iShares U.S. ETF Trust

· iShares Inflation Hedged Corporate Bond ETF | LQDI | Cboe BZX

· iShares Inflation Hedged High Yield Bond ETF | HYGI | NYSE Arca

· iShares Inflation Hedged U.S. Aggregate Bond ETF | AGIH | NYSE Arca

· iShares Interest Rate Hedged Corporate Bond ETF | LQDH | NYSE Arca

· iShares Interest Rate Hedged High Yield Bond ETF | HYGH | NYSE Arca

· iShares Interest Rate Hedged Long-Term Corporate Bond ETF | IGBH | NYSE Arca

· iShares Interest Rate Hedged U.S. Aggregate Bond ETF | AGRH | NYSE Arca

Table of Contents

Market Overview

iShares U.S. ETF Trust

U.S. Bond Market Overview

The U.S. bond market experienced a considerable decline for the 12 months ended October 31, 2022 (the “reporting period”). The Bloomberg U.S. Aggregate Bond Index, a broad measure of U.S. fixed-income performance, returned -15.68%.

The U.S. Federal Reserve’s (Fed’s) shift toward tighter monetary policy was the primary factor driving the market downturn. Annualized consumer price inflation, which had been under 3.0% for over a decade, began to rise throughout 2021 and ultimately climbed above 6.0% in the year’s fourth calendar quarter. The inflation picture soon grew even more challenging following Russia’s invasion of Ukraine in early 2022, which—together with the resulting sanctions—further snarled global supply chains and contributed to a spike in energy prices. Inflation exceeded 8.0% in March 2022 and remained above that level through the end of the reporting period, with a peak of 9.1% in June.

The Fed moved aggressively in an effort to calm price pressures, ending its stimulative quantitative easing program and boosting interest rates from a range of 0.0%-0.25% to 3.0-3.25% in five separate increases from March to September 2022. This marked the largest move in such a short interval since 1980. In addition, the Fed appeared set to continue raising rates until inflation showed signs of returning closer to its longer-term target of 2%. Some evidence began to emerge later in the period that the Fed’s rate hikes had begun to reduce activity in certain segments of the economy, but there was still no sign that consumer price inflation had started to decline in a meaningful fashion. As a result, market prices at the end of October indicated that the central bank would not stop tightening until rates reached the 4.5-5.0% range.

These circumstances weighed heavily on bond market performance. The yield on the two-year U.S. Treasury note rose from 0.50% at the beginning of the period to 4.48% by the end of October 2022, while the 10-year yield climbed from 1.55% to 4.05%. The yield curve inverted significantly as result, meaning that short-term yields were higher those on longer-term debt. In late September, the yield curve moved to its largest inversion since 1982.

The surge in U.S. Treasury yields, together with investors’ increased aversion to risk, fueled weakness across all sectors of the bond market. Mortgage-backed securities, which were hurt by concerns about the housing market and the loss of demand stemming from Fed’s decision to end its quantitative easing policy, posted negative returns. Still, the category held up better than the broader index.

Investment-grade corporate bonds were among the worst-performing segments of the market. In addition to being adversely affected by rising Treasury yields, the asset class was pressured by a pronounced increase in yield spreads. The latter trend reflected concerns that weaker economic growth could lead to a slowdown in corporate earnings. Notably, the yield on corporate bonds—as gauged by the ICE BofA US Corporate Index—closed the period at the highest level since 2009.

High yield bonds also experienced sizable losses. As was the case with investment-grade corporates, a rise in both prevailing yields and yield spreads weighed heavily on performance. However, the category outperformed the investment-grade market due to its lower interest-rate sensitivity and higher weighting in the energy sector. Higher-rated issuers in the category—which are seen as having the least vulnerability to slowing growth—generally outperformed their lower-quality counterparts.

Investment Objective

The iShares Inflation Hedged Corporate Bond ETF (the “Fund”) seeks to track the investment results of an index designed to mitigate the inflation risk of a portfolio composed of U.S. dollar-denominated, investment grade corporate bonds, as represented by the BlackRock Inflation Hedged Corporate Bond Index (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 iBoxx $ Investment Grade Corporate Bond ETF. The Fund attempts to mitigate the inflation risk of the underlying fund by holding inflation swaps.

Prior to 12/1/21, the Fund operated as a transparent active ETF. On 12/1/21, the Fund commenced operating as an index-based ETF and began to officially track the Index.

Performance

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSETVALUE)

The inception date of the Fund was May 8, 2018. The first day of secondary market trading was May 10, 2018.

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

Investment-grade corporate bonds suffered sizable losses in the annual period. Rising inflation, together with the shift toward tighter monetary policy by the U.S. Federal Reserve and other central banks, led to a sharp increase in prevailing yields. Corporate bonds were further pressured by rising yield spreads, as investor sentiment was dampened by geopolitical developments and concerns about the potential effect of slowing economic growth on corporate credit. In combination, these factors led to a return of -22.04% for the Markit iBoxx USD Liquid Investment Grade Index.

