LOGO

  JANUARY 31, 2022

 

  

2022 Semi-Annual Report

(Unaudited)

 

iShares Trust

 

·  

iShares China Large-Cap ETF | FXI | NYSE Arca

 

·  

iShares MSCI China A ETF | CNYA | Cboe BZX


The Markets in Review

Dear Shareholder,

The 12-month reporting period as of January 31, 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. Continued growth meant that the U.S. economy regained and then surpassed its pre-pandemic output. However, rapid changes in consumer spending led to supply constraints and elevated inflation.

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 slightly, while large-capitalization U.S. stocks posted a strong advance. International equities from developed markets also gained, 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 significantly 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 positive returns for high-yield corporate bonds, outpacing the modest 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 late in 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 tone 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.

In this environment, 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 January 31, 2022

 

     
      6-Month     12-Month 
   

U.S. large cap equities
(S&P 500® Index)

  3.44%   23.29%
   

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

  (8.41)   (1.21)
   

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

  (3.43)   7.03
   

Emerging market equities
(MSCI Emerging Markets Index)

  (4.59)   (7.23)
   

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

  0.01   0.04
   

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

  (3.87)   (4.43)
   

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

  (3.17)   (2.97)
   

Tax-exempt municipal bonds
(S&P Municipal Bond Index)

  (2.56)   (1.22)
   

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

  (1.55)   2.05
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  

H I S   A G E   I S   N O T    A R T   O F   O U R   U N D   E P O R  T


Table of Contents

 

      Page  

The Markets in Review

     2  

Fund Summary

     4  

About Fund Performance

     6  

Shareholder Expenses

     6  

Schedules of Investments

     7  

Financial Statements:

  

Statements of Assets and Liabilities

     17  

Statements of Operations

     18  

Statements of Changes in Net Assets

     19  

Financial Highlights

     20  

Notes to Financial Statements

     22  

Statement Regarding Liquidity Risk Management Program

     30  

Supplemental Information

     31  

General Information

     32  

Glossary of Terms Used in this Report

     33  

 

 

  3


Fund Summary as of January 31, 2022    iShares® China Large-Cap ETF

 

Investment Objective

The iShares China Large-Cap ETF (the “Fund”) seeks to track the investment results of an index composed of large-capitalization Chinese equities that trade on the Hong Kong Stock Exchange, as represented by the FTSE China 50 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

    (5.44 )%      (22.26 )%      2.81     2.27       (22.26 )%      14.87     25.20

Fund Market

    (5.34     (22.00     3.01       2.33         (22.00     15.98       25.95  

Index

   

 

(7.79

 

 

   

 

(23.73

 

 

   

 

3.08

 

 

 

   

 

2.78

 

 

 

           

 

(23.73

 

 

   

 

16.39

 

 

 

   

 

31.50

 

 

 

Index performance beginning on February 10, 2012 reflects net returns where dividends are reinvested into the Index net of withholding tax. Performance before this date reflects dividends being reinvested at gross.

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
(08/01/21)
 
 
 
      

Ending
Account Value
(01/31/22)
 
 
 
      

Expenses
Paid During
the Period 
 
 
(a) 
          Beginning
Account Value
(08/01/21)
      

Ending
Account Value
(01/31/22)
 
 
 
      

Expenses
Paid During
the Period 
 
 
(a) 
      

Annualized
Expense
Ratio
 
 
 
$ 1,000.00        $ 945.60        $ 3.63             $1,000.00      $ 1,021.50        $ 3.77          0.74

 

  (a)

Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). 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” on page 6 for more information.

 

Portfolio Information

 

ALLOCATION BY SECTOR

 

Sector    
Percent of
Total Investments
 
(a) 

Consumer Discretionary

    33.5

Financials

    29.0  

Communication Services

    19.2  

Information Technology

    4.2  

Health Care

    3.8  

Energy

    3.0  

Real Estate

    2.8  

Consumer Staples

    1.8  

Materials

    1.6  

Industrials

    1.1  

 

  (a) 

Excludes money market funds.

 

TEN LARGEST HOLDINGS

 

Security    
Percent of
Total Investments
 
(a) 

Tencent Holdings Ltd.

    9.6

Alibaba Group Holding Ltd.

    9.2  

Meituan, Class B

    8.7  

China Construction Bank Corp., Class H

    7.0  

JD.com Inc., Class A

    5.0  

Industrial & Commercial Bank of China Ltd., Class H

    4.9  

Ping An Insurance Group Co. of China Ltd., Class H

    4.9  

Baidu Inc.

    4.4  

Wuxi Biologics Cayman Inc.

    3.3  

China Merchants Bank Co. Ltd., Class H

    3.0  

 

 

 

4  

2 0 2 2   H A R E S    E M I - A N N U A L   E P O R T   T O   H  A R E H O L D E R S


Fund Summary as of January 31, 2022    iShares® MSCI China A ETF

 

Investment Objective

The iShares MSCI China A ETF (the “Fund”) seeks to track the investment results of an index composed of domestic Chinese equities that trade on the Shanghai or Shenzhen Stock Exchange, as represented by the MSCI China A Inclusion 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     Since
Inception
           1 Year     5 Years     Since
Inception
 

Fund NAV

    (2.90 )%      (8.38 )%      11.13     11.32       (8.38 )%      69.47     83.09

Fund Market

    (3.11     (7.92     10.95       11.35         (7.92     68.11       83.31  

Index

    (3.70     (9.30     9.82       10.01               (9.30     59.75       71.07  

The inception date of the Fund was 6/13/16. The first day of secondary market trading was 6/15/16.

Index performance through April 25, 2018 reflects the performance of the MSCI China A International Index. Index performance beginning on April 26, 2018 reflects the performance of the MSCI China A Inclusion 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 6 for more information.

Expense Example

 

Actual           Hypothetical 5% Return           
 

Beginning
Account Value
(08/01/21)
 
 
 
      

Ending
Account Value
(01/31/22)
 
 
 
    

 



 

 

Expenses
Paid During
the Period 

 


 
(a) 

           

Beginning
Account Value
(08/01/21)
 
 
 
      

Ending
Account Value
(01/31/22)
 
 
 
      

Expenses
Paid During
the Period 
 
 
(a) 
      

Annualized
Expense
Ratio
 
 
 
$ 1,000.00        $ 971.00        $ 1.19             $ 1,000.00        $ 1,024.00        $ 1.22          0.24

 

  (a) 

Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). 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” on page 6 for more information.

 

Portfolio Information

 

ALLOCATION BY SECTOR

Sector    
Percent of
Total Investments
 
(a) 

Financials

    19.3

Consumer Staples

    16.3  

Industrials

    16.2  

Information Technology

    14.1  

Materials

    11.3  

Health Care

    8.9  

Consumer Discretionary

    6.5  

Utilities

    2.4  

Real Estate

    1.9  

Energy

    1.8  

Communication Services

    1.3  

 

  (a) 

Excludes money market funds.

 

TEN LARGEST HOLDINGS

Security    
Percent of
Total Investments
 
(a) 

Kweichow Moutai Co. Ltd., Class A

    5.7

Contemporary Amperex Technology Co. Ltd., Class A

    3.5  

China Merchants Bank Co. Ltd., Class A

    2.5  

Wuliangye Yibin Co. Ltd., Class A

    1.9  

Ping An Insurance Group Co. of China Ltd., Class A

    1.3  

China Yangtze Power Co. Ltd., Class A

    1.2  

Industrial Bank Co. Ltd., Class A

    1.1  

BYD Co. Ltd., Class A

    1.0  

China Tourism Group Duty Free Corp. Ltd., Class A

    1.0  

LONGi Green Energy Technology Co. Ltd., Class A

    0.9  

 

 

U N D   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 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

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 (or from the commencement of operations if less than 6 months) 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   H A R E S    E M I - A N N U A L   E P O R T   T O   H  A R E H O L D E R S


Schedule of Investments (unaudited)

January 31, 2022

  

iShares® China Large-Cap ETF

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  

Common Stocks

 

Automobiles — 4.2%  

BYD Co. Ltd., Class H

    4,634,500     $ 137,074,865  

Geely Automobile Holdings Ltd.

    29,621,000       64,122,261  

Great Wall Motor Co. Ltd., Class H

    17,367,500       47,119,545  
   

 

 

 
      248,316,671  
Banks — 20.8%            

Agricultural Bank of China Ltd., Class H

    172,293,000       65,553,122  

Bank of China Ltd., Class H

    426,061,000       166,075,404  

Bank of Communications Co. Ltd., Class H

    40,655,200       27,269,145  

China CITIC Bank Corp. Ltd., Class H

    52,093,000       24,853,266  

China Construction Bank Corp., Class H

    541,831,320       415,773,338  

China Everbright Bank Co. Ltd., Class H

    17,255,000       6,482,653  

China Merchants Bank Co. Ltd., Class H

    21,181,438       177,037,018  

China Minsheng Banking Corp. Ltd., Class H

    35,721,100       14,237,042  

Industrial & Commercial Bank of China Ltd., Class H

    480,574,995       291,154,034  

Postal Savings Bank of China Co. Ltd., Class H(a)

    52,515,000       43,752,864  
   

 

 

 
          1,232,187,886  
Beverages — 1.1%            

China Resources Beer Holdings Co. Ltd.

    8,804,000       65,729,611  
   

 

 

 
Capital Markets — 1.0%            

China International Capital Corp. Ltd., Class H(a)

    8,237,200       22,438,278  

CITIC Securities Co. Ltd., Class H

    12,746,000       34,131,475  

CSC Financial Co. Ltd., Class H(a)(b)

    5,019,500       5,657,542  
   

 

 

 
      62,227,295  
Construction Materials — 0.6%            

Anhui Conch Cement Co. Ltd., Class H

    6,621,500       35,024,597  
   

 

 

 
Diversified Telecommunication Services — 0.5%  

China Tower Corp. Ltd., Class H(a)

    261,394,000       31,576,072  
   

 

 

 
Electronic Equipment, Instruments & Components — 1.6%  

Sunny Optical Technology Group Co. Ltd.

    3,644,300       94,086,929  
   

 

 

 
Entertainment — 3.0%            

NetEase Inc.

    8,435,400       176,126,809  
   

 

 

 
Household Durables — 0.8%            

Haier Smart Home Co. Ltd., Class H

    12,646,600       50,700,728  
   

 

 

 
Industrial Conglomerates — 0.5%        

CITIC Ltd.

    27,478,000       30,860,680  
   

 

 

 
Insurance — 7.1%            

China Life Insurance Co. Ltd., Class H

    41,598,000       73,125,038  

China Pacific Insurance Group Co. Ltd., Class H

    14,438,800       43,954,547  

People’s Insurance Co. Group of China Ltd. (The), Class H

    45,852,000       14,509,857  

Ping An Insurance Group Co. of China Ltd., Class H

    36,491,500       289,589,965  
   

 

 

 
      421,179,407  
Interactive Media & Services — 15.7%  

Baidu Inc.(c)

    13,197,900       261,435,628  

Kuaishou Technology(a)(c)

    8,729,000       99,779,045  

Tencent Holdings Ltd.

    9,102,200       570,364,556  
   

 

 

 
      931,579,229  
Internet & Direct Marketing Retail — 23.4%  

Alibaba Group Holding Ltd.(c)

    34,803,100       545,488,534  

JD Health International Inc.(a)(b)(c)

    4,099,250       33,110,314  

JD.com Inc., Class A(c)

    7,751,476       293,791,708  
Security   Shares     Value  

Internet & Direct Marketing Retail (continued)

 

Meituan, Class B(a)(c)

    17,359,600     $ 517,912,261  
   

 

 

 
          1,390,302,817  
Life Sciences Tools & Services — 3.8%        

WuXi AppTec Co. Ltd., Class H(a)

    1,850,652       26,544,386  

Wuxi Biologics Cayman Inc., New(a)(c)

    19,659,000       197,037,520  
   

 

 

 
      223,581,906  
Marine — 0.6%            

COSCO SHIPPING Holdings Co. Ltd., Class H(b)(c)

    18,159,100       33,035,567  
   

 

 

 
Metals & Mining — 1.0%            

Ganfeng Lithium Co. Ltd., Class H(a)

    952,000       15,127,593  

Zijin Mining Group Co. Ltd., Class H

    32,060,000       41,620,611  
   

 

 

 
      56,748,204  
Oil, Gas & Consumable Fuels — 3.0%        

China Petroleum & Chemical Corp., Class H

    142,984,600       74,865,281  

China Shenhua Energy Co. Ltd., Class H

    18,928,000       46,556,206  

PetroChina Co. Ltd., Class H

    116,468,000       57,755,524  
   

 

 

 
      179,177,011  
Real Estate Management & Development — 2.8%  

China Resources Land Ltd.

    15,405,333       74,463,489  

China Vanke Co. Ltd., Class H

    10,613,000       27,437,233  

Longfor Group Holdings Ltd.(a)

    10,297,000       61,769,904  
   

 

 

 
      163,670,626  
Technology Hardware, Storage & Peripherals — 2.6%  

Xiaomi Corp., Class B(a)(c)

    73,985,600       156,950,719  
   

 

 

 
Textiles, Apparel & Luxury Goods — 5.0%        

ANTA Sports Products Ltd.

