders in the event of a ‘flash crash’, such as the one that occurred on May 6, 2010. On September 18, 2017, the Court issued a Statement of Decision holding that the Plaintiffs lack standing to assert their claims. On October 11, 2017, the Court entered final judgment dismissing all of the Plaintiffs’ claims with prejudice. Plaintiffs have appealed the Court’s decision.
8. | SUBSEQUENT EVENTS |
Management has evaluated the impact of all subsequent events on the Funds through the date the financial statements were available to be issued and has determined that there were no subsequent events requiring adjustment or disclosure in the financial statements.
86 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Report of Independent Registered Public Accounting Firm
To the Board of Directors of iShares, Inc. and
Shareholders of the iShares Emerging Markets High Yield Bond ETF,
iShares J.P. Morgan EM Corporate Bond ETF, iShares J.P. Morgan EM Local Currency Bond ETF and
iShares US & Intl High Yield Corp Bond ETF
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 iShares Emerging Markets High Yield Bond ETF, iShares J.P. Morgan EM Corporate Bond ETF, iShares J.P. Morgan EM Local Currency Bond ETF and iShares US & Intl High Yield Corp Bond ETF (constituting funds of iShares, Inc., hereafter referred to as the “Funds”) as of October 31, 2017, and the results of each of their operations, the changes in each of their net assets and the financial highlights for each of the periods indicated, 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 as of October 31, 2017 by correspondence with the custodian, transfer agent and brokers, or by other appropriate auditing procedures where replies were not received, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
December 21, 2017
REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 87 |
Table of Contents
iSHARES®, INC.
For the fiscal year ended October 31, 2017, the following Funds earned foreign source income and paid foreign taxes which they intend to pass through to their shareholders:
iShares ETF | Foreign Source Income Earned | Foreign Taxes Paid | ||||||
Emerging Markets High Yield Bond | $ | 18,165,283 | $ | — | ||||
J.P. Morgan EM Corporate Bond | 3,060,746 | — | ||||||
J.P. Morgan EM Local Currency Bond | 16,948,436 | 501,722 |
For the fiscal year ended October 31, 2017, the Funds hereby designate the following maximum amounts allowable as interest-related dividends eligible for exemption from U.S. withholding tax for nonresident aliens and foreign corporations:
iShares ETF | Interest Related Dividends | |||
Emerging Markets High Yield Bond | $ | 208,775 | ||
J.P. Morgan EM Corporate Bond | 72,104 | |||
US & Intl High Yield Corp Bond | 4,305,219 |
88 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Board Review and Approval of Investment Advisory
Contract
iSHARES®, INC.
I. iShares Emerging Markets High Yield Bond ETF
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 and approve 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 all of the Independent Directors (the “15(c) Committee”), with independent counsel, met with management on May 5, 2017 and May 12, 2017. At these meetings, the 15(c) Committee reviewed and discussed information provided in response to the 15(c) Committee’s initial requests, and requested certain additional information, which management agreed to provide. At a meeting held on May 18, 2017, management presented information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its meetings. The Board, including the Independent Directors, reviewed and discussed such information at length. The Independent Directors requested from management certain additional information, which management agreed to provide. At a meeting held on June 19-21, 2017, the Board, including the Independent Directors, reviewed the additional information provided by management in response to these requests. After extensive discussions, the Board, including all 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. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Board also noted that the Board and BFA agreed to discuss potential further enhancements to the 15(c) process for the coming year. The Independent Directors were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Contract for the Fund, the Board, including the Independent Directors, considered the following factors, no one of which was controlling, and reached the following conclusions:
Expenses and Performance of the Fund — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of the Fund in comparison with the same information for other exchange traded funds (“ETFs”) (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising the Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of the proprietary ETF methodology used by Broadridge to determine the Fund’s Peer Group. The Board further noted that due to the limitations in providing comparable funds in the Peer Group, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Fund in all instances.
The Board also noted that the investment advisory fee rate and overall expenses (net of waivers and reimbursements) for the Fund were higher than the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in its Peer Group, excluding iShares funds.
In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as the Fund, Broadridge also provided, and the Board reviewed, a comparison of the Fund’s performance for the one-, three-, five-, ten-year, and since inception periods, as applicable, and for the quarter ended December 31, 2016, to that of relevant comparison funds for the same periods.
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 89 |
Table of Contents
Board Review and Approval of Investment Advisory
Contract (Continued)
iSHARES®, INC.
The Board noted that the Fund seeks to track its specified underlying index and that, during the year, the Board received periodic reports on the Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative performance information, including any additional detailed information requested by the Boards, was also considered. The Board noted that the Fund generally performed in line with its underlying index over the relevant periods.
Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and the historical performance of the Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, including information about recent and proposed enhancements to the iShares business, including with respect to capital markets support and analysis, technology, product design, compliance and risk management, and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the iShares funds and their shareholders. The Board also considered BFA’s compliance program and its compliance record with respect to the Fund. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Fund, as well as the resources available to them in managing the Fund. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the June 19-21, 2017 meeting and throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that the Fund had met its investment objective consistently since its inception date.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Fund under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Costs of Services Provided to Fund and Profits Realized by BFA and Affiliates — The Board reviewed information about the profitability of the Fund to BlackRock, based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and other sources of revenue and expense to BFA and its affiliates from the Fund’s operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, including supplemental information that was responsive to requests of the 15(c) Committee. The Board noted that the 15(c) Committee had focused on the methodology and profitability presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC, a BFA affiliate, from securities lending by the Fund. The Board also discussed BFA’s profit margin as reflected in the Fund’s profitability analysis and reviewed information regarding potential economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Fund and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.
Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Fund’s assets, noting that the issue of economies of scale had been focused on by the 15(c) Committee during its meetings and addressed by management, including through supplemental information. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through relatively
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low fee rates established at inception, breakpoints and waivers or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BlackRock’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished, among other things, between fixed and variable costs, and explained how the level of fixed and variable costs, as well as the nature of such costs, may impact the existence or size of scale benefits. The Board noted that the Advisory Contract for the Fund did not provide for any breakpoints in the Fund’s investment advisory fee rate as the assets of the Fund increase. However, the Board noted that should material economies of scale be identified in the future that are not otherwise shared, a breakpoint structure for the Fund may be appropriate, and that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding breakpoints in the future.
Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider the Advisory Contract at least annually, determined to approve the continuance of the Advisory Contract for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same investment objective and strategy as the Fund and that track the same index as the Fund. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Fund, including in terms of the different and generally more extensive services provided to the Fund, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Fund, as a publicly traded ETF, as compared to the Other Accounts that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged BFA’s expressed business purpose for launching a suite of iShares “Core” ETFs that generally are subject to lower investment advisory fees than iShares non-Core ETFs that may provide a similar investment exposure. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rate under the Advisory Contract for the Fund was generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.
Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Fund by BFA, such as payment of revenue to BTC, the Fund’s securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Fund in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board also noted the revenue received by BFA and/or its affiliates pursuant to an agreement that permits a service provider to use certain portions of BlackRock’s technology platform to service accounts managed by BFA and/or its affiliates, including the iShares funds. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Fund. The Board further noted that any portfolio transactions on behalf of the Fund placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board pursuant to
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Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Fund’s shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.
Conclusion — Based on the considerations described above, the Board determined that the Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded to approve the continuance of the Advisory Contract for the coming year.
II. iShares J.P. Morgan EM Corporate Bond ETF
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 and approve 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 all of the Independent Directors (the “15(c) Committee”), with independent counsel, met with management on May 5, 2017 and May 12, 2017. At these meetings, the 15(c) Committee reviewed and discussed information provided in response to the 15(c) Committee’s initial requests, and requested certain additional information, which management agreed to provide. At a meeting held on May 18, 2017, management presented information to the Board relating to the continuance of the Advisory Contract, including information requested by the 15(c) Committee during its meetings. The Board, including the Independent Directors, reviewed and discussed such information at length. The Independent Directors requested from management certain additional information, which management agreed to provide. At a meeting held on June 19-21, 2017, the Board, including the Independent Directors, reviewed the additional information provided by management in response to these requests. After extensive discussions, the Board, including all 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. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Board also noted that the Board and BFA agreed to discuss potential further enhancements to the 15(c) process for the coming year. The Independent Directors were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Contract for the Fund, the Board, including the Independent Directors, considered the following factors, no one of which was controlling, and reached the following conclusions:
Expenses and Performance of the Fund — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of the Fund in comparison with the same information for other exchange traded funds (“ETFs”) (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising the Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of the proprietary ETF methodology used by Broadridge to determine the Fund’s Peer Group. The Board further noted that due to the limitations in providing comparable funds in the Peer Group, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Fund in all instances.
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The Board also noted that the investment advisory fee rate and overall expenses (net of waivers and reimbursements) for the Fund were higher than the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in its Peer Group, excluding iShares funds. The Board further noted that the Peer Group for the Fund contained only four comparison funds identified by Broadridge, excluding iShares funds.
In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as the Fund, Broadridge also provided, and the Board reviewed, a comparison of the Fund’s performance for the one-, three-, five-, ten-year, and since inception periods, as applicable, and for the quarter ended December 31, 2016, to that of relevant comparison funds for the same periods.
The Board noted that the Fund seeks to track its specified underlying index and that, during the year, the Board received periodic reports on the Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative performance information, including any additional detailed information requested by the Boards, was also considered. The Board noted that the Fund generally performed in line with its underlying index over the relevant periods.
Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and the historical performance of the Fund supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Nature, Extent and Quality of Services Provided by BFA — Based on management’s representations, including information about recent and proposed enhancements to the iShares business, including with respect to capital markets support and analysis, technology, product design, compliance and risk management, and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Contract for the coming year as compared to the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the iShares funds and their shareholders. The Board also considered BFA’s compliance program and its compliance record with respect to the Fund. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Fund, as well as the resources available to them in managing the Fund. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the June 19-21, 2017 meeting and throughout the previous year, and matters related to BFA’s portfolio compliance policies and procedures. The Board noted that the Fund had met its investment objective consistently since its inception date.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided by BFA to the Fund under the Advisory Contract supported the Board’s approval of the continuance of the Advisory Contract for the coming year.
Costs of Services Provided to Fund and Profits Realized by BFA and Affiliates — The Board reviewed information about the profitability of the Fund to BlackRock, based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and other sources of revenue and expense to BFA and its affiliates from the Fund’s operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, including supplemental information that was responsive to requests of the 15(c) Committee. The Board noted that the 15(c) Committee had focused on the methodology and profitability presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with
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management, including the revenues to BTC, a BFA affiliate, from securities lending by the Fund. The Board also discussed BFA’s profit margin as reflected in the Fund’s profitability analysis and reviewed information regarding potential economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Fund and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.
Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Fund’s assets, noting that the issue of economies of scale had been focused on by the 15(c) Committee during its meetings and addressed by management, including through supplemental information. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through relatively low fee rates established at inception, breakpoints and waivers or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BlackRock’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished, among other things, between fixed and variable costs, and explained how the level of fixed and variable costs, as well as the nature of such costs, may impact the existence or size of scale benefits. The Board noted that the Advisory Contract for the Fund did not provide for any breakpoints in the Fund’s investment advisory fee rate as the assets of the Fund increase. However, the Board noted that should material economies of scale be identified in the future that are not otherwise shared, a breakpoint structure for the Fund may be appropriate, and that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding breakpoints in the future.
Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider the Advisory Contract at least annually, determined to approve the continuance of the Advisory Contract for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same investment objective and strategy as the Fund and that track the same index as the Fund. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Fund, including in terms of the different and generally more extensive services provided to the Fund, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Fund, as a publicly traded ETF, as compared to the Other Accounts that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged BFA’s expressed business purpose for launching a suite of iShares “Core” ETFs that generally are subject to lower investment advisory fees than iShares non-Core ETFs that may provide a similar investment exposure. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rate under the Advisory Contract for the Fund was generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.
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Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Fund by BFA, such as payment of revenue to BTC, the Fund’s securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Fund in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board also noted the revenue received by BFA and/or its affiliates pursuant to an agreement that permits a service provider to use certain portions of BlackRock’s technology platform to service accounts managed by BFA and/or its affiliates, including the iShares funds. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Fund. The Board further noted that any portfolio transactions on behalf of the Fund placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Fund’s shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Contract for the coming year.
Conclusion — Based on the considerations described above, the Board determined that the Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded to approve the continuance of the Advisory Contract for the coming year.
III. iShares J.P. Morgan EM Local Currency Bond ETF
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 and approve the Investment Advisory Contract between the Company and BFA (the “Advisory Contract”), and the Sub-Advisory Agreement between BFA and BlackRock International Limited (“BIL”) (the “Sub-Advisory Agreement”), on behalf of the Fund. The Advisory Contract and the Sub-Advisory Agreement are referred to hereafter as the “Advisory Agreements”. 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 Agreements. A committee of all of the Independent Directors (the “15(c) Committee”), with independent counsel, met with management on May 5, 2017 and May 12, 2017. At these meetings, the 15(c) Committee reviewed and discussed information provided in response to the 15(c) Committee’s initial requests, and requested certain additional information, which management agreed to provide. At a meeting held on May 18, 2017, management presented information to the Board relating to the continuance of the Advisory Agreements, including information requested by the 15(c) Committee during its meetings. The Board, including the Independent Directors, reviewed and discussed such information at length. The Independent Directors requested from management certain additional information, which management agreed to provide. At a meeting held on June 19-21, 2017, the Board, including the Independent Directors, reviewed the additional information provided by management in response to these requests. After extensive discussions, the Board, including all of the Independent Directors, approved the continuance of the Advisory Agreements for the Fund, based on a review of qualitative and quantitative information provided by BFA. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Board also noted that the Board and BFA agreed to discuss potential further enhancements to the 15(c) process for the coming year. The Independent Directors were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Agreements for the Fund, the Board, including the Independent Directors, considered the following factors, no one of which was controlling, and reached the following conclusions:
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Expenses and Performance of the Fund — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of the Fund in comparison with the same information for other exchange traded funds (“ETFs”) (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising the Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of the proprietary ETF methodology used by Broadridge to determine the Fund’s Peer Group. The Board further noted that due to the limitations in providing comparable funds in the Peer Group, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Fund in all instances.
The Board also noted that the investment advisory fee rate and overall expenses (net of waivers and reimbursements) for the Fund were higher than the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in its Peer Group, excluding iShares funds. The Board also noted that BFA pays BIL for its sub-advisory services, and that there are no additional fees imposed on the Fund in respect of the services provided under the Sub-Advisory Agreement.
In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as the Fund, Broadridge also provided, and the Board reviewed, a comparison of the Fund’s performance for the one-, three-, five-, ten-year, and since inception periods, as applicable, and for the quarter ended December 31, 2016, to that of relevant comparison funds for the same periods.
The Board noted that the Fund seeks to track its specified underlying index and that, during the year, the Board received periodic reports on the Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative performance information, including any additional detailed information requested by the Boards, was also considered. The Board noted that the Fund generally performed in line with its underlying index over the relevant periods.
Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and the historical performance of the Fund supported the Board’s approval of the continuance of the Advisory Agreements for the coming year.
Nature, Extent and Quality of Services Provided by BFA and BIL or their Affiliates — Based on management’s representations, including information about recent and proposed enhancements to the iShares business, including with respect to capital markets support and analysis, technology, product design, compliance and risk management, and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA (and any services provided by BIL on BFA’s behalf or at BFA’s direction) under the Advisory Agreements for the coming year as compared to the scope of services provided by BFA and BIL during prior years. In reviewing the scope of these services, the Board considered the investment philosophy and experience of BFA and BIL, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the iShares funds and their shareholders. The Board also considered the compliance program of BFA and BIL and their compliance record with respect to the Fund. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Fund, as well as the resources available to them in managing the Fund. In addition to the above considerations, the Board reviewed and considered detailed
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presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the June 19-21, 2017 meeting and throughout the previous year, and matters related to BFA’s and BIL’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 and BIL to the Fund under the Advisory Agreements supported the Board’s approval of the continuance of the Advisory Agreements for the coming year.
Costs of Services Provided to Fund and Profits Realized by BFA and Affiliates — The Board reviewed information about the profitability of the Fund to BlackRock, based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and other sources of revenue and expense to BFA and its affiliates from the Fund’s operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, including supplemental information that was responsive to requests of the 15(c) Committee. The Board noted that the 15(c) Committee had focused on the methodology and profitability presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC, a BFA affiliate, from securities lending by the Fund. The Board also discussed BFA’s profit margin as reflected in the Fund’s profitability analysis and reviewed information regarding potential economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Fund and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.
Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Fund’s assets, noting that the issue of economies of scale had been focused on by the 15(c) Committee during its meetings and addressed by management, including through supplemental information. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through relatively low fee rates established at inception, breakpoints and waivers or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BlackRock’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished, among other things, between fixed and variable costs, and explained how the level of fixed and variable costs, as well as the nature of such costs, may impact the existence or size of scale benefits. The Board noted that the Advisory Contract for the Fund did not provide for any breakpoints in the Fund’s investment advisory fee rate as the assets of the Fund increase. However, the Board noted that should material economies of scale be identified in the future that are not otherwise shared, a breakpoint structure for the Fund may be appropriate, and that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding breakpoints in the future.
Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider the Advisory Agreements at least annually, determined to approve the continuance of the Advisory Agreements for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same investment objective and strategy as the Fund and that track the same index as the Fund. The Board further noted that BFA
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provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Fund, including in terms of the different and generally more extensive services provided to the Fund, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Fund, as a publicly traded ETF, as compared to the Other Accounts that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged BFA’s expressed business purpose for launching a suite of iShares “Core” ETFs that generally are subject to lower investment advisory fees than iShares non-Core ETFs that may provide a similar investment exposure. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rate under the Advisory Contract for the Fund was generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.
Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Fund by BFA, such as payment of revenue to BTC, the Fund’s securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Fund in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board also noted the revenue received by BFA and/or its affiliates pursuant to an agreement that permits a service provider to use certain portions of BlackRock’s technology platform to service accounts managed by BFA and/or its affiliates, including the iShares funds. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Fund. The Board further noted that any portfolio transactions on behalf of the Fund placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Fund’s shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Agreements for the coming year.
Conclusion — Based on the considerations described above, the Board determined that the Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded to approve the continuance of the Advisory Agreements for the coming year.
IV. iShares US & Intl High Yield Corp Bond ETF
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 and approve the Investment Advisory Contract between the Company and BFA (the “Advisory Contract”), and the Sub-Advisory Agreement between BFA and BlackRock International Limited (“BIL”) (the “Sub-Advisory Agreement”), on behalf of the Fund. The Advisory Contract and the Sub-Advisory Agreement are referred to hereafter as the “Advisory Agreements”. 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 Agreements. A committee of all of the Independent Directors (the “15(c) Committee”), with independent counsel, met with management on May 5, 2017 and May 12, 2017. At these meetings, the 15(c) Committee reviewed and discussed information provided in response to the 15(c) Committee’s initial requests, and requested certain additional information, which management
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agreed to provide. At a meeting held on May 18, 2017, management presented information to the Board relating to the continuance of the Advisory Agreements, including information requested by the 15(c) Committee during its meetings. The Board, including the Independent Directors, reviewed and discussed such information at length. The Independent Directors requested from management certain additional information, which management agreed to provide. At a meeting held on June 19-21, 2017, the Board, including the Independent Directors, reviewed the additional information provided by management in response to these requests. After extensive discussions, the Board, including all of the Independent Directors, approved the continuance of the Advisory Agreements for the Fund, based on a review of qualitative and quantitative information provided by BFA. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Board also noted that the Board and BFA agreed to discuss potential further enhancements to the 15(c) process for the coming year. The Independent Directors were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Agreements for the Fund, the Board, including the Independent Directors, considered the following factors, no one of which was controlling, and reached the following conclusions:
Expenses and Performance of the Fund — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of the Fund in comparison with the same information for other exchange traded funds (“ETFs”) (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising the Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of the proprietary ETF methodology used by Broadridge to determine the Fund’s Peer Group. The Board further noted that due to the limitations in providing comparable funds in the Peer Group, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Fund in all instances.
