LOGO

  FEBRUARY 28, 2022

 

 

   

 

2022 Semi-Annual Report

(Unaudited)

 

 

iShares Trust

·  iShares MSCI India ETF | INDA | Cboe BZX

·  iShares MSCI India Small-Cap ETF | SMIN | Cboe BZX


The Markets in Review

Dear Shareholder,

The 12-month reporting period as of February 28, 2022 saw a continuation of the resurgent growth that followed the initial coronavirus (or “COVID-19”) pandemic reopening, albeit at a slower pace. The global economy weathered the emergence of several variant strains and the resulting peaks and troughs in infections amid optimism that increasing vaccinations and economic adaptation could help contain the pandemic’s disruptions. However, rapid changes in consumer spending led to supply constraints and elevated inflation. Moreover, while the foremost effect of Russia’s invasion of Ukraine has been a severe humanitarian crisis, the invasion has presented challenges for both investors and policymakers.

Equity prices were mixed, as persistently high inflation drove investors’ expectations for higher interest rates, which particularly weighed on relatively high valuation growth stocks and economically sensitive small-capitalization stocks. Overall, small-capitalization U.S. stocks declined, while large-capitalization U.S. stocks posted a solid advance. International equities from developed markets gained slightly, although emerging market stocks declined, 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 during the reporting period as the economy expanded rapidly and inflation reached its highest annualized reading in decades. In the corporate bond market, the improving economy assuaged credit concerns and led to modest returns for high-yield corporate bonds, outpacing the negative return of investment-grade corporate bonds.

The U.S. Federal Reserve (the “Fed”) maintained accommodative monetary policy during the reporting period by keeping near-zero interest rates. However, the Fed’s tone shifted during the period, as it reduced its bond-buying program and raised the prospect of higher rates in 2022. Continued high inflation and the Fed’s new stance led many analysts to anticipate that the Fed will raise interest rates multiple times throughout the year.

Looking ahead, however, the horrific war in Ukraine has significantly clouded the outlook for the global economy. Sanctions on Russia and general wartime disruption are likely to drive already-high commodity prices even further upwards, and we have already seen spikes in energy and metal markets. While this will exacerbate inflationary pressure, it could also constrain economic growth, making the Fed’s way forward less clear. Its challenge will be combating inflation without stifling a recovery that is now facing additional supply shocks.

In this environment, we favor an overweight to equities, as we believe low interest rates and continued economic growth will support further gains, albeit likely more modest than what we saw in 2021. Sectors that are better poised to manage the transition to a lower-carbon world, such as technology and health care, are particularly attractive in the long term. U.S. and other developed market equities have room for further growth, while we believe Chinese equities stand to gain from a more accommodative monetary and fiscal environment. We are underweight long-term credit, but inflation-protected U.S. Treasuries, Asian fixed income, and emerging market local-currency bonds offer potential opportunities. We believe that international diversification and a focus on sustainability can help provide portfolio resilience, and the disruption created by the coronavirus appears to be accelerating the shift toward sustainable investments.

Overall, our view is that investors need to think globally, extend their scope across a broad array of asset classes, 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 February 28, 2022
     
     6-Month    12-Month 
 

U.S. large cap equities

(S&P 500® Index)

      (2.62)%    16.39%
 

U.S. small cap equities

(Russell 2000® Index)

  (9.46)   (6.01)
 

International equities

(MSCI Europe, Australasia, Far East Index)

  (6.78)   2.83
 

Emerging market equities

(MSCI Emerging Markets Index)

  (9.81)   (10.69)  
 

3-month Treasury bills

(ICE BofA 3-Month U.S. Treasury Bill Index)

  0.02   0.04
 

U.S. Treasury securities

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

  (3.94)   (1.67)
 

U.S. investment grade bonds

(Bloomberg U.S. Aggregate Bond Index)

  (4.07)   (2.64)
 

Tax-exempt municipal bonds

(Bloomberg Municipal Bond Index)

  (3.09)   (0.66)
 

U.S. high yield bonds

(Bloomberg U.S. Corporate High Yield 2% Issuer Capped Index)

  (3.07)   0.64

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

Fund Summary

   4

About Fund Performance

   6

Shareholder Expenses

   6

Consolidated Schedules of Investments

   7

Consolidated Financial Statements

  

Consolidated Statements of Assets and Liabilities

   17

Consolidated Statements of Operations

   18

Consolidated Statements of Changes in Net Assets

   19

Consolidated Financial Highlights

   20

Notes to Consolidated Financial Statements

   22

Statement Regarding Liquidity Risk Management Program

   28

Supplemental Information

   29

General Information

   30

Glossary of Terms Used in this Report

   31

 

 

 


Fund Summary as of February 28, 2022    iShares® MSCI India ETF

 

Investment Objective

The iShares MSCI India ETF (the “Fund”) seeks to track the investment results of an index composed of Indian equities, as represented by the MSCI India 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 Months      1 Year     5 Years     10 Years           1 Year     5 Years     10 Years    

Fund NAV

    (4.56 )%       14.36     10.25   6.70%       14.36     62.90   91.30% 

Fund Market

    (4.13      13.67       10.23     6.80          13.67       62.73     93.05    

Index

    (4.95      16.29       11.58     7.66            16.29       72.92     109.24    

The inception date of the Fund was 2/2/12. The first day of secondary market trading was 2/3/12.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 6 for more information.

Expense Example

 

    Actual         Hypothetical 5% Return         
                                                            
     

Beginning     

Account Value     

(09/01/21)     

 

 

 

      

Ending
Account Value
(02/28/22)
 
 
 
      

Expenses
Paid During
the Period
 
 
 (a) 
       

Beginning   
Account Value   
(09/01/21)   
 
 
 
      

Ending
Account Value
(02/28/22)
 
 
 
      

Expenses
Paid During
the Period
 
 
 (a) 
    

Annualized    

Expense    

Ratio    

      $       1,000.00               $          954.40          $        3.10           $      1,000.00             $      1,021.60          $        3.21        0.64% 

 

  (a) 

Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period shown). Other fees, such as brokerage commissions and other fees to financial intermediaries, may be paid which are not reflected in the tables and examples above. See “Shareholder Expenses” for more information.

 

Portfolio Information

 

ALLOCATION BY SECTOR

 

   
Sector   Percent of    
Total Investments(a)

Financials

  24.4%

Information Technology

  18.3   

Energy

  11.8   

Materials

  10.2   

Consumer Discretionary

  8.4   

Consumer Staples

  8.4   

Utilities

  5.3   

Health Care

  4.8   

Industrials

  4.7   

Communication Services

  3.1   

Real Estate

  0.6   

TEN LARGEST HOLDINGS

 

   
Security   Percent of    
Total Investments(a)

Reliance Industries Ltd.

  9.7%

Infosys Ltd.

  8.2   

Housing Development Finance Corp. Ltd.

  5.8   

ICICI Bank Ltd.

  5.5   

Tata Consultancy Services Ltd.

  4.7   

Bajaj Finance Ltd.

  2.7   

Hindustan Unilever Ltd.

  2.6   

Bharti Airtel Ltd.

  2.4   

Axis Bank Ltd.

  2.4   

Larsen & Toubro Ltd.

  1.8   
  (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 February 28, 2022    iShares® MSCI India Small-Cap ETF

 

Investment Objective

The iShares MSCI India Small-Cap ETF (the “Fund”) seeks to track the investment results of an index composed of small-capitalization Indian equities, as represented by the MSCI India Small Cap 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 Months      1 Year     5 Years     10 Years           1 Year     5 Years     10 Years    

Fund NAV

    (3.80 )%       17.93     8.87   9.01%       17.93     52.94   136.90% 

Fund Market

    (3.64      18.41       8.86     9.15          18.41       52.89     140.06    

Index

    (4.34      19.68       10.43     10.15            19.68       64.24     162.91    

The inception date of the Fund was 2/8/12. The first day of secondary market trading was 2/9/12.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 6 for more information.

Expense Example

 

    Actual         Hypothetical 5% Return         
                                                            
     

Beginning     

Account Value     

(09/01/21)     

 

 

 

      

Ending
Account Value
(02/28/22)
 
 
 
      

Expenses
Paid During
the Period
 
 
 (a) 
       

Beginning   
Account Value   
(09/01/21)   
 
 
 
      

Ending
Account Value
(02/28/22)
 
 
 
      

Expenses
Paid During
the Period
 
 
 (a) 
    

Annualized    

Expense    

Ratio    

      $       1,000.00               $          962.00          $        3.60           $      1,000.00             $      1,021.10          $        3.71        0.74% 

 

  (a) 

Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period shown). Other fees, such as brokerage commissions and other fees to financial intermediaries, may be paid which are not reflected in the tables and examples above. See “Shareholder Expenses” for more information.

 

Portfolio Information

 

ALLOCATION BY SECTOR

 

   
Sector   Percent of    
Total Investments(a)

Materials

  18.7%

Industrials

  17.8   

Financials

  15.3   

Consumer Discretionary

  13.8   

Health Care

  9.4   

Information Technology

  9.1   

Communication Services

  5.0   

Real Estate

  3.9   

Consumer Staples

  3.4   

Utilities

  2.9   

Energy

  0.7   

TEN LARGEST HOLDINGS

 

   
Security   Percent of    
Total Investments(a)

Voltas Ltd.

  1.6%

Crompton Greaves Consumer Electricals Ltd.

  1.4   

Tata Elxsi Ltd.

  1.3   

Zee Entertainment Enterprises Ltd.

  1.2   

Persistent Systems Ltd.

  1.2   

Max Financial Services Ltd.

  1.1   

Aarti Industries Ltd.

  1.1   

Astral Ltd.

  1.0   

Ashok Leyland Ltd.

  1.0   

Laurus Labs Ltd.

  1.0   
  (a) 

Excludes money market funds.

 

 

 

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. Since shares of a fund may not trade in the secondary market until after the fund’s inception, for the period from inception to the first day of secondary market trading in shares of the fund, the NAV of the fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.

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

Shareholder 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 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 a 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


Consolidated Schedule of Investments   (unaudited)

February 28, 2022

  

iShares® MSCI India ETF

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  

Common Stocks

   
Aerospace & Defense — 0.4%            

Bharat Electronics Ltd.

    7,293,486     $ 20,496,785  
   

 

 

 
Airlines — 0.3%            

InterGlobe Aviation Ltd.(a)(b)

    576,449           14,430,791  
   

 

 

 
Auto Components — 1.0%            

Balkrishna Industries Ltd.