    6,325,200       94,974,586  

Li Ning Co. Ltd.

    12,691,000       123,838,767  

Shenzhou International Group Holdings Ltd.

    4,230,000       78,487,406  
   

 

 

 
      297,300,759  
Tobacco — 0.7%  

Smoore International Holdings Ltd.(a)

    9,812,000       42,219,288  
   

 

 

 

Total Common Stocks — 99.8%
(Cost: $6,135,156,301)

 

    5,922,582,811  
   

 

 

 

Rights

   
Capital Markets — 0.0%  

Citic Securities Co. Ltd.,
(Expires 03/18/22)(c)

    1,886,700       745,286  
   

 

 

 

Total Rights — 0.0%
(Cost: $0)

 

    745,286  
   

 

 

 

Short-Term Investments

 

Money Market Funds — 0.3%  

BlackRock Cash Funds: Institutional, SL Agency Shares, 0.08%(d)(e)(f)

    6,431,927       6,433,857  

 

 

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

  7


Schedule of Investments (unaudited) (continued)

January 31, 2022

  

iShares® China Large-Cap ETF

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  

Money Market Funds (continued)

   

BlackRock Cash Funds: Treasury, SL Agency Shares, 0.00%(d)(e)

    10,040,000     $ 10,040,000  
   

 

 

 
      16,473,857  
   

 

 

 

Total Short-Term Investments — 0.3%
(Cost: $16,471,570)

 

    16,473,857  
   

 

 

 

Total Investments in Securities — 100.1%
(Cost: $6,151,627,871)

 

      5,939,801,954  

Other Assets, Less Liabilities — (0.1)%

 

    (3,712,264
   

 

 

 

Net Assets — 100.0%

 

  $ 5,936,089,690  
   

 

 

 

 

(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) 

All or a portion of this security is on loan.

(c) 

Non-income producing security.

(d) 

Affiliate of the Fund.

(e) 

Annualized 7-day yield as of period end.

(f) 

All or a portion of this security was purchased with the cash collateral from loaned securities.

 

Affiliates

Investments in issuers considered to be affiliate(s) of the Fund during the six months ended January 31, 2022 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliated Issuer   Value at
07/31/21
    Purchases
at Cost
    Proceeds
from Sales
    Net Realized
Gain (Loss)
    Change in
Unrealized
Appreciation
(Depreciation)
    Value at
01/31/22
    Shares
Held at
01/31/22
    Income     Capital
Gain
Distributions
from
Underlying
Funds
 

BlackRock Cash Funds: Institutional, SL Agency Shares

  $ 48,946,269     $     $ (42,504,385 )(a)    $ 5,241     $ (13,268   $ 6,433,857       6,431,927     $ 171,873 (b)    $  

BlackRock Cash Funds: Treasury, SL Agency Shares

    222,350,000             (212,310,000 )(a)                  10,040,000       10,040,000       133        
       

 

 

   

 

 

   

 

 

     

 

 

   

 

 

 
        $ 5,241     $ (13,268   $ 16,473,857       $ 172,006     $  
       

 

 

   

 

 

   

 

 

     

 

 

   

 

 

 

 

  (a) 

Represents net amount purchased (sold).

 
  (b) 

All or a portion represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.

 

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

                 

MSCI China Free Index

     256          03/18/22        $ 7,894        $ (125,861
                 

 

 

 

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:

 

 

 
     Equity
Contracts
 

 

 

Liabilities — Derivative Financial Instruments

  

Futures contracts

  

Unrealized depreciation on futures contracts(a)

   $ 125,861  
  

 

 

 

 

  (a) 

Net cumulative unrealized appreciation (depreciation) on futures contracts are reported in the Schedule of Investments. In the Statements of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss).

 

 

 

8  

2 0 2 2   H A R E S    E M I - A N N U A L   E P O R T   T O   H  A R E H O L D E R S


Schedule of Investments (unaudited) (continued)

January 31, 2022

  

iShares® China Large-Cap ETF

 

For the period ended January 31, 2022, the effect of derivative financial instruments in the Statements of Operations was as follows:

 

 

 
     Equity
Contracts
 

 

 

Net Realized Gain (Loss) from:

  

Futures contracts

   $ (5,762,639
  

 

 

 
Net Change in Unrealized Appreciation (Depreciation) on:       

Futures contracts

   $ 4,827,240  
  

 

 

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

 

 

Futures contracts:

  

Average notional value of contracts — long

   $ 24,312,283      

 

 

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

Fair Value Hierarchy as of Period End

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

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

 

 

 
    

 

Level 1

 

      

 

Level 2

 

      

 

Level 3

 

      

 

Total

 

 

 

 

Investments

                 

Assets

                 

Common Stocks

   $                 —        $ 5,922,582,811        $                 —        $ 5,922,582,811  

Rights

              745,286                   745,286  

Money Market Funds

     16,473,857                            16,473,857  
  

 

 

      

 

 

      

 

 

      

 

 

 
   $ 16,473,857        $ 5,923,328,097        $        $ 5,939,801,954  
  

 

 

      

 

 

      

 

 

      

 

 

 

Derivative financial instruments(a)

                 

Liabilities

                 

Futures Contracts

   $                 —        $ (125,861      $        $ (125,861
  

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a)

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

 

See notes to financial statements.

 

 

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

  9


Schedule of Investments (unaudited)

January 31, 2022

  

iShares® MSCI China A ETF

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  

Common Stocks

   
Aerospace & Defense — 0.7%            

AECC Aero-Engine Control Co. Ltd., Class A

    181,298     $ 678,076  

AECC Aviation Power Co. Ltd., Class A

    362,898       2,744,097  

AVIC Electromechanical Systems Co. Ltd., Class A

    543,699       1,041,702  

AVICOPTER PLC, Class A

    90,699       794,011  

Kuang-Chi Technologies Co. Ltd., Class A(a)

    304,040       959,104  
   

 

 

 
      6,216,990  
Air Freight & Logistics — 1.1%            

SF Holding Co. Ltd., Class A

    679,915       6,821,010  

Sinotrans Ltd., Class A

    634,600       408,699  

YTO Express Group Co. Ltd., Class A

    453,000       1,151,484  

Yunda Holding Co. Ltd., Class A

    408,100       1,269,682  
   

 

 

 
      9,650,875  
Airlines — 0.5%            

Air China Ltd., Class A(a)

    906,800       1,445,903  

China Eastern Airlines Corp. Ltd., Class A(a)

    1,316,500       1,194,215  

China Southern Airlines Co. Ltd., Class A(a)

    1,497,724       1,734,828  
   

 

 

 
      4,374,946  
Auto Components — 1.4%            

Autel Intelligent Technology Corp. Ltd., Class A

    58,254       575,989  

Changzhou Xingyu Automotive Lighting Systems Co. Ltd., Class A

    45,397       1,220,282  

Fuyao Glass Industry Group Co. Ltd., Class A

    271,800       2,051,988  

Huayu Automotive Systems Co. Ltd., Class A

    453,000       1,977,477  

Huizhou Desay Sv Automotive Co. Ltd., Class A

    59,900       1,316,339  

Mianyang Fulin Precision Machining Co. Ltd., Class A(a)

    90,600       346,113  

Ningbo Joyson Electronic Corp., Class A

    181,600       528,534  

Ningbo Tuopu Group Co. Ltd., Class A

    181,200       1,589,310  

Sailun Group Co. Ltd., Class A

    432,500       793,024  

Shandong Linglong Tyre Co. Ltd., Class A

    181,600       878,586  

Shenzhen Kedali Industry Co., Class A

    45,300       1,117,597  
   

 

 

 
        12,395,239  
Automobiles — 1.9%            

BYD Co. Ltd., Class A

    252,773       9,425,250  

Chongqing Changan Automobile Co. Ltd., Class A

    906,060       1,858,943  

FAW Jiefang Group Co. Ltd., Class A

    407,700       605,274  

Great Wall Motor Co. Ltd., Class A

    317,189       2,055,250  

SAIC Motor Corp. Ltd., Class A

    1,087,606       3,230,966  
   

 

 

 
      17,175,683  
Banks — 10.5%            

Agricultural Bank of China Ltd., Class A

    10,467,100       4,879,228  

Bank of Beijing Co. Ltd., Class A

    3,080,400       2,178,447  

Bank of Changsha Co. Ltd., Class A

    543,600       673,152  

Bank of Chengdu Co. Ltd., Class A

    498,777       1,107,463  

Bank of China Ltd., Class A

    4,938,900       2,399,910  

Bank of Communications Co. Ltd., Class A

    5,528,202       4,128,391  

Bank of Hangzhou Co. Ltd., Class A

    815,888       1,822,615  

Bank of Jiangsu Co. Ltd., Class A

    2,084,600       2,167,198  

Bank of Nanjing Co. Ltd., Class A

    1,404,780       2,180,993  

Bank of Ningbo Co. Ltd., Class A

    911,821       5,638,087  

Bank of Shanghai Co. Ltd., Class A

    2,038,969       2,258,084  

China Construction Bank Corp., Class A

    1,359,400       1,286,419  

China Everbright Bank Co. Ltd., Class A

    5,980,400       3,153,886  

China Merchants Bank Co. Ltd., Class A

    2,900,402       22,549,048  

China Minsheng Banking Corp. Ltd., Class A

    5,028,380       3,073,900  

China Zheshang Bank Co. Ltd., Class A

    2,343,100       1,263,532  

Chongqing Rural Commercial Bank Co. Ltd., Class A

    1,255,530       762,053  

Huaxia Bank Co. Ltd., Class A

    1,799,960       1,597,299  
Security   Shares     Value  
Banks (continued)  

Industrial & Commercial Bank of China Ltd., Class A

      8,836,300     $ 6,486,637  

Industrial Bank Co. Ltd., Class A

    2,900,447       9,595,811  

Ping An Bank Co. Ltd., Class A

    2,719,256       6,815,584  

Postal Savings Bank of China Co. Ltd., Class A

    3,715,800       3,307,516  

Qingdao Rural Commercial Bank Corp., Class A

    757,200       446,901  

Shanghai Pudong Development Bank Co. Ltd., Class A

    4,168,020       5,528,128  
   

 

 

 
      95,300,282  
Beverages — 11.0%            

Anhui Gujing Distillery Co. Ltd., Class A

    54,299       1,795,475  

Anhui Kouzi Distillery Co. Ltd., Class A

    90,600       996,067  

Anhui Yingjia Distillery Co. Ltd., Class A

    90,600       980,181  

Beijing Shunxin Agriculture Co. Ltd., Class A

    135,900       585,190  

Chongqing Brewery Co. Ltd., Class A(a)

    63,895       1,337,737  

Jiangsu King’s Luck Brewery JSC Ltd., Class A

    181,200       1,463,353  

Jiangsu Yanghe Brewery Joint-Stock Co. Ltd., Class A

    199,600       4,952,703  

JiuGui Liquor Co. Ltd., Class A

    45,300       1,165,977  

Kweichow Moutai Co. Ltd., Class A

    174,003       51,967,258  

Luzhou Laojiao Co. Ltd., Class A

    202,400       6,952,817  

Shanghai Bairun Investment Holding Group Co. Ltd., Class A

    97,220       671,446  

Shanxi Xinghuacun Fen Wine Factory Co. Ltd., Class A

    181,201       7,889,249  

Sichuan Swellfun Co. Ltd., Class A

    65,400       1,025,362  

Tsingtao Brewery Co. Ltd., Class A

    96,200       1,405,870  

Wuliangye Yibin Co. Ltd., Class A

    543,614       17,096,458  
   

 

 

 
       100,285,143  
Biotechnology — 1.7%            

Beijing Tiantan Biological Products Corp. Ltd., Class A

    181,618       799,539  

Beijing Wantai Biological Pharmacy Enterprise Co. Ltd., Class A

    51,500       1,816,256  

BGI Genomics Co. Ltd., Class A

    50,900       671,035  

Chongqing Zhifei Biological Products Co. Ltd., Class A

    229,900       3,860,404  

Daan Gene Co Ltd., Class A

    206,544       577,331  

Hualan Biological Engineering Inc., Class A

    272,248       1,087,412  

Imeik Technology Development Co. Ltd., Class A

    28,600       2,001,028  

Shanghai Junshi Biosciences Co. Ltd., Class A(a)

    91,708       851,066  

Shanghai RAAS Blood Products Co. Ltd., Class A

    951,300       1,007,033  

Shenzhen Kangtai Biological Products Co. Ltd., Class A

    96,798       1,229,790  

Walvax Biotechnology Co. Ltd., Class A

    226,598       1,746,334  
   

 

 

 
      15,647,228  
Building Products — 0.4%            

Beijing New Building Materials PLC, Class A

    226,900       1,161,822  

Guangdong Kinlong Hardware Products Co. Ltd., Class A

    45,320       1,144,424  

Zhejiang Weixing New Building Materials Co. Ltd., Class A

    226,504       808,200  

Zhuzhou Kibing Group Co. Ltd., Class A

    380,300       956,983  
   

 

 

