LOGO

  JULY 31, 2023

 

   2023 Annual Report

 

BlackRock ETF Trust

 

·  

BlackRock Future Climate and Sustainable Economy ETF | BECO | NYSE Arca

 

·  

BlackRock Future Financial and Technology ETF | BPAY | NYSE Arca

 

·  

BlackRock Future Health ETF | BMED | NYSE Arca

 

·  

BlackRock Future Innovators ETF | BFTR | NYSE Arca

 

·  

BlackRock Future Tech ETF | BTEK | NYSE Arca

 

·  

BlackRock Future U.S. Themes ETF | BTHM | NYSE Arca

 

·  

BlackRock Large Cap Value ETF | BLCV | NASDAQ

 

·  

BlackRock U.S. Carbon Transition Readiness ETF | LCTU | NYSE Arca

 

·  

BlackRock U.S. Equity Factor Rotation ETF | DYNF | NYSE Arca

 

·  

BlackRock World ex U.S. Carbon Transition Readiness ETF | LCTD | NYSE Arca

 

 

 

 

Not FDIC Insured • May Lose Value • No Bank Guarantee


The Markets in Review

Dear Shareholder,

Despite an uncertain economic landscape during the 12-month reporting period ended July 31, 2023, the resilience of the U.S. economy in the face of ever tighter financial conditions provided an encouraging backdrop for investors. While inflation was near multi-decade highs at the beginning of the period, it declined precipitously as commodity prices dropped. Labor shortages also moderated, although wages continued to grow and unemployment rates reached the lowest levels in decades. This robust labor market powered further growth in consumer spending, backstopping the economy.

Equity returns were solid, as the durability of consumer sentiment eased investors’ concerns about the economy’s trajectory. The U.S. economy resumed growth in the third quarter of 2022 and continued to expand thereafter. Most major classes of equities advanced, including large- and small-capitalization U.S. stocks and equities from developed and emerging markets.

The 10-year U.S. Treasury yield rose during the reporting period, driving its price down, as investors reacted to elevated inflation and attempted to anticipate future interest rate changes. The corporate bond market also faced inflationary headwinds, although high-yield corporate bond prices fared significantly better than investment-grade bonds as demand from yield-seeking investors remained strong.

The U.S. Federal Reserve (the “Fed”), acknowledging that inflation has been more persistent than expected, raised interest rates seven times during the 12-month period ended July 31, 2023. Furthermore, the Fed wound down its bond-buying programs and incrementally reduced its balance sheet by not replacing securities that reach maturity. However, the Fed declined to raise interest rates at its June 2023 meeting, the first time it paused its tightening in the current cycle, before again raising rates in July 2023.

Supply constraints appear to have become an embedded feature of the new macroeconomic environment, making it difficult for developed economies to increase production without sparking higher inflation. Geopolitical fragmentation and an aging population risk further exacerbating these constraints, keeping the labor market tight and wage growth high. Although the Fed has decelerated the pace of interest rate hikes and recently opted for a pause, we believe that the new economic regime means that the Fed will need to maintain high rates for an extended period to keep inflation under control. Furthermore, ongoing structural changes may mean that the Fed will be hesitant to cut interest rates in the event of faltering economic activity lest inflation accelerate again. We believe investors should expect a period of higher volatility as markets adjust to the new economic reality and policymakers attempt to adapt.

While we favor an overweight position to developed market equities in the long term, we prefer an underweight stance in the near-term. Expectations for corporate earnings remain elevated, which seems inconsistent with macroeconomic constraints. Nevertheless, we are overweight on emerging market stocks in the near-term as growth trends for emerging markets appear brighter. We also believe that stocks with an A.I. tilt should benefit from an investment cycle that is set to support revenues and margins. We are neutral on credit overall amid tightening credit and financial conditions; however, there are selective opportunities in the near term. For fixed income investing with a six- to twelve-month horizon, we see the most attractive investments in short-term U.S. Treasuries, U.S. inflation-linked bonds, U.S. mortgage-backed securities, and hard-currency emerging market bonds.

Overall, our view is that investors need to think globally, position themselves to be prepared for a decarbonizing economy, and be nimble as market conditions change. We encourage you to talk with your financial advisor and visit blackrock.com for further insight about investing in today’s markets.

 

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

 

Total Returns as of July 31, 2023
     
     6-Month    12-Month 
   

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

  13.52%   13.02%
   

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

  4.51   7.91
   

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

  6.65   16.79
   

Emerging market equities
(MSCI Emerging Markets Index)

  3.26   8.35
   

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

  2.34   3.96
   

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

  (2.08)   (7.56)
   

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

  (1.02)   (3.37)
   

Tax-exempt municipal bonds
(Bloomberg Municipal Bond Index)

  0.20   0.93
   

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

  2.92   4.42
Past performance is not an indication of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.

 

 

2  

T H I S  P A G EI SN O T  P A R TO F  Y O U R  F U N D  R E P O R T


Table of Contents

 

      Page  

The Markets in Review

  

 

 

 

2

 

 

Annual Report:

  

Fund Summary

     4  

About Fund Performance

     24  

Disclosure of Expenses

     24  

Schedules of Investments

     25  

Financial Statements:

  

Statements of Assets and Liabilities

     60  

Statements of Operations

     63  

Statements of Changes in Net Assets

     66  

Financial Highlights

     71  

Notes to Financial Statements

     81  

Report of Independent Registered Public Accounting Firm

     95  

Important Tax Information

     96  

Disclosure of Investment Advisory Agreement and Sub-Advisory Agreements

     97  

Disclosure of Investment Advisory Agreement

     102  

Supplemental Information

     105  

Trustee and Officer Information

     107  

Additional Information

     111  

Glossary of Terms Used in this Report

     113  

 

 

  3


Fund Summary  as of July 31, 2023     BlackRock Future Climate and Sustainable Economy ETF

 

Investment Objective

The BlackRock Future Climate and Sustainable Economy ETF (the “Fund”) seeks to maximize total return by investing in companies that BlackRock Fund Advisors (“BFA”) believes are furthering the transition to a lower green house gas emissions economy.

On February 23, 2023, the Board approved a proposal to change the investment objective, investment strategy and investment process for BlackRock Future Climate and Sustainable Economy ETF. These changes became effective on May 2, 2023.

Performance

 

    Average Annual Total Returns           Cumulative Total Returns  
     1 Year      Since
Inception
           1 Year     Since
Inception
 

Fund NAV

    8.31      (5.55 )%        8.31     (10.77 )% 

Fund Market

    8.15        (5.65       8.15       (10.95

MSCI ACWI Multiple Industries Select Index(a)

    10.12        (0.10             10.12       (0.20

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

 

 

LOGO

The inception date of the Fund was August 3, 2021. The first day of secondary market trading was August 5, 2021.

 

  (a) 

The MSCI ACWI Multiple Industries Select Index is an index that includes large- and mid-cap securities across certain Developed Markets and Emerging Markets countries. The index represents the performance of component indexes which includes securities from selected Global Industry Classification Standard (GICS®) Sectors and Industries i.e. Chemicals, Industrials, Consumer Staples, Containers & Packaging, Electronic Equipment, Instruments & Components, Semiconductors & Semiconductor Equipment and Utilities.

 

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

Expense Example

 

     

Actual

         

Hypothetical 5% Return

          
 

 

 

     

 

 

      
         

Beginning
Account Value
(02/01/23
 
 
      

Ending
Account Value
(07/31/23
 
 
      

Expenses
Paid During
the Period
 
 
(a) 
           

Beginning
Account Value
(02/01/23
 
 
      

Ending
Account Value
(07/31/23
 
 
      

Expenses
Paid During
the Period
 
 
(a) 
      

Annualized
Expense
Ratio
 
 
 
          $   1,000.00          $   1,027.60          $   3.52               $   1,000.00          $   1,021.30          $   3.51          0.70

 

  (a) 

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

 

 

 

4  

2 0 2 3  B L A C K R O C K  A N N U A L  R E P O R TT O  S H A R E H O L D E R S


Fund Summary  as of July 31, 2023 (continued)    BlackRock Future Climate and Sustainable Economy ETF

 

Portfolio Management Commentary

The Fund underperformed its benchmark, the MSCI ACWI Multiple Industries Select Index. The Fund invests in companies furthering the transition to a lower carbon economy, allocating across five climate-oriented themes: sustainable food, resource efficiency, clean power, clean transportation, and climate resilience & biodiversity.

At the individual stock level, an out-of-benchmark position in agricultural equipment company Ag Growth International, Inc. was the top contributor to relative performance. The stock appreciated on rising demand for agricultural products and strong execution by the company’s management team. An overweight in First Solar, Inc. also contributed to performance. Shares of the solar panel manufacturer rose as government incentives and falling polysilicon costs boosted demand. The Fund’s lack of a position in Nvidia Corp. was the largest detractor from relative performance. The semiconductor designer’s stock jumped on strong demand for its graphics processing units that enable artificial intelligence. An overweight position in clean energy utility company EDP Renováveis SA also detracted, as concerns about a potential energy crisis in Europe increased the risk of possible windfall taxes.

Portfolio Information

 

INDUSTRY ALLOCATION

 

Industry

   
Percent of
Total Investments
 
(a) 

Machinery

    16.9

Chemicals

    13.2  

Food Products

    13.1  

Semiconductors & Semiconductor Equipment

    7.9  

Containers & Packaging

    6.6  

Electrical Equipment

    6.1  

Commercial Services & Supplies

    5.8  

Electric Utilities

    5.7  

Electronic Equipment, Instruments & Components

    5.1  

Independent Power and Renewable Electricity Producers

    4.5  

Software

    3.9  

Professional Services

    2.7  

Construction & Engineering

    2.1  

Paper & Forest Products

    1.9  

Building Products

    1.6  

Metals & Mining

    1.0  

Capital Markets

    1.0  

Ground Transportation

    0.9  

TEN LARGEST HOLDINGS

 

Security

   
Percent of
Total Investments
 
(a) 

EDP Renovaveis SA

    4.0

Deere & Co.

    3.8  

Xylem Inc./NY

    3.4  

Bunge Ltd.

