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JULY 31, 2023 |
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2023 Annual Report
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iShares Trust
· iShares China Large-Cap ETF | FXI | NYSE Arca
· iShares MSCI China A ETF | CNYA | Cboe BZX
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 iShares.com for further insight about investing in today’s markets.
Rob Kapito
President, BlackRock, Inc.
Rob Kapito
President, BlackRock, Inc.
Total Returns as of July 31, 2023 | ||||
6-Month | 12-Month | |||
U.S.
large cap equities |
13.52% | 13.02% | ||
U.S.
small cap equities |
4.51 | 7.91 | ||
International
equities |
6.65 | 16.79 | ||
Emerging
market equities |
3.26 | 8.35 | ||
3-month Treasury bills |
2.34 | 3.96 | ||
U.S.
Treasury securities |
(2.08) | (7.56) | ||
U.S.
investment grade bonds |
(1.02) | (3.37) | ||
Tax-exempt municipal
bonds |
0.20 | 0.93 | ||
U.S.
high yield bonds |
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. |
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iShares Trust
Global Market Overview
Global equity markets advanced during the 12 months ended July 31, 2023 (“reporting period”), supported by continued economic growth and moderating inflation. The MSCI ACWI, a broad global equity index that includes both developed and emerging markets, returned 12.91% in U.S. dollar terms for the reporting period. Despite concerns about the impact of higher interest rates and rising prices, the global economy continued to grow, albeit at a slower pace than during the initial post-pandemic recovery. Inflation began to subside in most regions of the world, and lower energy prices reduced pressure on consumers, leading consumer and business sentiment to improve. While the Russian invasion of Ukraine continued to disrupt trade in Europe and elsewhere, market adaptation lessened the economic impact of the ongoing war. The prices of oil, natural gas, and wheat all declined during the reporting period, easing pressure on the world’s economies.
The U.S. Federal Reserve (“Fed”) tightened monetary policy rapidly, raising short-term interest rates seven times during the reporting period. The pace of tightening decelerated as the Fed twice lowered the increment of increase before pausing entirely in June 2023, the first time it declined to take action since the tightening cycle began. However, the Fed then raised interest rates again at its July 2023 meeting and stated that it would continue to monitor economic data. The Fed also continued to decrease the size of its balance sheet by reducing the store of U.S. Treasuries it had accumulated to stabilize markets in the early phases of the coronavirus pandemic.
Despite the tightening financial conditions, the U.S. economy demonstrated continued strength, and U.S. equities advanced. The economy returned to growth in the third quarter of 2022 and showed robust, if slightly slower, growth thereafter. Consumers powered the economy and increased their spending in both nominal and inflation-adjusted terms. Spending was helped by a strong labor market, as unemployment remained very low in historic terms, and the total number of employed persons reached an all-time high. Tightness in the labor market drove higher wages, although wage growth slowed as the reporting period continued.
European stocks outpaced their counterparts in most other regions of the globe, advancing strongly for the reporting period despite modest economic growth. European stocks benefited from a solid recovery following the early phases of the war in Ukraine. While the conflict disrupted critical natural gas supplies, new sources were secured and prices declined, while a warm winter helped moderate consumption. The European Central Bank (“ECB”) responded to the highest inflation since the introduction of the euro by raising interest rates eight times and beginning to reduce the size of its debt holdings.
Stocks in the Asia-Pacific region gained, albeit at a slower pace than other regions of the world. Japan returned to growth in the fourth quarter of 2022 and first quarter of 2023, as strong business investment and exports helped boost the economy and support Japanese equities. However, Chinese stocks were negatively impacted by slowing economic growth. While investors were initially optimistic following China’s lifting of several pandemic-related lockdowns in December 2022, subsequent performance disappointed, and tensions with the U.S. increased. Emerging market stocks advanced, as the improving global economic environment reassured investors. The declining value of the U.S. dollar relative to many other currencies and the slowing pace of the Fed’s interest rate increases also supported emerging market stocks.
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2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Fund Summary as of July 31, 2023 | iShares® China Large-Cap ETF |
Investment Objective
The iShares China Large-Cap ETF (the “Fund”) seeks to track the investment results of an index composed of large-capitalization Chinese equities that trade on the Hong Kong Stock Exchange, as represented by the FTSE China 50 Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
1 Year | 5 Years | 10 Years | 1 Year | 5 Years | 10 Years | |||||||||||||||||||||||
Fund NAV |
2.71 | % | (4.72 | )% | 1.06 | % | 2.71 | % | (21.49 | )% | 11.13 | % | ||||||||||||||||
Fund Market |
2.80 | (4.91 | ) | 1.13 | 2.80 | (22.26 | ) | 11.87 | ||||||||||||||||||||
Index |
2.25 | (4.14 | ) | 1.75 | 2.25 | (19.05 | ) | 18.92 |
GROWTH OF $10,000 INVESTMENT
(AT NET ASSET VALUE)
Past performance is not an indication of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” for more information.
Expense Example
Actual |
Hypothetical 5% Return |
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Beginning Account Value (02/01/23) |
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Ending Account Value (07/31/23) |
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Expenses Paid During the Period |
(a) |
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Beginning Account Value (02/01/23) |
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Ending Account Value (07/31/23) |
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Expenses Paid During the Period |
(a) |
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Annualized Expense Ratio |
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$ 1,000.00 | $ 961.90 | $ 3.60 | $ 1,000.00 | $ 1,021.10 | $ 3.71 | 0.74 | % |
(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. |
F U N D S U M M A R Y |
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Fund Summary as of July 31, 2023 (continued) | iShares® China Large-Cap ETF |
Portfolio Management Commentary
Large-capitalization Chinese stocks advanced modestly for the reporting period. Media and entertainment companies in the communication services sector contributed the most to the Index’s return, as the Chinese government’s easing stance on regulation of internet firms toward the end of 2022 buoyed investor sentiment. In this environment, a leading social media and gaming company received government approval to release several new video games, bolstering the company’s growth prospects. Further, investor enthusiasm for initiatives related to artificial intelligence drove a rally in the stock of China’s largest search engine provider after the company announced the development of a new chatbot.
In the financials sector, the insurance industry contributed to the Index’s performance as China’s reopening allowed insurance agents to once again meet face-to-face with customers, the country’s economic recovery drove demand higher, and investment returns improved. Insurance companies also benefited from increased demand for financial products with more predictable income streams following a late 2022 bond selloff that led to declines for some wealth management products sold by banks.
On the downside, internet and direct marketing stocks in the consumer discretionary sector detracted from the Index’s return. The reopening of China’s economy dented the profit margins of a major provider of food delivery services, as the end of anti-COVID-19 lockdowns led to reduced demand. In addition, the company lost market share to newer competitors in the space, including one backed by another of China’s largest technology firms.
China’s healthcare sector also detracted from the Index’s return. Life sciences tools and services stocks were pressured by a U.S. executive order introducing a national biotechnology and biomanufacturing initiative. Given the program’s stated goal of reducing American reliance on China, stocks of Chinese companies engaged in contract drug research declined.
Portfolio Information
SECTOR ALLOCATION |
| |||
Sector |
|
Percent of Total Investments |
(a) | |
Consumer Discretionary |
36.4 | % | ||
Financials |
25.9 | |||
Communication Services |
20.0 | |||
Energy |
4.2 | |||
Consumer Staples |
3.0 | |||
Real Estate |
2.7 | |||
Health Care |
2.5 | |||
Information Technology |
2.5 | |||
Industrials |
1.4 | |||
Materials |
1.4 |
TEN LARGEST HOLDINGS |
| |||
Security |
|
Percent of Total Investments |
(a) | |
Alibaba Group Holding Ltd. |
10.1 | % | ||
Meituan, Class B |
9.9 | |||
Tencent Holdings Ltd. |
9.1 | |||
China Construction Bank Corp., Class H |
5.4 | |||
JD.com Inc., Class A |
4.8 | |||
Ping An Insurance Group Co. of China Ltd., Class H |
4.4 | |||
Baidu Inc. |
4.4 | |||
NetEase Inc. |
4.1 | |||
Industrial & Commercial Bank of China Ltd., Class H |
3.7 | |||
BYD Co. Ltd., Class H |
3.7 |
(a) |
Excludes money market funds. |
6 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Fund Summary as of July 31, 2023 | iShares® MSCI China A ETF |
Investment Objective
The iShares MSCI China A ETF (the “Fund”) seeks to track the investment results of an index composed of domestic Chinese equities that trade on the Shanghai or Shenzhen Stock Exchange, as represented by the MSCI China A Inclusion Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index.
Performance
Average Annual Total Returns | Cumulative Total Returns | |||||||||||||||||||||||||||
1 Year | 5 Years |
Since Inception |
1 Year | 5 Years |
Since Inception |
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Fund NAV |
(9.55 | )% | 4.88 | % | 5.48 | % | (9.55 | )% | 26.90 | % | 46.35 | % | ||||||||||||||||
Fund Market |
(9.49 | ) | 4.36 | 5.44 | (9.49 | ) | 23.77 | 45.88 | ||||||||||||||||||||
Index |
(9.28 | ) | 5.12 | 4.70 | (9.28 | ) | 28.36 | 38.73 |
GROWTH OF $10,000 INVESTMENT
(SINCE INCEPTION AT NET ASSETVALUE)
The inception date of the Fund was June 13, 2016. The first day of secondary market trading was June 15, 2016.
Index performance through April 25, 2018 reflects the performance of the MSCI China A International Index. Index performance beginning on April 26, 2018 reflects the performance of the MSCI China A Inclusion Index.
Past performance is not an indication of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” for more information.
Expense Example
Actual | Hypothetical 5% Return | |||||||||||||||||||||||||||||||
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Beginning Account Value (02/01/23) |
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Ending Account Value (07/31/23) |
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Expenses Paid During the Period |
(a) |
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Beginning Account Value (02/01/23) |
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Ending Account Value (07/31/23) |
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Expenses Paid During the Period |
(a) |
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Annualized Expense Ratio |
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$ 1,000.00 | $ 907.60 | $ 1.14 | $ 1,000.00 | $ 1,023.60 | $ 1.20 | 0.24 | % |
(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. |
F U N D S U M M A R Y |
7 |
Fund Summary as of July 31, 2023 (continued) | iShares® MSCI China A ETF |
Portfolio Management Commentary
Domestic Chinese equities declined during the reporting period, negatively impacted by slowing economic growth. While investors were initially optimistic following China’s lifting of several anti-COVID-19 lockdowns in December 2022, subsequent performance disappointed.
The industrials sector detracted the most from the Index’s return, led by stocks of companies in the electrical equipment industry involved in electric vehicle (“EV”) batteries and renewable energy. Battery makers endured production declines as a heat wave early in the reporting period slowed hydropower plants to a standstill, forcing temporary closures of factories. A reduction in EV car deliveries in China amid a weakening economy and supply-chain complications further weighed on the industry.
In the materials sector, chemicals industry stocks detracted from the Index’s performance as anti-COVID-19 lockdowns in Shanghai and other urban areas dampened output. Reduced demand for exports of chemicals to markets like Europe and the U.S. amid economic uncertainty further weighed on Chinese chemicals companies. Additionally, firms that specialize in the mining and processing of lithium were pressured as the price of the metal dropped significantly in response to softening domestic EV demand.
In the consumer staples sector, the packaged foods and meats industry weighed on the Index’s return as a major supplier of flavorings drew scrutiny for its use of additives in products sold domestically. Also within the industry, the profits of pork producers were dampened by the confluence of decreasing pork prices, an oversupply of the meat, and lower consumer demand.
On the upside, the insurance industry in the financials sector contributed to the Index’s performance. Demand for new insurance policies rose, China’s reopening allowed agents to once again meet face-to-face with customers to sell policies, and investment returns within the industry improved.
Portfolio Information
SECTOR ALLOCATION |
| |||
Sector |
|
Percent of Total Investments |
(a) | |
Financials |
18.7 | % | ||
Industrials |
15.6 | |||
Consumer Staples |
15.0 | |||
Information Technology |
14.9 | |||
Materials |
11.5 | |||
Health Care |
8.2 | |||
Consumer Discretionary |
6.2 | |||
Utilities |
3.6 | |||
Energy |
2.9 | |||
Real Estate |
1.9 | |||
Communication Services |
1.5 |
TEN LARGEST HOLDINGS |
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Security |
|
Percent of Total Investments |
(a) | |
Kweichow Moutai Co. Ltd., Class A |
5.8 | % | ||
Contemporary Amperex Technology Co. Ltd., Class A |
2.5 | |||
China Merchants Bank Co. Ltd., Class A |
1.8 | |||
Wuliangye Yibin Co. Ltd., Class A |
1.7 | |||
Ping An Insurance Group Co. of China Ltd., Class A |
1.4 | |||
China Yangtze Power Co. Ltd., Class A |
1.2 | |||
BYD Co. Ltd., Class A |
1.2 | |||
Shenzhen Mindray Bio-Medical Electronics Co. Ltd., Class A |
0.9 | |||
Luzhou Laojiao Co. Ltd., Class A |
0.9 | |||
Industrial Bank Co. Ltd., Class A |
0.8 |
(a) |
Excludes money market funds. |
8 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Past performance is not an indication of future results. Financial markets have experienced extreme volatility and trading in many instruments has been disrupted. These circumstances may continue for an extended period of time and may continue to affect adversely the value and liquidity of each Fund’s investments. As a result, current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at iShares.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are redeemed or sold in the market. Performance for certain funds may reflect a waiver of a portion of investment advisory fees. Without such a waiver, performance would have been lower.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. Beginning August 10, 2020, the price used to calculate market return (“Market Price”) is the closing price. Prior to August 10, 2020, Market Price was determined using the midpoint between the highest bid and the lowest ask on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of a fund may not trade in the secondary market until after the fund’s inception, for the period from inception to the first day of secondary market trading in shares of the fund, the NAV of the fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower.
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.
A B O U T F U N D P E R F O R M A N C E / D I S C L O S U R E O F E X P E N S E S |
9 |
Schedule of Investments July 31, 2023 |
iShares® China Large-Cap ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks |
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Automobiles — 6.3% | ||||||||
BYD Co. Ltd., Class H |
5,717,000 | $ | 203,628,219 | |||||
Great Wall Motor Co. Ltd., Class H(a) |
13,759,000 | 18,826,502 | ||||||
Li Auto Inc.(b) |
6,262,700 | 134,441,509 | ||||||
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356,896,230 | ||||||||
Banks — 16.8% | ||||||||
Agricultural Bank of China Ltd., Class H |
181,959,000 | 66,186,679 | ||||||
Bank of China Ltd., Class H |
446,774,000 | 165,707,502 | ||||||
Bank of Communications Co. Ltd., Class H |
43,088,200 | 26,030,888 | ||||||
China CITIC Bank Corp. Ltd., Class H |
55,128,000 | 26,659,597 | ||||||
China Construction Bank Corp., Class H |
510,765,320 | 297,703,898 | ||||||
China Everbright Bank Co. Ltd., Class H |
18,256,000 | 5,438,640 | ||||||
China Merchants Bank Co. Ltd., Class H |
22,400,938 | 111,393,813 | ||||||
China Minsheng Banking Corp. Ltd., Class H |
37,837,100 | 14,422,175 | ||||||
Industrial & Commercial Bank of China Ltd., Class H |
424,227,995 | 207,162,178 | ||||||
Postal Savings Bank of China Co. Ltd., Class H(c) |
55,421,000 | 34,166,898 | ||||||
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954,872,268 | ||||||||
Beverages — 2.1% | ||||||||
China Resources Beer Holdings Co. Ltd. |
9,312,000 | 59,996,009 | ||||||
Nongfu Spring Co. Ltd., Class H(a)(c) |
10,328,400 | 60,219,042 | ||||||
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120,215,051 | ||||||||
Capital Markets — 0.9% | ||||||||
China International Capital Corp. Ltd., Class H(c) |
8,745,200 | 19,354,315 | ||||||
CITIC Securities Co. Ltd., Class H |
13,288,700 | 28,622,954 | ||||||
CSC Financial Co. Ltd., Class H(c) |
5,320,000 | 6,298,109 | ||||||
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54,275,378 | ||||||||
Construction & Engineering — 0.3% | ||||||||
China Railway Group Ltd., Class H |
24,002,000 | 15,780,374 | ||||||
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Construction Materials — 0.4% | ||||||||
Anhui Conch Cement Co. Ltd., Class H |
7,002,500 | 21,139,809 | ||||||
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Entertainment — 4.0% | ||||||||
NetEase Inc. |
10,469,500 | 228,029,090 | ||||||
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Consumer Staples Distribution & Retail — 0.8% | ||||||||
JD Health International Inc.(b)(c) |
6,100,100 | 44,593,524 | ||||||
|
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Hotels, Restaurants & Leisure — 12.3% | ||||||||
Meituan, Class B(b)(c) |
28,971,620 | 553,071,573 | ||||||
Yum China Holdings Inc. |
2,391,800 | 147,287,696 | ||||||
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700,359,269 | ||||||||
Household Durables — 0.8% | ||||||||
Haier Smart Home Co. Ltd., Class H |
13,706,200 | 45,072,695 | ||||||
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Industrial Conglomerates — 0.6% | ||||||||
CITIC Ltd. |
29,028,000 | 32,767,516 | ||||||
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Insurance — 7.6% | ||||||||
China Life Insurance Co. Ltd., Class H |
44,048,000 | 77,331,110 | ||||||
China Pacific Insurance Group Co. Ltd., Class H |
15,261,000 | 41,142,436 | ||||||
People’s Insurance Co. Group of China Ltd. (The), Class H |
48,492,000 | 18,668,876 | ||||||
PICC Property & Casualty Co. Ltd., Class H |
39,856,000 | 46,748,029 | ||||||
Ping An Insurance Group Co. of China Ltd., Class H |
33,862,500 | 246,747,122 | ||||||
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430,637,573 | ||||||||
Interactive Media & Services — 15.5% | ||||||||
Baidu Inc.(b) |
12,470,800 | 243,813,953 | ||||||
Kuaishou Technology(b)(c) |
15,480,100 | 135,863,333 |
Security | Shares | Value | ||||||
Interactive Media & Services (continued) | ||||||||
Tencent Holdings Ltd. |
10,959,200 | $ | 503,697,114 | |||||
|
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883,374,400 | ||||||||
Life Sciences Tools & Services — 2.5% | ||||||||
WuXi AppTec Co. Ltd., Class H(c) |
2,040,452 | 19,409,621 | ||||||
Wuxi Biologics Cayman Inc.(b)(c) |
21,038,000 | 121,405,999 | ||||||
|
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140,815,620 | ||||||||
Machinery — 0.2% | ||||||||
CRRC Corp. Ltd., Class H |
23,746,000 | 13,105,613 | ||||||
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Marine Transportation — 0.3% | ||||||||
COSCO SHIPPING Holdings Co. Ltd., Class H |
18,108,100 | 19,165,834 | ||||||
|
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Metals & Mining — 1.0% | ||||||||
Zijin Mining Group Co. Ltd., Class H |
33,970,000 | 58,670,422 | ||||||
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|
|||||||
Broadline Retail — 14.5% | ||||||||
Alibaba Group Holding Ltd.(b) |
43,889,100 | 560,875,364 | ||||||
JD.com Inc., Class A |
12,932,750 | 267,754,168 | ||||||
|
|
|||||||
828,629,532 | ||||||||
Oil, Gas & Consumable Fuels — 4.1% | ||||||||
China Petroleum & Chemical Corp., Class H |
146,690,600 | 82,152,021 | ||||||
China Shenhua Energy Co. Ltd., Class H |
19,993,000 | 59,926,842 | ||||||
PetroChina Co. Ltd., Class H |
123,170,000 | 90,312,738 | ||||||
|
|
|||||||
232,391,601 | ||||||||
Real Estate Management & Development — 2.6% | ||||||||
China Overseas Land & Investment Ltd. |
22,670,500 | 53,778,252 | ||||||
China Resources Land Ltd. |
16,289,333 | 76,009,720 | ||||||
China Vanke Co. Ltd., Class H |
13,032,200 | 18,471,194 | ||||||
|
|
|||||||
148,259,166 | ||||||||
Specialty Retail — 0.2% | ||||||||
China
Tourism Group Duty Free Corp. |
642,600 | 10,322,845 | ||||||
|
|
|||||||
Technology Hardware, Storage & Peripherals — 2.4% | ||||||||
Xiaomi Corp., Class B(b)(c) |
86,711,000 | 137,946,884 | ||||||
|
|
|||||||
Textiles, Apparel & Luxury Goods — 1.5% | ||||||||
ANTA Sports Products Ltd. |
7,413,800 | 87,860,298 | ||||||
|
|
|||||||
Total
Long-Term Investments — 97.7% |
5,565,180,992 | |||||||
|
|
|||||||
Short-Term Securities | ||||||||
Money Market Funds — 0.4% | ||||||||
BlackRock Cash Funds: Institutional, SL Agency Shares, 5.42%(d)(e)(f) |
12,271,954 | 12,275,636 | ||||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 5.22%(d)(e) |
8,890,000 | 8,890,000 | ||||||
|
|
|||||||
Total
Short-Term Securities — 0.4% |
21,165,636 | |||||||
|
|
|||||||
Total
Investments — 98.1% |
5,586,346,628 | |||||||
Other Assets Less Liabilities — 1.9% |
106,444,719 | |||||||
|
|
|||||||
Net Assets — 100.0% |
$ | 5,692,791,347 | ||||||
|
|
(a) |
All or a portion of this security is on loan. |
(b) |
Non-income producing security. |
(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. |
10 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (continued) July 31, 2023 |
iShares® China Large-Cap ETF |
(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 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 |
$ | 53,497,119 | $ | — | $ | (41,228,881 | )(a) | $ | 5,682 | $ | 1,716 | $ | 12,275,636 | 12,271,954 | $ | 350,872 | (b) | $ | — | |||||||||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares |
2,890,000 | 6,000,000 | (a) | — | — | — | 8,890,000 | 8,890,000 | 192,234 | 2 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
$ | 5,682 | $ | 1,716 | $ | 21,165,636 | $ | 543,106 | $ | 2 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(a) |
Represents net amount purchased (sold). |
(b) |
All or a portion represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities. |
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
|
||||||||||||||||
Description |
|
Number of Contracts |
|
|
Expiration Date |
|
|
Notional Amount (000) |
|
|
Value/ Unrealized Appreciation (Depreciation) |
| ||||
|
||||||||||||||||
Long Contracts |
||||||||||||||||
FTSE China A50 |
4,636 | 08/30/23 | $ | 126,215 | $ | 7,134,202 | ||||||||||
|
|
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 |
||||||||||||||||||||||||||||
Futures contracts |
||||||||||||||||||||||||||||
Unrealized appreciation on futures contracts(a) |
$ | — | $ | — | $ | 7,134,202 | $ | — | $ | — | $ | — | $ | 7,134,202 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Net cumulative unrealized appreciation (depreciation) on futures contracts are reported in the Schedule of Investments. In the Statements of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss). |
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 |
| |||||||||||||||||||||||||||
Futures contracts |
$ | — | $ | — | $ | (9,275,558 | ) | $ | — | $ | — | $ | — | $ | (9,275,558 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on |
||||||||||||||||||||||||||||
Futures contracts |
$ | — | $ | — | $ | 18,431,138 | $ | — | $ | — | $ | — | $ | 18,431,138 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
S C H E D U L E O F I N V E S T M E N T S |
11 |
Schedule of Investments (continued) July 31, 2023 |
iShares® China Large-Cap ETF |
Average Quarterly Balances of Outstanding Derivative Financial Instruments
|
||||
Futures contracts: |
||||
Average notional value of contracts — long |
$ | 37,875,307 | ||
|
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of financial instruments. For a description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, refer to the Notes to Financial Statements.