 
      4,071,429  
Capital Markets — 6.5%            

BOC International China Co. Ltd., Class A

    255,200       487,554  

Caitong Securities Co. Ltd., Class A

    498,747       767,748  

Changjiang Securities Co. Ltd., Class A

    770,500       852,317  

China Galaxy Securities Co. Ltd., Class A

    589,300       979,227  

China Great Wall Securities Co. Ltd., Class A

    362,800       653,701  

China International Capital Corp. Ltd., Class A

    181,200       1,247,467  

China Merchants Securities Co. Ltd., Class A

    1,042,307       2,756,585  

CITIC Securities Co. Ltd., Class A

    1,707,570       6,680,582  

CSC Financial Co. Ltd., Class A

    589,339       2,474,124  

Dongxing Securities Co. Ltd., Class A

    453,039       757,070  

East Money Information Co. Ltd., Class A

    1,450,480       7,243,497  

Everbright Securities Co. Ltd., Class A

    544,000       1,180,644  

 

 

10  

2 0 2 2   H A R E S    E M I - A N N U A L   E P O R T   T O   H  A R E H O L D E R S


Schedule of Investments (unaudited) (continued)

January 31, 2022

  

iShares® MSCI China A ETF

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  
Capital Markets (continued)  

First Capital Securities Co. Ltd., Class A

    589,300     $ 605,045  

Founder Securities Co. Ltd., Class A

    1,133,300       1,313,151  

GF Securities Co. Ltd., Class A

    815,800       2,694,836  

Guangzhou Yuexiu Financial Holdings Group Co. Ltd., Class A

    453,090       579,337  

Guolian Securities Co. Ltd., Class A

    259,700       598,755  

Guosen Securities Co. Ltd., Class A

    875,000       1,514,456  

Guotai Junan Securities Co. Ltd., Class A

    1,042,345       2,907,423  

Guoyuan Securities Co. Ltd., Class A

    589,344       667,020  

Haitong Securities Co. Ltd., Class A

    1,359,800       2,464,623  

Hithink RoyalFlush Information Network Co. Ltd., Class A

    90,600       1,810,468  

Huatai Securities Co. Ltd., Class A

    1,042,300       2,820,563  

Huaxi Securities Co. Ltd., Class A

    362,800       518,340  

Industrial Securities Co. Ltd., Class A

    951,760       1,297,639  

Nanjing Securities Co. Ltd., Class A

    498,762       707,830  

Northeast Securities Co. Ltd., Class A

    317,500       424,829  

Orient Securities Co. Ltd., Class A

    815,823       1,580,966  

SDIC Capital Co. Ltd., Class A

    885,110       1,049,896  

Sealand Securities Co. Ltd., Class A

    770,500       473,859  

Shanxi Securities Co. Ltd., Class A

    498,757       464,728  

Shenwan Hongyuan Group Co. Ltd., Class A

    3,127,300       2,307,976  

Sinolink Securities Co. Ltd., Class A

    453,088       741,669  

SooChow Securities Co. Ltd., Class A

    724,838       895,670  

Southwest Securities Co. Ltd., Class A

    919,600       693,156  

Tianfeng Securities Co. Ltd., Class A

    1,223,100       718,374  

Western Securities Co. Ltd., Class A

    634,620       763,691  

Zheshang Securities Co. Ltd., Class A

    544,027       1,059,884  

Zhongtai Securities Co. Ltd., Class A

    815,800       1,117,841  
   

 

 

 
        58,872,541  
Chemicals — 5.8%            

Beijing Easpring Material, Class A

    90,600       1,241,118  

CNNC Hua Yuan Titanium Dioxide Co. Ltd., Class A

    271,800       432,993  

DO Fluoride New Materials, Class A

    122,600       810,897  

Guangzhou Tinci Materials Technology Co. Ltd., Class A

    135,960       2,047,171  

Hangzhou Oxygen Plant Group Co. Ltd., Class A

    135,900       661,105  

Hengli Petrochemical Co. Ltd., Class A

    815,815       3,087,382  

Hengyi Petrochemical Co. Ltd., Class A

    543,676       869,567  

Hoshine Silicon Industry Co. Ltd., Class A

    45,300       753,699  

Huafon Chemical Co. Ltd., Class A

    634,200       948,575  

Hubei Xingfa Chemicals Group Co. Ltd., Class A

    166,700       788,349  

Inner Mongolia Junzheng Energy & Chemical Industry Group Co. Ltd., Class A

      1,178,600       917,438  

Inner Mongolia Yuan Xing Energy Co. Ltd., Class A(a)

    519,500       713,246  

Jiangsu Eastern Shenghong Co. Ltd., Class A

    453,400       1,207,865  

Jiangsu Yangnong Chemical Co. Ltd., Class A

    45,300       841,260  

Jiangsu Yoke Technology Co. Ltd., Class A

    60,300       630,930  

Kingfa Sci & Tech Co. Ltd., Class A

    350,300       628,329  

LB Group Co. Ltd., Class A

    317,109       1,222,743  

Luxi Chemical Group Co. Ltd., Class A

    259,700       580,495  

Ningxia Baofeng Energy Group Co. Ltd., Class A

    876,200       2,222,215  

Rongsheng Petrochemical Co. Ltd., Class A

    1,494,951       4,279,371  

Satellite Chemical Co. Ltd., Class A

    241,760       1,609,354  

Shandong Hualu Hengsheng Chemical Co. Ltd., Class A

    317,160       1,527,967  

Shanghai Putailai New Energy Technology Co. Ltd., Class A

    94,460       2,135,417  

Shenzhen Capchem Technology Co. Ltd., Class A

    55,900       839,328  

Shenzhen Senior Technology Co. Ltd., Class A

    122,600       692,500  

Sichuan Hebang Biotechnology Co. Ltd., Class A(a)

    1,223,100       673,778  

Sichuan New Energy Power Co. Ltd.(a)

    165,500       534,045  

Sichuan Yahua Industrial Group Co. Ltd., Class A

    165,500       609,053  
Security   Shares     Value  
Chemicals (continued)  

Sinoma Science & Technology Co. Ltd., Class A

    226,500     $ 1,057,034  

Sinopec Shanghai Petrochemical Co. Ltd., Class A

    861,131       528,586  

Skshu Paint Co. Ltd., Class A

    48,660       811,808  

Tongkun Group Co. Ltd., Class A

    362,497       1,191,637  

Transfar Zhilian Co. Ltd., Class A

    408,533       498,957  

Wanhua Chemical Group Co. Ltd., Class A

    453,000       6,533,312  

Weihai Guangwei Composites Co. Ltd., Class A

    68,495       779,054  

Xinjiang Zhongtai Chemical Co. Ltd., Class A(b)

    331,400       555,484  

Yunnan Energy New Material Co. Ltd., Class A

    118,115       4,745,645  

Zhejiang Juhua Co. Ltd., Class A

    362,800       742,887  

Zhejiang Longsheng Group Co. Ltd., Class A

    453,400       891,167  

Zhejiang Yongtai Technology Co. Ltd., Class A(a)

    135,900       687,856  

Zibo Qixiang Tengda Chemical Co. Ltd., Class-A

    387,200       566,932  
   

 

 

 
         53,096,549  
Commercial Services & Supplies — 0.3%  

Beijing Originwater Technology Co. Ltd., Class A

    498,300       519,145  

Shanghai M&G Stationery Inc., Class A

    135,900       1,176,190  

Zhejiang Weiming Environment Protection Co. Ltd., Class A

    170,891       826,764  
   

 

 

 
      2,522,099  
Communications Equipment — 1.1%            

Addsino Co. Ltd., Class A

    226,900       530,845  

Beijing BDStar Navigation Co. Ltd., Class A(a)

    78,500       429,127  

China Zhenhua Group Science & Technology Co. Ltd., Class A

    77,300       1,379,379  

Fiberhome Telecommunication Technologies Co. Ltd., Class A

    135,999       350,805  

Guangzhou Haige Communications Group Inc. Co., Class A

    317,100       464,346  

Hengtong Optic-Electric Co. Ltd., Class A

    343,100       762,991  

Shenzhen Sunway Communication Co. Ltd., Class A

    135,900       459,212  

Tianjin 712 Communication & Broadcasting Co. Ltd., Class A

    91,000       514,048  

Yealink Network Technology Corp. Ltd., Class A

    135,955       1,670,725  

Zhongji Innolight Co. Ltd., Class A

    91,088       516,856  

ZTE Corp., Class A

    543,600       2,602,014  
   

 

 

 
      9,680,348  
Construction & Engineering — 1.7%            

China National Chemical Engineering Co. Ltd., Class A

    861,110       1,396,527  

China Railway Group Ltd., Class A

      2,855,100       2,801,901  

China State Construction Engineering Corp. Ltd., Class A

    5,982,000       4,899,536  

Metallurgical Corp. of China Ltd., Class A

    2,492,700       1,449,850  

Power Construction Corp. of China Ltd., Class A

    2,130,300       2,915,516  

Shanghai Construction Group Co. Ltd., Class A

    1,269,600       657,569  

Sichuan Road & Bridge Co. Ltd., Class A

    685,900       1,162,678  
   

 

 

 
      15,283,577  
Construction Materials — 0.6%            

Anhui Conch Cement Co. Ltd., Class A

    544,000       3,360,454  

BBMG Corp., Class A

    1,268,400       547,942  

China Jushi Co. Ltd., Class A

    543,950       1,403,337  

Huaxin Cement Co. Ltd., Class A

    181,219       529,296  
   

 

 

 
      5,841,029  
Distributors — 0.1%            

Wuchan Zhongda Group Co. Ltd., Class A

    725,214       605,067  
   

 

 

 
Diversified Financial Services — 0.1%            

AVIC Industry-Finance Holdings Co. Ltd., Class A

    1,359,001       815,137  
   

 

 

 

 

 

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

  11


Schedule of Investments (unaudited) (continued)

January 31, 2022

  

iShares® MSCI China A ETF

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  
Electrical Equipment — 7.0%            

Contemporary Amperex Technology Co. Ltd., Class A

    325,400     $ 31,398,394  

Dongfang Electric Corp. Ltd., Class A

    362,890       982,691  

Eve Energy Co. Ltd., Class A

    271,882       4,092,372  

Fangda Carbon New Material Co. Ltd., Class A

    544,028       832,297  

Ginlong Technologies Co. Ltd., Class A

    45,300       1,706,921  

Gotion High-tech Co. Ltd., Class A(a)

    232,100       1,481,564  

Hongfa Technology Co. Ltd., Class A

    103,600       1,042,277  

Jiangsu Zhongtian Technology Co. Ltd., Class A

    408,100       1,078,687  

Ming Yang Smart Energy Group Ltd., Class A

    278,800       1,134,644  

NARI Technology Co. Ltd., Class A

    770,512       4,306,288  

Shanghai Electric Group Co. Ltd., Class A

    1,812,850       1,223,042  

Sieyuan Electric Co. Ltd., Class A

    135,900       977,680  

Sungrow Power Supply Co. Ltd., Class A

    204,400       3,707,195  

Sunwoda Electronic Co. Ltd., Class A

    226,599       1,276,563  

Suzhou Maxwell Technologies Co. Ltd., Class A

    9,600       753,378  

TBEA Co. Ltd., Class A

    498,700       1,491,456  

Titan Wind Energy Suzhou Co. Ltd., Class A

    271,800       861,299  

Xinjiang Goldwind Science & Technology Co. Ltd., Class A

    496,051       1,178,281  

Youngy Co. Ltd., Class A(a)

    45,300       669,521  

Zhefu Holding Group Co. Ltd., Class A

    774,500       728,109  

Zhejiang Chint Electrics Co. Ltd., Class A

    317,100       2,390,413  

Zhejiang HangKe Technology Inc. Co., Class A

    40,170       554,842  
   

 

 

 
        63,867,914  
Electronic Equipment, Instruments & Components — 5.1%  

Avary Holding Shenzhen Co. Ltd., Class A

    210,100       1,206,726  

Beijing Yuanliu Hongyuan Electronic Technology Co. Ltd., Class A

    45,300       1,168,306  

BOE Technology Group Co. Ltd., Class A

      5,257,228       4,031,220  

Chaozhou Three-Circle Group Co. Ltd., Class A

    272,200       1,631,866  

China Railway Signal & Communication Corp. Ltd., Class A

    972,581       738,912  

Foxconn Industrial Internet Co. Ltd., Class A

    1,042,306       1,829,738  

GoerTek Inc., Class A

    498,304       3,754,266  

Guangzhou Shiyuan Electronic Technology Co. Ltd., Class A

    93,767       1,124,973  

Huagong Tech Co. Ltd., Class A

    135,983       527,307  

Lens Technology Co. Ltd., Class A

    679,900       1,839,958  

Leyard Optoelectronic Co. Ltd., Class A

    362,800       524,575  

Lingyi iTech Guangdong Co., Class A(a)

    997,800       968,626  

Luxshare Precision Industry Co. Ltd., Class A

    997,068       7,470,026  

Maxscend Microelectronics Co. Ltd., Class A

    47,360       1,963,896  

OFILM Group Co. Ltd., Class A(a)