    3.2  

Enel SpA

    3.1  

Kerry Group PLC, Class A

    2.9  

Ecolab Inc.

    2.9  

Cleanaway Waste Management Ltd.

    2.7  

Ag Growth International Inc.

    2.5  

SIG Group AG

    2.1  
  (a)

Excludes money market funds.

 

 

 

F U N D  S U M M A R Y

  5


Fund Summary  as of July 31, 2023     BlackRock Future Financial and Technology ETF

 

Investment Objective

The BlackRock Future Financial and Technology ETF (the “Fund”) seeks to maximize total return.

Performance

 

        Cumulative Total Returns  
            

Since

Inception

 

Fund NAV

      (9.20 )%(a) 

Fund Market

      (9.02

MSCI ACWI Index(b)

        9.08  

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

 

 

LOGO

The inception date of the Fund was August 16, 2022. The first day of secondary market trading was August 18, 2022.

 

  (a) 

The NAV total return presented in the table for the one-year period differs from the same period return disclosed in the financial highlights. The total return in the financial highlights is calculated in the same manner but differs due to certain adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

 
  (b)

MSCI All Country World Index captures large- and mid-cap representation across certain developed and emerging markets.

 

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

Expense Example

 

     

Actual

         

Hypothetical 5% Return

          
 

 

 

     

 

 

      
         

Beginning
Account Value
(02/01/23
 
 
      

Ending
Account Value
(07/31/23
 
 
      

Expenses
Paid During
the Period
 
 
(a) 
           

Beginning
Account Value
(02/01/23
 
 
      

Ending
Account Value
(07/31/23
 
 
      

Expenses
Paid During
the Period
 
 
(a) 
      

Annualized
Expense
Ratio
 
 
 
          $   1,000.00          $   988.60          $   3.45               $   1,000.00          $   1,021.30          $   3.51          0.70

 

  (a) 

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

 

Portfolio Management Commentary

The Fund posted a negative absolute return in the time from its inception on August 16, 2022, through the close of the period on July 31, 2023. In particular, it was hurt by its investments in three regional banks that failed in March 2023: Signature Bank, SVB Capital, and Silvergate Capital. All three have been sold from the Fund.

Network International Holdings PLC, which received multiple takeover bids, was a top contributor. The Fund sold the position in May, as the stock approached the takeover price. Kaspi.kz JSC, a Kazakhstan-based fintech company, also contributed to returns on the strength of robust earnings growth.

 

 

6  

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Fund Summary  as of July 31, 2023 (continued)    BlackRock Future Financial and Technology ETF

 

Portfolio Information

 

INDUSTRY ALLOCATION

 

Industry

   
Percent of
Total Investments
 
(a) 

Financial Services

    52.2

Consumer Finance

    15.2  

Banks

    14.4  

Software

    10.0  

Capital Markets

    8.2  

TEN LARGEST HOLDINGS

 

Security

   
Percent of
Total Investments
 
(a) 

Black Knight Inc.

    5.9

Kaspi.KZ JSC

    5.2  

Global Payments Inc.

    4.9  

Pagseguro Digital Ltd., Class A

    4.9  

Fidelity National Information Services Inc.

    4.8  

Nuvei Corp.

    4.6  

WEX Inc.

    4.6  

Fiserv Inc.

    4.4  

XP Inc., Class A

    3.8  

Repay Holdings Corp.

    3.4  
  (a) 

Excludes money market funds.

 

 

 

F U N D  S U M M A R Y

  7


Fund Summary  as of July 31, 2023     BlackRock Future Health ETF

 

Investment Objective

The BlackRock Future Health ETF (the “Fund”) seeks to maximize total return.

Performance

 

    Average Annual Total Returns           Cumulative Total Returns  
     1 Year      Since
Inception
           1 Year     Since
Inception
 

Fund NAV

    6.56      (0.56 )%        6.56     (1.59 )% 

Fund Market

    6.33        (0.61       6.33       (1.71

MSCI ACWI Index(a)

    12.91        10.18         12.91       31.65  

MSCI ACWI SMID Growth Health Care Index (b)

    0.47        (3.53             0.47       (9.70

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

 

 

LOGO

The inception date of the Fund was September 29, 2020. The first day of secondary market trading was October 1, 2020.

 

  (a) 

MSCI All Country World Index captures large- and mid-cap representation across certain developed and emerging markets.

 
  (b) 

MSCI ACWI SMID Growth Health Care Index captures mid- and small-cap securities exhibiting overall growth style characteristics across certain developed markets and emerging markets countries.

 

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

Expense Example

 

      Actual           Hypothetical 5% Return           
 

 

 

     

 

 

      
         

Beginning
Account Value
(02/01/23
 
 
      

Ending
Account Value
(07/31/23
 
 
      

Expenses
Paid During
the Period
 
 
(a) 
           

Beginning
Account Value
(02/01/23
 
 
      

Ending
Account Value
(07/31/23
 
 
      

Expenses
Paid During
the Period
 
 
(a) 
      

Annualized
Expense
Ratio
 
 
 
          $   1,000.00          $   1,031.20          $   4.28               $   1,000.00          $   1,020.60          $   4.26          0.85

 

  (a) 

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

 

 

 

8  

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Fund Summary  as of July 31, 2023 (continued)    BlackRock Future Health ETF

 

Portfolio Management Commentary

Small- to mid-sized healthcare stocks posted positive returns in the annual period, but they were unable to keep pace with broad-based measures of market performance, including the Fund’s benchmark, the MSCI ACWI Index.

At the industry level, the strongest performance came from the Fund’s positions in the biotechnology and healthcare equipment & supplies categories. Life sciences tools & services was the weakest performing area and the only segment of the Fund to finish the period with a negative total return.

On an individual security basis, an out-of-benchmark position in Penumbra, Inc. was the largest contributor to relative performance. The company continued to display strong fundamentals, and it benefitted from rumors of a potential acquisition. An out-of-benchmark holding in Reata Pharmaceuticals, Inc. was another top contributor. In March 2023, the company received FDA approval for its treatment of a rare hereditary neurological disorder. The company was acquired by Biogen in July 2023 as a result, boosting its shares.

An overweight position in Novocure was a key detractor. The U.S.-based oncology treatment provider reported weaker-than-expected clinical trial data for its electric-field based lung cancer treatment in June 2023, leading to a decline in its stock price.

Portfolio Information

 

INDUSTRY ALLOCATION

 

Industry

   
Percent of
Total Investments
 
(a) 

Biotechnology

    38.2

Health Care Equipment & Supplies

    36.5  

Life Sciences Tools & Services

    13.3  

Pharmaceuticals

    7.2  

Health Care Providers & Services

    4.5  

Other (each representing less than 1%)

    0.3  

TEN LARGEST HOLDINGS

 

Security

   
Percent of
Total Investments
 
(a) 

Intuitive Surgical Inc.

    3.3

Alcon Inc.

    3.2  

Vertex Pharmaceuticals Inc.

    3.0  

Boston Scientific Corp.

    2.9  

AmerisourceBergen Corp.

    2.7  

Align Technology Inc.

    2.6  

Argenx SE

    2.6  

Dexcom Inc.

    2.5  

West Pharmaceutical Services Inc.

    2.5  

Stryker Corp.

    2.3  
  (a) 

Excludes money market funds.

 

 

 

F U N D  S U M M A R Y

  9


Fund Summary  as of July 31, 2023     BlackRock Future Innovators ETF

 

Investment Objective

The BlackRock Future Innovators ETF (the “Fund”) seeks long-term capital appreciation.

On May 23, 2023, the Board approved the liquidation of BlackRock Future Innovators ETF. After the close of business on October 30, 2023, the Fund will no longer accept creation orders. Trading in the Fund will be halted prior to market open on October 31, 2023. Proceeds of the liquidation are expected to be sent to shareholders on or about November 2, 2023.

Performance

 

    Average Annual Total Returns           Cumulative Total Returns  
     1 Year      Since
Inception
           1 Year     Since
Inception
 

Fund NAV

    7.61      (5.48 )%        7.61     (14.78 )% 

Fund Market

    7.29        (5.59       7.29       (15.07

Russell 2500 Growth Index(a)

    9.99        4.93               9.99       14.62  

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

 

 

LOGO

The inception date of the Fund was September 29, 2020. The first day of secondary market trading was October 1, 2020.

 

  (a) 

The Russell 2500 Growth Index measures the performance of the small to mid-cap growth segment of the US equity universe. It includes those Russell 2500 companies with higher growth earning potential as defined by FTSE Russell’s leading style methodology.

 

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

Expense Example

 

      Actual           Hypothetical 5% Return           
 

 

 

     

 

 

      
         

Beginning
Account Value
(02/01/23
 
 
      

Ending
Account Value
(07/31/23
 
 
      

Expenses
Paid During
the Period
 
 
(a) 
           

Beginning
Account Value
(02/01/23
 
 
      

Ending
Account Value
(07/31/23
 
 
      

Expenses
Paid During
the Period
 
 
(a) 
      

Annualized
Expense
Ratio
 
 
 
          $   1,000.00          $   1,092.90          $   4.15               $   1,000.00          $   1,020.80          $   4.01          0.80

 

  (a)

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

 

 

 

10  

2 0 2 3  B L A C K R O C K  A N N U A L  R E P O R TT O  S H A R E H O L D E R S


Fund Summary  as of July 31, 2023 (continued)    BlackRock Future Innovators ETF

 

Portfolio Management Commentary

U.S. equities performed very well in the 12-month reporting period, as investors were cheered by the combination of positive economic growth and hopes that the U.S. Federal Reserve’s long series of interest rate increases would come to an end in 2023. Growth stocks outpaced the broader market, which was a tailwind for the Fund given its emphasis on small- to mid-sized, innovative companies. Its holdings in the industrials and information technology sectors performed particularly well in this environment. On the other hand, its positions in healthcare and communication services lagged.

Axon Enterprises, Inc. was a top contributor to performance. The stock was boosted by the growing adoption of Axon VR, an immersive de-escalation training system that helps make both communities and police officers safer. The company saw $20 million in bookings in its first year, with 1,100 public safety agencies signed up so far. Saia, Inc., a major player in the less-than-truckload industry, also contributed despite the softening in the economy. Saia has executed well, leading to robust earnings.