The Board also noted that the investment advisory fee rate and overall expenses (net of waivers and reimbursements) for the Fund were lower than the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in its Peer Group, excluding iShares funds. The Board also noted that BFA pays BIL for its sub-advisory services, and that there are no additional fees imposed on the Fund in respect of the services provided under the Sub-Advisory Agreement.
In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as the Fund, Broadridge also provided, and the Board reviewed, a comparison of the Fund’s performance for the one-, three-, five-, ten-year, and since inception periods, as applicable, and for the quarter ended December 31, 2016, to that of relevant comparison funds for the same periods.
The Board noted that the Fund seeks to track its specified underlying index and that, during the year, the Board received periodic reports on the Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative performance information, including any additional detailed information requested by the Boards, was also considered. The Board noted that the Fund generally performed in line with its underlying index over the relevant periods.
Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and the historical performance of the Fund supported the Board’s approval of the continuance of the Advisory Agreements for the coming year.
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Nature, Extent and Quality of Services Provided by BFA and BIL or their Affiliates — Based on management’s representations, including information about recent and proposed enhancements to the iShares business, including with respect to capital markets support and analysis, technology, product design, compliance and risk management, and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA (and any services provided by BIL on BFA’s behalf or at BFA’s direction) under the Advisory Agreements for the coming year as compared to the scope of services provided by BFA and BIL during prior years. In reviewing the scope of these services, the Board considered the investment philosophy and experience of BFA and BIL, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the iShares funds and their shareholders. The Board also considered the compliance program of BFA and BIL and their compliance record with respect to the Fund. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Fund, as well as the resources available to them in managing the Fund. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the June 19-21, 2017 meeting and throughout the previous year, and matters related to BFA’s and BIL’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 and BIL to the Fund under the Advisory Agreements supported the Board’s approval of the continuance of the Advisory Agreements for the coming year.
Costs of Services Provided to Fund and Profits Realized by BFA and Affiliates — The Board reviewed information about the profitability of the Fund to BlackRock, based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and other sources of revenue and expense to BFA and its affiliates from the Fund’s operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, including supplemental information that was responsive to requests of the 15(c) Committee. The Board noted that the 15(c) Committee had focused on the methodology and profitability presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC, a BFA affiliate, from securities lending by the Fund. The Board also discussed BFA’s profit margin as reflected in the Fund’s profitability analysis and reviewed information regarding potential economies of scale (as discussed below).
Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Fund and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.
Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Fund’s assets, noting that the issue of economies of scale had been focused on by the 15(c) Committee during its meetings and addressed by management, including through supplemental information. The Board and the 15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through relatively low fee rates established at inception, breakpoints and waivers or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BlackRock’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished, among other things, between fixed and variable costs, and explained how the level of fixed and variable costs, as well as the nature of such costs, may impact the existence or size of scale benefits. The Board noted that the Advisory Contract for the Fund did not provide for any breakpoints in
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the Fund’s investment advisory fee rate as the assets of the Fund increase. However, the Board noted that should material economies of scale be identified in the future that are not otherwise shared, a breakpoint structure for the Fund may be appropriate, and that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding breakpoints in the future.
Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider the Advisory Agreements at least annually, determined to approve the continuance of the Advisory Agreements for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same investment objective and strategy as the Fund and that track the same index as the Fund. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Fund, including in terms of the different and generally more extensive services provided to the Fund, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Fund, as a publicly traded ETF, as compared to the Other Accounts that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged BFA’s expressed business purpose for launching a suite of iShares “Core” ETFs that generally are subject to lower investment advisory fees than iShares non-Core ETFs that may provide a similar investment exposure. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rate under the Advisory Contract for the Fund was generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.
Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Fund by BFA, such as payment of revenue to BTC, the Fund’s securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Fund in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board also noted the revenue received by BFA and/or its affiliates pursuant to an agreement that permits a service provider to use certain portions of BlackRock’s technology platform to service accounts managed by BFA and/or its affiliates, including the iShares funds. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Fund. The Board further noted that any portfolio transactions on behalf of the Fund placed through a BFA affiliate or purchased from an underwriting syndicate in which a BFA affiliate participates, are reported to the Board pursuant to Rule 17e-1 or Rule 10f-3, as applicable, under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Fund’s shareholders and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Agreements for the coming year.
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Conclusion — Based on the considerations described above, the Board determined that the Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded to approve the continuance of the Advisory Agreements for the coming year.
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Supplemental Information (Unaudited)
iSHARES®, INC.
Proxy Results
A special meeting of the shareholders of each series of iShares, Inc. (the “Company”) was held on June 19, 2017, to elect five Directors to the Board of Directors of the Company. The five nominees were Jane D. Carlin, Richard L. Fagnani, Drew E. Lawton, Madhav V. Rajan and Mark Wiedman, all of whom were elected as Directors at the special meeting. The other Directors whose terms of office as Directors continued after the special meeting are Cecilia H. Herbert, Charles A. Hurty, John E. Kerrigan, John E. Martinez and Robert S. Kapito.
Director | Votes For | Votes Withheld | ||||||
Jane D. Carlin | 1,911,835,929 | 49,339,171 | ||||||
Richard L. Fagnani | 1,911,725,344 | 49,449,755 | ||||||
Drew E. Lawton | 1,911,790,083 | 49,385,017 | ||||||
Madhav V. Rajan | 1,902,999,095 | 58,176,004 | ||||||
Mark Wiedman | 1,908,143,500 | 53,031,599 |
Section 19(a) Notices
The amounts and sources of distributions reported are estimates and are provided pursuant to regulatory requirements and are not being provided for tax reporting purposes. The actual amounts and sources for tax reporting purposes will depend upon each Fund’s investment experience during the year and may be subject to changes based on the tax regulations. Shareholders will receive a Form 1099-DIV each calendar year that will inform them how to report these distributions for federal income tax purposes.
Total Cumulative Distributions for the Fiscal Year | % Breakdown of the Total Cumulative Distributions for the Fiscal Year | |||||||||||||||||||||||||||||||
iShares ETF | Net Investment Income | Net Realized Capital Gains | Return of Capital | Total Per Share | Net Investment Income | Net Realized Capital Gains | Return of Capital | Total Per Share | ||||||||||||||||||||||||
Emerging Markets High Yield Bond | $ | 2.895771 | $ | — | $ | 0.117058 | $ | 3.012829 | 96 | % | — | % | 4 | % | 100 | % | ||||||||||||||||
J.P. Morgan EM Corporate Bond | 2.038254 | — | 0.033488 | 2.071742 | 98 | — | 2 | 100 | ||||||||||||||||||||||||
US & Intl High Yield Corp Bond | 2.324109 | — | — | 2.324109 | 100 | — | — | 100 |
Premium/Discount Information
The Premium/Discount Information section is intended to present information about the differences between the daily market price on secondary markets for shares of a fund and that fund’s NAV. NAV is the price at which a fund issues and redeems shares. It is calculated in accordance with the standard formula for valuing mutual fund shares. The “Market Price” of a fund generally is determined using the midpoint between the highest bid and the lowest ask on the primary securities exchange on which shares of such fund are listed for trading, as of the time that the fund’s NAV is calculated. A fund’s Market Price may be at, above or below its NAV. The NAV of a fund will fluctuate with changes in the value of its portfolio holdings. The Market Price of a fund will fluctuate in accordance with changes in its NAV, as well as market supply and demand.
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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 the 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.
Premium/discount information for the Funds covering the most recently completed calendar year and the most recently completed calendar quarters since that year (or the life of the Fund, if shorter) is publicly accessible, free of charge, at www.iShares.com.
The following information shows the frequency of distributions of premiums and discounts for the Funds for the immediately preceding five calendar years (or from the inception date of the Fund, if less than five years) through the date of the most recent calendar quarter-end. Each line in each 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 High Yield Bond ETF
Period Covered: April 3, 2012 through September 30, 2017
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 1.5% and Less than 2.0% | 2 | 0.14 | % | |||||
Greater than 1.0% and Less than 1.5% | 71 | 5.13 | ||||||
Greater than 0.5% and Less than 1.0% | 363 | 26.25 | ||||||
Greater than 0.0% and Less than 0.5% | 685 | 49.53 | ||||||
At NAV | 12 | 0.87 | ||||||
Less than 0.0% and Greater than –0.5% | 220 | 15.91 | ||||||
Less than –0.5% and Greater than –1.0% | 25 | 1.81 | ||||||
Less than –1.0% and Greater than –1.5% | 5 | 0.36 | ||||||
|
|
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| |||||
1,383 | 100.00 | % | ||||||
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iSHARES®, INC.
iShares J.P. Morgan EM Corporate Bond ETF
Period Covered: April 17, 2012 through September 30, 2017
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 5.0% | 3 | 0.22 | % | |||||
Greater than 4.5% and Less than 5.0% | 1 | 0.07 | ||||||
Greater than 4.0% and Less than 4.5% | 4 | 0.29 | ||||||
Greater than 3.5% and Less than 4.0% | 19 | 1.38 | ||||||
Greater than 3.0% and Less than 3.5% | 11 | 0.80 | ||||||
Greater than 2.5% and Less than 3.0% | 10 | 0.73 | ||||||
Greater than 2.0% and Less than 2.5% | 18 | 1.31 | ||||||
Greater than 1.5% and Less than 2.0% | 32 | 2.33 | ||||||
Greater than 1.0% and Less than 1.5% | 190 | 13.83 | ||||||
Greater than 0.5% and Less than 1.0% | 212 | 15.43 | ||||||
Greater than 0.0% and Less than 0.5% | 426 | 31.00 | ||||||
At NAV | 7 | 0.51 | ||||||
Less than 0.0% and Greater than –0.5% | 203 | 14.77 | ||||||
Less than –0.5% and Greater than –1.0% | 98 | 7.13 | ||||||
Less than –1.0% and Greater than –1.5% | 78 | 5.68 | ||||||
Less than –1.5% and Greater than –2.0% | 31 | 2.26 | ||||||
Less than –2.0% and Greater than –2.5% | 24 | 1.75 | ||||||
Less than –2.5% and Greater than –3.0% | 4 | 0.29 | ||||||
Less than –3.0% and Greater than –3.5% | 3 | 0.22 | ||||||
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| |||||
1,374 | 100.00 | % | ||||||
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|
|
iShares J.P. Morgan EM Local Currency Bond ETF
Period Covered: January 1, 2012 through September 30, 2017
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 4.5% and Less than 5.0% | 1 | 0.07 | % | |||||
Greater than 4.0% and Less than 4.5% | 1 | 0.07 | ||||||
Greater than 3.5% and Less than 4.0% | 3 | 0.21 | ||||||
Greater than 3.0% and Less than 3.5% | 1 | 0.07 | ||||||
Greater than 2.5% and Less than 3.0% | 2 | 0.14 | ||||||
Greater than 2.0% and Less than 2.5% | 22 | 1.52 | ||||||
Greater than 1.5% and Less than 2.0% | 58 | 4.01 | ||||||
Greater than 1.0% and Less than 1.5% | 225 | 15.56 | ||||||
Greater than 0.5% and Less than 1.0% | 146 | 10.10 | ||||||
Greater than 0.0% and Less than 0.5% | 556 | 38.44 | ||||||
At NAV | 13 | 0.90 | ||||||
Less than 0.0% and Greater than –0.5% | 360 | 24.90 | ||||||
Less than –0.5% and Greater than –1.0% | 50 | 3.46 | ||||||
Less than –1.0% and Greater than –1.5% | 7 | 0.48 | ||||||
Less than –1.5% | 1 | 0.07 | ||||||
|
|
|
| |||||
1,446 | 100.00 | % | ||||||
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iSHARES®, INC.
iShares US & Intl High Yield Corp Bond ETF
Period Covered: April 3, 2012 through September 30, 2017
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 2.0% and Less than 2.5% | 4 | 0.29 | % | |||||
Greater than 1.5% and Less than 2.0% | 14 | 1.01 | ||||||
Greater than 1.0% and Less than 1.5% | 110 | 7.95 | ||||||
Greater than 0.5% and Less than 1.0% | 461 | 33.33 | ||||||
Greater than 0.0% and Less than 0.5% | 610 | 44.11 | ||||||
At NAV | 8 | 0.58 | ||||||
Less than 0.0% and Greater than –0.5% | 112 | 8.10 | ||||||
Less than –0.5% and Greater than –1.0% | 50 | 3.62 | ||||||
Less than –1.0% and Greater than –1.5% | 13 | 0.94 | ||||||
Less than –1.5% and Greater than –2.0% | 1 | 0.07 | ||||||
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| |||||
1,383 | 100.00 | % | ||||||
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|
|
Regulation under the Alternative Investment Fund Managers Directive
The Alternative Investment Fund Managers Directive (“AIFMD”) imposes obligations on fund managers established in the European Union (the “EU”). These do not currently apply to managers established outside the EU, such as BFA. Rather, non-EU managers are only required to comply with certain disclosure, reporting and transparency obligations of AIFMD if such managers market a fund to EU investors.
BFA has registered the iShares Emerging Markets High Yield Bond ETF (the “Fund”) for marketing to investors in the United Kingdom, the Netherlands, Finland, Sweden and Luxembourg.
Report on Remuneration
BFA is required under AIFMD to make quantitative disclosures of remuneration. These disclosures are made in line with BlackRock’s interpretation of currently available regulatory guidance on quantitative remuneration disclosures. As market or regulatory practice develops BlackRock may consider it appropriate to make changes to the way in which quantitative remuneration disclosures are calculated. Where such changes are made, this may result in disclosures in relation to a fund not being comparable to the disclosures made in the prior year, or in relation to other BlackRock fund disclosures in that same year.
Disclosures are provided in relation to both (a) the staff of BFA; (b) staff who are senior management; and (c) staff who have the ability to materially affect the risk profile of the Fund.
All individuals included in the aggregated figures disclosed are rewarded in line with BlackRock’s remuneration policy for their responsibilities across the relevant BlackRock business area. As all individuals have a number of areas of responsibilities, only the portion of remuneration for those individuals’ services attributable to the Fund is included in the aggregate figures disclosed.
BlackRock has a clear and well defined pay-for-performance philosophy, and compensation programs which support that philosophy. For senior management, a significant percentage of variable remuneration is deferred over time. All employees are subject to a claw-back policy.
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iSHARES®, INC.
Compensation decisions for employees are made based on BlackRock’s full-year financial results and other non-financial goals and objectives. Alongside financial performance, individual compensation is also based on strategic and operating results and other considerations such as management and leadership capabilities. No set formulas are established and no fixed benchmarks are used in determining annual incentive awards.
Bonus pools are reviewed by BlackRock’s independent compensation committee, taking into account both actual and projected financial information together with information provided by the Operational Risk and Regulatory Compliance departments in relation to any activities, incidents or events that warrant consideration in making compensation decisions.
Functions such as Finance, Operational Risk, Legal & Compliance, and Human Resources each have their own organizational structures which are independent of the business units. Functional bonus pools are determined with reference to the performance of each individual function and the remuneration of the senior members of control functions is directly overseen by BlackRock’s independent compensation committee. No individual is involved in setting his or her own remuneration.
Members of staff and senior management of BFA typically provide both AIFMD and non-AIFMD related services in respect of multiple funds, clients and functions of BFA and across the broader BlackRock group. Therefore, the figures disclosed are a sum of each individual’s portion of remuneration attributable to the Fund according to an objective apportionment methodology which acknowledges the multiple-service nature of BFA. Accordingly the figures are not representative of any individual’s actual remuneration or their remuneration structure.
The amount of the total remuneration awarded by BFA to its staff which has been attributed to the Fund in respect of BFA’s financial year ending December 31, 2016 was USD 10.08 thousand. This figure is comprised of fixed remuneration of USD 3.96 thousand and variable remuneration of USD 6.11 thousand. There were a total of 325 beneficiaries of the remuneration described above.
The amount of the aggregate remuneration awarded by BFA, which has been attributed to the Fund in respect of BFA’s financial year ending December 31, 2016, to its senior management was USD 1.39 thousand, and to members of its staff whose actions have a material impact on the risk profile of the Fund was USD 0.34 thousand.
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Director and Officer Information
iSHARES®, INC.
The Board of Directors has responsibility for the overall management and operations of the Funds, 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. Each officer shall hold office until his or her successor is elected and qualifies or until his or her death, resignation or removal. Directors who are not “interested persons” (as defined in the 1940 Act) of the Company are referred to as independent directors (“Independent Directors”).
The registered investment companies advised by BFA or its affiliates (the “BlackRock-advised Funds”) 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 also serves as a Trustee of iShares Trust and a Trustee of iShares U.S. ETF Trust and, as a result, oversees a total of 346 funds (as of October 31, 2017) within the Exchange-Traded Fund Complex. Drew E. Lawton, from October 2016 to June 2017, and Richard L. Fagnani, from April 2017 to June 2017, served as a member of the advisory board (“Advisory Board,” members of which are “Advisory Board Members”) for iShares Inc., iShares Trust and iShares U.S. ETF Trust with respect to all funds within the Exchange-Traded Fund Complex. With the exception of Robert S. Kapito, Mark K. Wiedman, Charles Park, Martin Small and Benjamin Archibald, the address of each Director, and officer is c/o BlackRock, Inc., 400 Howard Street, San Francisco, CA 94105. The address of Mr. Kapito, Mr. Wiedman, Mr. Park, Mr. Small and Mr. Archibald is c/o BlackRock, Inc., Park Avenue Plaza, 55 East 52nd Street, New York, NY 10055. The Board has designated Cecilia H. Herbert as its Independent Board Chair. 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
Name (Age) | Position(s) | Principal Occupation(s) During the Past 5 Years | Other Directorships Held by Director | |||
Robert S. Kapitoa (60) | Director (since 2009). | President, BlackRock, Inc. (since 2006); Vice Chairman of BlackRock, Inc. and Head of BlackRock’s Portfolio Management Group (since its formation in 1998) and BlackRock, Inc.’s predecessor entities (since 1988); Trustee, University of Pennsylvania (since 2009); President of Board of Directors, Hope & Heroes Children’s Cancer Fund (since 2002). | Director of BlackRock, Inc. (since 2006); Trustee of iShares Trust (since 2009); Trustee of iShares U.S. ETF Trust (since 2011). | |||
Mark K. Wiedmanb (46) | Director (since 2013). | Senior Managing Director, BlackRock, Inc. (since 2014); Managing Director, BlackRock, Inc. (2007-2014); Global Head of BlackRock’s ETF and Index Investments Business (since 2016); Global Head of iShares (2011-2016); Head of Corporate Strategy, BlackRock, Inc. (2009-2011). | Trustee of iShares Trust (since 2013); Trustee of iShares U.S. ETF Trust (since 2013); Director of PennyMac Financial Services, Inc. (since 2008). |
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. and its affiliates. |
b | Mark K. Wiedman 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. |
108 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Director and Officer Information (Continued)
iSHARES®, INC.