    453,800       572,630  

Raytron Technology Co. Ltd., Class A

    44,496       441,710  

Shanghai Friendess Electronic Technology Corp. Ltd., Class A

    10,903       543,393  

Shengyi Technology Co. Ltd., Class A

    317,582       987,593  

Shennan Circuits Co. Ltd., Class A

    67,167       1,259,933  

Shenzhen Kaifa Technology Co. Ltd., Class A

    226,500       477,417  

Shenzhen Sunlord Electronics Co. Ltd., Class A

    108,700       578,122  

Suzhou Dongshan Precision Manufacturing Co. Ltd., Class A

    242,700       951,057  

Tianma Microelectronics Co. Ltd., Class A

    407,700       767,340  

Unisplendour Corp. Ltd., Class A

    405,191       1,341,003  

Universal Scientific Industrial Shanghai Co. Ltd., Class A

    226,900       493,596  

Westone Information Industry Inc., Class A

    135,900       865,258  

Wingtech Technology Co. Ltd., Class A

    181,211       3,086,916  

Wuhan Guide Infrared Co. Ltd., Class A

    317,194       1,051,405  

Wuhu Token Science Co. Ltd., Class A

    362,400       590,436  

WUS Printed Circuit Kunshan Co. Ltd., Class A

    317,590       871,457  
Security   Shares     Value  
Electronic Equipment, Instruments & Components (continued)  

Xiamen Faratronic Co. Ltd., Class A

    17,800     $ 553,703  

Zhejiang Dahua Technology Co. Ltd., Class A

    422,900       1,278,455  

Zhuzhou Hongda Electronics Corp. Ltd., Class A

    45,300       600,335  
   

 

 

 
         46,092,154  
Energy Equipment & Services — 0.2%  

Offshore Oil Engineering Co. Ltd., Class A

    679,568       479,540  

Yantai Jereh Oilfield Services Group Co. Ltd., Class A

    135,985       900,743  
   

 

 

 
      1,380,283  
Entertainment — 0.7%            

Beijing Enlight Media Co. Ltd., Class A

    422,900       702,995  

G-Bits Network Technology Xiamen Co. Ltd., Class A

    5,500       305,349  

Giant Network Group Co. Ltd., Class A

    317,112       489,007  

Kunlun Tech Co. Ltd., Class A

    181,200       536,833  

Mango Excellent Media Co. Ltd., Class A

    271,880       1,516,395  

Perfect World Co. Ltd., Class A

    271,852       591,013  

Wuhu Sanqi Interactive Entertainment Network Technology Group Co. Ltd., Class A

    317,193       1,255,259  

Zhejiang Century Huatong Group Co. Ltd., Class A(a)

    1,027,382       1,097,693  
   

 

 

 
      6,494,544  
Food & Staples Retailing — 0.3%            

DaShenLin Pharmaceutical Group Co. Ltd., Class A

    90,672       529,817  

Laobaixing Pharmacy Chain JSC, Class A

    56,300       377,509  

Yifeng Pharmacy Chain Co. Ltd., Class A

    100,417       785,997  

Yonghui Superstores Co. Ltd., Class A

      1,314,900       804,671  
   

 

 

 
      2,497,994  
Food Products — 4.7%            

Angel Yeast Co. Ltd., Class A

    91,096       823,878  

Beijing Dabeinong Technology Group Co. Ltd., Class A

    589,300       853,448  

Chacha Food Co. Ltd., Class A

    90,600       781,975  

Chongqing Fuling Zhacai Group Co. Ltd., Class A

    135,900       677,187  

Foshan Haitian Flavouring & Food Co. Ltd., Class A

    498,365       7,626,998  

Fu Jian Anjoy Foods Co. Ltd., Class A

    45,300       949,703  

Fujian Sunner Development Co. Ltd., Class A

    181,200       603,398  

Guangdong Haid Group Co. Ltd., Class A

    226,599       2,580,465  

Heilongjiang Agriculture Co. Ltd., Class A

    226,900       473,840  

Henan Shuanghui Investment & Development Co. Ltd., Class A

    408,100       1,919,897  

Inner Mongolia Yili Industrial Group Co. Ltd., Class A

    906,000       5,460,175  

Jiangxi Zhengbang Technology Co. Ltd., Class A

    453,000       634,615  

Jonjee Hi-Tech Industrial And Commercial Holding Co. Ltd., Class A

    123,462       624,999  

Juewei Food Co. Ltd., Class A

    90,600       753,228  

Muyuan Foods Co. Ltd., Class A

    725,219       6,307,032  

New Hope Liuhe Co. Ltd., Class A(a)

    647,600       1,647,798  

Toly Bread Co. Ltd., Class A

    135,918       556,884  

Tongwei Co. Ltd., Class A

    634,693       3,785,908  

Wens Foodstuffs Group Co. Ltd., Class A(a)

    906,846       2,885,036  

Yihai Kerry Arawana Holdings Co. Ltd., Class A

    226,500       2,049,859  

Yuan Longping High-Tech Agriculture Co. Ltd., Class A(a)

    181,200       530,044  
   

 

 

 
      42,526,367  
Gas Utilities — 0.1%            

ENN Natural Gas Co. Ltd., Class A

    318,300       870,960  
   

 

 

 
Health Care Equipment & Supplies — 1.5%        

Autobio Diagnostics Co. Ltd., Class A

    90,640       689,445  

Intco Medical Technology Co. Ltd., Class A

    90,680       757,754  

Jafron Biomedical Co. Ltd., Class A

    111,950       832,171  

Jiangsu Yuyue Medical Equipment & Supply Co. Ltd., Class A

    136,300       641,073  

 

 

12  

2 0 2 2   H A R E S    E M I - A N N U A L   E P O R T   T O   H  A R E H O L D E R S


Schedule of Investments (unaudited) (continued)

January 31, 2022

  

iShares® MSCI China A ETF

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  
Health Care Equipment & Supplies (continued)        

Lepu Medical Technology Beijing Co. Ltd., Class A

    226,900     $ 741,310  

Ovctek China Inc., Class A

    115,880       696,584  

Shenzhen Mindray Bio-Medical Electronics Co. Ltd., Class A

    164,734       8,358,150  

Shenzhen New Industries Biomedical Engineering Co. Ltd., Class A

    90,600       573,320  
   

 

 

 
        13,289,807  
Health Care Providers & Services — 1.0%        

Aier Eye Hospital Group Co. Ltd., Class A

    770,113       3,943,067  

China National Medicines Corp. Ltd., Class A

    118,200       518,691  

Guangzhou Kingmed Diagnostics Group Co. Ltd., Class A

    56,297       686,698  

Huadong Medicine Co. Ltd., Class A

    226,925       1,310,212  

Jointown Pharmaceutical Group Co. Ltd., Class A

    242,500       508,191  

Meinian Onehealth Healthcare Holdings Co. Ltd., Class A(a)

    543,960       615,252  

Shanghai Pharmaceuticals Holding Co. Ltd., Class A

    272,209       808,165  

Topchoice Medical Corp., Class A(a)

    46,200       1,086,778  
   

 

 

 
      9,477,054  
Health Care Technology — 0.1%            

Winning Health Technology Group Co. Ltd., Class A

    317,588       578,538  
   

 

 

 
Hotels, Restaurants & Leisure — 0.4%  

Shanghai Jinjiang International Hotels Co. Ltd., Class A

    135,900       1,208,093  

Shenzhen Overseas Chinese Town Co. Ltd., Class A

      1,178,656       1,442,061  

Songcheng Performance Development Co. Ltd., Class A

    362,472       876,133  
   

 

 

 
      3,526,287  
Household Durables — 1.5%            

Beijing Roborock Technology Co. Ltd., Class A

    6,689       930,654  

Ecovacs Robotics Co. Ltd., Class A

    63,500       1,345,413  

Haier Smart Home Co. Ltd., Class A

    861,500       3,795,645  

Hang Zhou Great Star Industrial Co. Ltd., Class A(a)

    156,300       624,363  

Hangzhou Robam Appliances Co. Ltd., Class A

    135,900       742,334  

Jason Furniture Hangzhou Co. Ltd., Class A

    90,600       1,048,633  

Oppein Home Group Inc., Class A

    66,683       1,447,266  

Shenzhen MTC Co. Ltd., Class A(a)

    680,300       461,779  

TCL Technology Group Corp., Class A

    1,949,538       1,735,761  

Xiamen Intretech Inc., Class A

    96,326       455,401  

Zhejiang Supor Co. Ltd., Class A

    90,698       741,414  
   

 

 

 
      13,328,663  
Household Products — 0.0%            

C&S Paper Co. Ltd., Class A

    181,600       426,135  
   

 

 

 
Independent Power and Renewable Electricity Producers — 2.3%  

CECEP Solar Energy Co. Ltd., Class A

    431,300       598,432  

CECEP Wind Power Corp., Class A

    695,900       558,921  

China National Nuclear Power Co. Ltd., Class A

    2,039,347       2,279,418  

China Yangtze Power Co. Ltd., Class A

    3,203,088       11,046,640  

GD Power Development Co. Ltd., Class A

    2,496,700       1,038,263  

Huadian Power International Corp. Ltd., Class A

    973,400       641,209  

Huaneng Power International Inc., Class A

    1,042,300       1,207,629  

SDIC Power Holdings Co. Ltd., Class A

    1,042,300       1,645,451  

Shenzhen Energy Group Co. Ltd., Class A

    544,018       597,856  

Sichuan Chuantou Energy Co. Ltd., Class A

    544,000       947,698  
   

 

 

 
      20,561,517  
Industrial Conglomerates — 0.1%            

China Baoan Group Co. Ltd., Class A

    362,800       744,350  
   

 

 

 
Insurance — 2.2%            

China Life Insurance Co. Ltd., Class A

    407,700       1,778,468  

China Pacific Insurance Group Co. Ltd., Class A

    951,700       3,960,824  
Security   Shares     Value  
Insurance (continued)            

New China Life Insurance Co. Ltd., Class A

    317,100     $ 1,881,170  

People’s Insurance Co. Group of China Ltd. (The), Class A

    982,500       706,130  

Ping An Insurance Group Co. of China Ltd., Class A

    1,518,423          11,996,612  
   

 

 

 
      20,323,204  
IT Services — 0.2%            

Beijing Sinnet Technology Co. Ltd., Class A

    226,999       478,675  

China TransInfo Technology Co. Ltd., Class A

    226,500       484,071  

DHC Software Co. Ltd., Class A

    453,000       511,655  

Lakala Payment Co. Ltd., Class A

    117,600       482,255  
   

 

 

 
      1,956,656  
Life Sciences Tools & Services — 1.1%  

Hangzhou Tigermed Consulting Co. Ltd., Class A

    50,304       827,397  

Joinn Laboratories China Co. Ltd., Class A

    45,360       692,571  

Pharmaron Beijing Co. Ltd., Class A

    94,000       1,744,377  

Shanghai Medicilon Inc., Class A

    7,790       435,198  

WuXi AppTec Co. Ltd., Class A

    370,548       6,157,033  
   

 

 

 
      9,856,576  
Machinery — 2.9%            

China CSSC Holdings Ltd., Class A

    642,500       2,066,619  

CRRC Corp. Ltd., Class A

    3,328,800       3,054,519  

Hefei Meiya Optoelectronic Technology Inc., Class A

    90,687       480,882  

Jiangsu Hengli Hydraulic Co. Ltd., Class A

    181,224       2,206,843  

Luoyang Xinqianglian Slewing Bearing Co. Ltd., Class A

    13,600       364,217  

North Industries Group Red Arrow Co. Ltd., Class A(a)

    210,800       613,922  

Riyue Heavy Industry Co. Ltd., Class A

    138,582       611,423  

Sany Heavy Industry Co. Ltd., Class A

      1,178,650       3,760,167  

Shenzhen Inovance Technology Co. Ltd., Class A

    362,411       3,466,555  

Weichai Power Co. Ltd., Class A

    951,700       2,351,645  

Wuxi Lead Intelligent Equipment Co. Ltd., Class A

    104,200       1,196,592  

Wuxi Shangji Automation Co. Ltd., Class A

    45,300       908,550  

XCMG Construction Machinery Co. Ltd., Class A

    1,132,500       1,013,355  

Yantai Eddie Precision Machinery Co. Ltd., Class A

    109,720       518,178  

Zhejiang Dingli Machinery Co. Ltd., Class A

    90,698       1,046,434  

Zhejiang Sanhua Intelligent Controls Co. Ltd., Class A

    498,731       1,511,001  

Zoomlion Heavy Industry Science and Technology Co. Ltd., Class A

    997,400       1,113,373  
   

 

 

 
      26,284,275  
Marine — 0.5%            

COSCO SHIPPING Holdings Co. Ltd., Class A(a)

    1,767,550       4,585,012  
   

 

 

 
Media — 0.3%            

Focus Media Information Technology Co. Ltd., Class A

    2,039,760       2,463,747  
   

 

 

 
Metals & Mining — 4.6%            

Aluminum Corp. of China Ltd., Class A(a)

    1,857,700       1,572,902  

Anhui Honglu Steel Construction Group Co. Ltd., Class A

    90,600       706,303  

Baoshan Iron & Steel Co. Ltd., Class A

    3,126,970       3,483,921  

Chengtun Mining Group Co. Ltd., Class A

    407,700       565,489  

Chifeng Jilong Gold Mining Co. Ltd., Class A(a)

