|
JULY 31, 2023 |
2023 Annual Report |
iShares Trust
· |
iShares Breakthrough Environmental Solutions ETF | ETEC | NASDAQ |
· |
iShares Cybersecurity and Tech ETF | IHAK | NYSE Arca |
· |
iShares Exponential Technologies ETF | XT | NASDAQ |
· |
iShares Future Cloud 5G and Tech ETF | IDAT | NYSE Arca |
· |
iShares Genomics Immunology and Healthcare ETF | IDNA | NYSE Arca |
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iShares Neuroscience and Healthcare ETF | IBRN | NYSE Arca |
· |
iShares Robotics and Artificial Intelligence Multisector ETF | IRBO | NYSE Arca |
· |
iShares Self-Driving EV and Tech ETF | IDRV | NYSE Arca |
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iShares Virtual Work and Life Multisector ETF | IWFH | NYSE Arca |
Dear Shareholder,
Despite an uncertain economic landscape during the 12-month reporting period ended July 31, 2023, the resilience of the U.S. economy in the face of ever tighter financial conditions provided an encouraging backdrop for investors. While inflation was near multi-decade highs at the beginning of the period, it declined precipitously as commodity prices dropped. Labor shortages also moderated, although wages continued to grow and unemployment rates reached the lowest levels in decades. This robust labor market powered further growth in consumer spending, backstopping the economy.
Equity returns were solid, as the durability of consumer sentiment eased investors’ concerns about the economy’s trajectory. The U.S. economy resumed growth in the third quarter of 2022 and continued to expand thereafter. Most major classes of equities advanced, including large- and small-capitalization U.S. stocks and equities from developed and emerging markets.
The 10-year U.S. Treasury yield rose during the reporting period, driving its price down, as investors reacted to elevated inflation and attempted to anticipate future interest rate changes. The corporate bond market also faced inflationary headwinds, although high-yield corporate bond prices fared significantly better than investment-grade bonds as demand from yield-seeking investors remained strong.
The U.S. Federal Reserve (the “Fed”), acknowledging that inflation has been more persistent than expected, raised interest rates seven times during the 12-month period ended July 31, 2023. Furthermore, the Fed wound down its bond-buying programs and incrementally reduced its balance sheet by not replacing securities that reach maturity. However, the Fed declined to raise interest rates at its June 2023 meeting, the first time it paused its tightening in the current cycle, before again raising rates in July 2023.
Supply constraints appear to have become an embedded feature of the new macroeconomic environment, making it difficult for developed economies to increase production without sparking higher inflation. Geopolitical fragmentation and an aging population risk further exacerbating these constraints, keeping the labor market tight and wage growth high. Although the Fed has decelerated the pace of interest rate hikes and recently opted for a pause, we believe that the new economic regime means that the Fed will need to maintain high rates for an extended period to keep inflation under control. Furthermore, ongoing structural changes may mean that the Fed will be hesitant to cut interest rates in the event of faltering economic activity lest inflation accelerate again. We believe investors should expect a period of higher volatility as markets adjust to the new economic reality and policymakers attempt to adapt.
While we favor an overweight position to developed market equities in the long term, we prefer an underweight stance in the near-term. Expectations for corporate earnings remain elevated, which seems inconsistent with macroeconomic constraints. Nevertheless, we are overweight on emerging market stocks in the near-term as growth trends for emerging markets appear brighter. We also believe that stocks with an A.I. tilt should benefit from an investment cycle that is set to support revenues and margins. We are neutral on credit overall amid tightening credit and financial conditions; however, there are selective opportunities in the near term. For fixed income investing with a six- to twelve-month horizon, we see the most attractive investments in short-term U.S. Treasuries, U.S. inflation-linked bonds, U.S. mortgage-backed securities, and hard-currency emerging market bonds.
Overall, our view is that investors need to think globally, position themselves to be prepared for a decarbonizing economy, and be nimble as market conditions change. We encourage you to talk with your financial advisor and visit iShares.com for further insight about investing in today’s markets.
Rob Kapito
President, BlackRock, Inc.
Rob Kapito
President, BlackRock, Inc.
Total Returns as of July 31, 2023
6-Month
|
12-Month
| |||
U.S.
large cap equities |
13.52% | 13.02% | ||
U.S.
small cap equities |
4.51 | 7.91 | ||
International
equities |
6.65 | 16.79 | ||
Emerging
market equities |
3.26 | 8.35 | ||
3-month Treasury bills |
2.34 | 3.96 | ||
U.S.
Treasury securities |
(2.08) | (7.56) | ||
U.S.
investment grade bonds |
(1.02) | (3.37) | ||
Tax-exempt municipal
bonds |
0.20 | 0.93 | ||
U.S.
high yield bonds |
2.92 | 4.42 | ||
Past performance is not an indication of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index. |
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T H I S P A G E I S N O T P A R T O F Y O U R F U N D R E P O R T |
Table of Contents
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Annual Report: |
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Financial Statements: |
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60 | ||||
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81 | ||||
82 | ||||
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iShares Trust
Global Market Overview
Global equity markets advanced during the 12 months ended July 31, 2023 (“reporting period”), supported by continued economic growth and moderating inflation. The MSCI ACWI, a broad global equity index that includes both developed and emerging markets, returned 12.91% in U.S. dollar terms for the reporting period. Despite concerns about the impact of higher interest rates and rising prices, the global economy continued to grow, albeit at a slower pace than during the initial post-pandemic recovery. Inflation began to subside in most regions of the world, and lower energy prices reduced pressure on consumers, leading consumer and business sentiment to improve. While the Russian invasion of Ukraine continued to disrupt trade in Europe and elsewhere, market adaptation lessened the economic impact of the ongoing war. The prices of oil, natural gas, and wheat all declined during the reporting period, easing pressure on the world’s economies.
The U.S. Federal Reserve (“Fed”) tightened monetary policy rapidly, raising short-term interest rates seven times during the reporting period. The pace of tightening decelerated as the Fed twice lowered the increment of increase before pausing entirely in June 2023, the first time it declined to take action since the tightening cycle began. However, the Fed then raised interest rates again at its July 2023 meeting and stated that it would continue to monitor economic data. The Fed also continued to decrease the size of its balance sheet by reducing the store of U.S. Treasuries it had accumulated to stabilize markets in the early phases of the coronavirus pandemic.
Despite the tightening financial conditions, the U.S. economy demonstrated continued strength, and U.S. equities advanced. The economy returned to growth in the third quarter of 2022 and showed robust, if slightly slower, growth thereafter. Consumers powered the economy and increased their spending in both nominal and inflation-adjusted terms. Spending was helped by a strong labor market, as unemployment remained very low in historic terms, and the total number of employed persons reached an all-time high. Tightness in the labor market drove higher wages, although wage growth slowed as the reporting period continued.
European stocks outpaced their counterparts in most other regions of the globe, advancing strongly for the reporting period despite modest economic growth. European stocks benefited from a solid recovery following the early phases of the war in Ukraine. While the conflict disrupted critical natural gas supplies, new sources were secured and prices declined, while a warm winter helped moderate consumption. The European Central Bank (“ECB”) responded to the highest inflation since the introduction of the euro by raising interest rates eight times and beginning to reduce the size of its debt holdings.
Stocks in the Asia-Pacific region gained, albeit at a slower pace than other regions of the world. Japan returned to growth in the fourth quarter of 2022 and first quarter of 2023, as strong business investment and exports helped boost the economy and support Japanese equities. However, Chinese stocks were negatively impacted by slowing economic growth. While investors were initially optimistic following China’s lifting of several pandemic-related lockdowns in December 2022, subsequent performance disappointed, and tensions with the U.S. increased. Emerging market stocks advanced, as the improving global economic environment reassured investors. The declining value of the U.S. dollar relative to many other currencies and the slowing pace of the Fed’s interest rate increases also supported emerging market stocks.
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2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
5 |
Fund Summary as of July 31, 2023 | iShares® Breakthrough Environmental Solutions ETF |
Investment Objective
The iShares Breakthrough Environmental Solutions ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. and non-U.S. companies involved in breakthrough innovations and development of new technologies that address the climate transition, as represented by the Morningstar Global Emerging Green Technologies 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
Cumulative Total Returns | ||||
Since Inception |
||||
Fund NAV |
8.54 | % | ||
Fund Market |
8.36 | |||
Index |
9.18 |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was March 28, 2023. The first day of secondary market trading was March 30, 2023.
Past performance is not an indication of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” for more information.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||||||
|
Beginning Account Value (03/28/23) |
(a) |
|
Ending Account Value (07/31/23) |
|
|
Expenses Paid During the Period |
(b) |
|
Beginning Account Value (02/01/23) |
|
|
Ending Account Value (07/31/23) |
|
|
Expenses Paid During the Period |
(b) |
|
Annualized Expense Ratio |
| ||||||||||
$ | 1,000.00 | $ | 1,000.00 | $ | 1.61 | $ | 1,000.00 | $ | 1,022.50 | $ | 2.36 | 0.47 | % |
(a) |
Commencement of operations. |
(b) |
Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by 125/365 for actual expenses and 181/365 for hypothetical expenses (to reflect the six month period shown). Other fees, such as brokerage commissions and other fees to financial intermediaries, may be paid which are not reflected in the tables and examples above. See “Disclosure of Expenses” for more information. |
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2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Fund Summary as of July 31, 2023 (continued) | iShares® Breakthrough Environmental Solutions ETF |
Portfolio Information
INDUSTRY ALLOCATION
Industry | |
Percent
of Total Investments |
(a) | |
Automobiles |
21.9 | % | ||
Semiconductors & Semiconductor Equipment |
21.5 | |||
Electrical Equipment |
16.9 | |||
Machinery |
13.7 | |||
Chemicals |
7.2 | |||
Electronic Equipment, Instruments & Components |
5.4 | |||
Building Products |
5.4 | |||
Multi-Utilities |
4.8 | |||
Automobile Components |
2.2 | |||
Independent Power and Renewable Electricity Producers |
1.0 |
GEOGRAPHIC ALLOCATION
Country/Geographic Region | |
Percent
of Total Investments |
(a) | |
United States |
22.6 | % | ||
China |
21.3 | |||
Japan |
10.4 | |||
Germany |
6.7 | |||
Switzerland |
6.6 | |||
Cayman Islands |
5.9 | |||
Sweden |
5.3 | |||
South Korea |
4.5 | |||
Belgium |
4.1 | |||
Denmark |
3.7 | |||
Netherlands |
3.4 | |||
United Kingdom |
3.1 | |||
Canada |
1.5 | |||
Other (each representing less than 1%) |
0.9 |
(a) |
Excludes money market funds. |
F U N D S U M M A R Y |
7 |
Fund Summary as of July 31, 2023 | iShares® Cybersecurity and Tech ETF |
Investment Objective
The iShares Cybersecurity and Tech ETF (the “Fund”) seeks to track the investment results of an index composed of developed and emerging market companies that are involved in cyber security and technology, including cyber security hardware, software, products, and services, as represented by the NYSE® FactSet® Global Cyber Security Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||
1 Year | Since Inception |
1 Year | Since Inception |
|||||||||||||||||
Fund NAV |
7.57 | % | 12.20 | % | 7.57 | % | 61.08 | % | ||||||||||||
Fund Market |
7.78 | 12.22 | 7.78 | 61.18 | ||||||||||||||||
Index |
8.08 | 12.62 | 8.08 | 63.51 |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was June 11, 2019. The first day of secondary market trading was June 13, 2019.
Past performance is not an indication of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” for more information.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||||||
|
Beginning Account Value (02/01/23) |
|
|
Ending Account Value (07/31/23) |
|
|
Expenses Paid During the Period |
(a) |
|
Beginning Account Value (02/01/23) |
|
|
Ending Account Value (07/31/23) |
|
|
Expenses Paid During the Period |
(a) |
|
Annualized Expense Ratio |
| ||||||||||
$ | 1,000.00 | $ | 1,154.30 | $ | 2.51 | $ | 1,000.00 | $ | 1,022.50 | $ | 2.36 | 0.47 | % |
(a) |
Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period shown). Other fees, such as brokerage commissions and other fees to financial intermediaries, may be paid which are not reflected in the tables and examples above. See “Disclosure of Expenses” for more information. |
8 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Fund Summary as of July 31, 2023 (continued) | iShares® Cybersecurity and Tech ETF |
Portfolio Management Commentary
Stocks of global cybersecurity and technology companies advanced for the reporting period. Stocks in growth-oriented companies, including many in the information technology sector, outperformed the broader market. While growth stocks declined sharply in 2022 amid high inflation and rising interest rates, they rebounded in 2023 amid moderating inflation and investor optimism that interest rates would stabilize. Global cybersecurity attacks increased significantly in 2022, contributing to higher spending on technology-related security and risk management by global governments and businesses. Broadly, demand for cybersecurity analysts and engineers grew at twice the rate of employment demand for the general workforce. The increased adoption of artificial intelligence (“AI”) capabilities heightened cybersecurity concerns while at the same time aiding and improving security efforts.
U.S. stocks contributed the most to the Index’s return, led by the industrials sector. Research and consulting services companies specializing in cyber and digital intelligence reported strong demand for their services, partly reflecting new contracts from government agencies seeking to improve cloud and other technology security. Contractors providing technical and engineering assistance to the U.S. military benefited from new and renewing projects.
The U.S. information technology sector contributed significantly to the Index’s return. Systems software companies benefited from increased demand for software focused on helping companies secure their technology systems. Increased adoption of cloud platforms for cybersecurity programs and the modernization of companies’ security operation centers helped feed demand and encouraged the pursuit of smaller providers by larger technology conglomerates. Integration of security and networks into single platforms also boosted revenue and market share gains for systems software providers.
Stocks in Taiwan also contributed to the Index’s return, with AI-related demand attracting investors to the country’s information technology sector. Communications equipment companies benefited from rising sales of network appliances, ethernet switches, and other related hardware.
On the downside, Japanese stocks detracted from the Index’s return. Systems software companies, in the information technology sector, declined as rising global interest rates early in the reporting period pressured the broader Japanese equity market, particularly technology stocks.
Portfolio Information
INDUSTRY ALLOCATION
Industry | |
Percent
of Total Investments |
(a) | |
Software |
64.9 | % | ||
Professional Services |
13.8 | |||
Communications Equipment |
11.2 | |||
IT Services |
10.1 |
GEOGRAPHIC ALLOCATION
Country/Geographic Region | |
Percent
of Total Investments |
(a) | |
United States |
73.2 | % | ||
Israel |
8.8 | |||
Japan |
4.5 | |||
Taiwan |
4.0 | |||
Canada |
2.8 | |||
Germany |
2.2 | |||
Denmark |
2.0 | |||
United Kingdom |
1.4 | |||
Other (each representing less than 1%) |
1.1 |
(a) |
Excludes money market funds. |
F U N D S U M M A R Y |
9 |
Fund Summary as of July 31, 2023 | iShares® Exponential Technologies ETF |
Investment Objective
The iShares Exponential Technologies ETF (the “Fund”) seeks to track the investment results of an index composed of stocks of developed and emerging market companies that create or use exponential technologies, as represented by the Morningstar® Exponential Technologies 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
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
1 Year | 5 Years | Since Inception |
1 Year | 5 Years | Since Inception |
|||||||||||||||||||||||
Fund NAV |
13.05 | % | 10.26 | % | 11.70 | % | 13.05 | % | 62.96 | % | 152.48 | % | ||||||||||||||||
Fund Market |
13.04 | 10.23 | 11.69 | 13.04 | 62.77 | 152.31 | ||||||||||||||||||||||
Index |
13.55 | 10.66 | 12.03 | 13.55 | 65.92 | 158.67 |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was March 19, 2015. The first day of secondary market trading was March 23, 2015.
Past performance is not an indication of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” for more information.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||||||
|
Beginning Account Value (02/01/23) |
|
|
Ending Account Value (07/31/23) |
|
|
Expenses Paid Durintg the Period |
(a) |
|
Beginning Account Value (02/01/23) |
|
|
Ending Account Value (07/31/23) |
|
|
Expenses Paid During the Period |
(a) |
|
Annualized Expense Ratio |
| ||||||||||
$ | 1,000.00 | $ | 1,107.70 | $ | 2.40 | $ | 1,000.00 | $ | 1,022.50 | $ | 2.31 | 0.46 | % |
(a) |
Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period shown). Other fees, such as brokerage commissions and other fees to financial intermediaries, may be paid which are not reflected in the tables and examples above. See “Disclosure of Expenses” for more information. |
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2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Fund Summary as of July 31, 2023 (continued) | iShares® Exponential Technologies ETF |
Portfolio Management Commentary
Stocks of global companies that create or use exponential technologies advanced for the reporting period. Stocks in growth-oriented companies, including many in the information technology sector, outperformed the broader market. While growth stocks declined sharply in 2022 amid high inflation and rising interest rates, they rebounded in 2023 amid moderating inflation and investor optimism that interest rates would stabilize. The widespread emergence of artificial intelligence (“AI”) applications increased demand for machine learning capabilities, boosting the stocks of companies heavily involved in the burgeoning technology.
U.S. stocks, which represented approximately 64% of the Index on average during the reporting period, contributed the most to the Index’s return, led by the information technology sector. Demand for software and services rose as business and government enterprises sought increased implementation of machine learning and AI capabilities. That included increased demand from the U.S. intelligence and defense communities for AI-assisted software platforms. As providers of customer relationship management platforms developed new AI-powered offerings, demand for their software increased. Meanwhile, the rising proliferation of data-intensive applications and related analytics supported companies building platforms for the expanding data aggregation and cloud monitoring market.
U.S. semiconductor firms also contributed to the Index’s return. As with software, AI’s widespread emergence buoyed stocks of companies producing chips that power generative AI services, such as ChatGPT, other specialized AI applications, and the data centers that support AI functions. Makers of solar panels and microchips used in electric vehicles received a boost from the federal government’s Inflation Reduction Act, which created subsidies and tax credits for green energy initiatives.
Australian stocks contributed notably to the Index’s return. The information technology sector led the advance as logistics software firms benefited from businesses’ needs to improve supply chain efficiency following coronavirus pandemic-related disruptions. In Germany, information technology stocks also contributed as stronger-than-expected demand supported semiconductor manufacturers, particularly makers of microchips for automotive and industrial uses.
Portfolio Information
SECTOR ALLOCATION
Sector | |
Percent
of Total Investments |
(a) | |
Information Technology |
51.4 | % | ||
Health Care |
16.7 | |||
Industrials |
7.7 | |||
Financials |
7.4 | |||
Consumer Discretionary |
5.5 | |||
Communication Services |
4.2 | |||
Materials |
2.8 | |||
Utilities |
2.4 | |||
Real Estate |
1.3 | |||
Consumer Staples |
0.6 |
GEOGRAPHIC ALLOCATION
Country/Geographic Region | |
Percent
of Total Investments |
(a) | |
United States |
65.0 | % | ||
China |
5.7 | |||
Japan |
4.8 | |||
Australia |
3.4 | |||
Netherlands |
2.7 | |||
Canada |
2.4 | |||
Germany |
2.0 | |||
United Kingdom |
2.0 | |||
Switzerland |
2.0 | |||
France |
1.4 |
(a) |
Excludes money market funds. |
F U N D S U M M A R Y |
11 |
Fund Summary as of July 31, 2023 | iShares® Future Cloud 5G and Tech ETF |
Investment Objective
The iShares Future Cloud 5G and Tech ETF (the “Fund”) (Formerly the iShares Cloud 5G and Tech ETF) seeks to track the investment results of an index composed of companies from developed and emerging markets that could benefit from providing products, services, and technologies related to cloud computing and 5G, as represented by the Morningstar® Global Digital Infrastructure & Connectivity Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||
1 Year | Since Inception |
1 Year | Since Inception |
|||||||||||||||||
Fund NAV |
14.84 | % | 1.71 | % | 14.84 | % | 3.71 | % | ||||||||||||
Fund Market |
14.74 | 1.63 | 14.74 | 3.52 | ||||||||||||||||
Index |
15.28 | 1.73 | 15.28 | 3.75 |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was June 8, 2021. The first day of secondary market trading was June 10, 2021.
Past performance is not an indication of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” for more information.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||||||
|
Beginning Account Value (02/01/23) |
|
|
Ending Account Value (07/31/23) |
|
|
Expenses Paid During the Period |
(a) |
|
Beginning Account Value (02/01/23) |
|
|
Ending Account Value (07/31/23) |
|
|
Expenses Paid During the Period |
(a) |
|
Annualized Expense Ratio |
| ||||||||||
$ | 1,000.00 | $ | 1,101.00 | $ | 2.45 | $ | 1,000.00 | $ | 1,022.50 | $ | 2.36 | 0.47 | % |
(a) |
Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period shown). Other fees, such as brokerage commissions and other fees to financial intermediaries, may be paid which are not reflected in the tables and examples above. See “Disclosure of Expenses” for more information. |
12 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Fund Summary as of July 31, 2023 (continued) | iShares® Future Cloud 5G and Tech ETF |
Portfolio Management Commentary
Equities with considerable exposure to cloud computing and 5G networking advanced for the reporting period. Stocks in growth-oriented companies, including many in the information technology sector, outperformed the broader market. While growth stocks declined sharply in 2022 amid high inflation and rising interest rates, they rebounded in 2023 amid moderating inflation and investor optimism that interest rates would stabilize. The swift emergence of artificial intelligence (“AI”) applications drove rising demand for cloud computing solutions and the microchips that power AI. Mobile carriers continued expanding 5G networks as governments and carriers throughout the world increased their commitment to building them.
U.S. stocks, which represented approximately 73% of the Index on average during the reporting period, contributed the most to the Index’s return, led by the information technology sector. Amid strong growth forecasts, application software providers, particularly cloud computing platforms, benefited from ongoing digital transformation and data center modernization. Revenue for cloud service providers increased substantially amid rising demand for simplified and aggregated platform solutions. Likewise, companies providing software used to monitor network infrastructure, allowing companies to trouble-shoot technical problems, reported higher demand and revenue. Speculation that larger technology conglomerates might seek to expand their cloud operations via acquisitions also supported smaller cloud providers. The U.S. semiconductors industry also advanced, as investments in AI spurred rising demand for microchips used in data centers and specialized microchips that speed AI applications, boosting revenue for firms supplying them. Revenue also increased for firms that produce microchips for converting analog signals into digital data, particularly products used in automobile and industrial manufacturing.
Stocks in Taiwan contributed notably to the Index’s return. Within the information technology sector, technology hardware and equipment companies advanced amid strong demand from customers building AI servers. German information technology stocks also contributed, as supply chain improvements following disruptions caused by the coronavirus pandemic and the beginning of the war in Ukraine increased revenue for companies supplying microchips to automotive and industrial markets.
Portfolio Information
INDUSTRY ALLOCATION
Industry | |
Percent
of Total Investments |
(a) | |
Semiconductors & Semiconductor Equipment |
33.1 | % | ||
Communications Equipment |
14.1 | |||
IT Services |
13.8 | |||
Software |
13.4 | |||
Technology Hardware, Storage & Peripherals |
5.8 | |||
Electronic Equipment, Instruments & Components |
5.4 | |||
Specialized REITs |
5.2 | |||
Consumer Finance |
5.0 | |||
Chemicals |
2.4 | |||
Diversified Telecommunication Services |
1.0 | |||
Media |
0.8 |
(a) |
Excludes money market funds. |
GEOGRAPHIC ALLOCATION
Country/Geographic Region | |
Percent
of Total Investments |
(a) | |
United States |
76.0 | % | ||
Taiwan |
9.0 | |||
Japan |
3.8 | |||
Germany |
2.9 | |||
Australia |
2.1 | |||
Finland |
1.7 | |||
Sweden |
1.7 | |||
United Kingdom |
1.0 | |||
Other (each representing less than 1%) |
1.8 |
F U N D S U M M A R Y |
13 |
Fund Summary as of July 31, 2023 | iShares® Genomics Immunology and Healthcare ETF |
Investment Objective
The iShares Genomics Immunology and Healthcare ETF (the “Fund”) seeks to track the investment results of an index composed of developed and emerging market companies that could benefit from the long-term growth and innovation in genomics, immunology and bioengineering, as represented by the NYSE® FactSet® Global Genomics and Immuno Biopharma IndexTM (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||
1 Year | Since Inception |
1 Year | Since Inception |
|||||||||||||||||
Fund NAV |
(24.04 | )% | 0.12 | % | (24.04 | )% | 0.52 | % | ||||||||||||
Fund Market |
(24.04 | ) | 0.14 | (24.04 | ) | 0.58 | ||||||||||||||
Index |
(23.55 | ) | 0.27 | (23.55 | ) | 1.14 |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was June 11, 2019. The first day of secondary market trading was June 13, 2019.
Past performance is not an indication of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” for more information.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||||||
|
Beginning Account Value (02/01/23) |
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|
Ending Account Value (07/31/23) |
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|
Expenses Paid During the Period |
(a) |
|
Beginning Account Value (02/01/23) |
|
|
Ending Account Value (07/31/23) |
|
|
Expenses Paid During the Period |
(a) |
|
Annualized Expense Ratio |
| ||||||||||
$ | 1,000.00 | $ | 890.80 | $ | 2.25 | $ | 1,000.00 | $ | 1,022.40 | $ | 2.41 | 0.48 | % |
(a) |
Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period shown). Other fees, such as brokerage commissions and other fees to financial intermediaries, may be paid which are not reflected in the tables and examples above. See “Disclosure of Expenses” for more information. |
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Fund Summary as of July 31, 2023 (continued) | iShares® Genomics Immunology and Healthcare ETF |
Portfolio Management Commentary
Global genomics, immunology, and healthcare stocks declined significantly for the reporting period. Growth-oriented stocks declined sharply in 2022 amid high inflation, a slowing economy, and rising interest rates. They rebounded in 2023 as inflation moderated and investors’ optimism increased that interest rates would stabilize. However, innovation-related healthcare stocks did not benefit from that recovery, as growth investors mostly targeted technology stocks while generally avoiding the healthcare sector. Waning demand for COVID-19 vaccines and legislative challenges to drugmakers’ prices further reduced investor interest. Patent disputes between vaccine makers exacerbated biotech stocks’ weakness from falling vaccine demand.
U.S. equities, which represented approximately 64% of the Index on average during the reporting period, detracted the most from the Index’s return, driven by declines in the healthcare sector. Biotechnology stocks, in particular, accounted for the majority of the Index’s decline. Notably, an innovative biotechnology company focused on developing cellular immunotherapies declined after ending a research collaboration with a major healthcare-centered company. Despite an increase in COVID-19 vaccine prices, falling demand reduced revenue for vaccine makers. In May 2023, the U.S. government officially ended the coronavirus health emergency and lifted its vaccine mandate for international travelers. Biotechnology companies faced headwinds as demand for COVID-19 vaccinations and booster shots trailed expectations and manufacturers anticipated deliveries falling by as much as two-thirds overall for 2023. Vaccine makers responded with plans to significantly cut costs through infrastructure consolidation and considerable layoffs. Investors’ lessening interest in biotechnology stocks extended to companies not involved in vaccine development, especially startups facing delays in clinical trials and early-stage firms yet to receive approval for marketable treatments.
Healthcare stocks in Germany and Taiwan also detracted from the Index’s return. Patent disputes weighed on German biotechnology companies. Additionally, a leading biotechnology firm reduced its earnings outlook after suffering a cyberattack. In Taiwan, biotechnology firms involved in vaccine production faced headwinds as global demand for COVID-19 vaccines waned.
Portfolio Information
INDUSTRY ALLOCATION
Industry | |
Percent
of Total Investments |
(a) | |
Biotechnology |
76.7 | % | ||
Pharmaceuticals |
15.5 | |||
Chemicals |
6.3 | |||
Health Care Providers & Services |
1.0 | |||
Life Sciences Tools & Services |
0.5 |
(a) |
Excludes money market funds. |
GEOGRAPHIC ALLOCATION
Country/Geographic Region | |
Percent
of Total Investments |
(a) | |
United States |
62.7 | % | ||
Switzerland |
7.1 | |||
France |
6.3 | |||
Germany |
4.8 | |||
Denmark |
4.3 | |||
China |
3.9 | |||
Japan |
3.9 | |||
Netherlands |
2.3 | |||
Taiwan |
2.2 | |||
South Korea |
1.8 |
F U N D S U M M A R Y |
15 |
Fund Summary as of July 31, 2023 | iShares® Neuroscience and Healthcare ETF |
Investment Objective
The iShares Neuroscience and Healthcare ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. and non-U.S. companies that could benefit from the growth and innovation in neuroscience, as represented by the NYSE® FactSet® Global Neuro Biopharma and MedTech 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
Cumulative Total Returns | ||||||||||||||||||||
|
Since Inception |
|||||||||||||||||||
Fund NAV |
(2.45 | )% | ||||||||||||||||||
Fund Market |
(2.27 | ) | ||||||||||||||||||
Index |
(2.29 | ) |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was August 24, 2022. The first day of secondary market trading was August 26, 2022.
Past performance is not an indication of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” for more information.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||||||
|
Beginning Account Value (02/01/23) |
|
|
Ending Account Value (07/31/23) |
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|
Expenses Paid During the Period |
(a) |
|
Beginning Account Value (02/01/23) |
|
|
Ending Account Value (07/31/23) |
|
|
Expenses Paid During the Period |
(a) |
|
Annualized Expense Ratio |
| ||||||||||
$ | 1,000.00 | $ | 916.60 | $ | 2.23 | $ | 1,000.00 | $ | 1,022.50 | $ | 2.36 | 0.47 | % |
(a) |
Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period shown). Other fees, such as brokerage commissions and other fees to financial intermediaries, may be paid which are not reflected in the tables and examples above. See “Disclosure of Expenses” for more information. |
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Fund Summary as of July 31, 2023 (continued) | iShares® Neuroscience and Healthcare ETF |
Portfolio Management Commentary
Global stocks of companies involved in neuroscience, treatments for neurological disorders, and related healthcare innovation declined slightly for the reporting period. After falling earlier in the reporting period amid high inflation, a slowing economy, and rising interest rates, growth-oriented stocks rebounded in 2023 as inflation moderated and investors’ optimism increased that interest rates would stabilize. However, despite the Food and Drug Administration (“FDA”) approval of the first drug proven to slow the progression of Alzheimer’s disease, innovation-related healthcare stocks did not fully participate in that recovery. Investors who gravitated toward the healthcare sector as the stock market declined in 2022 increasingly sought other alternatives as stocks recovered later in the reporting period.
Equities in Switzerland detracted the most from the Index’s return, led by biotechnology stocks in the healthcare sector. Financial losses widened at a leading provider of treatments for insomnia and other conditions; the company responded by adopting cost cuts aimed at reducing its cash outflow by half. Amid a cash shortfall, the firm secured bridge financing while attempting to sell a portion of its operations. In the meantime, its revenue continued rising and it launched an innovative drug targeting the effects of chronic insomnia.
U.S. stocks also detracted from the Index’s performance. In the healthcare sector, the healthcare equipment and supplies industry declined. Ongoing struggles to achieve profitability weighed on the stocks of medical device makers, including a supplier of systems aimed at alleviating chronic pain via spinal cord stimulation and a manufacturer of devices to help patients with bladder and bowel dysfunction. Though reporting varying degrees of revenue growth, these companies disclosed either minimal profits or ongoing net losses.
Some countries contributed to the Index’s return. In Ireland, a fledging drugmaker benefited from the FDA’s approval of new treatment for daytime drowsiness in adults with narcolepsy, boosting stocks in the country’s pharmaceutical industry. Stocks in South Korea’s pharmaceutical industry also rose amid expansion plans, acquisitions, and partnerships announced by a leading maker of treatments for central nervous system disorders.
Portfolio Information
INDUSTRY ALLOCATION
Industry | |
Percent
of Total Investments |
(a) | |
Biotechnology |
57.1 | % | ||
Pharmaceuticals |
28.6 | |||
Health Care Equipment & Supplies |
14.0 | |||
Life Sciences Tools & Services |
0.3 |
(a) |
Excludes money market funds. |
GEOGRAPHIC ALLOCATION
Country/Geographic Region | |
Percent
of Total Investments |
(a) | |
United States |
72.4 | % | ||
Ireland |
6.5 | |||
South Korea |
4.8 | |||
Canada |
3.8 | |||
British Virgin Islands |
2.9 | |||
Sweden |
2.8 | |||
Australia |
2.4 | |||
Switzerland |
2.4 | |||
China |
1.2 | |||
Singapore |
0.8 |
F U N D S U M M A R Y |
17 |
Fund Summary as of July 31, 2023 | iShares® Robotics and Artificial Intelligence Multisector ETF |
Investment Objective
The iShares Robotics and Artificial Intelligence Multisector ETF (the “Fund”) seeks to track the investment results of an index composed of developed and emerging market companies that could benefit from the long-term growth and innovation in robotics technologies and artificial intelligence, as represented by the NYSE® FactSet® Global Robotics and Artificial Intelligence Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||
1 Year | 5 Years | Since Inception |
1 Year | 5 Years | Since Inception |
|||||||||||||||||||||
Fund NAV |
22.55 | % | 9.00 | % | 8.67 | % | 22.55 | % | 53.87 | % | 52.77 | % | ||||||||||||||
Fund Market |
23.16 | 8.95 | 8.73 | 23.16 | 53.50 | 53.24 | ||||||||||||||||||||
Index |
22.44 | 9.22 | 8.87 | 22.44 | 55.40 | 54.21 |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was June 26, 2018. The first day of secondary market trading was June 28, 2018.
Past performance is not an indication of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” for more information.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||||||
|
Beginning Account Value (02/01/23) |
|
|
Ending Account Value (07/31/23) |
|
|
Expenses Paid During the Period |
(a) |
|
Beginning Account Value (02/01/23) |
|
|
Ending Account Value (07/31/23) |
|
|
Expenses Paid During the Period |
(a) |
|
Annualized Expense Ratio |
| ||||||||||
$ | 1,000.00 | $ | 1,164.50 | $ | 2.52 | $ | 1,000.00 | $ | 1,022.50 | $ | 2.36 | 0.47 | % |
(a) |
Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period shown). Other fees, such as brokerage commissions and other fees to financial intermediaries, may be paid which are not reflected in the tables and examples above. See “Disclosure of Expenses” for more information. |
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Fund Summary as of July 31, 2023 (continued) | iShares® Robotics and Artificial Intelligence Multisector ETF |
Portfolio Management Commentary
Stocks of global companies producing or using robotics and artificial intelligence applications advanced considerably for the reporting period. Many stocks, particularly in the information technology sector, benefited from renewed investor interest in growth-oriented companies. Although growth stocks declined sharply in 2022 amid high inflation and rising interest rates, they rebounded in 2023 as inflation moderated and optimism increased that interest rates would stabilize. The widespread emergence of artificial intelligence (“AI”) applications increased demand for machine learning capabilities, boosting the stocks of companies heavily involved in the burgeoning technology.
U.S. equities, which represented approximately 53% of the Index on average for the reporting period, contributed the most to the Index’s return, led by the information technology sector. AI-related demand boosted the software and services industry, as business and government enterprises increasingly sought to implement machine learning and artificial intelligence capabilities. Providers of customer relationship management platforms benefited from new AI-powered offerings and related integration that increased demand for their software. In addition, revenue rose for makers of data analytics platforms. Strong interest in AI also buoyed stocks of companies producing chips that power generative AI services.
Chinese stocks also contributed to the Index’s return, led by the communications sector. Global investment demand for exposure to the Chinese market increased after the country lifted restrictive Covid-19 pandemic policies. Stocks within the media and entertainment industry rose, as subscriber growth rebounded for both visual and audio streaming services after a stretch of industry-wide declines. Social media and livestream platforms, including dating and other apps, also benefited from improved financial performance and changes in leadership that boosted investors’ optimism. In addition, a popular app provider generated first-time profits.
Stocks in Taiwan further benefited performance, driven by gains in the semiconductors and semiconductor equipment industry. Chipmakers that also provide engineering, consulting, and technical-support services advanced, as demand for engineering designs and solutions increased alongside the surge in orders for AI-related chips needed to train and deploy AI models.
Portfolio Information
SECTOR ALLOCATION
Sector | |
Percent
of Total Investments |
(a) | |
Information Technology |
55.6 | % | ||
Communication Services |
19.0 | |||
Industrials |
13.1 | |||
Consumer Discretionary |
10.4 | |||
Financials |
1.0 | |||
Health Care |
0.9 |
(a) |
Excludes money market funds. |
GEOGRAPHIC ALLOCATION
Country/Geographic Region | |
Percent
of Total Investments |
(a) | |
United States |
51.2 | % | ||
China |
13.1 | |||
Japan |
9.9 | |||
Taiwan |
8.6 | |||
Israel |
2.9 | |||
South Korea |
2.5 | |||
Switzerland |
1.8 | |||
Germany |
1.6 | |||
France |
1.3 | |||
Australia |
1.2 |
F U N D S U M M A R Y |
19 |
Fund Summary as of July 31, 2023 | iShares® Self-Driving EV and Tech ETF |
Investment Objective
The iShares Self-Driving EV and Tech ETF (the “Fund”) seeks to track the investment results of an index composed of developed and emerging market companies that may benefit from growth and innovation in and around electric vehicles, battery technologies and autonomous driving technologies, as represented by the NYSE® FactSet® Global Autonomous Driving and Electric Vehicle Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||
1 Year | Since Inception |
1 Year | Since Inception |
|||||||||||||||||
Fund NAV |
14.17 | % | 16.50 | % | 14.17 | % | 92.61 | % | ||||||||||||
Fund Market |
13.93 | 16.44 | 13.93 | 92.24 | ||||||||||||||||
Index |
14.57 | 16.63 | 14.57 | 93.45 |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was April 16, 2019. The first day of secondary market trading was April 18, 2019.
Past performance is not an indication of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” for more information.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||||||
|
Beginning Account Value (02/01/23) |
|
|
Ending Account Value (07/31/23) |
|
|
Expenses Paid During the Period |
(a) |
|
Beginning Account Value (02/01/23) |
|
|
Ending Account Value (07/31/23) |
|
|
Expenses Paid During the Period |
(a) |
|
Annualized Expense Ratio |
| ||||||||||
$ | 1,000.00 | $ | 1,121.20 | $ | 2.47 | $ | 1,000.00 | $ | 1,022.50 | $ | 2.36 | 0.47 | % |
(a) |
Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period shown). Other fees, such as brokerage commissions and other fees to financial intermediaries, may be paid which are not reflected in the tables and examples above. See “Disclosure of Expenses” for more information. |
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Fund Summary as of July 31, 2023 (continued) | iShares® Self-Driving EV and Tech ETF |
Portfolio Management Commentary
Stocks of companies related to innovation in electric vehicles (“EVs”) and self-driving cars advanced for the reporting period. Globally, EV sales increased in 2022 by approximately 52% to 10 million vehicles, with forecasts of continued growth in 2023. The U.S. government’s Inflation Reduction Act of 2022 expanded subsidies and taxes for green energy initiatives, including EVs, with a goal of pushing EVs to half of all U.S. car sales by 2030. Building on EV initiatives from the 2021 Infrastructure Investment and Jobs Act, the 2022 act spurred several new manufacturing investments from makers of vehicles and batteries. The impacts of those new programs increased capacity of global EV supply chains to support strong consumer demand. Meanwhile, automakers expanded investments in self-driving cars, which made inroads into ride-hailing and taxi services.
Stocks in China contributed the most to the Index’s return, led by the automobiles industry. China accounted for nearly 60% of global EV sales in 2022, while EVs almost doubled as a proportion of domestic car sales. EV sales also rose after China lifted highly restrictive coronavirus policies late in 2022, reopening large parts of the economy for the first time since the pandemic started. Stocks of EV manufacturers also benefited from announced plans to cut costs amid increasing global competition, and an investment from a large German automaker further aided the industry. The introduction of new models boosted new vehicle deliveries, which grew substantially even as price competition intensified. Rising sales bolstered industry profitability and raised expectations that the nation’s leading EV manufacturer might soon take over the top spot in the world.
The automobiles industry in Germany also contributed to the Index’s return. During the first seven months of 2023, new EV car registrations increased at a year-over-year rate of 13%, pushing sales to a fifth of the total market. South Korean stocks also aided performance, led by the materials sector. Stocks of chemical makers increased, as rising demand for materials used to manufacture batteries drove increased sales and profitability.
Portfolio Information
SECTOR ALLOCATION
Sector | |
Percent
of Total Investments |
(a) | |
Consumer Discretionary |
63.1 | % | ||
Materials |
16.0 | |||
Industrials |
14.5 | |||
Information Technology |
6.4 | |||
Communication Services |
0.0 |
GEOGRAPHIC ALLOCATION
Country/Geographic Region | |
Percent
of Total Investments |
(a) | |
United States |
38.9 | % | ||
China |
19.3 | |||
South Korea |
11.1 | |||
Germany |
8.2 | |||
Australia |
7.6 | |||
France |
5.4 | |||
Switzerland |
3.5 | |||
Sweden |
2.7 | |||
Japan |
1.5 | |||
United Kingdom |
1.1 |
(a) |
Excludes money market funds. |
F U N D S U M M A R Y |
21 |
Fund Summary as of July 31, 2023 | iShares® Virtual Work and Life Multisector ETF |
Investment Objective
The iShares Virtual Work and Life Multisector ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. and non-U.S. companies that provide products, services and technologies that empower individuals to work remotely, and support an increasingly virtual way of life across entertainment, wellness and learning, as represented by the NYSE® FactSet® Global Virtual Work and Life Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||
1 Year | Since Inception |
1 Year | Since Inception |
|||||||||||||||||
Fund NAV |
12.58 | % | (13.73 | )% | 12.58 | % | (34.23 | )% | ||||||||||||
Fund Market |
12.59 | (13.75 | ) | 12.59 | (34.30 | ) | ||||||||||||||
Index |
13.71 | (13.32 | ) | 13.71 | (33.34 | ) |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSET VALUE)
The inception date of the Fund was September 29, 2020. The first day of secondary market trading was October 1, 2020.
Past performance is not an indication of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” for more information.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||||||
|
Beginning Account Value (02/01/23) |
|
|
Ending Account Value (07/31/23) |
|
|
Expenses Paid During the Period |
(a) |
|
Beginning Account Value (02/01/23) |
|
|
Ending Account Value (07/31/23) |
|
|
Expenses Paid During the Period |
(a) |
|
Annualized Expense Ratio |
| ||||||||||
$ | 1,000.00 | $ | 1,079.10 | $ | 2.42 | $ | 1,000.00 | $ | 1,022.50 | $ | 2.36 | 0.47 | % |
(a) |
Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period shown). Other fees, such as brokerage commissions and other fees to financial intermediaries, may be paid which are not reflected in the tables and examples above. See “Disclosure of Expenses” for more information. |
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Fund Summary as of July 31, 2023 (continued) | iShares® Virtual Work and Life Multisector ETF |
Portfolio Management Commentary
Global stocks of companies focused on helping people work, consume entertainment, or study from home advanced during the reporting period. Stocks in growth-oriented companies, including many in the communication services and information technology sectors, outperformed the broader market. Even as the U.S. government proclaimed an official end to the coronavirus emergency, the growing shift to working from home persisted. Compared with prior to the pandemic, about six times as many total workdays occurred from home, and job listings mentioning remote work also rose almost sixfold.
U.S. equities contributed the most to the Index’s return, led by the communication services sector. In the entertainment industry, stocks of visual and audio streaming services, including content providers and the interfaces and platforms from which consumers access them, benefited from subscription and revenue growth after a post-pandemic lull. The U.S. software and services industry within the information technology sector also contributed to the Index’s performance, led by companies providing business software designed to enhance remote work environments. Demand increased for cloud-based applications used to manage workflow, organization, and customer relationships, boosting revenue for the firms providing them. Amid substantial customer growth, subscription revenue also rose for suppliers of software targeting innovative project management collaboration.
Outside the U.S., stocks in China and India contributed to the Index’s return. In China, within the communication services sector, stocks of interactive and media services companies rose as revenue for large social media platforms increased, while cost containment raised profits for suppliers of related mobile-based apps. In addition, stocks in visual and audio streaming services benefited from subscription growth that rebounded after a stretch of widespread declines. In China’s consumer discretionary sector, revenue increased significantly for providers of education services. In India, food delivery companies in the consumer discretionary sector benefited from rising orders. On the downside, Swedish stocks detracted slightly from performance. Streaming services in the communication services sector reported slowing growth amid rising inflation.
Portfolio Information
SECTOR ALLOCATION
Sector | |
Percent
of Total Investments |
(a) | |
Information Technology |
44.5 | % | ||
Communication Services |
31.9 | |||
Consumer Discretionary |
16.9 | |||
Consumer Staples |
3.9 | |||
Health Care |
2.8 |
TEN LARGEST HOLDINGS
Security | |
Percent
of Total Investments |
(a) | |
Roku Inc. |
3.6 | % | ||
DoorDash Inc., Class A |
3.0 | |||
Just Eat Takeaway.com NV |
2.9 | |||
Five9 Inc. |
2.8 | |||
Delivery Hero SE |
2.8 | |||
Teladoc Health Inc. |
2.7 | |||
Match Group Inc. |
2.7 | |||
RingCentral Inc., Class A |
2.7 | |||
Activision Blizzard Inc. |
2.6 | |||
Dropbox Inc., Class A |
2.6 |
(a) |
Excludes money market funds. |
F U N D S U M M A R Y |
23 |
About Fund Performance |
Past performance is not an indication of future results. Financial markets have experienced extreme volatility and trading in many instruments has been disrupted. These circumstances may continue for an extended period of time and may continue to affect adversely the value and liquidity of each Fund’s investments. As a result, current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at iShares.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are redeemed or sold in the market. Performance for certain funds may reflect a waiver of a portion of investment advisory fees. Without such a waiver, performance would have been lower.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. Beginning August 10, 2020, the price used to calculate market return (“Market Price”) is the closing price. Prior to August 10, 2020, Market Price was determined using the midpoint between the highest bid and the lowest ask on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of a fund may not trade in the secondary market until after the fund’s inception, for the period from inception to the first day of secondary market trading in shares of the fund, the NAV of the fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower.
Shareholders of each Fund may incur the following charges: (1) transactional expenses, including brokerage commissions on purchases and sales of fund shares and (2) ongoing expenses, including management fees and other fund expenses. The expense examples shown (which are based on a hypothetical investment of $1,000 invested at the beginning of the period and held through the end of the period) are intended to assist shareholders both in calculating expenses based on an investment in each Fund and in comparing these expenses with similar costs of investing in other funds.
The expense examples provide information about actual account values and actual expenses. Annualized expense ratios reflect contractual and voluntary fee waivers, if any. In order to estimate the expenses a shareholder paid during the period covered by this report, shareholders can divide their account value by $1,000 and then multiply the result by the number under the heading entitled “Expenses Paid During the Period.”
The expense examples also provide information about hypothetical account values and hypothetical expenses based on a fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses. In order to assist shareholders in comparing the ongoing expenses of investing in the Funds and other funds, compare the 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
The expenses shown in the expense examples are intended to highlight shareholders’ ongoing costs only and do not reflect any transactional expenses, such as brokerage commissions and other fees paid on purchases and sales of fund shares. Therefore, the hypothetical examples are useful in comparing ongoing expenses only and will not help shareholders determine the relative total expenses of owning different funds. If these transactional expenses were included, shareholder expenses would have been higher.
24 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
July 31, 2023 |
iShares® Breakthrough Environmental Solutions ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks |
||||||||
Automobile Components — 2.1% | ||||||||
Linamar Corp. |
1,144 | $ | 66,385 | |||||
Tianneng Power International Ltd. |
24,000 | 26,891 | ||||||
|
|
|||||||
93,276 | ||||||||
Automobiles — 21.9% | ||||||||
Li Auto Inc.(a) |
8,400 | 180,323 | ||||||
NIO Inc.(a) |
16,800 | 256,492 | ||||||
Tesla Inc.(a) |
888 | 237,478 | ||||||
XPeng Inc.(a) |
20,800 | 221,872 | ||||||
Yadea Group Holdings Ltd.(b) |
24,000 | 54,616 | ||||||
|
|
|||||||
950,781 | ||||||||
Building Products — 5.3% | ||||||||
Munters Group AB(b) |
3,988 | 50,617 | ||||||
Nibe Industrier AB, Class B |
20,100 | 181,056 | ||||||
|
|
|||||||
231,673 | ||||||||
Chemicals — 7.2% | ||||||||
Johnson Matthey PLC |
5,878 | 135,942 | ||||||
Umicore SA |
6,011 | 178,017 | ||||||
|
|
|||||||
313,959 | ||||||||
Electrical Equipment — 16.8% | ||||||||
ABB Ltd., Registered |
5,092 | 204,329 | ||||||
Alfen Beheer BV(a)(b) |
636 | 44,134 | ||||||
Goldwind Science & Technology Co. Ltd., Class A |
7,600 | 11,919 | ||||||
Gotion High-tech Co. Ltd., Class A(a) |
4,000 | 15,434 | ||||||
GS Yuasa Corp. |
2,000 | 40,244 | ||||||
Ming Yang Smart Energy Group Ltd., Class A |
5,600 | 14,152 | ||||||
NARI Technology Co. Ltd., Class A |
17,760 | 60,481 | ||||||
Nordex SE(a) |
3,296 | 46,574 | ||||||
Shanghai Electric Group Co. Ltd., Class A(a) |
26,400 | 17,632 | ||||||
Signify NV(b) |
3,239 | 101,839 | ||||||
SunPower Corp.(a)(c) |
1,496 | 14,766 | ||||||
Vestas Wind Systems A/S(a) |
6,041 | 161,575 | ||||||
|
|
|||||||
733,079 | ||||||||
Electronic Equipment, Instruments & Components — 5.4% | ||||||||
Landis+Gyr Group AG |
540 | 46,888 | ||||||
Samsung SDI Co. Ltd. |
356 | 185,834 | ||||||
|
|
|||||||
232,722 | ||||||||
Independent Power and Renewable Electricity Producers — 1.0% | ||||||||
Gunkul Engineering PCL, NVDR |
138,800 | 14,042 | ||||||
Sunnova Energy International Inc.(a)(c) |
1,756 | 31,011 | ||||||
|
|
|||||||
45,053 | ||||||||
Machinery — 13.7% | ||||||||
Kurita Water Industries Ltd. |
3,200 | 128,688 | ||||||
Meidensha Corp. |
1,200 | 17,888 | ||||||
NGK Insulators Ltd. |
7,200 | 88,303 | ||||||
Xylem Inc./NY |
1,655 | 186,601 |
Security | Shares | Value | ||||||
Machinery (continued) | ||||||||
Yaskawa Electric Corp. |
4,000 | $ | 173,881 | |||||
|
|
|||||||
595,361 | ||||||||
Multi-Utilities — 4.8% | ||||||||
E.ON SE |
16,537 | 209,198 | ||||||
|
|
|||||||
Semiconductors & Semiconductor Equipment — 21.5% | ||||||||
Daqo New Energy Corp., ADR(a) |
1,632 | 63,762 | ||||||
Duk San Neolux Co. Ltd.(a) |
348 | 10,997 | ||||||
Enphase Energy Inc.(a)(c) |
640 | 97,171 | ||||||
First Solar Inc.(a) |
604 | 125,270 | ||||||
Hangzhou First Applied Material Co. Ltd., Class A |
4,820 | 23,622 | ||||||
JA Solar Technology Co. Ltd., Class A |
4,880 | 22,729 | ||||||
LONGi Green Energy Technology Co. Ltd., Class A |
19,900 | 83,380 | ||||||
Meyer Burger Technology AG(a) |
57,580 | 34,619 | ||||||
SMA Solar Technology AG(a) |
364 | 34,703 | ||||||
SolarEdge Technologies Inc.(a) |
399 | 96,342 | ||||||
TCL Zhonghuan Renewable Energy Technology Co. Ltd., Class A |
10,400 | 42,373 | ||||||
TSEC Corp. |
8,465 | 8,425 | ||||||
United Renewable Energy Co. Ltd. |
28,000 | 15,886 | ||||||
Universal Display Corp. |
1,320 | 192,562 | ||||||
Xinyi Solar Holdings Ltd. |
76,000 | 82,524 | ||||||
|
|
|||||||
934,365 | ||||||||
|
|
|||||||
Total
Long-Term Investments — 99.7% |
|
4,339,467 | ||||||
|
|
|||||||
Short-Term Securities |
||||||||
Money Market Funds — 3.0% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 5.42%(d)(e)(f) |
130,333 | 130,372 | ||||||
|
|
|||||||
Total
Short-Term Securities — 3.0% |
|
130,372 | ||||||
|
|
|||||||
Total
Investments — 102.7% |
|
4,469,839 | ||||||
Liabilities in Excess of Other Assets — (2.7)% |
|
(118,430 | ) | |||||
|
|
|||||||
Net Assets — 100.0% |
|
$ | 4,351,409 | |||||
|
|
(a) |
Non-income producing security. |
(b) |
Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors. |
(c) |
All or a portion of this security is on loan. |
(d) |
Affiliate of the Fund. |
(e) |
Annualized 7-day yield as of period end. |
(f) |
All or a portion of this security was purchased with the cash collateral from loaned securities. |
S C H E D U L E O F I N V E S T M E N T S |
25 |
Schedule of Investments (continued) July 31, 2023 |
iShares® Breakthrough Environmental Solutions ETF |
Affiliates
Investments in issuers considered to be affiliate(s) of the Fund during the period ended July 31, 2023 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
Affiliated Issuer | |
Value at 03/28/23 |
(a) |
|
Purchases at Cost |
|
|
Proceeds from Sale |
|
|
Net Realized Gain (Loss) |
|
|
Change in Unrealized Appreciation (Depreciation) |
|
|
Value at 07/31/23 |
|
|
Shares Held at 07/31/23 |
|
Income |
|
Capital Gain Distributions from Underlying Funds |
| |||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares |
$ — | $130,370(b) | $ — | $ | — | $ | 2 | $ | 130,372 | 130,333 | $ | 32 | (c) | $ | — | |||||||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares(d) |
— | 0(b) | — | — | — | — | — | 25 | — | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
$ | — | $ | 2 | $ | 130,372 | $ | 57 | $ | — | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(a) |
Commencement of operations. |
(b) |
Represents net amount purchased (sold). |
(c) |
All or a portion represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities. |
(d) |
As of period end, the entity is no longer held. |
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
Description |
Number of Contracts |
Expiration Date |
Notional Amount (000) |
Value/ Unrealized Appreciation (Depreciation) |
||||||||
Long Contracts |
||||||||||||
Micro E-Mini Russell 2000 Index |
1 | 09/15/23 | $ 10 | $ | 557 | |||||||
|
|
Derivative Financial Instruments Categorized by Risk Exposure
As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:
Commodity Contracts |
Credit Contracts |
Equity Contracts |
Foreign Currency Exchange Contracts |
Interest Rate Contracts |
Other Contracts |
Total |
||||||||||||||||||||||
Assets — Derivative Financial Instruments |
||||||||||||||||||||||||||||
Futures contracts |
||||||||||||||||||||||||||||
Unrealized appreciation on futures contracts(a) |
$ | — | $ | — | $ | 557 | $ | — | $ | — | $ | — | $ | 557 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Net cumulative unrealized appreciation (depreciation) on futures contracts are reported in the Schedule of Investments. In the Statements of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss). |
For the period ended July 31, 2023, the effect of derivative financial instruments in the Statements of Operations was as follows:
Commodity Contracts |
Credit Contracts |
Equity Contracts |
Foreign Currency Exchange Contracts |
Interest Rate Contracts |
Other Contracts |
Total |
||||||||||||||||||||||
Net Realized Gain (Loss) from |
||||||||||||||||||||||||||||
Futures contracts |
$ | — | $ | — | $ | 405 | $ | — | $ | — | $ | — | $ | 405 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on |
||||||||||||||||||||||||||||
Futures contracts |
$ | — | $ | — | $ | 557 | $ | — | $ | — | $ | — | $ | 557 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Quarterly Balances of Outstanding Derivative Financial Instruments
Futures contracts: |
||
Average notional value of contracts — long |
$5,034 |
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
26 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (continued) July 31, 2023 |
iShares® Breakthrough Environmental Solutions ETF |
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of financial instruments. For a description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, refer to the Notes to Financial Statements.
The following table summarizes the Fund’s financial instruments categorized in the fair value hierarchy. The breakdown of the Fund’s financial instruments into major categories is disclosed in the Schedule of Investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets |
||||||||||||||||
Investments |
||||||||||||||||
Long-Term Investments |
||||||||||||||||
Common Stocks |
$ | 1,111,348 | $ | 3,228,119 | $ | — | $ | 4,339,467 | ||||||||
Short-Term Securities |
||||||||||||||||
Money Market Funds |
130,372 | — | — | 130,372 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 1,241,720 | $ | 3,228,119 | $ | — | $ | 4,469,839 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Derivative Financial Instruments(a) |
||||||||||||||||
Assets |
||||||||||||||||
Equity Contracts |
$ | 557 | $ | — | $ | — | $ | 557 | ||||||||
|
|
|
|
|
|
|
|
(a) |
Derivative financial instruments are futures contracts. Futures contracts are valued at the unrealized appreciation (depreciation) on the instrument. |
See notes to financial statements.
S C H E D U L E O F I N V E S T M E N T S |
27 |
Schedule of Investments July 31, 2023 |
iShares® Cybersecurity and Tech ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks |
| |||||||
Communications Equipment — 11.2% | ||||||||
Accton Technology Corp. |
2,038,000 | $ | 24,864,330 | |||||
ADTRAN Holdings Inc. |
417,890 | 4,066,070 | ||||||
Calix Inc.(a) |
343,875 | 15,512,201 | ||||||
Juniper Networks Inc. |
739,484 | 20,557,655 | ||||||
Radware Ltd.(a) |
232,251 | 4,363,996 | ||||||
|
|
|||||||
69,364,252 | ||||||||
IT Services — 10.1% | ||||||||
Akamai Technologies Inc.(a)(b) |
244,892 | 23,142,294 | ||||||
Change Holdings Inc.(b) |
239,000 | 3,158,978 | ||||||
Netcompany Group A/S(a)(c) |
259,660 | 12,053,065 | ||||||
Okta Inc.(a)(b) |
309,996 | 23,826,293 | ||||||
|
|
|||||||
62,180,630 | ||||||||
Professional Services — 13.7% | ||||||||
Booz Allen Hamilton Holding Corp., Class A |
220,832 | 26,738,338 | ||||||
CACI International Inc., Class A(a) |
74,322 | 26,045,402 | ||||||
My EG Services Bhd |
27,571,200 | 4,681,643 | ||||||
Science Applications International Corp. |
225,755 | 27,393,112 | ||||||
|
|
|||||||
84,858,495 | ||||||||
Software — 64.8% | ||||||||
A10 Networks Inc. |
403,913 | 6,268,730 | ||||||
Ahnlab Inc. |
34,411 | 1,696,115 | ||||||
Alarm.com Holdings Inc.(a) |
278,665 | 15,385,095 | ||||||
BlackBerry Ltd.(a) |
3,383,992 | 17,219,570 | ||||||
Check Point Software Technologies Ltd.(a)(b) |
184,646 | 24,412,048 | ||||||
Clear Secure Inc., Class A(b) |
475,283 | 11,268,960 | ||||||
Crowdstrike Holdings Inc., Class A(a)(b) |
151,208 | 24,444,285 | ||||||
CyberArk Software Ltd.(a) |
153,339 | 25,455,807 | ||||||
Darktrace PLC(a) |
1,858,603 | 8,814,529 | ||||||
Digital Arts Inc. |
63,900 | 2,528,727 | ||||||
Everbridge Inc.(a) |
235,396 | 7,259,613 | ||||||
ForgeRock Inc., Class A (a)(b) |
257,527 | 5,317,933 | ||||||
Fortinet Inc.(a) |
335,775 | 26,096,433 | ||||||
OneSpan Inc.(a) |
213,687 | 2,936,059 | ||||||
Palo Alto Networks Inc.(a) |
105,307 | 26,322,538 | ||||||
Qualys Inc.(a)(b) |
176,137 | 24,447,816 |
Security | Shares | Value | ||||||
Software (continued) | ||||||||
Rapid7 Inc.(a) |
345,663 | $ | 15,869,388 | |||||
SentinelOne Inc., Class A(a)(b) |
1,268,547 | 21,146,678 | ||||||
TeamViewer AG(a)(c) |
794,908 | 13,512,355 | ||||||
Tenable Holdings Inc.(a)(b) |
562,083 | 27,350,959 | ||||||
Trend Micro Inc./Japan |
473,100 | 22,351,955 | ||||||
Varonis Systems Inc.(a) |
623,376 | 17,890,891 | ||||||
VMware Inc., Class A(a) |
165,953 | 26,159,171 | ||||||
Zscaler Inc.(a) |
160,748 | 25,780,764 | ||||||
|
|
|||||||
399,936,419 | ||||||||
|
|
|||||||
Total
Long-Term Investments — 99.8% |
|
616,339,796 | ||||||
|
|
|||||||
Short-Term Securities |
||||||||
Money Market Funds — 4.7% | ||||||||
BlackRock
Cash Funds: Institutional, |
27,926,516 | 27,934,894 | ||||||
BlackRock
Cash Funds: Treasury, |
1,260,000 | 1,260,000 | ||||||
|
|
|||||||
Total
Short-Term Securities — 4.7% |
|
29,194,894 | ||||||
|
|
|||||||
Total
Investments — 104.5% |
|
645,534,690 | ||||||
Liabilities in Excess of Other Assets — (4.5)% |
|
(27,906,035 | ) | |||||
|
|
|||||||
Net Assets — 100.0% |
|
$ | 617,628,655 | |||||
|
|
(a) |
Non-income producing security. |
(b) |
All or a portion of this security is on loan. |
(c) |
Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors. |
(d) |
Affiliate of the Fund. |
(e) |
Annualized 7-day yield as of period end. |
(f) |
All or a portion of this security was purchased with the cash collateral from loaned securities. |
Affiliates
Investments in issuers considered to be affiliate(s) of the Fund during the year ended July 31, 2023 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
|
||||||||||||||||||||||||||||||||||||
Affiliated Issuer | Value at 07/31/22 |
Purchases at Cost |
Proceeds from Sale |
Net Realized Gain (Loss) |
Change in Unrealized Appreciation (Depreciation) |
Value at 07/31/23 |
Shares Held at 07/31/23 |
Income |
Capital Gain |
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares |
$ | 56,048,701 | $ | — | $ | (28,123,025 | )(a) | $ | 24,358 | $ | (15,140 | ) | $ | 27,934,894 | 27,926,516 | $ 92,846 | (b) | $ | — | |||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares |
510,000 | 750,000 | (a) | — | — | — | 1,260,000 | 1,260,000 | 36,112 | 1 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
$ | 24,358 | $ | (15,140 | ) | $ | 9,194,894 | $128,958 | $ | 1 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(a) |
Represents net amount purchased (sold). |
(b) |
All or a portion represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities. |
28 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (continued) July 31, 2023 |
iShares® Cybersecurity and Tech ETF |
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
|
||||||||||||||
Description | Number of Contracts |
Expiration Date |
Notional Amount (000) |
Value/ Unrealized Appreciation (Depreciation) |
||||||||||
|
||||||||||||||
Long Contracts | ||||||||||||||
E-Mini Technology Select Sector Index |
6 | 09/15/23 | $ 1,085 | $ | 26,926 | |||||||||
|
|
Derivative Financial Instruments Categorized by Risk Exposure
As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:
|
||||||||||||||||||||||||
Commodity Contracts |
Credit Contracts |
Equity Contracts |
Foreign Currency Exchange Contracts |
Interest Rate Contracts |
Other Contracts |
Total | ||||||||||||||||||
|
||||||||||||||||||||||||
Assets — Derivative Financial Instruments |
||||||||||||||||||||||||
Futures contracts |
||||||||||||||||||||||||
Unrealized appreciation on futures contracts(a) |
$ — | $ | — | $ 26,926 | $ | — | $ | — | $ | — | $ | 26,926 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Net cumulative unrealized appreciation (depreciation) on futures contracts are reported in the Schedule of Investments. In the Statements of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss). |
For the period ended July 31, 2023, the effect of derivative financial instruments in the Statements of Operations was as follows:
|
||||||||||||||||||||||||
Commodity Contracts |
Credit Contracts |
Equity Contracts |
Foreign Currency Exchange Contracts |
Interest Rate Contracts |
Other Contracts |
Total | ||||||||||||||||||
|
||||||||||||||||||||||||
Net Realized Gain (Loss) from |
||||||||||||||||||||||||
Futures contracts |
$ — | $ | — | $ 64,187 | $ | — | $ | — | $ | — | $ | 64,187 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on |
||||||||||||||||||||||||
Futures contracts |
$ — | $ | — | $(32,713) | $ | — | $ | — | $ | — | $ | (32,713 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Average Quarterly Balances of Outstanding Derivative Financial Instruments
Futures contracts: |
||||
Average notional value of contracts — long |
$ | 755,745 |
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of financial instruments. For a description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, refer to the Notes to Financial Statements.
The following table summarizes the Fund’s financial instruments categorized in the fair value hierarchy. The breakdown of the Fund’s financial instruments into major categories is disclosed in the Schedule of Investments above.
|
||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
|
||||||||||||||||
Assets |
||||||||||||||||
Investments |
||||||||||||||||
Long-Term Investments |
||||||||||||||||
Common Stocks |
$ | 522,678,099 | $ | 93,661,697 | $ | — | $ | 616,339,796 | ||||||||
Short-Term Securities |
||||||||||||||||
Money Market Funds |
29,194,894 | — | — | 29,194,894 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 551,872,993 | $ | 93,661,697 | $ | — | $ | 645,534,690 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Derivative Financial Instruments(a) |
||||||||||||||||
Assets |
||||||||||||||||
Equity Contracts |
$ | 26,926 | $ | — | $ | — | $ | 26,926 | ||||||||
|
|
|
|
|
|
|
|
(a) |
Derivative financial instruments are futures contracts. Futures contracts are valued at the unrealized appreciation (depreciation) on the instrument. |
See notes to financial statements.
S C H E D U L E O F I N V E S T M E N T S |
29 |
Schedule of Investments July 31, 2023 |
iShares® Exponential Technologies ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks |
| |||||||
Australia — 3.4% | ||||||||
IRESS Ltd. |
2,261,522 | $ | 15,809,654 | |||||
Megaport Ltd.(a)(b) |
3,509,740 | 24,112,427 | ||||||
Netwealth Group Ltd. |
1,572,165 | 16,062,733 | ||||||
NEXTDC Ltd.(a) |
2,453,386 | 21,056,209 | ||||||
Technology One Ltd. |
1,624,576 | 17,212,631 | ||||||
WiseTech Global Ltd. |
412,049 | 23,795,431 | ||||||
|
|
|||||||
118,049,085 | ||||||||
Canada — 2.3% | ||||||||
Ballard Power Systems Inc.(a)(b) |
2,699,708 | 12,836,742 | ||||||
BlackBerry Ltd.(a) |
3,351,724 | 17,055,373 | ||||||
Boralex Inc., Class A |
534,594 | 13,832,592 | ||||||
Brookfield Renewable Corp., Class A |
476,280 | 14,844,809 | ||||||
Lithium Americas Corp.(a)(b) |
618,322 | 12,482,260 | ||||||
Northland Power Inc. |
531,359 | 10,279,428 | ||||||
|
|
|||||||
81,331,204 | ||||||||
Cayman Islands — 0.5% | ||||||||
NIO Inc.(a)(b) |
1,160,750 | 17,721,660 | ||||||
|
|
|||||||
China — 5.7% | ||||||||
Baidu Inc.(a) |
1,030,950 | 20,155,884 | ||||||
BYD Co. Ltd., Class A |
376,400 | 14,367,317 | ||||||
China Longyuan Power Group Corp. Ltd., Class H |
12,841,000 | 12,432,098 | ||||||
China Resources Power Holdings Co. Ltd. |
8,338,000 | 18,088,791 | ||||||
Ganfeng Lithium Group Co. Ltd., Class A |
1,259,960 | 10,567,714 | ||||||
GDS Holdings Ltd., Class A(a) |
6,856,300 | 11,288,985 | ||||||
Genscript Biotech Corp.(a) |
5,452,000 | 14,042,003 | ||||||
Innovent Biologics Inc.(a)(c) |
4,154,500 | 18,576,591 | ||||||
Li Auto Inc.(a) |
1,306,000 | 28,035,929 | ||||||
Shanghai Junshi Biosciences Co. Ltd., Class A(a) |
1,815,327 | 10,355,104 | ||||||
Tianqi Lithium Corp. |
1,789,200 | 11,196,799 | ||||||
XPeng Inc.(a) |
2,609,600 | 27,836,414 | ||||||
|
|
|||||||
196,943,629 | ||||||||
Denmark — 0.8% | ||||||||
Orsted AS(c) |
159,092 | 13,844,101 | ||||||
Vestas Wind Systems A/S(a) |
561,938 | 15,029,852 | ||||||
|
|
|||||||
28,873,953 | ||||||||
Finland — 1.0% | ||||||||
Nokia OYJ |
3,064,816 | 12,047,605 | ||||||
Wartsila OYJ Abp |
1,716,031 | 21,558,234 | ||||||
|
|
|||||||
33,605,839 | ||||||||
France — 1.4% | ||||||||
Dassault Systemes SE |
400,950 | 17,136,057 | ||||||
Sanofi |
154,353 | 16,467,076 | ||||||
Worldline SA/France(a)(c) |
333,456 | 13,217,996 | ||||||
|
|
|||||||
46,821,129 | ||||||||
Germany — 2.0% | ||||||||
Infineon Technologies AG |
454,482 | 19,967,877 | ||||||
Merck KGaA |
81,184 | 14,266,053 | ||||||
SAP SE |
137,465 | 18,751,815 | ||||||
Siemens AG, Registered |
105,139 | 17,920,117 | ||||||
|
|
|||||||
70,905,862 | ||||||||
Israel — 0.5% | ||||||||
Nice Ltd.(a) |
77,319 | 16,830,064 | ||||||
|
|
|||||||
Italy — 1.0% | ||||||||
Infrastrutture Wireless Italiane SpA(c) |
1,471,507 | 18,453,866 |
Security | Shares | Value | ||||||
Italy (continued) | ||||||||
Nexi SpA(a)(c) |
1,800,287 | $ | 15,590,490 | |||||
|
|
|||||||
34,044,356 | ||||||||
Japan — 4.7% | ||||||||
Chugai Pharmaceutical Co. Ltd. |
553,300 | 16,466,894 | ||||||
Denso Corp. |
279,300 | 19,446,957 | ||||||
FANUC Corp. |
484,500 | 14,822,027 | ||||||
Harmonic Drive Systems Inc. |
554,300 | 15,266,451 | ||||||
Murata Manufacturing Co. Ltd. |
274,300 | 16,293,886 | ||||||
Nabtesco Corp. |
593,100 | 12,580,480 | ||||||
Taiyo Yuden Co. Ltd. |
466,100 | 13,898,779 | ||||||
TDK Corp. |
425,300 | 16,292,500 | ||||||
Tokyo Electron Ltd. |
134,700 | 20,216,710 | ||||||
Yaskawa Electric Corp. |
442,700 | 19,244,290 | ||||||
|
|
|||||||
164,528,974 | ||||||||
Netherlands — 2.7% | ||||||||
Adyen NV(a)(c) |
10,055 | 18,662,227 | ||||||
ASM International NV |
52,950 | 25,155,503 | ||||||
ASML Holding NV |
24,770 | 17,741,978 | ||||||
QIAGEN NV(a) |
302,867 | 14,210,988 | ||||||
TomTom NV(a) |
2,016,639 | 17,617,520 | ||||||
|
|
|||||||
93,388,216 | ||||||||
South Korea — 0.9% | ||||||||
Samsung Electro-Mechanics Co. Ltd. |
144,323 | 16,464,203 | ||||||
Samsung SDI Co. Ltd. |
27,470 | 14,339,464 | ||||||
|
|
|||||||
30,803,667 | ||||||||
Spain — 1.1% | ||||||||
Amadeus IT Group SA |
278,357 | 19,968,243 | ||||||
Cellnex Telecom SA(c) |
422,209 | 17,242,626 | ||||||
|
|
|||||||
37,210,869 | ||||||||
Sweden — 1.2% | ||||||||
Sandvik AB |
815,253 | 16,559,845 | ||||||
Swedish Orphan Biovitrum AB(a)(b) |
731,816 | 14,323,888 | ||||||
Telefonaktiebolaget LM Ericsson, Class B |
2,332,329 | 11,732,720 | ||||||
|
|
|||||||
42,616,453 | ||||||||
Switzerland — 2.0% | ||||||||
CRISPR Therapeutics AG(a)(b) |
290,965 | 16,681,023 | ||||||
Novartis AG, Registered |
161,618 | 16,920,941 | ||||||
Roche Holding AG, NVS |
45,736 | 14,180,508 | ||||||
STMicroelectronics NV |
392,112 | 20,972,642 | ||||||
|
|
|||||||
68,755,114 | ||||||||
Taiwan — 1.3% | ||||||||
MediaTek Inc. |
640,000 | 14,083,143 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. |
965,000 | 17,425,583 | ||||||
Yageo Corp. |
947,000 | 13,883,342 | ||||||
|
|
|||||||
45,392,068 | ||||||||
United Kingdom — 2.0% | ||||||||
AstraZeneca PLC |
107,044 | 15,379,675 | ||||||
GSK PLC |
805,181 | 14,333,149 | ||||||
Ocado Group PLC(a) |
1,755,955 | 21,139,182 | ||||||
Sage Group PLC (The) |
1,515,857 | 18,233,602 | ||||||
|
|
|||||||
69,085,608 | ||||||||
United States — 64.8% | ||||||||
AbbVie Inc. |
89,409 | 13,373,799 | ||||||
Advanced Micro Devices Inc.(a) |
209,923 | 24,015,191 | ||||||
AeroVironment Inc.(a) |
178,884 | 17,040,490 | ||||||
Agilent Technologies Inc. |
95,996 | 11,689,433 | ||||||
Akamai Technologies Inc.(a) |
164,851 | 15,578,419 | ||||||
Albemarle Corp. |
57,006 | 12,101,234 |
30 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (continued) July 31, 2023 |
iShares® Exponential Technologies ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
United States (continued) | ||||||||
Alnylam Pharmaceuticals Inc.(a) |
63,787 | $ | 12,463,980 | |||||
Alphabet Inc., Class A(a) |
155,198 | 20,597,879 | ||||||
Amazon.com Inc.(a) |
166,454 | 22,251,571 | ||||||
American Tower Corp. |
70,084 | 13,337,686 | ||||||
Analog Devices Inc. |
88,746 | 17,707,489 | ||||||
Ansys Inc.(a) |
60,660 | 20,751,786 | ||||||
Applied Materials Inc. |
138,579 | 21,007,191 | ||||||
Aptiv PLC(a) |
150,930 | 16,525,326 | ||||||
Arista Networks Inc.(a)(b) |
116,162 | 18,015,565 | ||||||
Atlassian Corp., NVS(a)(b) |
117,406 | 21,360,848 | ||||||
Autodesk Inc.(a) |
76,358 | 16,187,132 | ||||||
Biogen Inc.(a)(b) |
50,435 | 13,627,033 | ||||||
BioMarin Pharmaceutical Inc.(a) |
142,459 | 12,526,420 | ||||||
Bio-Techne Corp. |
182,779 | 15,243,769 | ||||||
Blackbaud Inc.(a) |
261,130 | 19,702,258 | ||||||
Block Inc.(a)(b) |
241,671 | 19,461,766 | ||||||
Bloom Energy Corp., Class A(a)(b) |
732,297 | 13,078,824 | ||||||
Box Inc., Class A(a)(b) |
530,142 | 16,566,937 | ||||||
Bristol-Myers Squibb Co. |
183,737 | 11,426,604 | ||||||
Broadcom Inc. |
28,383 | 25,506,383 | ||||||
Broadridge Financial Solutions Inc. |
103,618 | 17,399,535 | ||||||
Cadence Design Systems Inc.(a) |
91,754 | 21,471,354 | ||||||
Celanese Corp., Class A |
144,779 | 18,153,839 | ||||||
ChargePoint Holdings Inc., Class A(a)(b) |
1,374,552 | 11,903,620 | ||||||
Cisco Systems Inc. |
304,943 | 15,869,234 | ||||||
Cloudflare Inc., Class A(a)(b) |
332,712 | 22,880,604 | ||||||
Cogent Communications Holdings Inc. |
262,107 | 16,051,433 | ||||||
Coinbase Global Inc., Class A(a)(b) |
357,108 | 35,214,420 | ||||||
CoStar Group Inc.(a) |
184,242 | 15,470,801 | ||||||
Crowdstrike Holdings Inc., Class A(a)(b) |
130,163 | 21,042,151 | ||||||
Datadog Inc., Class A(a) |
215,764 | 25,183,974 | ||||||
Digital Realty Trust Inc. |
135,820 | 16,925,888 | ||||||
DISH Network Corp., Class A(a)(b) |
1,022,796 | 8,110,772 | ||||||
DocuSign Inc., Class A(a) |
350,138 | 18,844,427 | ||||||
Dropbox Inc., Class A(a) |
667,937 | 18,000,902 | ||||||
DuPont de Nemours Inc. |
211,778 | 16,440,326 | ||||||
Dynatrace Inc.(a) |
408,285 | 22,329,107 | ||||||
Edwards Lifesciences Corp.(a)(b) |
203,063 | 16,665,380 | ||||||
Elastic NV(a) |
283,384 | 18,830,867 | ||||||
Eli Lilly & Co. |
39,613 | 18,006,089 | ||||||
Enphase Energy Inc.(a)(b) |
46,191 | 7,013,180 | ||||||
Envestnet Inc.(a)(b) |
234,192 | 14,515,220 | ||||||
Exact Sciences Corp.(a)(b) |
320,853 | 31,296,002 | ||||||
F5 Inc.(a) |
99,397 | 15,728,581 | ||||||
FactSet Research Systems Inc. |
32,842 | 14,287,584 | ||||||
First Solar Inc.(a) |
95,195 | 19,743,443 | ||||||
Five9 Inc.(a) |
228,592 | 20,058,948 | ||||||
Fortinet Inc.(a)(b) |
285,649 | 22,200,640 | ||||||
Gen Digital Inc. |
654,263 | 12,725,415 | ||||||
Gilead Sciences Inc. |
168,342 | 12,817,560 | ||||||
Global Payments Inc. |
149,289 | 16,459,112 | ||||||
Guardant Health Inc.(a) |
305,592 | 11,924,200 | ||||||
Guidewire Software Inc.(a)(b) |
244,376 | 20,727,972 | ||||||
Hubbell Inc., Class B |
59,690 | 18,623,280 | ||||||
HubSpot Inc.(a) |
53,430 | 31,018,786 | ||||||
Illumina Inc.(a)(b) |
70,766 | 13,597,687 | ||||||
Incyte Corp.(a) |
174,736 | 11,134,178 | ||||||
Intel Corp. |
520,402 | 18,614,780 | ||||||
Intellia Therapeutics Inc.(a)(b) |
387,052 | 16,383,911 | ||||||
Intuit Inc. |
37,953 | 19,420,550 |
Security | Shares | Value | ||||||
United States (continued) | ||||||||
Intuitive Surgical Inc.(a)(b) |
54,983 | $ | 17,836,485 | |||||
Ionis Pharmaceuticals Inc.(a)(b) |
385,885 | 15,987,216 | ||||||
Jazz Pharmaceuticals PLC(a) |
97,882 | 12,765,770 | ||||||
Johnson & Johnson |
82,732 | 13,860,092 | ||||||
Keysight Technologies Inc.(a) |
82,650 | 13,313,262 | ||||||
KLA Corp. |
38,011 | 19,535,753 | ||||||
Lam Research Corp. |
33,139 | 23,810,040 | ||||||
Livent Corp.(a)(b) |
585,297 | 14,410,012 | ||||||
Lumen Technologies Inc. |
2,693,450 | 4,821,275 | ||||||
Manhattan Associates Inc.(a) |
124,818 | 23,792,807 | ||||||
MarketAxess Holdings Inc. |
53,209 | 14,324,927 | ||||||
Merck & Co. Inc. |
134,031 | 14,294,406 | ||||||
Meta Platforms Inc, Class A(a) |
129,285 | 41,190,201 | ||||||
Microchip Technology Inc. |
196,113 | 18,422,855 | ||||||
Micron Technology Inc.(b) |
273,682 | 19,538,158 | ||||||
Microsoft Corp. |
60,487 | 20,318,793 | ||||||
Moderna Inc.(a) |
82,295 | 9,682,830 | ||||||
MongoDB Inc.(a) |
82,618 | 34,980,461 | ||||||
Monolithic Power Systems Inc.(b) |
40,034 | 22,398,623 | ||||||
Nvidia Corp. |
91,330 | 42,677,596 | ||||||
NXP Semiconductors NV |
89,979 | 20,063,517 | ||||||
Okta Inc.(a) |
238,977 | 18,367,772 | ||||||
ON Semiconductor Corp.(a)(b) |
209,985 | 22,625,884 | ||||||
Oracle Corp. |
187,005 | 21,922,596 | ||||||
Palantir Technologies Inc., Class A(a) |
2,083,056 | 41,327,831 | ||||||
Palo Alto Networks Inc.(a)(b) |
89,458 | 22,360,922 | ||||||
Plug Power Inc.(a)(b) |
1,075,870 | 14,115,414 | ||||||
PTC Inc.(a)(b) |
121,273 | 17,682,816 | ||||||
Qorvo Inc.(a) |
154,591 | 17,008,102 | ||||||
Qualcomm Inc. |
124,867 | 16,503,671 | ||||||
Regeneron Pharmaceuticals Inc.(a) |
19,294 | 14,314,412 | ||||||
Revvity Inc. |
105,327 | 12,949,955 | ||||||
RingCentral Inc., Class A(a) |
417,990 | 17,288,066 | ||||||
Salesforce Inc.(a)(b) |
112,951 | 25,415,105 | ||||||
SEI Investments Co.(b) |
243,906 | 15,363,639 | ||||||
ServiceNow Inc.(a) |
37,936 | 22,116,688 | ||||||
Skyworks Solutions Inc. |
160,196 | 18,321,617 | ||||||
Snowflake Inc., Class A(a) |
107,261 | 19,061,352 | ||||||
SoFi Technologies Inc.(a)(b) |
3,424,906 | 39,215,174 | ||||||
SolarEdge Technologies Inc.(a) |
47,514 | 11,472,730 | ||||||
Splunk Inc.(a)(b) |
176,025 | 19,068,788 | ||||||
SunPower Corp.(a)(b) |
667,836 | 6,591,541 | ||||||
Sunrun Inc.(a)(b) |
513,134 | 9,739,283 | ||||||
Synopsys Inc.(a) |
45,509 | 20,560,966 | ||||||
Teradyne Inc. |
161,213 | 18,207,396 | ||||||
Tesla Inc.(a) |
84,632 | 22,633,136 | ||||||
Texas Instruments Inc. |
84,226 | 15,160,680 | ||||||
Toast Inc., Class A(a)(b) |
855,437 | 18,879,495 | ||||||
Tradeweb Markets Inc., Class A(b) |
229,101 | 18,738,171 | ||||||
Twilio Inc., Class A(a)(b) |
325,201 | 21,473,022 | ||||||
Tyler Technologies Inc.(a)(b) |
47,758 | 18,942,256 | ||||||
Veeva Systems Inc., Class A(a)(b) |
89,107 | 18,197,432 | ||||||
Vertex Pharmaceuticals Inc.(a) |
46,392 | 16,345,757 | ||||||
VMware Inc., Class A(a) |
124,795 | 19,671,436 | ||||||
Waters Corp.(a) |
43,505 | 12,016,516 | ||||||
Zscaler Inc.(a)(b) |
128,946 | 20,680,359 | ||||||
|
|
|||||||
2,246,595,824 | ||||||||
|
|
|||||||
Total Common Stocks — 99.3% (Cost: $2,844,888,023) |
3,443,503,574 | |||||||
|
|
S C H E D U L E O F I N V E S T M E N T S |
31 |
Schedule of Investments (continued) July 31, 2023 |
iShares® Exponential Technologies ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Preferred Stocks |
||||||||
Chile — 0.4% | ||||||||
Sociedad Quimica y Minera de Chile SA, Class B, Preference Shares |
155,477 | $ | 11,400,232 | |||||
|
|
|||||||
Total
Preferred Stocks — 0.4% |
|
11,400,232 | ||||||
|
|
|||||||
Total
Long-Term Investments — 99.7% |
|
3,454,903,806 | ||||||
|
|
|||||||
Short-Term Securities |
||||||||
Money Market Funds — 6.6% | ||||||||
BlackRock
Cash Funds: Institutional, |
224,335,809 | 224,403,109 | ||||||
BlackRock
Cash Funds: Treasury, |
5,560,000 | 5,560,000 | ||||||
|
|
|||||||
Total
Short-Term Securities — 6.6% |
|
229,963,109 | ||||||
|
|
|||||||
Total
Investments — 106.3% |
|
3,684,866,915 | ||||||
Liabilities in Excess of Other Assets — (6.3)% |
|
(217,266,670 | ) | |||||
|
|
|||||||
Net Assets — 100.0% |
|
$ | 3,467,600,245 | |||||
|
|
(a) |
Non-income producing security. |
(b) |
All or a portion of this security is on loan. |
(c) |
Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors. |
(d) |
Affiliate of the Fund. |
(e) |
Annualized 7-day yield as of period end. |
(f) |
All or a portion of this security was purchased with the cash collateral from loaned securities. |
Affiliates
Investments in issuers considered to be affiliate(s) of the Fund during the year ended July 31, 2023 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
Affiliated Issuer | Value at 07/31/22 |
Purchases at Cost |
Proceeds from Sale |
Net Realized Gain (Loss) |
Change
in Unrealized Appreciation (Depreciation) |
Value at 07/31/23 |
Shares Held at |
Income |
Capital Gain |
|||||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares |
$164,930,879 | $59,422,597 | (a) | $ — | $ | 4,527 | $ | 45,106 | $ | 224,403,109 | 224,335,809 | $ | 1,825,929 | (b) | $ | — | ||||||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares |
5,890,000 | — | (330,000 | )(a) | — | — | 5,560,000 | 5,560,000 | 120,863 | 1 | ||||||||||||||||||||||||||
BlackRock |
14,603,515 | 588,715 | (15,900,340 | ) | 5,205,181 | (4,497,071 | ) | — | — | 213,368 | — | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
$ | 5,209,708 | $ | (4,451,965 | ) | $ | 229,963,109 | $ | 2,160,160 | $ | 1 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(a) |
Represents net amount purchased (sold). |
(b) |
All or a portion represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities. |
(c) |
As of period end, the entity is no longer held. |
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
Description | Number of Contracts |
Expiration Date |
Notional Amount (000) |
Value/ Unrealized Appreciation (Depreciation) |
||||||||||
Long Contracts |
||||||||||||||
Euro STOXX 50 Index |
21 | 09/15/23 | $ | 1,037 | $ | 37,113 | ||||||||
MSCI Emerging Markets Index |
28 | 09/15/23 | 1,476 | 60,985 | ||||||||||
S&P 500 E-Mini Index |
41 | 09/15/23 | 9,460 | 512,511 | ||||||||||
|
|
|||||||||||||
$ | 610,609 | |||||||||||||
|
|
32 | 2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (continued) July 31, 2023 |
iShares® Exponential Technologies ETF |
Derivative Financial Instruments Categorized by Risk Exposure
As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:
Commodity Contracts |
Credit Contracts |
Equity Contracts |
Foreign Currency Exchange Contracts |
Interest Rate Contracts |
Other Contracts |
Total | ||||||||||||||||||||||
Assets — Derivative Financial Instruments |
||||||||||||||||||||||||||||
Futures contracts |
||||||||||||||||||||||||||||
Unrealized appreciation on futures contracts(a) |
$ | — | $ | — | $ | 610,609 | $ | — | $ | — | $ | — | $ | 610,609 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Net cumulative unrealized appreciation (depreciation) on futures contracts are reported in the Schedule of Investments. In the Statements of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss). |
For the period ended July 31, 2023, the effect of derivative financial instruments in the Statements of Operations was as follows:
Commodity Contracts |
Credit Contracts |
Equity Contracts |
Foreign Currency Exchange Contracts |
Interest Rate Contracts |
Other Contracts |
Total | ||||||||||||||||||||||
Net Realized Gain (Loss) from |
||||||||||||||||||||||||||||
Futures contracts |
$ | — | $ | — | $ | 629,369 | $ | — | $ | — | $ | — | $ | 629,369 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on |
||||||||||||||||||||||||||||
Futures contracts |
$ | — | $ | — | $ | 204,841 | $ | — | $ | — | $ | — | $ | 204,841 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Quarterly Balances of Outstanding Derivative Financial Instruments
Futures contracts: |
||||
Average notional value of contracts — long |
$ | 9,791,021 |
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of financial instruments. For a description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, refer to the Notes to Financial Statements.
The following table summarizes the Fund’s financial instruments categorized in the fair value hierarchy. The breakdown of the Fund’s financial instruments into major categories is disclosed in the Schedule of Investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets |
||||||||||||||||
Investments |
||||||||||||||||
Long-Term Investments |
||||||||||||||||
Common Stocks |
$ | 2,344,608,051 | $ | 1,098,895,523 | $ | — | $ | 3,443,503,574 | ||||||||
Preferred Stocks |
11,400,232 | — | — | 11,400,232 | ||||||||||||
Short-Term Securities |
||||||||||||||||
Money Market Funds |
229,963,109 | — | — | 229,963,109 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 2,585,971,392 | $ | 1,098,895,523 | $ | — | $ | 3,684,866,915 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Derivative Financial Instruments(a) |
||||||||||||||||
Assets |
||||||||||||||||
Equity Contracts |
$ | 573,496 | $ | 37,113 | $ | — | $ | 610,609 | ||||||||
|
|
|
|
|
|
|
|
(a) |
Derivative financial instruments are futures contracts. Futures contracts are valued at the unrealized appreciation (depreciation) on the instrument. |
See notes to financial statements.
S C H E D U L E O F I N V E S T M E N T S |
33 |
Schedule of Investments July 31, 2023 |
iShares® Future Cloud 5G and Tech ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks |
||||||||
Chemicals — 2.4% | ||||||||
DuPont de Nemours Inc. |
1,869 | $ | 145,090 | |||||
|
|
|||||||
Communications Equipment — 14.1% | ||||||||
Arista Networks Inc.(a) |
1,026 | 159,122 | ||||||
Ciena Corp.(a) |
3,036 | 128,119 | ||||||
F5 Inc.(a) |
883 | 139,726 | ||||||
Juniper Networks Inc. |
4,074 | 113,257 | ||||||
Lumentum Holdings Inc.(a) |
2,165 | 113,359 | ||||||
Nokia OYJ |
27,230 | 107,040 | ||||||
Telefonaktiebolaget LM Ericsson, Class B |
20,672 | 103,990 | ||||||
|
|
|||||||
864,613 | ||||||||
Consumer Finance — 5.0% | ||||||||
SoFi Technologies Inc.(a) |
26,727 | 306,024 | ||||||
|
|
|||||||
Diversified Telecommunication Services — 1.0% | ||||||||
JTOWER Inc.(a) |
200 | 10,216 | ||||||
NetLink NBN Trust |
63,000 | 40,751 | ||||||
Tower Bersama Infrastructure Tbk PT |
82,200 | 10,520 | ||||||
|
|
|||||||
61,487 | ||||||||
Electronic Equipment, Instruments & Components — 5.4% | ||||||||
Murata Manufacturing Co. Ltd. |
2,400 | 142,564 | ||||||
Quectel Wireless Solutions Co. Ltd., Class A |
408 | 3,271 | ||||||
Taiyo Yuden Co. Ltd. |
2,700 | 80,512 | ||||||
Yageo Corp. |
7,142 | 104,704 | ||||||
|
|
|||||||
331,051 | ||||||||
Specialized REITs — 5.2% | ||||||||
American Tower Corp. |
615 | 117,041 | ||||||
Crown Castle Inc. |
939 | 101,684 | ||||||
SBA Communications Corp., Class A |
453 | 99,184 | ||||||
|
|
|||||||
317,909 | ||||||||
IT Services — 13.8% | ||||||||
Akamai Technologies Inc.(a) |
1,468 | 138,727 | ||||||
Cloudflare Inc., Class A(a)(b) |
2,952 | 203,009 | ||||||
Computacenter PLC |
2,288 | 64,549 | ||||||
GDS Holdings Ltd., Class A(a) |
21,300 | 35,071 | ||||||
Kyndryl Holdings Inc.(a) |
6,575 | 89,814 | ||||||
NEXTDC Ltd.(a) |
14,760 | 126,678 | ||||||
Twilio Inc., Class A(a)(b) |
2,889 | 190,761 | ||||||
|
|
|||||||
848,609 | ||||||||
Media — 0.8% | ||||||||
DISH Network Corp., Class A(a) |
6,046 | 47,945 | ||||||
|
|
|||||||
Semiconductors & Semiconductor Equipment — 33.0% | ||||||||
Analog Devices Inc. |
781 | 155,833 | ||||||
Broadcom Inc. |
251 | 225,561 | ||||||
Diodes Inc.(a) |
1,431 | 135,215 |
Security | Shares | Value | ||||||
Semiconductors & Semiconductor Equipment (continued) | ||||||||
Infineon Technologies AG |
4,020 | $ | 176,621 | |||||
Intel Corp. |
4,631 | 165,651 | ||||||
MACOM Technology Solutions Holdings Inc., Class H(a) |
1,525 | 106,628 | ||||||
MediaTek Inc. |
6,000 | 132,029 | ||||||
NXP Semiconductors NV |
795 | 177,269 | ||||||
Qorvo Inc.(a) |
1,369 | 150,617 | ||||||
Qualcomm Inc. |
1,105 | 146,048 | ||||||
SiTime Corp.(a)(b) |
368 | 47,476 | ||||||
Skyworks Solutions Inc. |
1,418 | 162,177 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. |
8,000 | 144,461 | ||||||
Wolfspeed Inc.(a)(b) |
1,597 | 105,242 | ||||||
|
|
|||||||
2,030,828 | ||||||||
Software — 13.4% | ||||||||
Confluent Inc., Class A(a)(b) |
4,561 | 157,537 | ||||||
Datadog Inc., Class A(a) |
1,916 | 223,636 | ||||||
New Relic Inc.(a) |
1,648 | 138,399 | ||||||
Nutanix Inc., Class A(a) |
4,314 | 130,283 | ||||||
Teradata Corp.(a) |
3,104 | 176,462 | ||||||
|
|
|||||||
826,317 | ||||||||
Technology Hardware, Storage & Peripherals — 5.8% | ||||||||
Inspur Electronic Information Industry Co. Ltd., Class A |
3,200 | 20,464 | ||||||
Pure Storage Inc., Class A(a) |
4,545 | 168,120 | ||||||
Wiwynn Corp. |
3,000 | 170,367 | ||||||
|
|
|||||||
358,951 | ||||||||
|
|
|||||||
Total
Long-Term Investments — 99.9% |
6,138,824 | |||||||
|
|
|||||||
Short-Term Securities |
||||||||
Money Market Funds — 11.3% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 5.42%(c)(d)(e) |
697,435 | 697,644 | ||||||
|
|
|||||||
Total
Short-Term Securities — 11.3% |
|
697,644 | ||||||
|
|
|||||||
Total
Investments — 111.2% |
|
6,836,468 | ||||||
Liabilities in Excess of Other Assets — (11.2)% |
|
(688,914 | ) | |||||
|
|
|||||||
Net Assets — 100.0% |
|
$ | 6,147,554 | |||||
|
|
(a) |
Non-income producing security. |
(b) |
All or a portion of this security is on loan. |
(c) |
Affiliate of the Fund. |
(d) |
Annualized 7-day yield as of period end. |
(e) |
All or a portion of this security was purchased with the cash collateral from loaned securities. |
34 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (continued) July 31, 2023 |
iShares® Future Cloud 5G and Tech ETF |
Affiliates
Investments in issuers considered to be affiliate(s) of the Fund during the year ended July 31, 2023 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
Affiliated Issuer | |
Value at 07/31/22 |
|
|
Purchases at Cost |
|
|
Proceeds from Sale |
|
|
Net Realized Gain (Loss) |
|
|
Change
in Unrealized Appreciation (Depreciation) |
|
|
Value at 07/31/23 |
|
|
Shares Held at 07/31/23 |
|
Income |
|
Capital Gain from Underlying Funds |
| |||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares |
$ | 133,722 | $ | 563,844 | (a) | $ | — | $ | 76 | $ | 2 | $ | 697,644 | 697,435 | $ | 631 | (b) | $ | — | |||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares(c) |
— | 0 | (a) | — | — | — | — | — | 60 | — | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
$ | 76 | $ | 2 | $ | 697,644 | $ | 691 | $ | — | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(a) |
Represents net amount purchased (sold). |
(b) |
All or a portion represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities. |
(c) |
As of period end, the entity is no longer held. |
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of financial instruments. For a description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, refer to the Notes to Financial Statements.
The following table summarizes the Fund’s financial instruments categorized in the fair value hierarchy. The breakdown of the Fund’s financial instruments into major categories is disclosed in the Schedule of Investments above.
|
||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
|
||||||||||||||||
Assets |
||||||||||||||||
Investments |
||||||||||||||||
Long-Term Investments |
||||||||||||||||
Common Stocks |
$ | 4,696,000 | $ | 1,442,824 | $ | — | $ | 6,138,824 | ||||||||
Short-Term Securities |
||||||||||||||||
Money Market Funds |
697,644 | — | — | 697,644 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 5,393,644 | $ | 1,442,824 | $ | — | $ | 6,836,468 | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
S C H E D U L E O F I N V E S T M E N T S |
35 |
Schedule of Investments July 31, 2023 |
iShares® Genomics Immunology and Healthcare ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks |
||||||||
Canada — 0.7% | ||||||||
Arbutus Biopharma Corp.(a) |
473,769 | $ | 1,028,079 | |||||
|
|
|||||||
China — 3.9% | ||||||||
BeiGene Ltd.(a) |
338,200 | 5,601,444 | ||||||
|
|
|||||||
Denmark — 4.2% | ||||||||
Genmab A/S(a) |
14,938 | 6,157,437 | ||||||
|
|
|||||||
France — 6.3% | ||||||||
Sanofi |
57,473 | 6,131,479 | ||||||
Valneva SE(a)(b) |
398,508 | 2,992,606 | ||||||
|
|
|||||||
9,124,085 | ||||||||
Germany — 4.8% | ||||||||
BioNTech SE, ADR(a) |
54,146 | 5,894,875 | ||||||
MorphoSys AG(a) |
36,182 | 1,059,241 | ||||||
|
|
|||||||
6,954,116 | ||||||||
Japan — 3.9% | ||||||||
Takeda Pharmaceutical Co. Ltd. |
183,000 | 5,595,196 | ||||||
|
|
|||||||
Netherlands — 2.3% | ||||||||
CureVac NV(a)(b) |
357,680 | 3,319,270 | ||||||
|
|
|||||||
South Korea — 1.8% | ||||||||
ABLBio Inc.(a) |
112,085 | 1,683,393 | ||||||
Geneone Life Science Inc.(a) |
275,250 | 929,210 | ||||||
|
|
|||||||
2,612,603 | ||||||||
Switzerland — 7.0% | ||||||||
CRISPR Therapeutics AG(a) |
79,988 | 4,585,712 | ||||||
Roche Holding AG, NVS |
18,142 | 5,624,951 | ||||||
|
|
|||||||
10,210,663 | ||||||||
Taiwan — 2.2% | ||||||||
Adimmune Corp.(a) |
1,358,000 | 1,516,083 | ||||||
Medigen Vaccine Biologics Corp.(a) |
957,815 | 1,737,522 | ||||||
|
|
|||||||
3,253,605 | ||||||||
United States — 62.6% | ||||||||
Allogene Therapeutics Inc.(a)(b) |
295,036 | 1,463,379 | ||||||
Arcturus Therapeutics Holdings Inc.(a) |
25,403 | 888,089 | ||||||
Arcus Biosciences Inc.(a)(b) |
182,505 | 3,631,850 | ||||||
Atea Pharmaceuticals Inc.(a) |
281,609 | 965,919 | ||||||
Beam Therapeutics Inc.(a)(b) |
172,048 | 5,311,122 | ||||||
BioCryst Pharmaceuticals Inc.(a)(b) |
701,169 | 5,181,639 | ||||||
BioNano Genomics Inc.(a) |
1,156,157 | 679,473 | ||||||
Blueprint Medicines Corp.(a) |
100,563 | 6,637,158 | ||||||
Caribou Biosciences Inc.(a)(b) |
205,660 | 1,478,695 | ||||||
Coherus Biosciences Inc.(a)(b) |
288,921 | 1,392,599 | ||||||
Editas Medicine Inc.(a) |
262,162 | 2,301,782 |
Security | Shares | Value | ||||||
United States (continued) | ||||||||
Exelixis Inc.(a) |
305,095 | $ | 6,013,422 | |||||
Fate Therapeutics Inc.(a) |
354,386 | 1,463,614 | ||||||
Ginkgo Bioworks Holdings Inc.(a)(b) |
3,614,048 | 9,071,260 | ||||||
ImmunityBio Inc.(a)(b) |
418,787 | 921,331 | ||||||
Intellia Therapeutics Inc.(a)(b) |
86,842 | 3,676,022 | ||||||
Invitae Corp.(a)(b) |
971,080 | 1,378,934 | ||||||
Iovance Biotherapeutics Inc.(a) |
665,314 | 4,830,180 | ||||||
Karyopharm Therapeutics Inc.(a) |
398,310 | 716,958 | ||||||
Ligand Pharmaceuticals Inc.(a) |
62,353 | 4,173,286 | ||||||
MacroGenics Inc.(a) |
224,876 | 1,072,659 | ||||||
Moderna Inc.(a)(b) |
44,861 | 5,278,345 | ||||||
OmniAb Inc., 12.50 Earnout Shares(c) |
19,498 | — | ||||||
OmniAb Inc., 15.00 Earnout Shares(c) |
19,498 | — | ||||||
Prime Medicine Inc., NVS(a) |
30,180 | 454,813 | ||||||
Regeneron Pharmaceuticals Inc.(a)(b) |
7,913 | 5,870,734 | ||||||
Sana Biotechnology Inc.(a) |
88,593 | 519,155 | ||||||
SpringWorks Therapeutics Inc.(a) |
182,097 | 5,714,204 | ||||||
Twist Bioscience Corp.(a)(b) |
210,834 | 5,131,700 | ||||||
Vir Biotechnology Inc.(a) |
214,539 | 3,020,709 | ||||||
Xencor Inc.(a)(b) |
62,323 | 1,513,826 | ||||||
|
|
|||||||
90,752,857 | ||||||||
|
|
|||||||
Total
Long-Term Investments — 99.7% |
|
144,609,355 | ||||||
|
|
|||||||
Short-Term Securities |
||||||||
Money Market Funds — 16.7% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 5.42%(d)(e)(f) |
24,049,783 | 24,056,998 | ||||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 5.22%(d)(e) |
70,000 | 70,000 | ||||||
|
|
|||||||
Total
Short-Term Securities — 16.7% |
|
24,126,998 | ||||||
|
|
|||||||
Total
Investments — 116.4% |
|
168,736,353 | ||||||
Liabilities in Excess of Other Assets — (16.4)% |
|
(23,742,022 | ) | |||||
|
|
|||||||
Net Assets — 100.0% |
|
$ | 144,994,331 | |||||
|
|
(a) |
Non-income producing security. |
(b) |
All or a portion of this security is on loan. |
(c) |
Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. |
(d) |
Affiliate of the Fund. |
(e) |
Annualized 7-day yield as of period end. |
(f) |
All or a portion of this security was purchased with the cash collateral from loaned securities. |
36 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (continued) July 31, 2023 |
iShares® Genomics Immunology and Healthcare ETF |
Affiliates
Investments in issuers considered to be affiliate(s) of the Fund during the year ended July 31, 2023 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
Affiliated Issuer | Value at 07/31/22 |
Purchases at Cost |
Proceeds from Sale |
Net Realized Gain (Loss) |
Change
in Unrealized Appreciation (Depreciation) |
Value at 07/31/23 |
Shares Held at 07/31/23 |
Income |
Capital Gain |
|||||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares |
$ | 29,522,610 | $ | — | $ | (5,475,155 | )(a) | $ | 11,459 | $ | (1,916 | ) | $ | 24,056,998 | 24,049,783 | $ | 422,031 | (b) | $ | — | ||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares |
210,000 | — | (140,000 | )(a) | — | — | 70,000 | 70,000 | 6,772 | — | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
$ | 11,459 | $ | (1,916 | ) | $ | 24,126,998 | $ | 428,803 | $ | — | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(a) |
Represents net amount purchased (sold). |
(b) |
All or a portion represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities. |
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
Description | Number of Contracts |
Expiration Date |
Notional Amount (000) |
Value/ Unrealized Appreciation (Depreciation) |
||||||||||
Long Contracts |
||||||||||||||
E-Mini Health Care Sector Index |
2 | 09/15/23 | $ | 272 | $ | 7,450 | ||||||||
|
|
Derivative Financial Instruments Categorized by Risk Exposure
As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:
Commodity Contracts |
Credit Contracts |
Equity Contracts |
Foreign Currency Exchange Contracts |
Interest Rate Contracts |
Other Contracts |
Total | ||||||||||||||||||||||
Assets — Derivative Financial Instruments |
||||||||||||||||||||||||||||
Futures contracts |
||||||||||||||||||||||||||||
Unrealized appreciation on futures contracts(a) |
$ | — | $ | — | $ | 7,450 | $ | — | $ | — | $ | — | $ | 7,450 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Net cumulative unrealized appreciation (depreciation) on futures contracts are reported in the Schedule of Investments. In the Statements of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss). |
For the period ended July 31, 2023, the effect of derivative financial instruments in the Statements of Operations was as follows:
Commodity Contracts |
Credit Contracts |
Equity Contracts |
Foreign Currency Exchange Contracts |
Interest Rate Contracts |
Other Contracts |
Total | ||||||||||||||||||||||
Net Realized Gain (Loss) from |
||||||||||||||||||||||||||||
Futures contracts |
$ | — | $ | — | $ | 32,386 | $ | — | $ | — | $ | — | $ | 32,386 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on |
||||||||||||||||||||||||||||
Futures contracts |
$ | — | $ | — | $ | (30,897 | ) | $ | — | $ | — | $ | — | $ | (30,897 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Quarterly Balances of Outstanding Derivative Financial Instruments
Futures contracts: |
||||
Average notional value of contracts — long |
$ | 372,073 |
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
S C H E D U L E O F I N V E S T M E N T S |
37 |
Schedule of Investments (continued) July 31, 2023 |
iShares® Genomics Immunology and Healthcare ETF |
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of financial instruments. For a description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, refer to the Notes to Financial Statements.
The following table summarizes the Fund’s financial instruments categorized in the fair value hierarchy. The breakdown of the Fund’s financial instruments into major categories is disclosed in the Schedule of Investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets |
||||||||||||||||
Investments |
||||||||||||||||
Long-Term Investments |
||||||||||||||||
Common Stocks |
$ | 105,580,793 | $ | 39,028,562 | $ | — | $ | 144,609,355 | ||||||||
Short-Term Securities |
||||||||||||||||
Money Market Funds |
24,126,998 | — | — | 24,126,998 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 129,707,791 | $ | 39,028,562 | $ | — | $ | 168,736,353 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Derivative Financial Instruments(a) |
||||||||||||||||
Assets |
||||||||||||||||
Equity Contracts |
$ | 7,450 | $ | — | $ | — | $ | 7,450 | ||||||||
|
|
|
|
|
|
|
|
(a) |
Derivative financial instruments are futures contracts. Futures contracts are valued at the unrealized appreciation (depreciation) on the instrument. |
See notes to financial statements.
38 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments July 31, 2023 |
iShares® Neuroscience and Healthcare ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks |
||||||||
Biotechnology — 57.0% | ||||||||
ACADIA Pharmaceuticals Inc.(a) |
8,008 | $ | 234,154 | |||||
Alector Inc.(a) |
7,557 | 51,841 | ||||||
Alkermes PLC(a) |
6,712 | 196,527 | ||||||
Anavex Life Sciences Corp.(a) |
9,668 | 79,761 | ||||||
Annexon Inc.(a) |
4,302 | 14,842 | ||||||
BioArctic AB, Class B(a)(b) |
4,802 | 137,594 | ||||||
Biogen Inc.(a) |
660 | 178,325 | ||||||
Biohaven Ltd., NVS(a) |
7,182 | 142,778 | ||||||
Bioxcel Therapeutics Inc.(a) |
2,477 | 22,640 | ||||||
Catalyst Pharmaceuticals Inc.(a)(c) |
12,258 | 169,528 | ||||||
Cerevel Therapeutics Holdings Inc.(a) |
5,907 | 180,695 | ||||||
Design Therapeutics Inc.(a) |
4,013 | 32,666 | ||||||
Dyne Therapeutics Inc.(a)(c) |
3,849 | 46,881 | ||||||
Idorsia Ltd.(a)(c) |
14,827 | 117,599 | ||||||
Karuna Therapeutics Inc.(a) |
844 | 168,606 | ||||||
Neurocrine Biosciences Inc.(a) |
2,136 | 217,637 | ||||||
Prothena Corp. PLC(a) |
2,858 | 196,830 | ||||||
PTC Therapeutics Inc.(a) |
4,490 | 181,127 | ||||||
Sarepta Therapeutics Inc.(a)(c) |
1,583 | 171,581 | ||||||
Vanda Pharmaceuticals Inc.(a) |
6,801 | 39,310 | ||||||
Voyager Therapeutics Inc.(a) |
4,243 | 39,545 | ||||||
Xenon Pharmaceuticals Inc.(a) |
5,084 | 187,701 | ||||||
|
|
|||||||
2,808,168 | ||||||||
Health Care Equipment & Supplies — 14.0% | ||||||||
Axogen Inc.(a) |
5,003 | 43,226 | ||||||
Axonics Inc.(a) |
4,076 | 246,068 | ||||||
Integra LifeSciences Holdings Corp.(a) |
5,088 | 231,351 | ||||||
Nevro Corp.(a) |
4,257 | 106,383 | ||||||
Peijia Medical Ltd.(a)(b) |
54,000 | 61,264 | ||||||
|
|
|||||||
688,292 | ||||||||
Life Sciences Tools & Services — 0.4% | ||||||||
Cellivery Therapeutics Inc.(a)(d) |
3,565 | 16,815 | ||||||
|
|
|||||||
Pharmaceuticals — 28.5% | ||||||||
Amylyx Pharmaceuticals Inc.(a) |
5,095 | 119,478 | ||||||
Avadel Pharmaceuticals PLC, ADR(a) |
8,651 | 121,979 | ||||||
Cassava Sciences Inc.(a)(c) |
4,836 | 106,295 |
Security | Shares | Value | ||||||
Pharmaceuticals (continued) | ||||||||
Edgewise Therapeutics Inc.(a) |
4,907 | $ | 35,772 | |||||
Harmony Biosciences Holdings Inc.(a)(c) |
4,135 | 146,255 | ||||||
Intra-Cellular Therapies Inc.(a) |
3,216 | 198,878 | ||||||
KemPharm Inc.(a)(c) |
3,689 | 18,002 | ||||||
Marinus Pharmaceuticals Inc.(a) |
5,875 | 62,510 | ||||||
Neuren Pharmaceuticals Ltd., NVS(a) |
13,475 | 117,858 | ||||||
SK Biopharmaceuticals Co. Ltd.(a) |
3,420 | 218,388 | ||||||
Supernus Pharmaceuticals Inc.(a) |
5,909 | 181,347 | ||||||
WaVe Life Sciences Ltd.(a) |
8,533 | 37,289 | ||||||
Xeris Biopharma Holdings Inc.(a) |
15,969 | 41,679 | ||||||
|
|
|||||||
1,405,730 | ||||||||
|
|
|||||||
Total
Long-Term Investments — 99.9% |
|
4,919,005 | ||||||
|
|
|||||||
Short-Term Securities |
||||||||
Money Market Funds — 13.3% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 5.42%(e)(f)(g) |
656,384 | 656,581 | ||||||
|
|
|||||||
Total
Short-Term Securities — 13.3% |
|
656,581 | ||||||
|
|
|||||||
Total
Investments — 113.2% |
|
5,575,586 | ||||||
Liabilities in Excess of Other Assets — (13.2)% |
|
(650,258 | ) | |||||
|
|
|||||||
Net Assets — 100.0% |
|
$ | 4,925,328 | |||||
|
|
(a) |
Non-income producing security. |
(b) |
Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors. |
(c) |
All or a portion of this security is on loan. |
(d) |
Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. |
(e) |
Affiliate of the Fund. |
(f) |
Annualized 7-day yield as of period end. |
(g) |
All or a portion of this security was purchased with the cash collateral from loaned securities. |
Affiliates
Investments in issuers considered to be affiliate(s) of the Fund during the period ended July 31, 2023 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
Affiliated Issuer | |
Value at 08/24/22 |
(a) |
|
Purchases at Cost |
|
|
Proceeds from Sale |
|
|
Net Realized Gain (Loss) |
|
|
Change
in Unrealized Appreciation (Depreciation) |
|
|
Value at 07/31/23 |
|
|
Shares Held at 07/31/23 |
|
Income | |
Capital Gain |
| |||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares |
$ | — | $ | 656,476 | (b) | $ | — | $ | 51 | $ | 54 | $ | 656,581 | 656,384 | $17,876 | (c) | $ | — | ||||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares(d) |
— | 0 | (b) | — | — | — | — | — | 420 | — | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
$ | 51 | $ | 54 | $ | 656,581 | $18,296 | $ | — | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(a) |
Commencement of operations. |
(b) |
Represents net amount purchased (sold). |
(c) |
All or a portion represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities. |
(d) |
As of period end, the entity is no longer held. |
S C H E D U L E O F I N V E S T M E N T S |
39 |
Schedule of Investments (continued) July 31, 2023 |
iShares® Neuroscience and Healthcare ETF |
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of financial instruments. For a description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, refer to the Notes to Financial Statements.
The following table summarizes the Fund’s financial instruments categorized in the fair value hierarchy. The breakdown of the Fund’s financial instruments into major categories is disclosed in the Schedule of Investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets |
||||||||||||||||
Investments |
||||||||||||||||
Long-Term Investments |
||||||||||||||||
Common Stocks |
$ | 4,249,487 | $ | 652,703 | $ | 16,815 | $ | 4,919,005 | ||||||||
Short-Term Securities |
||||||||||||||||
Money Market Funds |
656,581 | — | — | 656,581 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 4,906,068 | $ | 652,703 | $ | 16,815 | $ | 5,575,586 | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
40 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments July 31, 2023 |
iShares® Robotics and Artificial Intelligence Multisector ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks |
||||||||
Australia — 1.2% | ||||||||
Megaport Ltd.(a) |
878,585 | $ | 6,036,008 | |||||
|
|
|||||||
Canada — 0.8% | ||||||||
ATS Corp.(a) |
92,945 | 4,215,001 | ||||||
|
|
|||||||
China — 13.0% | ||||||||
Alibaba Group Holding Ltd.(a) |
394,700 | 5,044,020 | ||||||
Baidu Inc.(a) |
251,800 | 4,922,888 | ||||||
Hello Group Inc., ADR |
468,510 | 4,989,632 | ||||||
iQIYI Inc., ADR(a) |
934,918 | 5,927,380 | ||||||
JOYY Inc., ADR |
144,186 | 5,011,905 | ||||||
Kingsoft Cloud Holdings Ltd., ADR(a)(b) |
761,964 | 5,364,227 | ||||||
Kuaishou Technology(a)(c) |
575,200 | 5,048,326 | ||||||
Meitu Inc.(b)(c) |
15,922,500 | 5,812,924 | ||||||
Meituan, Class B(a)(c) |
267,790 | 5,112,142 | ||||||
NetEase Inc. |
239,000 | 5,205,497 | ||||||
Tencent Holdings Ltd. |
97,300 | 4,472,017 | ||||||
Xiaomi Corp., Class B(a)(c) |
3,035,600 | 4,829,279 | ||||||
ZTE Corp., Class H |
1,326,400 | 4,854,394 | ||||||
|
|
|||||||
66,594,631 | ||||||||
France — 1.3% | ||||||||
Atos SE(a) |
267,044 | 2,773,902 | ||||||
Dassault Systemes SE |
93,109 | 3,979,352 | ||||||
|
|
|||||||
6,753,254 | ||||||||
Germany — 1.6% | ||||||||
Duerr AG |
136,785 | 4,267,758 | ||||||
Nemetschek SE |
51,848 | 3,772,927 | ||||||
|
|
|||||||
8,040,685 | ||||||||
Guernsey — 1.1% | ||||||||
Genius Sports Ltd.(a) |
734,230 | 5,756,363 | ||||||
|
|
|||||||
India — 1.0% | ||||||||
PB Fintech Ltd.(a) |
575,476 | 5,129,224 | ||||||
|
|
|||||||
Israel — 2.9% | ||||||||
Maytronics Ltd. |
354,777 | 4,832,183 | ||||||
Nano Dimension Ltd., ADR(a)(b) |
1,718,850 | 5,328,435 | ||||||
Stratasys Ltd.(a)(b) |
260,837 | 4,728,975 | ||||||
|
|
|||||||
14,889,593 | ||||||||
Italy — 1.1% | ||||||||
Stellantis NV |
262,339 | 5,382,641 | ||||||
|
|
|||||||
Japan — 9.8% | ||||||||
FANUC Corp. |
121,000 | 3,701,683 | ||||||
Harmonic Drive Systems Inc. |
121,800 | 3,354,598 | ||||||
Kawasaki Heavy Industries Ltd. |
190,800 | 4,866,014 | ||||||
Kyocera Corp. |
73,300 | 3,944,424 | ||||||
MINEBEA MITSUMI Inc. |
216,400 | 4,008,329 | ||||||
Nidec Corp. |
78,600 | 4,694,381 | ||||||
Oracle Corp. Japan |
52,900 | 3,708,216 | ||||||
Ricoh Co. Ltd. |
498,600 | 4,435,379 | ||||||
Sharp Corp./Japan(a) |
765,000 | 4,548,812 | ||||||
Sony Group Corp. |
42,100 | 3,943,348 | ||||||
Yamaha Motor Co. Ltd. |
163,500 | 4,795,275 | ||||||
Yaskawa Electric Corp. |
97,100 | 4,220,964 | ||||||
|
|
|||||||
50,221,423 | ||||||||
Netherlands — 0.0% | ||||||||
Yandex NV, Class A(a)(d) |
50,541 | 506 | ||||||
|
|
Security | Shares | Value | ||||||
Norway — 0.9% | ||||||||
AutoStore Holdings Ltd.(a)(b)(c) |
1,845,516 | $ | 4,602,497 | |||||
|
|
|||||||
South Korea — 2.6% | ||||||||
AfreecaTV Co. Ltd. |
79,111 | 4,532,680 | ||||||
Samsung Electronics Co. Ltd. |
74,930 | 4,102,615 | ||||||
Samsung SDS Co. Ltd. |
43,272 | 4,356,339 | ||||||
|
|
|||||||
12,991,634 | ||||||||
Sweden — 1.0% | ||||||||
Spotify Technology SA(a) |
27,637 | 4,129,244 | ||||||
Viaplay Group AB, Class B(a)(b) |
198,825 | 863,201 | ||||||
|
|
|||||||
4,992,445 | ||||||||
Switzerland — 1.8% | ||||||||
ABB Ltd., Registered |
110,783 | 4,445,446 | ||||||
STMicroelectronics NV |
91,963 | 4,918,766 | ||||||
|
|
|||||||
9,364,212 | ||||||||
Taiwan — 8.5% | ||||||||
Alchip Technologies Ltd. |
77,000 | 4,901,117 | ||||||
Faraday Technology Corp. |
741,000 | 7,718,344 | ||||||
Global Unichip Corp. |
89,000 | 4,655,105 | ||||||
Hiwin Technologies Corp. |
540,392 | 3,637,555 | ||||||
Holtek Semiconductor Inc. |
1,815,000 | 4,009,935 | ||||||
HTC Corp.(a) |
2,022,000 | 3,601,325 | ||||||
Nuvoton Technology Corp. |
997,000 | 4,460,511 | ||||||
Via Technologies Inc. |
1,507,000 | 6,414,334 | ||||||
Winbond Electronics Corp.(a) |
4,490,000 | 4,208,600 | ||||||
|
|
|||||||
43,606,826 | ||||||||
United States — 51.2% | ||||||||
3D Systems Corp.(a)(b) |
452,025 | 3,937,138 | ||||||
Adobe Inc.(a) |
9,566 | 5,224,662 | ||||||
Advanced Micro Devices Inc.(a) |
35,472 | 4,057,997 | ||||||
Alphabet Inc., Class A(a) |
35,981 | 4,775,398 | ||||||
Altair Engineering Inc., Class A(a)(b) |
56,213 | 4,212,602 | ||||||
Alteryx Inc., Class A(a) |
98,733 | 4,093,470 | ||||||
Amazon.com Inc.(a) |
33,753 | 4,512,101 | ||||||
Ambarella Inc.(a) |
54,349 | 4,533,794 | ||||||
AMETEK Inc. |
27,830 | 4,413,838 | ||||||
Analog Devices Inc. |
23,131 | 4,615,328 | ||||||
Ansys Inc.(a)(b) |
12,902 | 4,413,774 | ||||||
Apple Inc. |
24,149 | 4,744,071 | ||||||
Autodesk Inc.(a) |
20,367 | 4,317,600 | ||||||
Bentley Systems Inc., Class B(b) |
88,730 | 4,780,772 | ||||||
Bumble Inc., Class A(a) |
253,506 | 4,694,931 | ||||||
CEVA Inc.(a)(b) |
166,609 | 4,525,100 | ||||||
Cognex Corp. |
73,893 | 4,036,036 | ||||||
Credo Technology Group Holdings Ltd.(a) |
253,979 | 4,310,024 | ||||||
Desktop Metal Inc., Class A(a)(b) |
2,049,448 | 3,729,995 | ||||||
Dropbox Inc., Class A(a) |
175,689 | 4,734,819 | ||||||
Elastic NV(a) |
58,134 | 3,863,004 | ||||||
Freshworks Inc., Class A(a)(b) |
265,668 | 4,957,365 | ||||||
fuboTV Inc.(a)(b) |
2,493,853 | 8,404,285 | ||||||
GoDaddy Inc., Class A(a) |
55,485 | 4,277,339 | ||||||
HubSpot Inc.(a) |
8,015 | 4,653,108 | ||||||
Informatica Inc. , Class A(a)(b) |
235,731 | 4,488,318 | ||||||
Intel Corp. |
132,870 | 4,752,760 | ||||||
Intuitive Surgical Inc.(a) |
13,445 | 4,361,558 | ||||||
iRobot Corp.(a) |
104,059 | 4,162,360 | ||||||
Lattice Semiconductor Corp.(a)(b) |
52,504 | 4,774,714 | ||||||
Lumen Technologies Inc. |
2,069,834 | 3,705,003 | ||||||
Marvell Technology Inc. |
69,691 | 4,538,975 | ||||||
Matterport Inc., Class A(a)(b) |
1,599,962 | 5,423,871 |
S C H E D U L E O F I N V E S T M E N T S |
41 |
Schedule of Investments (continued) July 31, 2023 |
iShares® Robotics and Artificial Intelligence Multisector ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
United States (continued) | ||||||||
MaxLinear Inc.(a) |
144,306 | $ | 3,560,029 | |||||
Meta Platforms Inc, Class A(a) |
15,521 | 4,944,991 | ||||||
Microchip Technology Inc. |
54,112 | 5,083,281 | ||||||
Microsoft Corp. |
12,616 | 4,237,967 | ||||||
MicroStrategy Inc., Class A(a)(b) |
13,918 | 6,094,414 | ||||||
MicroVision Inc.(a)(b) |
856,200 | 3,424,800 | ||||||
Netflix Inc.(a) |
11,137 | 4,888,809 | ||||||
Nvidia Corp. |
10,663 | 4,982,713 | ||||||
Pegasystems Inc.(b) |
87,799 | 4,631,397 | ||||||
Peloton Interactive Inc., Class A(a)(b) |
497,059 | 4,826,443 | ||||||
Pinterest Inc., Class A(a) |
178,697 | 5,180,426 | ||||||
Proto Labs Inc.(a)(b) |
126,730 | 4,201,099 | ||||||
PTC Inc.(a) |
30,401 | 4,432,770 | ||||||
Qualcomm Inc. |
35,980 | 4,755,477 | ||||||
Regal Rexnord Corp.(b) |
29,715 | 4,640,889 | ||||||
Rumble Inc.(a)(b) |
420,229 | 3,622,374 | ||||||
Salesforce Inc.(a) |
19,871 | 4,471,174 | ||||||
Silicon Laboratories Inc.(a)(b) |
28,644 | 4,271,966 | ||||||
Snap Inc., Class A, NVS(a) |
403,683 | 4,585,839 | ||||||
Snowflake Inc., Class A(a) |
24,154 | 4,292,407 | ||||||
Splunk Inc.(a)(b) |
40,834 | 4,423,547 | ||||||
Sprinklr Inc.(a) |
315,651 | 4,431,740 | ||||||
Teradata Corp.(a) |
85,861 | 4,881,198 | ||||||
Texas Instruments Inc. |
23,929 | 4,307,220 | ||||||
Vimeo Inc.(a) |
268,642 | 1,106,805 | ||||||
|
|
|||||||
261,305,885 | ||||||||
|
|
|||||||
Total
Long-Term Investments — 99.8% |
|
509,882,828 | ||||||
|
|
Security | Shares | Value | ||||||
Short-Term Securities |
||||||||
Money Market Funds — 9.6% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 5.42%(e)(f)(g) |
49,075,660 | $ | 49,090,383 | |||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 5.22%(e)(f) |
60,000 | 60,000 | ||||||
|
|
|||||||
Total
Short-Term Securities — 9.6% |
|
49,150,383 | ||||||
|
|
|||||||
Total
Investments — 109.4% |
|
559,033,211 | ||||||
Liabilities in Excess of Other Assets — (9.4)% |
|
(48,013,539 | ) | |||||
|
|
|||||||
Net Assets — 100.0% |
|
$ | 511,019,672 | |||||
|
|
(a) |
Non-income producing security. |
(b) |
All or a portion of this security is on loan. |
(c) |
Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors. |
(d) |
Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. |
(e) Affiliate of the Fund.
(f) |
Annualized 7-day yield as of period end. |
(g) |
All or a portion of this security was purchased with the cash collateral from loaned securities. |
Affiliates
Investments in issuers considered to be affiliate(s) of the Fund during the year ended July 31, 2023 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
|
||||||||||||||||||||||||||||||||||||
Affiliated Issuer | Value at 07/31/22 |
Purchases at Cost |
Proceeds from Sale |
Net Realized Gain (Loss) |
Change
in Unrealized Appreciation (Depreciation) |
Value at 07/31/23 |
Shares Held at |
Income |
Capital Gain |
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares |
$ | 20,896,442 | $ | 28,192,166 | (a) | $ | — | $ | 4,705 | $ | (2,930 | ) | $ | 49,090,383 | 49,075,660 | $ | 1,386,461 | (b) | $ | — | ||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares |
200,000 | — | (140,000 | )(a) | — | — | 60,000 | 60,000 | 10,645 | — | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
$ | 4,705 | $ | (2,930 | ) | $ | 49,150,383 | $ | 1,397,106 | $ | — | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(a) |
Represents net amount purchased (sold). |
(b) |
All or a portion represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities. |
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
|
||||||||||||||
Description | Number of Contracts |
Expiration Date |
Notional Amount (000) |
Value/ Unrealized Appreciation (Depreciation) |
||||||||||
|
||||||||||||||
Long Contracts | ||||||||||||||
E-Mini Technology Select Sector Index |
4 | 09/15/23 | $ 723 | $ | 10,560 | |||||||||
|
|
42 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (continued) July 31, 2023 |
iShares® Robotics and Artificial Intelligence Multisector ETF |
Derivative Financial Instruments Categorized by Risk Exposure
As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:
|
||||||||||||||||||||||||||||
Commodity Contracts |
Credit Contracts |
Equity Contracts |
Foreign Currency Exchange Contracts |
Interest Rate Contracts |
Other Contracts |
Total | ||||||||||||||||||||||
|
||||||||||||||||||||||||||||
Assets — Derivative Financial Instruments |
||||||||||||||||||||||||||||
Futures contracts |
||||||||||||||||||||||||||||
Unrealized appreciation on futures contracts(a) |
$ | — | $ | — | $ | 10,560 | $ | — | $ | — | $ | — | $ | 10,560 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Net cumulative unrealized appreciation (depreciation) on futures contracts are reported in the Schedule of Investments. In the Statements of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss). |
For the period ended July 31, 2023, the effect of derivative financial instruments in the Statements of Operations was as follows:
|
||||||||||||||||||||||||||||
Commodity Contracts |
Credit Contracts |
Equity Contracts |
Foreign Currency Exchange Contracts |
Interest Rate Contracts |
Other Contracts |
Total | ||||||||||||||||||||||
|
||||||||||||||||||||||||||||
Net Realized Gain (Loss) from |
||||||||||||||||||||||||||||
Futures contracts |
$ | — | $ | — | $ | 337,965 | $ | — | $ | — | $ | — | $ | 337,965 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on |
||||||||||||||||||||||||||||
Futures contracts |
$ | — | $ | — | $ | (43,071 | ) | $ | — | $ | — | $ | — | $ | (43,071 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Quarterly Balances of Outstanding Derivative Financial Instruments
Futures contracts: |
||||
Average notional value of contracts — long |
$ | 1,269,170 |
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of financial instruments. For a description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, refer to the Notes to Financial Statements.
The following table summarizes the Fund’s financial instruments categorized in the fair value hierarchy. The breakdown of the Fund’s financial instruments into major categories is disclosed in the Schedule of Investments above.
|
||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
|
||||||||||||||||
Assets |
||||||||||||||||
Investments |
||||||||||||||||
Long-Term Investments |
||||||||||||||||
Common Stocks |
$ | 306,757,047 | $ | 203,125,275 | $ | 506 | $ | 509,882,828 | ||||||||
Short-Term Securities |
||||||||||||||||
Money Market Funds |
49,150,383 | — | — | 49,150,383 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 355,907,430 | $ | 203,125,275 | $ | 506 | $ | 559,033,211 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Derivative Financial Instruments(a) |
||||||||||||||||
Assets |
||||||||||||||||
Equity Contracts |
$ | 10,560 | $ | — | $ | — | $ | 10,560 | ||||||||
|
|
|
|
|
|
|
|
(a) |
Derivative financial instruments are futures contracts. Futures contracts are valued at the unrealized appreciation (depreciation) on the instrument. |
See notes to financial statements.
S C H E D U L E O F I N V E S T M E N T S |
43 |
Schedule of Investments July 31, 2023 |
iShares® Self-Driving EV and Tech ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks |
||||||||
Australia — 7.6% | ||||||||
Allkem Ltd.(a) |
1,658,526 | $ | 16,604,519 | |||||
ARB Corp. Ltd. |
55,082 | 1,156,383 | ||||||
Pilbara Minerals Ltd. |
5,480,186 | 17,928,674 | ||||||
Vulcan Energy Resources Ltd.(a) |
551,089 | 1,650,182 | ||||||
|
|
|||||||
37,339,758 | ||||||||
China — 19.2% | ||||||||
BYD Co. Ltd., Class H |
518,000 | 18,450,134 | ||||||
Ganfeng Lithium Co. Ltd., Class H(b) |
1,847,280 | 11,900,935 | ||||||
Li Auto Inc.(a) |
1,079,700 | 23,177,942 | ||||||
XPeng Inc.(a) |
3,871,100 | 41,292,743 | ||||||
|
|
|||||||
94,821,754 | ||||||||
France — 5.4% | ||||||||
Faurecia SE(a) |
113,832 | 2,860,469 | ||||||
Renault SA |
456,525 | 20,051,323 | ||||||
Valeo |
163,696 | 3,700,213 | ||||||
|
|
|||||||
26,612,005 | ||||||||
Germany — 1.5% | ||||||||
Continental AG |
78,917 | 6,300,706 | ||||||
Vitesco Technologies Group AG(a) |
12,477 | 1,067,082 | ||||||
|
|
|||||||
7,367,788 | ||||||||
Israel — 0.1% | ||||||||
Innoviz Technologies Ltd.(a)(c) |
94,814 | 388,737 | ||||||
|
|
|||||||
Japan — 1.5% | ||||||||
GS Yuasa Corp. |
379,500 | 7,636,290 | ||||||
|
|
|||||||
Netherlands — 0.0% | ||||||||
Yandex NV, Class A(a)(d) |
94,146 | 942 | ||||||
|
|
|||||||
South Korea — 11.0% | ||||||||
Chunbo Co. Ltd. |
22,226 | 3,322,867 | ||||||
Hyundai Mobis Co. Ltd. |
46,584 | 8,511,656 | ||||||
LG Energy Solution(a) |
35,974 | 15,804,510 | ||||||
Samsung SDI Co. Ltd. |
29,584 | 15,442,982 | ||||||
SK IE Technology Co. Ltd.(a)(b) |
134,239 | 11,311,445 | ||||||
|
|
|||||||
54,393,460 | ||||||||
Sweden — 2.7% | ||||||||
Hexagon AB, Class B |
1,360,267 | 13,188,886 | ||||||
|
|
|||||||
Switzerland — 3.5% | ||||||||
ABB Ltd., Registered |
433,061 | 17,377,662 | ||||||
|
|
|||||||
Taiwan — 0.6% | ||||||||
Advanced Energy Solution Holding Co. Ltd. |
144,000 | 3,180,892 | ||||||
|
|
|||||||
United Kingdom — 1.1% | ||||||||
Polestar Automotive Holding U.K. PLC, Class A(a)(c) |
1,222,061 | 5,474,833 | ||||||
|
|
|||||||
United States — 38.7% | ||||||||
Adient PLC(a) |
66,996 | 2,851,350 | ||||||
Aptiv PLC(a) |
172,918 | 18,932,792 | ||||||
Aurora Innovation Inc., Class A(a) |
228,615 | 749,857 | ||||||
Autoliv Inc. |
62,556 | 6,313,777 | ||||||
Blink Charging Co.(a)(c) |
251,085 | 1,606,944 | ||||||
Canoo Inc.(a)(c) |
2,148,197 | 1,386,017 | ||||||
ChargePoint Holdings Inc., Class A(a)(c) |
1,300,965 | 11,266,357 | ||||||
CTS Corp. |
22,651 | 1,010,914 | ||||||
EVgo Inc.(a)(c) |
460,420 | 2,012,035 | ||||||
Fisker Inc., Class A(a)(c) |
971,942 | 5,996,882 |
Security | Shares | Value | ||||||
United States (continued) | ||||||||
Gentex Corp. |
170,424 | $ | 5,722,838 | |||||
Gentherm Inc.(a) |
23,862 | 1,426,232 | ||||||
Lear Corp. |
43,018 | 6,657,466 | ||||||
Livent Corp.(a) |
646,678 | 15,921,212 | ||||||
Lucid Group Inc.(a)(c) |
2,455,595 | 18,687,078 | ||||||
Luminar Technologies Inc.(a)(c) |
166,768 | 1,234,083 | ||||||
Methode Electronics Inc. |
24,647 | 829,125 | ||||||
Microvast Holdings Inc.(a)(c) |
861,504 | 2,472,517 | ||||||
Nikola Corp.(a)(c) |
2,678,667 | 7,152,041 | ||||||
QuantumScape Corp.(a)(c) |
1,343,472 | 17,881,612 | ||||||
Rivian Automotive Inc., Class A(a)(c) |
1,118,834 | 30,924,572 | ||||||
Sensata Technologies Holding PLC(c) |
110,840 | 4,682,990 | ||||||
Solid Power Inc.(a)(c) |
585,580 | 1,674,759 | ||||||
Stoneridge Inc.(a) |
19,464 | 397,844 | ||||||
Tesla Inc.(a) |
75,715 | 20,248,462 | ||||||
Visteon Corp.(a) |
20,527 | 3,163,005 | ||||||
|
|
|||||||
191,202,761 | ||||||||
|
|
|||||||
Total
Common Stocks — 92.9% |
458,985,768 | |||||||
|
|
|||||||
Preferred Stocks |
||||||||
Germany — 6.6% | ||||||||
Porsche Automobil Holding SE, Preference Shares, NVS |
278,893 | 16,456,330 | ||||||
Volkswagen AG, Preference Shares, NVS |
124,279 | 16,463,931 | ||||||
|
|
|||||||
32,920,261 | ||||||||
|
|
|||||||
Total
Preferred Stocks — 6.6% |
32,920,261 | |||||||
|
|
|||||||
Total
Long-Term Investments — 99.5% |
491,906,029 | |||||||
|
|
|||||||
Short-Term Securities |
||||||||
Money Market Funds — 18.9% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 5.42%(e)(f)(g) |
93,093,689 | 93,121,617 | ||||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 5.22%(e)(f) |
180,000 | 180,000 | ||||||
|
|
|||||||
Total
Short-Term Securities — 18.9% |
|
93,301,617 | ||||||
|
|
|||||||
Total
Investments — 118.4% |
|
585,207,646 | ||||||
Liabilities in Excess of Other Assets — (18.4)% |
|
(91,000,328 | ) | |||||
|
|
|||||||
Net Assets — 100.0% |
|
$ | 494,207,318 | |||||
|
|
(a) |
Non-income producing security. |
(b) |
Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors. |
(c) |
All or a portion of this security is on loan. |
(d) |
Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. |
(e) |
Affiliate of the Fund. |
(f) |
Annualized 7-day yield as of period end. |
(g) |
All or a portion of this security was purchased with the cash collateral from loaned securities. |
44 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (continued) July 31, 2023 |
iShares® Self-Driving EV and Tech ETF |
Affiliates
Investments in issuers considered to be affiliate(s) of the Fund during the year ended July 31, 2023 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
Affiliated Issuer | Value at 07/31/22 |
Purchases at Cost |
Proceeds from Sale |
Net Realized Gain (Loss) |
Change
in Unrealized Appreciation (Depreciation) |
Value at 07/31/23 |
Shares Held at 07/31/23 |
Income |
Capital Gain |
|||||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares |
$ | 13,521,649 | $ | 79,594,454 | (a) | $ | — | $ | 3,125 | $ | 2,389 | $ | 93,121,617 | 93,093,689 | $ | 3,991,654 | (b) | $ | — | |||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares |
160,000 | 20,000 | (a) | — | — | — | 180,000 | 180,000 | 22,727 | 2 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
$ | 3,125 | $ | 2,389 | $ | 93,301,617 | $ | 4,014,381 | $ | 2 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(a) |
Represents net amount purchased (sold). |
(b) |
All or a portion represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities. |
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
Description | Number of Contracts |
Expiration Date |
Notional Amount (000) |
Value/ Unrealized Appreciation (Depreciation) |
||||||||||
Long Contracts | ||||||||||||||
Euro STOXX 50 Index |
14 | 09/15/23 | $ 692 | $ | 17,365 | |||||||||
S&P 500 E-Mini Index |
6 | 09/15/23 | 1,384 | 36,532 | ||||||||||
|
|
|||||||||||||
$ | 53,897 | |||||||||||||
|
|
Derivative Financial Instruments Categorized by Risk Exposure
As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:
|
Commodity Contracts |
|
|
Credit Contracts |
|
|
Equity Contracts |
|
|
Foreign Currency Exchange Contracts |
|
|
Interest Rate Contracts |
|
|
Other Contracts |
|
Total | ||||||||||
Assets — Derivative Financial Instruments |
||||||||||||||||||||||||||||
Futures contracts |
||||||||||||||||||||||||||||
Unrealized appreciation on futures contracts(a) |
$ | — | $ | — | $ | 53,897 | $ | — | $ | — | $ | — | $ | 53,897 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Net cumulative unrealized appreciation (depreciation) on futures contracts are reported in the Schedule of Investments. In the Statements of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss). |
|
Commodity Contracts |
|
|
Credit Contracts |
|
|
Equity Contracts |
|
|
Foreign Currency Exchange Contracts |
|
|
Interest Rate Contracts |
|
|
Other Contracts |
|
Total | ||||||||||
Net Realized Gain (Loss) from |
||||||||||||||||||||||||||||
Futures contracts |
$ | — | $ | — | $ | 363,492 | $ | — | $ | — | $ | — | $ | 363,492 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on |
||||||||||||||||||||||||||||
Futures contracts |
$ | — | $ | — | $ | 9,082 | $ | — | $ | — | $ | — | $ | 9,082 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Quarterly Balances of Outstanding Derivative Financial Instruments
Futures contracts: |
||
Average notional value of contracts — long |
$1,371,437 |
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
S C H E D U L E O F I N V E S T M E N T S |
45 |
Schedule of Investments (continued) July 31, 2023 |
iShares® Self-Driving EV and Tech ETF |
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of financial instruments. For a description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, refer to the Notes to Financial Statements.
The following table summarizes the Fund’s financial instruments categorized in the fair value hierarchy. The breakdown of the Fund’s financial instruments into major categories is disclosed in the Schedule of Investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets |
||||||||||||||||
Investments |
||||||||||||||||
Long-Term Investments |
||||||||||||||||
Common Stocks |
$ | 197,066,331 | $ | 261,918,495 | $ | 942 | $ | 458,985,768 | ||||||||
Preferred Stocks |
— | 32,920,261 | — | 32,920,261 | ||||||||||||
Short-Term Securities |
||||||||||||||||
Money Market Funds |
93,301,617 | — | — | 93,301,617 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 290,367,948 | $ | 294,838,756 | $ | 942 | $ | 585,207,646 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Derivative Financial Instruments(a) |
||||||||||||||||
Assets |
||||||||||||||||
Equity Contracts |
$ | 36,532 | $ | 17,365 | $ | — | $ | 53,897 | ||||||||
|
|
|
|
|
|
|
|
(a) |
Derivative financial instruments are futures contracts. Futures contracts are valued at the unrealized appreciation (depreciation) on the instrument. |
See notes to financial statements.
46 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments July 31, 2023 |
iShares® Virtual Work and Life Multisector ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks |
||||||||
Communication Services — 31.9% |
||||||||
Activision Blizzard Inc.(a) |
926 | $ | 85,897 | |||||
Bandwidth Inc., Class A(a) |
816 | 12,362 | ||||||
Bumble Inc., Class A(a) |
2,414 | 44,707 | ||||||
Electronic Arts Inc. |
582 | 79,356 | ||||||
fuboTV Inc.(a) |
6,964 | 23,469 | ||||||
Hello Group Inc., ADR |
3,468 | 36,934 | ||||||
HUYA Inc., ADR(a) |
2,204 | 7,560 | ||||||
iQIYI Inc., ADR(a) |
12,842 | 81,418 | ||||||
JOYY Inc., ADR |
1,116 | 38,792 | ||||||
Kahoot! ASA(a) |
682 | 2,346 | ||||||
Match Group Inc.(a)(b) |
1,908 | 88,741 | ||||||
Meitu Inc.(c) |
7,000 | 2,556 | ||||||
Netflix Inc.(a) |
184 | 80,770 | ||||||
Paradox Interactive AB |
70 | 2,010 | ||||||
Roku Inc.(a) |
1,234 | 118,797 | ||||||
Rumble Inc.(a)(b) |
1,910 | 16,464 | ||||||
Snap Inc., Class A, NVS(a)(b) |
7,138 | 81,088 | ||||||
Spotify Technology SA(a) |
491 | 73,360 | ||||||
Take-Two Interactive Software Inc.(a) |
542 | 82,894 | ||||||
Tencent Holdings Ltd. |
200 | 9,192 | ||||||
Ubisoft Entertainment SA(a) |
2,338 | 78,631 | ||||||
Viaplay Group AB, Class B(a)(b) |
176 | 764 | ||||||
XD Inc.(a) |
800 | 1,941 | ||||||
|
|
|||||||
1,050,049 | ||||||||
Consumer Discretionary — 16.9% | ||||||||
2U Inc.(a) |
1,862 | 8,900 | ||||||
Chegg Inc.(a) |
2,850 | 28,870 | ||||||
Deliveroo PLC, Class A(a)(c) |
27,854 | 46,971 | ||||||
Delivery Hero SE(a)(c) |
2,030 | 92,141 | ||||||
DoorDash Inc., Class A(a) |
1,090 | 98,961 | ||||||
Duolingo Inc, Class A(a)(b) |
478 | 74,181 | ||||||
GN Store Nord A/S(a) |
404 | 10,773 | ||||||
Just Eat Takeaway.com NV(a)(c) |
5,318 | 95,405 | ||||||
Meituan, Class B(a)(c) |
650 | 12,409 | ||||||
New Oriental Education & Technology Group Inc.(a) |
2,200 | 12,532 | ||||||
Peloton Interactive Inc., Class A(a) |
7,634 | 74,126 | ||||||
Zomato Ltd.(a) |
1,380 | 1,413 | ||||||
|
|
|||||||
556,682 | ||||||||
Consumer Staples — 3.9% | ||||||||
Alibaba Health Information Technology Ltd.(a) |
16,000 | 11,488 | ||||||
Dada Nexus Ltd., ADR(a) |
6,144 | 41,103 | ||||||
DocMorris AG(a) |
310 | 18,972 | ||||||
JD Health International Inc.(a)(c) |
1,500 | 10,966 | ||||||
Ping An Healthcare and Technology Co. Ltd.(a)(b)(c) |
1,600 | 4,241 | ||||||
Shop Apotheke Europe NV(a)(c) |
356 | 41,276 | ||||||
|
|
|||||||
128,046 | ||||||||
Health Care — 2.7% | ||||||||
Teladoc Health Inc.(a) |
3,036 | 90,382 | ||||||
|
|
|||||||
Information Technology — 44.5% | ||||||||
8x8 Inc.(a) |
4,016 | 19,036 |
Security | Shares | Value | ||||||
Information Technology (continued) | ||||||||
Asana Inc., Class A(a) |
2,918 | $ | 70,849 | |||||
Box Inc., Class A(a)(b) |
2,562 | 80,062 | ||||||
Braze Inc., Class A(a)(b) |
1,820 | 82,737 | ||||||
Cerence Inc.(a) |
1,392 | 38,712 | ||||||
Cloudflare Inc., Class A(a)(b) |
1,054 | 72,484 | ||||||
Consensus Cloud Solutions Inc.(a) |
652 | 21,131 | ||||||
Dropbox Inc., Class A(a) |
3,144 | 84,731 | ||||||
Everbridge Inc.(a) |
1,428 | 44,039 | ||||||
Five9 Inc.(a) |
1,058 | 92,839 | ||||||
GB Group PLC |
10,862 | 34,891 | ||||||
Gen Digital Inc. |
4,108 | 79,901 | ||||||
Instructure Holdings Inc.(a) |
374 | 10,162 | ||||||
Life360 Inc.(a)(c) |
2,914 | 15,182 | ||||||
LivePerson Inc.(a) |
2,632 | 12,502 | ||||||
Megaport Ltd.(a) |
3,530 | 24,252 | ||||||
Microsoft Corp. |
220 | 73,902 | ||||||
Mitek Systems Inc.(a) |
1,514 | 15,458 | ||||||
Monday.com Ltd.(a) |
420 | 75,928 | ||||||
Nice Ltd.(a) |
94 | 20,461 | ||||||
PagerDuty Inc.(a)(b) |
3,124 | 80,974 | ||||||
PowerSchool Holdings Inc., Class A(a) |
1,322 | 31,953 | ||||||
RingCentral Inc., Class A(a) |
2,112 | 87,352 | ||||||
Smartsheet Inc., Class A(a) |
1,520 | 67,488 | ||||||
Tyler Technologies Inc.(a) |
184 | 72,980 | ||||||
Verint Systems Inc.(a) |
1,986 | 74,217 | ||||||
Zoom Video Communications Inc., Class A(a) |
1,110 | 81,418 | ||||||
|
|
|||||||
1,465,641 | ||||||||
|
|
|||||||
Total
Long-Term Investments — 99.9% |
3,290,800 | |||||||
|
|
|||||||
Short-Term Securities |
||||||||
Money Market Funds — 13.3% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 5.42%(d)(e)(f) |
437,671 | 437,802 | ||||||
|
|
|||||||
Total
Short-Term Securities — 13.3% |
437,802 | |||||||
|
|
|||||||
Total
Investments — 113.2% |
3,728,602 | |||||||
Liabilities in Excess of Other Assets — (13.2)% |
(433,384 | ) | ||||||
|
|
|||||||
Net Assets — 100.0% |
$ | 3,295,218 | ||||||
|
|
(a) |
Non-income producing security. |
(b) |
All or a portion of this security is on loan. |
(c) |
Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors. |
(d) |
Affiliate of the Fund. |
(e) |
Annualized 7-day yield as of period end. |
(f) |
All or a portion of this security was purchased with the cash collateral from loaned securities. |
S C H E D U L E O F I N V E S T M E N T S |
47 |
Schedule of Investments (continued) July 31, 2023 |
iShares® Virtual Work and Life Multisector ETF |
Affiliates
Investments in issuers considered to be affiliate(s) of the Fund during the year ended July 31, 2023 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
Affiliated Issuer | Value at 07/31/22 |
Purchases at Cost |
Proceeds from Sale |
Net Realized Gain (Loss) |
Change
in Unrealized Appreciation (Depreciation) |
Value at 07/31/23 |
Shares Held at 07/31/23 |
Income |
Capital Gain |
|||||||||||||||||||||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares |
$ | 456,546 | $ | — | $ | (18,734 | )(a) | $ | (7 | ) | $ | (3 | ) | $ | 437,802 | 437,671 | $ | 3,724 | (b) | $ | — | |||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares(c) |
— | 0 | (a) | — | — | — | — | — | 141 | — | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
$ | (7 | ) | $ | (3 | ) | $ | 437,802 | $ | 3,865 | $ | — | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(a) |
Represents net amount purchased (sold). |
(b) |
All or a portion represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities. |
(c) |
As of period end, the entity is no longer held. |
Derivative Financial Instruments Categorized by Risk Exposure
For the period ended July 31, 2023, the effect of derivative financial instruments in the Statements of Operations was as follows:
|
Commodity Contracts |
|
|
Credit Contracts |
|
|
Equity Contracts |
|
|
Foreign Currency Exchange Contracts |
|
|
Interest Rate Contracts |
|
|
Other Contracts |
|
Total | ||||||||||
Net Realized Gain (Loss) from |
||||||||||||||||||||||||||||
Futures contracts |
$ | — | $ | — | $ | (46 | ) | $ | — | $ | — | $ | — | $ | (46 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of financial instruments. For a description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, refer to the Notes to Financial Statements.