Independent Directors
Name (Age) | Position(s) | Principal Occupation(s) During the Past 5 Years | Other Directorships Held by Director | |||
Cecilia H. Herbert (68) | Director (since 2005); Independent Board Chair (since 2016). | Trustee and Member of the Finance, Technology and Quality Committee of Stanford Health Care (since 2016); Trustee and Member of the Investment Committee, WNET, a New York public media company (since 2011); Chair (1994-2005) and Member (since 1992) of the Investment Committee, Archdiocese of San Francisco; Director (1998-2013) and President (2007-2011) of the Board of Directors, Catholic Charities CYO; Trustee (2002-2011) and Chair of the Finance and Investment Committee (2006-2010) of the Thacher School. | Trustee of iShares Trust (since 2005); Trustee of iShares U.S. ETF Trust (since 2011); Independent Board Chair of iShares Trust and iShares U.S. ETF Trust (since 2016); Trustee of Forward Funds (14 portfolios) (since 2009); Trustee of Salient MF Trust (4 portfolios) (since 2015). | |||
Jane D. Carlin (61) | Director (since 2015); Risk Committee Chair (since 2016). | Consultant (since 2012); Managing Director and Global Head of Financial Holding Company Governance & Assurance and the Global Head of Operational Risk Management of Morgan Stanley (2006-2012). | Trustee of iShares Trust (since 2015); Trustee of iShares U.S. ETF Trust (since 2015); Director of PHH Corporation (mortgage solutions) (since 2012); Director of The Hanover Insurance Group, Inc. (since 2016). | |||
Richard L. Fagnani (62) | Director (since 2017); Equity Plus Committee Chair (since 2017). | Partner, KPMG LLP (2002-2016). | Trustee of iShares Trust (since 2017); Trustee of iShares U.S. ETF Trust (since 2017). | |||
Charles A. Hurty (74) | Director (since 2005); Audit Committee Chair (since 2006). | Retired; Partner, KPMG LLP (1968-2001). | Trustee of iShares Trust (since 2005); Trustee of iShares U.S. ETF Trust (since 2011); Director of SkyBridge Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (2 portfolios) (since 2002). | |||
John E. Kerrigan (62) | Director (since 2005); Securities Lending Committee Chair (since 2016). | Chief Investment Officer, Santa Clara University (since 2002). | Trustee of iShares Trust (since 2005); Trustee of iShares U.S. ETF Trust (since 2011). | |||
Drew E. Lawton (58) | Director (since 2017); 15(c) Committee Chair (since 2017). | Senior Managing Director of New York Life Insurance Company (2010-2015). | Trustee of iShares Trust (since 2017); Trustee of iShares U.S. ETF Trust (since 2017). |
DIRECTORAND OFFICER INFORMATION | 109 |
Table of Contents
Director and Officer Information (Continued)
iSHARES®, INC.
Independent Directors (Continued)
Name (Age) | Position(s) | Principal Occupation(s) During the Past 5 Years | Other Directorships Held by Director | |||
John E. Martinez (56) | Director (since 2003); Fixed Income Plus Committee Chair (since 2016). | Director of Real Estate Equity Exchange, Inc. (since 2005). | Trustee of iShares Trust (since 2003); Trustee of iShares U.S. ETF Trust (since 2011). | |||
Madhav V. Rajan (53) | Director (since 2011); Nominating and Governance Committee Chair (since 2017). | Dean, and George Pratt Shultz Professor of Accounting, University of Chicago Booth School of Business (since 2017); Robert K. Jaedicke Professor of Accounting, Stanford University Graduate School of Business (2001-2017); Professor of Law (by courtesy), Stanford Law School (2005-2017); Senior Associate Dean for Academic Affairs and Head of MBA Program, Stanford University Graduate School of Business (2010-2016) . | Trustee of iShares Trust (since 2011); Trustee of iShares U.S. ETF Trust (since 2011); Director, Cavium, Inc. (since 2013). |
110 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Director and Officer Information (Continued)
iSHARES®, INC.
Officers
Name (Age) | Position(s) | Principal Occupation(s) During the Past 5 Years | ||
Martin Small (42) | President (since 2016). | Managing Director, BlackRock, Inc. (since 2010); Head of U.S. iShares (since 2015); Co-Head of the U.S. Financial Markets Advisory Group, BlackRock, Inc. (2008-2014). | ||
Jack Gee (58) | Treasurer and Chief Financial Officer (since 2008). | Managing Director, BlackRock, Inc. (since 2009); Senior Director of Fund Administration of Intermediary Investor Business, BGI (2009). | ||
Benjamin Archibald (42) | Secretary (since 2015). | Managing Director, BlackRock, Inc. (since 2014); Director, BlackRock, Inc. (2010-2013); Secretary of the BlackRock-advised mutual funds (since 2012). | ||
Alan Mason (56) | Executive Vice President (since 2016). | Managing Director, BlackRock, Inc. (since 2009). | ||
Steve Messinger (55) | Executive Vice President (since 2016). | Managing Director, BlackRock, Inc. (2007-2014 and since 2016); Managing Director, Beacon Consulting Group (2014-2016). | ||
Charles Park (50) | Chief Compliance Officer (since 2006). | Chief Compliance Officer of BlackRock Advisors, LLC and the BlackRock-advised Funds in the Equity-Bond Complex, the Equity-Liquidity Complex and the Closed-End Complex (since 2014); Chief Compliance Officer of BFA (since 2006). | ||
Scott Radell (48) | Executive Vice President (since 2012). | Managing Director, BlackRock, Inc. (since 2009); Head of Portfolio Solutions, BlackRock, Inc. (since 2009). |
DIRECTORAND OFFICER INFORMATION | 111 |
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Notes:
112 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Notes:
NOTES | 113 |
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Notes:
114 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
For more information visit www.iShares.com or call 1-800-iShares (1-800-474-2737)
This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.
Investing involves risk, including possible loss of principal.
The iShares Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by JPMorgan Chase & Co., Markit Indices Limited or Morningstar, 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 use to determine how to vote proxies relating to portfolio securities and information about how the Funds voted proxies relating to portfolio securities during the most recent twelve-month period ending June 30 is available without charge, upon request, by calling toll-free 1-800-474-2737; on the Funds’ website at www.iShares.com; and on the U.S. Securities and Exchange Commission (SEC) website at www.sec.gov.
The Funds file their complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website or may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Funds also disclose their complete schedules of portfolio holdings on a daily basis on the Funds’ website.
©2017 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc. or its subsidiaries. All other marks are the property of their respective owners.
iS-AR-1002-1017
Table of Contents
OCTOBER 31, 2017
2017 ANNUAL REPORT |
iShares, Inc.
Ø | iShares International High Yield Bond ETF | HYXU | Cboe BZX |
Table of Contents
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Table of Contents
Management’s Discussion of Fund Performance
iSHARES® INTERNATIONAL HIGH YIELD BOND ETF
GLOBAL BOND MARKET OVERVIEW
Global investment-grade bonds posted modestly positive returns for the 12 months ended October 31, 2017 (“reporting period”), reflecting improving economic growth and rising interest rates in virtually all major bond markets. The Bloomberg Barclays Global Aggregate Index, a broad measure of global bond market performance, returned 1.18% in U.S. dollar terms for the reporting period.
Regionally, European bond markets posted the strongest returns among developed markets for the reporting period. European corporate bonds performed particularly well, benefiting from better economic conditions and stronger corporate earnings throughout Europe. The Eurozone economy expanded for the 12 months ended September 2017, its fastest growth rate in more than six years, and the jobless rate in September 2017 was the lowest since February 2009. The European Central Bank (“ECB”) elected to keep interest rates at historically low levels throughout the reporting period, though the ECB announced late in the reporting period that it plans to taper its quantitative easing program beginning in 2018. Currency fluctuations also contributed meaningfully to European bond performance in U.S. dollar terms as the euro appreciated by approximately 6% against the U.S. dollar during the reporting period.
In the U.S. bond market, economically sensitive corporate bonds performed well during the reporting period, benefiting from improving growth, healthy corporate profits, and strong investor demand for their comparatively higher yields. In contrast, U.S. Treasury securities declined and were the weakest performers among the broad market segments. The poor performance of U.S. Treasury bonds reflected concerns about the expected effect of the new presidential administration’s proposed tax cuts and fiscal stimulus policies. In addition, the U.S. Federal Reserve Bank (“Fed”) increased short-term interest rates by a quarter percentage point three times during the reporting period, from 0.5% to 1.25%, which contributed to higher short-term U.S. Treasury yields. The Fed also started reducing the amount of U.S. Treasury bonds and mortgage-backed securities on its balance sheet in October 2017. These actions were made possible by improvement in the U.S. economy, led by strength in the job market, where the unemployment rate reached its lowest level in more than 16 years.
Bond markets in the Asia-Pacific region rose modestly in U.S. dollar terms for the reporting period, reflecting modest economic growth, low inflation, and accommodative monetary policies in many countries. In fundamental terms, however, conditions were generally supportive of Japanese bond performance, as Japanese economic growth was 1.4% for the year ended in June, while consumer prices rose just 0.7% for the 12 months ended in September 2017. In that environment, the Bank of Japan maintained its economic stimulus measures, targeting negative short-term interest rates and zero percent yields on longer-term bonds. However, Japanese bond market performance was hindered by a decline in the Japanese yen, which depreciated by approximately 8% against the U.S. dollar.
The performance of inflation-linked securities during the reporting period was also noteworthy. U.S. Treasury inflation-indexed bonds declined as interest rates rose and inflation was generally modest — the U.S. consumer price index rose 2.2% for the 12 months ended September 2017, well below the long-term historical average. In contrast, European government inflation-linked bonds were among the strongest performers in global bond markets for the reporting period. This reflected a surge in U.K. inflation, where consumer prices rose at their fastest rate in more than five years.
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 5 |
Table of Contents
Management’s Discussion of Fund Performance
iSHARES® INTERNATIONAL HIGH YIELD BOND ETF
Performance as of October 31, 2017
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
NAV | MARKET | INDEX | NAV | MARKET | INDEX | |||||||||||||||||||||||
1 Year | 14.21% | 14.33% | 14.56% | 14.21% | 14.33% | 14.56% | ||||||||||||||||||||||
5 Years | 3.80% | 3.80% | 3.93% | 20.52% | 20.52% | 21.28% | ||||||||||||||||||||||
Since Inception | 4.57% | 4.62% | 4.69% | 28.35% | 28.65% | 29.08% |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was 4/3/12. The first day of secondary market trading was 4/3/12.
Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 8 for more information.
Shareholder Expenses | ||||||||||||||||||||||||||
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||
Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Beginning Account Value (5/1/17) | Ending Account Value (10/31/17) | Expenses Paid During Period a | Annualized Expense Ratio | ||||||||||||||||||||
$ | 1,000.00 | $ | 1,105.70 | $ | 2.12 | $ | 1,000.00 | $ | 1,023.20 | $ | 2.04 | 0.40% |
a | Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). See “Shareholder Expenses” on page 8 for more information. |
6 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Management’s Discussion of Fund Performance (Continued)
iSHARES® INTERNATIONAL HIGH YIELD BOND ETF
The iShares International High Yield Bond ETF (the “Fund”) seeks to track the investment results of an index composed of euro, British pound sterling, and Canadian dollar-denominated, high yield corporate bonds, as represented by the Markit iBoxx® Global Developed Markets ex-US High Yield Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. For the 12-month reporting period ended October 31, 2017, the total return for the Fund was 14.21%, net of fees, while the total return for the Index was 14.56%.
From a country perspective, the high-yield corporate bond market of every nation represented in the Index contributed positively to its strong gain for the reporting period. High-yield corporate bonds in the Eurozone made the largest contribution to the Index’s return during the reporting period. A growing appetite for risk led to increased high-yield bond issuance in Europe, which was met by strong investor demand. The Eurozone’s largest individual contributor within the Index, Italy, experienced robust economic growth and an increase in the number of corporate mergers. U.K. high-yield bonds also benefited the Index’s return, as political risks subsided and the outlook for economic growth improved.
The euro-denominated bonds from French, German, and U.S. issuers benefited from low interest rates, low volatility, and robust demand from investors seeking higher yields than those of European government bonds. In the U.S., high-yield bonds were supported by improving economic and earnings growth, declining default rates, and strong investor demand for yield. High-yield bonds issued in Canada, especially those related to commodity producers, also contributed to the Index’s return, as the price of oil and other natural resources increased during the reporting period.
Looking at contribution to performance by sector and industry, bonds issued by the banking and other financial industries helped performance during the reporting period. Banks across the developed world benefited from stronger economic growth and rising interest rates. Communications, consumer cyclicals, and capital goods bonds were significant contributors, while every single industry in the Index posted positive performance for the reporting period.
Currency fluctuations also contributed positively to the Index’s performance during the reporting period, as the euro, British pound, and Canadian dollar appreciated by 6%, 8% and 4%, respectively, against the U.S. dollar.
ALLOCATION BY CREDIT QUALITY As of 10/31/17
Moody’s Credit Rating 1 | Percentage of Total Investments 2 |
Ba | 58.69 | % | ||
B | 25.45 | |||
Caa | 2.66 | |||
Not Rated | 13.20 | |||
|
| |||
TOTAL | 100.00 | % | ||
|
|
TEN LARGEST COUNTRIES As of 10/31/17
Country | Percentage of Total Investments 2 |
Italy | 22.75 | % | ||
United States | 13.65 | |||
France | 12.09 | |||
United Kingdom | 11.02 | |||
Germany | 9.26 | |||
Spain | 5.73 | |||
Luxembourg | 5.59 | |||
Ireland | 3.26 | |||
Netherlands | 3.23 | |||
Japan | 2.87 | |||
|
| |||
TOTAL | 89.45 | % | ||
|
|
1 | Credit quality ratings shown reflect the ratings assigned by Moody’s Investors Service (“Moody’s”), a widely used independent, nationally recognized statistical rating organization. Moody’s credit ratings are opinions of the credit quality of individual obligations or of an issuer’s general creditworthiness. Investment grade ratings are credit ratings of Baa or higher. Below investment grade ratings are credit ratings of Ba or lower. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change. |
2 | Excludes money market funds. |
MANAGEMENT’S DISCUSSIONOF FUND PERFORMANCE | 7 |
Table of Contents
Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.ishares.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are redeemed or sold in the market. Performance for certain funds may reflect a waiver of a portion of investment advisory fees. Without such a waiver, performance would have been lower.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Certain funds may have a NAV which is determined prior to the opening of regular trading on its listed exchange and their market returns are calculated using the midpoint of the bid/ask spread as of the opening of regular trading on the exchange. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower.
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of fund shares and (2) ongoing costs, including management fees and other fund expenses. The expense example, which is based on an investment of $1,000 invested on May 1, 2017 and held through October 31, 2017, is intended to help you understand your ongoing costs (in dollars and cents) of investing in the Fund and to compare these costs with the ongoing costs of investing in other funds.
Actual Expenses — The table provides information about actual account values and actual expenses. Annualized expense ratios reflect contractual and voluntary fee waivers, if any. To estimate the expenses that you paid on your account over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled “Expenses Paid During Period.”
Hypothetical Example for Comparison Purposes — The table also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of fund shares. Therefore, the hypothetical examples are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
8 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® INTERNATIONAL HIGH YIELD BOND ETF
October 31, 2017
Security | Principal or Shares (000s) | Value | ||||||||||
COMMON STOCKS — 0.00% |
| |||||||||||
SOUTH AFRICA — 0.00% |
| |||||||||||
Sentry Holdings Ltd. Class Aa | 25 | $ | — | |||||||||
|
| |||||||||||
TOTAL COMMON STOCKS |
| |||||||||||
(Cost: $159,437) |
| — | ||||||||||
CORPORATE BONDS & NOTES — 96.51% |
| |||||||||||
AUSTRALIA — 0.41% |
| |||||||||||
Origin Energy Finance Ltd. | ||||||||||||
VRN, (5 year EUR Swap + 3.670%) | ||||||||||||
4.00%, 09/16/74 (Call 09/16/19)b,c | EUR | 300 | 366,279 | |||||||||
|
| |||||||||||
366,279 | ||||||||||||
AUSTRIA — 1.04% |
| |||||||||||
Raiffeisen Bank International AG |
| |||||||||||
6.00%, 10/16/23c | EUR | 200 | 283,370 | |||||||||
6.63%, 05/18/21 | EUR | 200 | 276,023 | |||||||||
VRN, (5 year EUR Swap + 3.300%) | ||||||||||||
4.50%, 02/21/25 (Call 02/21/20)b,c | EUR | 100 | 124,814 | |||||||||
VRN, (5 year EUR Swap + 4.840%) | ||||||||||||
5.88%, 04/27/23 (Call 04/27/18)b,c | EUR | 100 | 119,627 | |||||||||
Raiffeisenlandesbank Niederoesterreich-Wien AG | ||||||||||||
5.88%, 11/27/23c | EUR | 100 | 131,483 | |||||||||
|
| |||||||||||
935,317 | ||||||||||||
BELGIUM — 0.43% |
| |||||||||||
Barry Callebaut Services NV |
| |||||||||||
2.38%, 05/24/24 (Call 02/24/24)c | 200 | 248,081 | ||||||||||
5.63%, 06/15/21c | EUR | 100 | 138,299 | |||||||||
|
| |||||||||||
386,380 | ||||||||||||
CANADA — 1.47% |
| |||||||||||
Baytex Energy Corp. |
| |||||||||||
6.63%, 07/19/22 (Call 11/30/17) | CAD | 125 | 94,543 | |||||||||
Bombardier Inc. |
| |||||||||||
6.13%, 05/15/21c | EUR | 300 | 377,597 | |||||||||
Brookfield Residential Properties Inc. |
| |||||||||||
6.13%, 05/15/23 (Call 05/15/18)c | CAD | 75 | 60,442 | |||||||||
Cascades Inc. |
| |||||||||||
5.50%, 07/15/21 (Call 11/30/17)d | CAD | 50 | 40,278 |
Security | (000s) | Value | ||||||||||
Cott Corp. |
| |||||||||||
5.50%, 07/01/24 (Call 07/01/19)c | EUR | 200 | $ | 255,885 | ||||||||
Iron Mountain Canada Operations ULC | ||||||||||||
5.38%, 09/15/23c | CAD | 100 | 81,101 | |||||||||
Mattamy Group Corp. |
| |||||||||||
6.50%, 10/01/25 (Call 10/01/20)d | CAD | 100 | 80,482 | |||||||||
Quebecor Media Inc. |
| |||||||||||
6.63%, 01/15/23d | CAD | 175 | 148,820 | |||||||||
Southern Pacific Resource Corp. |
| |||||||||||
8.75%, 01/25/18 (Call 11/30/17)a,d,e | CAD | 50 | 4 | |||||||||
Videotron Ltd. |
| |||||||||||
5.63%, 06/15/25 (Call 03/15/25) | CAD | 125 | 103,936 | |||||||||
5.75%, 01/15/26 (Call 09/15/20)c | CAD | 100 | 83,125 | |||||||||
|
| |||||||||||
1,326,213 | ||||||||||||
CYPRUS — 0.14% |
| |||||||||||
Bank of Cyprus PCL |
| |||||||||||
VRN, (5 year EUR Swap + 9.176%) | ||||||||||||
9.25%, 01/19/27 (Call 01/19/22)b,c | EUR | 100 | 126,700 | |||||||||
|
| |||||||||||
126,700 | ||||||||||||
DENMARK — 0.40% |
| |||||||||||
TDC A/S |
| |||||||||||
VRN, (5 year EUR Swap + 3.110%) | ||||||||||||
3.50%, 02/26/49 (Call 02/26/21)b,c | EUR | 300 | 364,999 | |||||||||
|
| |||||||||||
364,999 | ||||||||||||
FINLAND — 1.73% |
| |||||||||||
Nokia OYJ |
| |||||||||||
1.00%, 03/15/21 (Call 02/15/21)c | EUR | 200 | 235,573 | |||||||||
2.00%, 03/15/24 (Call 12/15/23)c | EUR | 300 | 356,985 | |||||||||
Stora Enso OYJ |
| |||||||||||
2.13%, 06/16/23 (Call 03/16/23)c | EUR | 100 | 122,468 | |||||||||
2.50%, 06/07/27 (Call 03/07/27)c | EUR | 100 | 118,362 | |||||||||
Teollisuuden Voima OYJ |
| |||||||||||
2.13%, 02/04/25 (Call 11/04/24)c | EUR | 200 | 233,104 | |||||||||
2.50%, 03/17/21c | EUR | 200 | 244,806 | |||||||||
2.63%, 01/13/23c | EUR | 200 | 245,018 | |||||||||
|
| |||||||||||
1,556,316 | ||||||||||||
FRANCE — 11.67% |
| |||||||||||
Areva SA |
| |||||||||||
3.25%, 09/04/20c | EUR | 300 | 370,812 |
SCHEDULEOF INVESTMENTS | 9 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® INTERNATIONAL HIGH YIELD BOND ETF
October 31, 2017
Security | (000s) | Value | ||||||||||
3.50%, 03/22/21 | EUR | 200 | $ | 249,341 | ||||||||
4.38%, 11/06/19 | EUR | 200 | 250,521 | |||||||||
Casino Guichard Perrachon SA |
| |||||||||||
1.87%, 06/13/22 (Call 03/13/22)c | EUR | 200 | 239,260 | |||||||||
3.58%, 02/07/25 (Call 11/07/24)c | EUR | 100 | 123,968 | |||||||||
4.05%, 08/05/26 (Call 05/05/26)c | EUR | 200 | 254,555 | |||||||||
4.41%, 08/06/19c | EUR | 200 | 250,532 | |||||||||
4.50%, 03/07/24 (Call 12/07/23)c | EUR | 400 | 526,183 | |||||||||
4.56%, 01/25/23c | EUR | 300 | 397,676 | |||||||||
5.24%, 03/09/20 | EUR | 200 | 260,087 | |||||||||
5.98%, 05/26/21c | EUR | 300 | 411,077 | |||||||||
CMA CGM SA |
| |||||||||||
5.25%, 01/15/25 (Call 10/15/20)c | EUR | 200 | 237,650 | |||||||||
6.50%, 07/15/22 (Call 07/15/19)c | EUR | 200 | 250,344 | |||||||||
7.75%, 01/15/21 (Call 01/15/18)c | EUR | 300 | 368,003 | |||||||||
Europcar Groupe SA | ||||||||||||
5.75%, 06/15/22 (Call 06/15/18)c | EUR | 100 | 123,054 | |||||||||
Faurecia |
| |||||||||||
3.13%, 06/15/22 (Call 06/15/18)c | EUR | 200 | 240,108 | |||||||||
3.63%, 06/15/23 (Call 06/15/19)c | EUR | 300 | 369,082 | |||||||||
Loxam SAS |
| |||||||||||
3.50%, 04/15/22 (Call 04/15/19)c | EUR | 100 | 122,458 | |||||||||
3.50%, 05/03/23 (Call 05/03/19)c | EUR | 100 | 121,606 | |||||||||
4.25%, 04/15/24 (Call 04/15/20)c | EUR | 100 | 124,799 | |||||||||
4.88%, 07/23/21 (Call 11/10/17)c | EUR | 73 | 87,388 | |||||||||
6.00%, 04/15/25 (Call 04/15/20)c | EUR | 100 | 127,277 | |||||||||
7.00%, 07/23/22 (Call 11/30/17)c | EUR | 100 | 123,337 | |||||||||
NEW Areva Holding SA |
| |||||||||||
3.13%, 03/20/23 (Call 12/20/22)c | EUR | 300 | 366,939 | |||||||||
4.88%, 09/23/24 | EUR | 400 | 525,010 | |||||||||
Peugeot SA |
| |||||||||||
2.00%, 03/23/24c | EUR | 275 | 330,927 | |||||||||
2.38%, 04/14/23c | EUR | 250 | 309,376 | |||||||||
6.50%, 01/18/19c | EUR | 100 | 125,558 | |||||||||
Rexel SA |
| |||||||||||
2.63%, 06/15/24 (Call 03/15/20)c | EUR | 125 | 149,623 | |||||||||
3.25%, 06/15/22 (Call 06/15/18)c | EUR | 200 | 240,184 | |||||||||
3.50%, 06/15/23 (Call 06/15/19)c | EUR | 200 | 245,039 | |||||||||
SFR Group SA |
| |||||||||||
5.38%, 05/15/22 (Call 11/30/17)c | EUR | 300 | 365,011 | |||||||||
5.63%, 05/15/24 (Call 05/15/19)c | EUR | 500 | 633,256 | |||||||||
SPCM SA |
| |||||||||||
2.88%, 06/15/23 (Call 06/15/18)c | EUR | 100 | 119,319 |
Security | (000s) | Value | ||||||||||
Synlab Bondco PLC |
| |||||||||||
6.25%, 07/01/22 (Call 07/01/18)c | EUR | 300 | $ | 371,876 | ||||||||
Synlab Unsecured Bondco PLC |
| |||||||||||
8.25%, 07/01/23 (Call 07/01/18)c | EUR | 150 | 191,840 | |||||||||
Tereos Finance Groupe I SA |
| |||||||||||
4.13%, 06/16/23 (Call 03/16/23)c | EUR | 200 | 246,752 | |||||||||
4.25%, 03/04/20 (Call 03/04/19) | EUR | 100 | 121,609 | |||||||||
Vallourec SA |
| |||||||||||
2.25%, 09/30/24c | EUR | 200 | 191,647 | |||||||||
3.25%, 08/02/19c | EUR | 100 | 120,607 | |||||||||
6.63%, 10/15/22 (Call 10/15/20)c | EUR | 200 | 240,344 | |||||||||
|
| |||||||||||
10,524,035 | ||||||||||||
GERMANY — 8.94% |
| |||||||||||
CBR Fashion Finance BV |
| |||||||||||
5.13%, 10/01/22 (Call 10/01/19)c | EUR | 100 | 117,378 | |||||||||
Deutsche Lufthansa AG |
| |||||||||||
VRN, (5 year EUR Swap + 4.783%) | ||||||||||||
5.13%, 08/12/75 (Call 02/12/21)b,c | EUR | 200 | 256,896 | |||||||||
Hapag-Lloyd AG |
| |||||||||||
5.13%, 07/15/24 (Call 07/15/20)c | EUR | 200 | 245,167 | |||||||||
6.75%, 02/01/22 (Call 02/01/19)c | EUR | 200 | 253,485 | |||||||||
K+S AG |
| |||||||||||
2.63%, 04/06/23 (Call 01/06/23)c | EUR | 300 | 365,555 | |||||||||
3.00%, 06/20/22c | EUR | 200 | 247,686 | |||||||||
4.13%, 12/06/21c | EUR | 200 | 262,271 | |||||||||
LANXESS AG |
| |||||||||||
VRN, (5 year EUR Swap + 4.510%) | ||||||||||||
4.50%, 12/06/76 (Call 06/06/23)b,c | EUR | 200 | 258,737 | |||||||||
METRO AG |
| |||||||||||
1.38%, 10/28/21c | EUR | 200 | 242,722 | |||||||||
1.50%, 03/19/25c | EUR | 200 | 237,018 | |||||||||
Norddeutsche Landesbank Girozentrale | ||||||||||||
6.00%, 06/29/20 | EUR | 200 | 255,162 | |||||||||
RWE AG |
| |||||||||||
VRN, (5 year EUR Swap + 2.643%) | ||||||||||||
2.75%, 04/21/75 (Call 10/21/20)b,c | EUR | 200 | 241,975 | |||||||||
VRN, (5 year EUR Swap + 3.245%) | ||||||||||||
3.50%, 04/21/75 (Call 04/21/25)b,c | EUR | 200 | 244,666 |
10 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® INTERNATIONAL HIGH YIELD BOND ETF
October 31, 2017
Security | (000s) | Value | ||||||||||
thyssenkrupp AG |
| |||||||||||
1.38%, 03/03/22 (Call 12/03/21)c | EUR | 350 | $ | 417,275 | ||||||||
1.75%, 11/25/20 (Call 08/25/20)c | EUR | 200 | 242,282 | |||||||||
2.50%, 02/25/25c | EUR | 200 | 252,477 | |||||||||
2.75%, 03/08/21 (Call 12/08/20)c | EUR | 400 | 497,917 | |||||||||
3.13%, 10/25/19 (Call 07/25/19)c | EUR | 300 | 367,930 | |||||||||
4.00%, 08/27/18 | EUR | 300 | 360,737 | |||||||||
Unitymedia GmbH |
| |||||||||||
3.75%, 01/15/27 (Call 01/15/21)c | EUR | 200 | 242,420 | |||||||||
Unitymedia Hessen GmbH & Co. KG/Unitymedia NRW GmbH | ||||||||||||
3.50%, 01/15/27 (Call 01/15/21)c | EUR | 200 | 245,066 | |||||||||
4.00%, 01/15/25 (Call 01/15/20)c | EUR | 400 | 496,082 | |||||||||
4.63%, 02/15/26 (Call 02/15/21)c | EUR | 200 | 255,122 | |||||||||
5.13%, 01/21/23 (Call 01/21/18)c | EUR | 146 | 175,829 | |||||||||
5.63%, 04/15/23 (Call 04/15/18)c | EUR | 70 | 85,732 | |||||||||
5.75%, 01/15/23 (Call 01/15/18)c | EUR | 73 | 88,222 | |||||||||
ZF North America Capital Inc. |
| |||||||||||
2.25%, 04/26/19c | EUR | 500 | 600,592 | |||||||||
2.75%, 04/27/23c | EUR | 400 | 503,493 | |||||||||
|
| |||||||||||
8,059,894 | ||||||||||||
GREECE — 0.55% |
| |||||||||||
OTE PLC |
| |||||||||||
3.50%, 07/09/20c | EUR | 300 | 369,222 | |||||||||
4.38%, 12/02/19c | EUR | 100 | 124,254 | |||||||||
|
| |||||||||||
493,476 | ||||||||||||
IRELAND — 3.14% |
| |||||||||||
Allied Irish Banks PLC |
| |||||||||||
VRN, (5 year EUR Swap + 3.950%) | ||||||||||||
4.13%, 11/26/25 (Call 11/26/20)b,c | EUR | 300 | 377,223 | |||||||||
Ardagh Packaging Finance PLC/Ardagh Holdings USA Inc. | ||||||||||||
2.75%, 03/15/24 (Call 03/15/20)c | EUR | 225 | 270,212 | |||||||||
4.13%, 05/15/23 (Call 05/15/19)c | EUR | 200 | 247,831 | |||||||||
4.75%, 07/15/27 (Call 07/15/22)c | GBP | 200 | 270,598 | |||||||||
6.75%, 05/15/24 (Call 05/15/19)c | EUR | 200 | 260,315 | |||||||||
Bank of Ireland |
| |||||||||||
10.00%, 12/19/22c | EUR | 100 | 164,446 | |||||||||
VRN, (5 year EUR Swap + 3.550%) | ||||||||||||
4.25%, 06/11/24 (Call 06/11/19)b,c | EUR | 200 | 245,808 |
Security | (000s) | Value | ||||||||||
Bank of Ireland Group PLC |
| |||||||||||
VRN, (5 year UK Government Bond + 2.700%) | ||||||||||||
3.13%, 09/19/27 (Call 09/19/22)b,c | GBP | 100 | $ | 131,346 | ||||||||
Europcar Drive Designated Activity Co. | ||||||||||||
4.13%, 11/15/24 (Call 11/15/20)c | EUR | 100 | 119,505 | |||||||||
Smurfit Kappa Acquisitions ULC |
| |||||||||||
2.38%, 02/01/24 (Call 11/01/23)c | EUR | 200 | 244,311 | |||||||||
2.75%, 02/01/25 (Call 11/01/24)c | EUR | 100 | 122,819 | |||||||||
3.25%, 06/01/21 (Call 03/10/21)c | EUR | 200 | 252,858 | |||||||||
4.13%, 01/30/20c | EUR | 100 | 126,743 | |||||||||
|
| |||||||||||
2,834,015 | ||||||||||||
ITALY— 21.96% |
| |||||||||||
Banca Monte dei Paschi di Siena SpA | ||||||||||||
3.63%, 04/01/19c | EUR | 300 | 362,888 | |||||||||
Banca Popolare di Milano Scarl | ||||||||||||
7.13%, 03/01/21c | EUR | 100 | 131,003 | |||||||||
Banco BPM SpA | ||||||||||||
2.75%, 07/27/20c | EUR | 400 | 489,242 | |||||||||
4.25%, 01/30/19c | EUR | 100 | 121,897 | |||||||||
VRN, (5 year EUR Swap + 4.179%) | ||||||||||||
4.38%, 09/21/27 (Call 09/21/22)b,c | EUR | 300 | 358,215 | |||||||||
Banco Popolare SC | ||||||||||||
2.63%, 09/21/18c | EUR | 100 | 118,799 | |||||||||
3.50%, 03/14/19c | EUR | 500 | 606,260 | |||||||||
6.00%, 11/05/20c | EUR | 200 | 254,364 | |||||||||
6.38%, 05/31/21c | EUR | 100 | 128,577 | |||||||||
BPER Banca | ||||||||||||
VRN, (5 year EUR Swap + 4.910%) | ||||||||||||
5.13%, 05/31/27 (Call 05/31/22)b,c | EUR | 200 | 242,157 | |||||||||
Enel SpA | ||||||||||||
VRN, (5 year EUR Swap + 3.648%) | ||||||||||||
5.00%, 01/15/75 (Call 01/15/20)b,c | EUR | 400 | 508,053 | |||||||||
VRN, (5 year EUR Swap + 5.242%) | ||||||||||||
6.50%, 01/10/74 (Call 01/10/19)b,c | EUR | 300 | 374,192 | |||||||||
Fiat Chrysler Finance Europe SA | ||||||||||||
4.75%, 03/22/21c | EUR | 400 | 522,621 | |||||||||
4.75%, 07/15/22c | EUR | 500 | 668,783 | |||||||||
6.75%, 10/14/19c | EUR | 400 | 523,602 |
SCHEDULEOF INVESTMENTS | 11 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® INTERNATIONAL HIGH YIELD BOND ETF
October 31, 2017
Security | (000s) | Value | ||||||||||
Iccrea Banca SpA | ||||||||||||
1.50%, 02/21/20c | EUR | 200 | $ | 236,349 | ||||||||
1.50%, 10/11/22c | EUR | 100 | 117,121 | |||||||||
1.88%, 11/25/19c | EUR | 200 | 238,628 | |||||||||
International Game Technology PLC | ||||||||||||
4.13%, 02/15/20 (Call 11/15/19)c | EUR | 300 | 374,629 | |||||||||
Intesa Sanpaolo SpA | ||||||||||||
2.86%, 04/23/25c | EUR | 300 | 362,872 | |||||||||
3.93%, 09/15/26c | EUR | 400 | 515,982 | |||||||||
5.00%, 09/23/19c | EUR | 200 | 252,753 | |||||||||
5.15%, 07/16/20 | EUR | 400 | 522,064 | |||||||||
6.63%, 09/13/23c | EUR | 500 | 735,274 | |||||||||
Leonardo SpA | ||||||||||||
1.50%, 06/07/24 (Call 03/07/24)c | EUR | 225 | 268,229 | |||||||||
4.50%, 01/19/21 | EUR | 200 | 264,596 | |||||||||
5.25%, 01/21/22 | EUR | 400 | 556,803 | |||||||||
8.00%, 12/16/19 | GBP | 100 | 151,026 | |||||||||
Mediobanca SpA | ||||||||||||
5.00%, 11/15/20 | EUR | 200 | 261,799 | |||||||||
5.75%, 04/18/23 | EUR | 200 | 271,855 | |||||||||
Saipem Finance International BV | ||||||||||||
2.75%, 04/05/22c | EUR | 200 | 241,655 | |||||||||
3.00%, 03/08/21c | EUR | 200 | 248,223 | |||||||||
3.75%, 09/08/23c | EUR | 200 | 251,728 | |||||||||
Salini Costruttori SpA | ||||||||||||
6.13%, 08/01/18 | EUR | 100 | 121,653 | |||||||||
Salini Impregilo SpA | ||||||||||||
1.75%, 10/26/24c | EUR | 150 | 174,493 | |||||||||
3.75%, 06/24/21c | EUR | 100 | 128,443 | |||||||||
Telecom Italia SpA | ||||||||||||
2.38%, 10/12/27 (Call 07/12/27)c | EUR | 100 | 118,801 | |||||||||
4.88%, 09/25/20c | EUR | 100 | 132,313 | |||||||||
5.25%, 02/10/22c | EUR | 300 | 418,192 | |||||||||
6.13%, 12/14/18 | EUR | 100 | 124,387 | |||||||||
Telecom Italia SpA/Milano | ||||||||||||
2.50%, 07/19/23c | EUR | 200 | 251,315 | |||||||||
3.00%, 09/30/25c | EUR | 200 | 255,705 | |||||||||
3.25%, 01/16/23c | EUR | 200 | 260,273 | |||||||||
3.63%, 01/19/24c | EUR | 200 | 265,224 | |||||||||
3.63%, 05/25/26c | EUR | 200 | 266,455 | |||||||||
4.50%, 01/25/21c | EUR | 100 | 132,494 | |||||||||
5.38%, 01/29/19c | EUR | 200 | 248,418 | |||||||||
6.38%, 06/24/19 | GBP | 150 | 215,475 |
Security | (000s) | Value | ||||||||||
UniCredit SpA | ||||||||||||
6.13%, 04/19/21c | EUR | 100 | $ | 135,706 | ||||||||
6.70%, 06/05/18c | EUR | 100 | 120,918 | |||||||||
6.95%, 10/31/22c | EUR | 500 | 726,346 | |||||||||
VRN, (5 year EUR Swap + 4.100%) | ||||||||||||
5.75%, 10/28/25 (Call 10/28/20)b,c | EUR | 400 | 523,053 | |||||||||
VRN, (5 year EUR Swap + 4.316%) | ||||||||||||
4.38%, 01/03/27 (Call 01/03/22)b,c | EUR | 400 | 508,292 | |||||||||
Unione di Banche Italiane SpA | ||||||||||||
VRN, (5 year EUR Swap + 4.182%) | ||||||||||||
4.25%, 05/05/26 (Call 05/05/21)b,c | EUR | 300 | 365,089 | |||||||||
VRN, (5 year EUR Swap + 4.240%) | ||||||||||||
4.45%, 09/15/27 (Call 09/15/22)b,c | EUR | 200 | 245,797 | |||||||||
Unipol Gruppo Finanziario SpA | ||||||||||||
3.00%, 03/18/25c | EUR | 400 | 478,047 | |||||||||
4.38%, 03/05/21c | EUR | 100 | 128,820 | |||||||||
Wind Acquisition Finance SA | ||||||||||||
4.00%, 07/15/20 (Call 11/10/17)c | EUR | 900 | 1,058,593 | |||||||||
7.00%, 04/23/21 (Call 11/30/17)c | EUR | 700 | 845,177 | |||||||||
Wind Tre SpA | ||||||||||||
2.63%, 01/20/23 (Call 11/03/19)c | EUR | 125 | 146,274 | |||||||||
3.13%, 01/20/25 (Call 11/03/20)c | EUR | 100 | 116,844 | |||||||||
|
| |||||||||||
19,794,836 | ||||||||||||
JAPAN — 2.77% |
| |||||||||||
SoftBank Group Corp. | ||||||||||||
3.13%, 09/19/25 (Call 06/21/25)c | EUR | 500 | 588,533 | |||||||||
4.00%, 07/30/22 (Call 04/30/22)c | EUR | 200 | 254,729 | |||||||||
4.00%, 09/19/29 (Call 06/21/29)c | EUR | 300 | 349,239 | |||||||||
4.63%, 04/15/20c | EUR | 300 | 381,856 | |||||||||
4.75%, 07/30/25 (Call 04/30/25)c | EUR | 500 | 654,085 | |||||||||
5.25%, 07/30/27 (Call 04/30/27)c | EUR | 200 | 266,162 | |||||||||
|
| |||||||||||
2,494,604 | ||||||||||||
LUXEMBOURG — 5.39% |
| |||||||||||
Altice Financing SA | ||||||||||||
5.25%, 02/15/23 (Call 02/15/18)c | EUR | 300 | 367,218 | |||||||||
Altice Finco SA | ||||||||||||
4.75%, 01/15/28 (Call 10/15/22)c | EUR | 200 | 234,983 | |||||||||
9.00%, 06/15/23 (Call 06/15/18)c | EUR | 100 | 127,737 |
12 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® INTERNATIONAL HIGH YIELD BOND ETF
October 31, 2017
Security | (000s) | Value | ||||||||||
Altice Luxembourg SA | ||||||||||||
6.25%, 02/15/25 (Call 02/15/20)c | EUR | 300 | $ | 386,156 | ||||||||
7.25%, 05/15/22 (Call 11/30/17)c | EUR | 800 | 992,454 | |||||||||
ArcelorMittal | ||||||||||||
2.88%, 07/06/20c | EUR | 200 | 249,655 | |||||||||
3.00%, 03/25/19c | EUR | 300 | 363,742 | |||||||||
3.00%, 04/09/21c | EUR | 200 | 253,144 | |||||||||
3.13%, 01/14/22c | EUR | 300 | 385,881 | |||||||||
Garfunkelux Holdco 3 SA | ||||||||||||
7.50%, 08/01/22 (Call 08/01/18)c | EUR | 100 | 124,889 | |||||||||
8.50%, 11/01/22 (Call 11/01/18)c | GBP | 200 | 286,496 | |||||||||
FRN, (3 Mo. Euribor + 3.50%) 3.50%, 09/01/23 (Call 09/01/18)c,f | EUR | 100 | 116,582 | |||||||||
INEOS Group Holdings SA | ||||||||||||
5.38%, 08/01/24 (Call 08/01/19)c | EUR | 200 | 252,541 | |||||||||
Matterhorn Telecom Holding SA | ||||||||||||
4.88%, 05/01/23 (Call 05/01/18)c | EUR | 100 | 120,249 | |||||||||
Matterhorn Telecom SA | ||||||||||||
3.88%, 05/01/22 (Call 05/01/18)c | EUR | 400 | 480,728 | |||||||||
Picard Bondco SA | ||||||||||||
7.75%, 02/01/20 (Call 11/30/17)c | EUR | 100 | 121,224 | |||||||||
|
| |||||||||||
4,863,679 | ||||||||||||
NETHERLANDS — 3.12% |
| |||||||||||
Axalta Coating Systems LLC | ||||||||||||
4.25%, 08/15/24 (Call 08/15/19)c | EUR | 100 | 125,439 | |||||||||
Constellium NV | ||||||||||||
4.63%, 05/15/21 (Call 11/30/17)c | EUR | 100 | 118,964 | |||||||||
SNS Bank NV | ||||||||||||
6.25%, 10/26/20a,e | EUR | 50 | — | |||||||||
United Group BV | ||||||||||||
4.38%, 07/01/22 (Call 07/01/19)c | EUR | 200 | 243,903 | |||||||||
4.88%, 07/01/24 (Call 07/01/20)c | EUR | 200 | 244,008 | |||||||||
UPC Holding BV | ||||||||||||
3.88%, 06/15/29 (Call 06/15/22)c | EUR | 300 | 337,560 | |||||||||
UPCB Finance IV Ltd. | ||||||||||||
4.00%, 01/15/27 (Call 01/15/21)c | EUR | 200 | 247,933 | |||||||||
UPCB Finance VII Ltd. | ||||||||||||
3.63%, 06/15/29 (Call 06/15/22)c | EUR | 200 | 233,822 | |||||||||
Ziggo Bond Co. BV | ||||||||||||
7.13%, 05/15/24 (Call 05/15/19)c | EUR | 300 | 393,180 | |||||||||
Ziggo Bond Finance BV | ||||||||||||
4.63%, 01/15/25 (Call 01/15/20)c | EUR | 100 | 124,320 |
Security | (000s) | Value | ||||||||||
Ziggo Secured Finance BV | ||||||||||||
3.75%, 01/15/25 (Call 01/15/20)c | EUR | 300 | $ | 367,411 | ||||||||
4.25%, 01/15/27 (Call 01/15/22)c | EUR | 300 | 373,457 | |||||||||
|
| |||||||||||
2,809,997 | ||||||||||||
PORTUGAL — 0.43% |
| |||||||||||
EDP – Energias de Portugal SA | ||||||||||||
VRN, (5 year EUR Swap + 5.043%) | ||||||||||||
5.38%, 09/16/75 (Call 03/16/21)b,c | EUR | 300 | 390,576 | |||||||||
|
| |||||||||||
390,576 | ||||||||||||
SINGAPORE — 0.68% |
| |||||||||||
Lincoln Finance Ltd. | ||||||||||||
6.88%, 04/15/21 (Call 04/15/18)c | EUR | 500 | 614,875 | |||||||||
|
| |||||||||||
614,875 | ||||||||||||
SPAIN — 5.53% |
| |||||||||||
Banco de Credito Social Cooperativo SA | ||||||||||||
VRN, (5 year EUR Swap + 7.591%) | ||||||||||||
7.75%, 06/07/27 (Call 06/07/22)b,c | EUR | 100 | 112,743 | |||||||||
Banco de Sabadell SA | ||||||||||||
5.63%, 05/06/26c | EUR | 200 | 270,909 | |||||||||
6.25%, 04/26/20 | EUR | 100 | 129,966 | |||||||||
Bankia SA | ||||||||||||
VRN, (5 year EUR Swap + 3.166%) | ||||||||||||
4.00%, 05/22/24 (Call 05/22/19)b,c | EUR | 300 | 364,280 | |||||||||
VRN, (5 year EUR Swap + 3.350%) | ||||||||||||
3.38%, 03/15/27 (Call 03/15/22)b,c | EUR | 200 | 244,765 | |||||||||
Bankinter SA | ||||||||||||
VRN, (5 year EUR Swap + 2.400%) | ||||||||||||
2.50%, 04/06/27 (Call 04/06/22)b,c | EUR | 200 | 240,090 | |||||||||
CaixaBank SA | ||||||||||||
VRN, (5 year EUR Swap + 2.350%) | ||||||||||||
2.75%, 07/14/28 (Call 07/14/23)b,c | EUR | 400 | 476,573 | |||||||||
VRN, (5 year EUR Swap + 3.350%) | ||||||||||||
3.50%, 02/15/27 (Call 02/15/22)b,c | EUR | 400 | 494,508 | |||||||||
VRN, (5 year EUR Swap + 3.950%) | ||||||||||||
5.00%, 11/14/23 (Call 11/14/18)b,c | EUR | 200 | 242,950 |
SCHEDULEOF INVESTMENTS | 13 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® INTERNATIONAL HIGH YIELD BOND ETF
October 31, 2017
Security | (000s) | Value | ||||||||||
Cellnex Telecom SA | ||||||||||||
2.38%, 01/16/24 (Call 10/16/23)c | EUR | 300 | $ | 364,453 | ||||||||
2.88%, 04/18/25 (Call 01/18/25)c | EUR | 100 | 123,668 | |||||||||
3.13%, 07/27/22c | EUR | 200 | 257,070 | |||||||||
Cirsa Funding Luxembourg SA | ||||||||||||
5.75%, 05/15/21 (Call 05/15/18)c | EUR | 100 | 122,873 | |||||||||
5.88%, 05/15/23 (Call 05/15/18)c | EUR | 200 | 245,422 | |||||||||
Grifols SA | ||||||||||||
3.20%, 05/01/25 (Call 05/01/20)c | EUR | 400 | 473,153 | |||||||||
Grupo Isolux Corsan SA | ||||||||||||
3.00%, 12/30/21 (Call 11/30/17)e | EUR | 141 | 2,459 | |||||||||
Ibercaja Banco SA | ||||||||||||
VRN, (5 year EUR Swap + 4.551%) | ||||||||||||
5.00%, 07/28/25 (Call 07/28/20)b,c | EUR | 200 | 238,564 | |||||||||
Liberbank SA | ||||||||||||
VRN, (5 year EUR Swap + 6.701%) | ||||||||||||
6.88%, 03/14/27 (Call 03/14/22)b,c | EUR | 100 | 124,867 | |||||||||
Repsol International Finance BV | ||||||||||||
VRN, (10 year EUR Swap + 4.200%) | ||||||||||||
4.50%, 03/25/75 (Call 03/25/25)b,c | EUR | 350 | 454,170 | |||||||||
|
| |||||||||||
4,983,483 | ||||||||||||
SWEDEN — 1.83% |
| |||||||||||
Intrum Justitia AB | ||||||||||||
2.75%, 07/15/22 (Call 07/15/19)c | EUR | 600 | 715,273 | |||||||||
3.13%, 07/15/24 (Call 07/15/20)c | EUR | 300 | 358,072 | |||||||||
Perstorp Holding AB | ||||||||||||
7.63%, 06/30/21 (Call 11/18/18)c | EUR | 100 | 126,372 | |||||||||
Telefonaktiebolaget LM Ericsson Series 7Y | ||||||||||||
1.88%, 03/01/24c | EUR | 200 | 228,819 | |||||||||
Verisure Holding AB | ||||||||||||
6.00%, 11/01/22 (Call 11/01/18)c | EUR | 180 | 225,901 | |||||||||
|
| |||||||||||
1,654,437 | ||||||||||||
SWITZERLAND — 1.07% |
| |||||||||||
Dufry Finance SCA | ||||||||||||
4.50%, 07/15/22 (Call 11/30/17)c | EUR | 300 | 361,852 | |||||||||
4.50%, 08/01/23 (Call 08/01/18)c | EUR | 200 | 247,567 | |||||||||
Dufry One BV | ||||||||||||
2.50%, 10/15/24 (Call 10/15/20)c | EUR | 300 | 357,348 | |||||||||
|
| |||||||||||
966,767 |
Security | (000s) | Value | ||||||||||
UNITED KINGDOM — 10.64% |
| |||||||||||
Ardonagh Midco 3 PLC | ||||||||||||
8.38%, 07/15/23 (Call 07/15/20)c | GBP | 100 | $ | 137,243 | ||||||||
Arqiva Broadcast Finance PLC | ||||||||||||
9.50%, 03/31/20 (Call 03/31/18)c | GBP | 100 | 139,951 | |||||||||
Boparan Finance PLC | ||||||||||||
4.38%, 07/15/21 (Call 11/30/17)c | EUR | 100 | 111,374 | |||||||||
5.50%, 07/15/21 (Call 11/10/17)c | GBP | 200 | 250,909 | |||||||||
Cabot Financial Luxembourg SA | ||||||||||||
7.50%, 10/01/23 (Call 10/01/19)c | GBP | 100 | 145,461 | |||||||||
CNH Industrial Finance Europe SA | ||||||||||||
1.38%, 05/23/22 (Call 02/23/22)c | EUR | 200 | 241,415 | |||||||||
1.75%, 09/12/25 (Call 06/12/25)c | EUR | 200 | 241,683 | |||||||||
2.88%, 05/17/23c | EUR | 200 | 259,604 | |||||||||
EC Finance PLC | ||||||||||||
5.13%, 07/15/21 (Call 11/02/17)c | EUR | 100 | 119,449 | |||||||||
Fastighets AB Balder | ||||||||||||
VRN, (5 year EUR Swap + 2.895%) | ||||||||||||
3.00%, 03/07/78 (Call 03/07/23)b,c | EUR | 100 | 118,387 | |||||||||
Fiat Chrysler Automobiles NV | ||||||||||||
3.75%, 03/29/24c | EUR | 500 | 640,643 | |||||||||
Heathrow Finance PLC | ||||||||||||
3.88%, 03/01/27c | GBP | 100 | 131,369 | |||||||||
Ineos Finance PLC | ||||||||||||
4.00%, 05/01/23 (Call 05/01/18)c | EUR | 300 | 361,308 | |||||||||
Iron Mountain Europe PLC | ||||||||||||
6.13%, 09/15/22 (Call 11/10/17)c | GBP | 200 | 277,154 | |||||||||
Jaguar Land Rover Automotive PLC | ||||||||||||
2.20%, 01/15/24c | EUR | 200 | 236,800 | |||||||||
2.75%, 01/24/21c | GBP | 100 | 134,809 | |||||||||
3.88%, 03/01/23c | GBP | 100 | 139,028 | |||||||||
5.00%, 02/15/22c | GBP | 200 | 291,216 | |||||||||
New Look Secured Issuer PLC | ||||||||||||
6.50%, 07/01/22 (Call 06/24/18)c | GBP | 200 | 160,081 | |||||||||
Royal Bank of Scotland Group PLC | ||||||||||||
VRN, (5 year EUR Swap + 2.650%) | ||||||||||||
3.63%, 03/25/24 (Call 03/25/19)b,c | EUR | 400 | 482,281 | |||||||||
Tesco Corporate Treasury Services PLC | ||||||||||||
1.38%, 07/01/19c | EUR | 300 | 357,491 | |||||||||
2.13%, 11/12/20 (Call 08/12/20)c | EUR | 200 | 245,880 | |||||||||
2.50%, 07/01/24c | EUR | 300 | 376,722 |
14 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® INTERNATIONAL HIGH YIELD BOND ETF
October 31, 2017
Security | (000s) | Value | ||||||||||
Tesco PLC | ||||||||||||
3.38%, 11/02/18c | EUR | 100 | $ | 120,408 | ||||||||
6.13%, 02/24/22 | GBP | 400 | 614,501 | |||||||||
Thomas Cook Finance PLC | ||||||||||||
6.75%, 06/15/21 (Call 01/15/18)c | EUR | 100 | 121,697 | |||||||||
Thomas Cook Group PLC | ||||||||||||
6.25%, 06/15/22 (Call 06/15/19)c | EUR | 300 | 381,866 | |||||||||
Virgin Media Finance PLC | ||||||||||||
4.50%, 01/15/25 (Call 01/15/20)c | EUR | 200 | 246,108 | |||||||||
6.38%, 10/15/24 (Call 10/15/19)c | GBP | 100 | 143,796 | |||||||||
7.00%, 04/15/23 (Call 04/15/18)c | GBP | 100 | 140,795 | |||||||||
Virgin Media Receivables Financing Notes I DAC | ||||||||||||
5.50%, 09/15/24 (Call 09/15/19)c | GBP | 300 | 414,545 | |||||||||
Series SEP | ||||||||||||
5.50%, 09/15/24 (Call 09/15/19)c | GBP | 200 | 276,420 | |||||||||
Virgin Media Secured Finance PLC | ||||||||||||
4.88%, 01/15/27 (Call 01/15/21)c | GBP | 200 | 275,814 | |||||||||
5.00%, 04/15/27 (Call 04/15/22)c | GBP | 300 | 413,807 | |||||||||
5.13%, 01/15/25 (Call 01/15/20)c | GBP | 200 | 280,245 | |||||||||
6.00%, 01/15/25 (Call 01/15/21)c,g | GBP | 100 | 153,771 | |||||||||
6.25%, 03/28/29 (Call 01/15/21)c | GBP | 200 | 289,557 | |||||||||
Viridian Group FinanceCo PLC/Viridian Power and Energy | ||||||||||||
4.00%, 09/15/25 (Call 09/15/20)c | EUR | 100 | 117,432 | |||||||||
|
| |||||||||||
9,591,020 | ||||||||||||
UNITED STATES — 13.17% |
| |||||||||||
Adient Global Holdings Ltd. | ||||||||||||
3.50%, 08/15/24 (Call 05/15/24)c | EUR | 400 | 491,771 | |||||||||
AMC Entertainment Holdings Inc. | ||||||||||||
6.38%, 11/15/24 (Call 11/15/19) | GBP | 200 | 272,330 | |||||||||
Aramark International Finance Sarl | ||||||||||||
3.13%, 04/01/25 (Call 04/01/20)c | EUR | 100 | 121,581 | |||||||||
Avantor Inc. | ||||||||||||
4.75%, 10/01/24 (Call 10/01/20)c | EUR | 200 | 237,253 | |||||||||
Avis Budget Finance PLC | ||||||||||||
4.13%, 11/15/24 (Call 11/15/19)c | EUR | 100 | 118,852 | |||||||||
4.50%, 05/15/25 (Call 05/15/20)c | EUR | 100 | 119,100 | |||||||||
Axalta Coating Systems Dutch Holding B BV | ||||||||||||
3.75%, 01/15/25 (Call 01/15/20)c | EUR | 200 | 249,895 |
Security | (000s) | Value | ||||||||||
Ball Corp. | ||||||||||||
3.50%, 12/15/20 | EUR | 100 | $ | 127,858 | ||||||||
4.38%, 12/15/23 | EUR | 300 | 400,727 | |||||||||
Chemours Co. (The) | ||||||||||||
6.13%, 05/15/23 (Call 05/15/18) | EUR | 100 | 124,468 | |||||||||
CNH Industrial Finance Europe SA | ||||||||||||
2.75%, 03/18/19c | EUR | 300 | 362,840 | |||||||||
2.88%, 09/27/21c | EUR | 200 | 257,178 | |||||||||
Crown European Holdings SA | ||||||||||||
2.63%, 09/30/24 (Call 03/31/24)c | EUR | 300 | 362,438 | |||||||||
3.38%, 05/15/25 (Call 11/15/24)c | EUR | 200 | 248,348 | |||||||||
4.00%, 07/15/22 (Call 04/15/22)c | EUR | 200 | 261,346 | |||||||||
Darling Global Finance BV | ||||||||||||
4.75%, 05/30/22 (Call 05/30/18)c | EUR | 100 | 121,717 | |||||||||
Equinix Inc. | ||||||||||||
2.88%, 10/01/25 (Call 10/01/20) | EUR | 400 | 477,759 | |||||||||
Federal-Mogul Holdings LLC | ||||||||||||
4.88%, 04/15/22 (Call 04/15/19)c | EUR | 225 | 267,501 | |||||||||
Federal-Mogul LLC/Federal-Mogul Financing Corp. | ||||||||||||
5.00%, 07/15/24 (Call 07/15/20)c | EUR | 100 | 116,155 | |||||||||
Goodyear Dunlop Tires Europe BV | ||||||||||||
3.75%, 12/15/23 (Call 12/15/18)c | EUR | 100 | 122,066 | |||||||||
Hanesbrands Finance Luxembourg SCA | ||||||||||||
3.50%, 06/15/24 (Call 03/15/24)c | EUR | 200 | 251,823 | |||||||||
Hertz Holdings Netherlands BV | ||||||||||||
4.38%, 01/15/19c | EUR | 100 | 118,105 | |||||||||
Huntsman International LLC | ||||||||||||
4.25%, 04/01/25 (Call 01/01/25) | EUR | 100 | 131,905 | |||||||||
5.13%, 04/15/21 (Call 01/15/21) | EUR | 200 | 262,029 | |||||||||
Infor U.S. Inc. | ||||||||||||
5.75%, 05/15/22 (Call 05/15/18) | EUR | 100 | 121,263 | |||||||||
International Game Technology PLC | ||||||||||||
4.75%, 03/05/20c | EUR | 200 | 255,489 | |||||||||
4.75%, 02/15/23 (Call 08/15/22)c | EUR | 300 | 393,574 | |||||||||
Iron Mountain Inc. | ||||||||||||
3.00%, 01/15/25 (Call 06/15/20)c | EUR | 100 | 118,339 | |||||||||
Levi Strauss & Co. | ||||||||||||
3.38%, 03/15/27 (Call 03/15/22) | EUR | 200 | 245,018 | |||||||||
LKQ Italia Bondco SpA | ||||||||||||
3.88%, 04/01/24 (Call 01/01/24)c | EUR | 200 | 257,590 |
SCHEDULEOF INVESTMENTS | 15 |
Table of Contents
Schedule of Investments (Continued)
iSHARES® INTERNATIONAL HIGH YIELD BOND ETF
October 31, 2017
Security | (000s) | Value | ||||||||||
MPT Operating Partnership LP/MPT Finance Corp. | ||||||||||||
3.33%, 03/24/25 (Call 12/24/24) | EUR | 200 | $ | 245,375 | ||||||||
4.00%, 08/19/22 (Call 05/19/22) | EUR | 200 | 258,847 | |||||||||
Netflix Inc. | ||||||||||||
3.63%, 05/15/27c | EUR | 500 | 597,457 | |||||||||
OI European Group BV | ||||||||||||
3.13%, 11/15/24 (Call 08/15/24)c | EUR | 300 | 365,552 | |||||||||
4.88%, 03/31/21c | EUR | 100 | 133,081 | |||||||||
6.75%, 09/15/20c | EUR | 100 | 137,597 | |||||||||
Postmedia Network Inc. | ||||||||||||
8.25%, 07/15/21 (Call 11/30/17)d | CAD | 3 | 1,838 | |||||||||
PSPC Escrow Corp. | ||||||||||||
6.00%, 02/01/23 (Call 02/01/18)c | EUR | 100 | 122,438 | |||||||||
PVH Corp. | ||||||||||||
3.63%, 07/15/24 (Call 04/15/24)c | EUR | 100 | 128,648 | |||||||||
Quintiles IMS Inc. | ||||||||||||
2.88%, 09/15/25 (Call 09/15/20)c | EUR | 200 | 236,213 | |||||||||
3.25%, 03/15/25 (Call 03/15/20)c | EUR | 500 | 602,998 | |||||||||
3.50%, 10/15/24 (Call 10/15/19)c | EUR | 300 | 367,399 | |||||||||
Sealed Air Corp. | ||||||||||||
4.50%, 09/15/23 (Call 06/15/23)c | EUR | 200 | 266,734 | |||||||||
Silgan Holdings Inc. | ||||||||||||
3.25%, 03/15/25 (Call 03/15/20)c | EUR | 200 | 241,848 | |||||||||
Spectrum Brands Inc. | ||||||||||||
4.00%, 10/01/26 (Call 10/01/21)c | EUR | 200 | 246,909 | |||||||||
Valeant Pharmaceuticals International Inc. | ||||||||||||
4.50%, 05/15/23 (Call 05/15/18)c | EUR | 550 | 541,106 | |||||||||
WMG Acquisition Corp. | ||||||||||||
4.13%, 11/01/24 (Call 11/01/19)c | EUR | 100 | 123,551 | |||||||||
XPO Logistics Inc. | ||||||||||||
5.75%, 06/15/21 (Call 12/15/17)c | EUR | 200 | 240,443 | |||||||||
|
| |||||||||||
11,874,352 | ||||||||||||
|
| |||||||||||
TOTAL CORPORATE BONDS & NOTES |
| |||||||||||
(Cost: $86,812,051) |
| 87,012,250 |
Security | (000s) | Value | ||||||||||
SHORT-TERM INVESTMENTS — 0.00% |
| |||||||||||
MONEY MARKET FUNDS — 0.00% |
| |||||||||||
BlackRock Cash Funds: Treasury, |
| |||||||||||
1.00%h,i | 1 | $ | 1,489 | |||||||||
|
| |||||||||||
1,489 | ||||||||||||
|
| |||||||||||
TOTAL SHORT-TERM INVESTMENTS |
| |||||||||||
(Cost: $1,489) |
| 1,489 | ||||||||||
|
| |||||||||||
TOTAL INVESTMENTS |
| |||||||||||
(Cost: $86,972,977)j |
| 87,013,739 | ||||||||||
Other Assets, Less Liabilities — 3.49% |
| 3,146,243 | ||||||||||
|
| |||||||||||
NET ASSETS — 100.00% |
| $ | 90,159,982 | |||||||||
|
|
CAD | — Canadian Dollar | |
EUR | — Euro | |
FRN | — Floating Rate Note | |
GBP | — British Pound | |
VRN | — Variable Rate Note |
a | Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. |
b | Variable rate security. Security may be issued at a fixed coupon rate, which converts to a variable rate at a specified date. Rate shown is the rate in effect as of period end. |