    271,800       611,482  

China Minmetals Rare Earth Co. Ltd., Class A

    135,900       661,056  

China Molybdenum Co. Ltd., Class A

    2,492,700       2,067,948  

China Northern Rare Earth Group High-Tech Co. Ltd., Class A

    498,700       2,964,667  

Ganfeng Lithium Co. Ltd., Class A

    160,750       3,457,674  

GEM Co. Ltd., Class A

    680,396       954,139  

Hesteel Co. Ltd., Class A

    1,662,800       625,419  

Hunan Valin Steel Co. Ltd., Class A

    984,140       857,838  

Inner Mongolia BaoTou Steel Union Co. Ltd., Class A(a)

    6,389,700       2,381,687  

Jiangxi Copper Co. Ltd., Class A

    272,200       887,393  

 

 

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

  13


Schedule of Investments (unaudited) (continued)

January 31, 2022

  

iShares® MSCI China A ETF

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  
Metals & Mining (continued)            

Pangang Group Vanadium Titanium & Resources Co. Ltd., Class A(a)

    1,223,100     $ 716,033  

Shandong Gold Mining Co. Ltd., Class A

    498,728       1,480,946  

Shandong Nanshan Aluminum Co. Ltd., Class A

    1,676,500       1,150,887  

Shanxi Meijin Energy Co. Ltd., Class A(a)

    589,300       1,231,013  

Shanxi Taigang Stainless Steel Co. Ltd., Class A

    815,800       878,466  

Shenghe Resources Holding Co. Ltd., Class A

    245,400       639,182  

Tianshan Aluminum Group Co. Ltd., Class A

    651,800       859,544  

Tibet Summit Resources Co. Ltd., Class-A

    121,400       553,100  

Tongling Nonferrous Metals Group Co. Ltd., Class A

    1,494,900       806,744  

Western Superconducting Technologies Co. Ltd., Class A

    59,568       768,218  

Xiamen Tungsten Co. Ltd., Class A

    181,698       565,018  

Yintai Gold Co. Ltd., Class A

    407,720       533,640  

YongXing Special Materials Technology Co. Ltd., Class A

    45,300       869,309  

Yunnan Aluminium Co. Ltd., Class A(a)

    498,300       872,488  

Yunnan Tin Co. Ltd., Class A(a)

    226,500       721,987  

Zhejiang Huayou Cobalt Co. Ltd., Class A

    181,225       2,847,328  

Zijin Mining Group Co. Ltd., Class A

      2,899,200       4,573,772  
   

 

 

 
        41,865,593  
Oil, Gas & Consumable Fuels — 1.7%            

China Petroleum & Chemical Corp., Class A

    4,531,243       3,011,815  

China Shenhua Energy Co. Ltd., Class A

    906,499       3,231,948  

COSCO SHIPPING Energy Transportation Co. Ltd., Class A

    498,349       403,068  

Guanghui Energy Co. Ltd., Class A(a)

    951,700       876,712  

PetroChina Co. Ltd., Class A

    3,035,900       2,412,884  

Shaanxi Coal Industry Co. Ltd., Class A

    1,359,801       2,700,753  

Shanxi Coking Coal Energy Group Co. Ltd., Class A

    569,360       703,246  

Shanxi Lu’an Environmental Energy Development Co. Ltd., Class A

    408,100       779,117  

Yankuang Energy Group Co. Ltd., Class A

    362,400       1,326,018  
   

 

 

 
      15,445,561  
Paper & Forest Products — 0.2%            

Chengxin Lithium Group Co Ltd., Class A(a)

    135,900       972,753  

Shandong Sun Paper Industry JSC Ltd., Class A

    362,800       639,555  
   

 

 

 
      1,612,308  
Personal Products — 0.2%            

By-Health Co. Ltd., Class A

    226,900       893,833  

Proya Cosmetics Co. Ltd., Class A

    22,500       601,080  

Shanghai Jahwa United Co. Ltd., Class A

    90,600       577,829  
   

 

 

 
      2,072,742  
Pharmaceuticals — 3.5%            

Apeloa Pharmaceutical Co. Ltd., Class A

    181,600       807,512  

Asymchem Laboratories Tianjin Co. Ltd., Class A

    27,100       1,384,337  

Betta Pharmaceuticals Co. Ltd., Class A

    45,312       445,455  

CanSino Biologics Inc., Class A(a)

    10,138       407,452  

Changchun High & New Technology Industry Group Inc., Class A

    52,740       1,466,214  

China Resources Sanjiu Medical & Pharmaceutical Co. Ltd., Class A

    135,900       739,685  

Dong-E-E-Jiao Co. Ltd., Class A

    90,600       538,767  

Guangzhou Baiyunshan Pharmaceutical Holdings Co. Ltd., Class A

    181,600       829,590  

Humanwell Healthcare Group Co. Ltd., Class A

    226,500       694,212  

Jiangsu Hengrui Medicine Co. Ltd., Class A

    906,442       5,846,398  

Joincare Pharmaceutical Group Industry Co. Ltd., Class A

    272,200       500,316  

Livzon Pharmaceutical Group Inc., Class A

    90,600       499,965  

Nanjing King-Friend Biochemical Pharmaceutical Co. Ltd., Class A

    181,216       1,028,995  
Security   Shares     Value  
Pharmaceuticals (continued)            

PharmaBlock Sciences Nanjing Inc., Class A

    45,300     $ 619,868  

Shandong Buchang Pharmaceuticals Co. Ltd., Class A

    178,627       555,366  

Shanghai Fosun Pharmaceutical Group Co. Ltd., Class A

    271,863       1,835,997  

Shenzhen Salubris Pharmaceuticals Co. Ltd., Class A(a)

    152,500       562,692  

Shijiazhuang Yiling Pharmaceutical Co. Ltd., Class A

    226,960       741,614  

Sichuan Kelun Pharmaceutical Co. Ltd., Class A

    181,600       504,892  

Yunnan Baiyao Group Co. Ltd., Class A

    181,200       2,578,827  

Zhangzhou Pientzehuang Pharmaceutical Co. Ltd., Class A

    90,699       5,136,505  

Zhejiang Huahai Pharmaceutical Co. Ltd., Class A

    226,504       746,168  

Zhejiang Jiuzhou Pharmaceutical Co. Ltd., Class A

    111,200       759,175  

Zhejiang NHU Co. Ltd., Class A

    362,857       1,724,283  

Zhejiang Wolwo Bio-Pharmaceutical Co. Ltd., Class A

    69,100       503,323  
   

 

 

 
         31,457,608  
Real Estate Management & Development — 1.9%        

China Merchants Shekou Industrial Zone Holdings Co. Ltd., Class A

      1,099,000       2,346,467  

China Vanke Co. Ltd., Class A

    1,359,400       4,355,094  

Gemdale Corp., Class A

    634,618       1,292,325  

Greenland Holdings Corp. Ltd., Class A

    1,165,350       803,948  

Jinke Properties Group Co. Ltd., Class A

    712,300       504,440  

Poly Developments and Holdings Group Co. Ltd., Class A

    1,676,831       4,131,779  

RiseSun Real Estate Development Co. Ltd., Class A

    634,237       445,933  

Seazen Holdings Co. Ltd., Class A

    317,166       1,658,410  

Shanghai Lingang Holdings Corp. Ltd., Class A

    181,200       410,936  

Shanghai Zhangjiang High-Tech Park Development Co. Ltd., Class A

    226,500       489,407  

Youngor Group Co. Ltd., Class A

    634,294       664,688  

Zhejiang China Commodities City Group Co. Ltd., Class A

    741,300       525,167  
   

 

 

 
      17,628,594  
Road & Rail — 0.5%            

Beijing-Shanghai High Speed Railway Co. Ltd., Class A

    5,798,894       4,621,478  
   

 

 

 
Semiconductors & Semiconductor Equipment — 5.1%  

Advanced Micro-Fabrication Equipment Inc., Class A(a)

    90,764       1,718,742  

Flat Glass Group Co. Ltd., Class A

    181,600       1,408,957  

GCL System Integration Technology Co. Ltd., Class A(a)

    906,400       455,092  

Gigadevice Semiconductor Beijing Inc., Class A

    93,057       2,072,633  

Hangzhou First Applied Material Co. Ltd., Class A

    135,179       2,446,171  

Hangzhou Silan Microelectronics Co. Ltd., Class A

    181,200       1,471,378  

Ingenic Semiconductor Co. Ltd., Class A

    60,900       1,063,499  

JA Solar Technology Co. Ltd., Class A

    226,500       3,221,631  

JCET Group Co. Ltd., Class A

    272,200       1,167,889  

LONGi Green Energy Technology Co. Ltd., Class A

    770,133       8,624,697  

Montage Technology Co. Ltd., Class A

    101,197       1,142,203  

National Silicon Industry Group Co. Ltd., Class A(a)

    282,486       1,053,007  

NAURA Technology Group Co. Ltd., Class A

    71,900       3,268,447  

SG Micro Corp., Class A

    24,400       1,066,725  

Shenzhen Goodix Technology Co. Ltd., Class A

    62,100       870,276  

Shenzhen SC New Energy Technology Corp., Class A

    45,300       587,221  

StarPower Semiconductor Ltd., Class A

    17,000       864,365  

Tianjin Zhonghuan Semiconductor Co. Ltd., Class A

    453,099       3,087,024  

Tianshui Huatian Technology Co. Ltd., Class A

    498,300       903,668  

TongFu Microelectronics Co. Ltd., Class A

    272,200       751,609  

Unigroup Guoxin Microelectronics Co. Ltd., Class A

    90,600       3,089,088  

Will Semiconductor Co. Ltd. Shanghai, Class A

    114,700       4,655,231  

Zhejiang Jingsheng Mechanical & Electrical Co. Ltd., Class A

    181,201       1,657,241  
   

 

 

 
      46,646,794  

 

 

14  

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Schedule of Investments (unaudited) (continued)

January 31, 2022

  

iShares® MSCI China A ETF

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  
Software — 1.8%            

360 Security Technology Inc., Class A(a)

    997,400     $ 1,648,095  

Beijing E-Hualu Information Technology Co. Ltd., Class A

    90,600       396,328  

Beijing Kingsoft Office Software Inc., Class A

    40,344       1,558,303  

Beijing Shiji Information Technology Co. Ltd., Class A

    136,380       680,978  

Hundsun Technologies Inc., Class A

    226,902       2,099,686  

Iflytek Co. Ltd., Class A

    317,150       2,193,307  

NavInfo Co. Ltd., Class A(a)

    305,000       768,323  

Sangfor Technologies Inc., Class A

    57,300       1,403,860  

Shanghai Baosight Software Co. Ltd., Class A

    181,232       1,548,799  

Thunder Software Technology Co. Ltd., Class A

    58,700       1,301,493  

Topsec Technologies Group Inc., Class A

    181,200       436,478  

Yonyou Network Technology Co. Ltd., Class A

    453,449       2,517,034  
   

 

 

 
        16,552,684  
Specialty Retail — 1.1%            

China Tourism Group Duty Free Corp. Ltd., Class A

    271,841       8,908,138  

Shanghai Yuyuan Tourist Mart Group Co. Ltd., Class A

    453,306       659,383  

Suning.com Co. Ltd., Class A(a)

      1,404,300       861,757  
   

 

 

 
      10,429,278  
Technology Hardware, Storage & Peripherals — 0.7%  

China Greatwall Technology Group Co. Ltd., Class A

    408,100       820,387  

Dawning Information Industry Co. Ltd., Class A

    173,500       833,082  

GRG Banking Equipment Co. Ltd., Class A

    362,400       647,523  

Inspur Electronic Information Industry Co. Ltd., Class A

    183,360       983,305  

Ninestar Corp., Class A

    181,210       1,398,829  

Shenzhen Transsion Holding Co. Ltd., Class A

    93,228       1,981,570  
   

 

 

 
      6,664,696  
Security   Shares     Value  
Textiles, Apparel & Luxury Goods — 0.1%  

SuZhou TA&A Ultra Clean Technology Co. Ltd., Class A

    90,600     $ 955,669  

Zhejiang Semir Garment Co. Ltd., Class A

    350,300       386,487  
   

 

 

 
      1,342,156  
Trading Companies & Distributors — 0.2%        

Beijing United Information Technology Co. Ltd., Class A

    48,400       872,694  

COSCO SHIPPING Development Co. Ltd., Class A

    1,404,300       657,473  

Xiamen C & D Inc., Class A

    453,000       669,673  
   

 

 

 
      2,199,840  
Transportation Infrastructure — 0.2%            

Shanghai International Airport Co. Ltd., Class A(a)

    135,922       1,084,317  

Shanghai International Port Group Co. Ltd., Class A

    1,314,500       1,177,050  
   

 

 

 
      2,261,367  
Wireless Telecommunication Services — 0.3%        

China United Network Communications Ltd., Class A

      4,161,000       2,431,219  
   

 

 

 

Total Common Stocks — 99.7%
(Cost: $ 748,402,241)

 

    906,198,117  
   

 

 

 

Total Investments in Securities — 99.7%
(Cost: $ 748,402,241)

 

    906,198,117  

Other Assets, Less Liabilities — 0.3%

 

    2,485,108  
   

 

 

 

Net Assets — 100.0%

 

  $  908,683,225  
   

 

 

 

 

(a) 

Non-income producing security.