The following table summarizes the Fund’s financial instruments categorized in the fair value hierarchy. The breakdown of the Fund’s financial instruments into major categories is disclosed in the Schedule of Investments above.
|
||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
|
||||||||||||||||
Assets |
||||||||||||||||
Investments |
||||||||||||||||
Long-Term Investments |
||||||||||||||||
Common Stocks |
$ | — | $ | 5,565,180,992 | $ | — | $ | 5,565,180,992 | ||||||||
Short-Term Securities |
||||||||||||||||
Money Market Funds |
21,165,636 | — | — | 21,165,636 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 21,165,636 | $ | 5,565,180,992 | $ | — | $ | 5,586,346,628 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Derivative Financial Instruments(a) |
||||||||||||||||
Assets |
||||||||||||||||
Equity Contracts |
$ | — | $ | 7,134,202 | $ | — | $ | 7,134,202 | ||||||||
|
|
|
|
|
|
|
|
(a) |
Derivative financial instruments are futures contracts. Futures contracts are valued at the unrealized appreciation (depreciation) on the instrument. |
See notes to financial statements.
12 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
July 31, 2023 |
iShares® MSCI China A ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Common Stocks |
||||||||
Aerospace & Defense — 0.5% | ||||||||
AECC Aero-Engine Control Co. Ltd., Class A |
63,398 | $ | 205,837 | |||||
AECC Aviation Power Co. Ltd., Class A |
148,198 | 839,424 | ||||||
AVICOPTER PLC, Class A |
42,299 | 240,926 | ||||||
Kuang-Chi Technologies Co. Ltd., Class A |
127,340 | 267,513 | ||||||
|
|
|||||||
1,553,700 | ||||||||
Air Freight & Logistics — 0.8% | ||||||||
SF Holding Co. Ltd., Class A |
274,815 | 1,915,624 | ||||||
YTO Express Group Co. Ltd., Class A |
189,900 | 418,224 | ||||||
Yunda Holding Co. Ltd., Class A |
169,200 | 246,227 | ||||||
|
|
|||||||
2,580,075 | ||||||||
Passenger Airlines — 1.0% | ||||||||
Air China Ltd., Class A(a) |
443,100 | 580,434 | ||||||
China Eastern Airlines Corp. Ltd., Class A(a) |
699,900 | 479,496 | ||||||
China Southern Airlines Co. Ltd., Class A(a) |
657,324 | 644,161 | ||||||
Hainan Airlines Holding Co. Ltd. |
2,467,000 | 577,001 | ||||||
Juneyao Airlines Co. Ltd., Class A(a) |
126,600 | 322,858 | ||||||
Spring Airlines Co. Ltd., Class A(a) |
62,800 | 538,280 | ||||||
|
|
|||||||
3,142,230 | ||||||||
Automobile Components — 1.3% | ||||||||
Bethel Automotive Safety Systems Co. Ltd. |
21,100 | 267,559 | ||||||
Changzhou Xingyu Automotive Lighting Systems Co. Ltd., Class A |
21,197 | 424,795 | ||||||
Fuyao Glass Industry Group Co. Ltd., Class A |
105,500 | 560,010 | ||||||
Huayu Automotive Systems Co. Ltd., Class A |
169,600 | 468,925 | ||||||
Huizhou Desay Sv Automotive Co. Ltd., Class A |
36,000 | 784,888 | ||||||
Ningbo Joyson Electronic Corp., Class A |
84,800 | 226,159 | ||||||
Ningbo Tuopu Group Co. Ltd., Class A |
66,805 | 687,734 | ||||||
Sailun Group Co. Ltd., Class A |
168,800 | 265,941 | ||||||
Shandong Linglong Tyre Co. Ltd., Class A |
84,800 | 286,049 | ||||||
Shenzhen Kedali Industry Co. Ltd., Class A |
18,600 | 331,184 | ||||||
|
|
|||||||
4,303,244 | ||||||||
Automobiles — 2.3% | ||||||||
AIMA Technology Group Co. Ltd. |
41,900 | 200,241 | ||||||
BYD Co. Ltd., Class A |
102,573 | 3,915,246 | ||||||
Chongqing Changan Automobile Co. Ltd., Class A |
466,838 | 1,049,962 | ||||||
Great Wall Motor Co. Ltd., Class A |
147,789 | 612,897 | ||||||
Guangzhou Automobile Group Co. Ltd., Class A |
274,300 | 449,992 | ||||||
SAIC Motor Corp. Ltd., Class A |
443,506 | 962,698 | ||||||
Seres Group Co. Ltd., NVS |
83,700 | 531,454 | ||||||
|
|
|||||||
7,722,490 | ||||||||
Banks — 9.8% | ||||||||
Agricultural Bank of China Ltd., Class A |
4,879,100 | 2,472,162 | ||||||
Bank of Beijing Co. Ltd., Class A |
1,251,900 | 818,222 | ||||||
Bank of Changsha Co. Ltd., Class A |
232,100 | 267,268 | ||||||
Bank of Chengdu Co. Ltd., Class A |
211,077 | 418,318 | ||||||
Bank of China Ltd., Class A |
2,012,100 | 1,101,346 | ||||||
Bank of Communications Co. Ltd., Class A |
2,260,102 | 1,841,917 | ||||||
Bank of Hangzhou Co. Ltd., Class A |
338,088 | 580,799 | ||||||
Bank of Jiangsu Co. Ltd., Class A |
841,100 | 850,750 | ||||||
Bank of Nanjing Co. Ltd., Class A |
592,080 | 710,703 | ||||||
Bank of Ningbo Co. Ltd., Class A |
383,921 | 1,566,916 | ||||||
Bank of Shanghai Co. Ltd., Class A |
838,669 | 724,224 | ||||||
Bank of Suzhou Co. Ltd. |
211,000 | 210,937 | ||||||
China Construction Bank Corp., Class A |
564,400 | 486,913 | ||||||
China Everbright Bank Co. Ltd., Class A |
2,679,700 | 1,170,726 | ||||||
China Merchants Bank Co. Ltd., Class A |
1,169,602 | 5,836,811 | ||||||
China Minsheng Banking Corp. Ltd., Class A |
2,046,780 | 1,151,304 |
Security | Shares | Value | ||||||
Banks (continued) | ||||||||
China Zheshang Bank Co. Ltd., Class A |
1,285,700 | $ | 500,550 | |||||
Chongqing Rural Commercial Bank Co. Ltd., Class A |
573,830 | 315,740 | ||||||
Huaxia Bank Co. Ltd., Class A |
767,860 | 623,460 | ||||||
Industrial & Commercial Bank of China Ltd., Class A |
3,631,800 | 2,425,119 | ||||||
Industrial Bank Co. Ltd., Class A |
1,187,147 | 2,771,140 | ||||||
Ping An Bank Co. Ltd., Class A |
1,118,356 | 1,931,340 | ||||||
Postal Savings Bank of China Co. Ltd., Class A |
1,669,700 | 1,214,390 | ||||||
Shanghai Pudong Development Bank Co. Ltd., Class A |
1,697,120 | 1,807,255 | ||||||
Shanghai Rural Commercial Bank Co. Ltd. |
569,700 | 470,508 | ||||||
|
|
|||||||
32,268,818 | ||||||||
Beverages — 11.1% | ||||||||
Anhui Gujing Distillery Co. Ltd., Class A |
24,199 | 921,577 | ||||||
Anhui Kouzi Distillery Co. Ltd., Class A |
29,800 | 254,441 | ||||||
Anhui Yingjia Distillery Co. Ltd., Class A |
42,200 | 412,959 | ||||||
Beijing Yanjing Brewery Co. Ltd., Class A |
147,700 | 233,739 | ||||||
Chongqing Brewery Co. Ltd., Class A |
29,095 | 370,315 | ||||||
Hebei Hengshui Laobaigan Liquor Co. Ltd. |
41,900 | 166,435 | ||||||
Jiangsu King’s Luck Brewery JSC Ltd., Class A |
80,140 | 686,599 | ||||||
Jiangsu Yanghe Brewery Joint-Stock Co. Ltd., Class A |
87,800 | 1,802,938 | ||||||
JiuGui Liquor Co. Ltd., Class A |
21,100 | 311,208 | ||||||
Kweichow Moutai Co. Ltd., Class A |
71,789 | 18,946,857 | ||||||
Luzhou Laojiao Co. Ltd., Class A |
83,100 | 2,808,956 | ||||||
Shanghai Bairun Investment Holding Group Co. Ltd., Class A(a) |
66,488 | 344,472 | ||||||
Shanxi Xinghuacun Fen Wine Factory Co. Ltd., Class A |
68,801 | 2,303,419 | ||||||
Shede Spirits Co. Ltd. |
21,000 | 455,172 | ||||||
Sichuan Swellfun Co. Ltd., Class A |
32,100 | 339,151 | ||||||
Tsingtao Brewery Co. Ltd., Class A |
47,800 | 660,971 | ||||||
Wuliangye Yibin Co. Ltd., Class A |
219,714 | 5,580,539 | ||||||
|
|
|||||||
36,599,748 | ||||||||
Biotechnology — 1.4% | ||||||||
Beijing Tiantan Biological Products Corp. Ltd., Class A |
83,700 | 293,002 | ||||||
Beijing Wantai Biological Pharmacy Enterprise Co. Ltd., Class A |
53,637 | 520,727 | ||||||
BGI Genomics Co. Ltd., Class A |
26,700 | 224,516 | ||||||
Bloomage Biotechnology Corp. Ltd. |
26,330 | 359,697 | ||||||
Chongqing Zhifei Biological Products Co. Ltd., Class A |
138,900 | 908,319 | ||||||
Daan Gene Co. Ltd., Class A |
84,444 | 119,735 | ||||||
Hualan Biological Engineering Inc., Class A |
106,748 | 344,250 | ||||||
Imeik Technology Development Co. Ltd., Class A |
12,800 | 853,621 | ||||||
Shanghai Junshi Biosciences Co. Ltd., Class A(a) |
42,868 | 244,530 | ||||||
Shanghai RAAS Blood Products Co. Ltd., Class A |
358,700 | 358,224 | ||||||
Shenzhen Kangtai Biological Products Co. Ltd., Class A(a) |
54,156 | 222,187 | ||||||
Walvax Biotechnology Co. Ltd., Class A |
84,498 | 321,207 | ||||||
|
|
|||||||
4,770,015 | ||||||||
Building Products — 0.3% | ||||||||
Beijing New Building Materials PLC, Class A |
84,800 | 336,390 | ||||||
Guangdong Kinlong Hardware Products Co. Ltd., Class A |
21,120 | 191,188 | ||||||
Zhejiang Weixing New Building Materials Co. Ltd., Class A |
84,404 | 256,336 | ||||||
Zhuzhou Kibing Group Co. Ltd., Class A |
152,800 | 196,035 | ||||||
|
|
|||||||
979,949 | ||||||||
Capital Markets — 6.2% | ||||||||
BOC International China Co. Ltd., Class A |
147,700 | 234,830 | ||||||
Caitong Securities Co. Ltd., Class A |
253,251 | 295,949 | ||||||
Changjiang Securities Co. Ltd., Class A |
338,000 | 315,746 | ||||||
China Galaxy Securities Co. Ltd., Class A |
253,600 | 483,099 |
S C H E D U L E O F I N V E S T M E N T S |
13 |
Schedule of Investments (continued) July 31, 2023 |
iShares® MSCI China A ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Capital Markets (continued) | ||||||||
China Great Wall Securities Co. Ltd., Class A |
211,400 | $ | 263,368 | |||||
China International Capital Corp. Ltd., Class A |
106,700 | 597,222 | ||||||
China Merchants Securities Co. Ltd., Class A |
422,007 | 884,782 | ||||||
CITIC Securities Co. Ltd., Class A |
696,370 | 2,353,380 | ||||||
CSC Financial Co. Ltd., Class A |
253,639 | 945,731 | ||||||
Dongxing Securities Co. Ltd., Class A |
189,939 | 242,320 | ||||||
East Money Information Co. Ltd., Class A |
894,139 | 2,017,426 | ||||||
Everbright Securities Co. Ltd., Class A |
211,400 | 543,520 | ||||||
First Capital Securities Co. Ltd., Class A |
253,200 | 223,405 | ||||||
Founder Securities Co. Ltd., Class A |
439,000 | 445,519 | ||||||
GF Securities Co. Ltd., Class A |
338,000 | 776,063 | ||||||
Guangzhou Yuexiu Financial Holdings Group Co. Ltd., Class A |
237,891 | 248,320 | ||||||
Guolian Securities Co. Ltd., Class A(a) |
147,700 | 210,836 | ||||||
Guosen Securities Co. Ltd., Class A |
394,100 | 534,933 | ||||||
Guotai Junan Securities Co. Ltd., Class A |
422,445 | 922,267 | ||||||
Guoyuan Securities Co. Ltd., Class A |
253,644 | 262,284 | ||||||
Haitong Securities Co. Ltd., Class A |
550,200 | 798,041 | ||||||
Hithink RoyalFlush Information Network Co. Ltd., Class A |
32,200 | 853,054 | ||||||
Huatai Securities Co. Ltd., Class A |
423,200 | 1,006,105 | ||||||
Huaxi Securities Co. Ltd., Class A |
148,100 | 191,372 | ||||||
Industrial Securities Co. Ltd., Class A |
488,808 | 477,736 | ||||||
Nanjing Securities Co. Ltd., Class A |
188,200 | 230,316 | ||||||
Orient Securities Co. Ltd., Class A |
414,321 | 627,863 | ||||||
SDIC Capital Co. Ltd., Class A |
344,600 | 380,467 | ||||||
Shanxi Securities Co. Ltd., Class A |
211,457 | 192,762 | ||||||
Shenwan Hongyuan Group Co. Ltd., Class A |
1,289,500 | 910,027 | ||||||
Sinolink Securities Co. Ltd., Class A |
188,200 | 257,202 | ||||||
SooChow Securities Co. Ltd., Class A |
275,138 | 349,431 | ||||||
Southwest Securities Co. Ltd., Class A |
372,300 | 247,289 | ||||||
Western Securities Co. Ltd., Class A |
254,420 | 256,182 | ||||||
Zheshang Securities Co. Ltd., Class A |
211,427 | 321,763 | ||||||
Zhongtai Securities Co. Ltd. |
381,000 | 412,088 | ||||||
|
|
|||||||
20,312,698 | ||||||||
Chemicals — 6.2% | ||||||||
Asia - Potash International Investment Guangzhou Co. Ltd.(a) |
42,200 | 161,794 | ||||||
Chengxin Lithium Group Co. Ltd., Class A |
43,100 | 166,219 | ||||||
CNGR Advanced Material Co. Ltd. |
37,900 | 328,395 | ||||||
CNNC Hua Yuan Titanium Dioxide Co. Ltd., Class A |
215,040 | 183,940 | ||||||
Do-Fluoride New Materials Co. Ltd., Class A |
59,400 | 162,941 | ||||||
Ganfeng Lithium Group Co. Ltd., Class A |
89,270 | 748,738 | ||||||
Guangzhou Tinci Materials Technology Co. Ltd., Class A |
105,520 | 544,520 | ||||||
Hangzhou Oxygen Plant Group Co. Ltd., Class A |
63,300 | 302,083 | ||||||
Haohua Chemical Science & Technology Co. Ltd., NVS |
41,900 | 211,575 | ||||||
Hengli Petrochemical Co. Ltd., Class A(a) |
401,315 | 874,840 | ||||||
Hengyi Petrochemical Co. Ltd., Class A(a) |
211,876 | 216,633 | ||||||
Hoshine Silicon Industry Co. Ltd., Class A |
42,200 | 425,964 | ||||||
Huafon Chemical Co. Ltd., Class A |
253,200 | 263,720 | ||||||
Hubei Feilihua Quartz Glass Co. Ltd. |
21,100 | 117,218 | ||||||
Hubei Xingfa Chemicals Group Co. Ltd., Class A |
56,700 | 191,829 | ||||||
Hunan Changyuan Lico Co. Ltd. |
99,905 | 156,546 | ||||||
Inner Mongolia Junzheng Energy & Chemical Industry Group Co. Ltd., Class A |
465,000 | 291,055 | ||||||
Inner Mongolia Yuan Xing Energy Co. Ltd., Class A |
194,400 | 204,212 | ||||||
Jiangsu Eastern Shenghong Co. Ltd., Class A |
358,700 | 630,946 | ||||||
Jiangsu Yangnong Chemical Co. Ltd., Class A |
27,430 | 272,660 | ||||||
Jiangsu Yoke Technology Co. Ltd., Class A |
36,100 | 344,088 | ||||||
LB Group Co. Ltd., Class A |
126,609 | 337,071 |
Security | Shares | Value | ||||||
Chemicals (continued) | ||||||||
Luxi Chemical Group Co. Ltd., Class A |
105,500 | $ | 156,184 | |||||
Ningbo Shanshan Co. Ltd. |
126,600 | 274,486 | ||||||
Ningxia Baofeng Energy Group Co. Ltd., Class A |
400,900 | 795,700 | ||||||
Qinghai Salt Lake Industry Co. Ltd., Class A(a) |
316,600 | 886,828 | ||||||
Rongsheng Petrochemical Co. Ltd., Class A |
571,301 | 1,017,066 | ||||||
Satellite Chemical Co. Ltd., Class A |
178,177 | 401,960 | ||||||
Shandong Hualu Hengsheng Chemical Co. Ltd., Class A |
127,460 | 603,605 | ||||||
Shanghai Putailai New Energy Technology Co. Ltd., Class A |
114,614 | 632,284 | ||||||
Shenzhen Capchem Technology Co. Ltd., Class A |
52,820 | 360,694 | ||||||
Shenzhen Dynanonic Co. Ltd. |
16,320 | 252,356 | ||||||
Shenzhen Senior Technology Co. Ltd., Class A |
63,317 | 150,698 | ||||||
Sichuan Hebang Biotechnology Co. Ltd., Class A |
485,300 | 177,399 | ||||||
Sichuan Yahua Industrial Group Co. Ltd., Class A |
61,600 | 153,773 | ||||||
Sinoma Science & Technology Co. Ltd., Class A |
84,400 | 273,438 | ||||||
Sinopec Shanghai Petrochemical Co. Ltd., Class A(a) |
443,531 | 201,081 | ||||||
Skshu Paint Co. Ltd., Class A(a) |
34,404 | 394,895 | ||||||
Sunresin New Materials Co. Ltd., NVS |
31,100 | 251,753 | ||||||
SuZhou TA&A Ultra Clean Technology Co. Ltd., Class A |
49,880 | 224,821 | ||||||
Tianqi Lithium Corp., Class A |
91,700 | 856,084 | ||||||
Tongkun Group Co. Ltd., Class A(a) |
127,497 | 266,561 | ||||||
Wanhua Chemical Group Co. Ltd., Class A |
183,700 | 2,518,046 | ||||||
Weihai Guangwei Composites Co. Ltd., Class A |
49,952 | 212,282 | ||||||
Xinjiang Zhongtai Chemical Co. Ltd., Class A |
147,700 | 153,024 | ||||||
Yunnan Energy New Material Co. Ltd., Class A(a) |
53,015 | 717,192 | ||||||
Yunnan Yuntianhua Co. Ltd. |
93,800 | 242,670 | ||||||
Zangge Mining Co. Ltd. |
87,800 | 295,985 | ||||||
Zhejiang Juhua Co. Ltd., Class A |
148,100 | 309,413 | ||||||
Zhejiang Longsheng Group Co. Ltd., Class A |
188,200 | 254,721 | ||||||
Zibo Qixiang Tengda Chemical Co. Ltd., Class A |
165,700 | 153,080 | ||||||
|
|
|||||||
20,325,066 | ||||||||
Commercial Services & Supplies — 0.2% | ||||||||
Shanghai M&G Stationery Inc., Class A |
63,300 | 396,598 | ||||||
Zhejiang Weiming Environment Protection Co. Ltd., Class A |
84,753 | 215,762 | ||||||
|
|
|||||||
612,360 | ||||||||
Communications Equipment — 0.9% | ||||||||
Guangzhou Haige Communications Group Inc. Co., Class A |
126,600 | 176,660 | ||||||
Hengtong Optic-Electric Co. Ltd., Class A |
132,500 | 285,390 | ||||||
Tianjin 712 Communication & Broadcasting Co. Ltd., Class A |
42,600 | 167,672 | ||||||
Yealink Network Technology Corp. Ltd., Class A |
76,077 | 400,735 | ||||||
Zhongji Innolight Co. Ltd., Class A |
42,688 | 765,674 | ||||||
ZTE Corp., Class A |
219,300 | 1,202,928 | ||||||
|
|
|||||||
2,999,059 | ||||||||
Construction & Engineering — 2.1% | ||||||||
China Energy Engineering Corp. Ltd. |
1,942,100 | 666,294 | ||||||
China National Chemical Engineering Co. Ltd., Class A |
337,610 | 410,178 | ||||||
China Railway Group Ltd., Class A |
1,181,600 | 1,330,872 | ||||||
China State Construction Engineering Corp. Ltd., Class A |
2,426,500 | 2,078,260 | ||||||
Metallurgical Corp. of China Ltd., Class A |
1,014,800 | 595,564 | ||||||
Power Construction Corp. of China Ltd., Class A |
991,700 | 833,399 | ||||||
Shanghai Construction Group Co. Ltd., Class A |
570,900 | 237,397 | ||||||
Sichuan Road & Bridge Co. Ltd., Class A |
413,800 | 572,503 | ||||||
Sinoma International Engineering Co. |
146,400 | 276,554 | ||||||
|
|
|||||||
7,001,021 |
14 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (continued) July 31, 2023 |
iShares® MSCI China A ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Construction Materials — 0.6% | ||||||||
Anhui Conch Cement Co. Ltd., Class A |
232,500 | $ | 884,741 | |||||
BBMG Corp., Class A |
569,700 | 192,239 | ||||||