Match Group, Inc. and Azenta, Inc. were the largest detractors at the individual stock level. Match Group, an operator of dating applications and websites, posted lower-than-expected earnings due in part to foreign exchange headwinds and weakness in the Asia Pacific region. Azenta underperformed as a corporate restructuring and business rebranding weighed on operating results and contributed to disappointing forward guidance by management. The company was also negatively impacted from a roll-off in COVID-related sales, challenges tied to a weaker macro environment, reduced customer funding caused by higher interest rates, inventory destocking, and a delayed economic reopening in China.

Portfolio Information

 

INDUSTRY ALLOCATION

 

Industry

   
Percent of
Total Investments
 
(a) 

Software

    17.9

Semiconductors & Semiconductor Equipment

    12.8  

Life Sciences Tools & Services

    9.7  

Hotels, Restaurants & Leisure

    7.6  

Capital Markets

    6.5  

Aerospace & Defense

    5.8  

IT Services

    5.0  

Machinery

    3.7  

Health Care Equipment & Supplies

    3.6  

Ground Transportation

    3.6  

Diversified Consumer Services

    3.4  

Health Care Technology

    2.4  

Interactive Media & Services

    2.3  

Construction & Engineering

    2.3  

Automobile Components

    2.0  

Air Freight & Logistics

    2.0  

Building Products

    2.0  

Professional Services

    2.0  

Biotechnology

    1.4  

Health Care Providers & Services

    1.3  

Other (each representing less than 1%)

    2.7  

TEN LARGEST HOLDINGS

 

Security

   
Percent of
Total Investments
 
(a) 

Saia Inc.

    3.6

Axon Enterprise Inc.

    3.2  

Entegris Inc.

    3.0  

Tradeweb Markets Inc., Class A

    3.0  

Monolithic Power Systems Inc.

    2.8  

Duolingo Inc, Class A

    2.8  

Lattice Semiconductor Corp.

    2.8  

HubSpot Inc.

    2.7  

Confluent Inc., Class A

    2.6  

HEICO Corp.

    2.6  
  (a)

Excludes money market funds.

 

 

 

F U N D  S U M M A R Y

  11


Fund Summary  as of July 31, 2023     BlackRock Future Tech ETF

 

Investment Objective

The BlackRock Future Tech ETF (the “Fund”) seeks to maximize total return.

Performance

 

    Average Annual Total Returns           Cumulative Total Returns  
     1 Year      Since
Inception
           1 Year     Since
Inception
 

Fund NAV

    8.35      (3.61 )%        8.35     (9.90 )% 

Fund Market

    8.28        (3.61       8.28       (9.90

MSCI ACWI Index(a)

    12.91        10.18         12.91       31.65  

MSCI ACWI SMID Growth Information Technology Index(b)

    17.83        9.04               17.83       27.82  

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

 

 

LOGO

The inception date of the Fund was September 29, 2020. The first day of secondary market trading was October 1, 2020.

 

  (a) 

MSCI All Country World Index captures large- and mid-cap representation across certain developed and emerging markets.

 
  (b) 

MSCI ACWI SMID Growth Information Technology Index captures mid- and small-cap securities exhibiting overall growth style characteristics across certain Developed and Emerging Markets.

 

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

Expense Example

 

      Actual           Hypothetical 5% Return           
 

 

 

     

 

 

      
         

Beginning
Account Value
(02/01/23
 
 
      

Ending
Account Value
(07/31/23
 
 
      

Expenses
Paid During
the Period
 
 
(a) 
           

Beginning
Account Value
(02/01/23
 
 
      

Ending
Account Value
(07/31/23
 
 
      

Expenses
Paid During
the Period
 
 
(a) 
      

Annualized
Expense
Ratio
 
 
 
          $   1,000.00          $   1,163.30          $   4.72               $   1,000.00          $   1,020.40          $   4.41          0.88

 

  (a) 

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

 

 

 

12  

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Fund Summary  as of July 31, 2023 (continued)    BlackRock Future Tech ETF

 

Portfolio Management Commentary

The Fund produced a positive absolute return in the annual period, reflecting strength in technology stocks. The strongest returns came from the Fund’s positions in the semiconductor & semiconductor equipment industry, followed by technology hardware & equipment, and IT services.

Among individual holdings, an overweight position in semiconductor designer NVIDIA, Inc. was the largest contributor to relative performance. The stock jumped on strong demand for the company’s graphics processing units (GPUs) that enable artificial intelligence (AI). An overweight position in Be Semiconductor Industries NV also contributed to relative performance. The semiconductor equipment manufacturer’s share price increased on rising demand for the tools required to produce leading-edge chips.

An overweight in the analog chip designer and manufacturer Wolfspeed, Inc. was the largest detractor. The stock fell on investor concerns about the company’s aggressive plan to ramp up production. An out-of-benchmark position in legal software provider CS Disco, Inc. also detracted from relative performance as customer usage for the company’s key product dropped sharply.

Portfolio Information

 

INDUSTRY ALLOCATION

 

Industry

   
Percent of
Total Investments
 
(a) 

Semiconductors & Semiconductor Equipment

    36.2

Software

    18.3  

Electronic Equipment, Instruments & Components

    9.6  

Technology Hardware, Storage & Peripherals

    4.9  

Entertainment

    4.7  

Financial Services

    4.0  

Automobiles

    2.9  

Hotels, Restaurants & Leisure

    2.8  

IT Services

    2.6  

Media

    2.3  

Professional Services

    2.2  

Interactive Media & Services

    2.1  

Broadline Retail

    2.1  

Communications Equipment

    1.3  

Consumer Finance

    1.1  

Other (each representing less than 1%)

    2.9  

TEN LARGEST HOLDINGS

 

Security

   
Percent of
Total Investments
 
(a) 

Nvidia Corp.

    5.7

Synopsys Inc.

    4.2  

ASM International NV

    3.0  

Tesla Inc.

    2.9  

Lattice Semiconductor Corp.

    2.6  

Jabil Inc.

    2.4  

ON Semiconductor Corp.

    2.4  

Informa PLC

    2.3  

Monolithic Power Systems Inc.

    2.2  

MongoDB Inc.

    2.1  
  (a)

Excludes money market funds.

 

 

 

F U N D  S U M M A R Y

  13


Fund Summary  as of July 31, 2023     BlackRock Future U.S. Themes ETF

 

Investment Objective

The BlackRock Future U.S. Themes ETF (the “Fund”) seeks long-term capital appreciation.

Performance

 

    Average Annual Total Returns           Cumulative Total Returns  
     1 Year      Since
Inception
           1 Year     Since
Inception
 

Fund NAV

    14.56      0.50       14.56     0.82

Fund Market

    14.44        0.43         14.44       0.70  

S&P 500® Index(a)

    13.02        1.02               13.02       1.67  

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

 

 

LOGO

The inception date of the Fund was December 14, 2021. The first day of secondary market trading was December 16, 2021.

 

  (a) 

The S&P 500® Index covers 500 leading companies and captures approximately 80% coverage of available market capitalization.

 

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

Expense Example

 

      Actual           Hypothetical 5% Return           
 

 

 

     

 

 

      
         

Beginning
Account Value
(02/01/23
 
 
      

Ending
Account Value
(07/31/23
 
 
      

Expenses
Paid During
the Period
 
 
(a) 
           

Beginning
Account Value
(02/01/23
 
 
      

Ending
Account Value
(07/31/23
 
 
      

Expenses
Paid During
the Period
 
 
(a) 
      

Annualized
Expense
Ratio
 
 
 
          $   1,000.00          $   1,115.90          $   3.15               $   1,000.00          $   1,021.80          $   3.01          0.60

 

  (a) 

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

 

 

 

14  

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Fund Summary  as of July 31, 2023 (continued)    BlackRock Future U.S. Themes ETF

 

Portfolio Management Commentary

U.S. equities delivered robust returns in the annual period, reflecting the backdrop of better-than-expected economic growth and hopes that the U.S. Federal Reserve would soon complete its long series of interest rate increases. The Fund posted a strong total return and outpaced the S&P 500 Index, led by the strength of its holdings in the information technology and industrials sectors.

Among individual holdings, Broadcom, Inc. and Palo Alto Networks, Inc. were the two largest contributors to performance. After challenges for technology firms in 2022, the ascendance of generative artificial intelligence (AI) in 2023 was perceived by investors as a watershed moment and quickly became a significant driver of market returns. Broadcom, as a developer of the chips and software used in AI development, benefited from this trend. Palo Alto Networks, a cybersecurity firm deploying advanced firewall solutions, also benefitted from tailwinds for technology- and AI-related stocks, as well as geopolitical tensions that could lead to higher cybersecurity demand.

An underweight position in Alphabet Inc., the parent company of Google and one of the leading technology firms by revenue and market capitalization, was the largest detractor from relative performance. Positions in Qualcomm, Inc. and Accenture PLC were also notable detractors in the annual period.

Portfolio Information

 

INDUSTRY ALLOCATION

 

Industry

   
Percent of
Total Investments
 
(a) 

Software

    15.7

Financial Services

    11.4  

Technology Hardware, Storage & Peripherals

    7.7  

Specialty Retail

    6.0  

Oil, Gas & Consumable Fuels

    5.5  

Semiconductors & Semiconductor Equipment

    4.7  

Hotels, Restaurants & Leisure

    4.4  

Professional Services

    4.2  

Electronic Equipment, Instruments & Components

    3.7  

Consumer Staples Distribution & Retail

    3.4  

Building Products

    2.8  

Trading Companies & Distributors

    2.7  

Machinery

    2.5  

Commercial Services & Supplies

    2.4  

Health Care Providers & Services

    2.4  

Textiles, Apparel & Luxury Goods

    1.7  

Ground Transportation

    1.7  

Construction & Engineering

    1.7  

Household Durables

    1.5  

Construction Materials

    1.4  

Metals & Mining

    1.3  

Distributors

    1.2  

Interactive Media & Services

    1.2  

Food Products

    1.2  

Electrical Equipment

    1.2  

Broadline Retail

    1.0  

Insurance

    1.0  

Other (each representing less than 1%)

    4.4  

TEN LARGEST HOLDINGS

 

Security

   
Percent of
Total Investments
 
(a) 

Apple Inc.

