iShares Trust


		SEPTEMBER 30, 2022

2022 Semi-Annual Report

(Unaudited)

iShares Trust

iShares Mortgage Real Estate ETF | REM | Cboe BZX

iShares Residential and Multisector Real Estate ETF | REZ | NYSE Arca

The Markets in Review

Dear Shareholder,

The 12-month reporting period as of September 30, 2022 saw the emergence of significant challenges that disrupted the economic recovery and strong financial markets of 2021. The U.S. economy shrank in the first half of 2022, ending the run of robust growth that followed the reopening of global economies and the development of COVID-19 vaccines. Changes in consumer spending patterns and a tight labor market led to elevated inflation, which reached a 40-year high. Moreover, while the foremost effect of Russia’s invasion of Ukraine has been a severe humanitarian crisis, the ongoing war continued to present challenges for both investors and policymakers.

Equity prices fell as interest rates rose, particularly weighing on relatively high-valuation growth stocks and economically sensitive small-capitalization stocks. While both large- and small-capitalization U.S. stocks fell, declines for small-capitalization U.S. stocks were steeper. Both emerging market stocks and international equities from developed markets fell significantly, pressured by rising interest rates and a strengthening U.S. dollar.

The 10-year U.S. Treasury yield (which is inversely related to bond prices) rose notably during the reporting period as investors reacted to higher inflation and attempted to anticipate its impact on future interest rate changes. The corporate bond market also faced inflationary headwinds, and increasing uncertainty led to higher corporate bond spreads (the difference in yield between U.S. Treasuries and similarly-dated corporate bonds).

The U.S. Federal Reserve (the “Fed”), acknowledging that inflation is proving more persistent than expected, raised interest rates five times while indicating that additional rate hikes were likely. Furthermore, the Fed wound down its bond-buying programs and is accelerating the reduction of its balance sheet. As investors attempted to assess the Fed’s future trajectory, the Fed’s statements late in the reporting period led markets to believe that additional tightening is likely in the near term.

The pandemic’s restructuring of the economy brought an ongoing mismatch between supply and demand, contributing to the current inflationary regime. While growth has slowed in 2022, we believe that taming inflation requires a more dramatic economic decline to bring demand back to a lower level that is more in line with the economy’s capacity. The Fed has been raising interest rates at the fastest pace in decades, and seems set to overtighten in its effort to get inflation back to target. With this in mind, we believe the possibility of a U.S. recession in the near-term is high, and the outlook for Europe and the U.K. is also troubling. Investors should expect a period of higher volatility as markets adjust to the new economic reality and policymakers attempt to adapt to rapidly changing conditions.

In this environment, while we favor an overweight to equities in the long-term, the market’s concerns over excessive rate hikes from central banks moderate our outlook. Rising input costs and a deteriorating economic backdrop in China and Europe are likely to challenge corporate earnings, so we are underweight equities overall in the near term. However, we see better opportunities in credit, where higher spreads provide income opportunities and partially compensate for inflation risk. We believe that investment-grade corporates, local-currency emerging market debt, and inflation-protected bonds (particularly in Europe) offer strong opportunities for a six- to twelve-month horizon.

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.

Sincerely,

LOGO

Rob Kapito

President, BlackRock, Inc.

LOGO

Rob Kapito

President, BlackRock, Inc.


Total Returns as of September 30, 2022
	6-Month		12-Month

U.S. large cap equities (S&P 500^® Index)		(20.20)%		(15.47)%

U.S. small cap equities (Russell 2000^® Index)		(19.01)		(23.50)

International equities (MSCI Europe, Australasia, Far East Index)		(22.51)		(25.13)

Emerging market equities (MSCI Emerging Markets Index)		(21.70)		(28.11)

3-month Treasury bills (ICE BofA 3-Month U.S. Treasury Bill Index)		0.58		0.63

U.S. Treasury securities (ICE BofA 10-Year U.S. Treasury Index)		(10.81)		(16.20)

U.S. investment grade bonds (Bloomberg U.S. Aggregate Bond Index)		(9.22)		(14.60)

Tax-exempt municipal bonds (Bloomberg Municipal Bond Index)		(6.30)		(11.50)

U.S. high yield bonds (Bloomberg U.S. Corporate High Yield 2% Issuer Capped Index)		(10.42)		(14.15)
Past performance is not an indication of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.