    521,024       12,669,569  

Bharat Forge Ltd.

    1,394,702       12,634,221  

Motherson Sumi Systems Ltd.

    7,563,377       15,206,472  

Motherson Sumi Wiring India Ltd.(b)

    7,635,201       4,708,952  

MRF Ltd.

    11,421       9,993,431  
   

 

 

 
      55,212,645  
Automobiles — 5.0%            

Bajaj Auto Ltd.

    415,763       19,564,824  

Eicher Motors Ltd.

    818,119       28,258,199  

Hero MotoCorp Ltd.

    717,441       24,302,714  

Mahindra & Mahindra Ltd.

    5,211,252       55,013,416  

Maruti Suzuki India Ltd.

    814,032       90,222,064  

Tata Motors Ltd.(b)

    9,942,270       60,271,844  
   

 

 

 
      277,633,061  
Banks — 11.1%            

Axis Bank Ltd.(b)

    13,652,649       135,449,951  

Bandhan Bank Ltd.(a)

    3,883,628       15,885,313  

ICICI Bank Ltd.

    31,009,244       307,138,293  

Kotak Mahindra Bank Ltd.

    3,325,392       81,858,158  

State Bank of India

    10,685,432       69,030,070  

Yes Bank Ltd.(b)

    67,539,495       11,931,676  
   

 

 

 
      621,293,461  
Beverages — 0.4%            

United Spirits Ltd.(b)

    1,740,081       20,546,323  
   

 

 

 
Biotechnology — 0.2%            

Biocon Ltd.(b)

    2,517,122       11,698,553  
   

 

 

 
Capital Markets — 0.2%            

HDFC Asset Management Co. Ltd.(a)

    318,658       8,860,929  
   

 

 

 
Chemicals — 3.8%            

Asian Paints Ltd.

    2,297,198       97,082,143  

Berger Paints India Ltd.

    1,454,570       13,359,284  

PI Industries Ltd.

    499,356       16,434,515  

Pidilite Industries Ltd.

    912,365       29,206,330  

SRF Ltd.

    886,430       28,210,058  

UPL Ltd.

    2,972,210       26,415,441  
   

 

 

 
      210,707,771  
Commercial Services & Supplies — 0.3%  

Indian Railway Catering & Tourism Corp. Ltd.

    1,437,260       15,595,599  
   

 

 

 
Construction & Engineering — 1.8%            

Larsen & Toubro Ltd.

    4,122,197       99,933,131  
   

 

 

 
Construction Materials — 2.5%            

ACC Ltd.

    450,011       12,534,192  

Ambuja Cements Ltd.

    4,160,388       17,436,618  

Grasim Industries Ltd.

    1,576,672       33,647,174  

Shree Cement Ltd.

    64,803       21,096,908  

UltraTech Cement Ltd.

    604,648       52,919,858  
   

 

 

 
      137,634,750  
Security   Shares     Value  
Consumer Finance — 3.9%            

Bajaj Finance Ltd.

    1,625,572     $ 152,194,512  

Cholamandalam Investment and Finance Co. Ltd.

    2,455,609       22,654,270  

Muthoot Finance Ltd.

    719,670       13,038,575  

SBI Cards & Payment Services Ltd.(b)

    1,409,052       14,773,875  

Shriram Transport Finance Co. Ltd.

    1,215,006           18,262,774  
   

 

 

 
      220,924,006  
Diversified Financial Services — 1.2%            

Bajaj Finserv Ltd.

    228,413       48,969,118  

Piramal Enterprises Ltd.

    714,938       19,764,818  
   

 

 

 
      68,733,936  
Diversified Telecommunication Services — 0.2%  

Indus Towers Ltd.(b)

    4,035,434       11,582,538  
   

 

 

 
Electric Utilities — 2.2%            

Adani Transmission Ltd.(b)

    1,645,924       46,903,311  

Power Grid Corp. of India Ltd.

    18,785,806       52,309,376  

Tata Power Co. Ltd. (The)

    8,605,474       25,661,656  
   

 

 

 
      124,874,343  
Electrical Equipment — 0.4%            

Havells India Ltd.

    1,499,444       23,688,850  
   

 

 

 
Food & Staples Retailing — 1.0%            

Avenue Supermarts Ltd.(a)(b)

    969,199       56,072,350  
   

 

 

 
Food Products — 2.4%            

Britannia Industries Ltd.

    648,704       29,610,215  

Marico Ltd.

    3,090,342       21,156,725  

Nestle India Ltd.

    202,074       47,458,040  

Tata Consumer Products Ltd.

    3,581,074       34,290,209  
   

 

 

 
      132,515,189  
Gas Utilities — 1.1%            

Adani Total Gas Ltd.

    1,648,099       34,745,748  

GAIL India Ltd.

    9,305,446       17,993,075  

Indraprastha Gas Ltd.

    1,675,929       7,748,751  
   

 

 

 
      60,487,574  
Health Care Providers & Services — 0.7%            

Apollo Hospitals Enterprise Ltd.

    602,371       38,554,714  
   

 

 

 
Hotels, Restaurants & Leisure — 0.3%            

Jubilant Foodworks Ltd.

    474,169       18,435,365  
   

 

 

 
Independent Power and Renewable Electricity Producers — 2.0%  

Adani Green Energy Ltd.(b)

    2,341,460       57,616,453  

NTPC Ltd.

    29,015,978       51,652,280  
   

 

 

 
      109,268,733  
Industrial Conglomerates — 0.2%            

Siemens Ltd.

    426,709       13,349,481  
   

 

 

 
Insurance — 2.0%            

HDFC Life Insurance Co. Ltd.(a)

    5,455,271       38,028,267  

ICICI Lombard General Insurance Co. Ltd.(a)

    1,343,096       22,605,946  

ICICI Prudential Life Insurance Co. Ltd.(a)

    2,165,120       13,831,854  

SBI Life Insurance Co. Ltd.(a)

    2,693,664       38,091,062  
   

 

 

 
      112,557,129  
Interactive Media & Services — 0.5%  

Info Edge India Ltd.

    461,653       27,442,433  
   

 

 

 
Internet & Direct Marketing Retail — 0.2%            

Zomato Ltd.(b)

    9,404,715       10,047,317  
   

 

 

 

 

 

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

  7


Consolidated Schedule of Investments  (unaudited) (continued)

February 28, 2022

  

iShares® MSCI India ETF

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  
IT Services — 18.2%            

HCL Technologies Ltd.

    6,497,329     $ 97,701,814  

Infosys Ltd.

    20,146,101       459,126,956  

Larsen & Toubro Infotech Ltd.(a)

    314,525       24,582,308  

Mindtree Ltd.

    394,624       20,477,382  

Mphasis Ltd.

    504,627       20,964,873  

Tata Consultancy Services Ltd.

    5,537,780       262,334,180  

Tech Mahindra Ltd.

    3,776,462       71,102,478  

Wipro Ltd.

    8,197,984       60,622,007  
   

 

 

 
      1,016,911,998  
Life Sciences Tools & Services — 0.8%  

Divi’s Laboratories Ltd.

    796,105       45,243,839  
   

 

 

 
Metals & Mining — 3.9%            

Hindalco Industries Ltd.

    9,434,474       72,505,104  

JSW Steel Ltd.

    5,047,453       42,346,770  

Tata Steel Ltd.

    4,324,969       70,815,853  

Vedanta Ltd.

    6,673,932       33,968,199  
   

 

 

 
      219,635,926  
Multiline Retail — 0.3%            

Trent Ltd.

    1,085,762       16,057,558  
   

 

 

 
Oil, Gas & Consumable Fuels — 11.8%            

Bharat Petroleum Corp. Ltd.

    5,192,972       24,222,328  

Coal India Ltd.

    9,222,978       20,860,905  

Hindustan Petroleum Corp. Ltd.

    3,823,008       13,907,470  

Indian Oil Corp. Ltd.

    11,273,097       17,302,994  

Oil & Natural Gas Corp. Ltd.

    15,057,923       32,431,217  

Petronet LNG Ltd.

    4,484,399       12,868,021  

Reliance Industries Ltd.

    17,093,744       538,140,125  
   

 

 

 
      659,733,060  
Personal Products — 3.7%            

Colgate-Palmolive India Ltd.

    733,143       14,143,385  

Dabur India Ltd.

    3,703,053       27,763,387  

Godrej Consumer Products Ltd.(b)

    2,142,085       21,906,945  

Hindustan Unilever Ltd.

    4,924,543       142,409,474  
   

 

 

 
      206,223,191  
Pharmaceuticals — 3.0%            

Aurobindo Pharma Ltd.

    1,754,358       14,604,064  

Cipla Ltd.

    2,898,784       35,678,355  

Dr. Reddy’s Laboratories Ltd.

    697,494       37,659,849  

Lupin Ltd.

    1,359,755       13,508,482  

Sun Pharmaceutical Industries Ltd.

    5,028,674       56,489,240  

Torrent Pharmaceuticals Ltd.

    303,577       11,110,650  
   

 

 

 
      169,050,640  
Real Estate Management & Development — 0.6%  

DLF Ltd.

    3,717,294       17,442,561  
Security   Shares     Value  
Real Estate Management & Development (continued)  

Godrej Properties Ltd.(b)

    749,190     $ 15,007,811  
   

 

 

 
      32,450,372  
Road & Rail — 0.2%            

Container Corp. of India Ltd.

    1,457,434       11,664,692  
   

 

 

 
Textiles, Apparel & Luxury Goods — 1.6%  

Page Industries Ltd.

    33,393       18,796,709  

Titan Co. Ltd.

    2,126,545       72,231,278  
   

 

 

 
      91,027,987  
Thrifts & Mortgage Finance — 5.8%            

Housing Development Finance Corp. Ltd.

    10,297,280       325,453,770  
   

 

 

 
Tobacco — 0.9%            

ITC Ltd.

    17,709,739       50,993,522  
   

 

 

 
Trading Companies & Distributors — 0.6%  

Adani Enterprises Ltd.

    1,645,527       36,186,332  
   

 

 

 
Transportation Infrastructure — 0.5%            

Adani Ports & Special Economic Zone Ltd.

    3,054,844       28,885,621  
   

 

 

 
Wireless Telecommunication Services — 2.4%  

Bharti Airtel Ltd.(b)

    14,822,778       135,543,811  
   

 

 

 

Total Common Stocks — 99.6%
(Cost: $3,083,141,765)

 

    5,567,640,076  
   

 

 

 

Short-Term Investments

   
Money Market Funds — 3.5%            

BlackRock Cash Funds: Treasury, SL Agency Shares, 0.03%(c)(d)

    198,120,000       198,120,000  
   

 

 

 

Total Short-Term Investments — 3.5%
(Cost: $198,120,000)

 

    198,120,000  
   

 

 

 

Total Investments in Securities — 103.1%
(Cost: $3,281,261,765)

 

    5,765,760,076  

Other Assets, Less Liabilities — (3.1)%

      (173,602,753
   

 

 

 

Net Assets — 100.0%

    $  5,592,157,323  
   

 

 

 

 

(a) 

Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors.

 
(b) 

Non-income producing security.

(c) 

Affiliate of the Fund.

(d) 

Annualized 7-day yield as of period end.

 

 

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


Consolidated Schedule of Investments  (unaudited) (continued)

February 28, 2022

  

iShares® MSCI India ETF

 

Affiliates

Investments in issuers considered to be affiliate(s) of the Fund during the six months ended February 28, 2022 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

 

 
Affiliated Issuer   Value at
08/31/21
    Purchases
at Cost
    Proceeds
from Sales
    Net Realized
Gain (Loss)
    Change in
Unrealized
Appreciation
(Depreciation)
    Value at
02/28/22
   

Shares

Held at
02/28/22

    Income    

Capital

Gain
Distributions
from
Underlying
Funds

 

 

 

BlackRock Cash Funds: Treasury, SL Agency Shares

  $ 138,250,000     $ 59,870,000 (a)    $     $     $     $ 198,120,000       198,120,000     $ 10,731     $  
       

 

 

   

 

 

   

 

 

     

 

 

   

 

 

 

 

  (a) 

Represents net amount purchased (sold).

 

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

       

SGX Nifty 50 Index

    632       03/31/22     $ 21,325     $ 21,508  
       

 

 

 

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Consolidated Statements of Assets and Liabilities were as follows:

 

 

 
     Equity
Contracts
 

 

 

Assets — Derivative Financial Instruments

  

Futures contracts

  

Unrealized appreciation on futures contracts(a)

   $ 21,508  
  

 

 

 

 

  (a) 

Net cumulative unrealized appreciation (depreciation) on futures contracts are reported in the Consolidated Schedule of Investments. In the Consolidated 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 February 28, 2022, the effect of derivative financial instruments in the Consolidated Statements of Operations was as follows:

 

 

 
    Equity
Contracts
 

 

 

Net Realized Gain (Loss) from:

 

Futures contracts

  $ (1,254,896
 

 

 

 

Net Change in Unrealized Appreciation (Depreciation) on:                                                                                                          

 

Futures contracts

  $ (45,926
 

 

 

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

 

 

Futures contracts:

  

Average notional value of contracts — long

   $ 14,141,036     

 

 

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

 

 

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

  9


Consolidated Schedule of Investments  (unaudited) (continued)

February 28, 2022

  

iShares® MSCI India ETF

 

Fair Value Hierarchy as of Period End (continued)

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  

 

 

Investments

           

Assets

           

Common Stocks

   $ 34,745,748      $ 5,532,894,328      $      $ 5,567,640,076  

Money Market Funds

     198,120,000                      198,120,000  
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 232,865,748      $ 5,532,894,328      $      $ 5,765,760,076  
  

 

 

    

 

 

    

 

 

    

 

 

 

Derivative financial instruments(a)

           

Assets

           

Futures Contracts

   $      $ 21,508      $      $ 21,508  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

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

 

See notes to consolidated 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


Consolidated Schedule of Investments  (unaudited)

February 28, 2022

  

iShares® MSCI India Small-Cap ETF

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  

Common Stocks

   
Air Freight & Logistics — 0.5%            

Allcargo Logistics Ltd.

    115,704     $ 497,092  

Blue Dart Express Ltd.

    7,486       598,270  

Mahindra Logistics Ltd.(a)

    45,506       243,406  

TCI Express Ltd.

    21,229       500,184  
   

 

 

 
      1,838,952  
Airlines — 0.1%            

SpiceJet Ltd.(b)

    379,933       305,909  
   

 

 

 
Auto Components — 3.4%            

Apollo Tyres Ltd.

    503,598       1,242,908  

Asahi India Glass Ltd.

    96,412       603,460  

Ceat Ltd.

    34,882       454,287  

Endurance Technologies Ltd.(a)

    55,285       970,771  

Exide Industries Ltd.

    601,927       1,196,423  

Mahindra CIE Automotive Ltd.(b)

    180,373       468,129  

Minda Industries Ltd.

    113,195       1,391,734  

Sundaram Clayton Ltd.

    8,026       416,050  

Sundram Fasteners Ltd.

    149,785       1,704,603  

Suprajit Engineering Ltd.

    108,981       456,204  

Tube Investments of India Ltd.

    168,301       3,408,877  
   

 

 

 
      12,313,446  
Automobiles — 0.7%            

TVS Motor Co. Ltd.

    300,817       2,475,214  
   

 

 

 
Banks — 3.7%            

AU Small Finance Bank Ltd.(a)(b)

    123,943       1,991,151  

Canara Bank(b)

    571,864       1,680,177  

City Union Bank Ltd.

    574,408       958,438  

Equitas Small Finance Bank Ltd.(a)(b)

    363,092       250,763  

Federal Bank Ltd.

    2,454,004       3,181,369  

IDFC First Bank Ltd.(b)

    4,804,463       2,705,178  

Karur Vysya Bank Ltd. (The)

    620,855       393,295  

RBL Bank Ltd.(a)(b)

    707,035       1,262,013  

Yes Bank Ltd., (Acquired 03/16/20,
Cost: $3,554,476)(b)(c)

    4,044,378       635,547  
   

 

 

 
          13,057,931  
Beverages — 1.2%            

Radico Khaitan Ltd.

    115,916       1,386,889  

Varun Beverages Ltd.

    239,260       3,010,058  
   

 

 

 
      4,396,947  
Building Products — 2.1%            

Astral Ltd.

    142,718       3,699,043  

Blue Star Ltd.

    91,521       1,304,828  

Cera Sanitaryware Ltd.

    8,163       470,340  

Kajaria Ceramics Ltd.

    125,984       1,816,493  

Prince Pipes and Fittings Ltd.

    43,599       374,587  
   

 

 

 
      7,665,291  
Capital Markets — 4.0%            

Angel One Ltd.

    32,893       587,152  

BSE Ltd.

    34,932       915,811  

Central Depository Services India Ltd.

    81,156       1,469,954  

CRISIL Ltd.

    23,101       886,826  

Dhani Services Ltd.(b)

    381,696       400,444  

Edelweiss Financial Services Ltd., NVS

    817,535       596,111  

ICICI Securities Ltd.(a)

    133,017       1,181,095  

IDFC Ltd.(b)

    1,759,231       1,359,234  

IIFL Wealth Management Ltd.

    56,072       1,146,091  

Indian Energy Exchange Ltd., NVS(a)

    694,760       1,913,140  

JM Financial Ltd.

    680,942       618,294  
Security   Shares     Value  
Capital Markets (continued)            

Motilal Oswal Financial Services Ltd.

    58,074     $ 681,875  

Multi Commodity Exchange of India Ltd.

    40,899       695,440  

Nippon Life India Asset Management Ltd.(a)

    196,644       806,876  

Tata Investment Corp. Ltd.

    20,023       354,799  

UTI Asset Management Co. Ltd.

    70,470       784,309  
   

 

 

 
      14,397,451  
Chemicals — 12.6%            

Aarti Industries Ltd.

    314,788       3,889,215  

Advanced Enzyme Technologies Ltd.

    70,468       300,467  

Akzo Nobel India Ltd.

    14,432       361,926  

Alkyl Amines Chemicals

    20,278       812,742  

Atul Ltd.

    23,355       2,882,205  

Balaji Amines Ltd., NVS

    15,358       586,131  

BASF India Ltd.

    17,086       626,600  

Bayer CropScience Ltd./India

    21,245       1,245,809  

Carborundum Universal Ltd.

    165,230       1,773,082  

Castrol India Ltd.

    627,691       903,083  

Chambal Fertilizers and Chemicals Ltd.

    261,959       1,321,884  

Chemplast Sanmar Ltd.(b)

    63,177       397,878  

Clean Science and Technology(b)

    33,390       816,388  

Coromandel International Ltd.

    185,058       1,906,989  

Deepak Fertilisers & Petrochemicals Corp. Ltd.

    86,135       652,866  

Deepak Nitrite Ltd.

    107,952       2,884,581  

EID Parry India Ltd.

    111,853       616,779  

Fine Organic Industries Ltd.

    12,155       694,788  

Finolex Industries Ltd.

    392,094       800,922  

Galaxy Surfactants Ltd.

    16,757       620,184  

Gujarat Fluorochemicals Ltd.(b)

    34,844       1,197,121  

Gujarat Narmada Valley Fertilizers & Chemicals Ltd.

    122,605       905,857  

Gujarat State Fertilizers & Chemicals Ltd.

    284,120       476,908  

Indigo Paints Ltd.(b)

    15,078       359,452  

Jubilant Ingrevia Ltd.

    101,015       674,050  

Kansai Nerolac Paints Ltd.

    212,162       1,283,147  

Laxmi Organic Industries Ltd.

    84,118       460,302  

Linde India Ltd.

    33,556       1,230,857  

Navin Fluorine International Ltd.

    50,953       2,642,673  

NOCIL Ltd.

    156,265       436,890  

Polyplex Corporation Ltd.

    19,984       482,160  

Rain Industries Ltd.

    265,637       658,336  

Rallis India Ltd.

    123,292       384,270  

Rossari Biotech Ltd.

    21,798       285,190  

Solar Industries India Ltd.

    43,054       1,327,363  

Sumitomo Chemical India Ltd.

    158,181       794,396  

Supreme Industries Ltd.

    100,539       2,738,556  

Supreme Petrochem Ltd.

    52,181       460,597  

Tata Chemicals Ltd.

    261,258       2,935,177  

Vinati Organics Ltd.

    40,367       996,873  
   

 

 

 
          44,824,694  
Commercial Services & Supplies — 0.1%            

SIS Ltd.(b)

    58,004       351,222  
   

 

 

 
Communications Equipment — 0.3%            

Sterlite Technologies Ltd.

    250,809       591,533  

Tejas Networks Ltd.(a)(b)

    90,941       495,744  
   

 

 

 
      1,087,277  
Construction & Engineering — 3.4%            

Dilip Buildcon Ltd.(a)

    57,940       208,218  

Engineers India Ltd.

    400,172       329,082  

GMR Power and Urban Infrastructure Ltd., NVS(b)

    300,381       133,551  

 

 

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

  11


Consolidated Schedule of Investments  (unaudited) (continued)

February 28, 2022

  

iShares® MSCI India Small-Cap ETF

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  
Construction & Engineering (continued)            

IRB Infrastructure Developers Ltd.(b)

    142,481     $ 409,874  

Kalpataru Power Transmission Ltd.

    104,936       547,535  

KEC International Ltd.

    183,447       1,138,726  

KNR Constructions Ltd.

    200,074       827,237  

NBCC India Ltd.

    1,136,315       591,209  

NCC Ltd./India

    624,307       520,964  

PNC Infratech Ltd.

    140,828       497,682  

Praj Industries Ltd.

    175,065       796,392  

Sterling and Wilson Renewable Energy Ltd.(b)

    60,056       255,969  

Voltas Ltd.

    339,722       5,711,481  
   

 

 

 
      11,967,920  
Construction Materials — 2.8%            

Birla Corp. Ltd.

    42,831       625,843  

Dalmia Bharat Ltd.

    118,095       2,466,191  

HeidelbergCement India Ltd.

    107,091       265,132  

India Cements Ltd. (The)

    219,618       592,734  

JK Cement Ltd.

    55,058       2,086,426  

JK Lakshmi Cement Ltd.

    93,342       555,982  

Nuvoco Vistas Corp. Ltd.(b)

    170,107       785,247  

Prism Johnson Ltd.(b)

    198,642       312,542  

Ramco Cements Ltd. (The)

    205,467       2,154,575  
   

 

 

 
      9,844,672  
Consumer Finance — 2.7%            

Cholamandalam Financial Holdings Ltd.

    148,869       1,276,246  

CreditAccess Grameen Ltd.(b)

    74,335       743,035  

Mahindra & Mahindra Financial Services Ltd.

    973,268       1,890,816  

Manappuram Finance Ltd.

    804,935       1,223,248  

MAS Financial Services Ltd.(a)

    26,239       198,272  

Paisalo Digital Ltd.

    40,404       356,700  

Poonawalla Fincorp Ltd.(b)

    239,684       762,926  

Shriram City Union Finance Ltd.

    36,546       772,033  

Spandana Sphoorty Financial Ltd.(b)

    30,416       151,010  

Sundaram Finance Ltd.

    95,694       2,428,095  
   

 

 

 
      9,802,381  
Containers & Packaging — 0.1%            

EPL Ltd.

    197,604       416,892  
   

 

 

 
Diversified Financial Services — 1.3%            

Aditya Birla Capital Ltd.(b)

    721,829       1,018,475  

L&T Finance Holdings Ltd.(b)

    1,173,910       1,034,207  

REC Ltd.

    1,563,076       2,546,189  
   

 

 

 
      4,598,871  
Diversified Telecommunication Services — 1.4%  

HFCL Ltd.

    909,217       887,017  

Tata Communications Ltd.

    179,933       2,839,613  

Tata Teleservices Maharastra Ltd.(b)

    774,194       1,210,209  
   

 

 

 
            4,936,839  
Electric Utilities — 0.7%            

CESC Ltd.

    946,215       986,925  

Torrent Power Ltd.

    265,133       1,678,601  
   

 

 

 
      2,665,526  
Electrical Equipment — 3.1%            

Amara Raja Batteries Ltd.

    149,070       1,115,068  

Bharat Heavy Electricals Ltd.(b)

    1,382,175       921,826  

CG Power and Industrial Solutions Ltd.(b)

    852,441       1,953,615  

Finolex Cables Ltd.

    108,697       598,764  

Graphite India Ltd.

    91,832       572,094  

HEG Ltd.

    18,363       278,637  

Hitachi Energy India Ltd.

    13,510       595,796  
Security   Shares     Value  
Electrical Equipment (continued)            

KEI Industries Ltd.

    85,769     $ 1,133,109  

Olectra Greentech Ltd.(b)

    51,663       437,653  

Polycab India Ltd.

    58,835       1,863,828  

Suzlon Energy Ltd.(b)

    7,701,727       969,749  

V-Guard Industries Ltd.

    271,681       707,948  
   

 

 

 
      11,148,087  
Electronic Equipment, Instruments & Components — 0.5%  

Redington India Ltd.

    804,254       1,646,825  
   

 

 

 
Entertainment — 0.8%            

Chennai Super Kings Cricket Ltd.(d)

    206,787       27  

Inox Leisure Ltd.(b)

    96,993       530,331  

Nazara Technologies Ltd.(b)

    12,931       299,910  

PVR Ltd.(b)

    72,235       1,582,720  

Saregama India Ltd.

    10,656       556,943  
   

 

 

 
      2,969,931  
Equity Real Estate Investment Trusts (REITs) — 1.4%  

Brookfield India Real Estate Trust(a)

    167,107       675,151  

Embassy Office Parks REIT

    673,205       3,350,617  

Mindspace Business Parks REIT(a)

    234,944       1,112,459  
   

 

 

 
      5,138,227  
Food Products — 1.1%            

Avanti Feeds Ltd.

    85,766       547,409  

Balrampur Chini Mills Ltd.

    193,181       1,024,912  

Bombay Burmah Trading Co.

    27,650       352,665  

CCL Products India Ltd.

    116,033       693,717  

Kaveri Seed Co. Ltd.

    37,068       240,367  

Shree Renuka Sugars Ltd.(b)

    840,323       371,057  

Triveni Engineering & Industries Ltd.

    114,421       379,888  

Zydus Wellness Ltd.

    19,905       419,290  
   

 

 

 
      4,029,305  
Gas Utilities — 1.3%            

Gujarat Gas Ltd.

    271,296       2,109,287  

Gujarat State Petronet Ltd.

    446,839       1,724,803  

Mahanagar Gas Ltd.

    86,231       835,964  
   

 

 

 
      4,670,054  
Health Care Equipment & Supplies — 0.1%            

Poly Medicure Ltd.

    38,360       406,472  
   

 

 

 
Health Care Providers & Services — 2.8%            

Aster DM Healthcare Ltd.(a)(b)

    194,809       444,371  

Dr Lal PathLabs Ltd.(a)

    52,336       1,757,026  

Fortis Healthcare Ltd.(b)

    717,028       2,350,402  

Krishna Institute Of Medical Sciences Ltd.(a)(b)

    45,137       762,994  

Max Healthcare Institute Ltd.(b)

    458,708       2,287,764  

Metropolis Healthcare Ltd.(a)

    40,280       1,051,169  

Narayana Hrudayalaya Ltd.(b)

    113,110       1,032,573  

Thyrocare Technologies Ltd.(a)

    29,335       335,598  
   

 

 

 
          10,021,897  
Hotels, Restaurants & Leisure — 1.5%            

Chalet Hotel Ltd.(b)

    96,772       339,008  

Delta Corp. Ltd.

    101,256       357,438  

Devyani International Ltd.(b)

    381,829       790,723  

EIH Ltd.(b)

    248,151       429,925  

Indian Hotels Co. Ltd. (The)

    1,028,281       2,744,773  

Restaurant Brands Asia Ltd.(b)

    244,650       341,949  

Westlife Development Ltd.(b)

    85,967       529,994  
   

 

 

 
      5,533,810  

 

 

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


Consolidated Schedule of Investments  (unaudited) (continued)

February 28, 2022

  

iShares® MSCI India Small-Cap ETF

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  
Household Durables — 4.1%            

Amber Enterprises India Ltd.(b)

    26,538     $ 1,230,204  

Bajaj Electricals Ltd.(b)

    72,771       1,112,037  

Crompton Greaves Consumer Electricals Ltd.

    842,832       4,820,488  

Dixon Technologies India Ltd.

    51,578       2,969,283  

Johnson Controls-Hitachi Air Conditioning India Ltd.(b)

    10,598       255,876  

Orient Electric Ltd.

    201,974       888,348  

Sheela Foam Ltd.(b)

    23,002       1,046,941  

Symphony Ltd.

    27,636       361,797  

TTK Prestige Ltd.

    66,052       697,272  

Whirlpool of India Ltd.

    50,342       1,122,279  
   

 

 

 
      14,504,525  
Household Products — 0.1%            

Jyothy Labs Ltd.

    232,809       424,348  
   

 

 

 
Independent Power and Renewable Electricity Producers — 0.9%  

Adani Power Ltd.(b)

    1,221,052       2,032,824  

NLC India Ltd.

    438,038       365,199  

Reliance Power Ltd.(b)

    3,753,754       657,142  
   

 

 

 
            3,055,165  
Industrial Conglomerates — 0.5%            

3M India Ltd.(b)

    4,434       1,252,617  

Godrej Industries Ltd.(b)

    79,515       550,030  
   

 

 

 
      1,802,647  
Insurance — 1.1%            

Max Financial Services Ltd.(b)

    355,738       3,934,368  
   

 

 

 
Interactive Media & Services — 0.3%            

Brightcom Group Ltd.

    574,060       912,736  

Just Dial Ltd.(b)

    26,510       263,960  
   

 

 

 
      1,176,696  
Internet & Direct Marketing Retail — 0.1%            

CarTrade Tech Ltd.(b)

    28,930       208,481  
   

 

 

 
IT Services — 3.7%            

Coforge Ltd.

    33,609       2,034,420  

Computer Age Management Services Ltd.

    42,602       1,418,842  

eClerx Services Ltd.

    24,840       713,019  

Firstsource Solutions Ltd.

    438,020       743,636  

Happiest Minds Technologies Ltd.

    92,543       1,212,191  

Infibeam Avenues Ltd.

    527,915       275,888  

Mastek Ltd.

    21,164       793,122  

NIIT Ltd.

    116,079       654,422  

Persistent Systems Ltd.

    78,587       4,131,211  

Sonata Software Ltd.

    98,961       970,222  

Vakrangee Ltd.

    667,451       278,880  
   

 

 

 
      13,225,853  
Life Sciences Tools & Services — 0.4%            

Syngene International Ltd.(a)(b)

    188,280       1,359,274  
   

 

 

 
Machinery — 5.7%            

AIA Engineering Ltd.

    67,244       1,452,742  

Ashok Leyland Ltd., NVS

    2,317,342       3,673,317  

BEML Ltd.

    29,707       619,122  

Cochin Shipyard Ltd.(a)

    51,094       197,075  

Cummins India Ltd.

    196,671       2,512,283  

Escorts Ltd.

    106,722       2,630,967  

GMM Pfaudler Ltd.

    10,364       604,531  

Grindwell Norton Ltd.

    70,203       1,505,654  

ISGEC Heavy Engineering Ltd.

    40,481       308,352  

Lakshmi Machine Works Ltd.

    5,045       695,768  
Security   Shares     Value  
Machinery (continued)            

MTAR Technologies Ltd.

    17,227     $ 415,755  

Schaeffler India Ltd.

    61,612       1,497,398  

SKF India Ltd.

    35,248       1,685,931  

Thermax Ltd.

    66,071       1,597,537  

Timken India Ltd.

    29,748       803,546  
   

 

 

 
      20,199,978  
Marine — 0.1%            

Shipping Corp. of India Ltd.

    184,059       255,901  
   

 

 

 
Media — 1.9%            

Affle India Ltd.(b)

    83,945       1,371,310  

Sun TV Network Ltd.

    125,018       746,345  

TV18 Broadcast Ltd.(b)

    705,770       578,190  

Zee Entertainment Enterprises Ltd.

    1,365,266       4,182,171  
   

 

 

 
      6,878,016  
Metals & Mining — 2.8%            

APL Apollo Tubes Ltd.(b)

    178,102       2,029,647  

Jindal Stainless Hisar Ltd.(b)

    148,635       700,073  

Jindal Stainless Ltd.(b)

    279,639       724,342  

Jindal Steel & Power Ltd.(b)

    644,000       3,672,591  

National Aluminium Co. Ltd.

    1,308,265       2,127,376  

Ratnamani Metals & Tubes Ltd.

    25,786       767,680  
   

 

 

 
          10,021,709  
Multiline Retail — 0.3%            

Future Retail Ltd.(b)

    335,925       218,459  

V-Mart Retail Ltd.(b)

    15,295       694,575  
   

 

 

 
      913,034  
Oil, Gas & Consumable Fuels — 0.7%            

Aegis Logistics Ltd.

    221,713       500,007  

Great Eastern Shipping Co. Ltd. (The)

    162,333       703,473  

Oil India Ltd.

    429,989       1,282,524  
   

 

 

 
      2,486,004  
Paper & Forest Products — 0.4%            

Century Plyboards India Ltd.

    87,778       697,843  

Century Textiles & Industries Ltd.

    70,842       724,977  
   

 

 

 
      1,422,820  
Personal Products — 0.9%            

Bajaj Consumer Care Ltd.

    151,701       327,806  

Emami Ltd.

    316,638       2,088,307  

Gillette India Ltd.

    10,308       710,530  
   

 

 

 
      3,126,643  
Pharmaceuticals — 6.0%            

Aarti Drugs Ltd.

    51,380       311,566  

Ajanta Pharma Ltd.

    40,845       936,291  

Alembic Pharmaceuticals Ltd.

    93,538       903,831  

AstraZeneca Pharma India Ltd.

    7,879       272,878  

Caplin Point Laboratories Ltd.

    29,765       264,729  

Eris Lifesciences Ltd.(a)

    54,210       487,895  

FDC Ltd./India(b)

    79,694       286,991  

GlaxoSmithKline Pharmaceuticals Ltd.

    53,741       1,086,225  

Glenmark Pharmaceuticals Ltd.

    223,730       1,335,726  

Granules India Ltd.

    216,264       838,867  

Hikal Ltd.

    58,625       287,425  

IOL Chemicals and Pharmaceuticals Ltd.

    36,221       170,059  

Ipca Laboratories Ltd.

    221,041       2,887,137  

JB Chemicals & Pharmaceuticals Ltd.

    55,163       1,185,367  

Jubilant Pharmova Ltd.

    101,123       533,421  

Laurus Labs Ltd.(a)

    508,223       3,672,739  

 

 

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

  13


Consolidated Schedule of Investments  (unaudited) (continued)

February 28, 2022

  

iShares® MSCI India Small-Cap ETF

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  
Pharmaceuticals (continued)            

Natco Pharma Ltd., NVS

    144,379     $ 1,670,038  

Procter & Gamble Health Ltd.

    11,845       719,464  

Sanofi India Ltd.

    12,699       1,224,309  

Shilpa Medicare Ltd.

    51,653       279,694  

Solara Active Pharma Sciences Ltd.

    19,693       179,586  

Strides Pharma Science Ltd.

    91,793       391,312  

Sun Pharma Advanced Research Co. Ltd.(b)

    103,929       372,775  

Suven Pharmaceuticals Ltd.

    141,445       965,715  

Wockhardt Ltd., NVS(b)

    52,262       236,248  
   

 

 

 
          21,500,288  
Professional Services — 1.2%            

L&T Technology Services Ltd.(a)

    41,624       2,521,133  

Quess Corp. Ltd.(a)

    104,492       880,523  

TeamLease Services Ltd.(b)

    17,562       960,384  
   

 

 

 
      4,362,040  
Real Estate Management & Development — 2.4%  

Brigade Enterprises Ltd.

    163,644       1,084,046  

Indiabulls Real Estate Ltd.(b)

    284,785       411,668  

NESCO Ltd.

    33,514       248,929  

Oberoi Realty Ltd.(b)

    200,638       2,429,574  

Phoenix Mills Ltd. (The)

    149,891       1,914,555  

Prestige Estates Projects Ltd.

    221,057       1,341,183  

Sobha Ltd.

    60,154       620,719  

Sunteck Realty Ltd.

    81,775       531,483  
   

 

 

 
      8,582,157  
Semiconductors & Semiconductor Equipment — 0.2%  

Borosil Renewables Ltd.(b)

    71,684       561,664  
   

 

 

 
Software — 4.4%            

Birlasoft Ltd.

    220,352       1,201,165  

Cyient Ltd.

    131,020       1,430,284  

Intellect Design Arena Ltd.(b)

    126,676       1,107,197  

KPIT Technologies Ltd.

    260,389       1,983,453  

Oracle Financial Services Software Ltd.

    33,964       1,535,383  

Route Mobile Ltd.

    34,739       690,591  

Tanla Platforms Ltd.

    105,094       2,203,659  

Tata Elxsi Ltd.

    54,103       4,643,241  

Zensar Technologies Ltd.

    177,451       823,567  
   

 

 

 
      15,618,540  
Textiles, Apparel & Luxury Goods — 3.7%  

Aditya Birla Fashion and Retail Ltd.(b)

    520,882       1,871,124  

Alok Industries Ltd.(b)

    1,954,986       630,444  

Bata India Ltd.

    81,381       1,967,655  

Garware Technical Fibres Ltd.

    14,622       575,492  

Indo Count Industries Ltd.

    125,152       291,770  

KPR Mill Ltd.

    135,432       1,142,884  

Lux Industries Ltd.

    11,925       393,406  

Rajesh Exports Ltd.

    93,651       873,646  

Relaxo Footwears Ltd.

    78,781       1,276,275  

Trident Ltd.

    1,577,974       1,067,759  

Vaibhav Global Ltd.

    77,077       422,141  

Vardhman Textiles Ltd.

    36,555       1,243,897  
Security   Shares     Value  
Textiles, Apparel & Luxury Goods (continued)  

VIP Industries Ltd.(b)

    89,629     $ 768,640  

Welspun India Ltd.

    392,777       550,881  
   

 

 

 
          13,076,014  
Thrifts & Mortgage Finance — 2.4%            

Aavas Financiers Ltd.(b)

    75,716       2,823,308  

Can Fin Homes Ltd.

    94,970       736,656  

Home First Finance Company India Ltd.(a)(b)

    41,816       379,239  

IIFL Finance Ltd.

    179,883       714,746  

Indiabulls Housing Finance Ltd.

    509,921       1,022,826  

LIC Housing Finance Ltd.

    523,512       2,398,805  

PNB Housing Finance Ltd.(a)(b)

    93,109       507,593  
   

 

 

 
      8,583,173  
Tobacco — 0.1%            

Godfrey Phillips India Ltd.

    19,657       267,901  
   

 

 

 
Trading Companies & Distributors — 0.3%            

IndiaMART Intermesh Ltd.(a)

    19,103       1,218,606  
   

 

 

 
Transportation Infrastructure — 0.5%            

GMR Infrastructure Ltd.(b)

    2,854,878       1,446,498  

Gujarat Pipavav Port Ltd.

    417,666       467,766  
   

 

 

 
      1,914,264  
Wireless Telecommunication Services — 0.5%  

Vodafone Idea Ltd.(b)

    13,593,733       1,875,671  
   

 

 

 

Total Common Stocks — 99.4%
(Cost: $245,566,604)

 

    355,067,823  
   

 

 

 

Short-Term Investments

   
Money Market Funds — 2.0%            

BlackRock Cash Funds: Treasury, SL Agency Shares, 0.03%(e)(f)

    7,200,000       7,200,000  
   

 

 

 

Total Short-Term Investments — 2.0%
(Cost: $7,200,000)

 

    7,200,000  
   

 

 

 

Total Investments in Securities — 101.4%
(Cost: $252,766,604)

      362,267,823  
Other Assets, Less Liabilities — (1.4)%         (5,160,045)  
   

 

 

 

Net Assets — 100.0%

    $   357,107,778  
   

 

 

 

 

(a) 

Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors.

(b) 

Non-income producing security.

(c) 

Restricted security as to resale, excluding 144A securities. The Fund held restricted securities with a current value of $635,547, representing 0.2% of its net assets as of period end, and an original cost of $3,554,476.

(d) 

Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy.

(e) 

Affiliate of the Fund.

(f) 

Annualized 7-day yield as of period end.

 

 

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


Consolidated Schedule of Investments  (unaudited) (continued)

February 28, 2022

  

iShares® MSCI India Small-Cap ETF

 

Affiliates

Investments in issuers considered to be affiliate(s) of the Fund during the six months ended February 28, 2022 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

 

 
Affiliated Issuer    Value at
08/31/21
     Purchases
at Cost
     Proceeds
from Sales
    Net Realized
Gain (Loss)
     Change in
Unrealized
Appreciation
(Depreciation)
     Value at
02/28/22
    

Shares

Held at

02/28/22

     Income     

Capital

Gain
Distributions

from

Underlying

Funds

 

 

 

BlackRock Cash Funds: Treasury, SL Agency Shares

   $ 7,290,000      $        $(90,000 )(a)    $      $      $ 7,200,000        7,200,000      $ 560      $  
          

 

 

    

 

 

    

 

 

       

 

 

    

 

 

 

 

  (a) 

Represents net amount purchased (sold).

 

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

       

SGX Nifty 50 Index

    67       03/31/22     $ 2,261     $ 27,722  
       

 

 

 

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Consolidated Statements of Assets and Liabilities were as follows:

 

 

 
     Equity
Contracts
 

 

 

Assets — Derivative Financial Instruments

  

Futures contracts

  

Unrealized appreciation on futures contracts(a)

   $ 27,722  
  

 

 

 

 

  (a) 

Net cumulative unrealized appreciation (depreciation) on futures contracts are reported in the Consolidated Schedule of Investments. In the Consolidated 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 February 28, 2022, the effect of derivative financial instruments in the Consolidated Statements of Operations was as follows:

 

 

 
     Equity
Contracts
 

 

 

Net Realized Gain (Loss) from:

  

Futures contracts

   $ (136,432
  

 

 

 

Net Change in Unrealized Appreciation (Depreciation) on:

  

Futures contracts

   $ 16,718  
  

 

 

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

 

 

Futures contracts:

  

Average notional value of contracts — long

   $ 1,174,131      

 

 

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

 

 

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

  15


Consolidated Schedule of Investments  (unaudited) (continued)

February 28, 2022

  

iShares® MSCI India Small-Cap ETF

 

Fair Value Hierarchy as of Period End (continued)

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  

 

 

Investments

           

Assets

           

Common Stocks

   $ 5,881,812      $ 349,185,984      $ 27      $ 355,067,823  

Money Market Funds

     7,200,000                      7,200,000  
  

 

 

    

 

 

    

 

 

    

 

 

 
   $   13,081,812      $ 349,185,984      $           27      $ 362,267,823  
  

 

 

    

 

 

    

 

 

    

 

 

 

Derivative financial instruments(a)

           

Assets

           

Futures Contracts

   $      $ 27,722      $      $ 27,722  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

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

 

See notes to consolidated 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


Consolidated Statements of Assets and Liabilities (unaudited)

February 28, 2022

 

   

iShares

MSCI India ETF

      

iShares

MSCI India

Small-Cap

ETF

 

 

 

ASSETS

      

Investments in securities, at value:

      

Unaffiliated(a)

  $ 5,567,640,076        $ 355,067,823  

Affiliated(b)

    198,120,000          7,200,000  

Cash

    7,326,525           

Foreign currency, at value(c)

    21,639,111          15,462,451  

Cash pledged:

      

Futures contracts

    1,054,000          180,000  

Receivables:

      

Investments sold

    47,281,847          1,153,369  

Variation margin on futures contracts

    265,506          39,190  

Dividends

    3,086,884          346,768  
 

 

 

      

 

 

 

Total assets

    5,846,413,949          379,449,601  
 

 

 

      

 

 

 

LIABILITIES

      

Bank overdraft

             12,416,425  

Deferred foreign capital gain tax

    177,314,876          6,426,566  

Payables:

      

Investments purchased

    26,533,787          2,632,297  

Capital shares redeemed

    47,581,562          645,915  

Investment advisory fees

    2,826,401          220,620  
 

 

 

      

 

 

 

Total liabilities

    254,256,626          22,341,823  
 

 

 

      

 

 

 

NET ASSETS

  $ 5,592,157,323        $ 357,107,778  
 

 

 

      

 

 

 

NET ASSETS CONSIST OF:

      

Paid-in capital

  $ 4,448,854,574        $ 322,635,320  

Accumulated earnings

    1,143,302,749          34,472,458  
 

 

 

      

 

 

 

NET ASSETS

  $ 5,592,157,323        $ 357,107,778  
 

 

 

      

 

 

 

Shares outstanding

    127,800,000          6,500,000  
 

 

 

      

 

 

 

Net asset value

  $ 43.76        $ 54.94  
 

 

 

      

 

 

 

Shares authorized

    Unlimited          Unlimited  
 

 

 

      

 

 

 

Par value

    None          None  
 

 

 

      

 

 

 

(a) Investments, at cost — Unaffiliated

  $ 3,083,141,765        $ 245,566,604  

(b) Investments, at cost — Affiliated

  $ 198,120,000        $ 7,200,000  

(c)  Foreign currency, at cost

  $ 21,638,956        $ 15,463,462  

See notes to consolidated financial statements.

 

 

C O N S O L I D A T E D   F I N A N C I A L   S T A T E M E N T S

  17


Consolidated Statements of Operations (unaudited)

Six Months Ended February 28, 2022

 

   

iShares

MSCI India

ETF

    

iShares

MSCI India

Small-Cap

ETF

 

 

 

INVESTMENT INCOME

 

  

Dividends — Unaffiliated

  $ 36,948,828      $ 1,605,222  

Dividends — Affiliated

    10,731        560  

Foreign taxes withheld

    (8,039,834      (314,731
 

 

 

    

 

 

 

Total investment income

    28,919,725        1,291,051  
 

 

 

    

 

 

 

EXPENSES

    

Investment advisory fees

    19,422,827        1,421,194  

Commitment fees

    19,090        1,873  

Professional fees

    217        217  

Mauritius income taxes

    295        295  
 

 

 

    

 

 

 

Total expenses

    19,442,429        1,423,579  
 

 

 

    

 

 

 

Net investment income (loss)

    9,477,296        (132,528
 

 

 

    

 

 

 

REALIZED AND UNREALIZED GAIN (LOSS)

    

Net realized gain (loss) from:

    

Investments — Unaffiliated(a)

    83,138,424        16,986,503  

Futures contracts

    (1,254,896      (136,432

Foreign currency transactions

    (2,671,710      (352,941
 

 

 

    

 

 

 

Net realized gain

    79,211,818        16,497,130  
 

 

 

    

 

 

 

Net change in unrealized appreciation (depreciation) on:

    

Investments — Unaffiliated(b)

    (362,090,418      (35,178,935

Futures contracts

    (45,926      16,718  

Foreign currency translations

    (96,408      (31,376
 

 

 

    

 

 

 

Net change in unrealized appreciation (depreciation)

    (362,232,752      (35,193,593
 

 

 

    

 

 

 

Net realized and unrealized loss

    (283,020,934      (18,696,463
 

 

 

    

 

 

 

NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS

  $ (273,543,638    $ (18,828,991
 

 

 

    

 

 

 

(a) Net of foreign capital gain tax and capital gain tax refund, if applicable

  $ (1,721,817    $ (1,688,647

(b) Net of reduction in deferred foreign capital gain tax of

  $ 399,010      $ 2,329,003  

See notes to consolidated financial statements.

 

 

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


Consolidated Statements of Changes in Net Assets

 

   

iShares

MSCI India ETF

   

iShares

MSCI India Small-Cap ETF

 
 

 

 

   

 

 

 
   

Six Months Ended
02/28/22

(unaudited)

   

Year Ended

08/31/21

   

Six Months Ended

02/28/22

(unaudited)

    Year Ended
08/31/21
 

 

 

INCREASE (DECREASE) IN NET ASSETS

            

OPERATIONS

            

Net investment income (loss)

    $ 9,477,296     $ 16,931,383              $ (132,528   $ (33,382

Net realized gain

      79,211,818       6,980,789          16,497,130       20,967,516  

Net change in unrealized appreciation (depreciation)

      (362,232,752 )         1,743,084,666          (35,193,593 )         110,021,003  
   

 

 

   

 

 

      

 

 

   

 

 

 

Net increase (decrease) in net assets resulting from operations

      (273,543,638     1,766,996,838          (18,828,991     130,955,137  
   

 

 

   

 

 

      

 

 

   

 

 

 

DISTRIBUTIONS TO SHAREHOLDERS(a)

            

From net investment income

      (374,889,807     (8,540,172        (5,222,074     (268,669

Return of capital

                           (1,270
   

 

 

   

 

 

      

 

 

   

 

 

 

Decrease in net assets resulting from distributions to shareholders

      (374,889,807     (8,540,172        (5,222,074     (269,939
   

 

 

   

 

 

      

 

 

   

 

 

 

CAPITAL SHARE TRANSACTIONS

            

Net increase (decrease) in net assets derived from capital share transactions

      (110,000,980     1,498,302,314          51,693,085       5,010,592  
   

 

 

   

 

 

      

 

 

   

 

 

 

NET ASSETS

            

Total increase (decrease) in net assets

      (758,434,425     3,256,758,980          27,642,020       135,695,790  

Beginning of period

      6,350,591,748       3,093,832,768          329,465,758       193,769,968  
   

 

 

   

 

 

      

 

 

   

 

 

 

End of period

    $ 5,592,157,323     $ 6,350,591,748        $ 357,107,778     $ 329,465,758  
   

 

 

   

 

 

      

 

 

   

 

 

 

 

(a) 

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

See notes to consolidated financial statements.

 

 

C O N S O L I D A T E D   F I N A N C I A L   S T A T E M E N T S

  19


Consolidated Financial Highlights

(For a share outstanding throughout each period)

 

    iShares MSCI India ETF  
 

 

 

 
   

Six Months Ended

02/28/22

(unaudited)

    Year Ended
08/31/21
    Year Ended
08/31/20
    Year Ended
08/31/19
    Year Ended
08/31/18
    Year Ended
08/31/17
 

 

 

Net asset value, beginning of period

             $ 48.79     $ 33.37     $ 32.38     $ 35.68     $ 34.20     $ 29.61  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income(a)

      0.07       0.14       0.14       0.29       0.25       0.26  

Net realized and unrealized gain (loss)(b)

      (2.19     15.35       0.96       (3.00     1.54       4.53  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) from investment operations

      (2.12     15.49       1.10       (2.71     1.79       4.79  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributions(c)

             

From net investment income

      (2.91     (0.07     (0.11     (0.49     (0.31     (0.20

Return of capital

                        (0.10            
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions

      (2.91     (0.07     (0.11     (0.59     (0.31     (0.20
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net asset value, end of period

    $ 43.76     $ 48.79     $ 33.37     $ 32.38     $ 35.68     $ 34.20  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Return(d)

             

Based on net asset value

      (4.56 )%(e)      46.54     3.40     (7.61 )%      5.26     16.27
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ratios to Average Net Assets(f)

             

Total expenses

      0.64 %(g)      0.65     0.69     0.69     0.68     0.68
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income

      0.31 %(g)      0.35     0.43     0.86     0.72     0.87
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Supplemental Data

             

Net assets, end of period (000)

    $ 5,592,157     $ 6,350,592     $ 3,093,833     $ 4,899,749     $ 5,082,120     $ 5,263,819  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio turnover rate(h)

      6 %(e)(i)      25 %(i)      25 %(i)      9 %(i)      10 %(i)      13 %(i) 
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(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 includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for  cash in U.S. dollars (“cash creations”).

    

    

    

    

    

  

    

    

(i)  Portfolio turnover rate excluding cash creations was as follows:

      6     17     19     6     5     5
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

See notes to consolidated financial statements.

 

 

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


Consolidated Financial Highlights  (continued)

(For a share outstanding throughout each period)

 

    iShares MSCI India Small-Cap ETF
 

 

 

 
   

 

Six Months Ended

02/28/22

(unaudited)

   

Year Ended

08/31/21

   

Year Ended

08/31/20

   

Year Ended

08/31/19

   

Year Ended

08/31/18

   

Year Ended

08/31/17

 

 

 

Net asset value, beginning of period

               $ 57.80       $ 34.60       $ 33.39       $ 44.10       $ 46.27       $ 36.01  
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Net investment income (loss)(a)

      (0.02       (0.01       0.15         0.10         (0.00 )(b)        0.09  

Net realized and unrealized gain (loss)(c)

      (2.07       23.26         1.88         (10.60       (1.06       10.55  
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Net increase (decrease) from investment operations

      (2.09       23.25         2.03         (10.50       (1.06       10.64  
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Distributions(d)

                       

From net investment income

      (0.77       (0.05       (0.82       (0.21       (0.63       (0.38

Return of capital

              (0.00 )(b)                        (0.48        
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Total distributions

      (0.77       (0.05       (0.82       (0.21       (1.11       (0.38
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Net asset value, end of period

    $ 54.94       $ 57.80       $ 34.60       $ 33.39       $ 44.10       $ 46.27  
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Total Return(e)

                       

Based on net asset value

      (3.80 )%(f)        67.25       6.35       (23.88 )%        (2.36 )%        29.97
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Ratios to Average Net Assets(g)

                       

Total expenses

      0.74 %(h)        0.74       0.81       0.76       0.77       0.75
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Net investment income (loss)

      (0.07 )%(h)        (0.01 )%        0.45       0.28       (0.00 )%(i)        0.21
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Supplemental Data

                       

Net assets, end of period (000)

    $ 357,108       $ 329,466       $ 193,770       $ 270,433       $ 282,264       $ 205,914  
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Portfolio turnover rate(j)

      28 %(f)(k)        55 %(k)        32 %(k)        24 %(k)        49 %(k)        38 %(k) 
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

 

(a)   Based on average shares outstanding.

(b)   Rounds to less than $0.01.

(c)   The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the  timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities.

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

(e)   Where applicable, assumes the reinvestment of distributions.

(f) Not annualized.

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

(h)   Annualized.

(i) Rounds to less than 0.01%.

(j) Portfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash in  U.S. dollars (“cash creations”).

(k)   Portfolio turnover rate excluding cash  creations was as follows:

      21       37       28       19       31       22
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

See notes to consolidated financial statements.

 

 

C O N S O L I D A T E D   F I N A N C I A L   H I G H L I G H T S

  21


Notes to Consolidated 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 consolidated financial statements relate only to the following funds (each, a “Fund” and collectively, the “Funds”):

 

   
iShares ETF   Diversification
Classification
 

MSCI India

    Non-diversified    

MSCI India Small-Cap

    Diversified  

Basis of Consolidation: The accompanying consolidated financial statements for each Fund includes the accounts of its subsidiary in the Republic of Mauritius, which is a wholly-owned subsidiary (each, a “Subsidiary”) of the Fund that invests in Indian securities. Through this investment structure, each Fund expects to obtain certain benefits under a current tax treaty between Mauritius and India. The net assets of the iShares MSCI India ETF and iShares MSCI India Small-Cap ETF as of period end were $5,443,582,894 and $350,549,119, which is 97.3% and 98.2% of each Fund’s consolidated net assets. Intercompany accounts and transactions, if any, have been eliminated.

 

2.

SIGNIFICANT ACCOUNTING POLICIES

The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. Below is a summary of significant accounting policies:

Investment Transactions and Income Recognition: For financial reporting purposes, investment transactions are recorded on the dates the transactions are executed. Realized gains and losses on investment transactions are determined using the specific identification method. Dividend income and capital gain distributions, if any, are recorded on the ex-dividend date. Non-cash dividends, if any, are recorded on the ex-dividend date at fair value. Dividends from foreign securities where the ex-dividend date may have passed are subsequently recorded when the Funds are informed of the ex-dividend date. Under the applicable foreign tax laws, a withholding tax at various rates may be imposed on capital gains, dividends and interest. Upon notification from issuers or as estimated by management, a portion of the dividend income received from a real estate investment trust may be redesignated as a reduction of cost of the related investment and/or realized gain.

Foreign Currency Translation: Each Fund’s books and records are maintained in U.S. dollars. Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using prevailing market rates as quoted by one or more data service providers. Purchases and sales of investments are recorded at the rates of exchange prevailing on the respective dates of such transactions. Generally, when the U.S. dollar rises in value against a foreign currency, the investments denominated in that currency will lose value; the opposite effect occurs if the U.S. dollar falls in relative value.

Each Fund does not isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of investments for financial reporting purposes. Accordingly, the effects of changes in exchange rates on investments are not segregated in the Consolidated Statements of Operations from the effects of changes in market prices of those investments, but are included as a component of net realized and unrealized gain (loss) from investments. Each Fund reports realized currency gains (losses) on foreign currency related transactions as components of net realized gain (loss) for financial reporting purposes, whereas such components are generally treated as ordinary income for U.S. federal income tax purposes.

Foreign Taxes: The Funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, capital gains on investments, or certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which each Fund invests. These foreign taxes, if any, are paid by each Fund and are reflected in its Consolidated Statements of Operations as follows: foreign taxes withheld at source are presented as a reduction of income, foreign taxes on securities lending income are presented as a reduction of securities lending income, foreign taxes on stock dividends are presented as “Other foreign taxes”, and foreign taxes on capital gains from sales of investments and foreign taxes on foreign currency transactions are included in their respective net realized gain (loss) categories. Foreign taxes payable or deferred as of February 28, 2022, if any, are disclosed in the Consolidated Statements of Assets and Liabilities.

The Funds file withholding tax reclaims in certain jurisdictions to recover a portion of amounts previously withheld. The Funds may record a reclaim receivable based on collectability, which includes factors such as the jurisdiction’s applicable laws, payment history and market convention. The Consolidated Statements of Operations includes tax reclaims recorded as well as professional and other fees, if any, associated with recovery of foreign withholding taxes.

Each Fund has conducted investment activities in India through its Subsidiary and expects to obtain benefits under the Double Tax Avoidance Agreement (“DTAA”) between India and Mauritius. In order to be eligible to claim benefits under the DTAA, each Subsidiary must have commercial substance, on an annual basis, to satisfy certain tests and conditions, including the establishment and maintenance of valid tax residence in Mauritius, have the place of effective management outside of India, and related requirements. Each Fund has obtained a current tax residence certificate issued by the Mauritian Revenue Authorities.

 

 

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


Notes to Consolidated Financial Statements (unaudited) (continued)

 

Based upon current interpretation and practice of the current tax laws in India and Mauritius and the DTAA, each Subsidiary is subject to tax in Mauritius on its net income at the rate of 15%. However, each Subsidiary is entitled to a tax credit equivalent to the higher of the actual foreign tax incurred or 80% of the Mauritius tax on its foreign source income, thus reducing its maximum effective tax rate to 3% up to June 30, 2021. After June 30, 2021, under the new tax regime and subject to meeting the necessary substance requirements as required under the Financial Services Act 2007 (as amended by the Finance Act 2018) and such guidelines issued by the Financial Services Commission (the “FSC”), each Subsidiary is entitled to either (a) a foreign tax credit equivalent to the actual foreign tax suffered on its foreign income against each Subsidiary’s tax liability computed at 15% on such income, or (b) a partial exemption of 80% of some of the income derived, including interest income or foreign source dividends. Taxes on income, if any, are paid by each Subsidiary and are disclosed in its Consolidated Statements of Operations. Any dividends paid by a Subsidiary to its Fund are not subject to tax in Mauritius. Each Subsidiary is currently exempt from tax in Mauritius on any gains from the sale of securities.

The DTAA provides that capital gains will be taxable in India with respect to the sale of shares acquired on or after April 1, 2017. Capital gains arising from shares acquired before April 1, 2017, regardless of when they are sold, will continue to be exempt from taxation under the amended DTAA, assuming requirements for eligibility under the DTAA are satisfied. There can be no assurance, however, that the DTAA will remain in effect during the Subsidiary’s existence or that it will continue to enjoy its benefits on the shares acquired prior to April 1, 2017.

Segregation and Collateralization: In cases where a Fund enters into certain investments (e.g., futures contracts) that would be treated as “senior securities” for 1940 Act purposes, a Fund may segregate or designate on its books and record cash or liquid assets having a market value at least equal to the amount of its future obligations under such investments. Doing so allows the investment to be excluded from treatment as a “senior security.” Furthermore, 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 or obligations.

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. Each Fund determines the fair values of its financial instruments using various independent dealers or pricing services under policies approved by the Board of Trustees of the Trust (the “Board”). 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 a policy approved by the Board as reflecting fair value. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) is the committee formed by management to develop global pricing policies and procedures and to oversee the pricing function for all financial instruments.

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 net asset value (“NAV”).

   

Futures contracts are valued based on that day’s last reported settlement or trade price on the exchange where the contract is traded.

Generally, trading in foreign instruments is substantially completed each day at various times prior to the close of trading on the New York Stock Exchange (“NYSE”). Each business day, the Funds use current market factors supplied by independent pricing services to value certain foreign instruments (“Systematic Fair Value Price”). The Systematic Fair Value Price is designed to value such foreign securities at fair value as of the close of trading on the NYSE, which follows the close of the local markets.

If events (e.g., market volatility, company announcement or a natural disaster) occur that are expected to materially affect the value of such investment, or in the event that application of these methods of valuation results in a price for an investment that is deemed not to be representative of the market value of such investment, or if a price is not available, the investment will be valued by the Global Valuation Committee, in accordance with a policy approved by the Board as reflecting fair value (“Fair Valued Investments”). The fair valuation approaches that may be used by the Global Valuation Committee include market approach, income approach and cost approach. Valuation techniques such as discounted cash flow, use of market comparables and matrix pricing are types of valuation approaches and are typically used in determining fair value. When determining the price for Fair Valued Investments, the Global Valuation Committee, or its delegate, 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 Global Valuation Committee, or its delegate, deems relevant and consistent with the principles of fair value measurement. The pricing of all Fair Valued Investments is subsequently reported to the Board or a committee thereof on a quarterly basis.

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.

 

 

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Notes to Consolidated Financial Statements (unaudited) (continued)

 

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 Global 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 Global 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.

DERIVATIVE FINANCIAL INSTRUMENTS

Futures Contracts: Futures contracts are purchased or sold to gain exposure to, or manage exposure to, changes in interest rates (interest rate risk) and changes in the value of equity securities (equity risk) or foreign currencies (foreign currency exchange rate risk).

Futures contracts are exchange-traded agreements between the Funds and a counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and on a specified date. Depending on the terms of a contract, it is settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash amount on the settlement date. Upon entering into a futures contract, the Funds are required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on a contract’s size and risk profile. The initial margin deposit must then be maintained at an established level over the life of the contract. Amounts pledged, which are considered restricted, are included in cash pledged for futures contracts in the Consolidated Statements of Assets and Liabilities.

Securities deposited as initial margin are designated in the Consolidated Schedule of Investments and cash deposited, if any, are shown as cash pledged for futures contracts in the Consolidated 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 Consolidated Statements of Assets and Liabilities. When the contract is closed, a realized gain or loss is recorded in the Consolidated 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.

 

5.

INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Advisory Fees: Pursuant to an Investment Advisory Agreement with the Trust, BlackRock Fund Advisors (“BFA”) manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock, Inc. (“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 the iShares MSCI India ETF, BFA is entitled to an annual investment advisory fee, accrued daily and paid monthly by the Fund, based on the average daily net assets of the Fund as follows:

 

   
Aggregate Average Daily Net Assets   Investment Advisory Fee  

First $4 billion

    0.6500

Over $4 billion, up to and including $6 billion

    0.6175  

Over $6 billion, up to and including $8 billion

    0.5867  

Over $8 billion

    0.5573  

For its investment advisory services to the iShares MSCI India Small-Cap ETF, BFA is entitled to an annual investment advisory fee of 0.74%, accrued daily and paid monthly by the Fund, based on the average daily net assets of the Fund.

Each Subsidiary has entered into a separate contract with BFA under which BFA provides investment advisory services to the Subsidiary but does not receive separate compensation from the Subsidiary for providing it with such services. Each Subsidiary has also entered into separate arrangements that provide for the provision of other services to the Subsidiary (including administrative, custody, transfer agency and other services), and BFA pays the costs and expenses related to the provision of those services.

 

 

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Notes to Consolidated Financial Statements (unaudited) (continued)

 

Distributor: BlackRock Investments, LLC, an affiliate of BFA, is the distributor for each Fund. Pursuant to the distribution agreement, BFA is responsible for any fees or expenses for distribution services provided to the Funds.

Officers and Trustees: Certain officers and/or trustees of the Trust are officers and/or trustees of BlackRock or its affiliates.

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 Consolidated 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.

 

6.

PURCHASES AND SALES

For the six months ended February 28, 2022, purchases and sales of investments, excluding short-term investments and in-kind transactions, were as follows:

 

     

iShares ETF

  Purchases     Sales  

MSCI India

  $   389,080,310       $   926,284,886    

MSCI India Small-Cap

    146,405,355       102,857,184  

There were no in-kind transactions for the six months ended February 28, 2022.

 

7.

INCOME TAX INFORMATION

Each Fund is treated as an entity separate from the Trust’s other funds for federal income tax purposes. It is each Fund’s policy to comply with the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies, and to distribute substantially all of its taxable income to its shareholders. Therefore, no U.S. federal income tax provision is required.

Management has analyzed tax laws and regulations and their application to the Funds as of February 28, 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’ consolidated financial statements.

As of August 31, 2021, the Funds had non-expiring capital loss carryforwards available to offset future realized capital gains as follows:

 

   
iShares ETF   Non-Expiring  

MSCI India

  $   655,989,828    

MSCI India Small-Cap

    62,205,401  

A fund may own shares in certain foreign investment entities, referred to, under U.S. tax law, as “passive foreign investment companies.” Such fund may elect to mark-to-market annually the shares of each passive foreign investment company and would be required to distribute to shareholders any such marked-to-market gains.

As of February 28, 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)

 

MSCI India

  $   3,502,127,841      $ 2,547,912,380      $ (284,258,637   $ 2,263,653,743    

MSCI India Small-Cap

    269,406,521       126,195,671       (33,306,647     92,889,024  

 

8.

LINE OF CREDIT

The Funds, along with certain other iShares funds (“Participating Funds”), are parties to a $800 million credit agreement (“Syndicated Credit Agreement”) with a group of lenders, which expires on August 12, 2022. The line of credit may be used for temporary or emergency purposes, including redemptions, settlement of trades and rebalancing of portfolio holdings in certain target markets. The Funds may borrow up to the aggregate commitment amount subject to asset coverage and other limitations as specified in the Syndicated Credit Agreement. The Syndicated Credit Agreement has the following terms: a commitment fee of 0.15% per annum on the unused portion of the credit agreement and interest at a rate equal to the higher of (a) the one-month LIBOR rate (not less than zero) plus 1.00% per annum or (b) the U.S. Federal Funds rate (not less than zero) plus 1.00% per annum on amounts borrowed. The commitment fee is generally allocated to each Participating Fund based on the lesser of a Participating Fund’s relative exposure to certain target markets or a Participating Fund’s maximum borrowing amount as set forth by the terms of the Syndicated Credit Agreement.

During the six months ended February 28, 2022, the Funds did not borrow under the Syndicated Credit Agreement.

 

 

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Notes to Consolidated Financial Statements (unaudited) (continued)

 

The Funds, along with certain other iShares funds (“Mauritius Participating Funds”), are parties to a $750,000,000 unsecured and uncommitted line of credit (“Uncommitted Liquidity Facility”) with State Street Bank and Trust Company, which may be used solely to facilitate trading associated with the closure of each Fund’s Mauritius subsidiary. The Uncommitted Liquidity Facility has interest at a rate equal to the higher of (a) the U.S. Federal Funds rate (not less than zero) plus 1.25% per annum or (b) the Overnight Bank Funding rate (not less than zero) plus 1.25% per annum on amounts borrowed. Each Mauritius Participating Fund will be removed from the Uncommitted Liquidity Facility once trading out of its holdings in the Mauritius subsidiary is complete. During the six months ended February 28, 2022, the Funds did not borrow under the Uncommitted Liquidity Facility.

 

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.

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.

The price each Fund could receive upon the sale of any particular portfolio investment may differ from each Fund’s valuation of the investment, particularly for securities that trade in thin or volatile markets or that are valued using a fair valuation technique or a price provided by an independent pricing service. Changes to significant unobservable inputs and assumptions (i.e., publicly traded company multiples, growth rate, time to exit) due to the lack of observable inputs.

Counterparty Credit Risk: The Funds may be exposed to counterparty credit risk, or the risk that an entity may fail to or be unable to perform on its commitments related to unsettled or open transactions, including making timely interest and/or principal payments or otherwise honoring its obligations. The Funds manage counterparty credit risk by entering into transactions only with counterparties that the Manager believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Funds to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Funds’ exposure to market, issuer and counterparty credit risks with respect to these financial assets is approximately their value recorded in the Consolidated Statements of Assets and Liabilities, less any collateral held by the Funds.

A derivative contract may suffer a mark-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform under the contract.

With exchange-traded futures, there is less counterparty credit risk to the Funds since the exchange or clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, credit risk is limited to failure of the clearinghouse. While offset rights may exist under applicable law, a Fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency). Additionally, credit risk exists in exchange-traded futures with respect to initial and variation margin that is held in a clearing broker’s customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Funds.

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 Consolidated Schedule of Investments.

 

 

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Notes to Consolidated Financial Statements (unaudited) (continued)

 

The Funds invest a significant portion of their assets in issuers located in a single country or a limited number of countries. When a Fund concentrates its investments in this manner, it assumes the risk that economic, regulatory, political and social conditions in that country or those countries may have a significant impact on the fund and could affect the income from, or the value or liquidity of, the Fund’s portfolio. Unanticipated or sudden political or social developments may cause uncertainty in the markets and as a result adversely affect the Fund’s investments. Foreign issuers may not be subject to the same uniform accounting, auditing and financial reporting standards and practices as used in the United States. Foreign securities markets may also be more volatile and less liquid than U.S. securities and may be less subject to governmental supervision not typically associated with investing in U.S. securities.

The Funds invest a significant portion of their assets in securities of issuers located in Asia or with significant exposure to Asian issuers or countries. The Asian financial markets have recently experienced volatility and adverse trends due to concerns in several Asian countries regarding monetary policy, government intervention in the markets, rising government debt levels or economic downturns. These events may spread to other countries in Asia and may affect the value and liquidity of certain of the Funds’ investments.

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 Consolidated 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

02/28/22

    

Year Ended

08/31/21

 
 

 

 

    

 

 

 
iShares ETF   Shares      Amount      Shares      Amount  

 

 

MSCI India

          

Shares sold

    2,900,000      $ 130,200,916        44,850,000      $ 1,805,890,047  

Shares redeemed

    (5,250,000      (240,201,896      (7,400,000      (307,587,733
 

 

 

    

 

 

    

 

 

    

 

 

 

Net increase (decrease)

    (2,350,000    $   (110,000,980      37,450,000      $ 1,498,302,314