    7.0

Microsoft Corp.

    3.7  

Berkshire Hathaway Inc., Class B

    3.7  

McDonald’s Corp.

    3.3  

Mastercard Inc., Class A

    3.0  

Broadcom Inc.

    2.8  

Visa Inc., Class A

    2.5  

Check Point Software Technologies Ltd.

    2.3  

TJX Companies Inc. (The)

    2.1  

Adobe Inc.

    2.1  
  (a)

Excludes money market funds.

 

 

 

F U N D  S U M M A R Y

  15


Fund Summary  as of July 31, 2023     BlackRock Large Cap Value ETF

 

Investment Objective

The BlackRock Large Cap Value ETF (the “Fund”) seeks to maximize total return.

Performance

 

        Cumulative Total Returns  
         

Since

Inception

 

Fund NAV

      8.70

Fund Market

      8.56  

Russell 1000 Value Index(a)

        8.24  

For the fiscal period ended July 31, 2023, the Fund did not have six months of performance and therefore line graphs are not presented.

The inception date of the Fund was May 19, 2023. The first day of secondary market trading was May 23, 2023.

 

  (a)

The Russell 1000® Value Index measures the performance of the large-cap value segment of the U.S. equity universe. It includes those Russell 1000® companies with lower price-to-book ratios and lower expected growth values.

 

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

Expense Example

 

      Actual           Hypothetical 5% Return           
 

 

 

     

 

 

      
         

Beginning
Account Value
(05/19/23
 
 
)(a) 
      

Ending
Account Value
(07/31/23
 
 
      

Expenses
Paid During
the Period
 
 
(b) 
           

Beginning
Account Value
(02/01/23
 
 
      

Ending
Account Value
(07/31/23
 
 
      

Expenses
Paid During
the Period
 
 
(b) 
      

Annualized
Expense
Ratio
 
 
 
          $   1,000.00          $   1,000.00          $   1.10               $   1,000.00          $   1,022.10          $   2.76          0.55

 

  (a) 

Commencement of operations.

 
  (b) 

Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by 73/365 for actual expenses and 181/365 for hypothetical expenses (to reflect the six month period shown). Other fees, such as brokerage commissions and other fees to financial intermediaries, may be paid which are not reflected in the tables and examples above. See “Disclosure of Expenses” for more information.

 

 

 

16  

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Fund Summary  as of July 31, 2023 (continued)    BlackRock Large Cap Value ETF

 

Portfolio Information

 

SECTOR ALLOCATION

 

Industry

   
Percent of
Total Investments
 
(a) 

Health Care Providers & Services

    12.3

Banks

    10.0  

Professional Services

    7.0  

Oil, Gas & Consumable Fuels

    6.8  

Insurance

    4.7  

Capital Markets

    4.7  

Health Care Equipment & Supplies

    4.4  

Communications Equipment

    4.3  

Electric Utilities

    4.3  

Media

    4.0  

Financial Services

    3.9  

Consumer Staples Distribution & Retail

    3.8  

Containers & Packaging

    3.1  

Textiles, Apparel & Luxury Goods

    3.1  

Interactive Media & Services

    2.6  

Software

    2.4  

IT Services

    2.0  

Pharmaceuticals

    1.8  

Machinery

    1.7  

Beverages

    1.7  

Automobiles

    1.7  

Automobile Components

    1.5  

Food Products

    1.5  

Aerospace & Defense

    1.4  

Chemicals

    1.3  

Broadline Retail

    1.1  

Technology Hardware, Storage & Peripherals

    1.0  

Specialty Retail

    1.0  

Other (each representing less than 1%)

    0.9  

TEN LARGEST HOLDINGS

 

Security

   
Percent of
Total Investments
 
(a) 

Cisco Systems Inc.

    3.9

Wells Fargo & Co.

    3.9  

Cardinal Health Inc.

    3.5  

Leidos Holdings Inc.

    3.4  

Ralph Lauren Corp.

    3.1  

Citigroup Inc.

    2.9  

Comcast Corp., Class A

    2.9  

Enterprise Products Partners LP

    2.7  

Cigna Group (The)

    2.7  

Laboratory Corp. of America Holdings

    2.6  
  (a)

Excludes money market funds.

 

 

 

F U N D  S U M M A R Y

  17


Fund Summary  as of July 31, 2023     BlackRock U.S. Carbon Transition Readiness ETF

 

Investment Objective

The BlackRock U.S. Carbon Transition Readiness ETF (the “Fund”) seeks long-term capital appreciation by investing in large- and mid-capitalization U.S. equity securities that may be better positioned to benefit from the transition to a low-carbon economy.

Performance

 

    Average Annual Total Returns           Cumulative Total Returns  
     1 Year      Since
Inception
           1 Year     Since
Inception
 

Fund NAV

    12.16      5.63       12.16     13.56

Fund Market

    12.22        5.65         12.22       13.61  

Russell 1000® Index(a)

    12.95        5.65               12.95       13.57  

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

 

 

LOGO

The inception date of the Fund was April 6, 2021. The first day of secondary market trading was April 8, 2021.

 

  (a)

The Russell 1000® Index measures the performance of the large-cap segment of the U.S. equity universe. It is a subset of the Russell 3000® Index and includes approximately 1,000 of the largest securities based on a combination of their market capitalization and current index membership. The index represents approximately 93% of the U.S. market.

 

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

Expense Example

 

      Actual           Hypothetical 5% Return           
 

 

 

     

 

 

      
         

Beginning
Account Value
(02/01/23
 
 
      

Ending
Account Value
(07/31/23
 
 
      

Expenses
Paid During
the Period
 
 
(a) 
           

Beginning
Account Value
(02/01/23
 
 
      

Ending
Account Value
(07/31/23
 
 
      

Expenses
Paid During
the Period
 
 
(a) 
      

Annualized
Expense
Ratio
 
 
 
          $   1,000.00          $   1,127.60          $   0.74               $   1,000.00          $   1,024.10          $   0.70          0.14

 

  (a) 

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

 

 

 

18  

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Fund Summary  as of July 31, 2023 (continued)    BlackRock U.S. Carbon Transition Readiness ETF

 

Portfolio Management Commentary

U.S. equities delivered robust returns in the annual period, as the combination of falling inflation and resilient economic growth raised hopes for a “soft landing.” Sustainable strategies generally underperformed in 2022, but they rebounded in the first seven months of 2023. The Fund’s exclusionary positions in fossil fuel sectors, which trailed due to the moderation in oil prices, benefited relative performance.

The Fund’s transition-readiness, model-driven investment process evaluates companies’ preparedness for the transition to a low-carbon economy across five “pillars” (Fossil Fuels, Clean Technology, Energy Management, Waste Management and Water Management). These evaluations are used to determine active portfolio weights, subject to risk and other constraints, relative to the Russell 1000 Index.

The Energy Production pillar added to performance in the annual period, while the Clean Technology Pillar detracted. Given the Fund’s tight risk constraints, Fund performance was primarily driven by individual stock selection. The Fund delivered the best results in the materials sector, while its positioning in financials detracted. Booking Holdings, Inc. and Netflix Inc. were among the top contributors at the individual company level, while Estee Lauder Inc. and Accenture Plc were among the largest detractors.

By design, the Fund remained largely sector neutral. With that said, it was slightly overweight in healthcare and modestly underweight in consumer staples, all within the risk bands employed by the portfolio management process.

Portfolio Information

 

SECTOR ALLOCATION

 

Sector

   
Percent of
Total Investments
 
(a) 

Information Technology

    27.1

Health Care

    13.4  

Financials

    13.1  

Consumer Discretionary

    10.8  

Industrials

    9.6  

Communication Services

    8.0  

Consumer Staples

    6.0  

Energy

    4.0  

Real Estate

    2.9  

Materials

    2.8  

Utilities

    2.3  

TEN LARGEST HOLDINGS

 

Security

   
Percent of
Total Investments
 
(a) 

Apple Inc.

    7.0

Microsoft Corp.

    6.2  

Amazon.com Inc.

    2.8  

Nvidia Corp.

    2.7  

Alphabet Inc., Class A

    2.1  

Alphabet Inc., Class C

    1.8  

Tesla Inc.

    1.8  

Meta Platforms Inc, Class A

    1.8  

Johnson & Johnson

    1.7  

Berkshire Hathaway Inc., Class B

    1.4  
  (a)

Excludes money market funds.

 

 

 

F U N D  S U M M A R Y

  19


Fund Summary  as of July 31, 2023     BlackRock U.S. Equity Factor Rotation ETF

 

Investment Objective

The BlackRock U.S. Equity Factor Rotation ETF (the “Fund”) seeks to outperform the investment results of the large- and mid-capitalization U.S. equity markets by providing diversified and tactical exposure to style factors via a factor rotation model.

Performance

 

    Average Annual Total Returns           Cumulative Total Returns  
     1 Year      Since
Inception
           1 Year     Since
Inception
 

Fund NAV

    20.47      12.42       20.47     66.78

Fund Market

    20.41        12.39         20.41       66.58  

MSCI USA Index(a)

    13.14        13.71               13.14       75.16  

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

 

 

LOGO

The inception date of the Fund was March 19, 2019. The first day of secondary market trading was March 21, 2019.

 

  (a) 

The MSCI USA Index is designed to measure the performance of the large- and mid cap segments of the US market. The index covers approximately 85% of the free float-adjusted market capitalization in the United States.

 

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

Expense Example

 

      Actual           Hypothetical 5% Return           
 

 

 

     

 

 

      
         

Beginning
Account Value
(02/01/23
 
 
      

Ending
Account Value
(07/31/23
 
 
      

Expenses
Paid During
the Period
 
 
(a) 
           

Beginning
Account Value
(02/01/23
 
 
      

Ending
Account Value
(07/31/23
 
 
      

Expenses
Paid During
the Period
 
 
(a) 
      

Annualized
Expense
Ratio
 
 
 
          $   1,000.00          $   1,187.70          $   1.08               $   1,000.00          $   1,023.80          $   1.00          0.20

 

  (a) 

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

 

 

 

20  

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Fund Summary  as of July 31, 2023 (continued)    BlackRock U.S. Equity Factor Rotation ETF

 

Portfolio Management Commentary

U.S. equities delivered robust returns in the annual period, reflecting the backdrop of better-than-expected economic growth and hopes that the U.S. Federal Reserve would soon complete its long series of interest rate increases.

The Fund’s actively managed factor rotation strategy seeks diversified exposure to five style factors: value, low size, momentum, quality, and minimum volatility. The Fund strives to outperform the broader market through the efficacy of these factors, as well as by actively emphasizing exposure to the factors that the investment adviser believes will perform best based on forward-looking insights.

The quality factor outperformed the MSCI USA Index, while value, momentum, low size, and minimum volatility lagged. An equal-weighted portfolio of five factor indexes would have underperformed the MSCI USA Index. In this environment, the Fund’s tilt toward the quality factor was the primary reason for its strong 12-month results. The investment adviser believed the defensive characteristics and relative stability of the quality factor represented positive attributes at a time of market turbulence.

At the sector level, the Fund benefited from its overweight in information technology and underweight in healthcare. On the other hand, an overweight in energy and underweight in industrials detracted. NVIDIA Corp. and Microsoft Corp. were the top individual contributors, while Intel Corp. and United Health Group, Inc. were notable detractors.

Portfolio Information

 

SECTOR ALLOCATION

 

Sector

   
Percent of
Total Investments
 
(a) 

Information Technology

    33.3

Consumer Discretionary

    17.2  

Financials

    14.5  

Energy

    11.2  

Communication Services

    8.1  

Industrials

    4.9  

Real Estate

    3.3  

Health Care

    3.0  

Materials

    3.0  

Consumer Staples

    1.5  

TEN LARGEST HOLDINGS

 

Security

   
Percent of
Total Investments
 
(a) 

Microsoft Corp.

    9.4

Apple Inc.

    9.2  

Visa Inc., Class A

    4.6  

Amazon.com Inc.

    4.4  

Nvidia Corp.

    3.9  

Home Depot Inc. (The)

    3.8  

Chevron Corp.

    3.8  

Exxon Mobil Corp.

    3.7  

Alphabet Inc., Class A

    3.5  

Mastercard Inc., Class A

    3.1  
  (a)

Excludes money market funds.

 

 

 

F U N D  S U M M A R Y

  21


Fund Summary  as of July 31, 2023     BlackRock World ex U.S. Carbon Transition Readiness ETF

 

Investment Objective

The BlackRock World ex U.S. Carbon Transition Readiness ETF (the “Fund”) seeks long-term capital appreciation by investing in large- and mid-capitalization World ex U.S. equity securities that may be better positioned to benefit from the transition to a low-carbon economy.

Performance

 

    Average Annual Total Returns           Cumulative Total Returns  
     1 Year      Since
Inception
           1 Year     Since
Inception
 

Fund NAV

    12.50      0.51       12.50     1.19

Fund Market

    12.71        0.58         12.71       1.35  

MSCI World ex USA Index(a)

    15.47        2.04               15.47       4.78  

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

 

 

LOGO

The inception date of the Fund was April 6, 2021. The first day of secondary market trading was April 8, 2021.

 

  (a) 

The MSCI World ex USA Index captures large- and mid-cap representation across certain developed markets countries, excluding the United States. The index covers approximately 85% of the free float-adjusted market capitalization in each country.

 

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

Expense Example

 

      Actual           Hypothetical 5% Return           
 

 

 

     

 

 

      
         

Beginning
Account Value
(02/01/23
 
 
      

Ending
Account Value
(07/31/23
 
 
      

Expenses
Paid During
the Period
 
 
(a) 
           

Beginning
Account Value
(02/01/23
 
 
      

Ending
Account Value
(07/31/23
 
 
      

Expenses
Paid During
the Period
 
 
(a) 
      

Annualized
Expense
Ratio
 
 
 
          $   1,000.00          $   1,053.60          $   1.02               $   1,000.00          $   1,023.80          $   1.00          0.20

 

  (a) 

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

 

 

 

22  

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Fund Summary  as of July 31, 2023 (continued)    BlackRock World ex U.S. Carbon Transition Readiness ETF

 

Portfolio Management Commentary

Global equities delivered robust returns in the annual period, as the combination of falling inflation and resilient economic growth raised hopes for a “soft landing.” Sustainable strategies generally underperformed in 2022, but they rebounded in the first seven months of 2023. The Fund’s exclusionary positions in fossil fuel sectors, which trailed due to the moderation in oil prices, benefited relative performance.

The Fund’s transition-readiness, model-driven investment process evaluates companies’ preparedness for the transition to a low-carbon economy across five “pillars” (Fossil Fuels, Clean Technology, Energy Management, Waste Management and Water Management). These evaluations are used to determine active portfolio weights, subject to risk and other constraints, relative to the MSCI World ex USA Index.

The Energy Production pillar added to performance in the annual period, while the Clean Technology and Water Management pillars detracted. Given the Fund’s tight risk constraints, Fund performance was primarily driven by individual stock selection. The Fund delivered the best results in the information technology sector, while its positioning in communication services detracted. Advantest Corp and Abb Ltd were among the top contributors at the individual company level, while Tele2 AB and Enbridge, Inc. were among the largest detractors.

By design, the Fund remained largely sector neutral. With that said, it was slightly overweight in information technology and modestly underweight in financials, all within the risk bands employed by the portfolio management process. The Fund also keeps its geographic allocations close to that of the index.

Portfolio Information

 

SECTOR ALLOCATION

 

Sector

   
Percent of
Total Investments
 
(a) 

Financials

    20.5

Industrials

    15.4  

Consumer Discretionary

    11.9  

Health Care

    11.9  

Consumer Staples

    9.4  

Information Technology

    8.6  

Materials

    7.7  

Energy

    5.7  

Communication Services

    3.6  

Utilities

    3.4  

Real Estate

    1.9  

GEOGRAPHIC ALLOCATION

 

Country/Geographic Region

   
Percent of
Total Investments
 
(a) 

Japan

    19.7

United Kingdom

    13.2  

France

    11.1  

Canada

    10.9  

Switzerland

    10.5  

Germany

    6.5  

Australia

    6.3  

Netherlands

    3.7  

Denmark

    3.1  

Spain

    2.8  
  (a)

Excludes money market funds.

 

 

 

F U N D  S U M M A R Y

  23


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 blackrock.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are redeemed or sold in the market. Performance for certain funds may reflect a waiver of a portion of investment advisory fees. Without such a waiver, performance would have been lower.

Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. Beginning August 10, 2020, the price used to calculate market return (“Market Price”) is the closing price. Prior to August 10, 2020, Market Price was determined using the midpoint between the highest bid and the lowest ask on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of a fund may not trade in the secondary market until after the fund’s inception, for the period from inception to the first day of secondary market trading in shares of the fund, the NAV of the fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.

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

Disclosure of Expenses

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

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

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

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

 

 

24  

2 0 2 3  B L A C K R O C K  A N N U A L  R E P O R TT O  S H A R E H O L D E R S


Schedule of Investments 

July 31, 2023

  

BlackRock Future Climate and Sustainable Economy ETF

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  

Common Stocks

   
Building Products — 1.5%            

Kingspan Group PLC

    845     $ 67,823  
   

 

 

 
Capital Markets — 0.9%            

Agronomics Ltd.(a)

    315,629       41,114  
   

 

 

 
Chemicals — 12.6%            

Albemarle Corp.

    99       21,016  

DSM-Firmenich AG

    625       69,062  

Ecolab Inc.

    662       121,238  

FMC Corp.

    777       74,771  

LG Chem Ltd.

    81       41,205  

Nutrien Ltd.

    1,017       70,061  

Robertet SA

    85       77,570  

Symrise AG, Class A

    759       82,907  
   

 

 

 
      557,830  
Commercial Services & Supplies — 5.6%            

Cleanaway Waste Management Ltd.

    61,904       114,899  

Republic Services Inc., Class A

    560       84,621  

Waste Management Inc.

    280       45,861  
   

 

 

 
      245,381  
Construction & Engineering — 2.0%            

AECOM

    498       43,326  

Quanta Services Inc.(b)

    221       44,558  
   

 

 

 
      87,884  
Containers & Packaging — 6.3%            

Avery Dennison Corp.

    255       46,923  

Crown Holdings Inc.

    879       81,536  

SIG Group AG

    3,386       90,520  

Smurfit Kappa Group PLC

    1,490       58,961  
   

 

 

 
      277,940  
Electric Utilities — 5.5%            

Enel SpA

    18,738       129,202  

NextEra Energy Inc.

    548       40,169  

Orsted AS(c)

    839       73,009  
   

 

 

 
      242,380  
Electrical Equipment — 5.8%            

Canadian Solar Inc.(a)

    2,039       73,730  

Contemporary Amperex Technology Co. Ltd., Class A

    1,400       46,672  

Schneider Electric SE

    366       65,284  

Vestas Wind Systems A/S(a)

    2,708       72,430  
   

 

 

 
      258,116  
Electronic Equipment, Instruments & Components — 4.9%  

Keyence Corp.

    200       89,748  

Rogers Corp.(a)

    258       43,501  

Samsung SDI Co. Ltd.

    163       85,087  
   

 

 

 
      218,336  
Food Products — 12.5%            

Archer-Daniels-Midland Co.

    766       65,079  

Bunge Ltd.

    1,232       133,881  

Darling Ingredients Inc.(a)

    1,186       82,131  

Kerry Group PLC, Class A

    1,243       123,493  

Maple Leaf Foods Inc.

    2,345       48,940  

Salmar ASA

    1,593       73,594  

SunOpta Inc.(a)

    3,850       25,526  
   

 

 

 
         552,644  
Independent Power and Renewable Electricity Producers — 4.3%  

EDP Renovaveis SA

    8,866       169,349  
Security   Shares     Value  
Independent Power and Renewable Electricity Producers (continued)  

Orron Energy AB(a)

    19,020     $ 21,987  
   

 

 

 
      191,336  
Machinery — 16.2%            

Ag Growth International Inc.