2		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


	Page

The Markets in Review		2

Semi-Annual Report:

Fund Summary		4

About Fund Performance		6

Disclosure of Expenses		6

Schedules of Investments		7

Financial Statements:

Statements of Assets and Liabilities		12

Statements of Operations		13

Statements of Changes in Net Assets		14

Financial Highlights		15

Notes to Financial Statements		17

Board Review and Approval of Investment Advisory Contract		23

Supplemental Information		25

General Information		26

Glossary of Terms Used in this Report		27


		3


Fund Summary as of September 30, 2022		iShares^® Mortgage Real Estate ETF

Investment Objective

The iShares Mortgage Real Estate ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. real estate investment trusts (REITs) that hold U.S. residential and commercial mortgages, as represented by the FTSE Nareit All Mortgage Capped 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
	6-Month Total Returns			1 Year			5 Years			10 Years			1 Year			5 Years			10 Years
Fund NAV		(32.47	)%		(36.69	)%		(7.04	)%		(0.21	)%		(36.69	)%		(30.57	)%		(2.03	)%
Fund Market		(32.52	)		(36.75	)		(7.05	)		(0.23	)		(36.75	)		(30.62	)		(2.31	)
Index		(32.46	)		(36.50	)		(6.47	)		0.35			(36.50	)		(28.42	)		3.58

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 (04/01/22)	Ending Account Value (09/30/22)	Expenses Paid During the Period	^(a)	Beginning Account Value (04/01/22)	Ending Account Value (09/30/22)	Expenses Paid During the Period	^(a)	Annualized Expense Ratio
$ 1,000.00	$ 675.30	$ 2.02		$ 1,000.00	$ 1,022.66	$ 2.43		0.48	%

^(a)

Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by 183/365 (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.

Portfolio Information


INDUSTRY ALLOCATION

Industry	Percent of Total Investments^(a)

Mortgage REITs		100.0%

TEN LARGEST HOLDINGS



Security		Percent of Total Investments^(a)
Annaly Capital Management, Inc.		15.4%
Starwood Property Trust, Inc.		11.1
AGNC Investment Corp.		9.2
Blackstone Mortgage Trust, Inc., Class A		8.2
Arbor Realty Trust, Inc.		4.7
Rithm Capital Corp.		4.7
Hannon Armstrong Sustainable Infrastructure Capital, Inc.		4.7
Chimera Investment Corp.		3.2
Apollo Commercial Real Estate Finance, Inc.		3.1
Two Harbors Investment Corp.		3.0

^(a⁾	Excludes money market funds.


4		2 0 2 2 I S H A R E S S E M I - 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 September 30, 2022		iShares^® Residential and Multisector Real Estate ETF

Investment Objective

The iShares Residential and Multisector Real Estate ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. residential, healthcare and self-storage real estate equities, as represented by the FTSE Nareit All Residential Capped 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

	6-Month Total Returns			1 Year			5 Years			10 Years			1 Year			5 Years			10 Years
Fund NAV		(23.79	)%		(13.78	)%		5.62	%		7.97	%		(13.78	)%		31.43	%		115.24	%
Fund Market		(23.87	)		(13.80	)		5.62			7.97			(13.80	)		31.46			115.28
Index		(23.67	)		(13.47	)		6.05			8.37			(13.47	)		34.16			123.49

Expense Example

Actual

Hypothetical 5% Return

Beginning

Ending

Expenses

Beginning

Ending

Expenses

Annualized

Account Value

Paid During

Account Value

Paid During

Expense

(04/01/22)

(09/30/22)

the Period

^(a)

(04/01/22)

(09/30/22)

the Period

^(a)

Ratio

$ 1,000.00

$ 762.10

$ 2.12

$ 1,000.00

$ 1,022.66

$ 2.43

0.48

^(a)

Portfolio Information

INDUSTRY ALLOCATION



Industry		Percent of Total Investments^(a)
Residential REITs		50.0%
Health Care REITs		25.6
Specialized REITs		24.1
Office REITs		0.3

^(a)	Excludes money market funds

TEN LARGEST HOLDINGS



Security		Percent of Total Investments^(a)
Public Storage		12.1%
Welltower, Inc.		7.9
AvalonBay Communities, Inc.		6.8
Equity Residential		6.6
Extra Space Storage, Inc.		6.0
Invitation Homes, Inc.		5.4
Mid-America Apartment Communities, Inc.		4.8
Sun Communities, Inc.		4.5
Essex Property Trust, Inc.		4.4
Ventas, Inc.		4.3


F U N D S U M M A R Y		5

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.