(b) 

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

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

                 

FTSE China A50 Index

     76          02/25/22        $ 1,135        $ (38,507
                 

 

 

 

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:

 

 

 
     Equity
Contracts
 

 

 

Liabilities — Derivative Financial Instruments

  

Futures contracts

  

Unrealized depreciation on futures contracts(a)

   $ 38,507  
  

 

 

 

 

  (a) 

Net cumulative unrealized appreciation (depreciation) on futures contracts are reported in the Schedule of Investments. In the Statements of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss).

 

 

 

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

  15


Schedule of Investments (unaudited) (continued)

January 31, 2022

  

iShares® MSCI China A ETF

 

For the period ended January 31, 2022, the effect of derivative financial instruments in the Statements of Operations was as follows:

 

 

 
     Equity
Contracts
 

 

 

Net Realized Gain (Loss) from:

  

Futures contracts

   $ (59,023
  

 

 

 

Net Change in Unrealized Appreciation (Depreciation) on:

  

Futures contracts

   $ 29,203  
  

 

 

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

 

 

Futures contracts:

  

Average notional value of contracts — long

   $ 982,131      

 

 

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

Fair Value Hierarchy as of Period End

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

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

 

 

 
    

 

Level 1

 

      

 

Level 2

 

      

 

Level 3

 

      

 

Total

 

 

 

 

Investments

                 

Assets

                 

Common Stocks

   $ 46,770,693        $ 858,871,940        $ 555,484        $ 906,198,117  
  

 

 

      

 

 

      

 

 

      

 

 

 

Derivative financial instruments(a)

                 

Liabilities

                 

Futures Contracts

   $        $ (38,507      $        $ (38,507
  

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

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

 

See notes to financial statements.

 

 

16  

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Statements of Assets and Liabilities (unaudited)

January 31, 2022

 

     iShares
China Large-Cap
ETF
    iShares
MSCI China
A ETF
 

ASSETS

   

Investments in securities, at value (including securities on loan)(a):

   

Unaffiliated(b)

  $ 5,923,328,097     $ 906,198,117  

Affiliated(c)

    16,473,857        

Cash

    7,705       1,869,944  

Foreign currency, at value(d)

    5,310,325       65,071  

Cash pledged:

   

Futures contracts

    724,000       81,000  

Receivables:

   

Investments sold

    507,320        

Securities lending income — Affiliated

    5,972        

Variation margin on futures contracts

    476,408       21,212  

Capital shares sold

    14,989,317       10,029,617  

Dividends

    8,330       793  
 

 

 

   

 

 

 

Total assets

    5,961,831,331       918,265,754  
 

 

 

   

 

 

 

LIABILITIES

   

Collateral on securities loaned, at value

    6,289,955        

Payables:

   

Investments purchased

    16,158,685       9,398,701  

Investment advisory fees

    3,293,001       183,828  
 

 

 

   

 

 

 

Total liabilities

    25,741,641       9,582,529  
 

 

 

   

 

 

 

NET ASSETS

  $ 5,936,089,690     $ 908,683,225  
 

 

 

   

 

 

 

NET ASSETS CONSIST OF:

   

Paid-in capital

  $ 8,980,280,144     $ 791,033,463  

Accumulated earnings (loss)

    (3,044,190,454     117,649,762  
 

 

 

   

 

 

 

NET ASSETS

  $ 5,936,089,690     $ 908,683,225  
 

 

 

   

 

 

 

Shares outstanding

    157,350,000       22,650,000  
 

 

 

   

 

 

 

Net asset value

  $ 37.73     $ 40.12  
 

 

 

   

 

 

 

Shares authorized

    Unlimited       Unlimited  
 

 

 

   

 

 

 

Par value

    None       None  
 

 

 

   

 

 

 

(a) Securities loaned, at value

  $ 6,166,499     $  

(b) Investments, at cost — Unaffiliated

  $ 6,135,156,301     $ 748,402,241  

(c)  Investments, at cost — Affiliated

  $ 16,471,570     $  

(d) Foreign currency, at cost

  $ 5,316,795     $ 65,080  

See notes to financial statements.

 

 

I N A N C I A L   T A T E M E N T  S

  17


 

Statements of Operations (unaudited)

Six Months Ended January 31, 2022

 

     iShares
China
Large-Cap
ETF
    iShares
MSCI China
A ETF
 

INVESTMENT INCOME

   

Dividends — Unaffiliated

  $ 16,996,738     $ 1,514,027  

Dividends — Affiliated

    133        

Interest — Unaffiliated

    4,001       314  

Securities lending income — Affiliated — net

    171,873        

Foreign taxes withheld

    (1,099,875     (153,091
 

 

 

   

 

 

 

Total investment income

    16,072,870       1,361,250  
 

 

 

   

 

 

 

EXPENSES

   

Investment advisory fees

    18,716,433       2,262,945  

Commitment fees

          4,298  

Miscellaneous

    217       217  
 

 

 

   

 

 

 

Total expenses

    18,716,650       2,267,460  

Less:

   

Investment advisory fees waived

          (1,362,283
 

 

 

   

 

 

 

Total expenses after fees waived

    18,716,650       905,177  
 

 

 

   

 

 

 

Net investment income (loss)

    (2,643,780     456,073  
 

 

 

   

 

 

 

REALIZED AND UNREALIZED GAIN (LOSS)

   

Net realized gain (loss) from:

   

Investments — Unaffiliated

    (298,789,195     (12,885,114

Investments — Affiliated

    5,241        

Futures contracts

    (5,762,639     (59,023

Foreign currency transactions

    (52,883     52,678  
 

 

 

   

 

 

 

Net realized loss

    (304,599,476     (12,891,459
 

 

 

   

 

 

 

Net change in unrealized appreciation (depreciation) on:

   

Investments — Unaffiliated

    13,565,583       (25,999,777

Investments — Affiliated

    (13,268      

Futures contracts

    4,827,240       29,203  

Foreign currency translations

    253       (3,687
 

 

 

   

 

 

 

Net change in unrealized appreciation (depreciation)

    18,379,808       (25,974,261
 

 

 

   

 

 

 

Net realized and unrealized loss

    (286,219,668     (38,865,720
 

 

 

   

 

 

 

NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS

  $ (288,863,448   $ (38,409,647
 

 

 

   

 

 

 

See notes to financial statements.

 

 

18  

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Statements of Changes in Net Assets

 

    iShares
China Large-Cap ETF
    iShares
MSCI China A ETF
 
    

 

Six Months Ended
01/31/22
(unaudited)

    Year Ended
07/31/21
   

 

Six Months Ended
01/31/22
(unaudited)

    Year Ended
07/31/21
 

INCREASE (DECREASE) IN NET ASSETS

       

OPERATIONS

       

Net investment income (loss)

  $ (2,643,780   $ 77,403,606     $ 456,073     $ 7,615,518  

Net realized loss

    (304,599,476     (291,904,538     (12,891,459     (11,951,056

Net change in unrealized appreciation (depreciation)

    18,379,808       46,397,705       (25,974,261     72,482,786  
 

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in net assets resulting from operations

    (288,863,448     (168,103,227     (38,409,647     68,147,248  
 

 

 

   

 

 

   

 

 

   

 

 

 

DISTRIBUTIONS TO SHAREHOLDERS(a)

       

Decrease in net assets resulting from distributions to shareholders

    (57,067,283     (75,177,990     (7,204,626     (6,046,186
 

 

 

   

 

 

   

 

 

   

 

 

 

CAPITAL SHARE TRANSACTIONS

       

Net increase in net assets derived from capital share transactions

    1,469,533,082       1,626,058,494       326,771,030       81,420,345  
 

 

 

   

 

 

   

 

 

   

 

 

 

NET ASSETS

       

Total increase in net assets

    1,123,602,351       1,382,777,277       281,156,757       143,521,407  

Beginning of period

    4,812,487,339       3,429,710,062       627,526,468       484,005,061  
 

 

 

   

 

 

   

 

 

   

 

 

 

End of period

  $ 5,936,089,690     $ 4,812,487,339     $ 908,683,225     $ 627,526,468  
 

 

 

   

 

 

   

 

 

   

 

 

 

 

(a) 

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

See notes to financial statements.

 

 

I N A N C I A L   T A T E M E N T  S

  19


Financial Highlights

(For a share outstanding throughout each period)

 

    iShares China Large-Cap ETF  
   

Six Months Ended

01/31/22

(unaudited)

    Year Ended
07/31/21
     Year Ended
07/31/20
     Year Ended
07/31/19
     Year Ended
07/31/18
     Year Ended
07/31/17
 
               

Net asset value, beginning of period

               $ 40.36     $ 41.57      $ 41.63      $ 43.14      $ 42.57      $ 35.11  
   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net investment income (loss)(a)

      (0.02     0.88        0.89        1.07        1.27        0.86  

Net realized and unrealized gain (loss)(b)

      (2.18     (1.26      0.17        (1.73      0.80        7.47  
   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net increase (decrease) from investment operations

      (2.20     (0.38      1.06        (0.66      2.07        8.33  
   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Distributions(c)

                 

From net investment income

      (0.43     (0.83      (1.12      (0.85      (1.50      (0.87
   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total distributions

      (0.43     (0.83      (1.12      (0.85      (1.50      (0.87
   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net asset value, end of period

    $ 37.73     $ 40.36      $ 41.57      $ 41.63      $ 43.14      $ 42.57  
   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Return(d)

                 

Based on net asset value

      (5.44 )%(e)       (1.13 )%       2.59      (1.44 )%       4.73      24.23
   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Ratios to Average Net Assets(f)

                 

Total expenses

      0.74 %(g)       0.74      0.74      0.74      0.74      0.74
   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net investment income (loss)

      (0.10 )%(g)       1.90      2.18      2.55      2.75      2.26
   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Supplemental Data

                 

Net assets, end of period (000)

    $ 5,936,090     $ 4,812,487      $ 3,429,710      $ 5,039,411      $ 4,096,070      $ 3,346,303  
   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Portfolio turnover rate(h)

      17 %(e)       62      18      14      18      15
   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(a) 

Based on average shares outstanding.

(b) 

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

(c) 

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

(d) 

Where applicable, assumes the reinvestment of distributions.

(e) 

Not annualized.

(f) 

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

(g) 

Annualized.

(h) 

Portfolio turnover rate excludes in-kind transactions.

See notes to financial statements.

 

 

20  

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Financial Highlights (continued)

(For a share outstanding throughout each period)

 

   

iShares MSCI China A ETF

 
  Six Months Ended 01/31/22 (unaudited)

 

 

Year Ended 07/31/21

 

 

Year Ended 07/31/20

 

 

Year Ended 07/31/19

 

 

Year Ended 07/31/18

 

 


 

Year Ended
07/31/17


 

 

 

Net asset value, beginning of period

             $ 41.70            $ 36.39            $ 28.68            $ 27.06            $ 29.19                $ 25.68  
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Net investment income(a)

      0.03         0.52         0.59         0.84         0.56         0.30  

Net realized and unrealized gain (loss)(b)

      (1.20       5.22         7.47         1.67         (2.38       3.66  
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Net increase (decrease) from investment operations

      (1.17       5.74         8.06         2.51         (1.82       3.96  
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Distributions(c)

                       

From net investment income

      (0.41       (0.43       (0.35       (0.19       (0.31       (0.45

From net realized gain

                              (0.70                
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Total distributions

      (0.41       (0.43       (0.35       (0.89       (0.31       (0.45
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Net asset value, end of period

    $ 40.12       $ 41.70       $ 36.39       $ 28.68       $ 27.06       $ 29.19  
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Total Return(d)

                       

Based on net asset value

      (2.90 )%(e)        15.79       28.40       9.97       (6.33 )%(f)        15.65
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Ratios to Average Net Assets(g)

                       

Total expenses

      0.60 %(h)         0.60       0.63       0.65       0.65       0.65
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Total expenses after fees waived

      0.24 %(h)         0.24       0.24       0.24       0.55       0.65
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Net investment income

      0.12 %(h)         1.24       1.98       3.10       1.81       1.13
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Supplemental Data

                       

Net assets, end of period (000)

    $ 908,683       $ 627,526       $ 484,005       $ 141,989       $ 13,529       $ 10,217  
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Portfolio turnover rate(i)

      12 %(e)(j)         38 %(j)         31 %(j)         44 %(j)         154       13
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

(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)  Includes payment received from an affiliate, which impacted the Fund’s total return. Excluding the payment from an affiliate, the Fund’s total return would have been -6.54%.

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

(h) Annualized.

(i)  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”).

  

  

   

  

  

   

  

  

   

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

      12       24       28       22                
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

See notes to financial statements.

 

 

I N A N C I A L   I G H L I G H T  S

  21


Notes to Financial Statements (unaudited)

 

1.

ORGANIZATION

iShares Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust is organized as a Delaware statutory trust and is authorized to have multiple series or portfolios.

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

 

iShares ETF   Diversification
Classification
 

China Large-Cap

    Non-diversified  

MSCI China A

    Diversified  

 

2.

SIGNIFICANT ACCOUNTING POLICIES

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

Investment Transactions and Income Recognition: For financial reporting purposes, investment transactions are recorded on the dates the transactions are executed. Realized gains and losses on investment transactions are determined using the specific identification method. Dividend income and capital gain distributions, if any, are recorded on the ex-dividend date. Non-cash dividends, if any, are recorded on the ex-dividend date at fair value. 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. Interest income, including amortization and accretion of premiums and discounts on debt securities, is recognized daily on an accrual basis.

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 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 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 January 31, 2022, if any, are disclosed in the 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 Statements of Operations includes tax reclaims recorded as well as professional and other fees, if any, associated with recovery of foreign withholding taxes.

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.

In-kind Redemptions: For financial reporting purposes, in-kind redemptions are treated as sales of securities resulting in realized capital gains or losses to the Funds. Because such gains or losses are not taxable to the Funds and are not distributed to existing Fund shareholders, the gains or losses are reclassified from accumulated net realized gain (loss) to paid-in capital at the end of the Funds’ tax year. These reclassifications have no effect on net assets or net asset value (“NAV”) per share.

Distributions: Dividends and distributions paid by each Fund are recorded on the ex-dividend dates. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds. The character and timing of distributions are determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP.

 

 

22  

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Notes to Financial Statements (unaudited) (continued)

 

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 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.

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.

SECURITIES AND OTHER INVESTMENTS

Securities Lending: Each Fund may lend its securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by an approved bank, or securities issued or guaranteed by the U.S. government. The initial collateral received by each Fund is required to have a value of at least 102% of the current market value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Fund and any additional required collateral is delivered to the Fund

 

 

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

  23


Notes to Financial Statements (unaudited) (continued)

 

or excess collateral is returned by the Fund, on the next business day. During the term of the loan, each Fund is entitled to all distributions made on or in respect of the loaned securities but does not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.

As of period end, any securities on loan were collateralized by cash and/or U.S. Government obligations. Cash collateral invested in money market funds managed by BlackRock Fund Advisors (“BFA”), the Funds’ investment adviser, or its affiliates is disclosed in the Schedule of Investments. Any non-cash collateral received cannot be sold, re-invested or pledged by the Fund, except in the event of borrower default. The securities on loan, if any, are also disclosed in each Fund’s Schedule of Investments. The market value of any securities on loan and the value of any related cash collateral are disclosed in the Statements of Assets and Liabilities.

Securities lending transactions are entered into by the Funds under Master Securities Lending Agreements (each, an “MSLA”) which provide the right, in the event of default (including bankruptcy or insolvency) for the non-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, the Funds, as lender, would offset the market value of the collateral received against the market value of the securities loaned. When the value of the collateral is greater than that of the market value of the securities loaned, the lender is left with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, absent an event of default, the borrower can resell or re-pledge the loaned securities, and the Funds can reinvest cash collateral received in connection with loaned securities. Upon an event of default, the parties’ obligations to return the securities or collateral to the other party are extinguished, and the parties can resell or re-pledge the loaned securities or the collateral received in connection with the loaned securities in order to satisfy the defaulting party’s net payment obligation for all transactions under the MSLA. The defaulting party remains liable for any deficiency.

As of period end, the following table is a summary of the securities on loan by counterparty which are subject to offset under an MSLA:

 

iShares ETF and Counterparty    
Market Value of
Securities on Loan
 
 
    
Cash Collateral
Received
 
(a)  
   
Non-Cash Collateral
Received
 
 
     Net Amount  

China Large-Cap

         

BofA Securities, Inc.

  $ 5,467,689      $ 5,467,689     $      $  

Goldman Sachs & Co. LLC

    698,810        698,810               
 

 

 

    

 

 

   

 

 

    

 

 

 
  $ 6,166,499      $ 6,166,499     $      $  
 

 

 

    

 

 

   

 

 

    

 

 

 

 

  (a) 

Collateral received in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by each Fund is disclosed in the Fund’s statement of assets and liabilities.

 

The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, each Fund benefits from a borrower default indemnity provided by BlackRock, Inc. (“BlackRock”). BlackRock’s indemnity allows for full replacement of the securities loaned to the extent the collateral received does not cover the value of the securities loaned in the event of borrower default. Each Fund could incur a loss if the value of an investment purchased with cash collateral falls below the market value of the loaned securities or if the value of an investment purchased with cash collateral falls below the value of the original cash collateral received. Such losses are borne entirely by each Fund.

 

5.

DERIVATIVE FINANCIAL INSTRUMENTS

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

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

Securities deposited as initial margin are designated in the Schedule of Investments and cash deposited, if any, are shown as cash pledged for futures contracts in the Statements of Assets and Liabilities. Pursuant to the contract, the Funds agree to receive from or pay to the broker an amount of cash equal to the daily fluctuation in market value of the contract (“variation margin”). Variation margin is recorded as unrealized appreciation (depreciation) and, if any, shown as variation margin receivable (or payable) on futures contracts in the Statements of Assets and Liabilities. When the contract is closed, a realized gain or loss is recorded in the Statements of Operations equal to the difference between the notional amount of the contract at the time it was opened and the notional amount at the time it was closed. The use of futures contracts involves the risk of an imperfect correlation in the movements in the price of futures contracts and interest rates, foreign currency exchange rates or underlying assets.

 

6.

INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Advisory Fees: Pursuant to an Investment Advisory Agreement with the Trust, BFA manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock. Under the Investment Advisory Agreement, BFA is responsible for substantially all expenses of the Funds, except (i) interest and taxes; (ii) brokerage commissions and other expenses connected with the execution of portfolio transactions; (iii) distribution fees; (iv) the advisory fee payable to BFA; and (v) litigation expenses and any extraordinary expenses (in each case as determined by a majority of the independent trustees).

 

 

24  

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Notes to Financial Statements (unaudited) (continued)

 

For its investment advisory services to the iShares China Large-Cap 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:

 

Average Daily Net Assets   Investment Advisory Fee      

First $6 billion

    0.74%  

Over $6 billion, up to and including $9 billion

    0.67     

Over $9 billion, up to and including $12 billion

    0.60     

Over $12 billion

    0.54     

For its investment advisory services to the iShares MSCI China A ETF, BFA is entitled to an annual investment advisory fee of 0.60%, accrued daily and paid monthly by the Fund, based on the average daily net assets of the Fund.

Expense Waivers: BFA may from time to time voluntarily waive and/or reimburse fees or expenses in order to limit total annual fund operating expenses (excluding acquired fund fees and expenses, if any). BFA has elected to implement a voluntary fee waiver in order to limit the Fund’s total annual operating expenses after fee waiver to 0.24%, and currently intends to keep such voluntary fee waiver for the Fund in place through December 31, 2022. Any such voluntary waiver or reimbursement may be eliminated by BFA at any time.

This amount is included in investment advisory fees waived in the Statements of Operations. For the six months ended January 31, 2022, the amounts waived in investment advisory fees pursuant to this arrangement were as follows:

 

iShares ETF   Amounts waived      

MSCI China A

  $  1,362,283      

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.

Securities Lending: The U.S. Securities and Exchange Commission (the “SEC”) has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (“BTC”), an affiliate of BFA, to serve as securities lending agent for the Funds, subject to applicable conditions. As securities lending agent, BTC bears all operational costs directly related to securities lending, including any custodial costs. Each Fund is responsible for fees in connection with the investment of cash collateral received for securities on loan (the “collateral investment fees”). The cash collateral is invested in a money market fund, BlackRock Cash Funds: Institutional or BlackRock Cash Funds: Treasury, managed by BFA, or its affiliates. However, BTC has agreed to reduce the amount of securities lending income it receives in order to effectively limit the collateral investment fees each Fund bears to an annual rate of 0.04%. The SL Agency Shares of such money market fund will not be subject to a sales load, distribution fee or service fee. The money market fund in which the cash collateral has been invested may, under certain circumstances, impose a liquidity fee of up to 2% of the value redeemed or temporarily restrict redemptions for up to 10 business days during a 90 day period, in the event that the money market fund’s weekly liquid assets fall below certain thresholds.

Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment fees. Each Fund retains a portion of securities lending income and remits the remaining portion to BTC as compensation for its services as securities lending agent.

Pursuant to the current securities lending agreement, each Fund retains 82% of securities lending income (which excludes collateral investment fees) and the amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees.

In addition, commencing the business day following the date that the aggregate securities lending income plus the collateral investment fees generated across all 1940 Act iShares exchange-traded funds (the “iShares ETF Complex”) in that calendar year exceeds a specified threshold, each Fund, pursuant to the securities lending agreement, will retain for the remainder of that calendar year 85% of securities lending income (which excludes collateral investment fees), and the amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees.

The share of securities lending income earned by each Fund is shown as securities lending income – affiliated – net in its Statements of Operations. For the six months ended January 31, 2022, the Funds paid BTC the following amounts for securities lending agent services:

 

iShares ETF   Fees Paid    
to BTC    
 

China Large-Cap

  $  47,783      

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

 

 

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Notes to Financial Statements (unaudited) (continued)

 

Other Transactions: Cross trading is the buying or selling of portfolio securities between funds to which BFA (or an affiliate) serves as investment adviser. At its regularly scheduled quarterly meetings, the Board reviews such transactions as of the most recent calendar quarter for compliance with the requirements and restrictions set forth by Rule 17a-7.

For the six months ended January 31, 2022, transactions executed by the Funds pursuant to Rule 17a-7 under the 1940 Act were as follows:

 

iShares ETF   Purchases      Sales      Net Realized    
Gain (Loss)    
 

China Large-Cap

  $ 37,591,703      $ 38,140,969      $ (1,251,104)      

Each Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is shown as dividends – affiliated in the Statements of Operations.

A fund, in order to improve its portfolio liquidity and its ability to track its underlying index, may invest in shares of other iShares funds that invest in securities in the fund’s underlying index.

 

7.

PURCHASES AND SALES

For the six months ended January 31, 2022, purchases and sales of investments, excluding short-term investments and in-kind transactions, were as follows:

 

iShares ETF   Purchases      Sales      

China Large-Cap

  $ 2,347,922,573      $ 876,880,060      

MSCI China A

    396,096,675        86,218,468      

There were no in-kind transactions for the six months ended January 31, 2022.

 

8.

INCOME TAX INFORMATION

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

Management has analyzed tax laws and regulations and their application to the Funds as of January 31, 2022, inclusive of the open tax return years, and does not believe that there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.

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

 

iShares ETF    Non-Expiring       

China Large-Cap

   $ 2,357,333,369      

MSCI China A

     13,836,433      

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 January 31, 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)     
 

China Large-Cap

  $   6,338,539,811      $   444,014,973      $ (842,878,691   $   (398,863,718)      

MSCI China A

    761,139,202        187,904,357        (42,883,949     145,020,408       

 

9.

LINE OF CREDIT

The iShares MSCI China A ETF, along with certain other iShares funds (“Participating Funds”), is a party to a $300 million credit agreement (“Credit Agreement”) with State Street Bank and Trust Company, which expires on October 15, 2021. 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 Credit Agreement sets specific sub limits on aggregate borrowings based on two tiers of Participating Funds: $300 million with respect to the funds within Tier 1 and $200 million with respect to Tier 2, including the Fund. The Funds may borrow up to the aggregate commitment amount subject to asset coverage and other limitations as specified in the Credit Agreement. The Credit Agreement has the following terms: a commitment fee of 0.20% 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

 

 

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Notes to Financial Statements (unaudited) (continued)

 

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 Credit Agreement. The Credit Agreement was terminated on August 12, 2021.

Effective August 13, 2021, the iShares MSCI China A ETF, along with certain other iShares funds (“Participating Funds”), is a party 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 January 31, 2022, the Fund did not borrow under the Credit Agreement or Syndicated Credit Agreement.

 

10.

PRINCIPAL RISKS

In the normal course of business, each Fund invests in securities or other instruments and may enter into certain transactions, and such activities subject the Fund to various risks, including, among others, fluctuations in the market (market risk) or failure of an issuer to meet all of its obligations. The value of securities or other instruments may also be affected by various factors, including, without limitation: (i) the general economy; (ii) the overall market as well as local, regional or global political and/or social instability; (iii) regulation, taxation or international tax treaties between various countries; or (iv) currency, interest rate or price fluctuations. Local, regional or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues, recessions, or other events could have a significant impact on the Funds and their investments. Each Fund’s prospectus provides details of the risks to which the Fund is subject.

BFA uses a “passive” or index approach to try to achieve each Fund’s investment objective following the securities included in its underlying index during upturns as well as downturns. BFA does not take steps to reduce market exposure or to lessen the effects of a declining market. Divergence from the underlying index and the composition of the portfolio is monitored by BFA.

The Funds may be exposed to additional risks when reinvesting cash collateral in money market funds that do not seek to maintain a stable NAV per share of $1.00, which may be subject to redemption gates or liquidity fees under certain circumstances.

Market Risk: The iShares MSCI China A ETF invests in A-shares (i.e., equity securities of companies based in the People’s Republic of China (“China” or “PRC”) that trade on the Shanghai Stock Exchange and Shenzhen Stock Exchange) primarily through the Shanghai-Hong Kong Stock Connect program or the Shenzhen-Hong Kong Stock Connect program (together, “Stock Connect”). Investing in A-shares through Stock Connect is subject to trading, clearance and settlement procedures, which could pose risks to the Fund. Trading through Stock Connect is subject to a daily quota, which limits the maximum net purchases under Stock Connect each day. The daily quota may restrict the Fund’s ability to invest in A-shares on a timely basis and could affect the Fund’s ability to effectively pursue its investment strategy. Additionally, the Fund may be subject to the risk of price fluctuations on days when the Chinese markets are open, but Stock Connect is not trading. The A-shares market has a higher propensity for trading suspensions than many other global equity markets.