The following table summarizes the Fund’s financial instruments categorized in the fair value hierarchy. The breakdown of the Fund’s financial instruments into major categories is disclosed in the Schedule of Investments above.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets |
||||||||||||||||
Investments |
||||||||||||||||
Long-Term Investments |
||||||||||||||||
Common Stocks |
$ | 2,788,968 | $ | 501,832 | $ | — | $ | 3,290,800 | ||||||||
Short-Term Securities |
||||||||||||||||
Money Market Funds |
437,802 | — | — | 437,802 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 3,226,770 | $ | 501,832 | $ | — | $ | 3,728,602 | |||||||||
|
|
|
|
|
|
|
|
See notes to financial statements.
48 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statements of Assets and Liabilities
July 31, 2023
iShares Breakthrough Environmental Solutions ETF |
iShares Cybersecurity and Tech ETF |
iShares Exponential Technologies ETF |
iShares Future Cloud 5G and Tech ETF |
|||||||||||||
ASSETS |
||||||||||||||||
Investments, at value — unaffiliated(a)(b) |
$ | 4,339,467 | $ | 616,339,796 | $ | 3,454,903,806 | $ | 6,138,824 | ||||||||
Investments, at value — affiliated(c) |
130,372 | 29,194,894 | 229,963,109 | 697,644 | ||||||||||||
Cash |
5,265 | 9,849 | 2,697 | 2,354 | ||||||||||||
Cash pledged for futures contracts |
1,000 | 58,000 | 504,000 | — | ||||||||||||
Foreign currency collateral pledged for futures contracts(d) |
— | — | 74,766 | — | ||||||||||||
Foreign currency, at value(e) |
5,399 | 198,008 | 4,119,823 | 6,674 | ||||||||||||
Receivables: |
||||||||||||||||
Investments sold |
— | — | 46,844 | — | ||||||||||||
Securities lending income — affiliated |
32 | 6,566 | 234,221 | 111 | ||||||||||||
Dividends — unaffiliated |
4,005 | 426 | 1,836,526 | 1,426 | ||||||||||||
Dividends — affiliated |
— | 4,890 | 26,933 | 7 | ||||||||||||
Tax reclaims |
1,525 | 2,835 | 1,559,500 | 549 | ||||||||||||
Variation margin on futures contracts |
110 | 2,400 | 16,154 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets |
4,487,175 | 645,817,664 | 3,693,288,379 | 6,847,589 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
LIABILITIES |
||||||||||||||||
Collateral on securities loaned, at value |
130,370 | 27,951,865 | 224,375,205 | 697,657 | ||||||||||||
Payables: |
||||||||||||||||
Investments purchased |
1,718 | — | — | — | ||||||||||||
Investment advisory fees |
1,678 | 237,144 | 1,312,929 | 2,378 | ||||||||||||
Other liabilities |
2,000 | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities |
135,766 | 28,189,009 | 225,688,134 | 700,035 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Commitments and contingent liabilities |
||||||||||||||||
NET ASSETS |
$ | 4,351,409 | $ | 617,628,655 | $ | 3,467,600,245 | $ | 6,147,554 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
NET ASSETS CONSIST OF |
||||||||||||||||
Paid-in capital |
$ | 4,025,360 | $ | 651,470,398 | $ | 2,909,953,806 | $ | 7,007,192 | ||||||||
Accumulated earnings (loss) |
326,049 | (33,841,743 | ) | 557,646,439 | (859,638 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
NET ASSETS |
$ | 4,351,409 | $ | 617,628,655 | $ | 3,467,600,245 | $ | 6,147,554 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
NET ASSETVALUE |
||||||||||||||||
Shares outstanding |
160,000 | 15,650,000 | 59,300,000 | 240,000 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net asset value |
$ | 27.20 | $ | 39.47 | $ | 58.48 | $ | 25.61 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Shares authorized |
Unlimited | Unlimited | Unlimited | Unlimited | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Par value |
None | None | None | None | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
(a) Investments, at cost — unaffiliated |
$ | 4,070,081 | $ | 601,315,149 | $ | 2,853,761,487 | $ | 6,384,851 | ||||||||
(b) Securities loaned, at value |
$ | 126,461 | $ | 27,767,971 | $ | 226,166,702 | $ | 676,762 | ||||||||
(c) Investments, at cost — affiliated |
$ | 130,370 | $ | 29,196,334 | $ | 229,893,594 | $ | 697,642 | ||||||||
(d) Foreign currency collateral pledged, at cost |
$ | — | $ | — | $ | 75,278 | $ | — | ||||||||
(e) Foreign currency, at cost |
$ | 5,381 | $ | 198,159 | $ | 4,127,651 | $ | 6,718 |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S |
49 |
Statements of Assets and Liabilities (continued)
July 31, 2023
iShares Genomics Immunology and Healthcare ETF |
iShares Neuroscience and Healthcare ETF |
iShares Robotics and |
iShares Self-Driving EV and Tech ETF |
|||||||||||||
ASSETS |
||||||||||||||||
Investments, at value — unaffiliated(a)(b) |
$ | 144,609,355 | $ | 4,919,005 | $ | 509,882,828 | $ | 491,906,029 | ||||||||
Investments, at value — affiliated(c) |
24,126,998 | 656,581 | 49,150,383 | 93,301,617 | ||||||||||||
Cash |
5,704 | 2,850 | 758,822 | 5,627 | ||||||||||||
Cash pledged for futures contracts |
12,000 | — | 20,000 | 68,000 | ||||||||||||
Foreign currency collateral pledged for futures contracts(d) |
— | — | — | 49,477 | ||||||||||||
Foreign currency, at value(e) |
219,335 | 4,059 | 142,174 | 542,540 | ||||||||||||
Receivables: |
||||||||||||||||
Securities lending income — affiliated |
41,404 | 1,245 | 82,444 | 524,063 | ||||||||||||
Capital shares sold |
— | — | 1,502,669 | — | ||||||||||||
Dividends — unaffiliated |
— | — | 390,866 | 348,449 | ||||||||||||
Dividends — affiliated |
518 | — | 1,199 | 733 | ||||||||||||
Tax reclaims |
112,412 | — | 44,759 | 764,730 | ||||||||||||
Variation margin on futures contracts |
— | — | 852 | 2,132 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets |
169,127,726 | 5,583,740 | 561,976,996 | 587,513,397 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
LIABILITIES |
||||||||||||||||
Collateral on securities loaned, at value |
24,066,095 | 656,476 | 49,104,542 | 93,119,069 | ||||||||||||
Payables: |
||||||||||||||||
Investments purchased |
— | — | 1,421,946 | — | ||||||||||||
Deferred foreign capital gain tax |
— | — | 241,923 | — | ||||||||||||
Investment advisory fees |
57,679 | 1,936 | 187,130 | 187,010 | ||||||||||||
Professional fees |
7,442 | — | 1,783 | — | ||||||||||||
Variation margin on futures contracts |
2,179 | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities |
24,133,395 | 658,412 | 50,957,324 | 93,306,079 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Commitments and contingent liabilities |
||||||||||||||||
NET ASSETS |
$ | 144,994,331 | $ | 4,925,328 | $ | 511,019,672 | $ | 494,207,318 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
NET ASSETS CONSIST OF |
||||||||||||||||
Paid-in capital |
$ | 292,677,108 | $ | 5,044,932 | $ | 542,786,227 | $ | 526,355,062 | ||||||||
Accumulated loss |
(147,682,777 | ) | (119,604 | ) | (31,766,555 | ) | (32,147,744 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
NET ASSETS |
$ | 144,994,331 | $ | 4,925,328 | $ | 511,019,672 | $ | 494,207,318 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
NET ASSETVALUE |
||||||||||||||||
Shares outstanding |
6,050,000 | 200,000 | 14,800,000 | 10,800,000 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net asset value |
$ | 23.97 | $ | 24.63 | $ | 34.53 | $ | 45.76 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Shares authorized |
Unlimited | Unlimited | Unlimited | Unlimited | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Par value |
None | None | None | None | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
(a) Investments, at cost — unaffiliated |
$ | 212,319,212 | $ | 4,974,420 | $ | 472,075,469 | $ | 431,670,310 | ||||||||
(b) Securities loaned, at value |
$ | 23,346,364 | $ | 647,598 | $ | 46,548,580 | $ | 91,333,536 | ||||||||
(c) Investments, at cost — affiliated |
$ | 24,128,841 | $ | 656,527 | $ | 49,153,109 | $ | 93,299,119 | ||||||||
(d) Foreign currency collateral pledged, at cost |
$ | — | $ | — | $ | — | $ | 49,215 | ||||||||
(e) Foreign currency, at cost |
$ | 217,165 | $ | 3,961 | $ | 141,340 | $ | 543,551 |
See notes to financial statements.
50 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statements of Assets and Liabilities (continued)
July 31, 2023
iShares Virtual Work and Life Multisector ETF |
||||
ASSETS |
||||
Investments, at value — unaffiliated(a)(b) |
$ | 3,290,800 | ||
Investments, at value — affiliated(c) |
437,802 | |||
Cash |
2,356 | |||
Foreign currency, at value(d) |
2,626 | |||
Receivables: |
||||
Securities lending income — affiliated |
102 | |||
Dividends — unaffiliated |
557 | |||
Tax reclaims |
158 | |||
|
|
|||
Total assets |
3,734,401 | |||
|
|
|||
LIABILITIES |
||||
Collateral on securities loaned, at value |
437,943 | |||
Payables: |
||||
Investment advisory fees |
1,240 | |||
|
|
|||
Total liabilities |
439,183 | |||
|
|
|||
Commitments and contingent liabilities |
||||
NET ASSETS |
$ | 3,295,218 | ||
|
|
|||
NET ASSETS CONSIST OF |
||||
Paid-in capital |
$ | 6,699,279 | ||
Accumulated loss |
(3,404,061 | ) | ||
|
|
|||
NET ASSETS |
$ | 3,295,218 | ||
|
|
|||
NET ASSET VALUE |
||||
Shares outstanding |
200,000 | |||
|
|
|||
Net asset value |
$ | 16.48 | ||
|
|
|||
Shares authorized |
Unlimited | |||
|
|
|||
Par value |
None | |||
|
|
|||
(a) Investments, at cost — unaffiliated |
$ | 4,958,098 | ||
(b) Securities loaned, at value |
$ | 441,742 | ||
(c) Investments, at cost — affiliated |
$ | 437,788 | ||
(d) Foreign currency, at cost |
$ | 2,561 |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S |
51 |
Year Ended July 31, 2023
|
iShares Breakthrough Environmental Solutions ETF |
(a) |
|
iShares Cybersecurity and Tech ETF |
|
iShares Exponential Technologies ETF |
|
iShares Future Cloud 5G and Tech ETF |
||||||||
INVESTMENT INCOME |
||||||||||||||||
Dividends — unaffiliated |
$ | 34,000 | $ | 2,545,549 | $ | 33,388,770 | $ | 91,425 | ||||||||
Dividends — affiliated |
25 | 36,112 | 334,231 | 60 | ||||||||||||
Interest — unaffiliated |
66 | 2,754 | 32,068 | 103 | ||||||||||||
Securities lending income — affiliated — net |
32 | 92,846 | 1,825,929 | 631 | ||||||||||||
Other income — unaffiliated |
— | — | 1,019 | — | ||||||||||||
Foreign taxes withheld |
(3,623 | ) | (125,377 | ) | (2,758,480 | ) | (7,853 | ) | ||||||||
Foreign withholding tax claims |
— | — | 413,095 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total investment income |
30,500 | 2,551,884 | 33,236,632 | 84,366 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
EXPENSES |
||||||||||||||||
Investment advisory |
6,554 | 2,455,446 | 14,188,759 | 29,614 | ||||||||||||
Commitment costs |
— | 1,420 | 11,165 | 37 | ||||||||||||
Professional |
— | — | 41,412 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total expenses |
6,554 | 2,456,866 | 14,241,336 | 29,651 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net investment income |
23,946 | 95,018 | 18,995,296 | 54,715 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
REALIZED AND UNREALIZED GAIN (LOSS) |
||||||||||||||||
Net realized gain (loss) from: |
||||||||||||||||
Investments — unaffiliated(b) |
48,562 | (16,821,154 | ) | (7,166,243 | ) | (455,241 | ) | |||||||||
Investments — affiliated |
— | 24,358 | 5,086,514 | 76 | ||||||||||||
Capital gain distributions from underlying funds — affiliated |
— | 1 | 1 | — | ||||||||||||
Foreign currency transactions |
(385 | ) | (23,848 | ) | (61,325 | ) | (286 | ) | ||||||||
Futures contracts |
405 | 64,187 | 629,369 | — | ||||||||||||
In-kind redemptions — unaffiliated(c) |
— | 9,040,109 | 37,742,930 | 133,934 | ||||||||||||
In-kind redemptions — affiliated(c) |
— | — | 123,194 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
48,582 | (7,716,347 | ) | 36,354,440 | (321,517 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net change in unrealized appreciation (depreciation) on: |
||||||||||||||||
Investments — unaffiliated(d) |
269,386 | 50,905,954 | 354,564,742 | 1,209,675 | ||||||||||||
Investments — affiliated |
2 | (15,140 | ) | (4,451,965 | ) | 2 | ||||||||||
Foreign currency translations |
126 | (3,775 | ) | 109,989 | (75 | ) | ||||||||||
Futures contracts |
557 | (32,713 | ) | 204,841 | — | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
270,071 | 50,854,326 | 350,427,607 | 1,209,602 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net realized and unrealized gain |
318,653 | 43,137,979 | 386,782,047 | 888,085 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS |
$ | 342,599 | $ | 43,232,997 | $ | 405,777,343 | $ | 942,800 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
(a) For the period from March 28, 2023 (commencement of operations) to July 31, 2023. |
||||||||||||||||
(b) Net of foreign capital gain tax and capital gain tax refund, if applicable |
$ | — | $ | — | $ | (864,535 | ) | $ | — | |||||||
(c) See Note 2 of the Notes to Financial Statements. |
||||||||||||||||
(d) Net of reduction in deferred foreign capital gain tax of |
$ | — | $ | — | $ | 1,115,749 | $ | — |
See notes to financial statements.
52 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statements of Operations (continued)
Year Ended July 31, 2023
|
iShares Genomics Immunology and Healthcare ETF |
|
iShares Neuroscience and Healthcare ETF |
(a) |
|
iShares Robotics and Artificial Intelligence Multisector ETF |
|
iShares Self-Driving EV and Tech ETF |
||||||||
INVESTMENT INCOME |
||||||||||||||||
Dividends — unaffiliated |
$ | 1,067,234 | $ | — | $ | 3,192,232 | $ | 9,786,346 | (b) | |||||||
Dividends — affiliated |
6,772 | 420 | 10,645 | 22,727 | ||||||||||||
Interest — unaffiliated |
856 | 65 | 5,084 | 2,757 | ||||||||||||
Securities lending income — affiliated — net |
422,031 | 17,876 | 1,386,461 | 3,991,654 | ||||||||||||
Other income — unaffiliated |
3,853 | — | — | — | ||||||||||||
Foreign taxes withheld |
(136,890 | ) | — | (304,846 | ) | (1,117,428 | ) | |||||||||
Foreign withholding tax claims |
69,992 | — | 17,604 | — | ||||||||||||
Other foreign taxes |
(15,348 | ) | — | — | — | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total investment income |
1,418,500 | 18,361 | 4,307,180 | 12,686,056 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
EXPENSES |
||||||||||||||||
Investment advisory |
770,296 | 22,026 | 1,354,621 | 2,020,766 | ||||||||||||
Professional |
7,390 | — | 1,760 | — | ||||||||||||
Commitment costs |
290 | — | 1,849 | 4,340 | ||||||||||||
Interest expense |
— | — | 1,260 | 516 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total expenses |
777,976 | 22,026 | 1,359,490 | 2,025,622 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net investment income (loss) |
640,524 | (3,665 | ) | 2,947,690 | 10,660,434 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
REALIZED AND UNREALIZED GAIN (LOSS) |
||||||||||||||||
Net realized gain (loss) from: |
||||||||||||||||
Investments — unaffiliated(c) |
(54,445,684 | ) | (64,390 | ) | (24,597,954 | ) | (79,547,087 | ) | ||||||||
Investments — affiliated |
11,459 | 51 | 4,705 | 3,125 | ||||||||||||
Capital gain distributions from underlying funds — affiliated |
— | — | — | 2 | ||||||||||||
Foreign currency transactions |
8,957 | 197 | (56,499 | ) | 70,776 | |||||||||||
Futures contracts |
32,386 | — | 337,965 | 363,492 | ||||||||||||
In-kind redemptions — unaffiliated(d) |
2,349,472 | — | 910,999 | 3,245,569 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
(52,043,410 | ) | (64,142 | ) | (23,400,784 | ) | (75,864,123 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Net change in unrealized appreciation (depreciation) on: |
||||||||||||||||
Investments — unaffiliated(e) |
2,540,149 | (55,415 | ) | 90,511,607 | 122,494,186 | |||||||||||
Investments — affiliated |
(1,916 | ) | 54 | (2,930 | ) | 2,389 | ||||||||||
Foreign currency translations |
15,855 | 97 | 1,187 | 26,623 | ||||||||||||
Futures contracts |
(30,897 | ) | — | (43,071 | ) | 9,082 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
2,523,191 | (55,264 | ) | 90,466,793 | 122,532,280 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net realized and unrealized gain (loss) |
(49,520,219 | ) | (119,406 | ) | 67,066,009 | 46,668,157 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
$ | (48,879,695 | ) | $ | (123,071 | ) | $ | 70,013,699 | $ | 57,328,591 | ||||||
|
|
|
|
|
|
|
|
|||||||||
(a) For the period from August 24, 2022 (commencement of operations) to July 31, 2023. |
||||||||||||||||
(b) Includes $2,513,953 related to a special distribution from Volkswagen AG. |
||||||||||||||||
(c) Net of foreign capital gain tax and capital gain tax refund, if applicable |
$ | — | $ | — | $ | (6,976 | ) | $ | (34,499 | ) | ||||||
(d) See Note 2 of the Notes to Financial Statements. |
||||||||||||||||
(e) Net of increase in deferred foreign capital gain tax of |
$ | — | $ | — | $ | (241,923 | ) | $ | — |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S |
53 |
Statements of Operations (continued)
Year Ended July 31, 2023
|
iShares Virtual Work and Life Multisector ETF |
|||
INVESTMENT INCOME |
||||
Dividends — unaffiliated |
$ | 9,808 | ||
Dividends — affiliated |
141 | |||
Interest — unaffiliated |
61 | |||
Securities lending income — affiliated — net |
3,724 | |||
Foreign taxes withheld |
(293 | ) | ||
|
|
|||
Total investment income |
13,441 | |||
|
|
|||
EXPENSES |
||||
Investment advisory |
14,369 | |||
Commitment costs |
3 | |||
|
|
|||
Total expenses |
14,372 | |||
|
|
|||
Net investment loss |
(931 | ) | ||
|
|
|||
REALIZED AND UNREALIZED GAIN (LOSS) |
||||
Net realized gain (loss) from: |
||||
Investments — unaffiliated |
(982,471 | ) | ||
Investments — affiliated |
(7 | ) | ||
Foreign currency transactions |
(604 | ) | ||
Futures contracts |
(46 | ) | ||
In-kind redemptions — unaffiliated(a) |
(389,200 | ) | ||
|
|
|||
(1,372,328 | ) | |||
|
|
|||
Net change in unrealized appreciation (depreciation) on: |
||||
Investments — unaffiliated |
1,512,928 | |||
Investments — affiliated |
(3 | ) | ||
Foreign currency translations |
115 | |||
|
|
|||
1,513,040 | ||||
|
|
|||
Net realized and unrealized gain |
140,712 | |||
|
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS |
$ | 139,781 | ||
|
|
(a) |
See Note 2 of the Notes to Financial Statements. |
See notes to financial statements.
54 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statements of Changes in Net Assets
iShares Breakthrough Environmental Solutions ETF |
iShares Cybersecurity and Tech ETF |
|||||||||||
|
Period From 03/28/23 to 07/31/23 |
(a)
|
|
Year Ended 07/31/23 |
|
Year Ended 07/31/22 |
||||||
|
||||||||||||
INCREASE (DECREASE) IN NET ASSETS |
||||||||||||
OPERATIONS |
||||||||||||
Net investment income |
$ | 23,946 | $ | 95,018 | $ | 3,801,354 | ||||||
Net realized gain (loss) |
48,582 | (7,716,347 | ) | 12,489,986 | ||||||||
Net change in unrealized appreciation (depreciation) |
270,071 | 50,854,326 | (123,288,836 | ) | ||||||||
|
|
|
|
|
|
|||||||
Net increase (decrease) in net assets resulting from operations |
342,599 | 43,232,997 | (106,997,496 | ) | ||||||||
|
|
|
|
|
|
|||||||
DISTRIBUTIONS TO SHAREHOLDERS(b) |
||||||||||||
Decrease in net assets resulting from distributions to shareholders |
(16,550 | ) | (566,608 | ) | (4,167,125 | ) | ||||||
|
|
|
|
|
|
|||||||
CAPITAL SHARE TRANSACTIONS |
||||||||||||
Net increase in net assets derived from capital share transactions |
4,025,360 | 35,073,669 | 34,658,872 | |||||||||
|
|
|
|
|
|
|||||||
NET ASSETS |
||||||||||||
Total increase (decrease) in net assets |
4,351,409 | 77,740,058 | (76,505,749 | ) | ||||||||
Beginning of period |
— | 539,888,597 | 616,394,346 | |||||||||
|
|
|
|
|
|
|||||||
End of period |
$ | 4,351,409 | $ | 617,628,655 | $ | 539,888,597 | ||||||
|
|
|
|
|
|
(a) |
Commencement of operations. |
(b) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S |
55 |
Statements of Changes in Net Assets (continued)
iShares Exponential Technologies ETF |
iShares Future Cloud 5G and Tech ETF |
|||||||||||||||
|
Year Ended 07/31/23 |
|
|
Year Ended 07/31/22 |
|
|
Year Ended 07/31/23 |
|
|
Year Ended 07/31/22 |
| |||||
|
||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS |
||||||||||||||||
OPERATIONS |
||||||||||||||||
Net investment income |
$ | 18,995,296 | $ | 27,596,886 | $ | 54,715 | $ | 65,871 | ||||||||
Net realized gain (loss) |
36,354,440 | 89,057,717 | (321,517 | ) | 548,409 | |||||||||||
Net change in unrealized appreciation (depreciation) |
350,427,607 | (850,719,765 | ) | 1,209,602 | (1,781,418 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net increase (decrease) in net assets resulting from operations |
405,777,343 | (734,065,162 | ) | 942,800 | (1,167,138 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
DISTRIBUTIONS TO SHAREHOLDERS(a) |
||||||||||||||||
Decrease in net assets resulting from distributions to shareholders |
(17,634,859 | ) | (31,230,965 | ) | (50,307 | ) | (63,758 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
CAPITAL SHARE TRANSACTIONS |
||||||||||||||||
Net increase (decrease) in net assets derived from capital share transactions |
(80,184,166 | ) | 10,360,369 | (1,935,326 | ) | 51,010 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
NET ASSETS |
||||||||||||||||
Total increase (decrease) in net assets |
307,958,318 | (754,935,758 | ) | (1,042,833 | ) | (1,179,886 | ) | |||||||||
Beginning of year |
3,159,641,927 | 3,914,577,685 | 7,190,387 | 8,370,273 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
End of year |
$ | 3,467,600,245 | $ | 3,159,641,927 | $ | 6,147,554 | $ | 7,190,387 | ||||||||
|
|
|
|
|
|
|
|
(a) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
See notes to financial statements.
56 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statements of Changes in Net Assets (continued)
iShares Genomics Immunology and Healthcare ETF |
iShares Neuroscience and Healthcare ETF |
|||||||||||
|
Year Ended 07/31/23 |
|
|
Year Ended 07/31/22 |
|
|
Period From 08/24/22 to 07/31/23 |
(a)
| ||||
|
||||||||||||
INCREASE (DECREASE) IN NET ASSETS |
||||||||||||
OPERATIONS |
||||||||||||
Net investment income (loss) |
$ | 640,524 | $ | 966,416 | $ | (3,665 | ) | |||||
Net realized loss |
(52,043,410 | ) | (17,729,834 | ) | (64,142 | ) | ||||||
Net change in unrealized appreciation (depreciation) |
2,523,191 | (117,898,157 | ) | (55,264 | ) | |||||||
|
|
|
|
|
|
|||||||
Net decrease in net assets resulting from operations |
(48,879,695 | ) | (134,661,575 | ) | (123,071 | ) | ||||||
|
|
|
|
|
|
|||||||
DISTRIBUTIONS TO SHAREHOLDERS(b) |
||||||||||||
From net investment income |
(435,229 | ) | (2,812,804 | ) | — | |||||||
Return of capital |
— | — | (1,648 | ) | ||||||||
|
|
|
|
|
|
|||||||
Decrease in net assets resulting from distributions to shareholders |
(435,229 | ) | (2,812,804 | ) | (1,648 | ) | ||||||
|
|
|
|
|
|
|||||||
CAPITAL SHARE TRANSACTIONS |
||||||||||||
Net increase (decrease) in net assets derived from capital share transactions |
(5,024,984 | ) | 8,990,520 | 5,050,047 | ||||||||
|
|
|
|
|
|
|||||||
NET ASSETS |
||||||||||||
Total increase (decrease) in net assets |
(54,339,908 | ) | (128,483,859 | ) | 4,925,328 | |||||||
Beginning of period |
199,334,239 | 327,818,098 | — | |||||||||
|
|
|
|
|
|
|||||||
End of period |
$ | 144,994,331 | $ | 199,334,239 | $ | 4,925,328 | ||||||
|
|
|
|
|
|
(a) |
Commencement of operations. |
(b) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S |
57 |
Statements of Changes in Net Assets (continued)
iShares Robotics and Artificial Intelligence Multisector ETF |
iShares Self-Driving EV and Tech ETF |
|||||||||||||||
|
Year Ended 07/31/23 |
|
|
Year Ended 07/31/22 |
|
|
Year Ended 07/31/23 |
|
|
Year Ended 07/31/22 |
| |||||
|
||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS |
||||||||||||||||
OPERATIONS |
||||||||||||||||
Net investment income |
$ | 2,947,690 | $ | 1,042,005 | $ | 10,660,434 | $ | 5,946,133 | ||||||||
Net realized loss |
(23,400,784 | ) | (15,447,483 | ) | (75,864,123 | ) | (407,070 | ) | ||||||||
Net change in unrealized appreciation (depreciation) |
90,466,793 | (127,618,290 | ) | 122,532,280 | (123,993,144 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net increase (decrease) in net assets resulting from operations |
70,013,699 | (142,023,768 | ) | 57,328,591 | (118,454,081 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
DISTRIBUTIONS TO SHAREHOLDERS(a) |
||||||||||||||||
Decrease in net assets resulting from distributions to shareholders |
(2,261,595 | ) | (10,540,562 | ) | (8,577,251 | ) | (9,781,417 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
CAPITAL SHARE TRANSACTIONS |
||||||||||||||||
Net increase (decrease) in net assets derived from capital share transactions |
182,260,510 | (19,873,283 | ) | (20,839,481 | ) | 165,346,390 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
NET ASSETS |
||||||||||||||||
Total increase (decrease) in net assets |
250,012,614 | (172,437,613 | ) | 27,911,859 | 37,110,892 | |||||||||||
Beginning of year |
261,007,058 | 433,444,671 | 466,295,459 | 429,184,567 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
End of year |
$ | 511,019,672 | $ | 261,007,058 | $ | 494,207,318 | $ | 466,295,459 | ||||||||
|
|
|
|
|
|
|
|
(a) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
See notes to financial statements.