    2,564       105,951  

AGCO Corp.

    547       72,807  

Deere & Co.

    374       160,670  

Ingersoll Rand Inc.

    1,009       65,858  

John Bean Technologies Corp.

    518       64,030  

Kurita Water Industries Ltd.

    1,000       40,215  

Marel HF(c)

    5,648       18,630  

Spirax-Sarco Engineering PLC

    314       44,845  

Xylem Inc./NY

    1,277       143,982  
   

 

 

 
      716,988  
Metals & Mining — 0.9%            

Sims Ltd.

    4,074       41,558  
   

 

 

 
Paper & Forest Products — 1.8%            

UPM-Kymmene OYJ

    2,380       78,796  
   

 

 

 
Professional Services — 2.6%            

Bureau Veritas SA

    2,976       81,732  

SGS SA

    341       33,110  
   

 

 

 
      114,842  
Ground Transportation — 0.9%            

Union Pacific Corp.

    163       37,819  
   

 

 

 
Semiconductors & Semiconductor Equipment — 7.6%  

Analog Devices Inc.

    396       79,014  

First Solar Inc.(a)

    423       87,730  

Infineon Technologies AG

    1,913       84,049  

STMicroelectronics NV

    1,563       83,599  
   

 

 

 
      334,392  
Software — 3.8%            

Ansys Inc.(a)

    253       86,551  

Dassault Systemes SE

    1,859       79,451  
   

 

 

 
      166,002  
   

 

 

 

Total Common Stocks — 95.7%
(Cost: $4,111,453)

       4,231,181  
   

 

 

 

Warrants

   
Capital Markets — 0.0%            

Agronomics Ltd., (Issued 06/01/21, Exercisable at calendar quarter end, 1 Share for 1 Warrant, Expires 12/08/23, Strike Price GBP 0.30)(a)

    329,052       4  
   

 

 

 

Total Warrants — 0.0%
(Cost: $—)

      4  
   

 

 

 

Total Long-Term Investments — 95.7%
(Cost: $4,111,453)

      4,231,185  
   

 

 

 

Short-Term Securities

   
Money Market Funds — 5.3%            

BlackRock Cash Funds: Institutional, SL Agency Shares, 5.42%(d)(e)(f)

    44,587       44,600  

 

 

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

  25


Schedule of Investments (continued)

July 31, 2023

  

BlackRock Future Climate and Sustainable Economy ETF

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  
Money Market Funds (continued)            

BlackRock Cash Funds: Treasury, SL Agency Shares, 5.22%(d)(e)

    190,000     $ 190,000  
   

 

 

 

Total Short-Term Securities — 5.3%
(Cost: $234,595)

      234,600  
   

 

 

 

Total Investments — 101.0%
(Cost: $4,346,048)

      4,465,785  

Liabilities in Excess of Other Assets — (1.0)%

      (42,646
   

 

 

 

Net Assets — 100.0%

    $  4,423,139  
   

 

 

 

 

(a) 

Non-income producing security.

(b) 

All or a portion of this security is on loan.

(c) 

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.

(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 period ended July 31, 2023 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

                   
Affiliated Issuer    Value at
07/31/22
     Purchases
at Cost
     Proceeds
from Sale
   

Net Realized

Gain (Loss)

    

Change in
Unrealized
Appreciation

(Depreciation)

     Value at
07/31/23
     Shares
Held at
07/31/23
     Income    

Capital

Gain
Distributions
from
Underlying
Funds

 

BlackRock Cash Funds: Institutional, SL Agency Shares

   $  127,650      $   —      $ (83,135 )(a)    $ 80      $    5      $ 44,600        44,587      $ 396 (b)     $   —  

BlackRock Cash Funds: Treasury, SL Agency Shares

     310,000               (120,000 )(a)        —               190,000        190,000        9,935        
          

 

 

    

 

 

    

 

 

       

 

 

   

 

 

 
           $ 80      $ 5      $ 234,600         $  10,331     $  
          

 

 

    

 

 

    

 

 

       

 

 

   

 

 

 

 

  (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.

 

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  

Assets

                 

Investments

                 

Long-Term Investments

                 

Common Stocks

   $ 2,507,933        $ 1,723,248        $   —        $ 4,231,181  

Warrants

              4                   4  

Short-Term Securities

                 

Money Market Funds

     234,600                            234,600  
  

 

 

      

 

 

      

 

 

      

 

 

 
   $ 2,742,533        $ 1,723,252        $        $ 4,465,785  
  

 

 

      

 

 

      

 

 

      

 

 

 

See notes to financial statements.

 

 

26  

2 0 2 3  B L A C K R O C K  A N N U A L  R E P O R TT O  S H A R E H O L D E R S


Schedule of Investments 

July 31, 2023

  

BlackRock Future Financial and Technology ETF

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  

Common Stocks

   
Banks — 13.8%            

Coastal Financial Corp./WA(a)

    2,158     $ 97,477  

FinecoBank Banca Fineco SpA

    4,819       74,826  

Inter & Co. Inc., NVS(a)

    33,074       130,792  

Inter & Co. Inc., Class A, NVS(a)

    16,104       63,611  

JPMorgan Chase & Co.

    287       45,334  

Live Oak Bancshares Inc.

    3,309       125,312  

Rakuten Bank Ltd., NVS(a)

    5,800       83,710  
   

 

 

 
      621,062  
Capital Markets — 7.8%            

Assetmark Financial Holdings Inc.(a)

    2,507       74,959  

KIWOOM Securities Co. Ltd.

    1,458       111,167  

XP Inc., Class A(a)

    6,119       165,274  
   

 

 

 
      351,400  
Consumer Finance — 14.5%            

American Express Co.

    518       87,480  

Capital One Financial Corp.

    762       89,169  

Discover Financial Services

    599       63,225  

Kaspi.KZ JSC(b)

    2,439       223,569  

Oportun Financial Corp.(a)

    9,162       56,346  

Synchrony Financial

    3,939       136,053  
   

 

 

 
      655,842  
Financial Services — 49.7%            

Adyen NV(a)(c)

    26       48,256  

Block Inc.(a)

    529       42,600  

Cab Payments Holdings PLC(a)

    37,634       138,614  

Fidelity National Information Services Inc.

    3,415       206,198  

Fiserv Inc.(a)

    1,485       187,422  

Global Payments Inc.

    1,916       211,239  

Illimity Bank SpA

    11,632       79,549  

Mastercard Inc., Class A

    107       42,188  

Nexi SpA(a)(c)

    13,460       116,564  

Nuvei Corp.(a)(c)

    5,864       199,980  

Pagseguro Digital Ltd., Class A(a)

    18,377       208,763  

Payoneer Global Inc.(a)

    22,080       117,466  

PayPal Holdings Inc.(a)(d)

    1,861       141,101  

Repay Holdings Corp.(a)(d)

    17,447       145,682  

Shift4 Payments Inc., Class A(a)(d)

    551       38,013  
Security   Shares     Value  
Financial Services (continued)            

Visa Inc., Class A

    171     $ 40,652  

WEX Inc.(a)

    1,050       198,818  

Worldline SA/France(a)(c)

    2,127       84,313  
   

 

 

 
      2,247,418  
Software — 9.5%            

Black Knight Inc.(a)

    3,633       255,472  

NCR Corp.(a)

    4,138       111,229  

Temenos AG, Registered

    739       63,556  
   

 

 

 
      430,257  
   

 

 

 

Total Long-Term Investments — 95.3%
(Cost: $4,005,616)

      4,305,979  
   

 

 

 

Short-Term Securities

   
Money Market Funds — 9.8%            

BlackRock Cash Funds: Institutional, SL Agency Shares, 5.42%(e)(f)(g)

    244,093       244,167  

BlackRock Cash Funds: Treasury, SL Agency Shares, 5.22%(e)(f)

    200,000       200,000  
   

 

 

 

Total Short-Term Securities — 9.8%
(Cost: $444,147)

      444,167  
   

 

 

 

Total Investments — 105.1%
(Cost: $4,449,763)

      4,750,146  

Liabilities in Excess of Other Assets — (5.1)%

      (231,682
   

 

 

 

Net Assets — 100.0%

    $ 4,518,464  
   

 

 

 

 

(a) 

Non-income producing security.

(b) 

This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933.

(c) 

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.

(d) 

All or a portion of this security is on loan.

(e) 

Affiliate of the Fund.

(f) 

Annualized 7-day yield as of period end.

(g) 

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 period ended July 31, 2023 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

                   
Affiliated Issuer    Value at
08/16/22(a)
     Purchases
at Cost
    Proceeds
from Sale
    

Net Realized

Gain (Loss)

   

Change in
Unrealized
Appreciation

(Depreciation)

     Value at
07/31/23
     Shares
Held at
07/31/23
     Income    

Capital

Gain
Distributions
from
Underlying
Funds

 

BlackRock Cash Funds: Institutional, SL Agency Shares

   $   —      $ 244,170 (b)    $   —      $ (23   $    20      $ 244,167        244,093      $ 10,601 (c)    $   —  

BlackRock Cash Funds: Treasury, SL Agency Shares

            200,000 (b)                          200,000        200,000        9,585        
          

 

 

   

 

 

    

 

 

       

 

 

   

 

 

 
           $ (23   $ 20      $ 444,167         $  20,186     $  
          

 

 

   

 

 

    

 

 

       

 

 

   

 

 

 

 

  (a) 

Commencement of operations.

 
  (b) 

Represents net amount purchased (sold).

 
  (c) 

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.

 

 

 

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

  27


Schedule of Investments (continued)

July 31, 2023

  

BlackRock Future Financial and Technology ETF

 

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  

Assets

                 

Investments

                 

Long-Term Investments

                 

Common Stocks

   $ 3,420,469        $ 885,510        $   —        $ 4,305,979  

Short-Term Securities

                 

Money Market Funds

     444,167                            444,167  
  

 

 

      

 

 

      

 

 

      

 

 

 
   $ 3,864,636        $ 885,510        $        $ 4,750,146  
  

 

 

      

 

 

      

 

 

      

 

 

 

See notes to financial statements.

 

 

28  

2 0 2 3  B L A C K R O C K  A N N U A L  R E P O R TT O  S H A R E H O L D E R S


Schedule of Investments

July 31, 2023

  

BlackRock Future Health ETF

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  

Common Stocks

   
Biotechnology — 36.4%            

4D Molecular Therapeutics Inc.(a)

    265     $ 4,849  

Abcam PLC, SP ADR(a)

    3,650       85,556  

ACADIA Pharmaceuticals Inc.(a)

    250       7,310  

Alkermes PLC(a)

    2,934       85,907  

Allakos Inc.(a)(b)

    370       1,991  

Alnylam Pharmaceuticals Inc.(a)

    446       87,148  

Apellis Pharmaceuticals Inc.(a)

    150       3,862  

Apogee Therapeutics Inc., NVS

    784       16,778  

Arcus Biosciences Inc.(a)

    480       9,552  

Arcutis Biotherapeutics Inc.(a)

    900       9,819  

Argenx SE, ADR(a)

    286        144,281  

Arrowhead Pharmaceuticals Inc.(a)

    230       7,940  

Aura Biosciences Inc.(a)

    465       5,533  

Bavarian Nordic A/S(a)

    210       4,506  

BeiGene Ltd., ADR(a)

    245       52,484  

Biogen Inc.(a)(b)

    235       63,495  

Biohaven Ltd., NVS(a)

    225       4,473  

BioMarin Pharmaceutical Inc.(a)

    805       70,784  

Biomea Fusion Inc.(a)(b)

    421       9,367  

Black Diamond Therapeutics Inc.(a)

    2,425       9,045  

Blueprint Medicines Corp.(a)

    907       59,862  

Bridgebio Pharma Inc.(a)

    180       6,302  

Cerevel Therapeutics Holdings Inc.(a)

    732       22,392  

CRISPR Therapeutics AG(a)(b)

    135       7,739  

CureVac NV(a)

    700       6,496  

Decibel Therapeutics Inc.(a)

    353       1,059  

Design Therapeutics Inc.(a)

    183       1,490  

Exact Sciences Corp.(a)

    644       62,816  

Exelixis Inc.(a)

    1,434       28,264  

Frequency Therapeutics Inc.(a)

    630       322  

Galapagos NV, ADR(a)(b)

    442       18,719  

Galecto Inc.(a)

    610       1,879  

Genmab A/S(a)

    84       34,625  

Genmab A/S, ADR(a)(b)

    272       11,250  

Gilead Sciences Inc.

    1,298       98,830  

Halozyme Therapeutics Inc.(a)

    615       26,420  

Horizon Therapeutics PLC(a)

    200       20,054  

Immunocore Holdings PLC(a)(b)

    930       61,361  

ImmunoGen Inc.(a)

    973       17,339  

Incyte Corp.(a)

    829       52,824  

Ionis Pharmaceuticals Inc.(a)

    1,391       57,629  

Iovance Biotherapeutics Inc.(a)

    460       3,340  

Karuna Therapeutics Inc.(a)

    129       25,770  

Keros Therapeutics Inc.(a)

    343       14,365  

Kinnate Biopharma Inc.(a)

    553       1,642  

Legend Biotech Corp., ADR(a)

    1,177       88,887  

MacroGenics Inc.(a)(b)

    520       2,480  

Merus NV(a)

    995       26,109  

Mirati Therapeutics Inc.(a)

    500       15,135  

Monte Rosa Therapeutics Inc.(a)

    344       2,432  

MoonLake Immunotherapeutics, NVS(a)(b)

    879       53,452  

Morphic Holding Inc.(a)

    430       24,394  

MorphoSys AG(a)

    145       4,245  

Neurocrine Biosciences Inc.(a)

    542       55,224  

Nuvalent Inc., Class A(a)(b)

    693       34,546  

PMV Pharmaceuticals Inc.(a)

    723       4,728  

Prime Medicine Inc., NVS(a)

    1,056       15,914  

Protagonist Therapeutics Inc.(a)(b)

    1,170       22,698  
Security   Shares     Value  
Biotechnology (continued)            

Prothena Corp. PLC(a)

    210     $ 14,463  

PTC Therapeutics Inc.(a)

    640       25,818  

Recursion Pharmaceuticals Inc., Class A(a)

    405       5,719  

Relay Therapeutics Inc.(a)

    95       1,197  

REVOLUTION Medicines Inc.(a)

    931       24,439  

Rhythm Pharmaceuticals Inc.(a)(b)

    1,725       30,774  

Rocket Pharmaceuticals Inc.(a)

    684       12,346  

Sarepta Therapeutics Inc.(a)

    311       33,709  

Seagen Inc.(a)

    304       58,301  

Tenaya Therapeutics Inc.(a)

    354       1,713  

TScan Therapeutics Inc.(a)

    3,403       7,623  

Twist Bioscience Corp.(a)(b)

    377       9,176  

Ultragenyx Pharmaceutical Inc.(a)

    222       9,573  

United Therapeutics Corp.(a)

    161       39,078  

Vaxcyte Inc.(a)(b)

    412       19,801  

Vertex Pharmaceuticals Inc.(a)

    481       169,475  

Viking Therapeutics Inc.(a)(b)

    650       9,425  

Viridian Therapeutics Inc.(a)

    231       4,334  

Voyager Therapeutics Inc.(a)

    465       4,334  
   

 

 

 
      2,159,011  
Electronic Equipment, Instruments & Components — 0.1%  

908 Devices Inc.(a)

    648       4,510  
   

 

 

 
Health Care Equipment & Supplies — 34.7%            

Abiomed Inc., CVR(c)

    246       686  

Alcon Inc.

    2,110       179,181  

Align Technology Inc.(a)

    392       148,133  

Bausch + Lomb Corp.(a)

    1,238       24,599  

Baxter International Inc.

    1,015       45,908  

Becton Dickinson and Co.

    225       62,690  

Boston Scientific Corp.(a)

    3,138       162,705  

CONMED Corp.

    270       32,684  

ConvaTec Group PLC(d)

    11,764       31,517  

Cooper Companies Inc. (The)

    312       122,073  

Dexcom Inc.(a)

    1,131       140,877  

GE Healthcare Inc., NVS(a)

    545       42,510  

Glaukos Corp.(a)

    298       22,988  

Hologic Inc.(a)

    548       43,522  

Inspire Medical Systems Inc.(a)

    135       38,854  

Insulet Corp.(a)

    257       71,125  

Intuitive Surgical Inc.(a)

    568       184,259  

iRhythm Technologies Inc.(a)

    120       12,607  

Masimo Corp.(a)

    675       82,553  

Novocure Ltd.(a)(b)

    577       18,833  

Nyxoah SA(a)(b)

    1,368       11,218  

Omnicell Inc.(a)

    454       28,670  

Penumbra Inc.(a)

    306       92,828  

Pulmonx Corp.(a)

    879       12,306  

ResMed Inc.

    194       43,136  

Shockwave Medical Inc.(a)

    139       36,223  

SI-BONE Inc.(a)

    448       11,540  

STAAR Surgical Co.(a)(b)

    188       10,297  

STERIS PLC

    465       104,881  

Straumann Holding AG

    300       49,642  

Stryker Corp.

    455       128,952  

Tandem Diabetes Care Inc.(a)(b)

    468       16,343  

Zimmer Biomet Holdings Inc.

    340       46,971  
   

 

 

 
      2,061,311  
Health Care Providers & Services — 4.3%            

AmerisourceBergen Corp.

    804       150,268  

 

 

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

  29


Schedule of Investments (continued)

July 31, 2023

  

BlackRock Future Health ETF

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  
Health Care Providers & Services (continued)            

Encompass Health Corp.

    310     $ 20,469  

Guardant Health Inc.(a)

    561       21,890  

McKesson Corp.

    110       44,264  

R1 RCM Inc.(a)

    894       15,448  
   

 

 

 
      252,339  
Health Care Technology — 0.0%            

Sophia Genetics SA(a)(b)

    619       2,352  
   

 

 

 
Life Sciences Tools & Services — 12.0%            

10X Genomics Inc., Class A(a)

    537       33,820  

Avantor Inc.(a)

    1,805       37,129  

Bio-Rad Laboratories Inc., Class A(a)

    55       22,295  

Bio-Techne Corp.

    747       62,300  

Bruker Corp.

    523       35,941  

Gerresheimer AG

    660       78,173  

IQVIA Holdings Inc.(a)(b)

    380       85,029  

Mettler-Toledo International Inc.(a)

    33       41,496  

Pacific Biosciences of California Inc.(a)

    1,170       15,456  

QIAGEN NV(a)

    1,720       80,530  

Repligen Corp.(a)(b)

    200       34,312  

Waters Corp.(a)(b)

    166       45,851  

West Pharmaceutical Services Inc.

    377       138,751  
   

 

 

 
      711,083  
Personal Care Products — 0.2%            

Haleon PLC, ADR, NVS(b)

    1,213       10,687  
   

 

 

 
Pharmaceuticals — 6.8%            

Arvinas Inc.(a)

    641       15,846  

Catalent Inc.(a)

    928       45,027  

Elanco Animal Health Inc.(a)

    2,525       30,477  

Merck & Co. Inc.

    402       42,873  

Novo Nordisk A/S, Class B

    175       28,219  

Pliant Therapeutics Inc.(a)(b)

    367       6,547  

Reata Pharmaceuticals Inc., Class A(a)

    578       95,705  

Roche Holding AG, NVS

    115       35,656  

Structure Therapeutics Inc.(a)(b)

    447       16,463  

UCB SA

    969       85,802  

Ventyx Biosciences Inc.(a)

    80       2,964  
   

 

 

 
      405,579  
   

 

 

 

Total Common Stocks — 94.5%
(Cost: $5,261,951)

      5,606,872  
   

 

 

 
Security   Shares     Value  
Preferred Stocks            
Life Sciences Tools & Services — 0.6%            

Sartorius AG, Preference Shares, NVS

    95     $ 39,195  
   

 

 

 

Total Preferred Stocks — 0.6%
(Cost: $43,183)

      39,195  
   

 

 

 

Total Long-Term Investments — 95.1%
(Cost: $5,305,134)

      5,646,067  
   

 

 

 
Short-Term Securities            
Money Market Funds — 13.2%            

BlackRock Cash Funds: Institutional, SL Agency Shares, 5.42%(e)(f)(g)

    519,317       519,473  

BlackRock Cash Funds: Treasury, SL Agency Shares, 5.22%(e)(f)

    260,000       260,000  
   

 

 

 

Total Short-Term Securities — 13.2%
(Cost: $779,371)

 

    779,473  
   

 

 

 

Total Investments — 108.3%
(Cost: $6,084,505)

 

    6,425,540  

Liabilities in Excess of Other Assets — (8.3)%

 

    (490,260
   

 

 

 

Net Assets — 100.0%

 

  $  5,935,280  
   

 

 

 

 

(a) 

Non-income producing security.