6		2 0 2 2 I S H A R E S S E M I - 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 (unaudited)

September 30, 2022

iShares^® Mortgage Real Estate ETF

(Percentages shown are based on Net Assets)


Security	Shares		Value

Common Stocks

Mortgage REITs — 97.1%
AG Mortgage Investment Trust, Inc.		307,664	$	1,264,499
AGNC Investment Corp.		5,853,048		49,282,664
Angel Oak Mortgage, Inc.^(a)		168,487		2,018,474
Annaly Capital Management, Inc.		4,826,256		82,818,553
Apollo Commercial Real Estate Finance, Inc.		1,991,498		16,529,433
Arbor Realty Trust, Inc.		2,195,747		25,251,091
Ares Commercial Real Estate Corp.		726,427		7,591,162
ARMOUR Residential REIT, Inc.		1,615,114		7,865,605
Blackstone Mortgage Trust, Inc., Class A		1,897,045		44,277,030
BrightSpire Capital, Inc.		1,326,242		8,368,587
Broadmark Realty Capital, Inc.		1,842,822		9,416,821
Chimera Investment Corp.		3,291,260		17,180,377
Dynex Capital, Inc.		619,536		7,217,594
Ellington Financial, Inc.		804,561		9,147,859
Franklin BSP Realty Trust, Inc.		1,191,543		12,832,918
Granite Point Mortgage Trust, Inc.		735,783		4,738,443
Great Ajax Corp.		304,588		2,287,456
Hannon Armstrong Sustainable Infrastructure Capital, Inc.^(a)		842,824		25,225,722
Invesco Mortgage Capital, Inc.		470,536		5,222,950
KKR Real Estate Finance Trust, Inc.		808,317		13,135,151
Ladder Capital Corp.		1,607,995		14,407,635
MFA Financial, Inc.		1,452,762		11,302,488
New York Mortgage Trust, Inc.		5,380,947		12,591,416
Orchid Island Capital, Inc.		504,124		4,133,817
PennyMac Mortgage Investment Trust		1,282,368		15,106,295


Security	Shares		Value

Mortgage REITs (continued)
Ready Capital Corp.		1,048,319	$	10,629,955
Redwood Trust, Inc.		1,651,488		9,479,541
Rithm Capital Corp.		3,447,755		25,237,567
Starwood Property Trust, Inc.		3,273,098		59,635,846
TPG RE Finance Trust, Inc.		975,422		6,827,954
Two Harbors Investment Corp.		4,889,972		16,234,707

				537,259,610


Total Long-Term Investments — 97.1% (Cost: $845,511,933)				537,259,610


Short-Term Securities^(b)(c)(d)

Money Market Funds — 1.3%
BlackRock Cash Funds: Institutional, SL Agency Shares, 3.18%		7,017,712		7,019,817


Total Short-Term Securities — 1.3% (Cost: $7,016,882)				7,019,817


Total Investments — 98.4% (Cost: $852,528,815)				544,279,427

Other Assets Less Liabilities — 1.6%				8,872,472


Net Assets — 100.0%			$	553,151,899

^(a)	All or a portion of this security is on loan.

^(b)	Affiliate of the Fund.

^(c)	Annualized 7-day yield as of period end.

^(d)	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 six months ended September 30, 2022 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:


Affiliated Issuer	Value at 03/31/22		Purchases at Cost			Proceeds from Sale			Net Realized Gain (Loss)		Change in Unrealized Appreciation (Depreciation)		Value at 09/30/22		Shares Held at 09/30/22		Income			Capital Gain Distributions from Underlying Funds
BlackRock Cash Funds: Institutional, SL Agency Shares	$	23,893		$6,989,153	^(a)	$	—		$	3,840	$	2,931	$	7,019,817		7,017,712	$	38,772	^(b)	$	—
BlackRock Cash Funds: Treasury, SL Agency Shares^(c)		1,230,000		—			(1,230,000	)^(a)		—		—		—		—		9,632			—

									$	3,840	$	2,931	$	7,019,817			$	48,404		$	—

^(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 by the Fund.

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

Dow Jones U.S. Real Estate Index

508

12/16/22

16,139

11,159


S C H E D U L E S O F I N V E S T M E N T S		7

Schedule of Investments (unaudited) (continued)

September 30, 2022

iShares^® Mortgage Real Estate 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)	$	—	$	—	$	11,159	$	—	$	—	$	—	$	11,159

^(a)

Net cumulative unrealized appreciation (depreciation) on futures contracts, if any, 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 September 30, 2022, 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	$	—	$	—	$	47,468	$	—	$	—	$	—	$	47,468

Net Change in Unrealized Appreciation (Depreciation) on
Futures contracts	$	—	$	—	$	41,084	$	—	$	—	$	—	$	41,084

Average Quarterly Balances of Outstanding Derivative Financial Instruments


Futures contracts
Average notional value of contracts — long	$	16,117,675

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	$	537,259,610	$	—	$	—	$	537,259,610
Short-Term Securities
Money Market Funds		7,019,817		—		—		7,019,817

	$	544,279,427	$	—	$	—	$	544,279,427

Derivative Financial Instruments^(a)
Assets
Equity Contracts	$	11,159	$	—	$	—	$	11,159

^(a)

Derivative financial instruments are futures contracts. Futures contracts are valued at the unrealized appreciation (depreciation) on the instrument.

See notes to financial statements.