China Jushi Co. Ltd., Class A |
232,450 | 483,400 | ||||||
Huaxin Cement Co. Ltd., Class A |
84,419 | 164,708 | ||||||
Tangshan Jidong Cement Co. Ltd., Class A |
168,800 | 193,121 | ||||||
|
|
|||||||
1,918,209 | ||||||||
Containers & Packaging — 0.0% | ||||||||
Shenzhen YUTO Packaging Technology Co. Ltd. |
42,200 | 152,062 | ||||||
|
|
|||||||
Distributors — 0.1% | ||||||||
Wuchan Zhongda Group Co. Ltd., Class A |
295,814 | 212,515 | ||||||
|
|
|||||||
Diversified Consumer Services — 0.1% | ||||||||
Offcn Education Technology Co. Ltd., Class A(a) |
345,100 | 221,460 | ||||||
|
|
|||||||
Financial Services — 0.1% | ||||||||
AVIC Industry-Finance Holdings Co. Ltd., Class A |
506,401 | 291,705 | ||||||
|
|
|||||||
Electrical Equipment — 6.1% | ||||||||
Beijing Easpring Material Technology Co. Ltd., Class A |
42,200 | 291,899 | ||||||
Contemporary Amperex Technology Co. Ltd., Class A |
249,491 | 8,317,279 | ||||||
Dajin Heavy Industry Co. Ltd. |
42,200 | 179,086 | ||||||
Dongfang Electric Corp. Ltd., Class A |
148,190 | 399,420 | ||||||
Eve Energy Co. Ltd., Class A |
106,682 | 885,834 | ||||||
Fangda Carbon New Material Co. Ltd., Class A(a) |
211,428 | 183,573 | ||||||
Ginlong Technologies Co. Ltd., Class A |
25,200 | 333,869 | ||||||
Goldwind Science & Technology Co. Ltd., Class A |
187,651 | 294,294 | ||||||
Gotion High-tech Co. Ltd., Class A(a) |
107,000 | 412,855 | ||||||
Guangzhou Great Power Energy & Technology Co. Ltd.(a) |
42,200 | 277,483 | ||||||
Hongfa Technology Co. Ltd., Class A |
28,900 | 140,495 | ||||||
Hoymiles Power Electronics Inc., NVS |
4,609 | 210,934 | ||||||
Jiangsu GoodWe Power Supply Technology Co. Ltd., NVS |
9,472 | 219,873 | ||||||
Jiangsu Zhongtian Technology Co. Ltd., Class A |
190,300 | 419,461 | ||||||
Jiangxi Special Electric Motor Co. Ltd., NVS(a) |
105,500 | 173,330 | ||||||
Ming Yang Smart Energy Group Ltd., Class A |
120,100 | 303,497 | ||||||
NARI Technology Co. Ltd., Class A |
463,888 | 1,579,749 | ||||||
Ningbo Orient Wires & Cables Co. Ltd. |
42,200 | 274,719 | ||||||
Ningbo Ronbay New Energy Technology Co. Ltd. |
24,541 | 172,655 | ||||||
Pylon Technologies Co. Ltd., NVS |
9,825 | 244,031 | ||||||
Shanghai Electric Group Co. Ltd., Class A(a) |
761,250 | 508,422 | ||||||
Shenzhen Kstar Science & Technology Co. Ltd. |
45,500 | 213,899 | ||||||
Sieyuan Electric Co. Ltd. |
43,000 | 294,991 | ||||||
Sungrow Power Supply Co. Ltd., Class A |
88,700 | 1,386,022 | ||||||
Sunwoda Electronic Co. Ltd., Class A |
105,599 | 243,337 | ||||||
Suzhou Maxwell Technologies Co. Ltd., Class A |
16,256 | 419,038 | ||||||
TBEA Co. Ltd., Class A |
274,820 | 631,008 | ||||||
Titan Wind Energy Suzhou Co. Ltd., Class A(a) |
106,300 | 212,207 | ||||||
Zhefu Holding Group Co. Ltd., Class A |
300,600 | 180,928 | ||||||
Zhejiang Chint Electrics Co. Ltd., Class A |
126,600 | 502,399 | ||||||
|
|
|||||||
19,906,587 | ||||||||
Electronic Equipment, Instruments & Components — 4.4% | ||||||||
Avary Holding Shenzhen Co. Ltd., Class A |
114,500 | 392,811 | ||||||
BOE Technology Group Co. Ltd., Class A |
2,092,128 | 1,239,514 | ||||||
Chaozhou Three-Circle Group Co. Ltd., Class A |
105,900 | 481,950 | ||||||
China Railway Signal & Communication Corp. Ltd., Class A |
428,781 | 360,382 | ||||||
China Zhenhua Group Science & Technology Co. Ltd., Class A |
35,200 | 440,392 | ||||||
Foxconn Industrial Internet Co. Ltd., Class A |
569,706 | 1,784,033 |
Security | Shares | Value | ||||||
Electronic Equipment, Instruments & Components (continued) | ||||||||
GoerTek Inc., Class A |
190,704 | $ | 478,115 | |||||
Guangzhou Shiyuan Electronic Technology Co. Ltd., Class A |
42,867 | 370,602 | ||||||
Hengdian Group DMEGC Magnetics Co. Ltd. |
84,400 | 205,889 | ||||||
Huagong Tech Co. Ltd., Class A |
62,800 | 316,296 | ||||||
Lens Technology Co. Ltd., Class A |
274,700 | 475,623 | ||||||
Lingyi iTech Guangdong Co., Class A |
381,800 | 328,668 | ||||||
Luxshare Precision Industry Co. Ltd., Class A |
402,168 | 1,821,941 | ||||||
Maxscend Microelectronics Co. Ltd., Class A |
34,556 | 582,903 | ||||||
Raytron Technology Co. Ltd., Class A |
25,496 | 165,534 | ||||||
Shanghai Friendess Electronic Technology Corp. Ltd., Class A |
7,914 | 246,761 | ||||||
Shengyi Technology Co. Ltd., Class A |
127,082 | 283,519 | ||||||
Shennan Circuits Co. Ltd., Class A |
30,767 | 329,738 | ||||||
Shenzhen Kaifa Technology Co. Ltd., Class A |
83,700 | 228,097 | ||||||
Shenzhen SED Industry Co. Ltd., NVS |
41,900 | 176,016 | ||||||
Shenzhen Sunlord Electronics Co. Ltd., Class A |
39,200 | 149,460 | ||||||
Suzhou Dongshan Precision Manufacturing Co. Ltd., Class A |
91,300 | 287,081 | ||||||
Tianma Microelectronics Co. Ltd., Class A(a) |
148,500 | 194,805 | ||||||
Unisplendour Corp. Ltd., Class A |
150,791 | 576,369 | ||||||
Universal Scientific Industrial Shanghai Co. Ltd., Class A |
104,600 | 211,747 | ||||||
Westone Information Industry Inc., Class A |
45,300 | 168,923 | ||||||
Wingtech Technology Co. Ltd., Class A |
69,211 | 450,830 | ||||||
Wuhan Guide Infrared Co. Ltd., Class A |
210,004 | 241,626 | ||||||
WUS Printed Circuit Kunshan Co. Ltd., Class A |
105,590 | 324,326 | ||||||
Xiamen Faratronic Co. Ltd. |
15,800 | 298,233 | ||||||
Zhejiang Dahua Technology Co. Ltd., Class A |
192,400 | 591,599 | ||||||
Zhejiang Supcon Technology Co. Ltd. |
40,998 | 310,717 | ||||||
|
|
|||||||
14,514,500 | ||||||||
Energy Equipment & Services — 0.1% | ||||||||
Offshore Oil Engineering Co. Ltd., Class A |
254,868 | 223,601 | ||||||
Yantai Jereh Oilfield Services Group Co. Ltd., Class A |
63,385 | 248,645 | ||||||
|
|
|||||||
472,246 | ||||||||
Entertainment — 0.9% | ||||||||
37 Interactive Entertainment Network Technology Group Co. Ltd., Class A |
126,693 | 477,217 | ||||||
Beijing Enlight Media Co. Ltd., Class A |
168,800 | 198,125 | ||||||
G-Bits Network Technology Xiamen Co. Ltd., Class A |
5,500 | 331,804 | ||||||
Giant Network Group Co. Ltd., Class A |
104,600 | 207,953 | ||||||
Kunlun Tech Co. Ltd., Class A(a) |
62,800 | 325,945 | ||||||
Mango Excellent Media Co. Ltd., Class A |
107,680 | 518,350 | ||||||
Perfect World Co. Ltd., Class A |
105,552 | 221,915 | ||||||
Wanda Film Holding Co. Ltd., Class A(a) |
128,600 | 260,745 | ||||||
Zhejiang Century Huatong Group Co. Ltd., Class A(a) |
422,882 | 312,978 | ||||||
|
|
|||||||
2,855,032 | ||||||||
Consumer Staples Distribution & Retail — 0.2% | ||||||||
DaShenLin Pharmaceutical Group Co. Ltd., Class A |
65,131 | 253,737 | ||||||
Yifeng Pharmacy Chain Co. Ltd., Class A |
59,183 | 314,981 | ||||||
Yonghui Superstores Co. Ltd., Class A(a) |
522,600 | 256,221 | ||||||
|
|
|||||||
824,939 | ||||||||
Food Products — 3.4% | ||||||||
Angel Yeast Co. Ltd., Class A |
46,096 | 239,263 | ||||||
Anjoy Foods Group Co. Ltd., Class A |
19,300 | 417,396 | ||||||
Beijing Dabeinong Technology Group Co. Ltd., Class A |
232,500 | 230,464 | ||||||
Chongqing Fuling Zhacai Group Co. Ltd., Class A |
55,100 | 145,629 | ||||||
Foshan Haitian Flavouring & Food Co. Ltd., Class A |
274,379 | 1,781,815 | ||||||
Fujian Sunner Development Co. Ltd., Class A |
63,300 | 189,483 |
S C H E D U L E O F I N V E S T M E N T S |
15 |
Schedule of Investments (continued) July 31, 2023 |
iShares® MSCI China A ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Food Products (continued) | ||||||||
Guangdong Haid Group Co. Ltd., Class A |
105,599 | $ | 744,389 | |||||
Hebei Yangyuan Zhihui Beverage Co. Ltd., Class A |
62,800 | 232,963 | ||||||
Heilongjiang Agriculture Co. Ltd., Class A |
105,900 | 217,703 | ||||||
Henan Shuanghui Investment & Development Co. Ltd., Class A |
190,300 | 672,715 | ||||||
Inner Mongolia Yili Industrial Group Co. Ltd., Class A |
359,500 | 1,443,896 | ||||||
Jonjee Hi-Tech Industrial And Commercial Holding Co. Ltd., Class A(a) |
37,462 | 183,987 | ||||||
Juewei Food Co. Ltd., Class A |
42,200 | 226,821 | ||||||
Meihua Holdings Group Co. Ltd. |
170,900 | 222,217 | ||||||
Muyuan Foods Co. Ltd., Class A |
316,919 | 1,971,075 | ||||||
New Hope Liuhe Co. Ltd., Class A(a) |
267,400 | 468,062 | ||||||
Toly Bread Co. Ltd., Class A |
89,938 | 132,966 | ||||||
Wens Foodstuffs Group Co. Ltd., Class A |
381,446 | 1,015,169 | ||||||
Yihai Kerry Arawana Holdings Co. Ltd., Class A |
85,200 | 502,341 | ||||||
Yuan Longping High-Tech Agriculture Co. Ltd., Class A(a) |
84,400 | 192,963 | ||||||
|
|
|||||||
11,231,317 | ||||||||
Gas Utilities — 0.1% | ||||||||
ENN Natural Gas Co. Ltd., Class A |
148,900 | 383,312 | ||||||
|
|
|||||||
Health Care Equipment & Supplies — 1.4% | ||||||||
Autobio Diagnostics Co. Ltd., Class A |
43,200 | 338,815 | ||||||
iRay Technology Co. Ltd. |
5,716 | 200,957 | ||||||
Jafron Biomedical Co. Ltd., Class A |
38,450 | 127,541 | ||||||
Jiangsu Yuyue Medical Equipment & Supply Co. Ltd., Class A |
63,700 | 301,235 | ||||||
Lepu Medical Technology Beijing Co. Ltd., Class A |
105,900 | 308,645 | ||||||
Ovctek China Inc., Class A |
43,480 | 207,264 | ||||||
Shenzhen Mindray Bio-Medical Electronics Co. Ltd., Class A |
68,434 | 2,839,757 | ||||||
Shenzhen New Industries Biomedical Engineering Co. Ltd., Class A |
42,200 | 334,171 | ||||||
|
|
|||||||
4,658,385 | ||||||||
Health Care Providers & Services — 1.3% | ||||||||
Aier Eye Hospital Group Co. Ltd., Class A |
529,281 | 1,493,388 | ||||||
China Meheco Co. Ltd., Class A |
90,520 | 166,754 | ||||||
China National Medicines Corp. Ltd., Class A |
41,900 | 195,266 | ||||||
Guangzhou Baiyunshan Pharmaceutical Holdings Co. Ltd., Class A |
84,800 | 378,389 | ||||||
Guangzhou Kingmed Diagnostics Group Co. Ltd., Class A |
32,097 | 323,868 | ||||||
Huadong Medicine Co. Ltd., Class A |
105,925 | 644,342 | ||||||
Jointown Pharmaceutical Group Co. Ltd., Class A |
170,651 | 236,604 | ||||||
Meinian Onehealth Healthcare Holdings Co. Ltd., Class A(a) |
211,360 | 213,994 | ||||||
Shanghai Pharmaceuticals Holding Co. Ltd., Class A |
148,109 | 416,974 | ||||||
Topchoice Medical Corp., Class A(a) |
21,100 | 341,159 | ||||||
|
|
|||||||
4,410,738 | ||||||||
Hotels, Restaurants & Leisure — 0.2% | ||||||||
BTG Hotels Group Co. Ltd., Class A(a) |
63,300 | 186,461 | ||||||
Shanghai Jinjiang International Hotels Co. Ltd., Class A |
48,200 | 336,269 | ||||||
Songcheng Performance Development Co. Ltd., Class A |
147,772 | 277,593 | ||||||
|
|
|||||||
800,323 | ||||||||
Household Durables — 1.5% | ||||||||
Beijing Roborock Technology Co. Ltd., Class A |
7,165 | 276,940 | ||||||
Ecovacs Robotics Co. Ltd., Class A |
39,300 | 435,416 | ||||||
Gree Electric Appliances Inc. of Zhuhai, Class A |
172,700 | 937,754 | ||||||
Haier Smart Home Co. Ltd., Class A |
359,500 | 1,244,990 |
Security | Shares | Value | ||||||
Household Durables (continued) | ||||||||
Hangzhou Robam Appliances Co. Ltd., Class A |
42,264 | $ | 172,759 | |||||
Jason Furniture Hangzhou Co. Ltd., Class A(a) |
61,220 | 388,588 | ||||||
Oppein Home Group Inc., Class A |
29,983 | 451,687 | ||||||
TCL Technology Group Corp., Class A(a) |
1,031,081 | 619,633 | ||||||
Zhejiang Supor Co. Ltd., Class A |
46,098 | 322,833 | ||||||
|
|
|||||||
4,850,600 | ||||||||
Independent Power and Renewable Electricity Producers — 3.5% | ||||||||
CECEP Solar Energy Co. Ltd., Class A |
214,900 | 198,595 | ||||||
CECEP Wind Power Corp, Class A |
387,240 | 198,405 | ||||||
China National Nuclear Power Co. Ltd., Class A |
1,097,247 | 1,123,056 | ||||||
China Three Gorges Renewables Group Co. Ltd., Class A |
1,624,700 | 1,226,223 | ||||||
China Yangtze Power Co. Ltd., Class A |
1,350,488 | 4,059,166 | ||||||
Datang International Power Generation Co. Ltd.(a) |
485,300 | 212,517 | ||||||
GD Power Development Co. Ltd., Class A |
1,012,800 | 523,070 | ||||||
Huadian Power International Corp. Ltd., Class A |
464,200 | 368,689 | ||||||
Huaneng Power International Inc., Class A(a) |
528,700 | 636,132 | ||||||
SDIC Power Holdings Co. Ltd., Class A |
439,200 | 782,156 | ||||||
Shanghai Electric Power Co. Ltd., Class A |
168,800 | 243,206 | ||||||
Shenergy Co. Ltd., Class A |
292,900 | 277,981 | ||||||
Shenzhen Energy Group Co. Ltd., Class A |
295,806 | 284,409 | ||||||
Sichuan Chuantou Energy Co. Ltd., Class A |
253,200 | 512,443 | ||||||
Wintime Energy Group Co. Ltd., NVS |
1,297,100 | 276,065 | ||||||
Zhejiang Zheneng Electric Power Co. Ltd., Class A(a) |
648,200 | 437,149 | ||||||
|
|
|||||||
11,359,262 | ||||||||
Industrial Conglomerates — 0.1% | ||||||||
China Baoan Group Co. Ltd., Class A |
148,100 | 238,967 | ||||||
|
|
|||||||
Insurance — 2.5% | ||||||||
China Life Insurance Co. Ltd., Class A |
148,500 | 763,694 | ||||||
China Pacific Insurance Group Co. Ltd., Class A |
400,916 | 1,682,628 | ||||||
New China Life Insurance Co. Ltd., Class A |
127,400 | 812,035 | ||||||
People’s Insurance Co. Group of China Ltd. (The), Class A |
549,900 | 486,527 | ||||||
Ping An Insurance Group Co. of China Ltd., Class A |
618,923 | 4,572,666 | ||||||
|
|
|||||||
8,317,550 | ||||||||
IT Services — 0.1% | ||||||||
DHC Software Co. Ltd., Class A |
168,800 | 160,656 | ||||||
Isoftstone Information Technology Group Co. Ltd., NVS |
62,650 | 209,584 | ||||||
|
|
|||||||
370,240 | ||||||||
Life Sciences Tools & Services — 0.7% | ||||||||
Hangzhou Tigermed Consulting Co. Ltd., Class A |
26,104 | 251,562 | ||||||
Joinn Laboratories China Co. Ltd., Class A |
47,073 | 185,164 | ||||||
Pharmaron Beijing Co. Ltd., Class A |
94,950 | 376,357 | ||||||
WuXi AppTec Co. Ltd., Class A |
148,648 | 1,495,772 | ||||||
|
|
|||||||
2,308,855 | ||||||||
Machinery — 2.9% | ||||||||
China CSSC Holdings Ltd., Class A |
253,200 | 1,183,860 | ||||||
CRRC Corp. Ltd., Class A |
1,394,190 | 1,310,108 | ||||||
FAW Jiefang Group Co. Ltd., Class A(a) |
168,800 | 219,144 | ||||||
Hoyuan Green Energy Co. Ltd., Class A |
35,465 | 252,023 | ||||||
Jiangsu Hengli Hydraulic Co. Ltd., Class A |
84,424 | 847,934 | ||||||
Keda Industrial Group Co. Ltd. |
105,500 | 168,127 | ||||||
Ningbo Deye Technology Co. Ltd., NVS |
21,160 | 371,262 | ||||||
North Industries Group Red Arrow Co. Ltd., Class A |
71,800 | 177,584 | ||||||
Riyue Heavy Industry Co. Ltd., Class A |
65,982 | 167,941 | ||||||
Sany Heavy Industry Co. Ltd., Class A |
486,150 | 1,209,341 | ||||||
Shenzhen Inovance Technology Co. Ltd., Class A |
84,411 | 839,660 | ||||||
Shuangliang Eco-Energy Systems Co. Ltd. |
104,600 | 171,699 |
16 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (continued) July 31, 2023 |
iShares® MSCI China A ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Machinery (continued) | ||||||||
Weichai Power Co. Ltd., Class A |
379,800 | $ | 702,020 | |||||
XCMG Construction Machinery Co. Ltd., Class A |
676,000 | 669,207 | ||||||
Zhejiang Dingli Machinery Co. Ltd., Class A |
21,598 | 178,633 | ||||||
Zhejiang Sanhua Intelligent Controls Co. Ltd., Class A |
104,600 | 408,246 | ||||||
Zhuzhou CRRC Times Electric Co. Ltd., NVS |
40,369 | 254,592 | ||||||
Zoomlion Heavy Industry Science and Technology Co. Ltd., Class A |
402,450 | 388,214 | ||||||
|
|
|||||||
9,519,595 | ||||||||
Marine Transportation — 0.3% | ||||||||
COSCO SHIPPING Holdings Co. Ltd., Class A |
720,850 | 1,022,104 | ||||||
|
|
|||||||
Media — 0.3% | ||||||||
Focus Media Information Technology Co. Ltd., Class A |
825,760 | 861,939 | ||||||
|
|
|||||||
Metals & Mining — 4.6% | ||||||||
Aluminum Corp. of China Ltd., Class A |
760,716 | 679,484 | ||||||
Anhui Honglu Steel Construction Group Co. Ltd., Class A |
48,530 | 224,244 | ||||||
Baoshan Iron & Steel Co. Ltd., Class A |
1,268,870 | 1,140,946 | ||||||
Chifeng Jilong Gold Mining Co. Ltd., Class A(a) |
83,700 | 173,427 | ||||||
China Minmetals Rare Earth Co. Ltd., Class A |
63,300 | 271,577 | ||||||
China Northern Rare Earth Group High-Tech Co. Ltd., Class A |
199,200 | 689,222 | ||||||
CMOC Group Ltd., Class A |
993,700 | 860,295 | ||||||
GEM Co. Ltd., Class A |
275,996 | 272,235 | ||||||
Guangdong HEC Technology Holding Co. Ltd., Class A |
168,800 | 168,868 | ||||||
Henan Shenhuo Coal & Power Co. Ltd. |
126,600 | 278,996 | ||||||
Hesteel Co. Ltd., Class A |
652,600 | 220,205 | ||||||
Huaibei Mining Holdings Co. Ltd. |
147,700 | 255,674 | ||||||
Hunan Valin Steel Co. Ltd., Class A |
403,840 | 339,344 | ||||||
Inner Mongolia BaoTou Steel Union Co. Ltd., Class A(a) |
2,600,100 | 688,334 | ||||||
Jiangxi Copper Co. Ltd., Class A |
105,900 | 296,867 | ||||||
Jinduicheng Molybdenum Co. Ltd., Class A |
188,400 | 303,857 | ||||||