58 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statements of Changes in Net Assets (continued)
iShares Virtual Work and Life Multisector ETF |
||||||||
|
Year Ended 07/31/23 |
|
|
Year Ended 07/31/22 |
| |||
|
||||||||
INCREASE (DECREASE) IN NET ASSETS |
||||||||
OPERATIONS |
||||||||
Net investment loss |
$ | (931 | ) | $ | (4,780 | ) | ||
Net realized loss |
(1,372,328 | ) | (321,143 | ) | ||||
Net change in unrealized appreciation (depreciation) |
1,513,040 | (3,180,036 | ) | |||||
|
|
|
|
|||||
Net increase (decrease) in net assets resulting from operations |
139,781 | (3,505,959 | ) | |||||
|
|
|
|
|||||
DISTRIBUTIONS TO SHAREHOLDERS(a) |
||||||||
Decrease in net assets resulting from distributions to shareholders |
(9,849 | ) | (6,350 | ) | ||||
|
|
|
|
|||||
CAPITAL SHARE TRANSACTIONS |
||||||||
Net decrease in net assets derived from capital share transactions |
(1,240,169 | ) | (548,572 | ) | ||||
|
|
|
|
|||||
NET ASSETS |
||||||||
Total decrease in net assets |
(1,110,237 | ) | (4,060,881 | ) | ||||
Beginning of year |
4,405,455 | 8,466,336 | ||||||
|
|
|
|
|||||
End of year |
$ | 3,295,218 | $ | 4,405,455 | ||||
|
|
|
|
(a) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S |
59 |
(For a share outstanding throughout the period)
iShares Breakthrough Environmental Solutions ETF |
||||
|
Period From 03/28/23 to 07/31/23 |
(a)
| ||
|
||||
Net asset value, beginning of period |
$ | 25.16 | ||
|
|
|||
Net investment income(b) |
0.15 | |||
Net realized and unrealized gain(c) |
1.99 | |||
|
|
|||
Net increase from investment operations |
2.14 | |||
|
|
|||
Distributions from net investment income(d) |
(0.10 | ) | ||
|
|
|||
Net asset value, end of period |
$ | 27.20 | ||
|
|
|||
Total Return(e) |
||||
Based on net asset value |
8.54 | %(f) | ||
|
|
|||
Ratios to Average Net Assets(g) |
||||
Total expenses |
0.47 | %(h) | ||
|
|
|||
Net investment income |
1.72 | %(h) | ||
|
|
|||
Supplemental Data |
||||
Net assets, end of period (000) |
$ | 4,351 | ||
|
|
|||
Portfolio turnover rate(i) |
9 | % | ||
|
|
(a) |
Commencement of operations. |
(b) |
Based on average shares outstanding. |
(c) |
The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
(d) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
(e) |
Where applicable, assumes the reinvestment of distributions. |
(f) |
Not annualized. |
(g) |
Excludes fees and expenses incurred indirectly as a result of investments in underlying funds. |
(h) |
Annualized. |
(i) |
Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
60 | 2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares Cybersecurity and Tech ETF | ||||||||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||
|
Year Ended 07/31/23 |
|
|
Year Ended 07/31/22 |
|
|
Year Ended 07/31/21 |
|
|
Year Ended 07/31/20 |
|
|
Period From 06/11/19 to 07/31/19 |
(a)
| ||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period |
$ | 36.73 | $ | 43.87 | $ | 33.69 | $ | 26.58 | $ | 24.94 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Net investment income(b) |
0.01 | 0.26 | 0.02 | 0.33 | (c) | 0.00 | (d) | |||||||||||||||||||||||||||||
Net realized and unrealized gain (loss)(e) |
2.77 | (7.13 | ) | 10.22 | 7.02 | 1.64 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Net increase (decrease) from investment operations |
2.78 | (6.87 | ) | 10.24 | 7.35 | 1.64 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Distributions(f) |
||||||||||||||||||||||||||||||||||||
From net investment income |
(0.04 | ) | (0.27 | ) | (0.06 | ) | (0.15 | ) | — | |||||||||||||||||||||||||||
From net realized gain |
— | — | — | (0.09 | ) | — | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total distributions |
(0.04 | ) | (0.27 | ) | (0.06 | ) | (0.24 | ) | — | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Net asset value, end of period |
$ | 39.47 | $ | 36.73 | $ | 43.87 | $ | 33.69 | $ | 26.58 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total Return(g) |
||||||||||||||||||||||||||||||||||||
Based on net asset value |
7.57 | % | (15.73 | )% | 30.42 | % | 27.85 | % | 6.58 | %(h) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Ratios to Average Net Assets(i) |
||||||||||||||||||||||||||||||||||||
Total expenses |
0.47 | % | 0.47 | % | 0.47 | % | 0.47 | % | 0.47 | %(j) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Net investment income |
0.02 | % | 0.62 | % | 0.04 | % | 1.12 | %(c) | 0.06 | %(j) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Supplemental Data |
||||||||||||||||||||||||||||||||||||
Net assets, end of period (000) |
$ | 617,629 | $ | 539,889 | $ | 616,394 | $ | 109,489 | $ | 3,987 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Portfolio turnover rate(k) |
39 | % | 44 | % | 38 | % | 29 | % | 8 | % | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(a) |
Commencement of operations. |
(b) |
Based on average shares outstanding. |
(c) |
Includes a one-time special distribution from NortonLifeLock Inc. Excluding such special distribution, the net investment income would have been $0.08 per share and 0.26% of average net assets. |
(d) |
Rounds to less than $0.01. |
(e) |
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. |
(f) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
(g) |
Where applicable, assumes the reinvestment of distributions. |
(h) |
Not annualized. |
(i) |
Excludes fees and expenses incurred indirectly as a result of investments in underlying funds. |
(j) |
Annualized. |
(k) |
Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
F I N A N C I A L H I G H L I G H T S |
61 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares Exponential Technologies ETF | ||||||||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||
Year Ended 07/31/23 |
Year Ended 07/31/22 |
Year Ended 07/31/21 |
Year Ended 07/31/20 |
Year Ended 07/31/19 |
||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Net asset value, beginning of year |
$ | 52.01 | $ | 63.91 | $ | 47.25 | $ | 38.89 | $ | 37.73 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Net investment income(a) |
0.32 | (b) | 0.44 | 0.52 | 0.44 | 0.55 | ||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss)(c) |
6.44 | (11.84 | ) | 16.61 | 8.47 | 1.16 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Net increase (decrease) from investment operations |
6.76 | (11.40 | ) | 17.13 | 8.91 | 1.71 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Distributions from net investment income(d) |
(0.29 | ) | (0.50 | ) | (0.47 | ) | (0.55 | ) | (0.55 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Net asset value, end of year |
$ | 58.48 | $ | 52.01 | $ | 63.91 | $ | 47.25 | $ | 38.89 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total Return(e) |
||||||||||||||||||||||||||||||||||||
Based on net asset value |
13.05 | %(b) | (17.91 | )% | 36.33 | % | 23.05 | % | 4.67 | % | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Ratios to Average Net Assets(f) |
||||||||||||||||||||||||||||||||||||
Total expenses |
0.46 | % | 0.46 | % | 0.46 | % | 0.47 | % | 0.47 | % | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total expenses excluding professional fees for foreign withholding tax claims |
0.46 | % | 0.46 | % | N/A | N/A | N/A | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Net investment income |
0.62 | %(b) | 0.74 | % | 0.91 | % | 1.07 | % | 1.47 | % | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Supplemental Data |
||||||||||||||||||||||||||||||||||||
Net assets, end of year (000) |
$ | 3,467,600 | $ | 3,159,642 | $ | 3,914,578 | $ | 2,657,627 | $ | 2,562,819 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Portfolio turnover rate(g) |
45 | % | 69 | % | 23 | % | 23 | % | 21 | % | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(a) |
Based on average shares outstanding. |
(b) |
Reflects the one-time, positive effect of foreign withholding tax claims, net of the associated professional fees, which resulted in the following increases for the year ended July 31, 2023: |
• |
Net investment income per share by $0.01. |
• |
Total return by 0.01%. |
• |
Ratio of net investment income to average net assets by 0.01%. |
(c) |
The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
(d) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
(e) |
Where applicable, assumes the reinvestment of distributions. |
(f) |
Excludes fees and expenses incurred indirectly as a result of investments in underlying funds. |
(g) |
Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
62 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares Future Cloud 5G and Tech ETF | ||||||||||||||||||||
|
|
|||||||||||||||||||
|
Year Ended 07/31/23 |
|
|
Year Ended 07/31/22 |
|
|
Period From 06/08/21 to 07/31/21 |
(a)
| ||||||||||||
|
||||||||||||||||||||
Net asset value, beginning of period |
$ | 22.47 | $ | 26.16 | $ | 25.07 | ||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Net investment income(b) |
0.19 | 0.21 | 0.04 | |||||||||||||||||
Net realized and unrealized gain (loss)(c) |
3.12 | (3.70 | ) | 1.05 | ||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Net increase (decrease) from investment operations |
3.31 | (3.49 | ) | 1.09 | ||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Distributions from net investment income(d) |
(0.17 | ) | (0.20 | ) | — | |||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Net asset value, end of period |
$ | 25.61 | $ | 22.47 | $ | 26.16 | ||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Total Return(e) |
||||||||||||||||||||
Based on net asset value |
14.84 | % | (13.46 | )% | 4.35 | %(f) | ||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Ratios to Average Net Assets(g) |
||||||||||||||||||||
Total expenses |
0.47 | % | 0.47 | % | 0.47 | %(h) | ||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Net investment income |
0.87 | % | 0.80 | % | 1.09 | %(h) | ||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Supplemental Data |
||||||||||||||||||||
Net assets, end of period (000) |
$ | 6,148 | $ | 7,190 | $ | 8,370 | ||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Portfolio turnover rate(i) |
45 | % | 51 | % | 0 | % | ||||||||||||||
|
|
|
|
|
|
(a) |
Commencement of operations. |
(b) |
Based on average shares outstanding. |
(c) |
The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
(d) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
(e) |
Where applicable, assumes the reinvestment of distributions. |
(f) |
Not annualized. |
(g) |
Excludes fees and expenses incurred indirectly as a result of investments in underlying funds. |
(h) |
Annualized. |
(i) |
Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
F I N A N C I A L H I G H L I G H T S |
63 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares Genomics Immunology and Healthcare ETF | ||||||||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||
|
Year Ended 07/31/23 |
|
|
Year Ended 07/31/22 |
|
|
Year Ended 07/31/21 |
|
|
Year Ended 07/31/20 |
|
|
Period From 06/11/19 to 07/31/19 |
(a)
| ||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period |
$ | 31.64 | $ | 50.05 | $ | 37.28 | $ | 27.61 | $ | 24.46 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Net investment income (loss)(b) |
0.10 | (c) | 0.14 | 0.08 | 0.17 | (0.01 | ) | |||||||||||||||||||||||||||||
Net realized and unrealized gain (loss)(d) |
(7.70 | ) | (18.16 | ) | 12.78 | 9.82 | 3.16 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Net increase (decrease) from investment operations |
(7.60 | ) | (18.02 | ) | 12.86 | 9.99 | 3.15 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Distributions(e) |
||||||||||||||||||||||||||||||||||||
From net investment income |
(0.07 | ) | (0.39 | ) | (0.09 | ) | (0.08 | ) | — | |||||||||||||||||||||||||||
From net realized gain |
— | — | — | (0.24 | ) | — | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total distributions |
(0.07 | ) | (0.39 | ) | (0.09 | ) | (0.32 | ) | — | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Net asset value, end of period |
$ | 23.97 | $ | 31.64 | $ | 50.05 | $ | 37.28 | $ | 27.61 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total Return(f) |
||||||||||||||||||||||||||||||||||||
Based on net asset value |
(24.04 | )%(c) | (36.11 | )% | 34.49 | % | 36.42 | % | 12.88 | %(g) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Ratios to Average Net Assets(h) |
||||||||||||||||||||||||||||||||||||
Total expenses |
0.47 | % | 0.47 | % | 0.47 | % | 0.47 | % | 0.47 | %(i) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total expenses excluding professional fees for foreign withholding tax claims |
0.47 | % | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Net investment income (loss) |
0.39 | %(c) | 0.35 | % | 0.16 | % | 0.54 | % | (0.35 | )%(i) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Supplemental Data |
||||||||||||||||||||||||||||||||||||
Net assets, end of period (000) |
$ | 144,994 | $ | 199,334 | $ | 327,818 | $ | 141,675 | $ | 24,851 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Portfolio turnover rate(j) |
45 | % | 59 | % | 52 | % | 38 | % | 19 | % | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(a) |
Commencement of operations. |
(b) |
Based on average shares outstanding. |
(c) |
Reflects the one-time, positive effect of foreign withholding tax claims, net of the associated professional fees, which resulted in the following increases for the year ended July 31, 2023: |
• |
Net investment income per share by $0.01. |
• |
Total return by 0.03%. |
• |
Ratio of net investment income to average net assets by 0.04%. |
(d) |
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. |
(e) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
(f) |
Where applicable, assumes the reinvestment of distributions. |
(g) |
Not annualized. |
(h) |
Excludes fees and expenses incurred indirectly as a result of investments in underlying funds. |
(i) |
Annualized. |
(j) |
Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
64 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout the period)
iShares Neuroscience and Healthcare ETF |
||||
|
|
|||
|
Period From 08/24/22 to 07/31/23 |
(a)
| ||
|
||||
Net asset value, beginning of period |
$ | 25.25 | ||
|
|
|||
Net investment loss(b) |
(0.02 | ) | ||
Net realized and unrealized loss(c) |
(0.59 | ) | ||
|
|
|||
Net decrease from investment operations |
(0.61 | ) | ||
|
|
|||
Distributions(d) |
||||
From net investment income |
— | |||
Return of capital |
(0.01 | ) | ||
|
|
|||
Total distributions |
(0.01 | ) | ||
|
|
|||
Net asset value, end of period |
$ | 24.63 | ||
|
|
|||
Total Return(e) |
||||
Based on net asset value |
(2.45 | )%(f) | ||
|
|
|||
Ratios to Average Net Assets(g) |
||||
Total expenses |
0.47 | %(h) | ||
|
|
|||
Net investment loss |
(0.08 | )%(h) | ||
|
|
|||
Supplemental Data |
||||
Net assets, end of period (000) |
$ | 4,925 | ||
|
|
|||
Portfolio turnover rate(i) |
61 | % | ||
|
|
(a) |
Commencement of operations. |
(b) |
Based on average shares outstanding. |
(c) |
The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
(d) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
(e) |
Where applicable, assumes the reinvestment of distributions. |
(f) |
Not annualized. |
(g) |
Excludes fees and expenses incurred indirectly as a result of investments in underlying funds. |
(h) |
Annualized. |
(i) |
Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
F I N A N C I A L H I G H L I G H T S |
65 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares Robotics and Artificial Intelligence Multisector ETF | ||||||||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||
Year Ended 07/31/23 |
Year Ended 07/31/22 |
Year Ended 07/31/21 |
Year Ended 07/31/20 |
Year Ended 07/31/19 |
||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Net asset value, beginning of year |
$ | 28.37 | $ | 43.34 | $ | 31.43 | $ | 24.99 | $ | 23.63 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Net investment income(a) |
0.30 | 0.11 | 0.17 | 0.11 | 0.24 | |||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss)(b) |
6.07 | (14.03 | ) | 12.00 | 6.44 | 1.30 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Net increase (decrease) from investment operations |
6.37 | (13.92 | ) | 12.17 | 6.55 | 1.54 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Distributions from net investment income(c) |
(0.21 | ) | (1.05 | ) | (0.26 | ) | (0.11 | ) | (0.18 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Net asset value, end of year |
$ | 34.53 | $ | 28.37 | $ | 43.34 | $ | 31.43 | $ | 24.99 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total Return(d) |
||||||||||||||||||||||||||||||||||||
Based on net asset value |
22.55 | %(e) | (32.79 | )% | 38.79 | % | 26.27 | % | 6.60 | % | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Ratios to Average Net Assets(f) |
||||||||||||||||||||||||||||||||||||
Total expenses |
0.47 | % | 0.47 | % | 0.47 | % | 0.47 | % | 0.47 | % | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total expenses excluding professional fees for foreign withholding tax claims |
0.47 | % | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Net investment income |
1.02 | %(e) | 0.29 | % | 0.42 | % | 0.40 | % | 1.02 | % | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Supplemental Data |
||||||||||||||||||||||||||||||||||||
Net assets, end of year (000) |
$ | 511,020 | $ | 261,007 | $ | 433,445 | $ | 157,172 | $ | 44,978 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Portfolio turnover rate(g) |
35 | % | 58 | % | 42 | % | 34 | % | 35 | % | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(a) |
Based on average shares outstanding. |
(b) |
The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
(c) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
(d) |
Where applicable, assumes the reinvestment of distributions. |
(e) |
Reflects the one-time, positive effect of foreign withholding tax claims, net of the associated professional fees, which resulted in the following increases for the year ended July 31, 2023: |
• |
Total return by 0.01%. |
• |
Ratio of net investment income to average net assets by 0.01%. |
(f) |
Excludes fees and expenses incurred indirectly as a result of investments in underlying funds. |
(g) |
Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
66 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares Self-Driving EV and Tech ETF | ||||||||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||
|
Year Ended 07/31/23 |
|
|
Year Ended 07/31/22 |
|
|
Year Ended 07/31/21 |
|
|
Year Ended 07/31/20 |
|
|
Period From 04/16/19 to 07/31/19 |
(a)
| ||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period |
$ | 40.90 | $ | 49.91 | $ | 29.69 | $ | 24.08 | $ | 25.39 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Net investment income(b) |
0.95 | (c) | 0.54 | 0.50 | 0.37 | 0.17 | ||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss)(d) |
4.68 | (8.71 | ) | 20.04 | 5.59 | (1.30 | ) | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Net increase (decrease) from investment operations |
5.63 | (8.17 | ) | 20.54 | 5.96 | (1.13 | ) | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Distributions from net investment income(e) |
(0.77 | ) | (0.84 | ) | (0.32 | ) | (0.35 | ) | (0.18 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Net asset value, end of period |
$ | 45.76 | $ | 40.90 | $ | 49.91 | $ | 29.69 | $ | 24.08 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total Return(f) |
||||||||||||||||||||||||||||||||||||
Based on net asset value |
14.17 | % | (16.54 | )% | 69.28 | % | 24.91 | %(g) | (4.40 | )%(h) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Ratios to Average Net Assets(i) |
||||||||||||||||||||||||||||||||||||
Total expenses |
0.47 | % | 0.47 | % | 0.47 | % | 0.47 | % | 0.47 | %(j) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Net investment income |
2.48 | %(c) | 1.16 | % | 1.10 | % | 1.44 | % | 2.43 | %(j) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Supplemental Data |
||||||||||||||||||||||||||||||||||||
Net assets, end of period (000) |
$ | 494,207 | $ | 466,295 | $ | 429,185 | $ | 32,660 | $ | 26,493 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Portfolio turnover rate(k) |
85 | % | 41 | % | 24 | % | 19 | % | 2 | % | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(a) |
Commencement of operations. |
(b) |
Based on average shares outstanding. |
(c) |
Includes a special distribution from Volkswagen AG. Excluding such special distribution, the net investment income would have been $0.72 per share and 1.89% of average net assets. |
(d) |
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. |
(e) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
(f) |
Where applicable, assumes the reinvestment of distributions. |
(g) |
Includes payment received from an affiliate, which had no impact on the Fund’s total return. |
(h) |
Not annualized. |
(i) |
Excludes fees and expenses incurred indirectly as a result of investments in underlying funds. |
(j) |
Annualized. |
(k) |
Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
F I N A N C I A L H I G H L I G H T S |
67 |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares Virtual Work and Life Multisector ETF | ||||||||||||||||||||
|
|
|||||||||||||||||||
|
Year Ended 07/31/23 |
|
|
Year Ended 07/31/22 |
|
|
Period From 09/29/20 to 07/31/21 |
(a)
| ||||||||||||
|
||||||||||||||||||||
Net asset value, beginning of period |
$ | 14.68 | $ | 28.22 | $ | 25.22 | ||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Net investment loss(b) |
(0.00 | ) | (0.02 | ) | (0.04 | ) | ||||||||||||||
Net realized and unrealized gain (loss)(c) |
1.85 | (13.50 | ) | 3.09 | ||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Net increase (decrease) from investment operations |
1.85 | (13.52 | ) | 3.05 | ||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Distributions from net investment income(d) |
(0.05 | ) | (0.02 | ) | (0.05 | ) | ||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Net asset value, end of period |
$ | 16.48 | $ | 14.68 | $ | 28.22 | ||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Total Return(e) |
||||||||||||||||||||
Based on net asset value |
12.58 | % | (47.89 | )% | 12.11 | %(f) | ||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Ratios to Average Net Assets(g) |
||||||||||||||||||||
Total expenses |
0.47 | % | 0.47 | % | 0.47 | %(h) | ||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Net investment loss |
(0.03 | )% | (0.08 | )% | (0.16 | )%(h) | ||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Supplemental Data |
||||||||||||||||||||
Net assets, end of period (000) |
$ | 3,295 | $ | 4,405 | $ | 8,466 | ||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Portfolio turnover rate(i) |
47 | % | 46 | % | 27 | % | ||||||||||||||
|
|
|
|
|
|
(a) |
Commencement of operations. |
(b) |
Based on average shares outstanding. |
(c) |
The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
(d) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
(e) |
Where applicable, assumes the reinvestment of distributions. |
(f) |
Not annualized. |
(g) |
Excludes fees and expenses incurred indirectly as a result of investments in underlying funds. |
(h) |
Annualized. |
(i) |
Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
68 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
1. ORGANIZATION
iShares Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust is organized as a Delaware statutory trust and is authorized to have multiple series or portfolios.
These financial statements relate only to the following funds (each, a “Fund” and collectively, the “Funds”):
iShares ETF | Diversification Classification | |
Breakthrough Environmental Solutions(a) |
Non-diversified | |
Cybersecurity and Tech |
Non-diversified | |
Exponential Technologies |
Diversified | |
Future Cloud 5G and Tech(b) |
Non-diversified | |
Genomics Immunology and Healthcare |
Non-diversified | |
Neuroscience and Healthcare(c) |
Non-diversified | |
Robotics and Artificial Intelligence Multisector |
Diversified | |
Self-Driving EV and Tech |
Non-diversified | |
Virtual Work and Life Multisector(d) |
Diversified |
(a) |
The Fund commenced operations on March 28, 2023. |
(b) |
Formerly the iShares Cloud 5G and Tech ETF. |
(c) |
The Fund commenced operations on August 24, 2022. |
(d) |
The Fund’s classification changed from non-diversified to diversified during the reporting period. |
2. SIGNIFICANT ACCOUNTING POLICIES
The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. Below is a summary of significant accounting policies:
Investment Transactions and Income Recognition: For financial reporting purposes, investment transactions are recorded on the dates the transactions are executed. Realized gains and losses on investment transactions are determined using the specific identification method. Dividend income and capital gain distributions, if any, are recorded on the ex-dividend date. Non-cash dividends, if any, are recorded on the ex-dividend date at fair value. Dividends from foreign securities where the ex-dividend date may have passed are subsequently recorded when the Funds are informed of the ex-dividend date. Under the applicable foreign tax laws, a withholding tax at various rates may be imposed on capital gains, dividends and interest. Upon notification from issuers or as estimated by management, a portion of the dividend income received from a real estate investment trust may be redesignated as a reduction of cost of the related investment and/or realized gain. Interest income, including amortization and accretion of premiums and discounts on debt securities, is recognized daily on an accrual basis.
Foreign Currency Translation: Each Fund’s books and records are maintained in U.S. dollars. Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using prevailing market rates as quoted by one or more data service providers. Purchases and sales of investments are recorded at the rates of exchange prevailing on the respective dates of such transactions. Generally, when the U.S. dollar rises in value against a foreign currency, the investments denominated in that currency will lose value; the opposite effect occurs if the U.S. dollar falls in relative value.
Each Fund does not isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of investments for financial reporting purposes. Accordingly, the effects of changes in exchange rates on investments are not segregated in the Statements of Operations from the effects of changes in market prices of those investments, but are included as a component of net realized and unrealized gain (loss) from investments. Each Fund reports realized currency gains (losses) on foreign currency related transactions as components of net realized gain (loss) for financial reporting purposes, whereas such components are generally treated as ordinary income for U.S. federal income tax purposes.
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 each Fund invests. These foreign taxes, if any, are paid by each Fund and are reflected in its 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 July 31, 2023, if any, are disclosed in the Statements of Assets and Liabilities.
The Funds file withholding tax reclaims in certain jurisdictions to recover a portion of amounts previously withheld. The Funds may record a reclaim receivable based on collectability, which includes factors such as the jurisdiction’s applicable laws, payment history and market convention. The Statements of Operations includes tax reclaims recorded as well as professional and other fees, if any, associated with recovery of foreign withholding taxes.
Collateralization: If required by an exchange or counterparty agreement, the Funds may be required to deliver/deposit cash and/or securities to/with an exchange, or broker-dealer or custodian as collateral for certain investments.
N O T E S T O F I N A N C I A L S T A T E M E N T S |
69 |
Notes to Financial Statements (continued)
In-kind Redemptions: For financial reporting purposes, in-kind redemptions are treated as sales of securities resulting in realized capital gains or losses to the Funds. Because such gains or losses are not taxable to the Funds and are not distributed to existing Fund shareholders, the gains or losses are reclassified from accumulated net realized gain (loss) to paid-in capital at the end of the Funds’ tax year. These reclassifications have no effect on net assets or net asset value (“NAV”) per share.
Distributions: Dividends and distributions paid by each Fund are recorded on the ex-dividend dates. Distributions are determined on a tax basis and may differ from net investment income, net realized capital gains and/or return of capital for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds.
The portion of distributions that exceeds each Fund’s current and accumulated earning and profits will constitute a non-taxable return of capital. Distributions in excess of each Fund’s minimum distribution requirements, but not in excess of the Fund’s earnings and profits, will be taxable to the Fund’s shareholders and will not constitute non-taxable returns of capital. Return of capital distributions will reduce a shareholder’s cost basis and will result in higher capital gains or lower capital losses when each Fund’s shares on which distributions were received are sold. Once a shareholder’s cost basis is reduced to zero, further distributions will be treated as capital gains.
Indemnifications: In the normal course of business, each Fund enters into contracts that contain a variety of representations that provide general indemnification. The Funds’ maximum exposure under these arrangements is unknown because it involves future potential claims against the Funds, which cannot be predicted with any certainty.
3. INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS
Investment Valuation Policies: Each Fund’s investments are valued at fair value (also referred to as “market value” within the financial statements) each day that the Fund’s listing exchange is open and, for financial reporting purposes, as of the report date. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Board of Trustees of the Trust (the “Board”) of each Fund has approved the designation of BlackRock Fund Advisors (“BFA”), the Funds’ investment adviser, as the valuation designee for each Fund. Each Fund determines the fair values of its financial instruments using various independent dealers or pricing services under BFA’s policies. If a security’s market price is not readily available or does not otherwise accurately represent the fair value of the security, the security will be valued in accordance with BFA’s policies and procedures as reflecting fair value. BFA has formed a committee (the “Valuation Committee”) to develop pricing policies and procedures and to oversee the pricing function for all financial instruments, with assistance from other BlackRock pricing committees.
Fair Value Inputs and Methodologies: The following methods and inputs are used to establish the fair value of each Fund’s assets and liabilities:
• |
Equity investments traded on a recognized securities exchange are valued at that day’s official closing price, as applicable, on the exchange where the stock is primarily traded. Equity investments traded on a recognized exchange for which there were no sales on that day are valued at the last traded price. |
• |
Investments in open-end U.S. mutual funds (including money market funds) are valued at that day’s published NAV. |
• |
Futures contracts are valued based on that day’s last reported settlement or trade price on the exchange where the contract is traded. |
Generally, trading in foreign instruments is substantially completed each day at various times prior to the close of trading on the New York Stock Exchange (“NYSE”). Each business day, the Funds use current market factors supplied by independent pricing services to value certain foreign instruments (“Systematic Fair Value Price”). The Systematic Fair Value Price is designed to value such foreign securities at fair value as of the close of trading on the NYSE, which follows the close of the local markets.
If events (e.g., market volatility, company announcement or a natural disaster) occur that are expected to materially affect the value of such investment, or in the event that application of these methods of valuation results in a price for an investment that is deemed not to be representative of the market value of such investment, or if a price is not available, the investment will be valued by the Valuation Committee, in accordance with BFA’s policies and procedures as reflecting fair value (“Fair Valued Investments”). The fair valuation approaches that may be used by the Valuation Committee include market approach, income approach and cost approach. Valuation techniques such as discounted cash flow, use of market comparables and matrix pricing are types of valuation approaches and are typically used in determining fair value. When determining the price for Fair Valued Investments, the Valuation Committee seeks to determine the price that each Fund might reasonably expect to receive or pay from the current sale or purchase of that asset or liability in an arm’s-length transaction. Fair value determinations shall be based upon all available factors that the Valuation Committee deems relevant and consistent with the principles of fair value measurement.
Fair value pricing could result in a difference between the prices used to calculate a fund’s NAV and the prices used by the fund’s underlying index, which in turn could result in a difference between the fund’s performance and the performance of the fund’s underlying index.
Fair Value Hierarchy: Various inputs are used in determining the fair value of financial instruments. These inputs to valuation techniques are categorized into a fair value hierarchy consisting of three broad levels for financial reporting purposes as follows:
• |
Level 1 – Unadjusted price quotations in active markets/exchanges for identical assets or liabilities that each Fund has the ability to access; |
• |
Level 2 – Other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs); and |
• |
Level 3 – Unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available, (including the Valuation Committee’s assumptions used in determining the fair value of financial instruments). |
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is
70 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued) |
determined based on the lowest level input that is significant to the fair value measurement in its entirety. Investments classified within Level 3 have significant unobservable inputs used by the Valuation Committee in determining the price for Fair Valued Investments. Level 3 investments include equity or debt issued by privately held companies or funds that may not have a secondary market and/or may have a limited number of investors. The categorization of a value determined for financial instruments is based on the pricing transparency of the financial instruments and is not necessarily an indication of the risks associated with investing in those securities.
4. |
SECURITIES AND OTHER INVESTMENTS |
Securities Lending: Each Fund may lend its securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by an approved bank, or securities issued or guaranteed by the U.S. government. The initial collateral received by each Fund is required to have a value of at least 102% of the current market value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Fund and any additional required collateral is delivered to the Fund or excess collateral is returned by the Fund, on the next business day. During the term of the loan, each Fund is entitled to all distributions made on or in respect of the loaned securities but does not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.
As of period end, any securities on loan were collateralized by cash and/or U.S. Government obligations. Cash collateral invested in money market funds managed by BFA, or its affiliates is disclosed in the Schedule of Investments. Any non-cash collateral received cannot be sold, re-invested or pledged by the Fund, except in the event of borrower default. The securities on loan, if any, are also disclosed in each Fund’s Schedule of Investments. The market value of any securities on loan and the value of any related cash collateral are disclosed in the Statements of Assets and Liabilities.
Securities lending transactions are entered into by the Funds under Master Securities Lending Agreements (each, an “MSLA”) which provide the right, in the event of default (including bankruptcy or insolvency) for the non-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, the Funds, as lender, would offset the market value of the collateral received against the market value of the securities loaned. When the value of the collateral is greater than that of the market value of the securities loaned, the lender is left with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, absent an event of default, the borrower can resell or re-pledge the loaned securities, and the Funds can reinvest cash collateral received in connection with loaned securities. Upon an event of default, the parties’ obligations to return the securities or collateral to the other party are extinguished, and the parties can resell or re-pledge the loaned securities or the collateral received in connection with the loaned securities in order to satisfy the defaulting party’s net payment obligation for all transactions under the MSLA. The defaulting party remains liable for any deficiency.
As of period end, the following table is a summary of the securities on loan by counterparty which are subject to offset under an MSLA:
|
||||||||||||||||
iShares ETF and Counterparty | |
Securities Loaned at Value |
|
|
Cash Collateral Received |
(a) |
|
Non-Cash
Collateral Received, at Fair Value |
(a) |
Net Amount | ||||||
|
||||||||||||||||
Breakthrough Environmental Solutions |
||||||||||||||||
BofA Securities, Inc. |
$ | 21,545 | $ | (21,545 | ) | $ | — | $ | — | |||||||
UBS AG |
91,098 | (91,098 | ) | — | — | |||||||||||
UBS Securities LLC |
13,818 | (13,299 | ) | — | 519 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 126,461 | $ | (125,942 | ) | $ | — | $ | 519 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Cybersecurity and Tech |
||||||||||||||||
BofA Securities, Inc. |
$ | 16,411,041 | $ | (16,411,041 | ) | $ | — | $ | — | |||||||
Citigroup Global Markets, Inc. |
4,927,797 | (4,927,797 | ) | — | — | |||||||||||
Goldman Sachs & Co. LLC |
1,272,910 | (1,269,913 | ) | — | 2,997 | (b) | ||||||||||
HSBC Bank PLC |
15,853 | (15,205 | ) | — | 648 | |||||||||||
J.P. Morgan Securities LLC |
1,089,712 | (1,089,712 | ) | — | — | |||||||||||
RBC Capital Markets LLC |
83,280 | (83,192 | ) | — | 88 | (b) | ||||||||||
UBS AG |
863,506 | (817,869 | ) | — | 45,637 | (b) | ||||||||||
Virtu Americas LLC |
3,103,872 | (3,045,872 | ) | — | 58,000 | (b) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 27,767,971 | $ | (27,660,601 | ) | $ | — | $ | 107,370 | ||||||||
|
|
|
|
|
|
|
|
N O T E S T O F I N A N C I A L S T A T E M E N T S |
71 |
Notes to Financial Statements (continued) |
|
||||||||||||||||
iShares ETF and Counterparty | |
Securities Loaned at Value |
|
|
Cash Collateral Received |
(a) |
|
Non-Cash Collateral Received, at Fair Value |
(a) |
Net Amount | ||||||
|
||||||||||||||||
Exponential Technologies |
||||||||||||||||
Barclays Bank PLC |
$ | 9,430,607 | $ | (9,365,622 | ) | $ | — | $ | 64,985 | |||||||
Barclays Capital, Inc. |
10,071,418 | (9,890,267 | ) | — | 181,151 | (b) | ||||||||||
BNP Paribas SA |
19,148,806 | (17,884,727 | ) | — | 1,264,079 | |||||||||||
BofA Securities, Inc. |
33,955,090 | (33,955,090 | ) | — | — | |||||||||||
Citadel Clearing LLC |
3,856,698 | (3,856,698 | ) | — | — | |||||||||||
Citigroup Global Markets, Inc. |
5,916,851 | (5,858,826 | ) | — | 58,025 | (b) | ||||||||||
Goldman Sachs & Co. LLC |
32,576,583 | (31,514,789 | ) | — | 1,061,794 | |||||||||||
HSBC Bank PLC |
5,362,297 | (5,362,297 | ) | — | — | |||||||||||
J.P. Morgan Securities LLC |
46,752,228 | (46,537,233 | ) | — | 214,995 | (b) | ||||||||||
Jefferies LLC |
4,682,192 | (4,682,192 | ) | — | — | |||||||||||
Natixis SA |
1,934,238 | (1,922,353 | ) | — | 11,885 | |||||||||||
SG Americas Securities LLC |
460,394 | (460,356 | ) | — | 38 | (b) | ||||||||||
State Street Bank & Trust Co. |
914,531 | (914,531 | ) | — | — | |||||||||||
Toronto-Dominion Bank |
21,836,756 | (21,836,756 | ) | — | — | |||||||||||
UBS AG |
1,717,656 | (1,640,820 | ) | — | 76,836 | (b) | ||||||||||
Wells Fargo Bank N.A. |
218,715 | (218,715 | ) | — | — | |||||||||||
Wells Fargo Securities LLC |
27,331,642 | (26,815,196 | ) | — | 516,446 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 226,166,702 | $ | (222,716,468 | ) | $ | — | $ | 3,450,234 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Future Cloud 5G and Tech |
||||||||||||||||
Barclays Bank PLC |
$ | 45,283 | $ | (44,747 | ) | $ | — | $ | 536 | (b) | ||||||
BNP Paribas SA |
377,440 | (375,155 | ) | — | 2,285 | (b) | ||||||||||
HSBC Bank PLC |
150,905 | (150,905 | ) | — | — | |||||||||||
Toronto-Dominion Bank |
103,134 | (102,495 | ) | — | 639 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 676,762 | $ | (673,302 | ) | $ | — | $ | 3,460 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Genomics Immunology and Healthcare |
||||||||||||||||
Barclays Capital, Inc. |
$ | 1,407,194 | $ | (1,407,194 | ) | $ | — | $ | — | |||||||
BNP Paribas SA |
568,174 | (565,636 | ) | — | 2,538 | (b) | ||||||||||
Citadel Clearing LLC |
890,292 | (890,292 | ) | — | — | |||||||||||
Citigroup Global Markets, Inc. |
206,725 | (206,725 | ) | — | — | |||||||||||
J.P. Morgan Securities LLC |
15,702,323 | (15,702,323 | ) | — | — | |||||||||||
Jefferies LLC |
2,008,827 | (1,967,020 | ) | — | 41,807 | (b) | ||||||||||
State Street Bank & Trust Co. |
108,007 | (108,007 | ) | — | — | |||||||||||
Toronto-Dominion Bank |
104,185 | (104,185 | ) | — | — | |||||||||||
UBS AG |
1,621,145 | (1,621,145 | ) | — | — | |||||||||||
Virtu Americas LLC |
729,492 | (729,492 | ) | — | — | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 23,346,364 | $ | (23,302,019 | ) | $ | — | $ | 44,345 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Neuroscience and Healthcare |
||||||||||||||||
Barclays Capital, Inc. |
$ | 8,558 | $ | (8,558 | ) | $ | — | $ | — | |||||||
BofA Securities, Inc. |
2,054 | (2,054 | ) | — | — | |||||||||||
Goldman Sachs & Co. LLC |
325,054 | (325,054 | ) | — | — | |||||||||||
HSBC Bank PLC |
21,096 | (21,096 | ) | — | — | |||||||||||
J.P. Morgan Securities LLC |
37,430 | (37,430 | ) | — | — | |||||||||||
UBS AG |
253,406 | (253,406 | ) | — | — | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 647,598 | $ | (647,598 | ) | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
72 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued) |
|
||||||||||||||||
iShares ETF and Counterparty | |
Securities Loaned at Value |
|
|
Cash Collateral Received |
(a) |
|
Non-Cash Collateral Received, at Fair Value |
(a) |
Net Amount | ||||||
|
||||||||||||||||
Robotics and Artificial Intelligence Multisector |
||||||||||||||||
Barclays Capital, Inc. |
$ | 2,758,428 | $ | (2,758,428 | ) | $ | — | $ | — | |||||||
BNP Paribas SA |
526,031 | (526,031 | ) | — | — | |||||||||||
BofA Securities, Inc. |
2,150,064 | (2,150,064 | ) | — | — | |||||||||||
Citadel Clearing LLC |
4,628,557 | (4,587,016 | ) | — | 41,541 | |||||||||||
Citigroup Global Markets, Inc. |
5,175,614 | (5,069,059 | ) | — | 106,555 | (b) | ||||||||||
Credit Suisse Securities (USA) LLC |
300 | (289 | ) | — | 11 | (b) | ||||||||||
Goldman Sachs & Co. LLC |
13,789,352 | (13,595,026 | ) | — | 194,326 | (b) | ||||||||||
HSBC Bank PLC |
102,630 | (98,962 | ) | — | 3,668 | |||||||||||
J.P. Morgan Securities LLC |
8,170,049 | (8,170,049 | ) | — | — | |||||||||||
Jefferies LLC |
132,123 | (132,123 | ) | — | — | |||||||||||
Morgan Stanley |
3,714,420 | (3,714,420 | ) | — | — | |||||||||||
Nomura Securities International, Inc. |
179,435 | (179,435 | ) | — | — | |||||||||||
State Street Bank & Trust Co. |
1,045,195 | (1,045,195 | ) | — | — | |||||||||||
Toronto-Dominion Bank |
2,364,788 | (2,364,788 | ) | — | — | |||||||||||
UBS AG |
655,208 | (655,208 | ) | — | — | |||||||||||
UBS Securities LLC |
1,156,386 | (1,156,386 | ) | — | — | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 46,548,580 | $ | (46,202,479 | ) | $ | — | $ | 346,101 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Self-Driving EV and Tech |
||||||||||||||||
Barclays Capital, Inc. |
$ | 6,428,476 | $ | (6,428,476 | ) | $ | — | $ | — | |||||||
BNP Paribas SA |
38,160,197 | (38,160,197 | ) | — | — | |||||||||||
Citigroup Global Markets, Inc. |
5,778,421 | (5,500,528 | ) | — | 277,893 | (b) | ||||||||||
ING Financial Markets LLC |
72,982 | (68,330 | ) | — | 4,652 | (b) | ||||||||||
J.P. Morgan Securities LLC |
31,746,603 | (31,746,603 | ) | — | — | |||||||||||
Jefferies LLC |
1,877,712 | (1,877,712 | ) | — | — | |||||||||||
National Financial Services LLC |
3,440,542 | (3,440,542 | ) | — | — | |||||||||||
UBS AG |
3,828,603 | (3,828,603 | ) | — | — | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 91,333,536 | $ | (91,050,991 | ) | $ | — | $ | 282,545 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Virtual Work and Life Multisector |
||||||||||||||||
Barclays Bank PLC |
$ | 54,315 | $ | (54,047 | ) | $ | — | $ | 268 | |||||||
BofA Securities, Inc. |
15,000 | (15,000 | ) | — | — | |||||||||||
Citadel Clearing LLC |
62,076 | (61,574 | ) | — | 502 | (b) | ||||||||||
Goldman Sachs & Co. LLC |
144,037 | (141,499 | ) | — | 2,538 | (b) | ||||||||||
J.P. Morgan Securities LLC |
81,789 | (80,661 | ) | — | 1,128 | (b) | ||||||||||
UBS AG |
807 | (807 | ) | — | — | |||||||||||
UBS Securities LLC |
83,718 | (83,718 | ) | — | — | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 441,742 | $ | (437,306 | ) | $ | — | $ | 4,436 | ||||||||
|
|
|
|
|
|
|
|
(a) |
Collateral received, if any, in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by each Fund is disclosed in the Fund’s Statements of Assets and Liabilities. |
(b) |
The market value of the loaned securities is determined as of July 31, 2023. Additional collateral is delivered to the Fund on the next business day in accordance with the MSLA. The net amount would be subject to the borrower default indemnity in the event of default by a counterparty. |
The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, each Fund benefits from a borrower default indemnity provided by BlackRock, Inc. (“BlackRock”). BlackRock’s indemnity allows for full replacement of the securities loaned to the extent the collateral received does not cover the value of the securities loaned in the event of borrower default. Each Fund could incur a loss if the value of an investment purchased with cash collateral falls below the market value of the loaned securities or if the value of an investment purchased with cash collateral falls below the value of the original cash collateral received. Such losses are borne entirely by each Fund.