c | This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933. |
d | This security may be resold to qualified institutional buyers under Rule 144A of the Securities Act of 1933. |
e | Issuer is in default of interest payments. |
f | Floating rate security. Rate shown is the rate in effect as of period end. |
g | 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. |
h | Affiliated issuer. See Schedule 1. |
i | The rate quoted is the annualized seven-day yield of the fund at period end. |
j | The cost of investments (including short positions and derivatives, if any) for federal income tax purposes was $86,980,242. Net unrealized appreciation was $33,497, of which $3,041,653 represented gross unrealized appreciation on investments and $3,008,156 represented gross unrealized depreciation on investments. |
16 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Schedule of Investments (Continued)
iSHARES® INTERNATIONAL HIGH YIELD BOND ETF
October 31, 2017
Schedule 1 — Affiliates (Note 2)
Investments in issuers considered to be affiliates of the Fund during the year ended October 31, 2017, for purposes of Section 2(a)(3) of the 1940 Act, and/or related parties of the Fund were as follows:
Affiliated issuer | Shares held at | Shares purchased (000s) | Shares sold (000s) | Shares held at 10/31/17 (000s) | Value at 10/31/17 | Net realized gain (loss) a | Change in unrealized appreciation (depreciation) | Income | ||||||||||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares | 4 | — | �� | (3 | )b | 1 | $ | 1,489 | $ | — | $ | — | $ | 198 | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
a | Includes realized capital gain distributions from an affiliated fund, if any. |
b | Net of shares purchased and sold. |
Schedule 2 — Fair Value Measurements
Various inputs are used in determining the fair value of financial instruments. For description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, see Note 1.
The following table summarizes the value of the Fund’s investments according to the fair value hierarchy as of October 31, 2017. The breakdown of the Fund’s investments into major categories is disclosed in the schedule of investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Investments: | ||||||||||||||||
Assets: | ||||||||||||||||
Common stocks | $ | — | $ | — | $ | 0 | a | $ | 0 | a | ||||||
Corporate bonds & notes | — | 87,012,246 | 4 | 87,012,250 | ||||||||||||
Money market funds | 1,489 | — | — | 1,489 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 1,489 | $ | 87,012,246 | $ | 4 | $ | 87,013,739 | ||||||||
|
|
|
|
|
|
|
| |||||||||
a | Rounds to less than $1. |
See notes to financial statements.
SCHEDULEOF INVESTMENTS | 17 |
Table of Contents
Statement of Assets and Liabilities
iSHARES® INTERNATIONAL HIGH YIELD BOND ETF
October 31, 2017
ASSETS | ||||
Investments in securities, at cost: | ||||
Unaffiliated | $ | 86,971,488 | ||
Affiliated (Note 2) | 1,489 | |||
|
| |||
Total cost of investments in securities | $ | 86,972,977 | ||
|
| |||
Investments in securities, at fair value (Note 1): | ||||
Unaffiliated | $ | 87,012,250 | ||
Affiliated (Note 2) | 1,489 | |||
Foreign currency, at valuea | 3,213,692 | |||
Receivables: | ||||
Investment securities sold | 727,598 | |||
Dividends and interest | 1,319,546 | |||
|
| |||
Total Assets | 92,274,575 | |||
|
| |||
LIABILITIES | ||||
Payables: | ||||
Investment securities purchased | 2,083,882 | |||
Investment advisory fees (Note 2) | 30,711 | |||
|
| |||
Total Liabilities | 2,114,593 | |||
|
| |||
NET ASSETS | $ | 90,159,982 | ||
|
| |||
Net assets consist of: | ||||
Paid-in capital | $ | 93,837,479 | ||
Accumulated net realized loss | (3,701,754 | ) | ||
Net unrealized appreciation | 24,257 | |||
|
| |||
NET ASSETS | $ | 90,159,982 | ||
|
| |||
Shares outstandingb | 1,700,000 | |||
|
| |||
Net asset value per share | $ | 53.04 | ||
|
|
a | Cost of foreign currency: $3,239,283. |
b | $0.001 par value, number of shares authorized: 500 million. |
See notes to financial statements.
18 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Statement of Operations
iSHARES® INTERNATIONAL HIGH YIELD BOND ETF
Year ended October 31, 2017
NET INVESTMENT INCOME | ||||
Dividends — affiliated (Note 2) | $ | 198 | ||
Interest — unaffiliated | 3,000,117 | |||
|
| |||
Total investment income | 3,000,315 | |||
|
| |||
EXPENSES | ||||
Investment advisory fees (Note 2) | 298,741 | |||
Proxy fees | 1,354 | |||
|
| |||
Total expenses | 300,095 | |||
|
| |||
Net investment income | 2,700,220 | |||
|
| |||
NET REALIZED AND UNREALIZED GAIN (LOSS) | ||||
Net realized gain (loss) from: | ||||
Investments — unaffiliated | (1,784,744 | ) | ||
In-kind redemptions — unaffiliated | (9,153,084 | ) | ||
Foreign currency transactions | 41,792 | |||
|
| |||
Net realized loss | (10,896,036 | ) | ||
|
| |||
Net change in unrealized appreciation/depreciation on: | ||||
Investments — unaffiliated | 14,646,067 | |||
Translation of assets and liabilities in foreign currencies | 43,617 | |||
|
| |||
Net change in unrealized appreciation/depreciation | 14,689,684 | |||
|
| |||
Net realized and unrealized gain | 3,793,648 | |||
|
| |||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 6,493,868 | ||
|
|
See notes to financial statements.
FINANCIAL STATEMENTS | 19 |
Table of Contents
Statements of Changes in Net Assets
iSHARES® INTERNATIONAL HIGH YIELD BOND ETF
Year ended October 31, 2017 | Year ended October 31, 2016 | |||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||
OPERATIONS: | ||||||||
Net investment income | $ | 2,700,220 | $ | 6,445,680 | ||||
Net realized loss | (10,896,036 | ) | (12,040,585 | ) | ||||
Net change in unrealized appreciation/depreciation | 14,689,684 | 9,692,594 | ||||||
|
|
|
| |||||
Net increase in net assets resulting from operations | 6,493,868 | 4,097,689 | ||||||
|
|
|
| |||||
DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||
From net investment income | (622,289 | ) | (906,680 | ) | ||||
Return of capital | (142,861 | ) | (2,212,307 | ) | ||||
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| |||||
Total distributions to shareholders | (765,150 | ) | (3,118,987 | ) | ||||
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| |||||
CAPITAL SHARE TRANSACTIONS: | ||||||||
Proceeds from shares sold | 21,160,679 | 27,637,363 | ||||||
Cost of shares redeemed | (91,525,582 | ) | (59,575,641 | ) | ||||
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|
|
| |||||
Net decrease in net assets from capital share transactions | (70,364,903 | ) | (31,938,278 | ) | ||||
|
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|
| |||||
DECREASE IN NET ASSETS | (64,636,185 | ) | (30,959,576 | ) | ||||
NET ASSETS | ||||||||
Beginning of year | 154,796,167 | 185,755,743 | ||||||
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| |||||
End of year | $ | 90,159,982 | $ | 154,796,167 | ||||
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| |||||
Undistributed net investment income included in net assets at end of year | $ | — | $ | 13 | ||||
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| |||||
SHARES ISSUED AND REDEEMED | ||||||||
Shares sold | 400,000 | 600,000 | ||||||
Shares redeemed | (2,000,000 | ) | (1,300,000 | ) | ||||
|
|
|
| |||||
Net decrease in shares outstanding | (1,600,000 | ) | (700,000 | ) | ||||
|
|
|
|
See notes to financial statements.
20 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® INTERNATIONAL HIGH YIELD BOND ETF
(For a share outstanding throughout each period)
Year ended Oct. 31, 2017 | Year ended Oct. 31, 2016 | Year ended Oct. 31, 2015 | Year ended Oct. 31, 2014 | Year ended Oct. 31, 2013 | ||||||||||||||||
Net asset value, beginning of year | $ | 46.91 | $ | 46.44 | $ | 52.90 | $ | 56.84 | $ | 52.01 | ||||||||||
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Income from investment operations: | ||||||||||||||||||||
Net investment incomea | 1.77 | 1.82 | 1.84 | 2.43 | 3.15 | |||||||||||||||
Net realized and unrealized gain (loss)b | 4.85 | (0.47 | ) | (6.57 | ) | (3.55 | ) | 4.51 | ||||||||||||
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Total from investment operations | 6.62 | 1.35 | (4.73 | ) | (1.12 | ) | 7.66 | |||||||||||||
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Less distributions from: | ||||||||||||||||||||
Net investment income | (0.40 | ) | (0.26 | ) | (0.05 | ) | (2.82 | ) | (2.83 | ) | ||||||||||
Net realized gain | — | — | (0.02 | ) | — | — | ||||||||||||||
Return of capital | (0.09 | ) | (0.62 | ) | (1.66 | ) | — | — | ||||||||||||
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| |||||||||||
Total distributions | (0.49 | ) | (0.88 | ) | (1.73 | ) | (2.82 | ) | (2.83 | ) | ||||||||||
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| |||||||||||
Net asset value, end of year | $ | 53.04 | $ | 46.91 | $ | 46.44 | $ | 52.90 | $ | 56.84 | ||||||||||
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| |||||||||||
Total return | 14.21 | % | 2.95 | % | (9.02 | )% | (2.20 | )% | 15.20 | % | ||||||||||
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| |||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (000s) | $ | 90,160 | $ | 154,796 | $ | 185,756 | $ | 142,827 | $ | 51,153 | ||||||||||
Ratio of expenses to average net assets | 0.40 | % | 0.40 | % | 0.40 | % | 0.40 | % | 0.40 | % | ||||||||||
Ratio of expenses to average net assets prior to waived fees | n/a | 0.51 | % | 0.55 | % | 0.55 | % | 0.55 | % | |||||||||||
Ratio of net investment income to average net assets | 3.62 | % | 3.93 | % | 3.85 | % | 4.25 | % | 5.85 | % | ||||||||||
Portfolio turnover ratec | 49 | % | 24 | % | 28 | % | 25 | % | 33 | % |
a | Based on average shares outstanding throughout each period. |
b | The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
c | Portfolio turnover rates exclude portfolio securities received or delivered as a result of processing capital share transactions in Creation Units. |
See notes to financial statements.
FINANCIAL HIGHLIGHTS | 21 |
Table of Contents
iSHARES® INTERNATIONAL HIGH YIELD BOND ETF
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 Articles of Incorporation as subsequently amended and restated.
These financial statements relate only to the following fund (the “Fund”):
iShares ETF | Diversification Classification | |
International High Yield Bond | Diversified |
The investment objective of the 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 the Fund’s investment objective.
Pursuant to the Company’s organizational documents, the Fund’s officers and directors are indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred.
1. | SIGNIFICANT ACCOUNTING POLICIES |
The following significant accounting policies are consistently followed by the Fund in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies.
SECURITY VALUATION
The Fund’s investments are valued at fair value each day that the Fund’s listing exchange is open and, for financial reporting purposes, as of the report date should the reporting period end on a day that the Fund’s listing exchange is not open. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) provides oversight of the valuation of investments for the Fund. The investments of the 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 using the last available bid price or current market quotations provided by dealers or prices (including evaluated prices) supplied by approved independent third-party pricing services. The pricing services may use matrix pricing or valuation models that utilize certain inputs and assumptions to derive values, including transaction data, credit quality information, perceived market movements, news, and other relevant information and by other methods, which may include consideration of: yields or prices of securities of comparable quality, coupon, maturity and type; indications as to values from dealers; general market conditions; and/or other factors and assumptions. Pricing services generally value fixed income securities assuming orderly transactions of an institutional round lot size, but a fund may hold or transact in such securities in smaller odd lot sizes. Odd lots may trade at lower prices than institutional round lots. |
22 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES® INTERNATIONAL HIGH YIELD BOND ETF
• | Equity investments traded on a recognized securities exchange are valued at that day’s last reported trade price or the official closing price, as applicable, on the exchange where the stock is primarily traded. Equity investments traded on a recognized exchange for which there were no sales on that day are valued at the last traded price. |
• | Open-end U.S. mutual funds (including money market funds) are valued at that day’s published net asset value (“NAV”). |
In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the fair value of such investment or if a price is not available, the investment will be valued by the Global Valuation Committee, in accordance with policies approved by the Board. The fair valuation approaches that may be utilized by the Global Valuation Committee to determine fair value include market approach, income approach and the cost approach. The valuation techniques used under these approaches take into consideration inputs that include but are not limited to (i) attributes specific to the investment; (ii) the principal market for the investment; (iii) the customary participants in the principal market for the investment; (iv) data assumptions by market participants for the investment, if reasonably available; (v) quoted prices for similar investments in active markets; and (vi) other inputs, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and/or default rates. Valuations based on such inputs are reported to the Board on a quarterly basis.
The Global Valuation Committee employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the 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, reviews of large movements in market values, and reviews of market related activity.
Fair value pricing could result in a difference between the prices used to calculate the Fund’s NAV and the prices used by the Fund’s underlying index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s underlying index.
Various inputs are used in determining the fair value of financial instruments. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs to valuation techniques are categorized into a fair value hierarchy consisting of three broad levels for financial reporting purposes as follows:
• | Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities; |
• | Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability (such as exchange rates, financing terms, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs; and |
• | Level 3 — Unobservable inputs for the asset or liability based on the best information available in the circumstances, to the extent observable inputs are not available, including the Global Valuation Committee’s assumptions used in determining the fair value of investments. |
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgement exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The fair value hierarchy for the Fund’s investments is included in its schedule of investments.
NOTESTO FINANCIAL STATEMENTS | 23 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES® INTERNATIONAL HIGH YIELD BOND ETF
Changes in valuation techniques may result in transfers in or out of an assigned level within the fair value 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 categorization of values determined for financial instruments are based on the pricing transparency of the financial instruments and are not necessarily an indication of the risks associated with investing in those securities.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are accounted for on trade date. Realized gains and losses on investment transactions are determined using the specific identification method. Interest income, including amortization and accretion of premiums and discounts on debt securities, and payment-in-kind interest income, are recognized daily on the accrual basis. Dividend income and capital gain distributions, if any, are recognized on the ex-dividend date, net of any foreign taxes withheld at source.
