iShares, Inc.

Table of Contents

Market Overview

iShares, Inc.

Global Market Overview

Global equity markets advanced during the 12 months ended August 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 13.95% 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-coronavirus 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 several key commodities, including oil, natural gas, and wheat, either stabilized or 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 over the course of 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 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, increasing their spending in both nominal and inflation-adjusted terms. A strong labor market bolstered spending, as unemployment remained low, and the 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 half 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 modestly, as the resilient 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.

Investment Objective

The iShares MSCI Agriculture Producers ETF (the “Fund”) (formerly the iShares MSCI Global Agriculture Producers ETF) seeks to track the investment results of an index composed of global equities of companies primarily engaged in the business of agriculture, as represented by the MSCIACWI Select Agriculture Producers Investable Market Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index.

Performance

GROWTH OF $10,000 INVESTMENT

(AT NET ASSET VALUE)

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

Portfolio Management Commentary

Stocks of global agricultural producers declined during the reporting period. Prices for many cash crops such as corn, wheat, soybeans, coffee, and rice decreased from sharply elevated levels in 2022 as geopolitical and trade tensions eased. Agreements between warring Russia and Ukraine to allow the export of Ukrainian agricultural products through the Black Sea region contributed to the decline in crop prices. Prices briefly rose sharply higher, as Russia withdrew from the agreement in July 2023. Stronger harvests offset increased price volatility amid rising extreme weather events and growing trade restrictions on food. Prices for food inputs such as fertilizers and diesel fuel decreased slightly from record high levels in 2022, although they remained elevated.

Canadian equities detracted the most from the Index’s performance, driven by the materials sector. Although fertilizer prices declined from record highs in 2022, global demand also fell, weighing on the chemicals industry. Prices remained above historic levels, and farmers reduced purchases expecting prices to drop further. North American fertilizer sales rebounded during the spring 2023 planting season, however, demand remained weak in many other markets. While costs for fertilizer manufacturing decreased amid price declines for production inputs such as natural gas, weaker sales volumes offset those gains.

U.S. stocks detracted notably from the Index’s return. In the materials sector, sales of herbicides and pesticides declined as retailers reduced excess inventories and farmers delayed purchases, pressuring the chemicals industry. Revenue from fertilizer sales contracted as fertilizer prices declined.

In China, the consumer staples sector detracted, as pork producers in the packaged foods and meats industry contended with surging cases of African swine fever, a highly infectious and incurable disease. The consumer staples sector in Norway also detracted. Norway’s government implemented a new tax, charging salmon farmers in the packaged foods and meats industry for the use of natural resources.

On the upside, the Italian industrials sector contributed to the Index’s return. The machinery industry advanced amid an increase in sales of farm machinery, as farmers adopted new high-tech equipment to increase efficiency and counter labor shortages.

Portfolio Information

Investment Objective

The iShares MSCI Global Energy Producers ETF(the “Fund”) seeks to track the investment results of an index composed of global equities of companies primarily engaged in the business of energy exploration and production, as represented by the MSCI ACWI Select Energy Producers Investable Market Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index.

Performance

GROWTH OF $10,000 INVESTMENT

(AT NET ASSET VALUE)

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

Portfolio Management Commentary

Stocks of global energy producers advanced for the reporting period despite falling fuel prices. Rising interest rates and high inflation weakened the outlook for global economies and fuel consumption, sending prices lower during the first half of the reporting period. Western governments agreed on a maximum price of $60 per barrel for Russian exports, keeping its oil flowing into world markets and contributing to weaker prices. China’s economy recovered slower than expected in early 2023 following the end of coronavirus pandemic-related lockdowns, which limited demand from the world’s largest importer of oil. However, by June 2023, world oil demand hit record highs, driven by increased airline travel and growing sales to China. In July 2023, Saudi Arabia and Russia announced plans to cut production, which, combined with increased demand, sent prices sharply higher. Natural gas prices dropped from sharply higher prices early in the reporting period after Russia limited exports to Western Europe. In Western Europe, prices declined after countries intensified conservation efforts and secured alternative sources of energy. In North America, record U.S. production weakened prices. The warm winter weather also moderated consumption in Europe and North America, weighing on natural gas prices.