The Fund returned -16.88% in net asset value. The Fund’s position in inflation-hedging securities was the largest contributor to performance versus the broader asset class at a time of rising inflation. Consumer price inflation (CPI) hit the highest level in 40 years and consistently exceeded expectations due to growing aggregate demand, supply-chain bottlenecks and the delayed effect of fiscal and monetary stimulus enacted in response to COVID-19. The portfolio managers sought to mitigate the impact of inflation by using zero-coupon CPI inflation swaps. The Fund actively adjusted its hedge positioning based on changes in composition of the investment-grade bond portfolio (achieved through a position in iShares iBoxx $ Investment Grade Corporate Bond ETF), shifts in the market’s inflation expectations, and interest-rate movements.

On an unhedged basis, financials posted the smallest decline of the market’s three major sectors, with larger losses for industrials and utilities, respectively. Long-term corporate bonds lagged shorter-term issues by a wide margin. In terms of credit quality, higher-rated bonds generally outperformed lower-rated securities amid investors’ search for relative “safe havens” in the challenging environment.

Portfolio Information

Investment Objective

The iShares Inflation Hedged High Yield Bond ETF (the “Fund”) seeks to track the investment results of an index designed to mitigate the inflation risk of a portfolio composed of U.S. dollar-denominated, high yield corporate bonds, as represented by the BlackRock Inflation Hedged High Yield Bond Index (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 iBoxx $ High Yield Corporate Bond ETF. The Fund attempts to mitigate the inflation risk of the underlying fund by holding inflation swaps.

Performance

For the fiscal period ended October 31, 2022, the Fund did not have six months of performance and therefore line graphs are not presented.

The inception date of the Fund was June 22, 2022. The first day of secondary market trading was June 24, 2022.

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 Information

Investment Objective

The iShares Inflation Hedged U.S. Aggregate Bond ETF (the “Fund”) seeks to track the investment results of an index designed to mitigate the inflation risk of a portfolio composed of U.S. dollar-denominated, investment-grade bonds, as represented by the BlackRock Inflation Hedged U.S. Aggregate Bond Index (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 Core U.S. Aggregate Bond ETF. The Fund attempts to mitigate the inflation risk of the underlying fund by holding inflation swaps.

Performance

For the fiscal period ended October 31, 2022, the Fund did not have six months of performance and therefore line graphs are not presented.

The inception date of the Fund was June 22, 2022. The first day of secondary market trading was June 24, 2022.

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 Information

Investment Objective

The iShares Interest Rate Hedged Corporate Bond ETF (the “Fund”) seeks to track the investment results of an index designed to mitigate the interest rate risk of a portfolio composed of U.S. dollar-denominated, investment-grade corporate bonds, as represented by the BlackRock Interest Rate Hedged Corporate Bond Index, (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 iBoxx $ Investment Grade Corporate Bond ETF. The Fund attempts to mitigate the interest rate risk of the underlying fund by holding short positions in U.S. Treasury futures or interest rate swaps.

Prior to 12/1/21, the Fund operated as a transparent active ETF. On 12/1/21, the Fund commenced operating as an index-based ETF and began to officially track the Index.

Performance

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSETVALUE)

The inception date of the Fund was May 27, 2014. The first day of secondary market trading was May 28, 2014.

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

Investment-grade corporate bonds suffered sizable losses in the annual period. Rising inflation, together with the shift toward tighter monetary policy by the U.S. Federal Reserve and other central banks, led to a sharp increase in prevailing yields. Corporate bonds were further pressured by rising yield spreads, as investor sentiment was dampened by geopolitical developments and concerns about the potential effect of slowing economic growth on corporate credit. Longer-term corporate bonds were particularly weak in the rising-rate environment. In combination, these factors led to a return of -22.04% for the Markit iBoxx USD Liquid Investment Grade Index.

The Fund returned -4.37% in net asset value. The Fund’s interest-rate hedging was the largest contributor to performance versus the broader asset class at a time in which bond yields surged. Rising interest rates typically reduce the price of existing bonds, while falling rates translate to rising bond prices. A fund that is hedged against interest-rate movements attempts to avoid these fluctuations by offsetting interest-rate risk, primarily by using interest-rate swaps and U.S. Treasury futures contracts.

Since the Fund’s hedging strategy seeks near-zero interest-rate sensitivity, the Fund’s return was minimally affected by rate movements. Instead, the Fund fluctuated based on direct exposure to the yield spreads of investment-grade corporate bonds, independent of rising rates. The Fund’s negative return therefore reflects the increase in yield spreads that occurred during the period.

Portfolio Information

Investment Objective

The iShares Interest Rate Hedged High Yield Bond ETF (the “Fund”) seeks to track the investment results of an index designed to mitigate the interest rate risk of a portfolio composed of U.S. dollar-denominated, high yield corporate bonds, as represented by the BlackRock Interest Rate Hedged High Yield Bond Index (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 iBoxx $ High Yield Corporate Bond ETF. The Fund attempts to mitigate the interest rate risk of the underlying fund by holding short positions in U.S. Treasury futures or interest rate swaps.