FOREIGN CURRENCY TRANSLATION
The accounting records of the Fund 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.
The 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 Fund as a component of realized and unrealized gains and losses from investments for financial reporting purposes. The Fund reports realized currency gains (losses) on foreign currency related transactions as components of net realized gain (loss) for financial reporting purposes, whereas such components are generally treated as ordinary income for U.S. federal income tax purposes.
FOREIGN TAXES
The Fund may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, capital gains on investments, or certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the Fund invests. These foreign taxes, if any, are paid by the Fund and are reflected in its statement of operations as follows: foreign taxes withheld at source are presented as a reduction of income, foreign taxes on securities lending income are presented as a reduction of securities lending income, foreign taxes on stock dividends are presented as “other foreign taxes”, and foreign taxes on capital gains from sales of investments and foreign taxes on foreign currency transactions are included in their respective net realized gain (loss) categories. Foreign taxes payable or deferred as of October 31, 2017, if any, are disclosed in the Fund’s statement of assets and liabilities.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends and distributions paid by the Fund are recorded on the ex-dividend dates. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Fund.
RECENT ACCOUNTING STANDARD
In March 2017, the Financial Accounting Standards Board issued Accounting Standards Update “Premium Amortization on Purchase Callable Debt Securities” which amends the amortization period for certain purchased callable debt securities. Under
24 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES® INTERNATIONAL HIGH YIELD BOND ETF
the new guidance, premium amortization of purchased callable debt securities that have explicit, non-contingent call features and are callable at fixed prices will be amortized to the earliest call date. The guidance will be applied on a modified retrospective basis and is effective for fiscal years, and their interim periods, beginning after December 15, 2018. Management is currently evaluating the impact of this guidance to the Fund.
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 the 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 Fund, except (i) interest and taxes; (ii) brokerage commissions and other expenses connected with the execution of portfolio transactions; (iii) distribution fees; (iv) the advisory fee payable to BFA; and (v) litigation expenses and any extraordinary expenses (in each case as determined by a majority of the independent directors).
BFA has entered into a sub-advisory agreement with BlackRock International Limited (the “Sub-Adviser”), an affiliate of BFA, under which BFA pays the Sub-Adviser for services it provides to the Fund.
For its investment advisory services to the Fund, BFA is entitled to an annual investment advisory fee of 0.40%, accrued daily and paid monthly by the Fund, based on the average daily net assets of the Fund.
BlackRock Investments, LLC, an affiliate of BFA, is the distributor for the Fund. Pursuant to the distribution agreement, BFA is responsible for any fees or expenses for distribution services provided to the Fund.
Cross trading is the buying or selling of portfolio securities between funds to which BFA (or an affiliate) serves as investment adviser. At its regularly scheduled quarterly meetings, the Board reviews such transactions as of the most recent calendar quarter for compliance with the requirements and restrictions set forth by Rule 17a-7.
For the year ended October 31, 2017, the purchase and sales transactions executed by the Fund pursuant to Rule 17a-7 under the 1940 Act were $1,150,811 and $756,509, respectively.
The Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is included in “Dividends – affiliated” in the statement of operations.
The PNC Financial Services Group, Inc. is the largest stockholder of BlackRock and is considered to be an affiliate of the Fund for 1940 Act purposes.
Certain directors and officers of the Company are also officers of BlackRock Institutional Trust Company, N.A. and/or BFA.
3. | INVESTMENT PORTFOLIO TRANSACTIONS |
Purchases and sales of investments (excluding in-kind transactions and short-term investments) for the year ended October 31, 2017, were $ 38,487,227 and $37,216,226, respectively.
In-kind purchases and sales (see Note 4) for the year ended October 31, 2017, were $17,927,400 and $87,062,673, respectively.
NOTESTO FINANCIAL STATEMENTS | 25 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES® INTERNATIONAL HIGH YIELD BOND ETF
4. | CAPITAL SHARE TRANSACTIONS |
Capital shares are issued and redeemed by the Fund only in aggregations of a specified number of shares or multiples thereof (“Creation Units”) at NAV. Except when aggregated in Creation Units, shares of the Fund are not redeemable. Transactions in capital shares for the 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 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. Such variable charges, if any, are included in “Proceeds from shares sold” in the statement of changes in net assets.
5. | PRINCIPAL RISKS |
In the normal course of business, the Fund invests in securities or other instruments and may enter into certain transactions, and such activities subject the Fund to various risks, including, among others, fluctuations in the market (market risk) or failure of an issuer to meet all of its obligations. The value of securities or other instruments may also be affected by various factors, including, without limitation: (i) the general economy; (ii) the overall market as well as local, regional or global political and/or social instability; (iii) regulation, taxation or international tax treaties between various countries; or (iv) currency, interest rate or price fluctuations. The Fund’s prospectus provides details of the risks to which the Fund is subject.
BFA uses a “passive” or index approach to try to achieve the Fund’s investment objective following the securities included in its underlying index during upturns as well as downturns. BFA does not take steps to reduce market exposure or to lessen the effects of a declining market. Divergence from the underlying index and the composition of the portfolio is monitored by BFA.
MARKET RISK
Market risk arises mainly from uncertainty about future values of financial instruments influenced by price, currency and interest rate movements. It represents the potential loss a fund may suffer through holding market positions in the face of market movements. A fund is exposed to market risk by its investment in equity, fixed income and/or financial derivative instruments or by its investment in underlying funds. The fair value of securities held by a fund may decline due to general market conditions, economic trends or events that are not specifically related to the issuers of the securities including local, regional or global political, social or economic instability or to factors that affect a particular industry or group of industries. The extent of a fund’s exposure to market risk is the market value of the investments held as shown in the fund’s schedule of investments.
A diversified portfolio, where this is appropriate and consistent with a fund’s objectives, minimizes the risk that a price change of a particular investment will have a material impact on the NAV of a fund. The investment concentrations within the Fund’s portfolio are disclosed in its schedule of investments.
Investing in the securities of non-U.S. issuers involves certain considerations and risks not typically associated with securities of U.S. issuers. Such risks include, but are not limited to: differences in accounting, auditing and financial reporting standards; more substantial governmental involvement in the economy; higher inflation rates, greater social, economic and political uncertainties; possible nationalization or expropriation of assets; less availability of public information about issuers; imposition of withholding or other taxes; higher transaction and custody costs and delays in settlement procedures; and lower level of regulation of the
26 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES® INTERNATIONAL HIGH YIELD BOND ETF
securities markets and issuers. Non-U.S. securities may be less liquid, more difficult to value, and have greater price volatility due to exchange rate fluctuations. These and other risks are heightened for investments in issuers from countries with less developed capital markets.
The economies and markets of European countries are often closely connected and interdependent, and events in one country in Europe can have an adverse impact on other European countries. The European financial markets have experienced volatility and adverse trends in recent years due to concerns about economic downturns or rising government debt levels in several European countries. These events have adversely affected the exchange rate of the euro and may continue to significantly affect European countries. The occurrence of terrorist incidents throughout Europe also could impact financial markets. In addition, the United Kingdom has voted to withdraw from the European Union. The referendum may introduce significant new uncertainties and instability in the financial markets as the United Kingdom negotiates its exit from the European Union.
Changes in market interest rates or economic conditions may affect the value and/or liquidity of fixed income investments. Interest rate risk is the risk that prices of bonds and other fixed-income securities will decrease as interest rates rise and increase as interest rates fall. Securities with longer durations tend to be more sensitive to interest rate changes, usually making their prices more volatile than those of securities with shorter durations. Given the environment of historically low interest rates, a fund may be subject to a greater risk of price losses if interest rates rise.
CREDIT RISK
Credit risk is the risk that an issuer or guarantor of debt instruments or the counterparty to a financial transaction, including derivatives contracts, repurchase agreements or loans of portfolio securities, is unable or unwilling to make timely interest and/or principal payments or to otherwise honor its obligations. BFA and its affiliates manage counterparty credit risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose a fund to issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of a fund’s exposure to credit and counterparty risks with respect to those financial assets is approximated by their value recorded in its statement of assets and liabilities.
High yield securities that are rated below investment-grade (commonly referred to as “junk bonds”) or are unrated may be deemed speculative, involve greater levels of risk than higher-rated securities of similar maturity and are more likely to default. High yield securities may be issued by less creditworthy issuers, and issuers of high yield securities may be unable to meet their interest or principal payment obligations. High yield securities are subject to extreme price fluctuations, may be less liquid than higher rated fixed-income securities, even under normal economic conditions, and frequently have redemption features.
6. | INCOME TAX INFORMATION |
The Fund is treated as an entity separate from the Company’s other funds for federal income tax purposes. It is the policy of the 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.
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 NAV per share. The following permanent differences as of
NOTESTO FINANCIAL STATEMENTS | 27 |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES® INTERNATIONAL HIGH YIELD BOND ETF
October 31, 2017, attributable to foreign currency transactions and realized gains (losses) from in-kind redemptions, were reclassified to the following accounts:
Paid-in Capital | Undistributed Net Investment Income/Distributions | Undistributed Net Realized Gain/Accumulated Net Realized Loss | ||||||
$(9,218,328) | $ | (2,077,944) | $ | 11,296,272 |
The tax character of distributions paid during the years ended October 31, 2017 and October 31, 2016 was as follows:
2017 | 2016 | |||||||
Ordinary income | $ | 622,289 | $ | 906,680 | ||||
Return of capital | 142,861 | 2,212,307 | ||||||
|
|
|
| |||||
$ | 765,150 | $ | 3,118,987 | |||||
|
|
|
| |||||
As of October 31, 2017, the tax components of accumulated net earnings (losses) were as follows:
Capital Loss Carryforwards | Net Unrealized Gains (Losses) a | Total | ||||||
$(3,694,489) | $ | 16,992 | $ | (3,677,497) |
a | The difference between book-basis and tax-basis unrealized gains (losses) was attributable primarily to the tax deferral of losses on wash sales. |
As of October 31, 2017, the Fund had non-expiring capital loss carryforwards in the amount of $3,694,489 available to offset future realized capital gains.
For the year ended October 31, 2017, the Fund utilized $326,171 of its capital loss carryforwards.
Management has analyzed tax laws and regulations and their application to the Fund as of October 31, 2017, inclusive of the open tax return years, and does not believe there are any uncertain tax positions that require recognition of a tax liability in the Fund’s financial statements.
7. | LEGAL PROCEEDINGS |
On June 16, 2016, investors (the “Plaintiffs”) in certain iShares funds (iShares Core S&P Small-Cap ETF, iShares Russell 1000 Growth ETF, iShares Core S&P 500 ETF, iShares Russell Mid-Cap Growth ETF, iShares Russell Mid-Cap ETF, iShares Russell Mid-Cap Value ETF, iShares Select Dividend ETF, iShares Morningstar Mid-Cap ETF, iShares Morningstar Large-Cap ETF, iShares U.S. Aerospace & Defense ETF and iShares U.S. Preferred Stock ETF) filed a putative class action lawsuit against iShares Trust, BlackRock, Inc. and certain of its advisory affiliates, and certain directors/trustees and officers of the Funds (collectively, “Defendants”). The lawsuit alleges the Defendants violated federal securities laws by failing to adequately disclose in the prospectuses issued by the funds noted above the risks of using stop-loss orders in the event of a ‘flash crash’, such as the one that occurred on May 6, 2010. On September 18, 2017, the Court issued a Statement of Decision holding that the Plaintiffs lack standing to assert their claims. On October 11, 2017, the Court entered final judgment dismissing all of the Plaintiffs’ claims with prejudice. Plaintiffs have appealed the Court’s decision.
28 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Notes to Financial Statements (Continued)
iSHARES® INTERNATIONAL HIGH YIELD BOND ETF
8. | SUBSEQUENT EVENTS |
Management has evaluated the impact of all subsequent events on the Fund through the date the financial statements were available to be issued and has determined that there were no subsequent events requiring adjustment or disclosure in the financial statements.
NOTESTO FINANCIAL STATEMENTS | 29 |
Table of Contents
Report of Independent Registered Public Accounting Firm
To the Board of Directors of iShares, Inc. and the Shareholders of the
iShares International High Yield Bond ETF
In our opinion, the accompanying statement of assets and liabilities, including the schedule 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 International High Yield Bond ETF (constituting a fund of iShares, Inc., hereafter referred to as the “Fund”) as of October 31, 2017, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, 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 Fund’s 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 as of October 31, 2017 by correspondence with the custodian, transfer agent and brokers, or by other appropriate auditing procedures where replies were not received, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
December 21, 2017
30 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
iSHARES® INTERNATIONAL HIGH YIELD BOND ETF
For the fiscal year ended October 31, 2017, the Fund earned foreign source income of $2,797,094 which it intends to pass through to its shareholders.
For the fiscal year ended October 31, 2017, the Fund hereby designates $143,038 as the maximum amount allowable as interest-related dividends eligible for exemption from U.S. withholding tax for nonresident aliens and foreign corporations.
TAX INFORMATION | 31 |
Table of Contents
Board Review and Approval of Investment Advisory
Contract
iSHARES® INTERNATIONAL HIGH YIELD BOND ETF
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 and approve the Investment Advisory Contract between the Company and BFA (the “Advisory Contract”), and the Sub-Advisory Agreement between BFA and BlackRock International Limited (“BIL”) (the “Sub-Advisory Agreement”), on behalf of the Fund. The Advisory Contract and the Sub-Advisory Agreement are referred to hereafter as the “Advisory Agreements”. 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 Agreements. A committee of all of the Independent Directors (the “15(c) Committee”), with independent counsel, met with management on May 5, 2017 and May 12, 2017. At these meetings, the 15(c) Committee reviewed and discussed information provided in response to the 15(c) Committee’s initial requests, and requested certain additional information, which management agreed to provide. At a meeting held on May 18, 2017, management presented information to the Board relating to the continuance of the Advisory Agreements, including information requested by the 15(c) Committee during its meetings. The Board, including the Independent Directors, reviewed and discussed such information at length. The Independent Directors requested from management certain additional information, which management agreed to provide. At a meeting held on June 19-21, 2017, the Board, including the Independent Directors, reviewed the additional information provided by management in response to these requests. After extensive discussions, the Board, including all of the Independent Directors, approved the continuance of the Advisory Agreements for the Fund, based on a review of qualitative and quantitative information provided by BFA. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Board also noted that the Board and BFA agreed to discuss potential further enhancements to the 15(c) process for the coming year. The Independent Directors were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Agreements for the Fund, the Board, including the Independent Directors, considered the following factors, no one of which was controlling, and reached the following conclusions:
Expenses and Performance of the Fund — The Board reviewed statistical information prepared by Broadridge Financial Solutions Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, waivers/reimbursements (if any), and underlying fund fees and expenses (if any) of the Fund in comparison with the same information for other exchange traded funds (“ETFs”) (including, where applicable, funds sponsored by an “at cost” service provider) and, in the limited instances where no comparable ETFs existed and the comparison group would not otherwise be reasonable in Broadridge’s judgment, pure index institutional mutual funds, objectively selected by Broadridge as comprising the Fund’s applicable peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of the proprietary ETF methodology used by Broadridge to determine the Fund’s Peer Group. The Board further noted that due to the limitations in providing comparable funds in the Peer Group, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Fund in all instances.
The Board also noted that the investment advisory fee rate and overall expenses (net of waivers and reimbursements) for the Fund were lower than the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in its Peer Group, excluding iShares funds. The Board also noted that BFA pays BIL for its sub-advisory services, and that there are no additional fees imposed on the Fund in respect of the services provided under the Sub-Advisory Agreement.
In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as the Fund, Broadridge also provided, and the Board reviewed, a comparison of the Fund’s performance for the one-, three-, five-, ten-year, and since inception periods, as applicable, and for the quarter ended December 31, 2016, to that of relevant comparison funds for the same periods.
32 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Board Review and Approval of Investment Advisory
Contract (Continued)
iSHARES® INTERNATIONAL HIGH YIELD BOND ETF
The Board noted that the Fund seeks to track its specified underlying index and that, during the year, the Board received periodic reports on the Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative performance information, including any additional detailed information requested by the Boards, was also considered. The Board noted that the Fund generally performed in line with its underlying index over the relevant periods.
Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and the historical performance of the Fund supported the Board’s approval of the continuance of the Advisory Agreements for the coming year.
Nature, Extent and Quality of Services Provided by BFA and BIL or their Affiliates — Based on management’s representations, including information about recent and proposed enhancements to the iShares business, including with respect to capital markets support and analysis, technology, product design, compliance and risk management, and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA (and any services provided by BIL on BFA’s behalf or at BFA’s direction) under the Advisory Agreements for the coming year as compared to the scope of services provided by BFA and BIL during prior years. In reviewing the scope of these services, the Board considered the investment philosophy and experience of BFA and BIL, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to supporting the iShares funds and their shareholders. The Board also considered the compliance program of BFA and BIL and their compliance record with respect to the Fund. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made appropriate officers available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Fund, as well as the resources available to them in managing the Fund. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the June 19-21, 2017 meeting and throughout the previous year, and matters related to BFA’s and BIL’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 and BIL to the Fund under the Advisory Agreements supported the Board’s approval of the continuance of the Advisory Agreements for the coming year.
Costs of Services Provided to Fund and Profits Realized by BFA and Affiliates — The Board reviewed information about the profitability of the Fund to BlackRock, based on the fees payable to BFA and its affiliates (including fees under the Advisory Contract), and other sources of revenue and expense to BFA and its affiliates from the Fund’s operations for the last calendar year. The Board reviewed BlackRock’s profitability methodology for the iShares funds, including supplemental information that was responsive to requests of the 15(c) Committee. The Board noted that the 15(c) Committee had focused on the methodology and profitability presentation during its meetings. The Board discussed the sources of direct and ancillary revenue with management, including the revenues to BTC, a BFA affiliate, from securities lending by the Fund. The Board also discussed BFA’s profit margin as reflected in the Fund’s profitability analysis and reviewed information regarding potential economies of scale (as discussed below). Based on this review, the Board concluded that the profits realized by BFA and its affiliates under the Advisory Contract and from other relationships between the Fund and BFA and/or its affiliates, if any, were within a reasonable range in light of the factors considered.
Economies of Scale — The Board reviewed information regarding potential economies of scale or other efficiencies that may result from increases in the Fund’s assets, noting that the issue of economies of scale had been focused on by the 15(c) Committee during its meetings and addressed by management, including through supplemental information. The Board and the
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 33 |
Table of Contents
Board Review and Approval of Investment Advisory
Contract (Continued)
iSHARES® INTERNATIONAL HIGH YIELD BOND ETF
15(c) Committee reviewed information provided by BFA regarding scale benefits shared with the iShares funds through relatively low fee rates established at inception, breakpoints and waivers or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board and the 15(c) Committee received information regarding BlackRock’s historical profitability, including BFA’s and its affiliates’ costs in providing services. The cost information distinguished, among other things, between fixed and variable costs, and explained how the level of fixed and variable costs, as well as the nature of such costs, may impact the existence or size of scale benefits. The Board noted that the Advisory Contract for the Fund did not provide for any breakpoints in the Fund’s investment advisory fee rate as the assets of the Fund increase. However, the Board noted that should material economies of scale be identified in the future that are not otherwise shared, a breakpoint structure for the Fund may be appropriate, and that it would continue to monitor the sharing of economies of scale to determine the appropriateness of adding breakpoints in the future.