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. 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

 

 

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Notes to Financial Statements (unaudited) (continued)

 

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 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 Schedule of Investments.

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 China or with significant exposure to Chinese issuers or countries. Investments in Chinese securities, including certain Hong Kong-listed securities, involves risks specific to China. China may be subject to considerable degrees of economic, political and social instability and demonstrates significantly higher volatility from time to time in comparison to developed markets. Chinese markets generally continue to experience inefficiency, volatility and pricing anomalies resulting from governmental influence, a lack of publicly available information and/or political and social instability. Internal social unrest or confrontations with other neighboring countries may disrupt economic development in China and result in a greater risk of currency fluctuations, currency non-convertibility, interest rate fluctuations and higher rates of inflation. Incidents involving China’s or the region’s security may cause uncertainty in Chinese markets and may adversely affect the Chinese economy and a fund’s investments. Reduction in spending on Chinese products and services, institution of tariffs or other trade barriers, or a downturn in any of the economies of China’s key trading partners may have an adverse impact on the Chinese economy. In addition, measures may be taken to limit the flow of capital and/or sanctions may be imposed, which could prohibit or restrict the ability to own or transfer fund assets and may also include retaliatory actions, such as seizure of fund assets.

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.

Certain Funds invest a significant portion of their assets in securities within a single or limited number of market sectors. When a Fund concentrates its investments in this manner, it assumes the risk that economic, regulatory, political and social conditions affecting such sectors may have a significant impact on the fund and could affect the income from, or the value or liquidity of, the fund’s portfolio. Investment percentages in specific sectors are presented in the Schedule of Investments.

Significant Shareholder Redemption Risk: Certain shareholders may own or manage a substantial amount of fund shares and/or hold their fund investments for a limited period of time. Large redemptions of fund shares by these shareholders may force a Fund to sell portfolio securities, which may negatively impact the fund’s NAV, increase the fund’s brokerage costs, and/or accelerate the realization of taxable income/gains and cause the fund to make additional taxable distributions to shareholders.

LIBORTransition 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.

 

11.

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.

 

 

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Notes to Financial Statements (unaudited) (continued)

 

Transactions in capital shares were as follows:

 

     Six Months Ended
01/31/22
    Year Ended
07/31/21
 
iShares ETF   Shares     Amount     Shares     Amount  

China Large-Cap

       

Shares sold

    38,100,000     $ 1,469,533,082       50,700,000     $ 2,298,663,625  

Shares redeemed

                (13,950,000     (672,605,131
 

 

 

   

 

 

   

 

 

   

 

 

 

Net increase

    38,100,000     $ 1,469,533,082       36,750,000     $ 1,626,058,494  
 

 

 

   

 

 

   

 

 

   

 

 

 

MSCI China A

       

Shares sold

    7,800,000     $ 335,255,691       3,900,000     $ 168,647,485  

Shares redeemed

    (200,000     (8,484,661     (2,150,000     (87,227,140
 

 

 

   

 

 

   

 

 

   

 

 

 

Net increase

    7,600,000     $ 326,771,030       1,750,000     $ 81,420,345  
 

 

 

   

 

 

   

 

 

   

 

 

 

The consideration for the purchase of Creation Units of a fund in the Trust generally consists of the in-kind deposit of a designated portfolio of securities and a specified amount of cash. Certain funds in the Trust may be offered in Creation Units solely or partially for cash in U.S. dollars. Investors purchasing and redeeming Creation Units may pay a purchase transaction fee and a redemption transaction fee directly to State Street Bank and Trust Company, the Trust’s administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash. Investors transacting in Creation Units for cash may also pay an additional variable charge to compensate the relevant fund for certain transaction costs (i.e., stamp taxes, taxes on currency or other financial transactions, and brokerage costs) and market impact expenses relating to investing in portfolio securities. Such variable charges, if any, are included in shares sold in the table above.

From time to time, settlement of securities related to in-kind contributions or in-kind redemptions may be delayed. In such cases, securities related to in-kind transactions are reflected as a receivable or a payable in the Statements of Assets and Liabilities.

 

12.

SUBSEQUENT EVENTS

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

 

 

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Statement Regarding Liquidity Risk Management Program (unaudited)

 

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the “Liquidity Rule”), iShares Trust (the “Trust”) has adopted and implemented a liquidity risk management program (the “Program”) for iShares China Large-Cap ETF and iShares MSCI China A ETF (the “Funds” or “ETFs”), each a series of the Trust, which is reasonably designed to assess and manage each Fund’s liquidity risk.

The Board of Trustees (the “Board”) of the Trust, on behalf of the Funds, met on December 9, 2021 (the “Meeting”) to review the Program. The Board previously appointed BlackRock Fund Advisors (“BlackRock”), the investment adviser to the Funds, as the program administrator for each Fund’s Program. BlackRock also previously delegated oversight of the Program to the 40 Act Liquidity Risk Management Committee (the “Committee”). At the Meeting, the Committee, on behalf of BlackRock, provided the Board with a report that addressed the operation of the Program and assessed its adequacy and effectiveness of implementation, including the management of each Fund’s Highly Liquid Investment Minimum (“HLIM”) where applicable, and any material changes to the Program (the “Report”). The Report covered the period from October 1, 2020 through September 30, 2021 (the “Program Reporting Period”).

The Report described the Program’s liquidity classification methodology for categorizing each Fund’s investments (including derivative transactions) into one of four liquidity buckets. It also referenced the methodology used by BlackRock to establish each Fund’s HLIM and noted that the Committee reviews and ratifies the HLIM assigned to each Fund no less frequently than annually. The Report also discussed notable events affecting liquidity over the Program Reporting Period, including extended market holidays and the imposition of capital controls in certain non-U.S. countries.

The Report noted that the Program complied with the key factors for consideration under the Liquidity Rule for assessing, managing and periodically reviewing each Fund’s liquidity risk, as follows:

 

  a)

The Fund’s investment strategy and liquidity of portfolio investments during both normal and reasonably foreseeable stressed conditions. During the Program Reporting Period, the Committee reviewed whether each Fund’s strategy is appropriate for an open-end fund structure, with a focus on funds with more significant and consistent holdings of less liquid and illiquid assets. The Committee also factored a fund’s concentration in an issuer into the liquidity classification methodology by taking issuer position sizes into account. Derivative exposure was also considered in the calculation of a fund’s liquidity bucketing. Finally, a factor for consideration under the Liquidity Rule is a Fund’s use of borrowings for investment purposes. However, the Funds do not borrow for investment purposes.

 

  b)

Short-term and long-term cash flow projections during both normal and reasonably foreseeable stressed conditions. During the Program Reporting Period, the Committee reviewed historical redemption activity and used this information as a component to establish each ETF’s reasonably anticipated trading size (“RATS”). The Committee may also take into consideration a fund’s shareholder ownership concentration (which, depending on product type and distribution channel, may or may not be available), a fund’s distribution channels, and the degree of certainty associated with a fund’s short-term and long-term cash flow projections.

 

  c)

Holdings of cash and cash equivalents, as well as borrowing arrangements. The Committee considered that ETFs generally do not hold more than de minimis amounts of cash. While the ETFs generally do not engage in borrowing, certain of the ETFs have the flexibility to draw on a line of credit to meet redemption requests or facilitate settlements.

 

  d)

The relationship between an ETF’s portfolio liquidity and the way in which, and the prices and spreads at which, ETF shares trade, including the efficiency of the arbitrage function and the level of active participation by market participants, including authorized participants. The Committee monitored the prevailing bid/ask spread and the ETF price premium (or discount) to NAV for all ETFs and reviewed any persistent deviations from long-term averages.

 

  e)

The effect of the composition of baskets on the overall liquidity of an ETF’s portfolio. In reviewing the linkage between the composition of custom baskets accepted by an ETF and any significant change in the liquidity profile of such ETF, the Committee reviewed changes in the proportion of each ETF’s portfolio comprised of less liquid and illiquid holdings to determine if applicable thresholds were met requiring enhanced review.

As part of BlackRock’s continuous review of the effectiveness of the Program, the Committee made the following material changes to the Program: (1) updates to certain model components in the Program’s methodology; and (2) certain iShares Funds entered into a $800 million credit agreement with a group of lenders that replaced a previous liquidity facility. The Report provided to the Board stated that the Committee concluded that based on the operation of the functions, as described in the Report, the Program is operating as intended and is effective in implementing the requirements of the Liquidity Rule.

 

 

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Supplemental Information (unaudited)

 

Regulation Regarding Derivatives

On October 28, 2020, the Securities and Exchange Commission (the “SEC”) adopted regulations governing the use of derivatives by registered investment companies (“Rule 18f-4”). The Funds will be required to implement and comply with Rule 18f-4 by August 19, 2022. Once implemented, Rule 18f-4 will impose limits on the amount of derivatives a fund can enter into, eliminate the asset segregation framework currently used by funds to comply with Section 18 of the 1940 Act, treat derivatives as senior securities and require funds whose use of derivatives is more than a limited specified exposure amount to establish and maintain a comprehensive derivatives risk management program and appoint a derivatives risk manager.

Section 19(a) Notices

The amounts and sources of distributions reported are estimates and are being provided pursuant to regulatory requirements and are not being provided for tax reporting purposes. The actual amounts and sources for tax reporting purposes will depend upon each Fund’s investment experience during the year and may be subject to changes based on tax regulations. Shareholders will receive a Form 1099-DIV each calendar year that will inform them how to report these distributions for federal income tax purposes.

January 31, 2022

 

     Total Cumulative Distributions
for the Fiscal Year-to-Date
     % Breakdown of the Total Cumulative
Distributions for the Fiscal Year-to-Date
 
iShares ETF   Net
Investment
Income
     Net Realized
Capital Gains
     Return of
Capital
     Total Per
Share
     Net
Investment
Income
    Net Realized
Capital Gains
    Return of
Capital
    Total Per
Share
 

MSCI China A(a)

  $ 0.390480      $      $ 0.020040      $ 0.410520        95         5     100

 

  (a) 

The Fund estimates that it has distributed more than its net investment income and net realized capital gains; therefore, a portion of the distribution may be a return of capital. A return of capital may occur, for example, when some or all of the shareholder’s investment in the Fund is returned to the shareholder. A return of capital does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income”. When distributions exceed total return performance, the difference will incrementally reduce the Fund’s net asset value per share.

 

 

 

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

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General Information

 

Electronic Delivery

Shareholders can sign up for email notifications announcing that the shareholder report or prospectus has been posted on the iShares website at iShares.com. Once you have enrolled, you will no longer receive prospectuses and shareholder reports in the mail.

To enroll in electronic delivery:

 

   

Go to icsdelivery.com.

   

If your brokerage firm is not listed, electronic delivery may not be available. Please contact your broker-dealer or financial advisor.

Householding

Householding is an option available to certain fund investors. Householding is a method of delivery, based on the preference of the individual investor, in which a single copy of certain shareholder documents and Rule 30e-3 notices can be delivered to investors who share the same address, even if their accounts are registered under different names. Please contact your broker-dealer if you are interested in enrolling in householding and receiving a single copy of prospectuses and other shareholder documents, or if you are currently enrolled in householding and wish to change your householding status.

Availability of Quarterly Schedule of Investments

The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to their reports on Form N-PORT. The Funds’ Forms N-PORT are available on the SEC’s website at sec.gov. Additionally, each Fund makes its portfolio holdings for the first and third quarters of each fiscal year available at iShares.com/fundreports.

Availability of Proxy Voting Policies and Proxy Voting Records

A description of the policies and procedures that the iShares Funds use to determine how to vote proxies relating to portfolio securities and information about how the iShares Funds voted proxies relating to portfolio securities during the most recent twelve-month period ending June 30 is available without charge, upon request (1) by calling toll-free 1-800-474-2737; (2) on the iShares website at iShares.com; and (3) on the SEC website at sec.gov.

A description of the Trust’s policies and procedures with respect to the disclosure of the Fund’s portfolio securities is available in the Fund Prospectus. The Fund discloses its portfolio holdings daily and provides information regarding its top holdings in Fund fact sheets at iShares.com.

 

 

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2 0 2 2   H A R E S    E M I - A N N U A L   E P O R T   T O   H  A R E H O L D E R S


Glossary of Terms Used in this Report

 

Portfolio Abbreviations - Equity
JSC    Joint Stock Company

 

 

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

  33


 

 

 

Want to know more?

iShares.com    |     1-800-474-2737

This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.

Investing involves risk, including possible loss of principal.

The iShares Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).

The iShares Funds are not sponsored, endorsed, issued, sold or promoted by FTSE International Limited or MSCI Inc., nor do these companies make any representation regarding the advisability of investing in the iShares Funds. BlackRock is not affiliated with the companies listed above

©2022 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc. or its subsidiaries. All other marks are the property of their respective owners.

iS-SAR-106-0122

 

 

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