8		2 0 2 2 I S H A R E S S E M I - 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 (unaudited)

September 30, 2022

iShares^® Residential and Multisector Real Estate ETF

(Percentages shown are based on Net Assets)


Security	Shares		Value

Common Stocks

Health Care REITs — 25.4%
CareTrust REIT, Inc.		185,625	$	3,361,669
Community Healthcare Trust, Inc.		45,567		1,492,319
Diversified Healthcare Trust		462,320		457,743
Global Medical REIT, Inc.		117,109		997,769
Healthcare Realty Trust, Inc.		733,175		15,286,699
Healthpeak Properties, Inc.		1,042,872		23,902,626
LTC Properties, Inc.		76,825		2,877,096
Medical Properties Trust, Inc.		1,148,456		13,620,688
National Health Investors, Inc.		82,624		4,670,735
Omega Healthcare Investors, Inc.		454,453		13,401,819
Physicians Realty Trust		432,494		6,504,710
Sabra Health Care REIT, Inc.		443,708		5,821,449
Universal Health Realty Income Trust		24,586		1,062,361
Ventas, Inc.		742,300		29,818,191
Welltower, Inc.		851,216		54,750,213


				178,026,087

Office REITs — 0.3%
Veris Residential, Inc.^(a)		165,583		1,882,679


Residential REITs — 49.7%
American Homes 4 Rent, Class A		586,525		19,243,885
Apartment Income REIT Corp.		297,700		11,497,174
Apartment Investment and Management Co., Class A		287,904		2,101,699
AvalonBay Communities, Inc.		256,281		47,204,397
Bluerock Residential Growth REIT, Inc.		55,089		1,473,631
BRT Apartments Corp.		23,370		474,645
Camden Property Trust		200,482		23,947,575
Centerspace		29,532		1,988,094
Elme Communities		168,043		2,950,835
Equity LifeStyle Properties, Inc.		343,459		21,582,964
Equity Residential		679,466		45,673,705
Essex Property Trust, Inc.		125,681		30,443,709
Independence Realty Trust, Inc.^(b)		426,131		7,129,172
Invitation Homes, Inc.^(b)		1,119,605		37,809,061
Mid-America Apartment Communities, Inc.		214,020		33,188,081


Security	Shares		Value

Residential REITs (continued)
NexPoint Residential Trust, Inc.		43,511	$	2,010,643
Sun Communities, Inc.		232,395		31,450,015
UDR, Inc.		626,145		26,116,508
UMH Properties, Inc.		95,195		1,537,399


				347,823,192

Specialized REITs — 24.0%
CubeSmart		432,234		17,315,294
Extra Space Storage, Inc.^(b)		243,085		41,983,210
Life Storage, Inc.		162,682		18,018,658
National Storage Affiliates Trust^(b)		164,153		6,825,482
Public Storage		286,924		84,014,217


				168,156,861


Total Long-Term Investments — 99.4% (Cost: $889,692,404)				695,888,819


Short-Term Securities^(c)(d)

Money Market Funds — 2.6%
BlackRock Cash Funds: Institutional, SL Agency Shares, 3.18%^(e)		16,649,592		16,654,587
BlackRock Cash Funds: Treasury, SL Agency Shares, 2.81%		1,250,564		1,250,564


Total Short-Term Securities — 2.6% (Cost: $17,902,333)				17,905,151


Total Investments — 102.0% (Cost: $907,594,737)				713,793,970
Liabilities in Excess of Other Assets — (2.0)%				(13,735,925	)


Net Assets — 100.0%			$	700,058,045

^(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.

Affiliates



Affiliated Issuer	Value at 03/31/22		Purchases at Cost			Proceeds from Sale			Net Realized Gain (Loss)		Change in Unrealized Appreciation (Depreciation)		Value at 09/30/22		Shares Held at 09/30/22		Income			Capital Gain Distributions from Underlying Funds

BlackRock Cash Funds: Institutional, SL Agency Shares	$	—	$	16,649,792	^(a)	$	—		$	1,977	$	2,818	$	16,654,587		16,649,592	$	7,053	^(b)	$	—
BlackRock Cash Funds: Treasury, SL Agency Shares		2,910,000		—			(1,659,436	)^(a)		—		—		1,250,564		1,250,564		9,780			—

									$	1,977	$	2,818	$	17,905,151			$	16,833		$	—

^(a)

Represents net amount purchased (sold).

^(b)


S C H E D U L E S O F I N V E S T M E N T S		9

Schedule of Investments (unaudited) (continued)

September 30, 2022

iShares^® Residential and Multisector Real Estate 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
Dow Jones U.S. Real Estate Index		129		12/16/22	$	4,098	$	(243,026	)

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

Liabilities — Derivative Financial Instruments
Futures contracts
Unrealized depreciation on futures contracts^(a)	$	—	$	—	$	243,026	$	—	$	—	$	—	$	243,026

^(a)

Net cumulative unrealized appreciation (depreciation) on futures contracts, if any, are reported in the Schedules of Investments. In the Statement 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 September 30, 2022, 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	$	—	$	—	$	23,157		$	—	$	—	$	—	$	23,157


Net Change in Unrealized Appreciation (Depreciation) on
Futures contracts	$	—	$	—	$	(384,731	)	$	—	$	—	$	—	$	(384,731	)

Average Quarterly Balances of Outstanding Derivative Financial Instruments



Futures contracts
Average notional value of contracts — long	$	4,137,030

For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.


10		2 0 2 2 I S H A R E S S E M I - 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 (unaudited) (continued)

September 30, 2022

iShares^® Residential and Multisector Real Estate ETF

Fair Value Hierarchy as of Period End



	Level 1			Level 2		Level 3		Total

Assets
Investments
Long-Term Investments
Common Stocks	$	695,888,819		$	—	$	—	$	695,888,819
Short-Term Securities
Money Market Funds		17,905,151			—		—		17,905,151

	$	713,793,970		$	—	$	—	$	713,793,970

Derivative Financial Instruments^(a)
Liabilities
Equity Contracts	$	(243,026	)	$	—	$	—	$	(243,026	)

^(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 S O F I N V E S T M E N T S		11

Statements of Assets and Liabilities (unaudited)

September 30, 2022


	iShares Mortgage Real Estate ETF			iShares Residential and Multisector Real Estate ETF

ASSETS
Investments, at value — unaffiliated^(a)(b)	$	537,259,610		$	695,888,819
Investments, at value — affiliated^(c)		7,019,817			17,905,151
Cash		808,769			119,999
Cash pledged for futures contracts		1,211,000			306,000
Receivables:
Investments sold		7,432,599			3,948,129
Securities lending income — affiliated		6,308			1,200
Dividends — unaffiliated		14,411,865			2,934,643
Dividends — affiliated		3,778			3,684
Variation margin on futures contracts		136,856			34,688


Total assets		568,290,602			721,142,313


LIABILITIES
Collateral on securities loaned		7,013,050			16,650,175
Payables:
Investments purchased		1,524,475			551,975
Capital shares redeemed		6,319,159			3,534,625
Investment advisory fees		282,019			347,493

Total liabilities		15,138,703			21,084,268


NET ASSETS	$	553,151,899		$	700,058,045


NET ASSETS CONSIST OF:
Paid-in capital	$	1,209,076,731		$	868,713,285
Accumulated loss		(655,924,832	)		(168,655,240	)


NET ASSETS	$	553,151,899		$	700,058,045


NET ASSET VALUE
Shares outstanding		26,400,000			9,750,000


Net asset value	$	20.95		$	71.80


Shares authorized		Unlimited			Unlimited


Par value		None			None


^(a)Investments, at cost — unaffiliated	$	845,511,933		$	889,692,404
^(b)Securities loaned, at value	$	6,969,670		$	16,390,943
^(c)Investments, at cost — affiliated	$	7,016,882		$	17,902,333

See notes to financial statements.


12		2 0 2 2 I S H A R E S S E M I - 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 (unaudited)

Six Months Ended September 30, 2022


	iShares Mortgage Real Estate ETF			iShares Residential and Multisector Real Estate ETF

INVESTMENT INCOME
Dividends — unaffiliated	$	14,914,644		$	15,540,236
Dividends — affiliated		9,632			9,780
Securities lending income — affiliated — net		38,772			7,053


Total investment income		14,963,048			15,557,069


EXPENSES
Investment advisory		1,935,142			2,394,892

Total expenses		1,935,142			2,394,892


Net investment income		13,027,906			13,162,177


REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments — unaffiliated		(60,948,687	)		(11,677,774	)
Investments — affiliated		3,840			1,977
Futures contracts		47,468			23,157
In-kind redemptions — unaffiliated^(a)		173,072			49,528,714

		(60,724,307	)		37,876,074

Net change in unrealized appreciation (depreciation) on:
Investments — unaffiliated		(243,520,056	)		(323,484,378	)
Investments — affiliated		2,931			2,818
Futures contracts		41,084			(384,731	)


		(243,476,041	)		(323,866,291	)


Net realized and unrealized loss		(304,200,348	)		(285,990,217	)


NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(291,172,442	)	$	(272,828,040	)

^(a)	See Note 2 of the Notes to Financial Statements.

See notes to financial statements.


F I N A N C I A L S T A T E M E N T S		13

Statements of Changes in Net Assets


	iShares Mortgage Real Estate ETF						iShares Residential and Multisector Real Estate ETF
	Six Months Ended 09/30/22 (unaudited)			Year Ended 03/31/22			Six Months Ended 09/30/22 (unaudited)			Year Ended 03/31/22

INCREASE (DECREASE) IN NET ASSETS

OPERATIONS
Net investment income	$	13,027,906		$	32,106,113		$	13,162,177		$	15,723,193
Net realized gain (loss)		(60,724,307	)		131,124,057			37,876,074			107,107,083
Net change in unrealized appreciation (depreciation)		(243,476,041	)		(173,766,987	)		(323,866,291	)		99,352,430

Net increase (decrease) in net assets resulting from operations		(291,172,442	)		(10,536,817	)		(272,828,040	)		222,182,706


DISTRIBUTIONS TO SHAREHOLDERS^(a)
Decrease in net assets resulting from distributions to shareholders		(35,558,183	)		(81,209,640	)		(14,075,997	)		(18,832,367	)


CAPITAL SHARE TRANSACTIONS
Net increase (decrease) in net assets derived from capital share transactions		(95,226,032	)		(446,732,193	)		(301,311,837	)		589,464,681


NET ASSETS
Total increase (decrease) in net assets		(421,956,657	)		(538,478,650	)		(588,215,874	)		792,815,020
Beginning of period		975,108,556			1,513,587,206			1,288,273,919			495,458,899

End of period	$	553,151,899		$	975,108,556		$	700,058,045		$	1,288,273,919

^(a)	Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

See notes to financial statements.


14		2 0 2 2 I S H A R E S S E M I - 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

(For a share outstanding throughout each period)


	iShares Mortgage Real Estate ETF
	Six Months Ended 09/30/22 (unaudited)			Year Ended 03/31/22			Year Ended 03/31/21			Year Ended 03/31/20			Year Ended 03/31/19			Year Ended 03/31/18

Net asset value, beginning of period	$	32.67		$	35.20		$	18.67		$	43.32		$	42.48		$	45.34

Net investment income^(a)		0.47			0.82			1.38			2.61			3.13			2.66
Net realized and unrealized gain (loss)^(b)		(10.86	)		(1.27	)		17.37			(23.51	)		1.52			(1.18	)

Net increase (decrease) from investment operations		(10.39	)		(0.45	)		18.75			(20.90	)		4.65			1.48


Distributions^(c)
From net investment income		(1.33	)		(2.08	)		(1.34	)		(2.60	)		(3.08	)		(3.53	)
Return of capital		—			—			(0.88	)		(1.15	)		(0.73	)		(0.81	)

Total distributions		(1.33	)		(2.08	)		(2.22	)		(3.75	)		(3.81	)		(4.34	)


Net asset value, end of period	$	20.95		$	32.67		$	35.20		$	18.67		$	43.32		$	42.48


Total Return^(d)
Based on net asset value		(32.47	)%^(e)		(1.65	)%		103.62	%		(51.80	)%		11.46	%		3.10	%


Ratios to Average Net Assets^(f)
Total expenses		0.48	%^(g)		0.48	%		0.48	%		0.48	%		0.48	%		0.48	%

Net investment income		3.23	%^(g)		2.30	%		4.94	%		6.16	%		7.22	%		5.82	%


Supplemental Data
Net assets, end of period (000)	$	553,152		$	975,109		$	1,513,587		$	593,850		$	1,252,029		$	1,004,534

Portfolio turnover rate^(h)		16	%		20	%		30	%		29	%		25	%		31	%

^(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)	Not annualized.

^(f)	Excludes fees and expenses incurred indirectly as a result of investments in underlying funds.

^(g)	Annualized.

^(h)	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		15

Financial Highlights

(For a share outstanding throughout each period)


	iShares Residential and Multisector Real Estate ETF
	Six Months Ended 09/30/22 (unaudited)			Year Ended 03/31/22			Year Ended 03/31/21			Year Ended 03/31/20			Year Ended 03/31/19			Year Ended 03/31/18

Net asset value, beginning of period	$	95.78		$	73.95		$	55.26		$	70.64		$	57.61		$	63.14

Net investment income^(a)		1.12			1.46			1.51			1.55			1.80			1.64
Net realized and unrealized gain (loss)^(b)		(23.86	)		21.98			19.29			(14.77	)		13.45			(4.94	)

Net increase (decrease) from investment operations		(22.74	)		23.44			20.80			(13.22	)		15.25			(3.30	)


Distributions^(c)
From net investment income		(1.24	)		(1.50	)		(2.11	)		(2.16	)		(2.00	)		(2.23	)
From net realized gain		—			(0.11	)		—			—			(0.22	)		—

Total distributions		(1.24	)		(1.61	)		(2.11	)		(2.16	)		(2.22	)		(2.23	)


Net asset value, end of period	$	71.80		$	95.78		$	73.95		$	55.26		$	70.64		$	57.61


Total Return^(d)
Based on net asset value		(23.79	)%^(e)		31.85	%		38.23	%		(19.25	)%		26.94	%		(5.41	)%


Ratios to Average Net Assets^(f)
Total expenses		0.48	%^(g)		0.48	%		0.48	%		0.48	%		0.48	%		0.48	%

Net investment income		2.64	%^(g)		1.64	%		2.36	%		2.07	%		2.81	%		2.61	%


Supplemental Data
Net assets, end of period (000)	$	700,058		$	1,288,274		$	495,459		$	331,559		$	430,875		$	285,163

Portfolio turnover rate^(h)		8	%		8	%		7	%		12	%		10	%		19	%

^(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)	Not annualized.

^(f)	Excludes fees and expenses incurred indirectly as a result of investments in underlying funds.

^(g)	Annualized.

^(h)	Portfolio turnover rate excludes in-kind transactions.

See notes to financial statements.


16		2 0 2 2 I S H A R E S S E M I - 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 (unaudited)

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
Mortgage Real Estate		Non-Diversified
Residential and Multisector Real Estate		Non-Diversified

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. 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.

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.

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 and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds. The character and timing of distributions are determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP.

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 Fund’s 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.

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


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		17

Notes to Financial Statements (unaudited) (continued)

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 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^(b)
Mortgage Real Estate
Goldman Sachs & Co. LLC	$	5,770,504	$	(5,764,720	)	$	—	$	5,784
J.P. Morgan Securities LLC		1,085,388		(1,085,388	)		—		—
Natixis SA		47,888		(47,840	)		—		48
Toronto-Dominion Bank		20,366		(20,366	)		—		—
UBS AG		45,524		(45,524	)		—		—

	$	6,969,670	$	(6,963,838	)	$	—	$	5,832


18		2 0 2 2 I S H A R E S S E M I - 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 (unaudited) (continued)


iShares ETF and Counterparty		Securities Loaned at Value		Cash Collateral Received	^(a)		Non-Cash Collateral Received, at Fair Value	^(a)		Net Amount	^(b)
Residential and Multisector Real Estate
Goldman Sachs & Co. LLC	$	10,549,748	$	(10,549,748	)	$	—		$	—
National Financial Services LLC		690,228		(684,750	)		—			5,478
Scotia Capital (USA), Inc.		4,943,715		(4,943,715	)		—			—
UBS Securities LLC		207,252		(206,760	)		—			492

	$	16,390,943	$	(16,384,973	)	$	—		$	5,970

^(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 Funds’ Statements of Assets and Liabilities.

^(b)

The market value of the loaned securities is determined as of September 30, 2022. 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 the 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 to 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.

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, BFA is entitled to an annual investment advisory fee, accrued daily and paid monthly by the Funds, based on the average daily net assets of each Fund as follows:


iShares ETF	Investment Advisory Fees
Mortgage Real Estate		0.48	%
Residential and Multisector Real Estate		0.48

Distributor: BlackRock Investments, LLC (“BRIL”), 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.

ETF Servicing Fees: Each Fund has entered into an ETF Services Agreement with BRIL to perform certain order processing, Authorized Participant communications, and related services in connection with the issuance and redemption of Creation Units (“ETF Services”). BRIL is entitled to a transaction fee from Authorized Participants on each creation or redemption order for the ETF Services provided. Each Fund does not pay BRIL for ETF Services.

Prior to April 25, 2022, ETF Services were performed by State Street Bank and Trust Company.

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


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		19

Notes to Financial Statements (unaudited) (continued)

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 Fund 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.

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 that calendar year exceeds a specified threshold, each 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.

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 six months ended September 30, 2022, the Funds paid BTC the following amounts for securities lending agent services:


iShares ETF	Amounts
Mortgage Real Estate	$	10,215
Residential and Multisector Real Estate		2,999

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 six months ended September 30, 2022, transactions executed by the Funds pursuant to Rule 17a-7 under the 1940 Act were as follows:


iShares ETF	Purchases		Sales		Net Realized Loss
Mortgage Real Estate	$	10,592,266	$	28,010,879	$	(7,567,853	)
Residential and Multisector Real Estate		17,553,110		13,363,828		(4,020,614	)

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 six months ended September 30, 2022, purchases and sales of investments, excluding short-term securities and in-kind transactions, were as follows:


iShares ETF	Purchases		Sales
Mortgage Real Estate	$	130,764,887	$	126,276,944
Residential and Multisector Real Estate		88,731,615		82,086,709

For the six months ended September 30, 2022, in-kind transactions were as follows:


iShares ETF	In-kind Purchases		In-kind Sales
Mortgage Real Estate	$	182,316,503	$	275,203,227
Residential and Multisector Real Estate		167,735,483		467,999,692

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.


20		2 0 2 2 I S H A R E S S E M I - 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 (unaudited) (continued)

Management has analyzed tax laws and regulations and their application to the Funds as of September 30, 2022, 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.

As of March 31, 2022, the Funds had non-expiring capital loss carryforwards available to offset future realized capital gains as follows:


iShares ETF	Amounts
Mortgage Real Estate	$	191,583,889

As of September 30, 2022, 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)
Mortgage Real Estate	$	925,406,870	$	35,232,039	$	(416,348,323	)	$	(381,116,284	)
Residential and Multisector Real Estate		918,075,109		4,376,316		(208,900,481	)		(204,524,165	)

9.	*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.

Market Risk: An outbreak of respiratory disease caused by a novel coronavirus has developed into a global pandemic and has resulted in closing borders, quarantines, disruptions to supply chains and customer activity, as well as general concern and uncertainty. The impact of this pandemic, and other global health crises that may arise in the future, could affect the economies of many nations, individual companies and the market in general in ways that cannot necessarily be foreseen at the present time. This pandemic may result in substantial market volatility and may adversely impact the prices and liquidity of a fund’s investments. Although vaccines have been developed and approved for use by various governments, the duration of this pandemic and its effects cannot be determined with certainty.

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.

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 Fund’s 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 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


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		21

Notes to Financial Statements (unaudited) (continued)

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.

Concentration 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.

The 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.

LIBOR Transition Risk: The United Kingdom’s Financial Conduct Authority announced a phase out of the London Interbank Offered Rate (“LIBOR”). Although many LIBOR rates ceased to be published or no longer are representative of the underlying market they seek to measure after December 31, 2021, a selection of widely used USD LIBOR rates will continue to be published through June 2023 in order to assist with the transition. The Funds may be exposed to financial instruments tied to LIBOR to determine payment obligations, financing terms, hedging strategies or investment value. The transition process away from LIBOR might lead to increased volatility and illiquidity in markets for, and reduce the effectiveness of new hedges placed against, instruments whose terms currently include LIBOR. The ultimate effect of the LIBOR transition process on the Funds is uncertain.

10.

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:



	Six Months Ended 09/30/22						Year Ended 03/31/22
iShares ETF	Shares			Amount			Shares			Amount

Mortgage Real Estate
Shares sold		6,400,000		$	183,567,514			8,400,000		$	299,578,675
Shares redeemed		(9,850,000	)		(278,793,546	)		(21,550,000	)		(746,310,868	)


		(3,450,000	)	$	(95,226,032	)		(13,150,000	)	$	(446,732,193	)


Residential and Multisector Real Estate
Shares sold		1,850,000		$	168,322,933			10,400,000		$	926,228,317
Shares redeemed		(5,550,000	)		(469,634,770	)		(3,650,000	)		(336,763,636	)


		(3,700,000	)	$	(301,311,837	)		6,750,000		$	589,464,681

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 BRIL, 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.

11. SUBSEQUENT EVENTS

Management has evaluated the impact of all subsequent events on the Funds through the date the financial statements were available to be issued and has determined that there were no subsequent events requiring adjustment or additional disclosure in the financial statements.


22		2 0 2 2 I S H A R E S S E M I - 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 Mortgage Real Estate ETF, iShares Residential and Multisector Real Estate 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 and approve 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 3, 2022 and May 18, 2022, 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 13-15, 2022, 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 another fund 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 waivers and reimbursements) for the Fund were higher than the median of the investment advisory fee rates and overall expenses (net of waivers and reimbursements) of the funds in its Peer Group, excluding iShares funds.

In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as the Fund, Broadridge also provided, and the Board reviewed, a comparison of the Fund’s performance for the one-year, three-year, five-year, ten-year, and since inception periods, as applicable, and for the quarter ended December 31, 2021, 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 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 recent 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. 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 3, 2022 meeting and throughout the year, and matters related to BFA’s portfolio compliance program.

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


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		23

Board Review and Approval of Investment Advisory Contract (continued)

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, 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 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 (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 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.

September 30, 2022



	Total Cumulative Distributions for the Fiscal Year-to-Date								% Breakdown of the Total Cumulative Distributions for the Fiscal Year-to-Date

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

Mortgage Real Estate^(a)	$	1.042518	$	—	$	0.290060	$	1.332578		78	%		—	%		22	%		100%
Residential and Multisector Real Estate		1.238873		—		—		1.238873		100			—			—			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.


S U P P L E M E N T A L I N F O R M A T I O N		25


General Information

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.


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Glossary of Terms Used in this Report

Portfolio Abbreviation

REIT Real Estate Investment Trust


G L O S S A R Y O F T E R M S U S E D I N T H I S R E P O R T		27

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 FTSE International Limited, nor does this company make any representation regarding the advisability of investing in the iShares Funds. BlackRock is not affiliated with the company listed above.

iS-SAR-312-0922