iShares Trust

Table of Contents

Market Overview

iShares Trust

Domestic Market Overview

U.S. stocks advanced for the 12 months ended March 31, 2021 (“reporting period”), when the Russell 3000^® Index, a broad measure of U.S. equity market performance, returned 62.53%. The reporting period began near the height of uncertainty surrounding the coronavirus pandemic, which drove equity prices to a multi-year low. However, stocks began to recover as the federal government took measures to adapt to the economic and public health impact of the novel coronavirus. Optimism about the growth outlook for the economy led to further advances, and stocks moved past pre-pandemic prices to reach all-time highs near the end of the reporting period.

The pandemic’s initial economic consequences were swift and far-reaching. Restrictions imposed to slow the virus’ spread resulted in extensive job losses, and the unemployment rate rose quickly, reaching 14.8% in April 2020. Consumer spending, an important engine of economic growth, decreased sharply as people spent more time at home. These disruptions led to a substantial economic contraction. The U.S. economy declined by an annualized 31.4% in the second quarter of 2020, the largest decline on record.

However, unprecedented fiscal stimulus began to reverse the downward economic momentum. Individuals began to receive direct payments in April 2020 as part of the U.S. $2.2 trillion CARES Act, and payments to support businesses that kept employees on payroll helped to stabilize the economy. Unemployment began to decline, decreasing each month between April 2020 and November 2020, while still remaining elevated compared to pre-pandemic levels. Equity prices rose in response to the improving economic outlook.

The U.S. Federal Reserve (“Fed”) also responded to the pandemic, maintaining short-term interest rates near zero to encourage lending and stimulate economic activity. The Fed further acted to stabilize bond markets by continuing an unlimited, open-ended, bond buying program for U.S. Treasuries and mortgage-backed securities. The Fed later widened its program to include directly purchasing corporate bonds for the first time, including high-yield bonds. In August 2020, the Fed revised its long-standing inflation policy, allowing inflation to exceed the 2% target to stimulate the economy.

Fiscal and monetary stimulus, along with partial reopenings in many states, helped the economy rebound sharply in the second half of 2020. Economic growth picked up in the third quarter of 2020, with an annualized gain of 33.4%, as some previously shut-down parts of the economy resumed functioning. Growth moderated in the fourth quarter of 2020, rising by an annualized 4.3%.

In addition to the growing economy, stocks were boosted by the November 2020 news that several vaccines under development showed high effectiveness rates. Stocks also benefited from the results of the election in November 2020, which led to a change of administrations but made wide-reaching reforms less likely due to slim majorities in the U.S. Congress. Additional stimulus packages signed in December 2020 and March 2021 propelled further strong gains in equities, and many U.S. stock indexes touched all-time highs near the end of the reporting period.

Rising household wealth amid higher asset prices and the return to economic growth led analysts to expect that high savings and pent-up consumer demand will drive increased spending as the pandemic wanes. However, this also raised investors’ inflation expectations near the end of the reporting period. Additionally, the unequal nature of the recovery highlighted the difficulty many individuals still face, as total unemployment remained well below pre-pandemic levels, and 30% of Americans reported lower incomes as of February 2021.

Investment Objective

The iShares Focused Value Factor ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. large- and mid-capitalization stocks with prominent value characteristics, as represented by the Focused Value Select Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index.

Performance

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

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

Certain sectors and markets performed exceptionally well based on market conditions during the one-year period. Achieving such exceptional returns involves the risk of volatility and investors should not expect that such exceptional returns will be repeated.

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 33 for more information.

Expense Example

Portfolio Management Commentary

Large and mid-capitalization stocks with prominent value characteristics gained significantly for the reporting period as the rollout of COVID-19 vaccine programs drove a rebound in economic activity. The financials sector contributed the most to the Index’s return. In the wake of the coronavirus pandemic, bank stocks faced headwinds amid concerns that widespread business failures would lead to significant loan losses, particularly regional banks whose businesses rely more heavily on loans than larger institutions. However, bank stocks rallied when the Fed backed credit markets and effective COVID-19 vaccines were developed and distributed, raising investors’ hopes for an economic rebound. Late in the reporting period, higher long-term bond yields and a steepening yield curve also pointed to a strengthening economy, further supporting bank stocks. Higher interest rates and a steeper yield curve often improve banks’ profitability by widening the difference between the interest banks charge to borrowing customers and banks’ own cost of borrowing.

In this environment, merger and acquisition activity increased as regional banks sought to increase scale, eliminate overlapping costs, and compete with larger competitors. The diversified financials industry also contributed to the Index’s return as robust capital markets and mergers and acquisition activity helped offset pressure from lower interest rates weak loan growth.

The materials sector also contributed to the Index’s return as chemicals stocks rebounded with the overall economy. Additionally, multiple production outages for commodities chemical companies along the Gulf Coast following severe weather events constrained the supply of petrochemicals used in many consumer goods, driving up demand and, in turn, prices.

In terms of relative performance, the Index notably outperformed the broader market, as represented by the Russell 1000 Index. Higher relative exposures to volatility and value drove the Index’s outperformance. To maintain value exposure, the Index tends to invest in smaller companies than the benchmark because value and small size tend to be closely intertwined. During the reporting period, mega capitalization stocks outperformed smaller companies, which limited the magnitude of the Index’s outperformance.

The Index is unconstrained at the sector level to maximize exposure to the value factor, which resulted in relatively consistent overweight positions in financials, materials, and energy sectors and underweight positions in information technology and healthcare. Financials and materials contributed to performance relative to the broader market while information technology detracted from relative performance.

Portfolio Information

Investment Objective

The iShares U.S. Aerospace & Defense ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. equities in the aerospace and defense sector, as represented by the Dow Jones U.S. Select Aerospace & Defense 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.

Performance

GROWTH OF $10,000 INVESTMENT

(AT NET ASSET VALUE)

Certain sectors and markets performed exceptionally well based on market conditions during the one-year period. Achieving such exceptional returns involves the risk of volatility and investors should not expect that such exceptional returns will be repeated.

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 33 for more information.

Expense Example

Portfolio Management Commentary

U.S. aerospace and defense stocks gained for the reporting period amid investor optimism for a recovery in air travel and consumer spending as the economy reopened following the global coronavirus outbreak. Additionally, the passage of the 2021 U.S. defense policy bill, which authorized national military spending, reaffirmed the country’s continued commitment to defense spending. Most of the other nations that spend heavily on defense, including China, India, and Japan, also reconfirmed or increased their military budgets during the reporting period despite the pandemic’s negative impact on government deficits.

Higher military sales partly offset a decrease in commercial sales as the commercial aerospace sector embarked on a multiyear recovery after the pandemic froze global air travel and curbed aircraft demand. While the total number of commercial aircraft operating was still below pre-pandemic levels, passenger demand markedly improved as the reporting period progressed, with bookings moving in lock step with rising vaccination rates and easing travel restrictions. Unsold inventories of commercial aircraft and parts peaked at the height of the travel freeze, and then dropped steadily as new orders increased. Manufacturers, in turn, boosted their output, and production of planes and their components has since returned to pre-pandemic levels.

As the airline industry continued to cut costs to offset still-low passenger volumes, the demand for more efficient aircraft technology accelerated. The return to market of a popular fuel-efficient jet, previously grounded after two high profile crashes, was met with a surge of orders. Another large order toward the end of the reporting period involved new, significantly more fuel-efficient engines that could lower operating costs and reduce carbon emissions.

Portfolio Information

Investment Objective

The iShares U.S. Broker-Dealers & Securities Exchanges ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. equities in the investment services sector, as represented by the Dow Jones U.S. Select Investment Services 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.

Performance

GROWTH OF $10,000 INVESTMENT

(AT NET ASSET VALUE)

Certain sectors and markets performed exceptionally well based on market conditions during the one-year period. Achieving such exceptional returns involves the risk of volatility and investors should not expect that such exceptional returns will be repeated.

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 33 for more information.

Expense Example

Portfolio Management Commentary

Stocks of U.S. broker-dealers and securities exchanges rose robustly during the reporting period. Amid the economic disruptions due to the coronavirus pandemic early in the reporting period, capital markets experienced historic volatility, driving sharply higher revenues due to increased trading, especially in fixed income, currency, and commodities. Income and revenues continued to rise sharply as fiscal and monetary stimulus was implemented, which led to a recovery in equities markets. Revenue also increased as effective COVID-19 vaccines were developed and distributed.

The investment banking and brokerage industry was the largest contributor to the Index’s return. Operating expenses declined and revenues rose due to strength in equities trading as well as increased volume in financial services due to increases in initial public offerings, especially in the information technology and healthcare sectors. Both the U.S. government and corporations issued record levels of debt to deal with the economic effects of the pandemic, boosting underwriting fees charged by investment banks. Accelerated mergers and acquisitions and increased financing in response to the pandemic benefited the industry. The favorable resolution of an ongoing investigation and a positive judgment by the Fed, which allowed investment banks to resume stock buybacks, also contributed. Investor optimism grew due to strategic acquisitions in the industry, which expanded technological offerings and increased the customer base, driving brokerage income.

Financial exchanges and data stocks also contributed to the Index’s return. People spent more time at home during the pandemic, with liquidity enhanced by stimulus checks and suspended payments for rents and loans. Consequently, trading by individuals increased sharply, especially options trading, which requires less capital to invest. Market volatility and the reduced cost of trading, including zero-commission options, increased transactions on exchanges, driving higher revenues.

Portfolio Information

Investment Objective

The iShares U.S. Healthcare Providers ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. equities in the healthcare providers sector, as represented by the Dow Jones U.S. Select Health Care Providers IndexTM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index.

Performance

GROWTH OF $10,000 INVESTMENT

(AT NET ASSET VALUE)

Certain sectors and markets performed exceptionally well based on market conditions during the one-year period. Achieving such exceptional returns involves the risk of volatility and investors should not expect that such exceptional returns will be repeated.

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 33 for more information.

Expense Example

Portfolio Management Commentary

Stocks of healthcare providers advanced strongly during the reporting period. Healthcare providers benefited from long-term trends including medical and technological innovations and an aging population that continued to drive higher demand for healthcare goods and services, despite coronavirus-related limits on services and patient delays in accessing care.

Managed healthcare companies contributed the most to the Index’s return. Despite higher pandemic-related costs, companies benefited from patients making fewer doctor visits and delaying elective procedures. Reduced expenses led to substantive profit growth at managed healthcare companies, which also advanced amid expectations that access to healthcare coverage could expand under the new presidential administration and a Democratically controlled Congress. Consolidation aided the industry as well. For example, a large healthcare benefits manager acquired a data analytics provider, allowing it to expand services offered to hospitals, health plans, medical providers, and government entities.

Healthcare services companies also benefited the Index’s performance, appreciating due to revenue growth from prescription benefit services along with strong demand for COVID-19 testing and vaccinations. Expanded services inside retail stores, including in-person medical clinics, as well as virtual healthcare consultations, supported gains. Optimism that pharmacies would see a pick-up in store traffic as more people became vaccinated bolstered stock prices. Although elective testing procedures declined, diagnostic laboratories posted sizable gains from COVID-19 testing.

Healthcare facilities operators also contributed meaningfully to the Index’s return. Despite lower patient volumes and a significant reduction in profitable elective surgeries during the pandemic, some hospitals generated solid earnings growth due to rising per-patient revenues. Acute care and behavioral healthcare facilities also contributed to the industry’s performance, posting solid revenue growth as patient volumes recover.

Portfolio Information

Investment Objective

The iShares U.S. Home Construction ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. equities in the home construction sector, as represented by the Dow Jones U.S. Select Home Construction IndexTM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index.

Performance

GROWTH OF $10,000 INVESTMENT

(AT NET ASSET VALUE)

Certain sectors and markets performed exceptionally well based on market conditions during the one-year period. Achieving such exceptional returns involves the risk of volatility and investors should not expect that such exceptional returns will be repeated.

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 33 for more information.

Expense Example

Portfolio Management Commentary

Home construction stocks gained strongly during the reporting period as a combination of lower mortgage rates and high demand for housing drove a comeback for the housing market. The outset of the reporting period was marked by the near freeze of housing and mortgage markets following the onset of coronavirus-led shutdowns. While construction activity was largely deemed essential, work progressed at a slower pace due to labor shortages and the rising cost and limited availability of building materials. However, as 2020 progressed and the overall economy continued improving, mortgage applications rose and the demand for new housing outpaced supply, leading to relatively low inventory.

Larger homebuilders used the market downturn to reset pricing contracts and make acquisitions, improving volumes, revenues, and profitability. To maintain liquidity, companies also purposefully slowed development activity and put off stock repurchases. Despite the uncertain environment, demand for entry-level homes accelerated as customers seeking space to accommodate their remote work needs moved from smaller homes in densely populated cities and rental apartments to more spacious homes in the suburban and rural markets. Demand was so strong relative to the homebuilders’ expectations that some homebuilders began limiting the number of new homes they sell at a time to avoid exceeding their capacity to build given the still-rising costs of material, labor, and land.

The building products industry, also contributed to the Index’s return as government stimulus supported an increase in remodeling and residential repairs. Merger and acquisition activity also increased among building products companies, as relatively low borrowing costs motivated corporate and private buyers to pursue deals.

Portfolio Information

Investment Objective

The iShares U.S. Infrastructure ETF (the “Fund”) seeks to track the investment results of an index composed of equities of U.S. companies that have infrastructure exposure and that could benefit from a potential increase in domestic infrastructure activities, as represented by the NYSE^® FactSet U.S. Infrastructure IndexSM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index.

Performance

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 4/3/18. The first day of secondary market trading was 4/5/18.

Certain sectors and markets performed exceptionally well based on market conditions during the one-year period. Achieving such exceptional returns involves the risk of volatility and investors should not expect that such exceptional returns will be repeated.

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 33 for more information.

Expense Example

Portfolio Management Commentary

U.S. infrastructure stocks advanced strongly during the reporting period amid rebounding economic activity, fiscal stimulus, and optimism about COVID-19 vaccination programs. Late in the reporting period, a proposal by the new administration that would address transportation, internet connectivity, and climate change heightened expectations for an increase in infrastructure spending.

The industrials sector was the primary contributor to the Index’s return, led by the capital goods industry. Within the industry, construction and engineering companies advanced due to large project wins, increasing activity, and expectations for higher government spending on roads, bridges, and other projects. Consumer spending on home improvement projects during the coronavirus pandemic, along with record-low interest rates that supported new home construction and purchases, boosted building products stocks. Construction machinery stocks also advanced as demand rebounded from a pandemic-related decrease amid cost-cutting efforts and increased home construction and remodeling.

The materials sector, particularly metals and mining companies, bolstered the index’s return significantly. Steel producers advanced as a supply and demand imbalance, due in part to a rebound in manufacturing after plant closures during the height of pandemic-related restrictions, helped drive steel prices and profits sharply higher. A recovery in automotive production, construction, and manufacturing, particularly in China, also supported steel prices. Chemicals stocks advanced as demand and prices rose amid improving global economic growth and increasing manufacturing activity. Supply shortages of commodity chemicals also led to higher prices, benefiting the industry.

Utilities sector stocks were solid contributors to the Index’s performance, helped by companies’ shift to clean power, amid encouragement by the new administration and state regulators, as well as investor interest in steady dividends. Utilities were largely able to offset a pandemic-related decline in commercial demand for electricity with strong residential sales and cost controls.

Portfolio Information

Investment Objective

The iShares U.S. Insurance ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. equities in the insurance sector, as represented by the Dow Jones U.S. Select Insurance IndexTM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index.

Performance

GROWTH OF $10,000 INVESTMENT

(AT NET ASSET VALUE)

Certain sectors and markets performed exceptionally well based on market conditions during the one-year period. Achieving such exceptional returns involves the risk of volatility and investors should not expect that such exceptional returns will be repeated.

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 33 for more information.

Expense Example

Portfolio Management Commentary

U.S. insurance stocks advanced strongly for the reporting period, rising particularly sharply in the latter half of the reporting period amid investor optimism as the economy started to recover from the effects of the coronavirus pandemic. Insurance stocks were bolstered by the development of vaccines, which were expected to reduce subsequent mortality from the COVID-19 virus. An increase in yields of U.S. Treasuries and government stimulus spending also supported insurance stocks. Toward the end of the reporting period, insurance companies benefited from a decline in catastrophe losses and increased stock buybacks.

The property and casualty insurance industry was the leading contributor to the Index’s return. Revenues and profits rose due to strong growth in sales of insurance products both domestically and internationally. During government-issued, stay-at-home guidance, automobile trips declined sharply, reducing the number of accidents and leading to fewer claims and higher profits. The industry was further bolstered by higher income from investments and favorable reserve development, a measure of the change in the expense of claims from the prior year. Victories in court surrounding business-interruption disputes mitigated expenditures stemming from the pandemic.

The life and health insurance industry was also a robust contributor to the Index’s return. Insurance companies reduced spending on medical procedures, as many were postponed by policyholders, while premature deaths due to the pandemic reduced the cost to insurers of annuities and long-term care. Revenues increased due to growth in the international insurance market and strength in demand for domestic workforce insurance. Multi-line insurance stocks also contributed. While damage from hurricanes and pandemic-related costs stemming from cancelled travel and events constrained profits, revenues rose due to growth in policy sales, as well as income from investments as market conditions improved.

Portfolio Information

Investment Objective

The iShares U.S. Medical Devices ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. equities in the medical devices sector, as represented by the Dow Jones U.S. Select Medical Equipment 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.

Performance

GROWTH OF $10,000 INVESTMENT

(AT NET ASSET VALUE)

Certain sectors and markets performed exceptionally well based on market conditions during the one-year period. Achieving such exceptional returns involves the risk of volatility and investors should not expect that such exceptional returns will be repeated.

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 33 for more information.

Expense Example

Portfolio Management Commentary

Stocks of medical device makers advanced strongly for the reporting period, fueled by optimism that successful development and distribution of COVID-19 vaccines would spur the resumption of elective medical procedures and drive sales of related instruments and devices. The healthcare equipment industry contributed the most to the Index’s performance. Manufacturers posted sharp gains as surging sales of coronavirus diagnostic tests to both healthcare facilities and individuals propelled strong profit growth. Diverse revenue drivers, such as testing and diagnostic equipment as well as medical devices and pharmaceuticals preparations, bolstered companies amid rapid changes in demand for certain products. Government contracts for manufacturing inputs used by pharmaceuticals companies in developing coronavirus vaccines also helped the industry’s performance. Despite an overall decline in medical procedures during the pandemic, strong sales of technologies such as ventilators and pulse oximeters used to treat coronavirus patients served as an industry tailwind.

Companies providing veterinary diagnostic services also boosted the Index’s performance amid an increase in pet ownership by consumers staying at home during the pandemic’s closures. In human medicine, ongoing strength in the market for robot-assisted surgery devices supported gains. Less invasive robot-assisted surgery in outpatient facilities helped keep patients out of higher-risk hospital settings and reduced staffing requirements, decreasing the probability of exposure to the coronavirus.

The life sciences, tools, and services industry was a smaller, though notable, contributor to the Index’s return. Strong sales of COVID-19 diagnostic tests, along with raw materials inputs for vaccine production, drove revenue growth in the industry. Companies providing specialty refrigeration for global vaccine distribution further benefited the industry’s performance.

Portfolio Information

Investment Objective

The iShares U.S. Oil & Gas Exploration & Production ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. equities in the oil and gas exploration and production sector, as represented by the Dow Jones U.S. Select Oil Exploration & Production 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.

Performance

GROWTH OF $10,000 INVESTMENT

(AT NET ASSET VALUE)

Certain sectors and markets performed exceptionally well based on market conditions during the one-year period. Achieving such exceptional returns involves the risk of volatility and investors should not expect that such exceptional returns will be repeated.

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 33 for more information.

Expense Example

Portfolio Management Commentary

U.S. oil and gas exploration and production stocks advanced sharply during the reporting period despite subdued energy demand driven by the coronavirus pandemic. Oil prices declined to historically low levels early in the reporting period following a sharp reduction in global economic activity due to business closures and travel restrictions. The stark drop in demand led to an oversupply of oil, which was further exacerbated by a production disagreement among some of the world’s largest oil producers. As oil production started to exceed the capacity of storage facilities, some West Texas Intermediate futures contracts briefly reached negative prices in April 2020, and the spot price of oil declined to a 21-year low.

Oil prices began to rebound in the summer of 2020 amid signs of economic revival as coronavirus infection rates decreased and governments eased restrictions. Optimism about a new economic stimulus package in the U.S. and the success of potential COVID-19 vaccines bolstered investor sentiment about economic recovery, further lifting oil prices through the end of 2020. Meanwhile, production cuts by OPEC trimmed the oversupply, leading to a stabilization of oil prices. Additional reductions in global oil supply in early 2021 along with improving industrial activity in some regions also supported oil prices.

Oil and gas exploration and production companies benefited significantly from higher oil prices. In addition, disciplined capital spending programs and ongoing cost-cutting led to greater-than-expected cash flow, which helped companies maintain dividend payments and buy back stock. Integrated oil and gas companies also gained as they responded to reduced capacity and production levels by lowering capital spending, investment, and debt.

Portfolio Information