iShares Trust

· iShares 0-5 Year High Yield Corporate Bond ETF | SHYG | NYSE Arca

· iShares Broad USD High Yield Corporate Bond ETF | USHY | Cboe BZX

· iShares ESG Advanced High Yield Corporate Bond ETF | HYXF | NASDAQ

· iShares Fallen Angels USD Bond ETF | FALN | NASDAQ

Table of Contents

Market Overview

iShares Trust

U.S. Bond Market Overview

The U.S. bond market declined slightly for the 12 months ended October 31, 2021 (“reporting period”). The Bloomberg U.S. Aggregate Bond Index, a broad measure of U.S. fixed-income performance, returned -0.48%.

The U.S. economy continued to recover from the effects of the coronavirus pandemic, growing at a brisk pace during the reporting period. Driven by strong consumer spending and significant fiscal and monetary stimulus, U.S. growth outpaced most other developed economies. An ongoing COVID-19 vaccination program helped accelerate the easing of pandemic-related restrictions, and consumers returned to activities that were previously curtailed, such as travel, restaurant dining, and in-person shopping. Spending on goods also remained elevated, leading imports to rise to an all-time high.

However, this robust consumer demand combined with continued pandemic-related disruptions to the global supply chain led to significantly higher inflation. Similarly, in the labor market, the reopening economy and pent-up demand meant that hiring accelerated, and the unemployment rate fell substantially. Nonetheless, total employment remained notably below pre-pandemic levels and job openings reached a record high despite rising wages. Elevated demand drove an increase in industrial production, although rising commodities prices and supply delays constrained growth, particularly late in the reporting period. The emergence of the highly contagious Delta variant, which was responsible for a significant rise in cases beginning late in summer 2021, also weighed on the economy.

The U.S. Federal Reserve Bank (“Fed”) continued to keep short-term interest rates at near-zero levels and maintained a significant bond-buying program for U.S. Treasuries and mortgage-backed securities, although it discontinued its corporate bond purchasing program. The Fed indicated that it would begin slowing its bond buying activities late in 2021 and signaled that an interest rate increase could be possible in 2022. However, the improving employment environment and a sharp rise in inflation led investors to anticipate a more accelerated tightening of monetary policy. Trading activity showed that investors view multiple interest rate increases as probable in 2022.

U. S. Treasuries declined, as inflation increased, and investors moved toward equities and lower-rated bonds. Rising domestic inflation expectations pressured U. S. Treasuries, which typically lose value in an inflationary environment. U.S. Treasury yields (which move inversely to prices) began the reporting period near historic lows, but generally rose as inflation increased and the economy continued to strengthen. Yields of U.S. Treasuries with intermediate- and long-term maturities, which are more sensitive to inflation, generally increased more than short-term U.S. Treasuries. However, long-term U.S. Treasury yields rose less than intermediate-term U.S. Treasury yields, with two-year, 10-year, and 30-year U.S. Treasury yields rising by 0.34%, 0.67%, and 0.28%, respectively.

Mortgage-backed securities (“MBS”) declined slightly, despite ongoing support from Fed bond purchasing. MBS performance was constrained by prepayments, as homeowners took advantage of low mortgage rates to refinance their mortgages at a lower interest rate.

On the upside, most corporate bonds advanced for the reporting period, particularly lower-rated corporate bonds. A narrowing yield spread (the difference between yields on corporate bonds and U.S. Treasuries) buoyed the performance of corporate bonds compared to U.S. Treasuries. Investors’ ongoing search for yield in a low interest rate environment drove the decline in the yield spread and supported corporate bond prices. High-yield bonds gained the most, as investors’ concerns about solvency abated alongside the growing economy, and the Fed’s support led to high investor confidence. Corporate bond issuance was elevated by historical standards as companies took advantage of low yields to refinance and lock in advantageous borrowing costs.

Investment Objective

The iShares 0-5 Year High Yield Corporate Bond ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. dollar-denominated, high yield corporate bonds with remaining maturities of less than five years, as represented by the Markit iBoxx^® USD Liquid High Yield 0-5 Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index.

Performance

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 10/15/13. The first day of secondary market trading was 10/17/13.

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 13 for more information.

Expense Example

Portfolio Management Commentary

Short-term high-yield corporate bonds advanced sharply during the reporting period amid a strong economic recovery from the disruptions of the coronavirus pandemic and investor demand for higher-yield investments in a low interest rate environment. Corporate earnings recovered as economies reopened, pushing the ratio of debt to profits back to pre-pandemic levels and driving investor optimism surrounding credit quality. On the supply side, bond issuance reached historically high levels as companies sought to capitalize on rising investor demand and low interest rates to refinance existing higher-cost debt.

The Index advanced despite increasing concerns regarding ongoing inflation, which rose briskly amid rising consumer demand and supply chain disruptions. High-yield credit spreads (the difference in yield between high-yield bonds and U.S. Treasuries) also declined during the reporting period. While the Fed maintained interest rates at historically low levels, high-yield corporate bond yields declined to record lows due to strong corporate balance sheets combined with strong investor demand. In addition, many companies that were downgraded at the beginning of the pandemic strengthened their financial positions as the economy improved, contributing to the fall in yields and credit spreads. Short-term bonds rated Ba were the top contributors to the Index’s return, though all other rating categories in the Index contributed.

From an industry perspective, high-yield corporate bonds issued by companies in the energy industry contributed the most to the Index’s performance, as the global recovery produced rising demand for energy, leading to sharply higher oil prices. The consumer cyclicals industry also contributed, as revenues of gaming companies rose due to recovery in travel and entertainment spending as the U.S. economy reopened. Bonds issued by automotive companies gained, benefiting from strength in electric vehicle orders.

Portfolio Information

Investment Objective

The iShares Broad USD High Yield Corporate Bond ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. dollar-denominated, high yield corporate bonds, as represented by the ICE BofA U.S. High Yield Constrained Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index.

Performance

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 10/25/17. The first day of secondary market trading was 10/26/17.

On 3/1/2021 the Fund began to track the 4pm pricing variant of the ICE BofA US High Yield Constrained Index. Historical index data prior to 3/1/2021 is for the 3pm pricing variant of the ICE BofA US High Yield Constrained Index. Index data on and after 3/1/2021 is for the 4pm pricing variant of the ICE BofA US High Yield Constrained Index.

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 13 for more information.

Expense Example

Portfolio Management Commentary

High-yield corporate bonds advanced for the reporting period amid a strong economic recovery from the disruptions of the coronavirus pandemic and elevated investor demand for higher-yield investments in a low-interest-rate environment. Corporate earnings recovered as the U.S. economy reopened, supporting investor optimism surrounding credit quality, as the ratio of debt to profits decreased significantly. On the supply side, high-yield bond issuance reached historically high levels as companies sought to capitalize on rising investor demand and lower interest rates to refinance existing, higher-cost debt.

The Index advanced despite increasing concerns regarding ongoing inflation, which rose sharply amid rising consumer demand and supply chain disruptions. High-yield credit spreads (the difference in yield between high-yield bonds and U.S. Treasuries) declined during the reporting period. While the Fed maintained interest rates at historically low levels, high yield corporate bond yields declined to record lows, falling below the inflation rate for the first time on record, due to strong corporate balance sheets combined with solid investor demand. In addition, many companies which were downgraded at the beginning of the pandemic strengthened their financial positions as the economy improved, contributing to the fall in yields and spreads. High yield bonds rated Ba contributed the most to the Index’s return, followed by bonds rated B and Caa.

From an industry perspective, high-yield corporate bonds issued by companies in the energy industry contributed the most to the Index’s performance, as the global recovery led to rising demand for energy, which drove prices for oil, natural gas, and coal sharply higher. The consumer cyclicals industry also contributed as a rebound in demand for cruises benefited the leisure industry.

Portfolio Information

Investment Objective

The iShares ESG Advanced High Yield Corporate Bond ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. dollar-denominated high yield corporate bonds from issuers with a favorable environmental, social and governance rating as identified by the index provider, while applying extensive screens for involvement in controversial activities , as represented by the Bloomberg MSCI US High Yield Choice ESG Screened Index (the “Index”) (formerly the Bloomberg Barclays MSCI US High Yield Choice ESG Screened Index). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index.

Performance

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 6/14/16. The first day of secondary market trading was 6/16/16.

Index performance through September 14, 2020 reflects the performance of the Markit iBoxx USD Liquid High Yield ex-Oil & Gas Index. Index performance beginning on September 15, 2020 reflects the performance of the Bloomberg MSCI US High Yield Choice ESG Screened Index.

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 13 for more information.

Expense Example

Portfolio Management Commentary

U.S. high yield corporate bonds issued by companies with positive environmental, social, and governance (“ESG”) characteristics with additional screens for controversial activities posted a solid advance for the reporting period. Investor interest in the ESG attributes of companies continued to grow during the reporting period as the global economy recovered from the effects of the coronavirus pandemic. For many investors, the threat to public health from COVID-19 underscored the importance of a financial reporting system that accounts for the effects of company behavior on global social and environmental well-being. Companies with ESG attributes were also supported by significant wind and solar power incentives included in a December 2020 stimulus bill. Additionally, a rule proposed by the Department of Labor in October 2021 would expand the ability of retirement plan sponsors to offer ESG products, reversing the stance of the prior administration.

Bonds issued by consumer cyclical companies contributed the most to the Index’s return, as fiscal stimulus and increased COVID-19 vaccinations led to higher consumer spending, particularly on entertainment. A significant rebound in travel and in-person activities supported leisure companies, including cruise lines and amusement park operators. Bonds of retailers also advanced, helped by higher spending and fewer pandemic-related shopping restrictions.

Bonds of communications companies also contributed solidly to the Index’s performance, particularly in the media and entertainment industry. Households continued to spend on home entertainment platforms, even as restrictions on other activities loosened. Radio and television broadcasters benefited as the economic recovery drove an increase in advertising spending.

In terms of relative performance, the Index underperformed the broader market, as represented by the Bloomberg U.S. Corporate High Yield Index. Relative to the broader market, the ESG selection process leads to overweight and underweight positions in bonds with higher or lower ESG characteristics, respectively. Consequently, the Index attained an ESG quality score that was 48.40% higher than the broader market, with 63.86% lower exposure to carbon-intensive companies. Relative to the broader market, the Index held overweight positions in the technology and communications sectors and a significant underweight in the energy sector. The Index’s relative lack of exposure to the energy sector was the largest source of detraction from relative performance, as energy companies benefited from rising oil prices during the reporting period. However, overweight positions in the technology and communications sectors contributed to the Index’s relative return.

Portfolio Information

Investment Objective

The iShares Fallen Angels USD Bond ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. dollar-denominated, high yield corporate bonds that were previously rated investment grade, as represented by the Bloomberg U.S. High Yield Fallen Angel 3% Capped Index (the “Index”)(formerly the Bloomberg Barclays U.S. High Yield Fallen Angel 3% Capped Index). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index.

Performance

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

The inception date of the Fund was 6/14/16. The first day of secondary market trading was 6/16/16.

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 13 for more information.

Expense Example

Portfolio Management Commentary

High-yield corporate bonds of companies formerly rated as high-quality issuers advanced sharply for the reporting period. Credit rating downgrades due to the coronavirus pandemic added significantly to the ranks of “fallen angels,” which subsequently benefited from improved investor optimism due to economic recovery amid the rollouts of coronavirus vaccines, driving yields lower. High-yield credit spreads, the difference in yield between high-yield bonds and U.S. Treasuries, also declined during the reporting period. Support from the Fed and the recovery of corporate earnings, which increased as the U.S. economy reopened, drove investor confidence. On the supply side, high-yield corporate bond issuance reached historically high levels as companies sought to capitalize on rising investor demand to shore up their balance sheets.

High-yield corporate bonds issued by companies in the energy industry, which represented approximately 25% of the Index on average, contributed the most to the Index’s performance. During the economic disruptions of the early part of the pandemic, reduced oil prices led to downgrades of a significant number of energy companies. Subsequently, as the global economic recovery produced rising demand for energy, oil prices rose sharply. High-yield consumer cyclicals industry bonds were also contributors, as consumers increased purchases of apparel and footwear for social gatherings as pandemic-related restrictions were lifted. High-yield bonds in the leisure industry advanced amid a strong recovery in cruise bookings.

In terms of performance by credit rating, high-yield corporate bonds rated Ba, which represented approximately 74% of the Index on average, contributed the most to the Index’s return. While all credit-quality ratings contributed to the Index’s performance, higher-rated high-yield bonds benefited from investors’ expectations that the improving financial environment would pave the way for credit upgrades.

Portfolio Information

About Fund Performance

Past performance is not an indication of future results. Financial markets have experienced extreme volatility and trading in many instruments has been disrupted. These circumstances may continue for an extended period of time and may continue to affect adversely the value and liquidity of each Fund’s investments. As a result, current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at iShares.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are redeemed or sold in the market. Performance for certain funds may reflect a waiver of a portion of investment advisory fees. Without such a waiver, performance would have been lower.

Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. Beginning August 10, 2020, the price used to calculate market return (“Market Price”) is the closing price. Prior to August 10, 2020, Market Price was determined by 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

As a shareholder of your Fund, you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of fund shares and (2) ongoing costs, including management fees and other fund expenses. The expense example, which is based on an investment of $1,000 invested at the beginning of the period (or from the commencement of operations if less than 6 months) and held through the end of the period, is intended to help you understand your ongoing costs (in dollars and cents) of investing in your Fund and to compare these costs with the ongoing costs of investing in other funds.

Actual Expenses – The table provides information about actual account values and actual expenses. Annualized expense ratios reflect contractual and voluntary fee waivers, if any. To estimate the expenses that you paid on your account over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled “Expenses Paid During the Period.”

Hypothetical Example for Comparison Purposes – The table also provides information about hypothetical account values and hypothetical expenses based on your Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions and other fees paid on purchases and sales of fund shares. Therefore, the hypothetical examples are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.