5. |
DERIVATIVE FINANCIAL INSTRUMENTS |
Futures Contracts: Futures contracts are purchased or sold to gain exposure to, or manage exposure to, changes in interest rates (interest rate risk) and changes in the value of equity securities (equity risk) or foreign currencies (foreign currency exchange rate risk).
Futures contracts are exchange-traded agreements between the Funds and a counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and on a specified date. Depending on the terms of a contract, it is settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash amount on the settlement date. Upon entering into a futures contract, the Funds are required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on a contract’s size and risk profile. The initial margin deposit must then be maintained at an established level over the life of the contract. Amounts pledged, which are considered restricted, are included in cash pledged for futures contracts in the Statements of Assets and Liabilities.
N O T E S T O F I N A N C I A L S T A T E M E N T S |
73 |
Notes to Financial Statements (continued) |
Securities deposited as initial margin are designated in the Schedule of Investments and cash deposited, if any, are shown as cash pledged for futures contracts in the Statements of Assets and Liabilities. Pursuant to the contract, the Funds agree to receive from or pay to the broker an amount of cash equal to the daily fluctuation in market value of the contract (“variation margin”). Variation margin is recorded as unrealized appreciation (depreciation) and, if any, shown as variation margin receivable (or payable) on futures contracts in the Statements of Assets and Liabilities. When the contract is closed, a realized gain or loss is recorded in the Statements of Operations equal to the difference between the notional amount of the contract at the time it was opened and the notional amount at the time it was closed. The use of futures contracts involves the risk of an imperfect correlation in the movements in the price of futures contracts and interest rates, foreign currency exchange rates or underlying assets.
6. |
INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES |
Investment Advisory Fees: Pursuant to an Investment Advisory Agreement with the Trust, BFA manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock. Under the Investment Advisory Agreement, BFA is responsible for substantially all expenses of the Funds, except (i) interest and taxes; (ii) brokerage commissions and other expenses connected with the execution of portfolio transactions; (iii) distribution fees; (iv) the advisory fee payable to BFA; and (v) litigation expenses and any extraordinary expenses (in each case as determined by a majority of the independent trustees).
For its investment advisory services to each of the following Funds, BFAis entitled to an annual investment advisory fee, accrued daily and paid monthly by the Funds, based on the average daily net assets of each Fund as follows:
iShares ETF | Investment Advisory Fees | |||
Breakthrough Environmental Solutions |
0.47 | % | ||
Cybersecurity and Tech |
0.47 | |||
Future Cloud 5G and Tech |
0.47 | |||
Genomics Immunology and Healthcare |
0.47 | |||
Neuroscience and Healthcare |
0.47 | |||
Robotics and Artificial Intelligence Multisector |
0.47 | |||
Self-Driving EV and Tech |
0.47 | |||
Virtual Work and Life Multisector |
0.47 |
For its investment advisory services to the iShares Exponential Technologies ETF, BFA is entitled to an annual investment advisory fee, accrued daily and paid monthly by the Fund, based on the Fund’s allocable portion of the aggregate of the average daily net assets of the Fund and certain other iShares funds, as follows:
Aggregate Average Net Assets | Investment Advisory Fees | |||
First $2 billion |
0.4700 | % | ||
Over $2 billion, up to and including $3 billion |
0.4465 | |||
Over $3 billion, up to and including $4 billion |
0.4242 | |||
Over $4 billion |
0.4030 |
Distributor: BlackRock Investments, LLC, an affiliate of BFA, is the distributor for each Fund. Pursuant to the distribution agreement, BFA is responsible for any fees or expenses for distribution services provided to the Funds.
Securities Lending: The U.S. Securities and Exchange Commission (the “SEC”) has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (“BTC”), an affiliate of BFA, to serve as securities lending agent for the Funds, subject to applicable conditions. As securities lending agent, BTC bears all operational costs directly related to securities lending, including any custodial costs. Each Fund is responsible for fees in connection with the investment of cash collateral received for securities on loan (the “collateral investment fees”). The cash collateral is invested in a money market fund, BlackRock Cash Funds: Institutional or BlackRock Cash Funds: Treasury, managed by BFA, or its affiliates. However, BTC has agreed to reduce the amount of securities lending income it receives in order to effectively limit the collateral investment fees each Fund bears to an annual rate of 0.04%. The SL Agency Shares of such money market fund will not be subject to a sales load, distribution fee or service fee. The money market fund in which the cash collateral has been invested may, under certain circumstances, impose a liquidity fee of up to 2% of the value redeemed or temporarily restrict redemptions for up to 10 business days during a 90 day period, in the event that the money market fund’s weekly liquid assets fall below certain thresholds.
Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment fees. Each Fund retains a portion of securities lending income and remits the remaining portion to BTC as compensation for its services as securities lending agent.
Pursuant to the current securities lending agreement, each of iShares Cybersecurity and Tech ETF and iShares Neuroscience and Healthcare ETF (the “Group 1 Funds”), retains 81% of securities lending income (which excludes collateral investment fees) and the amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees.
Pursuant to the current securities lending agreement, each of iShares Breakthrough Environmental Solutions ETF, iShares Exponential Technologies ETF, iShares Future Cloud 5G and Tech ETF, iShares Genomics Immunology and Healthcare ETF, iShares Robotics and Artificial Intelligence Multisector ETF, iShares Self-Driving EV and Tech ETF and iShares Virtual Work and Life Multisector ETF (the “Group 2 Funds”), retains 82% of securities lending income (which excludes collateral investment fees) and the amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees.
In addition, commencing the business day following the date that the aggregate securities lending income plus the collateral investment fees generated across all 1940 Act iShares exchange-traded funds (the “iShares ETF Complex”) in a given calendar year exceeds a specified threshold: (1) each Group 1 Fund, pursuant to the securities lending agreement, will retain for the remainder of that calendar year 81% of securities lending income (which excludes collateral investment fees), and the amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees, and (2) each Group 2 Fund will retain for the remainder of that
74 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued) |
calendar year 85% of securities lending income (which excludes collateral investment fees), and the amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees.
The share of securities lending income earned by each Fund is shown as securities lending income – affiliated – net in its Statements of Operations. For the year ended July 31, 2023, the Funds paid BTC the following amounts for securities lending agent services:
iShares ETF | Amounts | |||
Breakthrough Environmental Solutions |
$ | 10 | ||
Cybersecurity and Tech |
34,644 | |||
Exponential Technologies |
470,235 | |||
Future Cloud 5G and Tech |
231 | |||
Genomics Immunology and Healthcare |
100,939 | |||
Neuroscience and Healthcare |
4,226 | |||
Robotics and Artificial Intelligence Multisector |
310,850 | |||
Self-Driving EV and Tech |
880,007 | |||
Virtual Work and Life Multisector |
933 |
Officers and Trustees: Certain officers and/or trustees of the Trust are officers and/or trustees of BlackRock or its affiliates.
Other Transactions: Cross trading is the buying or selling of portfolio securities between funds to which BFA (or an affiliate) serves as investment adviser. At its regularly scheduled quarterly meetings, the Board reviews such transactions as of the most recent calendar quarter for compliance with the requirements and restrictions set forth by Rule 17a-7.
For the year ended July 31, 2023, transactions executed by the Funds pursuant to Rule 17a-7 under the 1940 Act were as follows:
iShares ETF | Purchases | Sales | Net Realized Gain (Loss) |
|||||||||||||||||
Cybersecurity and Tech |
$ | 13,038,440 | $ | 47,438,466 | $ | (23,636,745 | ) | |||||||||||||
Exponential Technologies |
128,718,372 | 189,831,990 | 38,376,409 | |||||||||||||||||
Future Cloud 5G and Tech |
705,728 | 272,102 | (37,265 | ) | ||||||||||||||||
Genomics Immunology and Healthcare |
6,256,675 | 25,278,918 | (4,629,069 | ) | ||||||||||||||||
Robotics and Artificial Intelligence Multisector |
18,621,444 | 17,791,380 | (2,635,272 | ) | ||||||||||||||||
Self-Driving EV and Tech |
29,803,869 | 113,792,431 | (11,130,182 | ) | ||||||||||||||||
Virtual Work and Life Multisector |
304,984 | 161,554 | (224,701 | ) |
Each Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is shown as dividends – affiliated in the Statements of Operations.
A fund, in order to improve its portfolio liquidity and its ability to track its underlying index, may invest in shares of other iShares funds that invest in securities in the fund’s underlying index.
7. |
PURCHASES AND SALES |
For the year ended July 31, 2023, purchases and sales of investments, excluding short-term securities and in-kind transactions, were as follows:
iShares ETF | Purchases | Sales | ||||||
Breakthrough Environmental Solutions |
$ | 884,531 | $ | 370,491 | ||||
Cybersecurity and Tech |
207,631,475 | 206,741,091 | ||||||
Exponential Technologies |
1,416,032,465 | 1,385,719,086 | ||||||
Future Cloud 5G and Tech |
2,855,850 | 3,007,831 | ||||||
Genomics Immunology and Healthcare |
72,294,006 | 73,628,928 | ||||||
Neuroscience and Healthcare |
3,150,123 | 3,049,206 | ||||||
Robotics and Artificial Intelligence Multisector |
144,433,004 | 103,054,276 | ||||||
Self-Driving EV and Tech |
364,955,147 | 366,664,028 | ||||||
Virtual Work and Life Multisector |
1,429,022 | 1,461,532 |
N O T E S T O F I N A N C I A L S T A T E M E N T S |
75 |
Notes to Financial Statements (continued) |
For the year ended July 31, 2023, in-kind transactions were as follows:
iShares ETF | In-kind Purchases |
In-kind Sales |
||||||
Breakthrough Environmental Solutions |
$ | 3,507,534 | $ | — | ||||
Cybersecurity and Tech |
83,877,528 | 50,784,454 | ||||||
Exponential Technologies |
61,059,443 | 153,256,869 | ||||||
Future Cloud 5G and Tech |
— | 1,759,050 | ||||||
Genomics Immunology and Healthcare |
12,855,976 | 16,171,661 | ||||||
Neuroscience and Healthcare |
4,937,895 | — | ||||||
Robotics and Artificial Intelligence Multisector |
156,430,824 | 13,229,277 | ||||||
Self-Driving EV and Tech |
13,753,786 | 31,924,490 | ||||||
Virtual Work and Life Multisector |
— | 1,213,273 |
8. |
INCOME TAX INFORMATION |
Each Fund is treated as an entity separate from the Trust’s other funds for federal income tax purposes. It is each Fund’s policy to comply with the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies, and to distribute substantially all of its taxable income to its shareholders. Therefore, no U.S. federal income tax provision is required.
Management has analyzed tax laws and regulations and their application to the Funds as of July 31, 2023, inclusive of the open tax return years, and does not believe that there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.
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. As of July 31, 2023, permanent differences attributable to net investment loss, distributions paid in excess of taxable income and realized gains (losses) from in-kind redemptions were reclassified to the following accounts:
iShares ETF | Paid-in Capital |
Accumulated Earnings (Loss) |
||||||
Cybersecurity and Tech |
$ | 8,328,729 | $ | (8,328,729 | ) | |||
Exponential Technologies |
35,458,405 | (35,458,405 | ) | |||||
Future Cloud 5G and Tech |
127,463 | (127,463 | ) | |||||
Genomics Immunology and Healthcare |
1,925,033 | (1,925,033 | ) | |||||
Neuroscience and Healthcare |
(3,467 | ) | 3,467 | |||||
Robotics and Artificial Intelligence Multisector |
817,056 | (817,056 | ) | |||||
Self-Driving EV and Tech |
2,400,122 | (2,400,122 | ) | |||||
Virtual Work and Life Multisector |
(405,812 | ) | 405,812 |
The tax character of distributions paid was as follows:
iShares ETF | Period Ended 07/31/23 |
|||
Breakthrough Environmental Solutions |
||||
Ordinary income |
$ | 16,550 | ||
|
|
iShares ETF | Year
Ended 07/31/23 |
Year
Ended 07/31/22 |
||||||
Cybersecurity and Tech |
||||||||
Ordinary income |
$ | 566,608 | $ | 4,167,125 | ||||
|
|
|
|
|||||
Exponential Technologies |
||||||||
Ordinary income |
$ | 17,634,859 | $ | 31,230,965 | ||||
|
|
|
|
|||||
Future Cloud 5G and Tech |
||||||||
Ordinary income |
$ | 50,307 | $ | 63,758 | ||||
|
|
|
|
|||||
Genomics Immunology and Healthcare |
||||||||
Ordinary income |
$ | 435,229 | $ | 2,812,804 | ||||
|
|
|
|
iShares ETF | Period Ended 07/31/23 |
|||
Neuroscience and Healthcare |
||||
Return of capital |
$ | 1,648 | ||
|
|
76 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued) |
iShares ETF | Year Ended 07/31/23 |
Year
Ended 07/31/22 |
||||||
Robotics and Artificial Intelligence Multisector |
||||||||
Ordinary income |
$ | 2,261,595 | $ | 10,540,562 | ||||
|
|
|
|
|||||
Self-Driving EV and Tech |
||||||||
Ordinary income |
$ | 8,577,251 | $ | 9,781,417 | ||||
|
|
|
|
|||||
Virtual Work and Life Multisector |
||||||||
Ordinary income |
$ | 9,849 | $ | 6,350 | ||||
|
|
|
|
As of July 31, 2023, the tax components of accumulated net earnings (losses) were as follows:
iShares ETF | |
Undistributed Ordinary Income |
|
|
Undistributed Long-Term Capital Gains |
|
|
Non-expiring Capital Loss Carryforwards |
(a) |
|
Net Unrealized Gains (Losses) |
(b) |
|
Qualified Late-Year Losses |
(c) |
Total | ||||||||
Breakthrough Environmental Solutions |
$ | 57,049 | $ | 577 | $ | — | $ | 268,423 | $ | — | $ | 326,049 | ||||||||||||
Cybersecurity and Tech |
— | — | (46,277,332 | ) | 12,454,929 | (19,340 | ) | (33,841,743 | ) | |||||||||||||||
Exponential Technologies |
1,903,814 | — | (34,675,999 | ) | 590,418,624 | — | 557,646,439 | |||||||||||||||||
Future Cloud 5G and Tech |
17,505 | — | (613,248 | ) | (263,895 | ) | — | (859,638 | ) | |||||||||||||||
Genomics Immunology and Healthcare |
973,171 | — | (74,880,768 | ) | (73,775,180 | ) | — | (147,682,777 | ) | |||||||||||||||
Neuroscience and Healthcare |
— | — | (59,252 | ) | (60,352 | ) | — | (119,604 | ) | |||||||||||||||
Robotics and Artificial Intelligence Multisector |
1,928,437 | — | (62,816,894 | ) | 29,121,902 | — | (31,766,555 | ) | ||||||||||||||||
Self-Driving EV and Tech |
2,667,354 | — | (88,412,872 | ) | 53,597,774 | — | (32,147,744 | ) | ||||||||||||||||
Virtual Work and Life Multisector |
51,062 | — | (1,676,647 | ) | (1,778,476 | ) | — | (3,404,061 | ) |
(a) |
Amounts available to offset future realized capital gains. |
(b) |
The difference between book-basis and tax-basis unrealized gains (losses) was attributable primarily to tax deferral of losses on wash sales, the realization for tax purposes of unrealized gains (losses) on certain futures contracts, the realization for tax purposes of unrealized gains on investments in passive foreign investment companies and the characterization of corporate actions. |
(c) |
The Funds have elected to defer certain qualified late-year losses and recognize such losses in the next taxable year. |
A fund may own shares in certain foreign investment entities, referred to, under U.S. tax law, as “passive foreign investment companies.” Such fund may elect to mark-to-market annually the shares of each passive foreign investment company and would be required to distribute to shareholders any such marked-to-market gains.
As of July 31, 2023, gross unrealized appreciation and depreciation based on cost of investments (including short positions and derivatives, if any) for U.S. federal income tax purposes were as follows:
iShares ETF | Tax Cost | Gross Unrealized Appreciation |
Gross Unrealized Depreciation |
Net Unrealized Appreciation (Depreciation) |
||||||||||||
Breakthrough Environmental Solutions |
$ | 4,201,542 | $ | 493,218 | $ | (224,921) | $ | 268,297 | ||||||||
Cybersecurity and Tech |
633,079,681 | 78,384,938 | (65,929,929 | ) | 12,455,009 | |||||||||||
Exponential Technologies |
3,094,417,499 | 845,263,125 | (254,813,709 | ) | 590,449,416 | |||||||||||
Future Cloud 5G and Tech |
7,100,322 | 870,549 | (1,134,403 | ) | (263,854 | ) | ||||||||||
Genomics Immunology and Healthcare |
242,518,180 | 10,765,045 | (84,546,872 | ) | (73,781,827 | ) | ||||||||||
Neuroscience and Healthcare |
5,636,035 | 538,504 | (598,953 | ) | (60,449 | ) | ||||||||||
Robotics and Artificial Intelligence Multisector |
529,670,905 | 77,052,977 | (47,690,671 | ) | 29,362,306 | |||||||||||
Self-Driving EV and Tech |
531,632,550 | 83,631,690 | (30,056,594 | ) | 53,575,096 | |||||||||||
Virtual Work and Life Multisector |
5,507,101 | 184,988 | (1,963,487 | ) | (1,778,499 | ) |
9. |
LINE OF CREDIT |
The iShares Cybersecurity and Tech ETF, iShares Exponential Technologies ETF, iShares Future Cloud 5G and Tech ETF, iShares Genomics Immunology and Healthcare ETF, iShares Robotics andArtificial Intelligence Multisector ETF, iShares Self-Driving EV and Tech ETF and iShares Virtual Work and Life Multisector ETF, along with certain other iShares funds (“Participating Funds”), are parties to a $800 million credit agreement (“Syndicated Credit Agreement”) with a group of lenders, which expires on August 11, 2023. The line of credit may be used for temporary or emergency purposes, including redemptions, settlement of trades and rebalancing of portfolio holdings in certain target markets. The Funds may borrow up to the aggregate commitment amount subject to asset coverage and other limitations as specified in the Syndicated Credit Agreement. The Syndicated Credit Agreement has the following terms: a commitment fee of 0.15% per annum on the unused portion of the credit agreement and interest at a rate equal to the higher of (a) Daily Simple Secured Overnight Financing Rate (“SOFR”) plus 0.10% and 1.00% per annum or (b) the U.S. Federal Funds rate plus 1.00% per annum on amounts borrowed. The commitment fee is generally allocated to each Participating Fund based on the lesser of a Participating Fund’s relative exposure to certain target markets or a Participating Fund’s maximum borrowing amount as set forth by the terms of the Syndicated Credit Agreement.
N O T E S T O F I N A N C I A L S T A T E M E N T S |
77 |
Notes to Financial Statements (continued) |
During the year ended July 31, 2023, the iShares Cybersecurity and Tech ETF, iShares Exponential Technologies ETF, iShares Future Cloud 5G and Tech ETF, iShares Genomics Immunology and Healthcare ETF and iShares Virtual Work and Life Multisector ETF did not borrow under the Syndicated Credit Agreement.
For the year ended July 31, 2023, the maximum amount borrowed, the average daily borrowing and the weighted average interest rate, if any, under the Syndicated Credit Agreement were as follows:
iShares ETF | Maximum Amount Borrowed |
Average Borrowing |
Weighted Average Interest Rates |
|||||||||
Robotics and Artificial Intelligence Multisector |
$ | 2,100,000 | $ | 23,014 | 5.40 | % | ||||||
Self-Driving EV and Tech |
860,000 | 9,425 | 5.40 |
10. |
PRINCIPAL RISKS |
In the normal course of business, each Fund invests in securities or other instruments and may enter into certain transactions, and such activities subject the Fund to various risks, including, among others, fluctuations in the market (market risk) or failure of an issuer to meet all of its obligations. The value of securities or other instruments may also be affected by various factors, including, without limitation: (i) the general economy; (ii) the overall market as well as local, regional or global political and/or social instability; (iii) regulation, taxation or international tax treaties between various countries; or (iv) currency, interest rate or price fluctuations. Local, regional or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues, recessions, or other events could have a significant impact on the Funds and their investments. Each Fund’s prospectus provides details of the risks to which the Fund is subject.
BFA uses a “passive” or index approach to try to achieve each Fund’s investment objective following the securities included in its underlying index during upturns as well as downturns. BFA does not take steps to reduce market exposure or to lessen the effects of a declining market. Divergence from the underlying index and the composition of the portfolio is monitored by BFA.
The Funds may be exposed to additional risks when reinvesting cash collateral in money market funds that do not seek to maintain a stable NAV per share of $1.00, which may be subject to redemption gates or liquidity fees under certain circumstances.
Infectious Illness Risk: An outbreak of an infectious illness, such as the COVID-19 pandemic, may adversely impact the economies of many nations and the global economy, and may impact individual issuers and capital markets in ways that cannot be foreseen. An infectious illness outbreak may result in, among other things, closed international borders, prolonged quarantines, supply chain disruptions, market volatility or disruptions and other significant economic, social and political impacts.
Valuation Risk: The market values of equities, such as common stocks and preferred securities or equity related investments, such as futures and options, may decline due to general market conditions which are not specifically related to a particular company. They may also decline due to factors which affect a particular industry or industries. A fund may invest in illiquid investments. An illiquid investment is any investment that a fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. A fund may experience difficulty in selling illiquid investments in a timely manner at the price that it believes the investments are worth. Prices may fluctuate widely over short or extended periods in response to company, market or economic news. Markets also tend to move in cycles, with periods of rising and falling prices. This volatility may cause a fund’s NAV to experience significant increases or decreases over short periods of time. If there is a general decline in the securities and other markets, the NAV of a fund may lose value, regardless of the individual results of the securities and other instruments in which a fund invests.
The price each Fund could receive upon the sale of any particular portfolio investment may differ from each Fund’s valuation of the investment, particularly for securities that trade in thin or volatile markets or that are valued using a fair valuation technique or a price provided by an independent pricing service. Changes to significant unobservable inputs and assumptions (i.e., publicly traded company multiples, growth rate, time to exit) due to the lack of observable inputs.
Counterparty Credit Risk: The Funds may be exposed to counterparty credit risk, or the risk that an entity may fail to or be unable to perform on its commitments related to unsettled or open transactions, including making timely interest and/or principal payments or otherwise honoring its obligations. The Funds manage counterparty credit risk by entering into transactions only with counterparties that BFA believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Funds to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Funds’ exposure to market, issuer and counterparty credit risks with respect to these financial assets is approximately their value recorded in the Statements of Assets and Liabilities, less any collateral held by the Funds.
A derivative contract may suffer a mark-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform under the contract.
With exchange-traded futures, there is less counterparty credit risk to the Funds since the exchange or clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, credit risk is limited to failure of the clearinghouse. While offset rights may exist under applicable law, a fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency). Additionally, credit risk exists in exchange-traded futures with respect to initial and variation margin that is held in a clearing broker’s customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Funds.
Geographic/Asset Class Risk: A diversified portfolio, where this is appropriate and consistent with a fund’s objectives, minimizes the risk that a price change of a particular investment will have a material impact on the NAV of a fund. The investment concentrations within each Fund’s portfolio are disclosed in its Schedule of Investments.
78 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued) |
The Funds invest a significant portion of their assets in securities of issuers located in the United States. A decrease in imports or exports, changes in trade regulations, inflation and/or an economic recession in the United States may have a material adverse effect on the U.S. economy and the securities listed on U.S. exchanges. Proposed and adopted policy and legislative changes in the United States may also have a significant effect on U.S. markets generally, as well as on the value of certain securities. Governmental agencies project that the United States will continue to maintain elevated public debt levels for the foreseeable future which may constrain future economic growth. Circumstances could arise that could prevent the timely payment of interest or principal on U.S. government debt, such as reaching the legislative “debt ceiling.” Such non-payment would result in substantial negative consequences for the U.S. economy and the global financial system. If U.S. relations with certain countries deteriorate, it could adversely affect issuers that rely on the United States for trade. The United States has also experienced increased internal unrest and discord. If these trends were to continue, they may have an adverse impact on the U.S. economy and the issuers in which the the Funds invest.
Certain Funds invest a significant portion of their assets in securities of issuers located in Asia or with significant exposure to Asian issuers or countries. The Asian financial markets have recently experienced volatility and adverse trends due to concerns in several Asian countries regarding monetary policy, government intervention in the markets, rising government debt levels or economic downturns. These events may spread to other countries in Asia and may affect the value and liquidity of certain of the Funds’ investments.
Certain Funds invest a significant portion of their assets in securities within a single or limited number of market sectors. When a fund concentrates its investments in this manner, it assumes the risk that economic, regulatory, political and social conditions affecting such sectors may have a significant impact on the fund and could affect the income from, or the value or liquidity of, the fund’s portfolio. Investment percentages in specific sectors are presented in the Schedule of Investments.
Significant Shareholder Redemption Risk: Certain shareholders may own or manage a substantial amount of fund shares and/or hold their fund investments for a limited period of time. Large redemptions of fund shares by these shareholders may force a fund to sell portfolio securities, which may negatively impact the fund’s NAV, increase the fund’s brokerage costs, and/or accelerate the realization of taxable income/gains and cause the fund to make additional taxable distributions to shareholders.
11. |
CAPITAL SHARE TRANSACTIONS |
Capital shares are issued and redeemed by each Fund only in aggregations of a specified number of shares or multiples thereof (“Creation Units”) at NAV. Except when aggregated in Creation Units, shares of each Fund are not redeemable.
Transactions in capital shares were as follows:
|
||||||||
Period Ended 07/31/23(a) |
||||||||
iShares ETF | Shares | Amount | ||||||
|
||||||||
Breakthrough Environmental Solutions |
||||||||
Shares sold |
160,000 | $ | 4,025,360 | |||||
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(a) |
The Fund commenced operations on March 28, 2023. |
|
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Year Ended 07/31/23 |
Year Ended 07/31/22 |
|||||||||||||||
iShares ETF | Shares | Amount | Shares | Amount | ||||||||||||
|
||||||||||||||||
Cybersecurity and Tech |
||||||||||||||||
Shares sold |
2,500,000 | $ | 89,024,383 | 4,600,000 | $ | 198,682,832 | ||||||||||
Shares redeemed |
(1,550,000 | ) | (53,950,714 | ) | (3,950,000 | ) | (164,023,960 | ) | ||||||||
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950,000 | $ | 35,073,669 | 650,000 | $ | 34,658,872 | |||||||||||
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|
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Exponential Technologies |
||||||||||||||||
Shares sold |
1,750,000 | $ | 85,761,417 | 3,700,000 | $ | 234,079,077 | ||||||||||
Shares redeemed |
(3,200,000 | ) | (165,945,583 | ) | (4,200,000 | ) | (223,718,708 | ) | ||||||||
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|||||||||
(1,450,000 | ) | $ | (80,184,166 | ) | (500,000 | ) | $ | 10,360,369 | ||||||||
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|
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Future Cloud 5G and Tech |
||||||||||||||||
Shares sold |
— | $ | — | 80,000 | $ | 2,360,993 | ||||||||||
Shares redeemed |
(80,000 | ) | (1,935,326 | ) | (80,000 | ) | (2,309,983 | ) | ||||||||
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(80,000 | ) | $ | (1,935,326 | ) | — | $ | 51,010 | |||||||||
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Genomics Immunology and Healthcare |
||||||||||||||||
Shares sold |
450,000 | $ | 13,403,128 | 1,150,000 | $ | 54,981,603 | ||||||||||
Shares redeemed |
(700,000 | ) | (18,428,112 | ) | (1,400,000 | ) | (45,991,083 | ) | ||||||||
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(250,000 | ) | $ | (5,024,984 | ) | (250,000 | ) | $ | 8,990,520 | ||||||||
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N O T E S T O F I N A N C I A L S T A T E M E N T S |
79 |
Notes to Financial Statements (continued) |
|
||||||||
Period Ended 07/31/23(a) |
||||||||
iShares ETF | Shares | Amount | ||||||
Neuroscience and Healthcare |
||||||||
Shares sold |
200,000 | $ | 5,050,047 | |||||
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|
(a) |
The Fund commenced operations on August 24, 2022. |
|
||||||||||||||||
Year Ended 07/31/23 |
Year Ended 07/31/22 |
|||||||||||||||
iShares ETF | Shares | Amount | Shares | Amount | ||||||||||||
|
||||||||||||||||
Robotics and Artificial Intelligence Multisector |
||||||||||||||||
Shares sold |
6,200,000 | $ | 197,528,251 | 1,000,000 | $ | 39,951,403 | ||||||||||
Shares redeemed |
(600,000 | ) | (15,267,741 | ) | (1,800,000 | ) | (59,824,686 | ) | ||||||||
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|
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|
|
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|||||||||
5,600,000 | $ | 182,260,510 | (800,000 | ) | $ | (19,873,283 | ) | |||||||||
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|
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|
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|
|
|||||||||
Self-Driving EV and Tech |
||||||||||||||||
Shares sold |
400,000 | $ | 15,998,969 | 3,800,000 | $ | 206,676,608 | ||||||||||
Shares redeemed |
(1,000,000 | ) | (36,838,450 | ) | (1,000,000 | ) | (41,330,218 | ) | ||||||||
|
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|
|
|
|
|
|
|||||||||
(600,000 | ) | $ | (20,839,481 | ) | 2,800,000 | $ | 165,346,390 | |||||||||
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|
|
|
|
|
|||||||||
Virtual Work and Life Multisector |
||||||||||||||||
Shares sold |
— | $ | — | 100,000 | $ | 2,213,935 | ||||||||||
Shares redeemed |
(100,000 | ) | (1,240,169 | ) | (100,000 | ) | (2,762,507 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
(100,000 | ) | $ | (1,240,169 | ) | — | $ | (548,572 | ) | ||||||||
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|
The consideration for the purchase of Creation Units of a fund in the Trust generally consists of the in-kind deposit of a designated portfolio of securities and a specified amount of cash. Certain funds in the Trust may be offered in Creation Units solely or partially for cash in U.S. dollars. Investors purchasing and redeeming Creation Units may pay a purchase transaction fee and a redemption transaction fee directly to State Street Bank and Trust Company, the Trust’s administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash. Investors transacting in Creation Units for cash may also pay an additional variable charge to compensate the relevant fund for certain transaction costs (i.e., stamp taxes, taxes on currency or other financial transactions, and brokerage costs) and market impact expenses relating to investing in portfolio securities. Such variable charges, if any, are included in shares sold in the table above.
From time to time, settlement of securities related to in-kind contributions or in-kind redemptions may be delayed. In such cases, securities related to in-kind transactions are reflected as a receivable or a payable in the Statements of Assets and Liabilities.
12. |
FOREIGN WITHHOLDING TAX CLAIMS |
The Internal Revenue Service (“IRS”) has issued guidance to address U.S. income tax liabilities attributable to fund shareholders resulting from the recovery of foreign taxes withheld in prior calendar years. These withheld foreign taxes were passed through to shareholders in the form of foreign tax credits in the year the taxes were withheld. Assuming there are sufficient foreign taxes paid which the iShares Exponential Technologies ETF is able to pass through to shareholders as a foreign tax credit in the current year, the Fund will be able to offset the prior years’ withholding taxes recovered against the foreign taxes paid in the current year. Accordingly, no federal income tax liability is recorded by the Fund.
13. |
SUBSEQUENT EVENTS |
Management’s evaluation of the impact of all subsequent events on the Funds’ financial statements was completed through the date the financial statements were available to be issued and the following items were noted:
Effective August 11, 2023, the Syndicated Credit Agreement to which the Participating Funds are party was extended until August 2024 under the same terms. As part of the Syndicated Credit Agreement renewal, iShares Breakthrough Environmental Solutions ETF was added as a Participating Fund.
80 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of
iShares Trust and Shareholders of each of the nine funds listed in the table below
Opinions on the Financial Statements
We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of each of the funds listed in the table below (nine of the funds constituting iShares Trust, hereafter collectively referred to as the “Funds”) as of July 31, 2023, the related statements of operations and of changes in net assets for each of the periods indicated below, including the related notes, and the financial highlights for each of the periods included therein (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds as of July 31, 2023, the results of each of their operations and the changes in each of their net assets for the periods indicated in the table below, and each of the financial highlights for each of the periods indicated therein, in conformity with accounting principles generally accepted in the United States of America.
iShares Breakthrough Environmental Solutions ETF(1) |
iShares Cybersecurity and Tech ETF |
iShares Exponential Technologies ETF |
iShares Future Cloud 5G and Tech ETF |
iShares Genomics Immunology and Healthcare ETF |
iShares Neuroscience and Healthcare ETF(2) |
iShares Robotics and Artificial Intelligence Multisector ETF |
iShares Self-Driving EV and Tech ETF |
iShares Virtual Work and Life Multisector ETF |
(1) |
Statement of operations and statement of changes in net assets for the period March 28, 2023 (commencement of operations) to July 31, 2023. |
(2) |
Statement of operations and statement of changes in net assets for the period August 24, 2022 (commencement of operations) to July 31, 2023. |
Basis for Opinions
These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of July 31, 2023 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinions.
/s/PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
September 22, 2023
We have served as the auditor of one or more BlackRock investment companies since 2000.
R E P O R T O F I N D E P E N D E N T R E G I S T E R E D P U B L I C A C C O U N T I N G F I R M |
81 |
Important Tax Information (unaudited)
The following amounts, or maximum amounts allowable by law, are hereby designated as qualified dividend income for individuals for the fiscal year ended July 31, 2023:
iShares ETF | Qualified Dividend Income |
|||
Breakthrough Environmental Solutions |
$ | 30,922 | ||
Cybersecurity and Tech |
2,165,824 | |||
Exponential Technologies |
27,281,164 | |||
Future Cloud 5G and Tech |
56,363 | |||
Genomics Immunology and Healthcare |
1,065,995 | |||
Robotics and Artificial Intelligence Multisector |
1,700,366 | |||
Self-Driving EV and Tech |
9,251,376 | |||
Virtual Work and Life Multisector |
5,160 |
The Funds intend to pass through to their shareholders the following amounts, or maximum amounts allowable by law, of foreign source income earned and foreign taxes paid for the fiscal year ended July 31, 2023:
iShares ETF | Foreign Source Income Earned |
Foreign Taxes Paid |
||||||
Breakthrough Environmental Solutions |
$ | 32,835 | $ | 3,377 | ||||
Self-Driving EV and Tech |
8,377,711 | 1,132,337 |
The following percentage, or maximum percentage allowable by law, of ordinary income distributions paid during the fiscal year ended July 31, 2023 qualified for the dividends-received deduction for corporate shareholders:
iShares ETF | Dividends-Received Deduction |
|||
Breakthrough Environmental Solutions |
1.51 | % | ||
Exponential Technologies |
62.78 | % | ||
Future Cloud 5G and Tech |
57.22 | % | ||
Genomics Immunology and Healthcare |
11.92 | % | ||
Robotics and Artificial Intelligence Multisector |
14.58 | % | ||
Self-Driving EV and Tech |
11.37 | % | ||
Virtual Work and Life Multisector |
3.06 | % |
82 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Board Review and Approval of Investment Advisory Contract
iShares Breakthrough Environmental Solutions ETF (each the “Fund”)
Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Board Members who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Board Members”), is required to consider and approve the proposed Investment Advisory Agreement between the Trust and BFA (the “Advisory Agreement”) on behalf of the Fund. The Independent Board Members requested, and BFA provided, such information as the Independent Board Members, with advice from independent counsel, deemed reasonably necessary to evaluate the terms of the proposed Advisory Agreement. At a meeting held on December 12-14, 2022, the Board, including the Independent Board Members, approved the selection of BFA as investment adviser and approved the proposed Advisory Agreement for the Fund, based on a review of qualitative and quantitative information provided by BFA. The Board also considered information previously provided by BFA, BlackRock Institutional Trust Company, N.A. (“BTC”), and BlackRock, Inc. (“BlackRock”), as applicable, at prior Board meetings. The Independent Board Members were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the Advisory Agreement for the Fund, the Board, including the Independent Board Members, considered various factors, including: (i) the expenses of the Fund; (ii) the nature, extent and quality of the services to be provided by BFA; (iii) the costs of services to be provided to the Fund and the availability of information related to profits to be realized by BFA and its affiliates; (iv) potential economies of scale; (v) the fees and services provided for other comparable funds/accounts managed by BFA and its affiliates; and (vi) other benefits to BFA and/or its affiliates. The material factors, no one of which was controlling, and conclusions that formed the basis for the Board, including the Independent Board Members, to approve the Advisory Agreement are discussed below.
Expenses 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 of the Fund in comparison with the same information for other ETFs, objectively selected by Broadridge as comprising the Fund’s applicable expense peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of the proprietary ETF methodology used by Broadridge to determine the Fund’s Peer Group. The Board noted that due to the limitations in providing comparable funds in the Peer Group, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Fund in all instances.
The Board also noted that the investment advisory fee rate and overall expenses (net of 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.
Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and expense level of the Fund supported the Board’s approval of the Advisory Agreement.
Nature, Extent and Quality of Services to be Provided by BFA: The Board reviewed the scope of services to be provided by BFA under the Advisory Agreement. 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 and have made significant investments into the iShares business to support the iShares funds and their shareholders. The Board considered representations by BFA, BTC, and BlackRock that the scope and quality of services to be provided to the Fund would be similar to the scope and quality of services provided to other iShares funds. The Board also considered BFA’s compliance program and its compliance record with respect to other iShares funds. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made relevant officers and other employees of BFA (and its affiliates) available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons who will be responsible for the day-to-day management of the Fund, as well as the resources that will be available to them in managing the Fund. The Board also considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies, which were provided throughout the year with respect to other iShares funds, and other matters related to BFA’s portfolio compliance program.
Based on review of this information, the Board concluded that the nature, extent and quality of services to be provided to the Fund under the Advisory Agreement supported the Board’s approval of the Advisory Agreement.
Costs of Services to be Provided to the Fund and Profits to be Realized by BFA and Affiliates: The Board did not consider the profitability of the Fund to BFA based on the fees payable under the Advisory Agreement or revenue to be received by BFAor its affiliates in connection with services to be provided to the Fund since the proposed relationship had not yet commenced. The Board noted that it expects to receive profitability information from BFA periodically following the Fund’s launch and will thus be in a position to evaluate whether any new or additional breakpoints or other adjustments in Fund fees would be appropriate.
Economies of Scale: The Board considered information that it had previously received regarding potential economies of scale, efficiencies and scale benefits shared with the iShares funds through relatively low fee rates established at inception, breakpoints, waivers, or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board noted that the Advisory Agreement for the Fund did not provide for breakpoints in the Fund’s investment advisory fee rate as the assets of the Fund increase. However, the Board noted that it would continue to assess the appropriateness of adding breakpoints in the future.
This consideration of potential economies of scale and the sharing of related benefits, as well as the other factors considered at the meeting, supported the Board’s approval of the Advisory Agreement.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates: The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds, and institutional separate accounts (collectively, the “Other Accounts”). The Board acknowledged BFA’s representation that the iShares funds are fundamentally different investment vehicles from the Other Accounts. The Board 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
B O A R D R E V I E W A N D A P P R O V A L O F I N V E S T M E N T A D V I S O R Y C O N T R A C T |
83 |
Board Review and Approval of Investment Advisory Contract (continued)
as the Fund. The Board further noted that BFA previously provided the Board with detailed information regarding how the Other Accounts (particularly institutional clients) generally differ from the iShares funds, including in terms of the different and generally more extensive services provided to the iShares funds, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Fund, as a publicly traded investment vehicle, as compared to the Other Accounts, particularly those that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. The Board considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund’s expenses borne by BFA under this arrangement.
Other Benefits to BFA and/or its Affiliates: Except as noted below, the Board did not consider the “fallout” benefits or ancillary revenue to be received by BFA and/or its affiliates in connection with the services to be provided to the Fund by BFA since the proposed relationship had not yet commenced. However, 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 considered the potential payment of advisory fees and/or administration fees to BFA(or its affiliates) in connection with any investments by the Fund in other funds for which BFA (or its affiliates) provides investment advisory services and/or administration services. The Board also noted the potential revenue to be received by BFA and/or its affiliates pursuant to an agreement that would permit 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 also considered the potential for revenue to BTC, the Fund’s securities lending agent, and its affiliates in the event of any loaning of portfolio securities of the Fund. The Board concluded that any such ancillary benefits would not be disadvantageous to the Fund and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the Advisory Agreement.
Conclusion: Based on a review of the factors described above, as well as such other factors as deemed appropriate by the Board, the Board, including all of the Independent Board Members, determined that the Fund’s investment advisory fee rate under the Advisory Agreement does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services to be rendered and that could not have been the product of arm’s-length bargaining, and concluded to approve the Advisory Agreement.
iShares Cybersecurity and Tech ETF, iShares Future Cloud 5G and Tech ETF, iShares Genomics Immunology and Healthcare ETF, iShares Neuroscience and Healthcare ETF, iShares Robotics and Artificial Intelligence Multisector ETF, iShares Self-Driving EVandTech ETF, iShares Virtual Work and Life Multisector ETF (each the “Fund”)
Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Board Members who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Board Members”), is required annually to consider the approval of the Investment Advisory Agreement between the Trust and BFA (the “Advisory Agreement”) on behalf of the Fund. The Board’s consideration entails a year-long process whereby the Board and its committees (composed solely of Independent Board Members) assess BlackRock’s services to the Fund, including investment management; fund accounting; administrative and shareholder services; oversight of the Fund’s service providers; risk management and oversight; legal and compliance services; and ability to meet applicable legal and regulatory requirements. The Independent Board Members requested, and BFA provided, such information as the Independent Board Members, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Agreement. At meetings on May 2, 2023 and May 15, 2023, a committee composed of all of the Independent Board Members (the “15(c) Committee”), with independent counsel, met with management and reviewed and discussed information provided in response to initial requests of the 15(c) Committee and/or its independent counsel, and requested certain additional information, which management agreed to provide.At a meeting held on June 7-8, 2023, the Board, including the Independent Board Members, reviewed the additional information provided by management in response to these requests.
After extensive discussions and deliberations, the Board, including all of the Independent Board Members, approved the continuance of the Advisory Agreement for the Fund, based on a review of qualitative and quantitative information provided by BFA and their cumulative experience as Board Members. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Independent Board Members were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the continuance of the Advisory Agreement for the Fund, the Board, including the Independent Board Members, considered various factors, including: (i) the expenses and performance of the Fund; (ii) the nature, extent and quality of the services provided by BFA; (iii) the costs of services provided to the Fund and profits realized by BFA and its affiliates; (iv) potential economies of scale and the sharing of related benefits; (v) the fees and services provided for other comparable funds/accounts managed by BFA and its affiliates; and (vi) other benefits to BFA and/or its affiliates. The material factors, none of which was controlling, and conclusions that formed the basis for the Board, including the Independent Board Members, to approve the continuance of the Advisory Agreement are discussed below.
Expenses and Performance of the Fund: The Board reviewed statistical information prepared by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, fees and expenses of other fund(s) in which the Fund invests (if applicable), and waivers/reimbursements (if applicable) of the Fund in comparison with the same information for other ETFs, objectively selected by Broadridge as comprising the Fund’s applicable expense peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of the proprietary ETF methodology used by Broadridge to determine the Fund’s Peer Group. The Board noted that, due to the limitations in providing comparable funds in the Peer Group, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Fund in all instances. The Board also noted that the investment advisory fee rate and overall expenses (net of any waivers and reimbursements) for the Fund were lower than the median of the investment advisory fee rates and overall expenses (net of any waivers and reimbursements) of the funds in its Peer Group, excluding iShares funds.
In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as the Fund, Broadridge also provided, and the Board reviewed, a comparison of the Fund’s performance for the one-year, three-year, five-year, ten-year, and since inception periods, as applicable, and for the quarter ended December 31, 2022, to that of such relevant comparison fund(s) for the same periods. The Board noted that the Fund seeks to track its specified underlying index and that, during the year, the Board received periodic reports on the Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic
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Board Review and Approval of Investment Advisory Contract (continued)
comparative performance information, including additional detailed information as requested by the Board, was also considered. The Board noted that the Fund generally performed in line with its underlying index over the relevant periods.
Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and expense level and the historical performance of the Fund supported the Board’s approval of the continuance of the Advisory Agreement for the coming year.
Nature, Extent and Quality of Services Provided: Based on management’s representations, including information about ongoing enhancements and initiatives with respect to the iShares business, including with respect to capital markets support and analysis, technology, portfolio management, product design and quality, compliance and risk management, global public policy and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Agreement for the coming year as compared with the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to support the iShares funds and their shareholders and have made significant investments into the iShares business. The Board also considered BFA’s compliance program and its compliance record with respect to the Fund, including related programs implemented pursuant to regulatory requirements. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made relevant officers and other employees of BFA (and its affiliates) available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Fund, as well as the resources available to them in managing the Fund. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the May 2, 2023 meeting and throughout the year, and matters related to BFA’s portfolio compliance program and other compliance programs and services.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided to the Fund under the Advisory Agreement supported the Board’s approval of the continuance of the Advisory Agreement for the coming year.
Costs of Services Provided to the Fund and Profits Realized by BFA and its Affiliates: The Board reviewed information about the estimated profitability to BlackRock in managing the Fund, based on the fees payable to BFA and its affiliates (including fees under the Advisory Agreement), and other sources of revenue and expense to BFA and its affiliates from the Fund’s operations for the last calendar year. The Board reviewed BlackRock’s methodology for calculating estimated profitability of the iShares funds, noting that the 15(c) Committee and the Board had focused on the methodology and profitability presentation. The Board recognized that profitability may be affected by numerous factors, including, among other things, fee waivers by BFA, the types of funds managed, expense allocations and business mix. The Board thus recognized that calculating and comparing profitability at individual fund levels is challenging. The Board discussed with management the sources of direct and ancillary revenue, including the revenues to BTC, a BlackRock affiliate, from securities lending by the Fund. The Board also discussed BFA’s estimated profit margin as reflected in the Fund’s profitability analysis and reviewed information regarding potential economies of scale (as discussed below).
Based on this review, the Board concluded that the information considered with respect to the profits realized by BFA and its affiliates under the Advisory Agreement and from other relationships between the Fund and BFA and/or its affiliates, if any, as well as the other factors considered at the meeting, supported the Board’s approval of the continuance of the Advisory Agreement for the coming year.
Economies of Scale: The Board reviewed information and considered the extent to which economies of scale might be realized as the assets of the Fund increase, noting that the issue of potential economies of scale had been focused on by the 15(c) Committee and the Board during their meetings and addressed by management. The 15(c) Committee and the Board received information regarding BlackRock’s historical estimated profitability (as discussed above), including BFA’s and its affiliates’ estimated costs in providing services. The estimated cost information distinguished, among other things, between fixed and variable costs, and showed how the level and nature of fixed and variable costs may impact the existence or size of scale benefits, with the Board recognizing that potential economies of scale are difficult to measure. The 15(c) Committee and the Board reviewed information provided by BFA regarding the sharing of scale benefits with the iShares funds through various means, including, as applicable, through relatively low fee rates established at inception, breakpoints, waivers, or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board noted that the Advisory Agreement for the Fund did not provide for breakpoints in the Fund’s investment advisory fee rate as the assets of the Fund increase. However, the Board noted that it would continue to assess the appropriateness of adding breakpoints in the future.
The Board concluded that this review of potential economies of scale and the sharing of related benefits, as well as the other factors considered at the meeting, supported the Board’s approval of the continuance of the Advisory Agreement for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates: The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds and institutional separate accounts (collectively, the “Other Accounts”). The Board acknowledged BFA’s representation that the iShares funds are fundamentally different investment vehicles from the Other Accounts.
The Board received detailed information regarding how the Other Accounts generally differ from the Fund, including in terms of the types of services and generally more extensive services provided to the Fund, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Fund, as a publicly traded investment vehicle, as compared to the Other Accounts, particularly those that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same investment objective and
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Board Review and Approval of Investment Advisory Contract (continued)
strategy as the Fund and that track the same index as the Fund. The Board also acknowledged management’s assertion that, for certain iShares funds, and for client segmentation purposes, BlackRock has launched an iShares fund that may provide a similar investment exposure at a lower investment advisory fee rate.
The Board considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund’s expenses borne by BFA under this arrangement and noted that the investment advisory fee rate under the Advisory Agreement for the Fund was generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.
Other Benefits to BFA and/or its Affiliates: The Board reviewed other benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Fund by BFA, both direct and indirect, including, but not limited to, payment of revenue to BTC, the Fund’s securities lending agent, for loaning portfolio securities, as applicable (which was included in the profit margins reviewed by the Board pursuant to BFA’s estimated profitability methodology), payment of advisory fees or other fees to BFA (or its affiliates) in connection with any investments by the Fund in other funds for which BFA (or its affiliates) provides investment advisory services or other services, and BlackRock’s profile in the investment community. The Board further considered other direct benefits that might accrue to BFA, including the potential for reduction in the Fund’s expenses that are borne by BFA under the “all-inclusive” management fee arrangement, due in part to the size and scope of BFA’s investment operations servicing the Fund (and other funds in the iShares complex) as well as in response to a changing market environment. The Board also reviewed and considered information provided by BFA concerning authorized participant primary market order processing services that are provided by BlackRock Investments, LLC (“BRIL”), an affiliate of BFA, and paid for by authorized participants under the ETF Servicing Platform. The Board also noted the revenue received by BFA and/or its affiliates pursuant to an agreement that permits a service provider to use certain portions of BlackRock’s technology platform to service accounts managed by BFA and/or its affiliates, including the iShares funds. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Fund. The Board concluded that any such ancillary benefits would not be disadvantageous to the Fund and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Agreement for the coming year.
Conclusion: Based on a review of the factors described above, as well as such other factors as deemed appropriate by the Board, the Board, including all of the Independent Board Members, determined that the Fund’s investment advisory fee rate under the Advisory Agreement does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded to approve the continuance of the Advisory Agreement for the coming year
iShares Exponential Technologies ETF (the “Fund”)
Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Board Members who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Board Members”), is required annually to consider the approval of the Investment Advisory Agreement between the Trust and BFA (the “Advisory Agreement”) on behalf of the Fund. The Board’s consideration entails a year-long process whereby the Board and its committees (composed solely of Independent Board Members) assess BlackRock’s services to the Fund, including investment management; fund accounting; administrative and shareholder services; oversight of the Fund’s service providers; risk management and oversight; legal and compliance services; and ability to meet applicable legal and regulatory requirements. The Independent Board Members requested, and BFA provided, such information as the Independent Board Members, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Agreement. At meetings on May 2, 2023 and May 15, 2023, a committee composed of all of the Independent Board Members (the “15(c) Committee”), with independent counsel, met with management and reviewed and discussed information provided in response to initial requests of the 15(c) Committee and/or its independent counsel, and requested certain additional information, which management agreed to provide.At a meeting held on June 7-8, 2023, the Board, including the Independent Board Members, reviewed the additional information provided by management in response to these requests.
After extensive discussions and deliberations, the Board, including all of the Independent Board Members, approved the continuance of the Advisory Agreement for the Fund, based on a review of qualitative and quantitative information provided by BFA and their cumulative experience as Board Members. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Independent Board Members were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the continuance of the Advisory Agreement for the Fund, the Board, including the Independent Board Members, considered various factors, including: (i) the expenses and performance of the Fund; (ii) the nature, extent and quality of the services provided by BFA; (iii) the costs of services provided to the Fund and profits realized by BFA and its affiliates; (iv) potential economies of scale and the sharing of related benefits; (v) the fees and services provided for other comparable funds/accounts managed by BFA and its affiliates; and (vi) other benefits to BFA and/or its affiliates. The material factors, none of which was controlling, and conclusions that formed the basis for the Board, including the Independent Board Members, to approve the continuance of the Advisory Agreement are discussed below.
Expenses and Performance of the Fund: The Board reviewed statistical information prepared by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, fees and expenses of other fund(s) in which the Fund invests (if applicable), and waivers/reimbursements (if applicable) of the Fund in comparison with the same information for other ETFs, objectively selected by Broadridge as comprising the Fund’s applicable expense peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of the proprietary ETF methodology used by Broadridge to determine the Fund’s Peer Group. The Board noted that, due to the limitations in providing comparable funds in the Peer Group, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Fund in all instances. The Board also noted that the investment advisory fee rate and overall expenses (net of any waivers and reimbursements) for the Fund were lower than the median of the investment advisory fee rates and overall expenses (net of any waivers and reimbursements) of the funds in its Peer Group, excluding iShares funds.
In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as the Fund, Broadridge also provided, and the Board reviewed, a comparison of the Fund’s performance for the one-year, three-year, five-year, ten-year, and since inception periods, as applicable, and for the quarter ended December 31, 2022, to that of such relevant comparison fund(s) for the same periods. The Board noted that the Fund seeks to track its specified underlying
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Board Review and Approval of Investment Advisory Contract (continued)
index and that, during the year, the Board received periodic reports on the Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative performance information, including additional detailed information as requested by the Board, was also considered. The Board noted that the Fund generally performed in line with its underlying index over the relevant periods.
Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and expense level and the historical performance of the Fund supported the Board’s approval of the continuance of the Advisory Agreement for the coming year.
Nature, Extent and Quality of Services Provided: Based on management’s representations, including information about ongoing enhancements and initiatives with respect to the iShares business, including with respect to capital markets support and analysis, technology, portfolio management, product design and quality, compliance and risk management, global public policy and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Agreement for the coming year as compared with the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to support the iShares funds and their shareholders and have made significant investments into the iShares business. The Board also considered BFA’s compliance program and its compliance record with respect to the Fund, including related programs implemented pursuant to regulatory requirements. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made relevant officers and other employees of BFA (and its affiliates) available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Fund, as well as the resources available to them in managing the Fund. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the May 2, 2023 meeting and throughout the year, and matters related to BFA’s portfolio compliance program and other compliance programs and services.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided to the Fund under the Advisory Agreement supported the Board’s approval of the continuance of the Advisory Agreement for the coming year.
Costs of Services Provided to the Fund and Profits Realized by BFA and its Affiliates: The Board reviewed information about the estimated profitability to BlackRock in managing the Fund, based on the fees payable to BFA and its affiliates (including fees under the Advisory Agreement), and other sources of revenue and expense to BFA and its affiliates from the Fund’s operations for the last calendar year. The Board reviewed BlackRock’s methodology for calculating estimated profitability of the iShares funds, noting that the 15(c) Committee and the Board had focused on the methodology and profitability presentation. The Board recognized that profitability may be affected by numerous factors, including, among other things, fee waivers by BFA, the types of funds managed, expense allocations and business mix. The Board thus recognized that calculating and comparing profitability at individual fund levels is challenging. The Board discussed with management the sources of direct and ancillary revenue, including the revenues to BTC, a BlackRock affiliate, from securities lending by the Fund. The Board also discussed BFA’s estimated profit margin as reflected in the Fund’s profitability analysis and reviewed information regarding potential economies of scale (as discussed below).
Based on this review, the Board concluded that the information considered with respect to the profits realized by BFA and its affiliates under the Advisory Agreement and from other relationships between the Fund and BFA and/or its affiliates, if any, as well as the other factors considered at the meeting, supported the Board’s approval of the continuance of the Advisory Agreement for the coming year.
Economies of Scale: The Board reviewed information and considered the extent to which economies of scale might be realized as the assets of the Fund increase, noting that the issue of potential economies of scale had been focused on by the 15(c) Committee and the Board during their meetings and addressed by management. The 15(c) Committee and the Board received information regarding BlackRock’s historical estimated profitability (as discussed above), including BFA’s and its affiliates’ estimated costs in providing services. The estimated cost information distinguished, among other things, between fixed and variable costs, and showed how the level and nature of fixed and variable costs may impact the existence or size of scale benefits, with the Board recognizing that potential economies of scale are difficult to measure. The 15(c) Committee and the Board reviewed information provided by BFA regarding the sharing of scale benefits with the iShares funds through various means, including, as applicable, through relatively low fee rates established at inception, breakpoints, waivers, or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board noted that the Advisory Agreement for the Fund already provided for breakpoints in the Fund’s investment advisory fee rate as the assets of the Fund, on an aggregated basis with the assets of certain other iShares funds, increase. The Board noted that it would continue to assess the appropriateness of adding new or revised breakpoints in the future.
The Board concluded that this review of potential economies of scale and the sharing of related benefits, as well as the other factors considered at the meeting, supported the Board’s approval of the continuance of the Advisory Agreement for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates: The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds and institutional separate accounts (collectively, the “Other Accounts”). The Board acknowledged BFA’s representation that the iShares funds are fundamentally different investment vehicles from the Other Accounts.
The Board received detailed information regarding how the Other Accounts generally differ from the Fund, including in terms of the types of services and generally more extensive services provided to the Fund, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Fund, as a publicly traded investment vehicle, as compared to the Other Accounts, particularly those that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same investment objective and
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Board Review and Approval of Investment Advisory Contract (continued)
strategy as the Fund and that track the same index as the Fund. The Board also acknowledged management’s assertion that, for certain iShares funds, and for client segmentation purposes, BlackRock has launched an iShares fund that may provide a similar investment exposure at a lower investment advisory fee rate.
The Board considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund’s expenses borne by BFA under this arrangement and noted that the investment advisory fee rate under the Advisory Agreement for the Fund was generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.
Other Benefits to BFA and/or its Affiliates: The Board reviewed other benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Fund by BFA, both direct and indirect, including, but not limited to, payment of revenue to BTC, the Fund’s securities lending agent, for loaning portfolio securities, as applicable (which was included in the profit margins reviewed by the Board pursuant to BFA’s estimated profitability methodology), payment of advisory fees or other fees to BFA (or its affiliates) in connection with any investments by the Fund in other funds for which BFA (or its affiliates) provides investment advisory services or other services, and BlackRock’s profile in the investment community. The Board further considered other direct benefits that might accrue to BFA, including the potential for reduction in the Fund’s expenses that are borne by BFA under the “all-inclusive” management fee arrangement, due in part to the size and scope of BFA’s investment operations servicing the Fund (and other funds in the iShares complex) as well as in response to a changing market environment. The Board also reviewed and considered information provided by BFA concerning authorized participant primary market order processing services that are provided by BlackRock Investments, LLC (“BRIL”), an affiliate of BFA, and paid for by authorized participants under the ETF Servicing Platform. The Board also noted the revenue received by BFA and/or its affiliates pursuant to an agreement that permits a service provider to use certain portions of BlackRock’s technology platform to service accounts managed by BFA and/or its affiliates, including the iShares funds. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Fund. The Board concluded that any such ancillary benefits would not be disadvantageous to the Fund and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Agreement for the coming year.
Conclusion: Based on a review of the factors described above, as well as such other factors as deemed appropriate by the Board, the Board, including all of the Independent Board Members, determined that the Fund’s investment advisory fee rate under the Advisory Agreement does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded to approve the continuance of the Advisory Agreement for the coming year.
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Supplemental Information (unaudited)
Section 19(a) Notices
The amounts and sources of distributions reported are estimates and are being provided pursuant to regulatory requirements and are not being provided for tax reporting purposes. The actual amounts and sources for tax reporting purposes will depend upon each Fund’s investment experience during the year and may be subject to changes based on tax regulations. Shareholders will receive a Form 1099-DIV each calendar year that will inform them how to report these distributions for federal income tax purposes.
July 31, 2023
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 |
||||||||||||||||||||||||
Breakthrough Environmental Solutions(a) |
$ | 0.103423 | $ | — | $ | 0.000014 | $ | 0.103437 | 100 | % | — | % | — | % | 100 | % | ||||||||||||||||
Cybersecurity and Tech(a) |
0.023100 | — | 0.014712 | 0.037812 | 61 | — | 39 | 100 | ||||||||||||||||||||||||
Exponential Technologies(a) |
0.281035 | — | 0.011283 | 0.292318 | 96 | — | 4 | 100 | ||||||||||||||||||||||||
Neuroscience and Healthcare(a) |
— | — | 0.008241 | 0.008241 | — | — | 100 | 100 | ||||||||||||||||||||||||
Virtual Work and Life Multisector(a) |
0.016890 | — | 0.032357 | 0.049247 | 34 | — | 66 | 100 |
(a) |
The Fund estimates that it has distributed more than its net investment income and net realized capital gains; therefore, a portion of the distribution may be a return of capital. A return of capital may occur, for example, when some or all of the shareholder’s investment in the Fund is returned to the shareholder. A return of capital does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income”. When distributions exceed total return performance, the difference will incrementally reduce the Fund’s net asset value per share. |
Tailored Shareholder Reports for Open-End Mutual Funds and ETFs
Effective January 24, 2023, the SEC adopted rule and form amendments to require open-end mutual funds and ETFs to transmit concise and visually engaging streamlined annual and semiannual reports to shareholders that highlight key information. Other information, including financial statements, will no longer appear in a streamlined shareholder report but must be available online, delivered free of charge upon request, and filed on a semiannual basis on Form N-CSR. The rule and form amendments have a compliance date of July 24, 2024. At this time, management is evaluating the impact of these amendments on the shareholder reports for the Funds.
Premium/Discount Information
Information on the Fund’s net asset value, market price, premiums and discounts, and bid-ask spreads can be found at iShares.com.
S U P P L E M E N T A L I N F O R M A T I O N |
89 |
Trustee and Officer Information (unaudited)
The Board of Trustees 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 Trustee 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. Trustees who are not “interested persons” (as defined in the 1940 Act) of the Trust are referred to as independent trustees (“Independent Trustees”).
The registered investment companies advised by BFA or its affiliates (the “BlackRock-advised Funds”) are organized into one complex of open-end equity, multi-asset, index and money market funds and ETFs (the “BlackRock Multi-Asset Complex”), one complex of closed-end funds and open-end non-index fixed-income funds (including ETFs) (the “BlackRock Fixed-Income Complex”) and one complex of ETFs (“Exchange-Traded Fund Complex”) (each, a “BlackRock Fund Complex”). Each Fundis included in the Exchange-Traded Fund Complex. Each Trustee also serves as a Director of iShares, Inc. and a Trustee of iShares U.S. ETF Trust and, as a result, oversees all of the funds within the Exchange-Traded Fund Complex, which consists of 387 funds as of July 31, 2023. With the exception of Robert S. Kapito, Salim Ramji and Aaron Wasserman, the address of each Trustee and officer is c/o BlackRock, Inc., 400 Howard Street, San Francisco, CA 94105. The address of Mr. Kapito, Mr. Ramji and Mr. Wasserman is c/o BlackRock, Inc., 50 Hudson Yards, New York, NY 10001. The Board has designated John E. Kerrigan as its Independent Board Chair. Additional information about the Funds’ Trustees 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 Trustees | ||||||
Name (Year of Birth) |
Position(s) |
Principal Occupation(s) During Past 5 Years |
Other Directorships Held by Trustee | |||
Robert S. Kapito(a) (1957) |
Trustee (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); Director of iShares, Inc. (since 2009); Trustee of iShares U.S. ETF Trust (since 2011). | |||
Salim Ramji(b) (1970) |
Trustee (since 2019). | Senior Managing Director, BlackRock, Inc. (since 2014); Global Head of BlackRock’s ETF and Index Investments Business (since 2019); Head of BlackRock’s U.S. Wealth Advisory Business (2015-2019); Global Head of Corporate Strategy, BlackRock, Inc. (2014-2015); Senior Partner, McKinsey & Company (2010-2014). | Director of iShares, Inc. (since 2019); Trustee of iShares U.S. ETF Trust (since 2019). | |||
(a) Robert S. Kapito is deemed to be an “interested person” (as defined in the 1940 Act) of the Trust due to his affiliations with BlackRock, Inc. and its affiliates. (b) Salim Ramji is deemed to be an “interested person” (as defined in the 1940 Act) of the Trust due to his affiliations with BlackRock, Inc. and its affiliates. | ||||||
Independent Trustees | ||||||
Name (Year of Birth) |
Position(s) |
Principal Occupation(s) During Past 5 Years |
Other Directorships Held by Trustee | |||
John E. Kerrigan (1955) |
Trustee (since 2005); Independent Board Chair (since 2022). | Chief Investment Officer, Santa Clara University (since 2002). | Director of iShares, Inc. (since 2005); Trustee of iShares U.S. ETF Trust (since 2011); Independent Board Chair of iShares, Inc. and iShares U.S. ETF Trust (since 2022). | |||
Jane D. Carlin (1956) |
Trustee (since 2015); Risk Committee Chair (since 2016). | Consultant (since 2012); Member of the Audit Committee (2012-2018), Chair of the Nominating and Governance Committee (2017-2018) and Director of PHH Corporation (mortgage solutions) (2012-2018); Managing Director and Global Head of Financial Holding Company Governance & Assurance and the Global Head of Operational Risk Management of Morgan Stanley (2006-2012). | Director of iShares, Inc. (since 2015); Trustee of iShares U.S. ETF Trust (since 2015); Member of the Audit Committee (since 2016), Chair of the Audit Committee (since 2020) and Director of The Hanover Insurance Group, Inc. (since 2016). | |||
Richard L. Fagnani (1954) |
Trustee (since 2017); Audit Committee Chair (since 2019). | Partner, KPMG LLP (2002-2016); Director of One Generation Away (since 2021). | Director of iShares, Inc. (since 2017); Trustee of iShares U.S. ETF Trust (since 2017). |
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Trustee and Officer Information (unaudited) (continued)
Independent Trustees (continued) | ||||||
Name (Year of Birth) |
Position(s) |
Principal Occupation(s) During Past 5 Years |
Other Directorships Held by Trustee | |||
Cecilia H. Herbert (1949) |
Trustee (since 2005); Nominating and Governance and Equity Plus Committee Chairs (since 2022). | Chair of the Finance Committee (since 2019) and Trustee and Member of the Finance, Audit and Quality Committees of Stanford Health Care (since 2016); Trustee of WNET, New York’s public media company (since 2011) and Member of the Audit Committee (since 2018), Investment Committee (since 2011) and Personnel Committee (since 2022); Member of the Wyoming State Investment Funds Committee (since 2022); Director of the Jackson Hole Center for the Arts (since 2021); Trustee of Forward Funds (14 portfolios) (2009-2018); Trustee of Salient MF Trust (4 portfolios) (2015-2018). | Director of iShares, Inc. (since 2005); Trustee of iShares U.S. ETF Trust (since 2011). | |||
Drew E. Lawton (1959) |
Trustee (since 2017); 15(c) Committee Chair (since 2017). | Senior Managing Director of New York Life Insurance Company (2010-2015). | Director of iShares, Inc. (since 2017); Trustee of iShares U.S. ETF Trust (since 2017); Director of Jackson Financial Inc. (since 2021). | |||
John E. Martinez (1961) |
Trustee (since 2003); Securities Lending Committee Chair (since 2019). | Director of Real Estate Equity Exchange, Inc. (since 2005); Director of Cloudera Foundation (2017-2020); and Director of Reading Partners (2012-2016). | Director of iShares, Inc. (since 2003); Trustee of iShares U.S. ETF Trust (since 2011). | |||
Madhav V. Rajan (1964) |
Trustee (since 2011); Fixed-Income Plus Committee Chair (since 2019). | Dean, and George Pratt Shultz Professor of Accounting, University of Chicago Booth School of Business (since 2017); Advisory Board Member (since 2016) and Director (since 2020) of C.M. Capital Corporation; Chair of the Board for the Center for Research in Security Prices, LLC (since 2020); 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). | Director of iShares, Inc. (since 2011); Trustee of iShares U.S. ETF Trust (since 2011). | |||
Officers | ||||||
Name (Year of Birth) |
Position(s) |
Principal Occupation(s) During Past 5 Years | ||||
Dominik Rohé (1973) |
President (since 2023). | Managing Director, BlackRock, Inc. (since 2005); Head of Americas ETF and Index Investments (since 2023); Head of Latin America (2019-2023). | ||||
Trent Walker (1974) |
Treasurer and Chief Financial Officer (since 2020). | Managing Director, BlackRock, Inc. (since September 2019); Chief Financial Officer of iShares Delaware Trust Sponsor LLC, BlackRock Funds, BlackRock Funds II, BlackRock Funds IV, BlackRock Funds V and BlackRock Funds VI (since 2021); Executive Vice President of PIMCO (2016-2019); Senior Vice President of PIMCO (2008-2015); Treasurer (2013-2019) and Assistant Treasurer (2007-2017) of PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, 2 PIMCO-sponsored interval funds and 21 PIMCO-sponsored closed-end funds. | ||||
Aaron Wasserman (1974) |
Chief Compliance Officer (iShares, Inc. and iShares Trust, since 2023; iShares U.S. ETF Trust, since 2023). | Managing Director of BlackRock, Inc. (since 2018); Chief Compliance Officer of the BlackRock Multi-Asset Complex, the BlackRock Fixed-Income Complex and the Exchange-Traded Fund Complex (since 2023); Deputy Chief Compliance Officer for the BlackRock Multi-Asset Complex, the BlackRock Fixed-Income Complex and the Exchange-Traded Fund Complex (2014-2023). | ||||
Marisa Rolland (1980) |
Secretary (since 2022). | Managing Director, BlackRock, Inc. (since 2023); Director, BlackRock, Inc. (2018-2022); Vice President, BlackRock, Inc. (2010-2017). | ||||
Rachel Aguirre (1982) |
Executive Vice President (since 2022). | Managing Director, BlackRock, Inc. (since 2018); Director, BlackRock, Inc. (2009-2018); Head of U.S. iShares Product (since 2022); Head of EII U.S. Product Engineering (since 2021); Co-Head of EII’s Americas Portfolio Engineering (2020-2021); Head of Developed Markets Portfolio Engineering (2016-2019). |
T R U S T E E A N D O F F I C E R I N F O R M A T I O N |
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Trustee and Officer Information (unaudited) (continued)
Officers (continued) | ||||||
Name (Year of Birth) |
Position(s) |
Principal Occupation(s) During Past 5 Years | ||||
Jennifer Hsui (1976) |
Executive Vice President (since 2022). | Managing Director, BlackRock, Inc. (since 2009); Co-Head of Index Equity (since 2022). | ||||
James Mauro (1970) |
Executive Vice President (since 2022). | Managing Director, BlackRock, Inc. (since 2010); Head of Fixed Income Index Investments in the Americas and Head of San Francisco Core Portfolio Management (since 2020). |
Effective March 30, 2023, Dominik Rohé replaced Armando Senra as President.
Effective July 1, 2023, Aaron Wasserman replaced Charles Park as Chief Compliance Officer. |
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Electronic Delivery
Shareholders can sign up for e-mail notifications announcing that the shareholder report or prospectus has been posted on the iShares website at iShares.com. Once you have enrolled, you will no longer receive prospectuses and shareholder reports in the mail.
To enroll in electronic delivery:
• |
Go to icsdelivery.com. |
• |
If your brokerage firm is not listed, electronic delivery may not be available. Please contact your broker-dealer or financial advisor. |
Householding
Householding is an option available to certain fund investors. Householding is a method of delivery, based on the preference of the individual investor, in which a single copy of certain shareholder documents and Rule 30e-3 notices can be delivered to investors who share the same address, even if their accounts are registered under different names. Please contact your broker-dealer if you are interested in enrolling in householding and receiving a single copy of prospectuses and other shareholder documents, or if you are currently enrolled in householding and wish to change your householding status.
Availability of Quarterly Schedule of Investments
The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to their reports on Form N-PORT. The Funds’ Forms N-PORT are available on the SEC’s website at sec.gov. Additionally, each Fund makes its portfolio holdings for the first and third quarters of each fiscal year available at iShares.com/fundreports.
Availability of Proxy Voting Policies and Proxy Voting Records
A description of the policies and procedures that the iShares Funds use to determine how to vote proxies relating to portfolio securities and information about how the iShares Funds voted proxies relating to portfolio securities during the most recent twelve-month period ending June 30 is available without charge, upon request (1) by calling toll-free 1-800-474-2737; (2) on the iShares website at iShares.com; and (3) on the SEC website at sec.gov.
A description of the Trust’s policies and procedures with respect to the disclosure of the Fund’s portfolio securities is available in the Fund Prospectus. The Fund discloses its portfolio holdings daily and provides information regarding its top holdings in Fund fact sheets at iShares.com.
G E N E R A L I N F O R M A T I O N |
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Glossary of Terms Used in this Report
Portfolio Abbreviation
ADR | American Depositary Receipt | |
NVDR | Non-Voting Depositary Receipt | |
NVS | Non-Voting Shares | |
Portfolio Abbreviation | ||
S&P | Standard & Poor’s |
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Want to know more?
iShares.com | 1-800-474-2737
This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.
Investing involves risk, including possible loss of principal.
The iShares Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by ICE Data Indices, LLC or Morningstar Inc., nor do these companies make any representation regarding the advisability of investing in the iShares Funds. BlackRock is not affiliated with the companies listed above.
©2023 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc. or its subsidiaries. All other marks are the property of their respective owners.
iS-AR-701-0723
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