Based on this review, as well as the other factors considered at the meeting, the Board, recognizing its responsibility to consider the Advisory Agreements at least annually, determined to approve the continuance of the Advisory Agreements for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates — The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (together, the “Other Accounts”), and acknowledged BFA’s assertion that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same investment objective and strategy as the Fund and that track the same index as the Fund. The Board further noted that BFA provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the Fund, including in terms of the different and generally more extensive services provided to the Fund, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Fund, as a publicly traded ETF, as compared to the Other Accounts that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. The Board also acknowledged BFA’s expressed business purpose for launching a suite of iShares “Core” ETFs that generally are subject to lower investment advisory fees than iShares non-Core ETFs that may provide a similar investment exposure. The Board also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund expenses borne by BFA under this arrangement. The Board noted that the investment advisory fee rate under the Advisory Contract for the Fund was generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.
Other Benefits to BFA and/or its Affiliates — The Board reviewed the “fallout” benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Fund by BFA, such as payment of revenue to BTC, the Fund’s securities lending agent, for loaning portfolio securities (which was included in the profit margins reviewed by the Board pursuant to BFA’s profitability methodology), and payment of advisory fees and/or administration fees to BFA and BTC (or their affiliates) in connection with any investments by the Fund in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board also noted the revenue received by BFA and/or its affiliates pursuant to an agreement that permits a service provider to use certain portions of BlackRock’s technology platform to service accounts managed by BFA and/or its affiliates, including the iShares funds. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio
34 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Board Review and Approval of Investment Advisory
Contract (Continued)
iSHARES® INTERNATIONAL HIGH YIELD BOND ETF
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 Agreements for the coming year.
Conclusion — Based on the considerations described above, the Board determined that the Fund’s investment advisory fee rate under the Advisory Contract does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded to approve the continuance of the Advisory Agreements for the coming year.
BOARD REVIEWAND APPROVALOF INVESTMENT ADVISORY CONTRACT | 35 |
Table of Contents
Supplemental Information (Unaudited)
iSHARES® INTERNATIONAL HIGH YIELD BOND ETF
Proxy Results
A special meeting of the shareholders of each series of iShares, Inc. (the “Company”) was held on June 19, 2017, to elect five Directors to the Board of Directors of the Company. The five nominees were Jane D. Carlin, Richard L. Fagnani, Drew E. Lawton, Madhav V. Rajan and Mark Wiedman, all of whom were elected as Directors at the special meeting. The other Directors whose terms of office as Directors continued after the special meeting are Cecilia H. Herbert, Charles A. Hurty, John E. Kerrigan, John E. Martinez and Robert S. Kapito.
Director | Votes For | Votes Withheld | ||||||
Jane D. Carlin | 1,911,835,929 | 49,339,171 | ||||||
Richard L. Fagnani | 1,911,725,344 | 49,449,755 | ||||||
Drew E. Lawton | 1,911,790,083 | 49,385,017 | ||||||
Madhav V. Rajan | 1,902,999,095 | 58,176,004 | ||||||
Mark Wiedman | 1,908,143,500 | 53,031,599 |
Section 19(a) Notices
The amounts and sources of distributions reported are estimates and are provided pursuant to regulatory requirements and are not being provided for tax reporting purposes. The actual amounts and sources for tax reporting purposes will depend upon each Fund’s investment experience during the year and may be subject to changes based on the tax regulations. Shareholders will receive a Form 1099-DIV each calendar year that will inform them how to report distributions for federal income tax purposes.
Total Cumulative Distributions for the Fiscal Year | % Breakdown of the Total Cumulative Distributions for the Fiscal Year | |||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||
$ | 0.356815 | $ | — | $ | 0.128974 | $ | 0.485789 | 73 | % | — | % | 27 | % | 100 | % |
Premium/Discount Information
The Premium/Discount Information section is intended to present information about the differences between the daily market price on secondary markets for shares of a fund and that fund’s NAV. NAV is the price at which a fund issues and redeems shares. It is calculated in accordance with the standard formula for valuing mutual fund shares. The “Market Price” of a fund generally is determined using the midpoint between the highest bid and the lowest ask on the primary securities exchange on which shares of such fund are listed for trading, as of the time that the fund’s NAV is calculated. A fund’s Market Price may be at, above or below its NAV. The NAV of a fund will fluctuate with changes in the value of its portfolio holdings. The Market Price of a 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 the 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.
Premium/discount information for the Fund covering the most recently completed calendar year and the most recently completed calendar quarters since that year (or the life of the Fund, if shorter) is publicly accessible, free of charge, at www.iShares.com.
36 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Supplemental Information (Unaudited) (Continued)
iSHARES® INTERNATIONAL HIGH YIELD BOND ETF
The following information shows the frequency of distributions of premiums and discounts for the Fund for the immediately preceding five calendar years (or from the inception date of the Fund, if less than five years) through the date of the most recent calendar quarter-end. 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.
Period Covered: April 3, 2012 through September 30, 2017
Premium/Discount Range | Number of Days | Percentage of Total Days | ||||||
Greater than 3.5% and Less than 4.0% | 1 | 0.07 | % | |||||
Greater than 3.0% and Less than 3.5% | 7 | 0.51 | ||||||
Greater than 2.5% and Less than 3.0% | 7 | 0.51 | ||||||
Greater than 2.0% and Less than 2.5% | 6 | 0.43 | ||||||
Greater than 1.5% and Less than 2.0% | 29 | 2.10 | ||||||
Greater than 1.0% and Less than 1.5% | 84 | 6.07 | ||||||
Greater than 0.5% and Less than 1.0% | 492 | 35.57 | ||||||
Greater than 0.0% and Less than 0.5% | 620 | 44.84 | ||||||
At NAV | 5 | 0.36 | ||||||
Less than 0.0% and Greater than –0.5% | 111 | 8.03 | ||||||
Less than –0.5% and Greater than –1.0% | 19 | 1.37 | ||||||
Less than –1.0% and Greater than –1.5% | 1 | 0.07 | ||||||
Less than –1.5% and Greater than –2.0% | 1 | 0.07 | ||||||
|
|
|
| |||||
1,383 | 100.00 | % | ||||||
|
|
|
|
SUPPLEMENTAL INFORMATION | 37 |
Table of Contents
Director and Officer Information
iSHARES®, INC.
The Board of Directors has responsibility for the overall management and operations of the Funds, 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. Each officer shall hold office until his or her successor is elected and qualifies or until his or her death, resignation or removal. Directors who are not “interested persons” (as defined in the 1940 Act) of the Company are referred to as independent directors (“Independent Directors”).
The registered investment companies advised by BFA or its affiliates (the “BlackRock-advised Funds”) 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 also serves as a Trustee of iShares Trust and a Trustee of iShares U.S. ETF Trust and, as a result, oversees a total of 346 funds (as of October 31, 2017) within the Exchange-Traded Fund Complex. Drew E. Lawton, from October 2016 to June 2017, and Richard L. Fagnani, from April 2017 to June 2017, served as a member of the advisory board (“Advisory Board,” members of which are “Advisory Board Members”) for iShares, Inc., iShares Trust and iShares U.S. ETF Trust with respect to all funds within the Exchange-Traded Fund Complex. With the exception of Robert S. Kapito, Mark K. Wiedman, Charles Park, Martin Small and Benjamin Archibald, the address of each Director, and officer is c/o BlackRock, Inc., 400 Howard Street, San Francisco, CA 94105. The address of Mr. Kapito, Mr. Wiedman, Mr. Park, Mr. Small and Mr. Archibald is c/o BlackRock, Inc., Park Avenue Plaza, 55 East 52nd Street, New York, NY 10055. The Board has designated Cecilia H. Herbert as its Independent Board Chair. 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
Name (Age) | Position(s) | Principal Occupation(s) During the Past 5 Years | Other Directorships Held by Director | |||
Robert S. Kapitoa (60) | Director (since 2009). | President, BlackRock, Inc. (since 2006); Vice Chairman of BlackRock, Inc. and Head of BlackRock’s Portfolio Management Group (since its formation in 1998) and BlackRock, Inc.’s predecessor entities (since 1988); Trustee, University of Pennsylvania (since 2009); President of Board of Directors, Hope & Heroes Children’s Cancer Fund (since 2002). | Director of BlackRock, Inc. (since 2006); Trustee of iShares Trust (since 2009); Trustee of iShares U.S. ETF Trust (since 2011). | |||
Mark K. Wiedmanb (46) | Director | Senior Managing Director, BlackRock, Inc. (since 2014); Managing Director, BlackRock, Inc. (2007-2014); Global Head of BlackRock’s ETF and Index Investments Business (since 2016); Global Head of iShares (2011-2016); Head of Corporate Strategy, BlackRock, Inc. (2009-2011). | Trustee of iShares Trust (since 2013); Trustee of iShares U.S. ETF Trust (since 2013); Director of PennyMac Financial Services, Inc. (since 2008). |
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. and its affiliates. |
b | Mark K. Wiedman 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. |
38 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
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Director and Officer Information (Continued)
iSHARES®, INC.
Independent Directors
Name (Age) | Position(s) | Principal Occupation(s) During the Past 5 Years | Other Directorships Held by Director | |||
Cecilia H. Herbert (68) | Director (since 2005); Independent Board Chair (since 2016). | Trustee and Member of the Finance, Technology and Quality Committee of Stanford Health Care (since 2016); Trustee and Member of the Investment Committee, WNET, a New York public media company (since 2011); Chair (1994-2005) and Member (since 1992) of the Investment Committee, Archdiocese of San Francisco; Director (1998-2013) and President (2007-2011) of the Board of Directors, Catholic Charities CYO; Trustee (2002-2011) and Chair of the Finance and Investment Committee (2006-2010) of the Thacher School. | Trustee of iShares Trust (since 2005); Trustee of iShares U.S. ETF Trust (since 2011); Independent Board Chair of iShares Trust and iShares U.S. ETF Trust (since 2016); Trustee of Forward Funds (14 portfolios) (since 2009); Trustee of Salient MF Trust (4 portfolios) (since 2015). | |||
Jane D. Carlin (61) | Director (since 2015); Risk Committee Chair (since 2016). | Consultant (since 2012); Managing Director and Global Head of Financial Holding Company Governance & Assurance and the Global Head of Operational Risk Management of Morgan Stanley (2006-2012). | Trustee of iShares Trust (since 2015); Trustee of iShares U.S. ETF Trust (since 2015); Director of PHH Corporation (mortgage solutions) (since 2012); Director of The Hanover Insurance Group, Inc. (since 2016). | |||
Richard L. Fagnani (62) | Director (since 2017); Equity Plus Committee Chair (since 2017). | Partner, KPMG LLP (2002-2016). | Trustee of iShares Trust (since 2017); Trustee of iShares U.S. ETF Trust (since 2017). | |||
Charles A. Hurty (74) | Director (since 2005); Audit Committee Chair (since 2006). | Retired; Partner, KPMG LLP (1968-2001). | Trustee of iShares Trust (since 2005); Trustee of iShares U.S. ETF Trust (since 2011); Director of SkyBridge Alternative Investments Multi-Adviser Hedge Fund Portfolios LLC (2 portfolios) (since 2002). | |||
John E. Kerrigan (62) | Director (since 2005); Securities Lending Committee Chair (since 2016). | Chief Investment Officer, Santa Clara University (since 2002). | Trustee of iShares Trust (since 2005); Trustee of iShares U.S. ETF Trust (since 2011). | |||
Drew E. Lawton (58) | Director (since 2017); 15(c) Committee Chair (since 2017). | Senior Managing Director of New York Life Insurance Company (2010-2015). | Trustee of iShares Trust (since 2017); Trustee of iShares U.S. ETF Trust (since 2017). |
DIRECTORAND OFFICER INFORMATION | 39 |
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Director and Officer Information (Continued)
iSHARES®, INC.
Independent Directors (Continued)
Name (Age) | Position(s) | Principal Occupation(s) During the Past 5 Years | Other Directorships Held by Director | |||
John E. Martinez (56) | Director (since 2003); Fixed Income Plus Committee Chair (since 2016). | Director of Real Estate Equity Exchange, Inc. (since 2005). | Trustee of iShares Trust (since 2003); Trustee of iShares U.S. ETF Trust (since 2011). | |||
Madhav V. Rajan (53) | Director (since 2011); Nominating and Governance Committee Chair (since 2017). | Dean, and George Pratt Shultz Professor of Accounting, University of Chicago Booth School of Business (since 2017); Robert K. Jaedicke Professor of Accounting, Stanford University Graduate School of Business (2001-2017); Professor of Law (by courtesy), Stanford Law School (2005-2017); Senior Associate Dean for Academic Affairs and Head of MBA Program, Stanford University Graduate School of Business (2010-2016) . | Trustee of iShares Trust (since 2011); Trustee of iShares U.S. ETF Trust (since 2011); Director, Cavium, Inc. (since 2013). |
40 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
Director and Officer Information (Continued)
iSHARES®, INC.
Officers
Name (Age) | Position(s) | Principal Occupation(s) During the Past 5 Years | ||
Martin Small (42) | President (since 2016). | Managing Director, BlackRock, Inc. (since 2010); Head of U.S. iShares (since 2015); Co-Head of the U.S. Financial Markets Advisory Group, BlackRock, Inc. (2008-2014). | ||
Jack Gee (58) | Treasurer and Chief Financial Officer (since 2008). | Managing Director, BlackRock, Inc. (since 2009); Senior Director of Fund Administration of Intermediary Investor Business, BGI (2009). | ||
Benjamin Archibald (42) | Secretary (since 2015). | Managing Director, BlackRock, Inc. (since 2014); Director, BlackRock, Inc. (2010-2013); Secretary of the BlackRock-advised mutual funds (since 2012). | ||
Alan Mason (56) | Executive Vice President (since 2016). | Managing Director, BlackRock, Inc. (since 2009). | ||
Steve Messinger (55) | Executive Vice President (since 2016). | Managing Director, BlackRock, Inc. (2007-2014 and since 2016); Managing Director, Beacon Consulting Group (2014-2016). | ||
Charles Park (50) | Chief Compliance Officer (since 2006). | Chief Compliance Officer of BlackRock Advisors, LLC and the BlackRock-advised Funds in the Equity-Bond Complex, the Equity-Liquidity Complex and the Closed-End Complex (since 2014); Chief Compliance Officer of BFA (since 2006). | ||
Scott Radell (48) | Executive Vice President (since 2012). | Managing Director, BlackRock, Inc. (since 2009); Head of Portfolio Solutions, BlackRock, Inc. (since 2009). |
DIRECTORAND OFFICER INFORMATION | 41 |
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Notes:
42 | 2017 iSHARES ANNUAL REPORTTO SHAREHOLDERS |
Table of Contents
For more information visit www.iShares.com or call 1-800-iShares (1-800-474-2737)
This report is intended for the Fund’s shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.
Investing involves risk, including possible loss of principal.
The iShares Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by Markit Indices Limited, nor does this company make any representation regarding the advisability of investing in the iShares Funds. BlackRock is not affiliated with the company listed above.
A description of the policies that the Fund uses to determine how to vote proxies relating to portfolio securities and information about how the Fund 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 Fund’s website at www.iShares.com; and on the U.S. Securities and Exchange Commission (SEC) website at www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s 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 Fund also discloses its complete schedule of portfolio holdings on a daily basis on the Fund’s website.
©2017 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc. or its subsidiaries. All other marks are the property of their respective owners.
iS-AR-1017-1017
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Item 2. | Code of Ethics. |
The registrant has adopted a code of ethics, as of the end of the period covered by this report, applicable to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. During the period covered by this report, the code of ethics was amended to clarify an inconsistency in to whom persons covered by the code should report suspected violations of the code. The amendment clarifies that such reporting should be made to BlackRock’s General Counsel, and retains the alternative option of anonymous reporting following “whistleblower” policies. Other non-material changes were also made in connection with this amendment. During the period covered by this report, there have been no waivers granted under the code of ethics. The registrant undertakes to provide a copy of the code of ethics to any person upon request, without charge, by calling 1-800-474-2737.
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, Richard L. Fagnani (began serving on the audit committee effective as of June 20, 2017 and was designated as an audit committee financial expert serving on the audit committee effective as of September 15, 2017), John E. Kerrigan, and Madhav V. Rajan, all of whom are independent, as that term is defined under Item 3(a)(2).
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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, 2017 (the “Funds”), and whose annual financial statements are reported in Item 1.
(a) | Audit Fees – The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the Funds’ annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years were $79,000 for the fiscal year ended October 31, 2016 and $77,500 for the fiscal year ended October 31, 2017. |
(b) | Audit-Related Fees – There were no fees billed for the fiscal years ended October 31, 2016 and October 31, 2017 for assurance and related services by the principal accountant that were reasonably related to the performance of the audit of the Fund’s financial statements and are not reported under (a) of this Item. |
(c) | Tax Fees – The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice and tax planning for the Funds were $18,905 for the fiscal year ended October 31, 2016 and $18,905 for the fiscal year ended October 31, 2017. These services related to the review of the Funds’ tax returns and excise tax calculations. |
(d) | All Other Fees – There were no other fees billed in each of the fiscal years ended October 31, 2016 and October 31, 2017 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 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 Funds’ financial statements for the fiscal year ended October 31, 2017 were attributable to work performed by persons other than the principal accountant’s full-time, permanent employees. |
(g) | The aggregate non-audit fees billed by the registrant’s principal accountant for services rendered to the Funds, and rendered to the registrant’s investment adviser, and any Adviser Affiliate that provides ongoing services to the registrant for the last two fiscal years were $18,905 for the fiscal year ended October 31, 2016 and $18,905 for the fiscal year ended October 31, 2017. The aggregate non-audit fees for the fiscal year ended October 31, 2016 included in this report are different from those included in the previously filed report covering the 12-month period ended October 31, 2016 as this report excludes non-audit fees for services that were rendered to the registrant’s investment adviser or any Adviser Affiliate that provides ongoing services to the registrant but that were not related 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 provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, if any, is compatible with maintaining the principal accountant’s independence, and has determined that the provision of these services, if any, does not compromise the principal accountant’s independence. |
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Item 5. | Audit Committee of Listed Registrants |
(a) The registrant is a listed issuer as defined in Rule 10A-3 under the Exchange Act of 1934 and has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act of 1934. The registrant’s audit committee members are Charles A. Hurty, Richard L. Fagnani (began serving on the audit committee effective as of June 20, 2017), John E. Kerrigan, and Madhav V. Rajan.
(b) Not applicable.
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 Treasurer and Chief Financial Officer (the registrant’s Principal Financial Officer) have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are effective as of a date within 90 days of the filing date of this report, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the Investment Company Act of 1940 and Rules 13a-15(b) or 15d-15(b) under the Exchange Act of 1934.
(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. | Disclosure of Securities Lending Activities for Closed-End Management Investment Companies. |
Not applicable to the registrant.
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Item 13. | Exhibits. |
(a) (1) Code of Ethics is not filed as an exhibit; please refer to Item 2.
(a) (2) Section 302 Certifications are attached.
(a) (3) Not applicable.
(a) (4) Not applicable.
(b) Section 906 Certifications are attached.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
iShares, Inc. | ||
By: | /s/ Martin Small | |
Martin Small, President (Principal Executive Officer) |
Date: May 4, 2018
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Martin Small | |
Martin Small, President (Principal Executive Officer) | ||
Date: May 4, 2018 | ||
By: | /s/ Jack Gee | |
Jack Gee, Treasurer and Chief Financial Officer (Principal Financial Officer) | ||
Date: May 4, 2018 |