Prior to 12/1/21, the Fund operated as a transparent active ETF. On 12/1/21, the Fund commenced operating as an index-based ETF and began to officially track the Index.

Performance

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSETVALUE)

The inception date of the Fund was May 27, 2014. The first day of secondary market trading was May 28, 2014.

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

High-yield corporate bonds experienced a sizable downturn in the annual period. A surge in inflation prompted the U.S. Federal Reserve (Fed) to tighten monetary policy by winding down its stimulative quantitative easing program and beginning to raise interest rates, which weighed on returns across the bond market. High yield bonds were also pressured by rising yield spreads relative to U.S. Treasuries. The spread widening was the result of an increase investor risk aversion that was driven, in part, by Russia’s invasion of Ukraine and elevated volatility in the equity market. In addition, investors became more cautious on corporate credit given the prospect of slowing economic growth and a concurrent downturn in corporate earnings in 2023. In combination, these factors led to a return of -10.82% for the Markit iBoxx USD Liquid High Yield Index.

The Fund returned -0.42% in net asset value. The Fund’s interest-rate hedging was the largest contributor to performance versus the broader asset class in the environment of surging bond yields. Rising interest rates typically reduce the price of existing bonds, while falling rates translate to rising bond prices. A fund that is hedged against interest-rate movements attempts to avoid these fluctuations by offsetting interest-rate risk, primarily by using interest-rate swaps and U.S. Treasury futures contracts.

Since the Fund’s hedging strategy seeks near-zero interest-rate sensitivity, the Fund’s return was minimally affected by rate movements. Instead, the Fund fluctuated based on direct exposure to the yield spreads of high-yield corporate bonds, independent of rising rates. The Fund’s negative return therefore reflects the increase in yield spreads that occurred during the period.

Portfolio Information

Investment Objective

The iShares Interest Rate Hedged Long-Term Corporate Bond ETF (the “Fund”) seeks to track the investment results of an index designed to mitigate the interest rate risk of a portfolio composed of U.S. dollar-denominated investment-grade corporate bonds with remaining maturities greater than ten years, as represented by the BlackRock Interest Rate Hedged Long-Term Corporate Bond Index (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 10+ Year Investment Grade Corporate Bond ETF. The Fund attempts to mitigate the interest rate risk of the underlying fund by holding short positions in U.S. Treasury futures or interest rate swaps.

Performance

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSETVALUE)

The inception date of the Fund was July 22, 2015. The first day of secondary market trading was July 23, 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

Investment-grade corporate bonds suffered sizable losses in the annual period. Rising inflation, together with the shift toward tighter monetary policy by the U.S. Federal Reserve and other central banks, led to a sharp increase in prevailing yields. Corporate bonds were further pressured by rising yield spreads, as investor sentiment was dampened by geopolitical developments and concerns about the potential effect of slowing economic growth on corporate credit. Longer-term corporate bonds were particularly weak in the rising-rate environment. In combination, these factors led to a return of -31.06% for the ICE BofA 10+ Year US Corporate Index.

The Fund returned -7.59% in net asset value. The Fund’s interest-rate hedging was the largest contributor to performance versus the broader asset class at a time in which bond yields surged. Rising interest rates typically reduce the price of existing bonds, while falling rates translate to rising bond prices. A fund that is hedged against interest-rate movements attempts to avoid these fluctuations by offsetting interest-rate risk, primarily by using interest-rate swaps and U.S. Treasury futures contracts.

Since the Fund’s hedging strategy seeks near-zero interest-rate sensitivity, the Fund’s return was minimally affected by rate movements. Instead, the Fund fluctuated based on direct exposure to the yield spreads of investment grade corporate bonds, independent of rising rates. The Fund’s negative return therefore reflects the increase in yield spreads that occurred during the period.

Portfolio Information

Investment Objective

The iShares Interest Rate Hedged U.S. Aggregate Bond ETF (the “Fund”) seeks to track the investment results of an index designed to mitigate the interest rate risk of a portfolio composed of U.S. dollar-denominated, investment grade bonds, as represented by the BlackRock Interest Rate Hedged U.S. Aggregate Bond Index (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 Core U.S. Aggregate Bond ETF. The Fund attempts to mitigate the interest rate risk of the underlying fund by holding positions in U.S. Treasury futures or interest rate swaps.

Performance

For the fiscal period ended October 31, 2022, the Fund did not have six months of performance and therefore line graphs are not presented.

The inception date of the Fund was June 22, 2022. The first day of secondary market trading was June 24, 2022.

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 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 October 31, 2022 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

Futures Contracts

Centrally Cleared Inflation Swaps

Centrally Cleared Inflation Swaps (continued)

Balances Reported in the Statements of Assets and Liabilities for Centrally Cleared Swaps

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: