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MARCH 31, 2015

2015 ANNUAL REPORT

iShares Trust

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Management��s Discussion of Fund Performance

iSHARES^® TRUST

U.S. MUNICIPAL BOND MARKET OVERVIEW

Municipal bonds posted solid gains during the 12 months ended March 31, 2015 (the ��reporting period��), ending the reporting period as one of the best-performing U.S. fixed income asset classes. The S&P National AMT-Free Municipal Bond Index^TM, a broad measure of the domestic municipal bond market, rose 6.35% for the reporting period, outpacing the 5.72% increase of the Barclays U.S. Aggregate Bond Index, which tracks U.S. Treasuries and other U.S. investment grade bonds.

The U.S. economy experienced relatively solid economic growth and low inflation during the reporting period. The improving economy motivated the U.S. Federal Reserve Bank (the ��Fed��) to scale back its economic stimulus measures during the reporting period. The Fed ended its quantitative easing program in October 2014, after two years of operation, and indicated that it may raise its short-term interest rate target sometime in 2015.

Shifting market expectations for short-term interest rates had a relatively muted effect on the short-term municipal bond market during the reporting period, as short-term yields fluctuated in a relatively narrow range. For the first half of the reporting period, yields on municipal bonds maturing within five years declined slightly. However, expectations for a rate hike by the Fed increased in the second half of the reporting period, pushing short-term municipal bond yields higher. For the entire reporting period, the yield on AAA-rated, 2-year municipal bonds finished the reporting period slightly higher, while their 5-year counterparts were relatively unchanged.

Strengthening creditworthiness among state and local issuers of municipal debt also helped bolster municipal bond returns. Most states exceeded pre-recession revenues, with gains in 16 of the last 18 quarters. States�� spending remained constrained, their budgets were largely balanced and passed on time and some states were able to bolster rainy day funds. By year-end 2014, municipal defaults were on pace to be at their lowest levels in three years. In 2014, roughly $1.15 billion of outstanding municipal debt entered into default, amounting to only 0.03% of the total bonds outstanding.

California and New York �� two of the largest municipal bond issuers �� generally outperformed the broader municipal bond market, as improving credit quality led to lower yields. Moody��s Investors Service (��Moody��s��) upgraded California��s general obligation bond rating to Aa3 in June 2014, citing a rapidly improving financial position, high but declining debt metrics, pension funding ratios close to the state median, strong liquidity and robust employment growth. In November, Standard & Poor��s Ratings Service (��S&P��) adjusted its rating one notch higher to A+, encouraged by voter approval of budget stabilization measures. New York bonds were helped by S&P��s credit rating upgrade in July 2014 to the second-highest investment grade level, the state��s highest rating since 1972. S&P pointed to New York��s ��recent history of improved structural budget balance with a strong focus on spending restraint and on-time budgets.�� Moody��s had upgraded the state��s credit rating in the prior month.

Favorable supply and demand conditions further boosted municipal bond results. Relatively tight state budgets and high levels of bond refinancing in prior years led to a slight decrease in the total supply of municipal bonds. Demand for municipal bonds (and the tax-free income they offer) rebounded from 2013 levels, as tax-sensitive investors �� many of whom were facing the highest top federal income-tax rates since 2000, as well as rising state and local tax burdens �� looked to municipal bonds for tax-free income.

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Management��s Discussion of Fund Performance

iSHARES^® iBONDS ^® SEP 2015 AMT-FREE MUNI BOND ETF

Performance as of March 31, 2015

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 1/7/10. The first day of secondary market trading was 1/8/10.

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 18 for more information.

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Management��s Discussion of Fund Performance (Continued)

iSHARES^® iBONDS^® SEP 2015 AMT-FREE MUNI BOND ETF

The iShares iBonds Sep 2015 AMT-Free Muni Bond ETF (the ��Fund��) (formerly the iShares 2015 AMT-Free Muni Term ETF) seeks to track the investment results of an index composed of investment-grade U.S. municipal bonds maturing after May 31 and before September 2, 2015, as represented by the S&P AMT-Free Municipal Series 2015 Index^TM (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 March 31, 2015, the total return for the Fund was 0.01%, net of fees, while the total return for the Index was 0.25%.

The Fund will be liquidating on or about September 1, 2015, following the termination of the Index, on or about the same date. All bonds in the Index will mature between May 31 and September 2 of this year. As each bond matures, an amount representing its value at maturity will be included in the Index throughout the remaining life of the Index. By September 1, 2015, the Index is expected to consist entirely of cash carried in this manner.

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Management��s Discussion of Fund Performance

iSHARES^® iBONDS ^® SEP 2016 AMT-FREE MUNI BOND ETF

Performance as of March 31, 2015

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 1/7/10. The first day of secondary market trading was 1/8/10.

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 18 for more information.

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Management��s Discussion of Fund Performance (Continued)

iSHARES^® iBONDS^® SEP 2016 AMT-FREE MUNI BOND ETF

The iShares iBonds Sep 2016 AMT-Free Muni Bond ETF (the ��Fund��) (formerly the iShares 2016 AMT-Free Muni Term ETF) seeks to track the investment results of an index composed of investment-grade U.S. municipal bonds maturing after May 31 and before September 2, 2016, as represented by the S&P AMT-Free Municipal Series 2016 Index^TM (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 March 31, 2015, the total return for the Fund was 0.48%, net of fees, while the total return for the Index was 0.70%.

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Management��s Discussion of Fund Performance

iSHARES^® iBONDS ^® SEP 2017 AMT-FREE MUNI BOND ETF

Performance as of March 31, 2015

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 1/7/10. The first day of secondary market trading was 1/8/10.

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 18 for more information.

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Management��s Discussion of Fund Performance (Continued)

iSHARES^® iBONDS^® SEP 2017 AMT-FREE MUNI BOND ETF

The iShares iBonds Sep 2017 AMT-Free Muni Bond ETF (the ��Fund��) (formerly the iShares 2017 AMT-Free Muni Term ETF) seeks to track the investment results of an index composed of investment-grade U.S. municipal bonds maturing after May 31 and before September 2, 2017, as represented by the S&P AMT-Free Municipal Series 2017 Index^TM (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 March 31, 2015, the total return for the Fund was 1.03%, net of fees, while the total return for the Index was 1.31%.

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Management��s Discussion of Fund Performance

iSHARES^® iBONDS ^® SEP 2018 AMT-FREE MUNI BOND ETF

Performance as of March 31, 2015

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 3/19/13. The first day of secondary market trading was 3/21/13.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See ��About Fund Performance�� on page 18 for more information.

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Management��s Discussion of Fund Performance (Continued)

iSHARES^® iBONDS^® SEP 2018 AMT-FREE MUNI BOND ETF

The iShares iBonds Sep 2018 AMT-Free Muni Bond ETF (the ��Fund��) (formerly the iShares 2018 AMT-Free Muni Term ETF) seeks to track the investment results of an index composed of investment-grade U.S. municipal bonds maturing after May 31 and before September 2, 2018, as represented by the S&P AMT-Free Municipal Series 2018 Index^TM (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 March 31, 2015, the total return for the Fund was 1.60%, net of fees, while the total return for the Index was 1.79%.

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Management��s Discussion of Fund Performance

iSHARES^® iBONDS ^® SEP 2019 AMT-FREE MUNI BOND ETF

Performance as of March 31, 2015

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 2/4/14. The first day of secondary market trading was 2/6/14.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See ��About Fund Performance�� on page 18 for more information.

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Management��s Discussion of Fund Performance (Continued)

iSHARES^® iBONDS^® SEP 2019 AMT-FREE MUNI BOND ETF

The iShares iBonds Sep 2019 AMT-Free Muni Bond ETF (the ��Fund��) (formerly the iShares 2019 AMT-Free Muni Term ETF) seeks to track the investment results of an index composed of investment-grade U.S. municipal bonds maturing after May 31 and before September 2, 2019, as represented by the S&P AMT-Free Municipal Series 2019 Index^TM (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 March 31, 2015, the total return for the Fund was 2.73%, net of fees, while the total return for the Index was 2.65%.

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Management��s Discussion of Fund Performance

iSHARES^® iBONDS ^® SEP 2020 AMT-FREE MUNI BOND ETF

Performance as of March 31, 2015

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 8/12/14. The first day of secondary market trading was 8/14/14.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See ��About Fund Performance�� on page 18 for more information.

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Management��s Discussion of Fund Performance (Continued)

iSHARES^® iBONDS^® SEP 2020 AMT-FREE MUNI BOND ETF

The iShares iBonds Sep 2020 AMT-Free Muni Bond ETF (the ��Fund��) seeks to track the investment results of an index composed of investment-grade U.S. municipal bonds maturing after May 31 and before September 2, 2020, as represented by the S&P AMT-Free Municipal Series 2020 Index^TM (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 period from August 12, 2014 (inception date of the Fund) through March 31, 2015 (the ��reporting period��), the total return for the Fund was 1.88%, net of fees, while the total return for the Index was 1.55%.

Throughout most of the reporting period, municipal bond yields generally followed Treasury bond yields. Shorter-maturity yields generally rose, as investors began to anticipate interest rate hikes by the Fed. Yields on most investment-grade municipal bonds maturing in approximately five years rose slightly during the reporting period. Nevertheless, the Index��s relatively modest sensitivity to interest rates and relatively high credit quality led to a positive return with low volatility during the reporting period.

Within the short-term investment-grade municipal bond group, lower-rated bonds performed somewhat better than higher-rated bonds. The yield on 5-year, AAA- and AA-rated municipal bonds rose slightly, translating to lower bond prices during the reporting period. Meanwhile, the yield on A-rated bonds with a 5-year maturity finished the reporting period relatively unchanged, outperforming their higher-quality AAA- and AA-rated counterparts. More than 80% of the Index was invested in relatively high quality AAA- and AA-rated bonds during the reporting period, which meant lower relative yields, lower credit risk and modest demand from investors.

California and New York bonds were the Index��s two largest state weightings during the reporting period, representing approximately 25% of the Index. These two states delivered solid performance, boosted by improving credit fundamentals. Exposure to these states contributed to the Index��s slightly positive return during the reporting period.

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About Fund Performance

Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.iShares.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are redeemed or sold in the market. Performance for certain funds may reflect a waiver of a portion of investment management fees. Without such 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. Since shares of a fund may not have traded in the secondary market until after the fund��s inception, for the period from inception to the first day of secondary trading, the NAV of the fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.

An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower.

Shareholder Expenses

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 October 1, 2014 and held through March 31, 2015, 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 for 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.

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Schedule of Investments

iSHARES^® iBONDS^® SEP 2015 AMT-FREE MUNI BOND ETF

March 31, 2015

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Schedule of Investments (Continued)

iSHARES^® iBONDS^® SEP 2015 AMT-FREE MUNI BOND ETF

March 31, 2015