The U.S. energy sector contributed the most to the Index’s performance as companies in the oil, gas, and consumable fuels industry posted strong profits even as oil prices declined, boosted by increased demand and effective cost-cutting measures. Companies rewarded shareholders by buying back their own stock and raising dividends. Despite strong profits, relatively high oil prices, and political pressure to increase production, oil and gas extraction divisions of companies in the industry focused on managing costs, growing profit margins, and returning cash to shareholders rather than investing heavily in new drilling operations.

U.K. energy companies in the oil, gas, and consumable fuels industry also contributed to the Index’s return. Despite decreasing energy prices, energy trading divisions of energy companies benefited from rapid movements in fuel prices in the recent volatile markets. U.K. energy companies also increased dividends and continued to buy back stock.

Portfolio Information

Investment Objective

The iShares MSCI Global Gold Miners ETF(the “Fund”) seeks to track the investment results of an index composed of global equities of companies primarily engaged in the business of gold mining, as represented by the MSCI ACWI Select Gold Miners Investable Market Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index.

Performance

GROWTH OF $10,000 INVESTMENT

(AT NET ASSET VALUE)

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

Portfolio Management Commentary

Global gold mining stocks advanced sharply for the reporting period as the price of gold rose, reflecting increased demand from central banks and other investors. Inflation in developed markets surged in 2022, reaching the highest level since the 1980s in the U.S. and the U.K. Global central banks responded by consistently raising their benchmark policy rates at the fastest pace in two decades. Because gold does not pay interest, its investment appeal generally declines when bond yields increase, offering more attractive options. However, investors also view gold as a hedge against inflation. Amid concerns about slowing economic growth, the Fed paused its benchmark rate increases in June 2023. U.S. inflation, though, remained higher than the Fed’s stated policy target of 2% and rose slightly after the interest rate pause, underpinning demand for gold purchases as U.S. Treasury yields moderated and the U.S. dollar weakened. Gold also benefited from concerns that the U.S. government would default on its debt obligations. As central banks increased their gold purchases, allocations to gold by nonbank investors reached their highest level in over a decade. Gold prices surpassed US$2,000 per ounce for only the second time since reaching an all-time high in August 2020.

From a country perspective, Canada, the world’s fourth-largest gold producer, contributed the most to the Index’s return. Despite rising costs, the country’s gold miners consistently surpassed consensus earnings projections amid solid sales growth, increased production, and record-high export volume. China’s reopening from tight coronavirus restrictions in late 2022 increased demand and prices for copper, benefiting gold miners also sourcing that metal. Meanwhile, rising demand driven by low-carbon technologies for rare earth minerals that Canada produces, such as lithium and cobalt, increased expectations for mergers and consolidation among Canadian mining companies.

South Africa’s mining industry also contributed to the Index’s performance. Stock in the nation’s two leading gold miners increased after they announced a proposed joint venture aimed at creating Africa’s largest gold mine.

Portfolio Information

Investment Objective

The iShares MSCI Global Metals & Mining Producers ETF(the “Fund”) seeks to track the investment results of an index composed of global equities of companies primarily engaged in mining, extraction or production of diversified metals, excluding gold and silver, as represented by the MSCI ACWI Select Metals & Mining Producers ex Gold & Silver Investable Market Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index.

Performance

GROWTH OF $10,000 INVESTMENT

(AT NET ASSET VALUE)

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

Portfolio Management Commentary

Stocks of global metals and mining producers rose for the reporting period despite economic weakness in China. China, the world’s largest metal refining country, consumes approximately half of the world’s industrial metals, so Chinese demand has a large influence on metals prices. Prices for many metals increased during the first half of the reporting period as China ended coronavirus-related lockdowns and businesses restarted production. However, metal prices later weakened due to slowing growth in China, particularly in the resource-intensive manufacturing sector. In addition, a slowdown in China’s real estate industry weakened metals prices, notably iron ore, which is used in the production of steel.

The U.S. metals and mining industry contributed the most to the Index’s performance. Copper producers rose sharply, reflecting strong gains in copper prices. Steel companies reported stronger profits as higher steel prices offset lower sales volumes. Steel manufacturers also benefited from lower prices for scrap iron, which is used in steel production. New U.S. government incentives and funding to encourage investment in alternative energy also improved the outlook for U.S. mining companies.

Australian mining companies also contributed to the Index’s return. Australian miners increased production of industrial metals, including iron ore, copper, and coal, as labor shortages and supply constraints eased. However, escalating costs for labor and energy, particularly diesel, constrained profit growth.

Korean companies in the steel industry also contributed to the Index. The stock price of one steel company climbed sharply higher as investors grew optimistic about its growing business in the electric vehicle industry. The company increased its sales forecast while continuing to pursue its strategic plan for owning the entire process of manufacturing rechargeable batteries.

The stocks of Japanese companies in the steel industry also added to the Index’s performance. Despite slowing sales of steel to the auto industry, Japanese steel manufacturers raised prices, passing higher production costs on to customers.

Conversely, South African mining companies detracted from the Index. A rapid and steep drop in the price of palladium and lower quality output weakened profits.

Portfolio Information

Investment Objective

The iShares MSCI Global Silver and Metals Miners ETF (the “Fund”) seeks to track the investment results of an index composed of global equities of companies primarily engaged in the business of silver exploration or metals mining, as represented by the MSCI ACWI Select Silver Miners Investable Market Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index.

Performance

GROWTH OF $10,000 INVESTMENT

(AT NET ASSET VALUE)

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

Portfolio Management Commentary

Global silver mining stocks advanced for the reporting period as the price of silver increased amid record-high demand for physical silver. Demand for silver jewelry and silverware increased, particularly in India, due to pent-up demand following the coronavirus pandemic. In addition, investors bought silver bars and coins in record-high amounts. Due to its electrical and thermal conductive properties, silver is an important industrial metal, and industrial demand increased during the reporting period. Industrial applications for silver include electronics, solar cells, and electric vehicle batteries. Expectations of rapid growth of solar panel installations and electronics in automobile manufacturing raised concerns that supplies may not meet increased demand in the short term, possibly leading to the largest supply deficit in decades. As U.S. interest rates increased, analysts expected a decline in silver demand, and prices fell in early 2023. In March 2023, turmoil in the global banking sector boosted demand for government bonds, sending yields sharply lower. As that happened, silver prices rebounded strongly and remained relatively steady for the remainder of the reporting period. As silver does not pay interest, its appeal generally increases relative to other investments as bond yields fall, offering a more attractive investment option.

From a country perspective, the Canadian materials sector contributed the most to the Index’s return. As silver prices increased, silver production from Canadian mines increased 32% in 2022 from the prior year. Canada’s government, which introduced a U.S. $3 billion plan in early 2022 to boost domestic production of key strategic minerals, also released a production-friendly strategy document calling for speedier approvals of critical mineral projects. Sales and cash flow from operating activities increased for metals and mining companies in 2022, and their stocks benefited in late 2022 from analysts’ predictions that silver prices will rise higher than gold prices in 2023.

Mexico’s materials sector also contributed to the Index’s performance. Despite inflationary pressure that drove up costs for key inputs, stock in a leading metals and mining company followed global silver prices higher during the reporting period as the company’s production increased.

Portfolio Information

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. 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.

Disclosure of Expenses

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.

Affiliates

Investments in issuers considered to be affiliate(s) of the Fund during the year ended August 31, 2023 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows: