iShares Trust

· iShares Currency Hedged MSCI United Kingdom ETF | HEWU | NYSE Arca

· iShares MSCI United Kingdom ETF | EWU | NYSE Arca

· iShares MSCI United Kingdom Small-Cap ETF | EWUS | Cboe BZX

Table of Contents

Market Overview

iShares Trust

Global Market Overview

Global equity markets advanced during the 12 months ended August 31, 2023 (“reporting period”), supported by continued economic growth and moderating inflation. The MSCI ACWI, a broad global equity index that includes both developed and emerging markets, returned 13.95% in U.S. dollar terms for the reporting period. Despite concerns about the impact of higher interest rates and rising prices, the global economy continued to grow, albeit at a slower pace than during the initial post-coronavirus pandemic recovery. Inflation began to subside in most regions of the world, and lower energy prices reduced pressure on consumers, leading consumer and business sentiment to improve. While the Russian invasion of Ukraine continued to disrupt trade in Europe and elsewhere, market adaptation lessened the economic impact of the ongoing war. The prices of several key commodities, including oil, natural gas, and wheat, either stabilized or declined during the reporting period, easing pressure on the world’s economies.

The U.S. Federal Reserve (“Fed”) tightened monetary policy rapidly, raising short-term interest rates seven times over the course of the reporting period. The pace of tightening decelerated as the Fed twice lowered the increment of increase before pausing entirely in June 2023, the first time it declined to take action since the tightening cycle began. However, the Fed then raised interest rates again at its July 2023 meeting and stated that it would continue to monitor economic data. The Fed also continued to decrease the size of its balance sheet by reducing the store of U.S. Treasuries it had accumulated to stabilize markets in the early phases of the pandemic.

Despite the tightening financial conditions, the U.S. economy demonstrated continued strength, and U.S. equities advanced. The economy returned to growth in the third quarter of 2022 and showed robust, if slightly slower, growth thereafter. Consumers powered the economy, increasing their spending in both nominal and inflation-adjusted terms. A strong labor market bolstered spending, as unemployment remained low, and the number of employed persons reached an all-time high. Tightness in the labor market drove higher wages, although wage growth slowed as the reporting period continued.

European stocks outpaced their counterparts in most other regions of the globe, advancing strongly for the reporting period despite modest economic growth. European stocks benefited from a solid recovery following the early phases of the war in Ukraine. While the conflict disrupted critical natural gas supplies, new sources were secured and prices declined, while a warm winter helped moderate consumption. The European Central Bank (“ECB”) responded to the highest inflation since the introduction of the euro by raising interest rates eight times and beginning to reduce the size of its debt holdings.

Stocks in the Asia-Pacific region gained, albeit at a slower pace than other regions of the world. Japan returned to growth in the fourth quarter of 2022 and first half of 2023, as strong business investment and exports helped boost the economy and support Japanese equities. However, Chinese stocks were negatively impacted by slowing economic growth. While investors were initially optimistic following China’s lifting of several pandemic-related lockdowns in December 2022, subsequent performance disappointed, and tensions with the U.S. increased. Emerging market stocks advanced modestly, as the resilient global economic environment reassured investors. The declining value of the U.S. dollar relative to many other currencies and the slowing pace of the Fed’s interest rate increases also supported emerging market stocks.

Investment Objective

The iShares Currency Hedged MSCI United Kingdom ETF (the “Fund”) seeks to track the investment results of an index composed of large- and mid-capitalization United Kingdom equities while mitigating exposure to fluctuations between the value of the British pound and the U.S. dollar, as represented by the MSCI United Kingdom 100% Hedged to USD 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. The Fund currently seeks to achieve its investment objective by investing a substantial portion of its assets in one underlying fund, the iShares MSCI United Kingdom ETF.

On June 6, 2023, the Board approved a proposal to close the Fund to new and subsequent investments and thereafter to liquidate the Fund. After the close of business on October 30, 2023, the Fund will no longer accept creation orders. Trading in the Fund will be halted prior to market open on October 31, 2023. Proceeds of the liquidation will be sent to shareholders on or about November 2, 2023.

Performance

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSETVALUE)

The inception date of the Fund was June 29, 2015. The first day of secondary market trading was July 1, 2015.

Past performance is not an indication of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” for more information.

Expense Example

Portfolio Management Commentary

Despite a slowing economy, stocks from the U.K. advanced significantly in U.S. dollar terms during the reporting period. Early in the reporting period, a tax plan proposed by the government raised investor concerns about additional borrowing requirements and the impact of the plan on financial markets. However, the plan was withdrawn, and new leadership stabilized the country’s fiscal position. Inflation remained elevated, although it declined notably during the reporting period, as the Bank of England raised interest rates eight times in an attempt to control rising prices.

The financials sector contributed the most to the Index’s return, driven primarily by the banking industry. Rising interest rates drove increased bank revenues, and cost cuts in the form of automation and layoffs also improved profitability, supporting larger dividend payouts and a stock buyback program. A rebound in an international interbank lending rate led to higher net interest margins (a measure of the profitability of interest-bearing assets compared to interest paid to depositors) for large British banks.

The industrials sector contributed meaningfully to the Index’s performance, as the aerospace and defense industry drove solid gains. The rebound in international travel following the end of coronavirus pandemic-related restrictions increased demand for aircraft engines, bolstering profits in the industry. Furthermore, geopolitical tensions in the wake of Russia’s invasion of Ukraine led to a significant increase in orders for defense equipment. The energy sector also contributed, as the oil, gas, and consumable fuels industry was buoyed by strong cash flows that enabled increased dividend payments to shareholders.

In terms of currency performance during the reporting period, the British pound appreciated by approximately 9% against the U.S. dollar. As the Fed slowed and then paused its interest rate increases, the Bank of England continued to raise interest rates, supporting the value of the British pound relative to the U.S. dollar.

The British pound’s positive performance meant hedging activity detracted from the Index’s return. A fully hedged investor seeks to bypass the currency fluctuations — both on the upside and on the downside — related to holding foreign-currency-denominated securities. The Index’s hedging activity offset the positive impact of the British pound’s performance relative to the U.S. dollar, resulting in an Index return that was relatively close to the return of British equities measured in British pounds.

Portfolio Information

Investment Objective

The iShares MSCI United Kingdom ETF (the “Fund”) seeks to track the investment results of an index composed of U.K. equities, as represented by the MSCI United Kingdom Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index.

Performance

GROWTH OF $10,000 INVESTMENT

(AT NET ASSET VALUE)

Past performance is not an indication of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” for more information.

Expense Example 

Portfolio Management Commentary

Despite a slowing economy, stocks from the U.K. advanced significantly during the reporting period. Early in the reporting period, a tax plan proposed by the government raised investor concerns about additional borrowing requirements and the impact of the plan on financial markets. However, the plan was withdrawn, and new leadership stabilized the country’s fiscal position. Inflation remained elevated, although it declined notably during the reporting period, as the Bank of England raised interest rates eight times in an attempt to control rising prices. Higher interest rates supported the British pound, which appreciated relative to the U.S. dollar, making British stocks more valuable in U.S. dollar terms.

The financials sector contributed the most to the Index’s return, driven primarily by the banking industry. Rising interest rates drove increased bank revenues, and cost cuts in the form of automation and layoffs also improved profitability, supporting larger dividend payouts and a stock buyback program. A rebound in an international interbank lending rate led to higher net interest margins (a measure of the profitability of interest-bearing assets compared to interest paid to depositors) for large British banks.

The industrials sector contributed meaningfully to the Index’s performance, as the aerospace and defense industry drove solid gains. The rebound in international travel following the end of coronavirus pandemic-related restrictions increased demand for aircraft engines, bolstering profits in the industry. Furthermore, geopolitical tensions in the wake of Russia’s invasion of Ukraine led to a significant increase in orders for defense equipment. The energy sector also contributed, as the oil, gas, and consumable fuels industry was buoyed by strong cash flows that enabled increased dividend payments to shareholders.

Portfolio Information 

Investment Objective

The iShares MSCI United Kingdom Small-Cap ETF (the “Fund”) seeks to track the investment results of an index composed of small-capitalization U.K. equities, as represented by the MSCI United Kingdom 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

GROWTH OF $10,000 INVESTMENT

(AT NET ASSET VALUE)

Past performance is not an indication of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” for more information.

Expense Example

Portfolio Management Commentary

Despite a slowing economy and higher interest rates, small capitalization stocks from the U.K. advanced significantly during the reporting period. Many larger companies were reclassified as small companies due to falling stock prices in 2022, which lowered valuations for small capitalization stocks overall. Relatively low valuations, as well as solid fundamental results both from companies with global exposure and from domestically focused niche companies, ultimately propelled small capitalization stocks. Higher interest rates supported the British pound, which appreciated relative to the U.S. dollar, making British stocks more valuable in U.S. dollar terms.

The consumer discretionary sector was the largest contributor to the Index’s return despite declining retail sales. U.K. consumers sought refuge from rising prices by shifting purchases to less expensive products. Consequently, a prominent discount store’s strong sales and improving earnings guidance drove the company’s stock higher. Similarly, the leisure products industry advanced, driven mostly by solid earnings at a company that sells miniature figurines for a medieval fantasy wargame.

The industrials sector also advanced amid a modest recovery in industrial production. Engineering services stocks in the machinery industry gained, as strong demand for mining equipment, sustainability projects, and automation drove earnings growth. Among trading companies and distributors, a manufacturer of custom kitchen cabinets advanced despite a flat housing market. The financials sector benefited from rising capital markets and solid growth at a bank with operations in Georgia, whose economy grew rapidly amid rising foreign investment, tourism, and the country’s ascendance as a key shipping center during the war in Ukraine.

On the downside, broad-based weakness in the real estate sector detracted from the Index’s return. Rising interest rates, office vacancy due to the rise of remote work, and financial distress at a subsidized housing provider weighed on the sector.

Portfolio Information

About Fund Performance

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

Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. Beginning August 10, 2020, the price used to calculate market return (“Market Price”) is the closing price. Prior to August 10, 2020, Market Price was determined using the midpoint between the highest bid and the lowest ask on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. 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.

Disclosure of Expenses

Shareholders of each Fund may incur the following charges: (1) transactional expenses, including brokerage commissions on purchases and sales of fund shares and (2) ongoing expenses, including management fees and other fund expenses. The expense examples shown (which are based on a hypothetical investment of $1,000 invested at the beginning of the period and held through the end of the period) are intended to assist shareholders both in calculating expenses based on an investment in each Fund and in comparing these expenses with similar costs of investing in other funds.

The expense examples provide information about actual account values and actual expenses. Annualized expense ratios reflect contractual and voluntary fee waivers, if any. In order to estimate the expenses a shareholder paid during the period covered by this report, shareholders can divide their account value by $1,000 and then multiply the result by the number under the heading entitled “Expenses Paid During the Period.”

The expense examples also provide information about hypothetical account values and hypothetical expenses based on a fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses. In order to assist shareholders in comparing the ongoing expenses of investing in the Funds and other funds, compare the 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

The expenses shown in the expense examples are intended to highlight shareholders’ ongoing costs only and do not reflect any transactional expenses, such as brokerage commissions and other fees paid on purchases and sales of fund shares. Therefore, the hypothetical examples are useful in comparing ongoing expenses only and will not help shareholders determine the relative total expenses of owning different funds. If these transactional expenses were included, shareholder expenses would have been higher.

Affiliates

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

Derivative Financial Instruments Outstanding as of Period End Forward

Foreign Currency Exchange Contracts

Forward Foreign Currency Exchange Contracts (continued)

Derivative Financial Instruments Categorized by Risk Exposure

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

For the period ended August 31, 2023, the effect of derivative financial instruments in the Statements of Operations was as follows:

Average Quarterly Balances of Outstanding Derivative Financial Instruments

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

Derivative Financial Instruments - Offsetting as of Period End

The Fund’s derivative assets and liabilities (by type) were as follows:

The following tables present the Fund’s derivative assets and liabilities by counterparty net of amounts available for offset under an MNA and net of the related collateral received and pledged by the Fund:

Derivative Financial Instruments - Offsetting as of Period End (continued)

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of financial instruments. For a description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, refer to the Notes to Financial Statements.

The following table summarizes the Fund’s financial instruments categorized in the fair value hierarchy. The breakdown of the Fund’s financial instruments into major categories is disclosed in the Schedule of Investments above.

See notes to financial statements.