(b) 

All or a portion of this security is on loan.

(c) 

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

(d) 

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.

(e) 

Affiliate of the Fund.

(f) 

Annualized 7-day yield as of period end.

(g) 

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

 

 

30  

2 0 2 3  B L A C K R O C K  A N N U A L  R E P O R TT O  S H A R E H O L D E R S


Schedule of Investments (continued)

July 31, 2023

  

BlackRock Future Health ETF

 

Affiliates

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

 

 

 
Affiliated Issuer    Value at
07/31/22
     Purchases
at Cost
     Proceeds
from Sale
     Net Realized
Gain (Loss)
     Change in
Unrealized
Appreciation
(Depreciation)
     Value at
07/31/23
     Shares
Held at
07/31/23
     Income     

Capital

Gain
Distributions
from
Underlying
Funds

 

 

 

BlackRock Cash Funds: Institutional, SL Agency Shares

   $ 133,820      $ 385,474 (a)      $      $ 103      $ 76      $ 519,473        519,317      $ 4,419 (b)      $  

BlackRock Cash Funds: Treasury, SL Agency Shares

     180,000        80,000 (a)                             260,000        260,000        8,085         
           

 

 

    

 

 

    

 

 

       

 

 

    

 

 

 
            $ 103      $ 76      $ 779,473         $ 12,504      $  
           

 

 

    

 

 

    

 

 

       

 

 

    

 

 

 

 

  (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

Forward Foreign Currency Exchange Contracts

 

         
Currency Purchased      Currency Sold      Counterparty    Settlement Date    Unrealized
Appreciation
(Depreciation)
 
CHF      36,000        USD        39,941      BNP Paribas SA    09/14/23    $ 1,526  
EUR      103,500        USD        111,301      BNP Paribas SA    09/14/23      2,734  
                 

 

 

 
                    4,260  
                 

 

 

 
JPY      12,584,000        USD        91,172      Bank of America N.A.    09/14/23      (2,125
                 

 

 

 
                  $ 2,135  
                 

 

 

 

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:

 

 

 
     Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

 

 

Assets — Derivative Financial Instruments

                    

Forward foreign currency exchange contracts

                    

Unrealized appreciation on forward foreign currency exchange contracts

   $      $      $      $ 4,260      $      $      $ 4,260  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities — Derivative Financial Instruments

                    

Forward foreign currency exchange contracts

                    

Unrealized depreciation on forward foreign currency exchange contracts

   $      $      $      $ 2,125      $      $      $ 2,125  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

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

 

 

 
     Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

 

 

Net Realized Gain (Loss) from

 

  

Forward foreign currency exchange contracts

   $      $      $      $ 4,989      $      $      $ 4,989  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net Change in Unrealized Appreciation (Depreciation) on

                    

Forward foreign currency exchange contracts

   $      $      $      $ 2,135      $      $      $ 2,135  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

 

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

  31


Schedule of Investments (continued)

July 31, 2023

  

BlackRock Future Health ETF

 

Derivative Financial Instruments Categorized by Risk Exposure (continued)

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

 

 

Forward foreign currency exchange contracts:

  

Average amounts purchased — in USD

   $ 252,185   

Average amounts sold — in USD

   $ 8,094   

 

 

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

Derivative Financial Instruments - Offsetting as of Period End

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

 

     
      Assets      Liabilities  

Derivative Financial Instruments:

     

Forward foreign currency exchange contracts

   $ 4,260      $ 2,125  
  

 

 

    

 

 

 

Total derivative assets and liabilities in the Statement of Assets and Liabilities

     4,260        2,125  

Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)

             
  

 

 

    

 

 

 

Total derivative assets and liabilities subject to an MNA

     4,260        2,125  
  

 

 

    

 

 

 

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

 

           
Counterparty     



Derivative
Assets
Subject to an
MNA by
Counterparty
 
 
 
 
 
    

Derivatives
Available for
Offset
 
 
(a) 
    

Non-Cash
Collateral
Received
 
 
 
    

Cash
Collateral
Received
 
 
 
    

Net Amount
of Derivative
Assets
 
 
(b)(c)  

BNP Paribas SA

   $ 4,260      $      $      $      $ 4,260  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
              
           
Counterparty     



Derivative
Liabilities
Subject to an
MNA by
Counterparty
 
 
 
 
 
    

Derivatives
Available for
Offset
 
 
(a) 
    

Non-Cash
Collateral
Pledged
 
 
 
    

Cash
Collateral
Pledged
 
 
 
    

Net Amount
of Derivative
Liabilities
 
 
(c)(d) 

Bank of America N.A

   $ 2,125      $      $      $      $ 2,125  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a)

The amount of derivatives available for offset is limited to the amount of derivative assets and/or liabilities that are subject to an MNA.

 
  (b) 

Net amount represents the net amount receivable from the counterparty in the event of default.

 
  (c) 

Net amount may also include forward foreign currency exchange contracts that are not required to be collateralized.

 
  (d) 

Net amount represents the net amount payable due to the counterparty in the event of default.

 

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  

 

 

Assets

                 

Investments

                 

Long-Term Investments

                 

Common Stocks

   $ 5,253,801        $ 352,385        $ 686        $ 5,606,872  

Preferred Stocks

              39,195                   39,195  

Short-Term Securities

                 

Money Market Funds

     779,473                            779,473  
  

 

 

      

 

 

      

 

 

      

 

 

 
   $ 6,033,274        $ 391,580        $ 686        $ 6,425,540  
  

 

 

      

 

 

      

 

 

      

 

 

 

Derivative Financial Instruments(a)

                 

Assets

                 

Foreign Currency Exchange Contracts

   $        $ 4,260        $        $ 4,260  

 

 

32  

2 0 2 3  B L A C K R O C K  A N N U A L  R E P O R TT O  S H A R E H O L D E R S


Schedule of Investments (continued)

July 31, 2023

  

BlackRock Future Health ETF

 

Fair Value Hierarchy as of Period End (continued)

 

 

 
     Level 1        Level 2        Level 3        Total  

 

 

Liabilities

                 

Foreign Currency Exchange Contracts

   $        $ (2,125      $        $ (2,125
  

 

 

      

 

 

      

 

 

      

 

 

 
   $        $ 2,135        $          2,135  
  

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

Derivative financial instruments are forward foreign currency exchange contracts. Forward foreign currency exchange contracts are valued at the unrealized appreciation (depreciation) on the instrument.

 

See notes to financial statements.

 

 

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

  33


Schedule of Investments 

July 31, 2023

  

BlackRock Future Innovators ETF

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  

Common Stocks

   
Industrial REITs — 0.6%            

Innovative Industrial Properties Inc.

    204     $ 16,163  

Rexford Industrial Realty Inc.

    519       28,592  
   

 

 

 
      44,755  
Aerospace & Defense — 5.8%            

Axon Enterprise Inc.(a)

    1,247       231,855  

HEICO Corp.

    1,051       184,955  
   

 

 

 
       416,810  
Air Freight & Logistics — 2.0%            

GXO Logistics Inc.(a)

    2,148       144,066  
   

 

 

 
Automobile Components — 2.0%            

Fox Factory Holding Corp.(a)

    1,304       145,918  
   

 

 

 
Biotechnology — 1.4%            

Halozyme Therapeutics Inc.(a)

    2,387       102,545  
   

 

 

 
Building Products — 2.0%            

AZEK Co. Inc. (The)(a)

    4,613       143,926  
   

 

 

 
Capital Markets — 6.5%            

MarketAxess Holdings Inc.

    441       118,726  

TPG Inc.

    4,639       136,526  

Tradeweb Markets Inc., Class A

    2,595       212,245  
   

 

 

 
      467,497  
Construction & Engineering — 2.2%            

Comfort Systems USA Inc.

    926       161,096  
   

 

 

 
Diversified Consumer Services — 3.3%            

Bright Horizons Family Solutions Inc.(a)(b)

    409       39,685  

Duolingo Inc, Class A(a)

    1,294       200,816  
   

 

 

 
      240,501  
Electronic Equipment, Instruments & Components — 0.4%  

Halma PLC

    1,105       31,732  
   

 

 

 
Food Products — 0.5%            

Freshpet Inc.(a)(b)

    519       38,167  
   

 

 

 
Health Care Equipment & Supplies — 3.6%            

Inmode Ltd.(a)

    951       40,807  

Inspire Medical Systems Inc.(a)

    381       109,656  

Insulet Corp.(a)

    385       106,549  
   

 

 

 
      257,012  
Health Care Providers & Services — 1.3%            

Surgery Partners Inc.(a)(b)

    2,360       91,167  
   

 

 

 
Health Care Technology — 2.4%            

Certara Inc.(a)(b)

    3,761       73,227  

Doximity Inc., Class A(a)(b)

    1,602       57,240  

Phreesia Inc.(a)

    1,377       43,678  
   

 

 

 
      174,145  
Hotels, Restaurants & Leisure — 7.6%            

Domino’s Pizza Inc.

    100       39,674  

Evolution AB(c)

    1,116       137,617  

Penn Entertainment Inc.(a)(b)

    3,358       88,282  

Planet Fitness Inc., Class A(a)

    2,188       147,777  

Wingstop Inc.

    772       130,144  
   

 

 

 
      543,494  
Interactive Media & Services — 2.3%