Pangang Group Vanadium Titanium & Resources Co. Ltd., Class A(a) |
527,500 | 303,581 | ||||||
Shandong Gold Mining Co. Ltd., Class A |
211,428 | 722,519 | ||||||
Shandong Nanshan Aluminum Co. Ltd., Class A |
697,500 | 316,672 | ||||||
Shanxi Meijin Energy Co. Ltd., Class A(a) |
232,500 | 252,973 | ||||||
Shanxi Taigang Stainless Steel Co. Ltd., Class A |
359,100 | 216,248 | ||||||
Shenghe Resources Holding Co. Ltd., Class A |
96,700 | 171,115 | ||||||
Sinomine Resource Group Co. Ltd., Class A |
41,792 | 264,881 | ||||||
Tianshan Aluminum Group Co. Ltd., Class A |
256,100 | 251,903 | ||||||
Tibet Summit Resources Co. Ltd., Class-A(a) |
42,200 | 107,658 | ||||||
Tongling Nonferrous Metals Group Co. Ltd., Class A |
602,500 | 274,446 | ||||||
Western Mining Co. Ltd., Class A |
147,700 | 254,536 | ||||||
Western Superconducting Technologies Co. Ltd., Class A |
35,991 | 266,680 | ||||||
Xiamen Tungsten Co. Ltd., Class A |
84,898 | 226,835 | ||||||
Yintai Gold Co. Ltd., Class A |
160,220 | 293,360 | ||||||
YongXing Special Materials Technology Co. Ltd., Class A |
30,640 | 232,453 | ||||||
Youngy Co. Ltd. |
21,100 | 181,534 | ||||||
Yunnan Aluminium Co. Ltd., Class A |
189,900 | 395,194 | ||||||
Yunnan Tin Co. Ltd., Class A |
84,400 | 196,788 | ||||||
Zhejiang Huayou Cobalt Co. Ltd., Class A |
89,112 | 629,330 | ||||||
Zhongjin Gold Corp. Ltd., Class A |
271,800 | 405,274 | ||||||
Zijin Mining Group Co. Ltd., Class A |
1,183,200 | 2,160,841 | ||||||
|
|
|||||||
14,988,396 | ||||||||
Oil, Gas & Consumable Fuels — 2.7% | ||||||||
China Merchants Energy Shipping Co. Ltd., Class A |
468,800 | 419,274 |
Security | Shares | Value | ||||||
Oil, Gas & Consumable Fuels (continued) | ||||||||
China Petroleum & Chemical Corp., Class A |
1,814,843 | $ | 1,576,748 | |||||
China Shenhua Energy Co. Ltd., Class A |
380,299 | 1,512,644 | ||||||
COSCO SHIPPING Energy Transportation Co. Ltd., Class A |
189,949 | 390,124 | ||||||
Guanghui Energy Co. Ltd., Class A |
380,983 | 379,932 | ||||||
Inner Mongolia Dian Tou Energy Corp. Ltd. |
126,600 | 243,802 | ||||||
Jizhong Energy Resources Co. Ltd. |
211,000 | 194,065 | ||||||
PetroChina Co. Ltd., Class A |
1,216,000 | 1,350,415 | ||||||
Pingdingshan Tianan Coal Mining Co. Ltd. |
126,600 | 141,793 | ||||||
Shaanxi Coal Industry Co. Ltd., Class A |
550,201 | 1,251,958 | ||||||
Shan Xi Hua Yang Group New Energy Co. Ltd. |
211,000 | 240,328 | ||||||
Shanxi Coking Coal Energy Group Co. Ltd., Class A |
316,560 | 402,392 | ||||||
Shanxi Lu’an Environmental Energy Development Co. Ltd., Class A |
169,200 | 387,360 | ||||||
Yankuang Energy Group Co. Ltd., Class A |
222,450 | 552,518 | ||||||
|
|
|||||||
9,043,353 | ||||||||
Paper & Forest Products — 0.1% | ||||||||
Shandong Sun Paper Industry JSC Ltd., Class A |
169,200 | 284,728 | ||||||
|
|
|||||||
Personal Care Products — 0.2% | ||||||||
By-health Co. Ltd., Class A |
84,800 | 251,141 | ||||||
Yunnan Botanee Bio-Technology Group Co. Ltd. |
18,000 | 262,083 | ||||||
|
|
|||||||
513,224 | ||||||||
Pharmaceuticals — 3.2% | ||||||||
Apeloa Pharmaceutical Co. Ltd., Class A |
63,700 | 157,250 | ||||||
Asymchem Laboratories Tianjin Co. Ltd., Class A |
21,380 | 373,235 | ||||||
Beijing Tongrentang Co. Ltd., Class A |
73,800 | 527,227 | ||||||
Betta Pharmaceuticals Co. Ltd., Class A |
21,112 | 160,959 | ||||||
Changchun High & New Technology Industry Group Inc., Class A |
25,840 | 543,938 | ||||||
China Resources Sanjiu Medical & Pharmaceutical Co. Ltd., Class A |
63,300 | 443,780 | ||||||
Dong-E-E-Jiao Co. Ltd., Class A |
42,200 | 289,109 | ||||||
Hubei Jumpcan Pharmaceutical Co. Ltd., Class A |
42,200 | 155,572 | ||||||
Humanwell Healthcare Group Co. Ltd., Class A |
84,400 | 267,257 | ||||||
Jiangsu Hengrui Medicine Co. Ltd., Class A |
359,942 | 2,248,639 | ||||||
Joincare Pharmaceutical Group Industry Co. Ltd., Class A |
105,900 | 186,459 | ||||||
Livzon Pharmaceutical Group Inc., Class A |
42,200 | 217,413 | ||||||
Nanjing King-Friend Biochemical Pharmaceutical Co. Ltd., Class A |
90,800 | 172,630 | ||||||
Porton Pharma Solutions Ltd. |
21,100 | 89,303 | ||||||
Shandong Buchang Pharmaceuticals Co. Ltd., Class A |
66,327 | 189,364 | ||||||
Shanghai Fosun Pharmaceutical Group Co. Ltd., Class A(a) |
126,663 | 562,460 | ||||||
Shenzhen Salubris Pharmaceuticals Co. Ltd., Class A |
58,800 | 264,288 | ||||||
Shijiazhuang Yiling Pharmaceutical Co. Ltd., Class A |
84,860 | 296,535 | ||||||
Sichuan Kelun Pharmaceutical Co. Ltd., Class A |
84,800 | 327,932 | ||||||
Yunnan Baiyao Group Co. Ltd., Class A |
105,560 | 795,603 | ||||||
Zhangzhou Pientzehuang Pharmaceutical Co. Ltd., Class A |
36,199 | 1,470,942 | ||||||
Zhejiang Huahai Pharmaceutical Co. Ltd., Class A |
85,204 | 219,608 | ||||||
Zhejiang Jiuzhou Pharmaceutical Co. Ltd., Class A |
42,900 | 161,924 | ||||||
Zhejiang NHU Co. Ltd., Class A |
169,968 | 392,858 | ||||||
Zhejiang Wolwo Bio-Pharmaceutical Co. Ltd., Class A |
25,600 | 135,722 | ||||||
|
|
|||||||
10,650,007 | ||||||||
Real Estate Management & Development — 1.9% | ||||||||
China Merchants Shekou Industrial Zone Holdings Co. Ltd., Class A |
443,100 | 884,901 |
S C H E D U L E O F I N V E S T M E N T S |
17 |
Schedule of Investments (continued) July 31, 2023 |
iShares® MSCI China A ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
Real Estate Management & Development (continued) | ||||||||
China Vanke Co. Ltd., Class A |
555,400 | $ | 1,187,022 | |||||
Gemdale Corp., Class A |
253,618 | 307,092 | ||||||
Greenland Holdings Corp. Ltd., Class A(a) |
648,000 | 294,056 | ||||||
Hainan Airport Infrastructure Co. Ltd., NVS |
627,100 | 374,776 | ||||||
Hangzhou Binjiang Real Estate Group Co. Ltd. |
168,800 | 255,498 | ||||||
Poly Developments and Holdings Group Co. Ltd., Class A |
676,731 | 1,350,211 | ||||||
Seazen Holdings Co. Ltd., Class A(a) |
126,666 | 292,452 | ||||||
Shanghai Lingang Holdings Corp. Ltd., Class A |
127,023 | 230,416 | ||||||
Shenzhen Overseas Chinese Town Co. Ltd., Class A(a) |
465,856 | 320,518 | ||||||
Youngor Group Co. Ltd., Class A |
295,794 | 295,638 | ||||||
Zhejiang China Commodities City Group Co. Ltd., Class A |
316,500 | 377,058 | ||||||
|
|
|||||||
6,169,638 | ||||||||
Ground Transportation — 0.7% | ||||||||
Beijing-Shanghai High Speed Railway Co. Ltd., Class A |
1,881,500 | 1,441,567 | ||||||
Daqin Railway Co. Ltd., Class A |
865,100 | 866,739 | ||||||
|
|
|||||||
2,308,306 | ||||||||
Semiconductors & Semiconductor Equipment — 6.5% | ||||||||
3peak Inc. |
5,986 | 197,047 | ||||||
Advanced Micro-Fabrication Equipment Inc., Class A(a) |
38,738 | 776,240 | ||||||
Amlogic Shanghai Co. Ltd.(a) |
22,347 | 275,920 | ||||||
ASR Microelectronics Co. Ltd.(a) |
22,064 | 237,825 | ||||||
Cambricon Technologies Corp. Ltd.(a) |
22,992 | 528,964 | ||||||
China Resources Microelectronics Ltd. |
70,619 | 567,609 | ||||||
Flat Glass Group Co. Ltd., Class A |
84,800 | 416,606 | ||||||
GalaxyCore Inc., NVS |
82,089 | 184,666 | ||||||
GigaDevice Semiconductor Inc., Class A |
42,757 | 687,577 | ||||||
Hangzhou Chang Chuan Technology Co. Ltd. |
42,200 | 248,712 | ||||||
Hangzhou First Applied Material Co. Ltd., Class A |
97,210 | 476,413 | ||||||
Hangzhou Lion Electronics Co. Ltd. |
42,200 | 227,136 | ||||||
Hangzhou Silan Microelectronics Co. Ltd., Class A |
84,400 | 362,343 | ||||||
Ingenic Semiconductor Co. Ltd., Class A |
34,300 | 402,939 | ||||||
JA Solar Technology Co. Ltd., Class A |
182,780 | 851,308 | ||||||
JCET Group Co. Ltd., Class A |
106,700 | 493,325 | ||||||
Jiangsu Pacific Quartz Co. Ltd., NVS |
21,600 | 310,667 | ||||||
Jinko Solar Co. Ltd. |
378,584 | 660,420 | ||||||
LONGi Green Energy Technology Co. Ltd., Class A |
436,846 | 1,830,363 | ||||||
Montage Technology Co. Ltd., Class A |
66,745 | 541,147 | ||||||
National Silicon Industry Group Co. Ltd., Class A(a) |
125,600 | 371,239 | ||||||
NAURA Technology Group Co. Ltd., Class A |
32,200 | 1,280,752 | ||||||
Risen Energy Co. Ltd. |
64,800 | 209,453 | ||||||
Rockchip Electronics Co. Ltd. |
21,000 | 219,742 | ||||||
Sanan Optoelectronics Co. Ltd., Class A |
271,800 | 645,973 | ||||||
SG Micro Corp., Class A |
30,995 | 366,301 | ||||||
Shanghai Aiko Solar Energy Co. Ltd. |
111,900 | 404,374 | ||||||
Shanghai Fudan Microelectronics Group Co. Ltd. |
31,017 | 241,335 | ||||||
Shenzhen SC New Energy Technology Corp., Class A |
21,100 | 277,030 | ||||||
StarPower Semiconductor Ltd., Class A |
10,000 | 306,842 | ||||||
TCL Zhonghuan Renewable Energy Technology Co. Ltd., Class A |
221,123 | 900,919 | ||||||
Tianshui Huatian Technology Co. Ltd., Class A |
189,700 | 254,823 | ||||||
TongFu Microelectronics Co. Ltd., Class A |
86,400 | 263,027 | ||||||
Tongwei Co. Ltd., Class A |
256,293 | 1,250,124 | ||||||
Trina Solar Co. Ltd. |
121,789 | 642,737 | ||||||
Unigroup Guoxin Microelectronics Co. Ltd., Class A |
49,679 | 649,079 | ||||||
Verisilicon Microelectronics Shanghai Co. Ltd.(a) |
26,754 | 258,480 | ||||||
Will Semiconductor Co. Ltd. Shanghai, Class A |
63,355 | 911,273 | ||||||
Wuxi Autowell Technology Co. Ltd. |
8,456 | 203,788 |
Security | Shares | Value | ||||||
Semiconductors & Semiconductor Equipment (continued) | ||||||||
Xinjiang Daqo New Energy Co. Ltd. |
98,862 | $ | 570,998 | |||||
Yangzhou Yangjie Electronic Technology Co. Ltd. |
21,300 | 128,097 | ||||||
Zhejiang Jingsheng Mechanical & Electrical Co. Ltd., Class A |
84,401 | 730,353 | ||||||
|
|
|||||||
21,363,966 | ||||||||
Software — 2.2% | ||||||||
360 Security Technology Inc., Class A(a) |
402,500 | 668,986 | ||||||
Beijing E-Hualu Information Technology Co. Ltd., Class A(a) |
41,900 | 180,647 | ||||||
Beijing Kingsoft Office Software Inc., Class A |
27,344 | 1,555,971 | ||||||
Beijing Shiji Information Technology Co. Ltd., Class A(a) |
133,595 | 260,293 | ||||||
China National Software & Service Co. Ltd., Class A |
54,920 | 400,104 | ||||||
Hundsun Technologies Inc., Class A |
113,282 | 652,960 | ||||||
Iflytek Co. Ltd., Class A |
126,650 | 1,114,883 | ||||||
NavInfo Co. Ltd., Class A(a) |
126,600 | 198,800 | ||||||
Qi An Xin Technology Group Inc.(a) |
37,413 | 265,387 | ||||||
Sangfor Technologies Inc., Class A(a) |
25,400 | 401,953 | ||||||
Shanghai Baosight Software Co. Ltd., Class A |
108,888 | 732,620 | ||||||
Thunder Software Technology Co. Ltd., Class A |
31,900 | 403,564 | ||||||
Yonyou Network Technology Co. Ltd., Class A |
190,749 | 504,302 | ||||||
|
|
|||||||
7,340,470 | ||||||||
Specialty Retail — 0.7% | ||||||||
China Tourism Group Duty Free Corp. Ltd., Class A |
110,341 | 1,950,202 | ||||||
Shanghai Yuyuan Tourist Mart Group Co. Ltd., Class A |
232,406 | 247,294 | ||||||
|
|
|||||||
2,197,496 | ||||||||
Technology Hardware, Storage & Peripherals — 0.7% | ||||||||
China Greatwall Technology Group Co. Ltd., Class A |
190,400 | 326,594 | ||||||
GRG Banking Equipment Co. Ltd., Class A |
126,600 | 204,140 | ||||||
Inspur Electronic Information Industry Co. Ltd., Class A |
84,560 | 540,774 | ||||||
Ninestar Corp., Class A |
84,410 | 395,912 | ||||||
Shenzhen Transsion Holding Co. Ltd., Class A |
45,463 | 781,084 | ||||||
|
|
|||||||
2,248,504 | ||||||||
Trading Companies & Distributors — 0.3% | ||||||||
Beijing United Information Technology Co. Ltd., Class A |
53,694 | 287,944 | ||||||
COSCO SHIPPING Development Co. Ltd., Class A |
591,600 | 208,766 | ||||||
Shanxi Coal International Energy Group Co. Ltd. |
104,600 | 213,734 | ||||||
Sichuan New Energy Power Co. Ltd., Class A(a) |
73,000 | 149,058 | ||||||
Xiamen C & D Inc., Class A |
168,800 | 265,265 | ||||||
|
|
|||||||
1,124,767 | ||||||||
Transportation Infrastructure — 0.4% | ||||||||
Guangzhou Baiyun International Airport Co. Ltd., Class A(a) |
125,500 | 253,039 | ||||||
Liaoning Port Co Ltd., Class A |
1,223,800 | 282,659 | ||||||
Shanghai International Airport Co. Ltd., Class A(a) |
63,322 | 420,873 | ||||||
Shanghai International Port Group Co. Ltd., Class A |
402,500 | 305,456 | ||||||
|
|
|||||||
1,262,027 | ||||||||
Wireless Telecommunication Services — 0.4% | ||||||||
China United Network Communications Ltd., Class A |
1,812,700 | 1,311,540 | ||||||
|
|
|||||||
Total
Common Stocks — 99.6% |
|
327,679,337 | ||||||
|
|
18 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (continued) July 31, 2023 |
iShares® MSCI China A ETF (Percentages shown are based on Net Assets) |
Security | Shares | Value | ||||||
|
||||||||
Rights |
| |||||||
Pharmaceuticals — 0.0% |
| |||||||
Kangmei Pharmaceutical Co. Ltd. (Expires 12/31/49)(a) |
30,064 | $ | — | |||||
|
|
|||||||
Total
Rights — 0.0% |
|
— | ||||||
|
|
|||||||
Total
Long-Term Investments — 99.6% |
|
327,679,337 | ||||||
|
|
|||||||
Short-Term Securities |
| |||||||
Money Market Funds — 0.3% | ||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares, 5.22%(b)(c) |
870,000 | 870,000 | ||||||
|
|
|||||||
Total
Short-Term Securities — 0.3% |
|
870,000 | ||||||
|
|
|||||||
Total
Investments — 99.9% |
|
328,549,337 | ||||||
Other Assets Less Liabilities — 0.1% |
|
438,671 | ||||||
|
|
|||||||
Net Assets — 100.0% |
|
$ | 328,988,008 | |||||
|
|
(a) |
Non-income producing security. |
(b) |
Affiliate of the Fund. |
(c) |
Annualized 7-day yield as of period end. |
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 |
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
BlackRock Cash Funds: Treasury, SL Agency Shares |
$ | — | $ | 870,000 | (a) | $ | — | $ | — | $ | — | $ | 870,000 | 870,000 | $ | 11,161 | $ | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(a) |
Represents net amount purchased (sold). |
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
|
||||||||||||||||
Description |
Number of Contracts |
Expiration Date |
Notional Amount (000) |
Value/ Unrealized Appreciation (Depreciation) |
||||||||||||
|
||||||||||||||||
Long Contracts |
||||||||||||||||
FTSE China A50 |
76 | 08/30/23 | $ | 1,015 | $ | 33,081 | ||||||||||
|
|
S C H E D U L E O F I N V E S T M E N T S |
19 |
Schedule of Investments (continued) July 31, 2023 |
iShares® MSCI China A ETF |
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 |
||||||||||||||||||||||||||||
Futures contracts |
||||||||||||||||||||||||||||
Unrealized appreciation on futures contracts(a) |
$ | — | $ | — | $ | 33,081 | $ | — | $ | — | $ | — | $ | 33,081 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Net cumulative unrealized appreciation (depreciation) on futures contracts are reported in the Schedule of Investments. In the Statements of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss). |
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 |
| |||||||||||||||||||||||||||
Futures contracts |
$ | — | $ | — | $ | (77,633 | ) | $ | — | $ | — | $ | — | $ | (77,633 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on |
| |||||||||||||||||||||||||||
Futures contracts |
$ | — | $ | — | $ | 41,204 | $ | — | $ | — | $ | — | $ | 41,204 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Quarterly Balances of Outstanding Derivative Financial Instruments
Futures contracts: |
||||
Average notional value of contracts — long |
$ | 880,187 |
For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of financial instruments. For a description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, refer to the Notes to Financial Statements.
The following table summarizes the Fund’s financial instruments categorized in the fair value hierarchy. The breakdown of the Fund’s financial instruments into major categories is disclosed in the Schedule of Investments above.
|
||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
|
||||||||||||||||
Assets |
||||||||||||||||
Investments |
||||||||||||||||
Long-Term Investments |
||||||||||||||||
Common Stocks |
$ | 4,185,721 | $ | 323,493,616 | $ | — | $ | 327,679,337 | ||||||||
Rights |
— | — | — | — | ||||||||||||
Short-Term Securities |
||||||||||||||||
Money Market Funds |
870,000 | — | — | 870,000 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 5,055,721 | $ | 323,493,616 | $ | — | $ | 328,549,337 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Derivative Financial Instruments(a) |
||||||||||||||||
Assets |
||||||||||||||||
Equity Contracts |
$ | — | $ | 33,081 | $ | — | $ | 33,081 | ||||||||
|
|
|
|
|
|
|
|
(a) |
Derivative financial instruments are futures contracts. Futures contracts are valued at the unrealized appreciation (depreciation) on the instrument. |
See notes to financial statements.
20 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statements of Assets and Liabilities
July 31, 2023
iShares China Large-Cap ETF |
iShares MSCI China AETF |
|||||||
|
||||||||
ASSETS |
||||||||
Investments, at value — unaffiliated(a)(b) |
$ | 5,565,180,992 | $ | 327,679,337 | ||||
Investments, at value — affiliated(c) |
21,165,636 | 870,000 | ||||||
Cash |
17,943 | — | ||||||
Cash pledged for futures contracts |
11,332,000 | 68,000 | ||||||
Foreign currency, at value(d) |
23,002,969 | 488,990 | ||||||
Receivables: |
||||||||
Securities lending income — affiliated |
3,996 | — | ||||||
Dividends — unaffiliated |
84,319,770 | 5,553 | ||||||
Dividends — affiliated |
15,291 | 3,005 | ||||||
Variation margin on futures contracts |
3,181,171 | 952 | ||||||
|
|
|
|
|||||
Total assets |
5,708,219,768 | 329,115,837 | ||||||
|
|
|
|
|||||
LIABILITIES |
||||||||
Bank overdraft |
— | 64,543 | ||||||
Collateral on securities loaned, at value |
12,130,635 | — | ||||||
Payables: |
||||||||
Investment advisory fees |
3,297,786 | 63,286 | ||||||
|
|
|
|
|||||
Total liabilities |
15,428,421 | 127,829 | ||||||
|
|
|
|
|||||
Commitments and contingent liabilities |
||||||||
NET ASSETS |
$ | 5,692,791,347 | $ | 328,988,008 | ||||
|
|
|
|
|||||
NET ASSETS CONSIST OF |
||||||||
Paid-in capital |
$ | 9,940,811,561 | $ | 393,282,602 | ||||
Accumulated loss |
(4,248,020,214 | ) | (64,294,594 | ) | ||||
|
|
|
|
|||||
NET ASSETS |
$ | 5,692,791,347 | $ | 328,988,008 | ||||
|
|
|
|
|||||
NET ASSET VALUE |
||||||||
Shares outstanding |
187,350,000 | 10,550,000 | ||||||
|
|
|
|
|||||
Net asset value |
$ | 30.39 | $ | 31.18 | ||||
|
|
|
|
|||||
Shares authorized |
Unlimited | Unlimited | ||||||
|
|
|
|
|||||
Par value |
None | None | ||||||
|
|
|
|
|||||
(a) Investments, at cost — unaffiliated |
$ | 5,922,528,041 | $ | 264,297,364 | ||||
(b) Securities loaned, at value |
$ | 11,492,040 | $ | — | ||||
(c) Investments, at cost — affiliated |
$ | 21,162,585 | $ | 870,000 | ||||
(d) Foreign currency, at cost |
$ | 22,990,035 | $ | 487,081 |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S |
21 |
Year Ended July 31, 2023
iShares China Large-Cap ETF |
iShares MSCI China |
|||||||
|
||||||||
INVESTMENT INCOME |
||||||||
Dividends — unaffiliated |
$ | 167,469,979 | $ | 8,281,918 | ||||
Dividends — affiliated |
192,234 | 11,161 | ||||||
Interest — unaffiliated |
85,532 | 51,919 | ||||||
Securities lending income — affiliated — net |
350,872 | — | ||||||
Foreign taxes withheld |
(14,462,666 | ) | (831,373 | ) | ||||
|
|
|
|
|||||
Total investment income |
153,635,951 | 7,513,625 | ||||||
|
|
|
|
|||||
EXPENSES |
||||||||
Investment advisory |
38,791,801 | 2,326,392 | ||||||
Commitment costs |
— | 4,473 | ||||||
|
|
|
|
|||||
Total expenses |
38,791,801 | 2,330,865 | ||||||
Less: |
||||||||
Investment advisory fees waived |
— | (1,400,308 | ) | |||||
|
|
|
|
|||||
Total expenses after fees waived |
38,791,801 | 930,557 | ||||||
|
|
|
|
|||||
Net investment income |
114,844,150 | 6,583,068 | ||||||
|
|
|
|
|||||
REALIZED AND UNREALIZED GAIN (LOSS) |
||||||||
Net realized gain (loss) from: |
||||||||
Investments — unaffiliated |
(732,517,399 | ) | (5,478,178 | ) | ||||
Investments — affiliated |
5,682 | — | ||||||
Capital gain distributions from underlying funds — affiliated |
2 | — | ||||||
Foreign currency transactions |
142,130 | 34,506 | ||||||
Futures contracts |
(9,275,558 | ) | (77,633 | ) | ||||
|
|
|
|
|||||
(741,645,143 | ) | (5,521,305 | ) | |||||
|
|
|
|
|||||
Net change in unrealized appreciation (depreciation) on: |
||||||||
Investments — unaffiliated |
737,540,692 | (53,055,303 | ) | |||||
Investments — affiliated |
1,716 | — | ||||||
Foreign currency translations |
290,263 | (69 | ) | |||||
Futures contracts |
18,431,138 | 41,204 | ||||||
|
|
|
|
|||||
756,263,809 | (53,014,168 | ) | ||||||
|
|
|
|
|||||
Net realized and unrealized gain (loss) |
14,618,666 | (58,535,473 | ) | |||||
|
|
|
|
|||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
$ | 129,462,816 | $ | (51,952,405 | ) | |||
|
|
|
|
See notes to financial statements.
22 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statements of Changes in Net Assets
iShares China Large-Cap ETF |
iShares MSCI China A ETF |
|||||||||||||||||||||
|
|
|
|
|||||||||||||||||||
Year Ended 07/31/23 |
Year Ended 07/31/22 |
Year Ended 07/31/23 |
Year Ended 07/31/22 |
|||||||||||||||||||
|
||||||||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS |
||||||||||||||||||||||
OPERATIONS |
||||||||||||||||||||||
Net investment income |
$ | 114,844,150 | $ | 111,144,219 | $ | 6,583,068 | $ | 8,412,505 | ||||||||||||||
Net realized loss |
(741,645,143 | ) | (696,107,215 | ) | (5,521,305 | ) | (100,193,129 | ) | ||||||||||||||
Net change in unrealized appreciation (depreciation) |
756,263,809 | (875,861,384 | ) | (53,014,168 | ) | (67,300,859 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
Net increase (decrease) in net assets resulting from operations |
129,462,816 | (1,460,824,380 | ) | (51,952,405 | ) | (159,081,483 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS(a) |
||||||||||||||||||||||
Decrease in net assets resulting from distributions to shareholders |
(137,823,574 | ) | (82,196,257 | ) | (8,340,710 | ) | (8,184,031 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
CAPITAL SHARE TRANSACTIONS |
||||||||||||||||||||||
Net increase (decrease) in net assets derived from capital share transactions |
407,457,486 | 2,024,227,917 | (161,024,123 | ) | 90,044,292 | |||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
NET ASSETS |
||||||||||||||||||||||
Total increase (decrease) in net assets |
399,096,728 | 481,207,280 | (221,317,238 | ) | (77,221,222 | ) | ||||||||||||||||
Beginning of year |
5,293,694,619 | 4,812,487,339 | 550,305,246 | 627,526,468 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
End of year |
$ | 5,692,791,347 | $ | 5,293,694,619 | $ | 328,988,008 | $ | 550,305,246 | ||||||||||||||
|
|
|
|
|
|
|
|
(a) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
See notes to financial statements.
F I N A N C I A L S T A T E M E N T S |
23 |
(For a share outstanding throughout each period)
iShares China Large-Cap ETF | ||||||||||||||||||||
|
|
|||||||||||||||||||
Year Ended 07/31/23 |
Year Ended 07/31/22 |
Year Ended 07/31/21 |
Year Ended 07/31/20 |
Year Ended 07/31/19 |
||||||||||||||||
|
||||||||||||||||||||
Net asset value, beginning of year |
$ | 30.37 | $ | 40.36 | $ | 41.57 | $ | 41.63 | $ | 43.14 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net investment income(a) |
0.62 | 0.75 | 0.88 | 0.89 | 1.07 | |||||||||||||||
Net realized and unrealized gain (loss)(b) |
0.15 | (10.16 | ) | (1.26 | ) | 0.17 | (1.73 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net increase (decrease) from investment operations |
0.77 | (9.41 | ) | (0.38 | ) | 1.06 | (0.66 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Distributions from net investment income(c) |
(0.75 | ) | (0.58 | ) | (0.83 | ) | (1.12 | ) | (0.85 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net asset value, end of year |
$ | 30.39 | $ | 30.37 | $ | 40.36 | $ | 41.57 | $ | 41.63 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Return(d) |
||||||||||||||||||||
Based on net asset value |
2.71 | % | (23.54 | )% | (1.13 | )% | 2.59 | % | (1.44 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Ratios to Average Net Assets(e) |
||||||||||||||||||||
Total expenses |
0.74 | % | 0.74 | % | 0.74 | % | 0.74 | % | 0.74 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net investment income |
2.19 | % | 2.12 | % | 1.90 | % | 2.18 | % | 2.55 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Supplemental Data |
||||||||||||||||||||
Net assets, end of year (000) |
$ | 5,692,791 | $ | 5,293,695 | $ | 4,812,487 | $ | 3,429,710 | $ | 5,039,411 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Portfolio turnover rate(f) |
23 | % | 29 | % | 62 | % | 18 | % | 14 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
(a) |
Based on average shares outstanding. |
(b) |
The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. |
(c) |
Distributions for annual periods determined in accordance with U.S. federal income tax regulations. |
(d) |
Where applicable, assumes the reinvestment of distributions. |
(e) |
Excludes fees and expenses incurred indirectly as a result of investments in underlying funds. |
(f) |
Portfolio turnover rate excludes in-kind transactions. |
See notes to financial statements.
24 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights (continued)
(For a share outstanding throughout each period)
iShares MSCI China A ETF | ||||||||||||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||||||
Year Ended 07/31/23 |
Year Ended 07/31/22 |
Year Ended 07/31/21 |
Year Ended 07/31/20 |
Year Ended 07/31/19 |
||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of year |
$ | 35.39 | $ | 41.70 | $ | 36.39 | $ | 28.68 | $ | 27.06 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Net investment income(a) |
0.54 | 0.46 | 0.52 | 0.59 | 0.84 | |||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss)(b) |
(3.92 | ) | (6.29 | ) | 5.22 | 7.47 | 1.67 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Net increase (decrease) from investment operations |
(3.38 | ) | (5.83 | ) | 5.74 | 8.06 | 2.51 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Distributions(c) |
||||||||||||||||||||||||||||||||||||||||
From net investment income |
(0.83 | ) | (0.48 | ) | (0.43 | ) | (0.35 | ) | (0.19 | ) | ||||||||||||||||||||||||||||||
From net realized gain |
— | — | — | — | (0.70 | ) | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Total distributions |
(0.83 | ) | (0.48 | ) | (0.43 | ) | (0.35 | ) | (0.89 | ) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Net asset value, end of year |
$ | 31.18 | $ | 35.39 | $ | 41.70 | $ | 36.39 | $ | 28.68 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Total Return(d) |
||||||||||||||||||||||||||||||||||||||||
Based on net asset value |
(9.55 | )% | (14.18 | )% | 15.79 | % | 28.40 | % | 9.97 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Ratios to Average Net Assets(e) |
||||||||||||||||||||||||||||||||||||||||
Total expenses |
0.60 | % | 0.60 | % | 0.60 | % | 0.63 | % | 0.65 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Total expenses after fees waived |
0.24 | % | 0.24 | % | 0.24 | % | 0.24 | % | 0.24 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Net investment income |
1.70 | % | 1.15 | % | 1.24 | % | 1.98 | % | 3.10 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Supplemental Data |
||||||||||||||||||||||||||||||||||||||||
Net assets, end of year (000) |
$ | 328,988 | $ | 550,305 | $ | 627,526 | $ | 484,005 | $ | 141,989 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Portfolio turnover rate(f) |
26 | %(g) | 64 | % | 38 | %(g) | 31 | %(g) | 44 | %(g) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
(a) Based on average shares outstanding. (b) The amounts reported for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period due to the timing of capital share transactions in relation to the fluctuating market values of the Fund’s underlying securities. (c) Distributions for annual periods determined in accordance with U.S. federal income tax regulations. (d) Where applicable, assumes the reinvestment of distributions. (e) Excludes fees and expenses incurred indirectly as a result of investments in underlying funds. (f) Portfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash in U.S. dollars (“cash creations”). |
| |||||||||||||||||||||||||||||||||||||||
(g) Portfolio turnover rate excluding cash creations was as follows: |
13 | % | — | 24 | % | 28 | % | 22 | % | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
See notes to financial statements.
F I N A N C I A L H I G H L I G H T S |
25 |
1. |
ORGANIZATION |
iShares Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust is organized as a Delaware statutory trust and is authorized to have multiple series or portfolios.
These financial statements relate only to the following funds (each, a “Fund” and collectively, the “Funds”):
iShares ETF |
Diversification Classification |
|||
China Large-Cap |
Non-diversified | |||
MSCI China A |
Diversified |
2. |
SIGNIFICANT ACCOUNTING POLICIES |
The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. Below is a summary of significant accounting policies:
Investment Transactions and Income Recognition: For financial reporting purposes, investment transactions are recorded on the dates the transactions are executed. Realized gains and losses on investment transactions are determined using the specific identification method. Dividend income and capital gain distributions, if any, are recorded on the ex-dividend date. Non-cash dividends, if any, are recorded on the ex-dividend date at fair value. Dividends from foreign securities where the ex-dividend date may have passed are subsequently recorded when the Funds are informed of the ex-dividend date. Under the applicable foreign tax laws, a withholding tax at various rates may be imposed on capital gains, dividends and interest. Interest income, including amortization and accretion of premiums and discounts on debt securities, is recognized daily on an accrual basis.
Foreign Currency Translation: Each Fund’s books and records are maintained in U.S. dollars. Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars using prevailing market rates as quoted by one or more data service providers. Purchases and sales of investments are recorded at the rates of exchange prevailing on the respective dates of such transactions. Generally, when the U.S. dollar rises in value against a foreign currency, the investments denominated in that currency will lose value; the opposite effect occurs if the U.S. dollar falls in relative value.
Each Fund does not isolate the effect of fluctuations in foreign exchange rates from the effect of fluctuations in the market prices of investments for financial reporting purposes. Accordingly, the effects of changes in exchange rates on investments are not segregated in the Statements of Operations from the effects of changes in market prices of those investments, but are included as a component of net realized and unrealized gain (loss) from investments. Each Fund reports realized currency gains (losses) on foreign currency related transactions as components of net realized gain (loss) for financial reporting purposes, whereas such components are generally treated as ordinary income for U.S. federal income tax purposes.
Foreign Taxes: The Funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, capital gains on investments, or certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which each Fund invests. These foreign taxes, if any, are paid by each Fund and are reflected in its Statements of Operations as follows: foreign taxes withheld at source are presented as a reduction of income, foreign taxes on securities lending income are presented as a reduction of securities lending income, foreign taxes on stock dividends are presented as “Other foreign taxes”, and foreign taxes on capital gains from sales of investments and foreign taxes on foreign currency transactions are included in their respective net realized gain (loss) categories. Foreign taxes payable or deferred as of July 31, 2023, if any, are disclosed in the Statements of Assets and Liabilities.
The Funds file withholding tax reclaims in certain jurisdictions to recover a portion of amounts previously withheld. The Funds may record a reclaim receivable based on collectability, which includes factors such as the jurisdiction’s applicable laws, payment history and market convention. The Statements of Operations includes tax reclaims recorded as well as professional and other fees, if any, associated with recovery of foreign withholding taxes.
Bank Overdraft: The iShares MSCI China A ETF had outstanding cash disbursements exceeding deposited cash amounts at the custodian and utilized its ability to temporarily borrow from that custodian for operational purposes. The Funds are obligated to repay the custodian for any overdraft, including any related costs or expenses, where applicable.
Collateralization: If required by an exchange or counterparty agreement, the Funds may be required to deliver/deposit cash and/or securities to/with an exchange, or broker-dealer or custodian as collateral for certain investments.
In-kind Redemptions: For financial reporting purposes, in-kind redemptions are treated as sales of securities resulting in realized capital gains or losses to the Funds. Because such gains or losses are not taxable to the Funds and are not distributed to existing Fund shareholders, the gains or losses are reclassified from accumulated net realized gain (loss) to paid-in capital at the end of the Funds’ tax year. These reclassifications have no effect on net assets or net asset value (“NAV”) per share.
26 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
Distributions: Dividends and distributions paid by each Fund are recorded on the ex-dividend dates. Distributions are determined on a tax basis and may differ from net investment income and net realized capital gains for financial reporting purposes. Dividends and distributions are paid in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds.
Indemnifications: In the normal course of business, each Fund enters into contracts that contain a variety of representations that provide general indemnification. The Funds’ maximum exposure under these arrangements is unknown because it involves future potential claims against the Funds, which cannot be predicted with any certainty.
3. |
INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS |
Investment Valuation Policies: Each Fund’s investments are valued at fair value (also referred to as “market value” within the financial statements) each day that the Fund’s listing exchange is open and, for financial reporting purposes, as of the report date. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Board of Trustees of the Trust (the “Board”) of each Fund has approved the designation of BlackRock Fund Advisors (“BFA”), the Funds’ investment adviser, as the valuation designee for each Fund. Each Fund determines the fair values of its financial instruments using various independent dealers or pricing services under BFA’s policies. If a security’s market price is not readily available or does not otherwise accurately represent the fair value of the security, the security will be valued in accordance with BFA’s policies and procedures as reflecting fair value. BFA has formed a committee (the “Valuation Committee”) to develop pricing policies and procedures and to oversee the pricing function for all financial instruments, with assistance from other BlackRock pricing committees.
Fair Value Inputs and Methodologies: The following methods and inputs are used to establish the fair value of each Fund’s assets and liabilities:
• |
Equity investments traded on a recognized securities exchange are valued at that day’s official closing price, as applicable, on the exchange where the stock is primarily traded. Equity investments traded on a recognized exchange for which there were no sales on that day are valued at the last traded price. |
• |
Investments in open-end U.S. mutual funds (including money market funds) are valued at that day’s published NAV. |
• |
Futures contracts are valued based on that day’s last reported settlement or trade price on the exchange where the contract is traded. |
Generally, trading in foreign instruments is substantially completed each day at various times prior to the close of trading on the New York Stock Exchange (“NYSE”). Each business day, the Funds use current market factors supplied by independent pricing services to value certain foreign instruments (“Systematic Fair Value Price”). The Systematic Fair Value Price is designed to value such foreign securities at fair value as of the close of trading on the NYSE, which follows the close of the local markets.
If events (e.g., market volatility, company announcement or a natural disaster) occur that are expected to materially affect the value of such investment, or in the event that application of these methods of valuation results in a price for an investment that is deemed not to be representative of the market value of such investment, or if a price is not available, the investment will be valued by the Valuation Committee, in accordance with BFA’s policies and procedures as reflecting fair value (“Fair Valued Investments”). The fair valuation approaches that may be used by the Valuation Committee include market approach, income approach and cost approach. Valuation techniques such as discounted cash flow, use of market comparables and matrix pricing are types of valuation approaches and are typically used in determining fair value. When determining the price for Fair Valued Investments, the Valuation Committee seeks to determine the price that each Fund might reasonably expect to receive or pay from the current sale or purchase of that asset or liability in an arm’s-length transaction. Fair value determinations shall be based upon all available factors that the Valuation Committee deems relevant and consistent with the principles of fair value measurement.
Fair value pricing could result in a difference between the prices used to calculate a fund’s NAV and the prices used by the fund’s underlying index, which in turn could result in a difference between the fund’s performance and the performance of the fund’s underlying index.
Fair Value Hierarchy: Various inputs are used in determining the fair value of financial instruments. These inputs to valuation techniques are categorized into a fair value hierarchy consisting of three broad levels for financial reporting purposes as follows:
• |
Level 1 – Unadjusted price quotations in active markets/exchanges for identical assets or liabilities that each Fund has the ability to access; |
• |
Level 2 – Other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs); and |
• |
Level 3 – Unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available, (including the Valuation Committee’s assumptions used in determining the fair value of financial instruments). |
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Investments classified within Level 3 have significant unobservable inputs used by the Valuation Committee in determining the price for Fair Valued Investments. Level 3 investments include equity or debt issued by privately held companies or funds that may not have a secondary market and/or may have a limited number of investors. The categorization of a value determined for financial instruments is based on the pricing transparency of the financial instruments and is not necessarily an indication of the risks associated with investing in those securities.
N O T E S T O F I N A N C I A L S T A T E M E N T S |
27 |
Notes to Financial Statements (continued)
4. |
SECURITIES AND OTHER INVESTMENTS |
Securities Lending: Each Fund may lend its securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Fund collateral consisting of cash, an irrevocable letter of credit issued by an approved bank, or securities issued or guaranteed by the U.S. government. The initial collateral received by each Fund is required to have a value of at least 102% of the current market value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Fund and any additional required collateral is delivered to the Fund or excess collateral is returned by the Fund, on the next business day. During the term of the loan, each Fund is entitled to all distributions made on or in respect of the loaned securities but does not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.
As of period end, any securities on loan were collateralized by cash and/or U.S. Government obligations. Cash collateral invested in money market funds managed by BFA, or its affiliates is disclosed in the Schedule of Investments. Any non-cash collateral received cannot be sold, re-invested or pledged by the Fund, except in the event of borrower default. The securities on loan, if any, are also disclosed in each Fund’s Schedule of Investments. The market value of any securities on loan and the value of any related cash collateral are disclosed in the Statements of Assets and Liabilities.
Securities lending transactions are entered into by the Funds under Master Securities Lending Agreements (each, an “MSLA”) which provide the right, in the event of default (including bankruptcy or insolvency) for the non-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, the Funds, as lender, would offset the market value of the collateral received against the market value of the securities loaned. When the value of the collateral is greater than that of the market value of the securities loaned, the lender is left with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty’s bankruptcy or insolvency. Under the MSLA, absent an event of default, the borrower can resell or re-pledge the loaned securities, and the Funds can reinvest cash collateral received in connection with loaned securities. Upon an event of default, the parties’ obligations to return the securities or collateral to the other party are extinguished, and the parties can resell or re-pledge the loaned securities or the collateral received in connection with the loaned securities in order to satisfy the defaulting party’s net payment obligation for all transactions under the MSLA. The defaulting party remains liable for any deficiency.
As of period end, the following table is a summary of the securities on loan by counterparty which are subject to offset under an MSLA:
|
||||||||||||||||
iShares ETF and Counterparty |
|
Securities Loaned at Value |
|
|
Cash Collateral Received |
(a) |
|
Non-Cash Collateral Received, at Fair Value |
(a) |
Net Amount | ||||||
|
||||||||||||||||
China Large-Cap |
||||||||||||||||
Credit Suisse Securities (USA) LLC |
$ | 112,201 | $ | (112,023 | ) | $ | — | $ | 178 | (b) | ||||||
Morgan Stanley |
11,379,839 | (11,379,839 | ) | — | — | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 11,492,040 | $ | (11,491,862 | ) | $ | — | $ | 178 | ||||||||
|
|
|
|
|
|
|
|
(a) |
Collateral received in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by the Fund is disclosed in the Fund’s statement of assets and liabilities. |
(b) |
The market value of the loaned securities is determined as of July 31, 2023. Additional collateral is delivered to the Fund on the next business day in accordance with the MSLA. The net amount would be subject to the borrower default indemnity in the event of default by a counterparty. |
The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, each Fund benefits from a borrower default indemnity provided by BlackRock, Inc. (“BlackRock”). BlackRock’s indemnity allows for full replacement of the securities loaned to the extent the collateral received does not cover the value of the securities loaned in the event of borrower default. Each Fund could incur a loss if the value of an investment purchased with cash collateral falls below the market value of the loaned securities or if the value of an investment purchased with cash collateral falls below the value of the original cash collateral received. Such losses are borne entirely by each Fund.
5. |
DERIVATIVE FINANCIAL INSTRUMENTS |
Futures Contracts: Futures contracts are purchased or sold to gain exposure to, or manage exposure to, changes in interest rates (interest rate risk) and changes in the value of equity securities (equity risk) or foreign currencies (foreign currency exchange rate risk).
Futures contracts are exchange-traded agreements between the Funds and a counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and on a specified date. Depending on the terms of a contract, it is settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash amount on the settlement date. Upon entering into a futures contract, the Funds are required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on a contract’s size and risk profile. The initial margin deposit must then be maintained at an established level over the life of the contract. Amounts pledged, which are considered restricted, are included in cash pledged for futures contracts in the Statements of Assets and Liabilities.
Securities deposited as initial margin are designated in the Schedule of Investments and cash deposited, if any, are shown as cash pledged for futures contracts in the Statements of Assets and Liabilities. Pursuant to the contract, the Funds agree to receive from or pay to the broker an amount of cash equal to the daily fluctuation in market value of the contract (“variation margin”). Variation margin is recorded as unrealized appreciation (depreciation) and, if any, shown as variation margin receivable (or payable) on futures contracts in the Statements of Assets and Liabilities. When the contract is closed, a realized gain or loss is recorded in the Statements of Operations equal to the difference between the notional amount of the contract at the time it was opened and the notional amount at the time it was closed. The use of futures contracts involves the risk of an imperfect correlation in the movements in the price of futures contracts and interest rates, foreign currency exchange rates or underlying assets.
28 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
6. |
INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES |
Investment Advisory Fees: Pursuant to an Investment Advisory Agreement with the Trust, BFA manages the investment of each Fund’s assets. BFA is a California corporation indirectly owned by BlackRock. Under the Investment Advisory Agreement, BFA is responsible for substantially all expenses of the Funds, except (i) interest and taxes; (ii) brokerage commissions and other expenses connected with the execution of portfolio transactions; (iii) distribution fees; (iv) the advisory fee payable to BFA; and (v) litigation expenses and any extraordinary expenses (in each case as determined by a majority of the independent trustees).
For its investment advisory services to the iShares China Large-Cap ETF, BFA is entitled to an annual investment advisory fee, accrued daily and paid monthly by the Fund, based on the average daily net assets of the Fund as follows:
Average Daily Net Assets | Investment Advisory Fees | |||
First $6 billion |
0.74 | % | ||
Over $6 billion, up to and including $9 billion |
0.67 | |||
Over $9 billion, up to and including $12 billion |
0.60 | |||
Over $12 billion |
0.54 |
For its investment advisory services to the iShares MSCI China A ETF, BFA is entitled to an annual investment advisory fee of 0.60%, accrued daily and paid monthly by the Fund, based on the average daily net assets of the Fund.
Expense Waivers: BFA may from time to time voluntarily waive and/or reimburse fees or expenses in order to limit total annual fund operating expenses (excluding acquired fund fees and expenses, if any). BFA has elected to implement a voluntary fee waiver in order to limit the iShares MSCI China A ETF’s total annual operating expenses after fee waiver to 0.24%, and currently intends to keep such voluntary fee waiver for the Fund in place through December 31, 2023. Any such voluntary waiver or reimbursement may be eliminated by BFA at any time.
This amount is included in investment advisory fees waived in the Statement of Operations. For the year ended July 31, 2023, the amounts waived in investment advisory fees pursuant to this arrangement were as follows:
iShares ETF | Amounts Waived | |||
MSCI China A |
$ | 1,400,308 |
Distributor: BlackRock Investments, LLC, an affiliate of BFA, is the distributor for each Fund. Pursuant to the distribution agreement, BFA is responsible for any fees or expenses for distribution services provided to the Funds.
Securities Lending: The U.S. Securities and Exchange Commission (the “SEC”) has issued an exemptive order which permits BlackRock Institutional Trust Company, N.A. (“BTC”), an affiliate of BFA, to serve as securities lending agent for the Funds, subject to applicable conditions. As securities lending agent, BTC bears all operational costs directly related to securities lending, including any custodial costs. Each Fund is responsible for fees in connection with the investment of cash collateral received for securities on loan (the “collateral investment fees”). The cash collateral is invested in a money market fund, BlackRock Cash Funds: Institutional or BlackRock Cash Funds: Treasury, managed by BFA, or its affiliates. However, BTC has agreed to reduce the amount of securities lending income it receives in order to effectively limit the collateral investment fees each Fund bears to an annual rate of 0.04%. The SL Agency Shares of such money market fund will not be subject to a sales load, distribution fee or service fee. The money market fund in which the cash collateral has been invested may, under certain circumstances, impose a liquidity fee of up to 2% of the value redeemed or temporarily restrict redemptions for up to 10 business days during a 90 day period, in the event that the money market fund’s weekly liquid assets fall below certain thresholds.
Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment fees. Each Fund retains a portion of securities lending income and remits the remaining portion to BTC as compensation for its services as securities lending agent.
Pursuant to the current securities lending agreement, each Fund retains 82% of securities lending income (which excludes collateral investment fees), and the amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees.
In addition, commencing the business day following the date that the aggregate securities lending income plus the collateral investment fees generated across all 1940 Act iShares exchange-traded funds (the “iShares ETF Complex”) in that calendar year exceeds a specified threshold, each Fund, pursuant to the securities lending agreement, will retain for the remainder of that calendar year 85% of securities lending income (which excludes collateral investment fees), and the amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees.
N O T E S T O F I N A N C I A L S T A T E M E N T S |
29 |
Notes to Financial Statements (continued)
The share of securities lending income earned by each Fund is shown as securities lending income – affiliated – net in its Statements of Operations. For the year ended July 31, 2023, the Funds paid BTC the following amounts for securities lending agent services:
iShares ETF | Amounts | |||
China Large-Cap |
$ | 88,820 |
Officers and Trustees: Certain officers and/or trustees of the Trust are officers and/or trustees of BlackRock or its affiliates.
Other Transactions: Cross trading is the buying or selling of portfolio securities between funds to which BFA (or an affiliate) serves as investment adviser. At its regularly scheduled quarterly meetings, the Board reviews such transactions as of the most recent calendar quarter for compliance with the requirements and restrictions set forth by Rule 17a-7.
For the year ended July 31, 2023, transactions executed by the Funds pursuant to Rule 17a-7 under the 1940 Act were as follows:
iShares ETF | Purchases | Sales |
Net Realized Gain (Loss) |
|||||||||
China Large-Cap |
$ | 10,592,013 | $ | 22,764,517 | $ | (24,654,678 | ) |
Each Fund may invest its positive cash balances in certain money market funds managed by BFA or an affiliate. The income earned on these temporary cash investments is shown as dividends – affiliated in the Statements of Operations.
A fund, in order to improve its portfolio liquidity and its ability to track its underlying index, may invest in shares of other iShares funds that invest in securities in the fund’s underlying index.
7. |
PURCHASES AND SALES |
For the year ended July 31, 2023, purchases and sales of investments, excluding short-term securities and in-kind transactions, were as follows:
iShares ETF | Purchases | Sales | ||||||
China Large-Cap |
$ | 1,599,045,074 | $ | 1,207,403,913 | ||||
MSCI China A |
98,762,518 | 261,952,184 |
There were no in-kind transactions for the year ended July 31, 2023.
8. |
INCOME TAX INFORMATION |
Each Fund is treated as an entity separate from the Trust’s other funds for federal income tax purposes. It is each Fund’s policy to comply with the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies, and to distribute substantially all of its taxable income to its shareholders. Therefore, no U.S. federal income tax provision is required.
Management has analyzed tax laws and regulations and their application to the Funds as of July 31, 2023, inclusive of the open tax return years, and does not believe that there are any uncertain tax positions that require recognition of a tax liability in the Funds’ financial statements.
The tax character of distributions paid was as follows:
|
||||||||
iShares ETF | Year Ended 07/31/23 |
Year Ended 07/31/22 |
||||||
|
||||||||
China Large-Cap |
||||||||
Ordinary income |
$ | 137,823,574 | $ | 82,196,257 | ||||
|
|
|
|
|||||
MSCI China A |
||||||||
Ordinary income |
$ | 8,340,710 | $ | 8,184,031 | ||||
|
|
|
|
As of July 31, 2023, the tax components of accumulated net earnings (losses) were as follows:
iShares ETF |
|
Undistributed Ordinary Income |
|
|
Non-expiring Capital Loss Carryforwards |
(a) |
|
Net Unrealized Gains (Losses) |
(b) |
Total | ||||||
China Large-Cap |
$ | 105,366,586 | $ | (3,429,917,973 | ) | $ | (923,468,827 | ) | $ | (4,248,020,214 | ) | |||||
MSCI China A |
7,209,269 | (113,808,609 | ) | 42,304,746 | (64,294,594 | ) |
(a) |
Amounts available to offset future realized capital gains. |
30 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
(b) |
The difference between book-basis and tax-basis unrealized gains (losses) was attributable primarily to the tax deferral of losses on wash sales, characterization of corporate actions and the realization for tax purposes of unrealized gains on investments in passive foreign investment companies. |
A fund may own shares in certain foreign investment entities, referred to, under U.S. tax law, as “passive foreign investment companies.” Such fund may elect to mark-to-market annually the shares of each passive foreign investment company and would be required to distribute to shareholders any such marked-to-market gains.
As of July 31, 2023, gross unrealized appreciation and depreciation based on cost of investments (including short positions and derivatives, if any) for U.S. federal income tax purposes were as follows:
iShares ETF | Tax Cost |
Gross Unrealized Appreciation |
Gross Unrealized Depreciation |
Net Unrealized Appreciation (Depreciation) |
||||||||||||
China Large-Cap |
$ | 6,517,224,208 | $ | 423,762,750 | $ | (1,347,506,128 | ) | $ | (923,743,378 | ) | ||||||
MSCI China A |
286,279,241 | 83,125,069 | (40,821,892 | ) | 42,303,177 |
9. |
LINE OF CREDIT |
The iShares MSCI China A ETF, along with certain other iShares funds (“Participating Funds”), is a party to a $800 million credit agreement (“Syndicated Credit Agreement”) with a group of lenders, which expires on August 11, 2023. The line of credit may be used for temporary or emergency purposes, including redemptions, settlement of trades and rebalancing of portfolio holdings in certain target markets. The Funds may borrow up to the aggregate commitment amount subject to asset coverage and other limitations as specified in the Syndicated Credit Agreement. The Syndicated Credit Agreement has the following terms: a commitment fee of 0.15% per annum on the unused portion of the credit agreement and interest at a rate equal to the higher of (a) Daily Simple Secured Overnight Financing Rate (“SOFR”) plus 0.10% and 1.00% per annum or (b) the U.S. Federal Funds rate plus 1.00% per annum on amounts borrowed. The commitment fee is generally allocated to each Participating Fund based on the lesser of a Participating Fund’s relative exposure to certain target markets or a Participating Fund’s maximum borrowing amount as set forth by the terms of the Syndicated Credit Agreement.
During the year ended July 31, 2023, the Fund did not borrow under the Syndicated Credit Agreement.
10. |
PRINCIPAL RISKS |
In the normal course of business, each Fund invests in securities or other instruments and may enter into certain transactions, and such activities subject the Fund to various risks, including, among others, fluctuations in the market (market risk) or failure of an issuer to meet all of its obligations. The value of securities or other instruments may also be affected by various factors, including, without limitation: (i) the general economy; (ii) the overall market as well as local, regional or global political and/or social instability; (iii) regulation, taxation or international tax treaties between various countries; or (iv) currency, interest rate or price fluctuations. Local, regional or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues, recessions, or other events could have a significant impact on the Funds and their investments. Each Fund’s prospectus provides details of the risks to which the Fund is subject.
BFA uses a “passive” or index approach to try to achieve each Fund’s investment objective following the securities included in its underlying index during upturns as well as downturns. BFA does not take steps to reduce market exposure or to lessen the effects of a declining market. Divergence from the underlying index and the composition of the portfolio is monitored by BFA.
The Funds may be exposed to additional risks when reinvesting cash collateral in money market funds that do not seek to maintain a stable NAV per share of $1.00, which may be subject to redemption gates or liquidity fees under certain circumstances.
Market Risk: The iShares MSCI China A ETF invests in A-shares (i.e., equity securities of companies based in the People’s Republic of China (“China” or “PRC”) that trade on the Shanghai Stock Exchange and Shenzhen Stock Exchange) primarily through the Shanghai-Hong Kong Stock Connect program or the Shenzhen-Hong Kong Stock Connect program (together, “Stock Connect”). Investing in A-shares through Stock Connect is subject to trading, clearance and settlement procedures, which could pose risks to the Fund. Trading through Stock Connect is subject to a daily quota, which limits the maximum net purchases under Stock Connect each day. The daily quota may restrict the Fund’s ability to invest in A-shares on a timely basis and could affect the Fund’s ability to effectively pursue its investment strategy. Additionally, the Fund may be subject to the risk of price fluctuations on days when the Chinese markets are open, but Stock Connect is not trading. The A-shares market has a higher propensity for trading suspensions than many other global equity markets.
Infectious Illness Risk: An outbreak of an infectious illness, such as the COVID-19 pandemic, may adversely impact the economies of many nations and the global economy, and may impact individual issuers and capital markets in ways that cannot be foreseen. An infectious illness outbreak may result in, among other things, closed international borders, prolonged quarantines, supply chain disruptions, market volatility or disruptions and other significant economic, social and political impacts.
Valuation Risk: The market values of equities, such as common stocks and preferred securities or equity related investments, such as futures and options, may decline due to general market conditions which are not specifically related to a particular company. They may also decline due to factors which affect a particular industry or industries. A fund may invest in illiquid investments. An illiquid investment is any investment that a fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. A fund may experience difficulty in selling illiquid investments in a timely manner at the price that it believes the investments are worth. Prices may fluctuate widely over short or extended periods in response to
N O T E S T O F I N A N C I A L S T A T E M E N T S |
31 |
Notes to Financial Statements (continued)
company, market or economic news. Markets also tend to move in cycles, with periods of rising and falling prices. This volatility may cause a fund’s NAV to experience significant increases or decreases over short periods of time. If there is a general decline in the securities and other markets, the NAV of a fund may lose value, regardless of the individual results of the securities and other instruments in which a fund invests.
Counterparty Credit Risk: The Funds may be exposed to counterparty credit risk, or the risk that an entity may fail to or be unable to perform on its commitments related to unsettled or open transactions, including making timely interest and/or principal payments or otherwise honoring its obligations. The Funds manage counterparty credit risk by entering into transactions only with counterparties that BFA believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Funds to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Funds’ exposure to market, issuer and counterparty credit risks with respect to these financial assets is approximately their value recorded in the Statements of Assets and Liabilities, less any collateral held by the Funds.
A derivative contract may suffer a mark-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform under the contract.
With exchange-traded futures, there is less counterparty credit risk to the Funds since the exchange or clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, credit risk is limited to failure of the clearinghouse. While offset rights may exist under applicable law, a fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency). Additionally, credit risk exists in exchange-traded futures with respect to initial and variation margin that is held in a clearing broker’s customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Funds.
Geographic/Asset Class Risk: A diversified portfolio, where this is appropriate and consistent with a fund’s objectives, minimizes the risk that a price change of a particular investment will have a material impact on the NAV of a fund. The investment concentrations within each Fund’s portfolio are disclosed in its Schedule of Investments.
The Funds invest a significant portion of their assets in issuers located in a single country or a limited number of countries. When a fund concentrates its investments in this manner, it assumes the risk that economic, regulatory, political and social conditions in that country or those countries may have a significant impact on the fund and could affect the income from, or the value or liquidity of, the Fund’s portfolio. Unanticipated or sudden political or social developments may cause uncertainty in the markets and as a result adversely affect the Fund’s investments. Foreign issuers may not be subject to the same uniform accounting, auditing and financial reporting standards and practices as used in the United States. Foreign securities markets may also be more volatile and less liquid than U.S. securities and may be less subject to governmental supervision not typically associated with investing in U.S. securities.
The Funds invest a significant portion of their assets in securities of issuers located in China or with significant exposure to Chinese issuers. Investments in Chinese securities, including certain Hong Kong-listed securities, involve risks specific to China. China may be subject to considerable degrees of economic, political and social instability and demonstrates significantly higher volatility from time to time in comparison to developed markets. Chinese markets generally continue to experience inefficiency, volatility and pricing anomalies resulting from governmental influence, a lack of publicly available information and/or political and social instability. Internal social unrest or confrontations with other neighboring countries may disrupt economic development in China and result in a greater risk of currency fluctuations, currency non-convertibility, interest rate fluctuations and higher rates of inflation. Incidents involving China’s or the region’s security may cause uncertainty in Chinese markets and may adversely affect the Chinese economy and a fund’s investments. Reduction in spending on Chinese products and services, institution of tariffs or other trade barriers, or a downturn in any of the economies of China’s key trading partners may have an adverse impact on the Chinese economy. In addition, measures may be taken to limit the flow of capital and/or sanctions may be imposed, which could prohibit or restrict the ability to own or transfer fund assets and may also include retaliatory actions, such as seizure of fund assets.
The Funds invest a significant portion of their assets in securities of issuers located in Asia or with significant exposure to Asian issuers or countries. The Asian financial markets have recently experienced volatility and adverse trends due to concerns in several Asian countries regarding monetary policy, government intervention in the markets, rising government debt levels or economic downturns. These events may spread to other countries in Asia and may affect the value and liquidity of certain of the Funds’ investments.
The Funds invest a significant portion of their assets in securities within a single or limited number of market sectors. When a fund concentrates its investments in this manner, it assumes the risk that economic, regulatory, political and social conditions affecting such sectors may have a significant impact on the fund and could affect the income from, or the value or liquidity of, the fund’s portfolio. Investment percentages in specific sectors are presented in the Schedule of Investments.
Significant Shareholder Redemption Risk: Certain shareholders may own or manage a substantial amount of fund shares and/or hold their fund investments for a limited period of time. Large redemptions of fund shares by these shareholders may force a fund to sell portfolio securities, which may negatively impact the fund’s NAV, increase the fund’s brokerage costs, and/or accelerate the realization of taxable income/gains and cause the fund to make additional taxable distributions to shareholders.
11. |
CAPITAL SHARE TRANSACTIONS |
Capital shares are issued and redeemed by each Fund only in aggregations of a specified number of shares or multiples thereof (“Creation Units”) at NAV. Except when aggregated in Creation Units, shares of each Fund are not redeemable.
32 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
Transactions in capital shares were as follows:
|
||||||||||||||||
Year Ended 07/31/23 |
Year Ended 07/31/22 |
|||||||||||||||
|
|
|
|
|||||||||||||
iShares ETF | Shares | Amount | Shares | Amount | ||||||||||||
|
||||||||||||||||
China Large-Cap |
||||||||||||||||
Shares sold |
21,300,000 | $ | 633,923,422 | 55,800,000 | $ | 2,047,521,737 | ||||||||||
Shares redeemed |
(8,250,000 | ) | (226,465,936 | ) | (750,000 | ) | (23,293,820 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
13,050,000 | $ | 407,457,486 | 55,050,000 | $ | 2,024,227,917 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
MSCI China A |
||||||||||||||||
Shares sold |
1,650,000 | $ | 54,145,546 | 10,350,000 | $ | 432,813,220 | ||||||||||
Shares redeemed |
(6,650,000 | ) | (215,169,669 | ) | (9,850,000 | ) | (342,768,928 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
(5,000,000 | ) | $ | (161,024,123 | ) | 500,000 | $ | 90,044,292 | |||||||||
|
|
|
|
|
|
|
|
The consideration for the purchase of Creation Units of a fund in the Trust generally consists of the in-kind deposit of a designated portfolio of securities and a specified amount of cash. Certain funds in the Trust may be offered in Creation Units solely or partially for cash in U.S. dollars. Investors purchasing and redeeming Creation Units may pay a purchase transaction fee and a redemption transaction fee directly to State Street Bank and Trust Company, the Trust’s administrator, to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units, including Creation Units for cash. Investors transacting in Creation Units for cash may also pay an additional variable charge to compensate the relevant fund for certain transaction costs (i.e., stamp taxes, taxes on currency or other financial transactions, and brokerage costs) and market impact expenses relating to investing in portfolio securities. Such variable charges, if any, are included in shares sold in the table above.
From time to time, settlement of securities related to in-kind contributions or in-kind redemptions may be delayed. In such cases, securities related to in-kind transactions are reflected as a receivable or a payable in the Statements of Assets and Liabilities.
12. |
SUBSEQUENT EVENTS |
Management’s evaluation of the impact of all subsequent events on the Funds’ financial statements was completed through the date the financial statements were available to be issued and the following items were noted:
Effective August 11, 2023, the Syndicated Credit Agreement to which the Participating Funds are party was extended until August 2024 under the same terms.
N O T E S T O F I N A N C I A L S T A T E M E N T S |
33 |
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of
iShares Trust and Shareholders of each of the two funds listed in the table below
Opinions on the Financial Statements
We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of each of the funds listed in the table below (two of the funds constituting iShares Trust , hereafter collectively referred to as the “Funds”) as of July 31, 2023, the related statements of operations for the year ended July 31, 2023, the statements of changes in net assets for each of the two years in the period ended July 31, 2023, including the related notes, and the financial highlights for each of the five years in the period ended July 31, 2023 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds as of July 31, 2023, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period ended July 31, 2023 and each of the financial highlights for each of the five years in the period ended July 31, 2023 in conformity with accounting principles generally accepted in the United States of America.
iShares China Large-Cap ETF iShares MSCI China A ETF
|
Basis for Opinions
These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of July 31, 2023 by correspondence with the custodian, transfer agent and brokers. We believe that our audits provide a reasonable basis for our opinions.
/s/PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
September 22, 2023
We have served as the auditor of one or more BlackRock investment companies since 2000.
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2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Important Tax Information (unaudited)
The following amounts, or maximum amounts allowable by law, are hereby designated as qualified dividend income for individuals for the fiscal year ended July 31, 2023:
iShares ETF |
Qualified Dividend Income |
|||
China Large-Cap |
$ | 134,506,250 | ||
MSCI China A |
7,856,959 |
The Funds intend to pass through to their shareholders the following amounts, or maximum amounts allowable by law, of foreign source income earned and foreign taxes paid for the fiscal year ended July 31, 2023:
iShares ETF |
Foreign Source Income Earned |
Foreign Taxes Paid |
||||||
China Large-Cap |
$ | 194,691,110 | $ | 10,299,986 | ||||
MSCI China A |
8,281,917 | 831,104 |
I M P O R T A N T T A X I N F O R M A T I O N |
35 |
Board Review and Approval of Investment Advisory Contract
iShares China Large-Cap ETF (the “Fund”)
Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Board Members who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Board Members”), is required annually to consider the approval of the Investment Advisory Agreement between the Trust and BFA (the “Advisory Agreement”) on behalf of the Fund. The Board’s consideration entails a year-long process whereby the Board and its committees (composed solely of Independent Board Members) assess BlackRock’s services to the Fund, including investment management; fund accounting; administrative and shareholder services; oversight of the Fund’s service providers; risk management and oversight; legal and compliance services; and ability to meet applicable legal and regulatory requirements. The Independent Board Members requested, and BFA provided, such information as the Independent Board Members, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Agreement. At meetings on May 2, 2023 and May 15, 2023, a committee composed of all of the Independent Board Members (the “15(c) Committee”), with independent counsel, met with management and reviewed and discussed information provided in response to initial requests of the 15(c) Committee and/or its independent counsel, and requested certain additional information, which management agreed to provide. At a meeting held on June 7-8, 2023, the Board, including the Independent Board Members, reviewed the additional information provided by management in response to these requests.
After extensive discussions and deliberations, the Board, including all of the Independent Board Members, approved the continuance of the Advisory Agreement for the Fund, based on a review of qualitative and quantitative information provided by BFA and their cumulative experience as Board Members. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Independent Board Members were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the continuance of the Advisory Agreement for the Fund, the Board, including the Independent Board Members, considered various factors, including: (i) the expenses and performance of the Fund; (ii) the nature, extent and quality of the services provided by BFA; (iii) the costs of services provided to the Fund and profits realized by BFA and its affiliates; (iv) potential economies of scale and the sharing of related benefits; (v) the fees and services provided for other comparable funds/accounts managed by BFA and its affiliates; and (vi) other benefits to BFA and/or its affiliates. The material factors, none of which was controlling, and conclusions that formed the basis for the Board, including the Independent Board Members, to approve the continuance of the Advisory Agreement are discussed below.
Expenses and Performance of the Fund: The Board reviewed statistical information prepared by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, fees and expenses of other fund(s) in which the Fund invests (if applicable), and waivers/reimbursements (if applicable) of the Fund in comparison with the same information for other ETFs, objectively selected by Broadridge as comprising the Fund’s applicable expense peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of the proprietary ETF methodology used by Broadridge to determine the Fund’s Peer Group. The Board noted that, due to the limitations in providing comparable funds in the Peer Group, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Fund in all instances. The Board also noted that the investment advisory fee rate and overall expenses (net of any waivers and reimbursements) for the Fund were higher than the median of the investment advisory fee rates and overall expenses (net of any waivers and reimbursements) of the funds in its Peer Group, excluding iShares funds. The Board also noted the tradability, liquidity and developed capital markets ecosystem associated with the Fund that differentiates it from other ETFs in the marketplace.
In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as the Fund, Broadridge also provided, and the Board reviewed, a comparison of the Fund’s performance for the one-year, three-year, five-year, ten-year, and since inception periods, as applicable, and for the quarter ended December 31, 2022, to that of such relevant comparison fund(s) for the same periods. The Board noted that the Fund seeks to track its specified underlying index and that, during the year, the Board received periodic reports on the Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative performance information, including additional detailed information as requested by the Board, was also considered. The Board noted that the Fund generally performed in line with its underlying index over the relevant periods.
Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and expense level and the historical performance of the Fund supported the Board’s approval of the continuance of the Advisory Agreement for the coming year.
Nature, Extent and Quality of Services Provided: Based on management’s representations, including information about ongoing enhancements and initiatives with respect to the iShares business, including with respect to capital markets support and analysis, technology, portfolio management, product design and quality, compliance and risk management, global public policy and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Agreement for the coming year as compared with the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to support the iShares funds and their shareholders and have made significant investments into the iShares business. The Board also considered BFA’s compliance program and its compliance record with respect to the Fund, including related programs implemented pursuant to regulatory requirements. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made relevant officers and other employees of BFA (and its affiliates) available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Fund, as well as the resources available to them in managing the Fund. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the May 2, 2023 meeting and throughout the year, and matters related to BFA’s portfolio compliance program and other compliance programs and services.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided to the Fund under the Advisory Agreement supported the Board’s approval of the continuance of the Advisory Agreement for the coming year.
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2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Board Review and Approval of Investment Advisory Contract (continued)
Costs of Services Provided to the Fund and Profits Realized by BFA and its Affiliates: The Board reviewed information about the estimated profitability to BlackRock in managing the Fund, based on the fees payable to BFA and its affiliates (including fees under the Advisory Agreement), and other sources of revenue and expense to BFA and its affiliates from the Fund’s operations for the last calendar year. The Board reviewed BlackRock’s methodology for calculating estimated profitability of the iShares funds, noting that the 15(c) Committee and the Board had focused on the methodology and profitability presentation. The Board recognized that profitability may be affected by numerous factors, including, among other things, fee waivers by BFA, the types of funds managed, expense allocations and business mix. The Board thus recognized that calculating and comparing profitability at individual fund levels is challenging. The Board discussed with management the sources of direct and ancillary revenue, including the revenues to BTC, a BlackRock affiliate, from securities lending by the Fund. The Board also discussed BFA’s estimated profit margin as reflected in the Fund’s profitability analysis and reviewed information regarding potential economies of scale (as discussed below).
Based on this review, the Board concluded that the information considered with respect to the profits realized by BFA and its affiliates under the Advisory Agreement and from other relationships between the Fund and BFA and/or its affiliates, if any, as well as the other factors considered at the meeting, supported the Board’s approval of the continuance of the Advisory Agreement for the coming year.
Economies of Scale: The Board reviewed information and considered the extent to which economies of scale might be realized as the assets of the Fund increase, noting that the issue of potential economies of scale had been focused on by the 15(c) Committee and the Board during their meetings and addressed by management. The 15(c) Committee and the Board received information regarding BlackRock’s historical estimated profitability (as discussed above), including BFA’s and its affiliates’ estimated costs in providing services. The estimated cost information distinguished, among other things, between fixed and variable costs, and showed how the level and nature of fixed and variable costs may impact the existence or size of scale benefits, with the Board recognizing that potential economies of scale are difficult to measure. The 15(c) Committee and the Board reviewed information provided by BFA regarding the sharing of scale benefits with the iShares funds through various means, including, as applicable, through relatively low fee rates established at inception, breakpoints, waivers, or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board noted that the Advisory Agreement for the Fund already provided for breakpoints in the Fund’s investment advisory fee rate as the assets of the Fund, on an aggregated basis with the assets of certain other iShares funds, increase. The Board noted that it would continue to assess the appropriateness of adding new or revised breakpoints in the future.
The Board concluded that this review of potential economies of scale and the sharing of related benefits, as well as the other factors considered at the meeting, supported the Board’s approval of the continuance of the Advisory Agreement for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates: The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds and institutional separate accounts (collectively, the “Other Accounts”). The Board acknowledged BFA’s representation that the iShares funds are fundamentally different investment vehicles from the Other Accounts.
The Board received detailed information regarding how the Other Accounts generally differ from the Fund, including in terms of the types of services and generally more extensive services provided to the Fund, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Fund, as a publicly traded investment vehicle, as compared to the Other Accounts, particularly those that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same investment objective and strategy as the Fund and that track the same index as the Fund. The Board also acknowledged management’s assertion that, for certain iShares funds, and for client segmentation purposes, BlackRock has launched an iShares fund that may provide a similar investment exposure at a lower investment advisory fee rate.
The Board considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund’s expenses borne by BFA under this arrangement and noted that the investment advisory fee rate under the Advisory Agreement for the Fund was generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.
Other Benefits to BFA and/or its Affiliates: The Board reviewed other benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Fund by BFA, both direct and indirect, including, but not limited to, payment of revenue to BTC, the Fund’s securities lending agent, for loaning portfolio securities, as applicable (which was included in the profit margins reviewed by the Board pursuant to BFA’s estimated profitability methodology), payment of advisory fees or other fees to BFA (or its affiliates) in connection with any investments by the Fund in other funds for which BFA (or its affiliates) provides investment advisory services or other services, and BlackRock’s profile in the investment community. The Board further considered other direct benefits that might accrue to BFA, including the potential for reduction in the Fund’s expenses that are borne by BFA under the “all-inclusive” management fee arrangement, due in part to the size and scope of BFA’s investment operations servicing the Fund (and other funds in the iShares complex) as well as in response to a changing market environment. The Board also reviewed and considered information provided by BFA concerning authorized participant primary market order processing services that are provided by BlackRock Investments, LLC (“BRIL”), an affiliate of BFA, and paid for by authorized participants under the ETF Servicing Platform. The Board also noted the revenue received by BFA and/or its affiliates pursuant to an agreement that permits a service provider to use certain portions of BlackRock’s technology platform to service accounts managed by BFA and/or its affiliates, including the iShares funds. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Fund. The Board concluded that any such ancillary benefits would not be disadvantageous to the Fund and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Agreement for the coming year.
Conclusion: Based on a review of the factors described above, as well as such other factors as deemed appropriate by the Board, the Board, including all of the Independent Board Members, determined that the Fund’s investment advisory fee rate under the Advisory Agreement does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded to approve the continuance of the Advisory Agreement for the coming year.
B O A R D R E V I E W A N D A P P R O V A L O F I N V E S T M E N T A D V I S O R Y C O N T R A C T |
37 |
Board Review and Approval of Investment Advisory Contract (continued)
iShares MSCI China A ETF (the “Fund”)
Under Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), the Trust’s Board of Trustees (the “Board”), including a majority of Board Members who are not “interested persons” of the Trust (as that term is defined in the 1940 Act) (the “Independent Board Members”), is required annually to consider the approval of the Investment Advisory Agreement between the Trust and BFA (the “Advisory Agreement”) on behalf of the Fund. The Board’s consideration entails a year-long process whereby the Board and its committees (composed solely of Independent Board Members) assess BlackRock’s services to the Fund, including investment management; fund accounting; administrative and shareholder services; oversight of the Fund’s service providers; risk management and oversight; legal and compliance services; and ability to meet applicable legal and regulatory requirements. The Independent Board Members requested, and BFA provided, such information as the Independent Board Members, with advice from independent counsel, deemed reasonably necessary to evaluate the Advisory Agreement. At meetings on May 2, 2023 and May 15, 2023, a committee composed of all of the Independent Board Members (the “15(c) Committee”), with independent counsel, met with management and reviewed and discussed information provided in response to initial requests of the 15(c) Committee and/or its independent counsel, and requested certain additional information, which management agreed to provide. At a meeting held on June 7-8, 2023, the Board, including the Independent Board Members, reviewed the additional information provided by management in response to these requests.
After extensive discussions and deliberations, the Board, including all of the Independent Board Members, approved the continuance of the Advisory Agreement for the Fund, based on a review of qualitative and quantitative information provided by BFA and their cumulative experience as Board Members. The Board noted its satisfaction with the extent and quality of information provided and its frequent interactions with management, as well as the detailed responses and other information provided by BFA. The Independent Board Members were advised by their independent counsel throughout the process, including about the legal standards applicable to their review. In approving the continuance of the Advisory Agreement for the Fund, the Board, including the Independent Board Members, considered various factors, including: (i) the expenses and performance of the Fund; (ii) the nature, extent and quality of the services provided by BFA; (iii) the costs of services provided to the Fund and profits realized by BFA and its affiliates; (iv) potential economies of scale and the sharing of related benefits; (v) the fees and services provided for other comparable funds/accounts managed by BFA and its affiliates; and (vi) other benefits to BFA and/or its affiliates. The material factors, none of which was controlling, and conclusions that formed the basis for the Board, including the Independent Board Members, to approve the continuance of the Advisory Agreement are discussed below.
Expenses and Performance of the Fund: The Board reviewed statistical information prepared by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent provider of investment company data, regarding the expense ratio components, including gross and net total expenses, fees and expenses of other fund(s) in which the Fund invests (if applicable), and waivers/reimbursements (if applicable) of the Fund in comparison with the same information for other ETFs, objectively selected by Broadridge as comprising the Fund’s applicable expense peer group pursuant to Broadridge’s proprietary ETF methodology (the “Peer Group”). The Board was provided with a detailed description of the proprietary ETF methodology used by Broadridge to determine the Fund’s Peer Group. The Board noted that, due to the limitations in providing comparable funds in the Peer Group, the statistical information provided in Broadridge’s report may or may not provide meaningful direct comparisons to the Fund in all instances. The Board also noted that the investment advisory fee rate and overall expenses (net of any waivers and reimbursements) for the Fund were lower than the median of the investment advisory fee rates and overall expenses (net of any waivers and reimbursements) of the funds in its Peer Group, excluding iShares funds.
In addition, to the extent that any of the comparison funds included in the Peer Group, excluding iShares funds, track the same index as the Fund, Broadridge also provided, and the Board reviewed, a comparison of the Fund’s performance for the one-year, three-year, five-year, ten-year, and since inception periods, as applicable, and for the quarter ended December 31, 2022, to that of such relevant comparison fund(s) for the same periods. The Board noted that the Fund seeks to track its specified underlying index and that, during the year, the Board received periodic reports on the Fund’s short- and longer-term performance in comparison with its underlying index. Such periodic comparative performance information, including additional detailed information as requested by the Board, was also considered. The Board noted that the Fund generally performed in line with its underlying index over the relevant periods.
Based on this review, the other factors considered at the meeting, and their general knowledge of ETF pricing, the Board concluded that the investment advisory fee rate and expense level and the historical performance of the Fund supported the Board’s approval of the continuance of the Advisory Agreement for the coming year.
Nature, Extent and Quality of Services Provided: Based on management’s representations, including information about ongoing enhancements and initiatives with respect to the iShares business, including with respect to capital markets support and analysis, technology, portfolio management, product design and quality, compliance and risk management, global public policy and other services, the Board expected that there would be no diminution in the scope of services required of or provided by BFA under the Advisory Agreement for the coming year as compared with the scope of services provided by BFA during prior years. In reviewing the scope of these services, the Board considered BFA’s investment philosophy and experience, noting that BFA and its affiliates have committed significant resources over time, including during the past year, to support the iShares funds and their shareholders and have made significant investments into the iShares business. The Board also considered BFA’s compliance program and its compliance record with respect to the Fund, including related programs implemented pursuant to regulatory requirements. In that regard, the Board noted that BFA reports to the Board about portfolio management and compliance matters on a periodic basis in connection with regularly scheduled meetings of the Board, and on other occasions as necessary and appropriate, and has provided information and made relevant officers and other employees of BFA (and its affiliates) available as needed to provide further assistance with these matters. The Board also reviewed the background and experience of the persons responsible for the day-to-day management of the Fund, as well as the resources available to them in managing the Fund. In addition to the above considerations, the Board reviewed and considered detailed presentations regarding BFA’s investment performance, investment and risk management processes and strategies provided at the May 2, 2023 meeting and throughout the year, and matters related to BFA’s portfolio compliance program and other compliance programs and services.
Based on review of this information, and the performance information discussed above, the Board concluded that the nature, extent and quality of services provided to the Fund under the Advisory Agreement supported the Board’s approval of the continuance of the Advisory Agreement for the coming year.
38 |
2 0 2 3 I S H A R E S A N N U A L R E P O R T T O S H A R E H O L D E R S |
Board Review and Approval of Investment Advisory Contract (continued)
Costs of Services Provided to the Fund and Profits Realized by BFA and its Affiliates: The Board reviewed information about the estimated profitability to BlackRock in managing the Fund, based on the fees payable to BFA and its affiliates (including fees under the Advisory Agreement), and other sources of revenue and expense to BFA and its affiliates from the Fund’s operations for the last calendar year. The Board reviewed BlackRock’s methodology for calculating estimated profitability of the iShares funds, noting that the 15(c) Committee and the Board had focused on the methodology and profitability presentation. The Board recognized that profitability may be affected by numerous factors, including, among other things, fee waivers by BFA, the types of funds managed, expense allocations and business mix. The Board thus recognized that calculating and comparing profitability at individual fund levels is challenging. The Board discussed with management the sources of direct and ancillary revenue, including the revenues to BTC, a BlackRock affiliate, from securities lending by the Fund. The Board also discussed BFA’s estimated profit margin as reflected in the Fund’s profitability analysis and reviewed information regarding potential economies of scale (as discussed below).
Based on this review, the Board concluded that the information considered with respect to the profits realized by BFA and its affiliates under the Advisory Agreement and from other relationships between the Fund and BFA and/or its affiliates, if any, as well as the other factors considered at the meeting, supported the Board’s approval of the continuance of the Advisory Agreement for the coming year.
Economies of Scale: The Board reviewed information and considered the extent to which economies of scale might be realized as the assets of the Fund increase, noting that the issue of potential economies of scale had been focused on by the 15(c) Committee and the Board during their meetings and addressed by management. The 15(c) Committee and the Board received information regarding BlackRock’s historical estimated profitability (as discussed above), including BFA’s and its affiliates’ estimated costs in providing services. The estimated cost information distinguished, among other things, between fixed and variable costs, and showed how the level and nature of fixed and variable costs may impact the existence or size of scale benefits, with the Board recognizing that potential economies of scale are difficult to measure. The 15(c) Committee and the Board reviewed information provided by BFA regarding the sharing of scale benefits with the iShares funds through various means, including, as applicable, through relatively low fee rates established at inception, breakpoints, waivers, or other fee reductions, as well as through additional investment in the iShares business and the provision of improved or additional infrastructure and services to the iShares funds and their shareholders. The Board noted that the Advisory Agreement for the Fund did not provide for breakpoints in the Fund’s investment advisory fee rate as the assets of the Fund increase. However, the Board noted that it would continue to assess the appropriateness of adding breakpoints in the future.
The Board concluded that this review of potential economies of scale and the sharing of related benefits, as well as the other factors considered at the meeting, supported the Board’s approval of the continuance of the Advisory Agreement for the coming year.
Fees and Services Provided for Other Comparable Funds/Accounts Managed by BFA and its Affiliates: The Board received and considered information regarding the investment advisory/management fee rates for other funds/accounts in the U.S. for which BFA (or its affiliates) provides investment advisory/management services, including open-end funds registered under the 1940 Act (including sub-advised funds), collective trust funds and institutional separate accounts (collectively, the “Other Accounts”). The Board acknowledged BFA’s representation that the iShares funds are fundamentally different investment vehicles from the Other Accounts.
The Board received detailed information regarding how the Other Accounts generally differ from the Fund, including in terms of the types of services and generally more extensive services provided to the Fund, as well as other significant differences. In that regard, the Board considered that the pricing of services to institutional clients is typically based on a number of factors beyond the nature and extent of the specific services to be provided and often depends on the overall relationship between the client and its affiliates and the adviser and its affiliates. In addition, the Board considered the relative complexity and inherent risks and challenges of managing and providing other services to the Fund, as a publicly traded investment vehicle, as compared to the Other Accounts, particularly those that are institutional clients, in light of differing regulatory requirements and client-imposed mandates. The Board noted that BFA and its affiliates do not manage Other Accounts with substantially the same investment objective and strategy as the Fund and that track the same index as the Fund. The Board also acknowledged management’s assertion that, for certain iShares funds, and for client segmentation purposes, BlackRock has launched an iShares fund that may provide a similar investment exposure at a lower investment advisory fee rate.
The Board considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund’s expenses borne by BFA under this arrangement and noted that the investment advisory fee rate under the Advisory Agreement for the Fund was generally higher than the investment advisory/management fee rates for certain of the Other Accounts (particularly institutional clients) and concluded that the differences appeared to be consistent with the factors discussed.
Other Benefits to BFA and/or its Affiliates: The Board reviewed other benefits or ancillary revenue received by BFA and/or its affiliates in connection with the services provided to the Fund by BFA, both direct and indirect, including, but not limited to, payment of revenue to BTC, the Fund’s securities lending agent, for loaning portfolio securities, as applicable (which was included in the profit margins reviewed by the Board pursuant to BFA’s estimated profitability methodology), payment of advisory fees or other fees to BFA (or its affiliates) in connection with any investments by the Fund in other funds for which BFA (or its affiliates) provides investment advisory services or other services, and BlackRock’s profile in the investment community. The Board further considered other direct benefits that might accrue to BFA, including the potential for reduction in the Fund’s expenses that are borne by BFA under the “all-inclusive” management fee arrangement, due in part to the size and scope of BFA’s investment operations servicing the Fund (and other funds in the iShares complex) as well as in response to a changing market environment. The Board also reviewed and considered information provided by BFA concerning authorized participant primary market order processing services that are provided by BlackRock Investments, LLC (“BRIL”), an affiliate of BFA, and paid for by authorized participants under the ETF Servicing Platform. The Board also noted the revenue received by BFA and/or its affiliates pursuant to an agreement that permits a service provider to use certain portions of BlackRock’s technology platform to service accounts managed by BFA and/or its affiliates, including the iShares funds. The Board noted that BFA generally does not use soft dollars or consider the value of research or other services that may be provided to BFA (including its affiliates) in selecting brokers for portfolio transactions for the Fund. The Board concluded that any such ancillary benefits would not be disadvantageous to the Fund and thus would not alter the Board’s conclusion with respect to the appropriateness of approving the continuance of the Advisory Agreement for the coming year.
Conclusion: Based on a review of the factors described above, as well as such other factors as deemed appropriate by the Board, the Board, including all of the Independent Board Members, determined that the Fund’s investment advisory fee rate under the Advisory Agreement does not constitute a fee that is so disproportionately large as to bear no reasonable relationship to the services rendered and that could not have been the product of arm’s-length bargaining, and concluded to approve the continuance of the Advisory Agreement for the coming year.
B O A R D R E V I E W A N D A P P R O V A L O F I N V E S T M E N T A D V I S O R Y C O N T R A C T |
39 |
Supplemental Information (unaudited)
Section 19(a) Notices
The amounts and sources of distributions reported are estimates and are being provided pursuant to regulatory requirements and are not being provided for tax reporting purposes. The actual amounts and sources for tax reporting purposes will depend upon each Fund’s investment experience during the year and may be subject to changes based on tax regulations. Shareholders will receive a Form 1099-DIV each calendar year that will inform them how to report these distributions for federal income tax purposes.
July 31, 2023
Total Cumulative Distributions for the Fiscal Year |
% Breakdown of the Total Cumulative Distributions for the Fiscal Year |
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|
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|
|
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iShares ETF |
Net Investment Income |
Net Realized Capital Gains |
Return of Capital |
Total Per Share |
Net Investment Income |
Net Realized Capital Gains |
Return of Capital |
Total Per Share |
||||||||||||||||||||||||
China Large-Cap(a) |
$ | 0.746077 | $ | — | $ | 0.001443 | $ | 0.747520 | 100 | % | — | % | 0 | %(b) | 100 | % |
(a) |
The Fund estimates that it has distributed more than its net investment income and net realized capital gains; therefore, a portion of the distribution may be a return of capital. A return of capital may occur, for example, when some or all of the shareholder’s investment in the Fund is returned to the shareholder. A return of capital does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income”. When distributions exceed total return performance, the difference will incrementally reduce the Fund’s net asset value per share. |
(b) |
Rounds to less than 1%. |
Tailored Shareholder Reports for Open-End Mutual Funds and ETFs
Effective January 24, 2023, the SEC adopted rule and form amendments to require open-end mutual funds and ETFs to transmit concise and visually engaging streamlined annual and semiannual reports to shareholders that highlight key information. Other information, including financial statements, will no longer appear in a streamlined shareholder report but must be available online, delivered free of charge upon request, and filed on a semiannual basis on Form N-CSR. The rule and form amendments have a compliance date of July 24, 2024. At this time, management is evaluating the impact of these amendments on the shareholder reports for the Funds.
Premium/Discount Information
Information on the Fund’s net asset value, market price, premiums and discounts, and bid-ask spreads can be found at iShares.com.
Regulation under the Alternative Investment Fund Managers Directive
The Alternative Investment Fund Managers Directive, and its United Kingdom (“UK”) equivalent, ( “AIFMD”) impose detailed and prescriptive obligations on fund managers established in the European Union (the “EU”) and the UK. These do not currently apply to managers established outside of the EU or UK, such as BFA (the “Company”). Rather, the Company is only required to comply with certain disclosure, reporting and transparency obligations of AIFMD because it has registered the iShares China Large-Cap ETF (the “Fund”) to be marketed to investors in the EU and/or UK.
Report on Remuneration
The Company is required under AIFMD to make quantitative disclosures of remuneration. These disclosures are made in line with BlackRock’s interpretation of currently available regulatory guidance on quantitative remuneration disclosures. As market or regulatory practice develops BlackRock may consider it appropriate to make changes to the way in which quantitative remuneration disclosures are calculated. Where such changes are made, this may result in disclosures in relation to a fund not being comparable to the disclosures made in the prior year, or in relation to other BlackRock fund disclosures in that same year.
Disclosures are provided in relation to (a) the staff of the Company; (b) staff who are senior management; and (c) staff who have the ability to materially affect the risk profile of the Fund.
All individuals included in the aggregated figures disclosed are rewarded in line with BlackRock’s remuneration policy for their responsibilities across the relevant BlackRock business area. As all individuals have a number of areas of responsibilities, only the portion of remuneration for those individuals’ services attributable to the Fund is included in the aggregate figures disclosed.
BlackRock has a clear and well-defined pay-for-performance philosophy, and compensation programs which support that philosophy.
BlackRock operates a total compensation model for remuneration which includes a base salary, which is contractual, and a discretionary bonus scheme. Although all employees are eligible to receive a discretionary bonus, there is no contractual obligation to make a discretionary bonus award to any employees. For senior management and staff who have the ability to materially affect the risk profile of the Fund, a significant percentage of variable remuneration is deferred over time. All employees are subject to a clawback policy.
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Supplemental Information (unaudited) (continued)
Remuneration decisions for employees are made once annually in January following the end of the performance year, based on BlackRock’s full-year financial results and other non-financial goals and objectives. Alongside financial performance, individual total compensation is also based on strategic and operating results and other considerations such as management and leadership capabilities. No set formulas are established and no fixed benchmarks are used in determining annual incentive awards.
Annual incentive awards are paid from a bonus pool which is reviewed throughout the year by BlackRock’s independent compensation committee, taking into account both actual and projected financial information together with information provided by the Enterprise Risk and Regulatory Compliance departments in relation to any activities, incidents or events that warrant consideration in making compensation decisions. Individuals are not involved in setting their own remuneration.
Each of the control functions (Enterprise Risk, Legal & Compliance, and Internal Audit) each have their own organizational structures which are independent of the business units and therefore staff members in control functions are remunerated independently of the businesses they oversee. Functional bonus pools for those control functions are determined with reference to the performance of each individual function and the remuneration of the senior members of control functions is directly overseen by BlackRock’s independent remuneration committee.
Members of staff and senior management of the Company typically provide both AIFMD and non-AIFMD related services in respect of multiple funds, clients and functions of the Company and across the broader BlackRock group. Conversely, members of staff and senior management of the broader BlackRock group may provide both AIFMD and non-AIFMD related services in respect of multiple funds, clients and functions of the broader BlackRock group and of the Company. Therefore, the figures disclosed are a sum of individuals’ portion of remuneration attributable to the Company according to an objective apportionment methodology which acknowledges the multiple-service nature of the Company and the broader BlackRock group. Accordingly, the figures are not representative of any individual’s actual remuneration or their remuneration structure.
The amount of the total remuneration awarded to the Company’s staff in respect of the Company’s financial year ending December 31, 2022 was USD 4.12 million. This figure is comprised of fixed remuneration of USD 685 thousand and variable remuneration of USD 3.43 million. There was a total of 8 beneficiaries of the remuneration described above.
The amount of the aggregate remuneration awarded by the Company in respect of the Company’s financial year ending December 31, 2022, to its senior management was USD 2.96 million, and to other members of its staff whose actions potentially have a material impact on the risk profile of the Company or its funds was USD 970 thousand. These figures relate to the entire Company and not to the Fund.
Disclosures Under the EU Sustainable Finance Disclosure Regulation
The iShares China Large-Cap ETF (the “Fund”) is registered under the Alternative Investment Fund Managers Directive to be marketed to European Union (“EU”) investors, as noted above. As a result, certain disclosures are required under the EU Sustainable Finance Disclosure Regulation (“SFDR”).
The Fund has not been categorized under the SFDR as an “Article 8” or “Article 9” product. In addition, the Fund’s investment strategy does not take into account the criteria for environmentally sustainable economic activities under the EU sustainable investment taxonomy regulation or principal adverse impacts (“PAIs”) on sustainability factors under the SFDR. PAIs are identified under the SFDR as the material impacts of investment decisions on sustainability factors relating to environmental, social and employee matters, respect for human rights, and anti-corruption and anti-bribery matters.
S U P P L E M E N T A L I N F O R M A T I O N |
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Trustee and Officer Information (unaudited)
The Board of Trustees has responsibility for the overall management and operations of the Funds, including general supervision of the duties performed by BFA and other service providers. Each Trustee serves until he or she resigns, is removed, dies, retires or becomes incapacitated. Each officer shall hold office until his or her successor is elected and qualifies or until his or her death, resignation or removal. Trustees who are not “interested persons” (as defined in the 1940 Act) of the Trust are referred to as independent trustees (“Independent Trustees”).
The registered investment companies advised by BFA or its affiliates (the “BlackRock-advised Funds”) are organized into one complex of open-end equity, multi-asset, index and money market funds and ETFs (the “BlackRock Multi-Asset Complex”), one complex of closed-end funds and open-end non-index fixed-income funds (including ETFs) (the “BlackRock Fixed-Income Complex”) and one complex of ETFs (“Exchange-Traded Fund Complex”) (each, a “BlackRock Fund Complex”). Each Fund is included in the Exchange-Traded Fund Complex. Each Trustee also serves as a Director of iShares, Inc. and a Trustee of iShares U.S. ETF Trust and, as a result, oversees all of the funds within the Exchange-Traded Fund Complex, which consists of 387 funds as of July 31, 2023. With the exception of Robert S. Kapito, Salim Ramji and Aaron Wasserman, the address of each Trustee and officer is c/o BlackRock, Inc., 400 Howard Street, San Francisco, CA 94105. The address of Mr. Kapito, Mr. Ramji and Mr. Wasserman is c/o BlackRock, Inc., 50 Hudson Yards, New York, NY 10001. The Board has designated John E. Kerrigan as its Independent Board Chair. Additional information about the Funds’ Trustees and officers may be found in the Funds’ combined Statement of Additional Information, which is available without charge, upon request, by calling toll-free 1-800-iShares (1-800-474-2737).
Interested Trustees | ||||||
Name (Year of Birth) |
Position(s) |
Principal Occupation(s) During Past 5 Years |
Other Directorships Held by Trustee | |||
Robert S. Kapito(a) (1957) |
Trustee (since 2009). |
President, BlackRock, Inc. (since 2006); Vice Chairman of BlackRock, Inc. and Head of BlackRock’s Portfolio Management Group (since its formation in 1998) and BlackRock, Inc.’s predecessor entities (since 1988); Trustee, University of Pennsylvania (since 2009); President of Board of Directors, Hope & Heroes Children’s Cancer Fund (since 2002). | Director of BlackRock, Inc. (since 2006); Director of iShares, Inc. (since 2009); Trustee of iShares U.S. ETF Trust (since 2011). | |||
Salim Ramji(b) (1970) |
Trustee (since 2019). |
Senior Managing Director, BlackRock, Inc. (since 2014); Global Head of BlackRock’s ETF and Index Investments Business (since 2019); Head of BlackRock’s U.S. Wealth Advisory Business (2015-2019); Global Head of Corporate Strategy, BlackRock, Inc. (2014-2015); Senior Partner, McKinsey & Company (2010-2014). | Director of iShares, Inc. (since 2019); Trustee of iShares U.S. ETF Trust (since 2019). | |||
(a) Robert S. Kapito is deemed to be an “interested person” (as defined in the 1940 Act) of the Trust due to his affiliations with BlackRock, Inc. and its affiliates.
(b) Salim Ramji is deemed to be an “interested person” (as defined in the 1940 Act) of the Trust due to his affiliations with BlackRock, Inc. and its affiliates. | ||||||
Independent Trustees | ||||||
Name (Year of Birth) |
Position(s) |
Principal Occupation(s) During Past 5 Years |
Other Directorships Held by Trustee | |||
John E. Kerrigan (1955) |
Trustee (since 2005); Independent Board Chair (since 2022). |
Chief Investment Officer, Santa Clara University (since 2002). | Director of iShares, Inc. (since 2005); Trustee of iShares U.S. ETF Trust (since 2011); Independent Board Chair of iShares, Inc. and iShares U.S. ETF Trust (since 2022). | |||
Jane D. Carlin (1956) |
Trustee (since 2015); Risk Committee Chair (since 2016). |
Consultant (since 2012); Member of the Audit Committee (2012-2018), Chair of the Nominating and Governance Committee (2017-2018) and Director of PHH Corporation (mortgage solutions) (2012-2018); Managing Director and Global Head of Financial Holding Company Governance & Assurance and the Global Head of Operational Risk Management of Morgan Stanley (2006-2012). | Director of iShares, Inc. (since 2015); Trustee of iShares U.S. ETF Trust (since 2015); Member of the Audit Committee (since 2016), Chair of the Audit Committee (since 2020) and Director of The Hanover Insurance Group, Inc. (since 2016). | |||
Richard L. Fagnani (1954) |
Trustee (since 2017); Audit Committee Chair (since 2019). |
Partner, KPMG LLP (2002-2016); Director of One Generation Away (since 2021). | Director of iShares, Inc. (since 2017); Trustee of iShares U.S. ETF Trust (since 2017). |
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Trustee and Officer Information (unaudited) (continued)
Independent Trustees (continued) | ||||||
Name (Year of Birth) |
Position(s) |
Principal Occupation(s) During Past 5 Years |
Other Directorships Held by Trustee | |||
Cecilia H. Herbert (1949) |
Trustee (since 2005); Nominating and Governance and Equity Plus Committee Chairs (since 2022). |
Chair of the Finance Committee (since 2019) and Trustee and Member of the Finance, Audit and Quality Committees of Stanford Health Care (since 2016); Trustee of WNET, New York’s public media company (since 2011) and Member of the Audit Committee (since 2018), Investment Committee (since 2011) and Personnel Committee (since 2022); Member of the Wyoming State Investment Funds Committee (since 2022); Director of the Jackson Hole Center for the Arts (since 2021); Trustee of Forward Funds (14 portfolios) (2009-2018); Trustee of Salient MF Trust (4 portfolios) (2015-2018). | Director of iShares, Inc. (since 2005); Trustee of iShares U.S. ETF Trust (since 2011). | |||
Drew E. Lawton (1959) |
Trustee (since 2017); 15(c) Committee Chair (since 2017). |
Senior Managing Director of New York Life Insurance Company (2010-2015). | Director of iShares, Inc. (since 2017); Trustee of iShares U.S. ETF Trust (since 2017); Director of Jackson Financial Inc. (since 2021). | |||
John E. Martinez (1961) |
Trustee (since 2003); Securities Lending Committee Chair (since 2019). |
Director of Real Estate Equity Exchange, Inc. (since 2005); Director of Cloudera Foundation (2017-2020); and Director of Reading Partners (2012-2016). | Director of iShares, Inc. (since 2003); Trustee of iShares U.S. ETF Trust (since 2011). | |||
Madhav V. Rajan (1964) |
Trustee (since 2011); Fixed-Income Plus Committee Chair (since 2019). |
Dean, and George Pratt Shultz Professor of Accounting, University of Chicago Booth School of Business (since 2017); Advisory Board Member (since 2016) and Director (since 2020) of C.M. Capital Corporation; Chair of the Board for the Center for Research in Security Prices, LLC (since 2020); Robert K. Jaedicke Professor of Accounting, Stanford University Graduate School of Business (2001-2017); Professor of Law (by courtesy), Stanford Law School (2005-2017); Senior Associate Dean for Academic Affairs and Head of MBA Program, Stanford University Graduate School of Business (2010-2016). | Director of iShares, Inc. (since 2011); Trustee of iShares U.S. ETF Trust (since 2011). | |||
Officers | ||||||
Name (Year of Birth) |
Position(s) |
Principal Occupation(s) During Past 5 Years | ||||
Dominik Rohé (1973) |
President (since 2023). |
Managing Director, BlackRock, Inc. (since 2005); Head of Americas ETF and Index Investments (since 2023); Head of Latin America (2019-2023). | ||||
Trent Walker (1974) |
Treasurer and Chief Financial Officer (since 2020). |
Managing Director, BlackRock, Inc. (since September 2019); Chief Financial Officer of iShares Delaware Trust Sponsor LLC, BlackRock Funds, BlackRock Funds II, BlackRock Funds IV, BlackRock Funds V and BlackRock Funds VI (since 2021); Executive Vice President of PIMCO (2016-2019); Senior Vice President of PIMCO (2008-2015); Treasurer (2013-2019) and Assistant Treasurer (2007-2017) of PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, 2 PIMCO-sponsored interval funds and 21 PIMCO-sponsored closed-end funds. | ||||
Aaron Wasserman (1974) |
Chief Compliance Officer (iShares, Inc. and iShares Trust, since 2023; iShares U.S. ETF Trust, since 2023). |
Managing Director of BlackRock, Inc. (since 2018); Chief Compliance Officer of the BlackRock Multi-Asset Complex, the BlackRock Fixed-Income Complex and the Exchange-Traded Fund Complex (since 2023); Deputy Chief Compliance Officer for the BlackRock Multi-Asset Complex, the BlackRock Fixed-Income Complex and the Exchange-Traded Fund Complex (2014-2023). | ||||
Marisa Rolland (1980) |
Secretary (since 2022). |
Managing Director, BlackRock, Inc. (since 2023); Director, BlackRock, Inc. (2018-2022); Vice President, BlackRock, Inc. (2010-2017). | ||||
Rachel Aguirre (1982) |
Executive Vice President (since 2022). |
Managing Director, BlackRock, Inc. (since 2018); Director, BlackRock, Inc. (2009-2018); Head of U.S. iShares Product (since 2022); Head of EII U.S. Product Engineering (since 2021); Co-Head of EII’s Americas Portfolio Engineering (2020-2021); Head of Developed Markets Portfolio Engineering (2016-2019). |
T R U S T E E A N D O F F I C E R I N F O R M A T I O N |
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Trustee and Officer Information (unaudited) (continued)
Officers (continued) | ||||||
Name (Year of Birth) |
Position(s) |
Principal Occupation(s) During Past 5 Years | ||||
Jennifer Hsui (1976) |
Executive Vice President (since 2022). |
Managing Director, BlackRock, Inc. (since 2009); Co-Head of Index Equity (since 2022). | ||||
James Mauro (1970) |
Executive Vice President (since 2022). |
Managing Director, BlackRock, Inc. (since 2010); Head of Fixed Income Index Investments in the Americas and Head of San Francisco Core Portfolio Management (since 2020). |
Effective March 30, 2023, Dominik Rohé replaced Armando Senra as President.
Effective July 1, 2023, Aaron Wasserman replaced Charles Park as Chief Compliance Officer.
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Electronic Delivery
Shareholders can sign up for e-mail notifications announcing that the shareholder report or prospectus has been posted on the iShares website at iShares.com. Once you have enrolled, you will no longer receive prospectuses and shareholder reports in the mail.
To enroll in electronic delivery:
• |
Go to icsdelivery.com. |
• |
If your brokerage firm is not listed, electronic delivery may not be available. Please contact your broker-dealer or financial advisor. |
Householding
Householding is an option available to certain fund investors. Householding is a method of delivery, based on the preference of the individual investor, in which a single copy of certain shareholder documents and Rule 30e-3 notices can be delivered to investors who share the same address, even if their accounts are registered under different names. Please contact your broker-dealer if you are interested in enrolling in householding and receiving a single copy of prospectuses and other shareholder documents, or if you are currently enrolled in householding and wish to change your householding status.
Availability of Quarterly Schedule of Investments
The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to their reports on Form N-PORT. The Funds’ Forms N-PORT are available on the SEC’s website at sec.gov. Additionally, each Fund makes its portfolio holdings for the first and third quarters of each fiscal year available at iShares.com/fundreports.
Availability of Proxy Voting Policies and Proxy Voting Records
A description of the policies and procedures that the iShares Funds use to determine how to vote proxies relating to portfolio securities and information about how the iShares Funds voted proxies relating to portfolio securities during the most recent twelve-month period ending June 30 is available without charge, upon request (1) by calling toll-free 1-800-474-2737; (2) on the iShares website at iShares.com; and (3) on the SEC website at sec.gov.
A description of the Trust’s policies and procedures with respect to the disclosure of the Fund’s portfolio securities is available in the Fund Prospectus. The Fund discloses its portfolio holdings daily and provides information regarding its top holdings in Fund fact sheets at iShares.com.
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Glossary of Terms Used in this Report
Portfolio Abbreviation | ||
JSC | Joint Stock Company | |
NVS | Non-Voting Shares |
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Want to know more?
iShares.com | 1-800-474-2737
This report is intended for the Funds’ shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current prospectus.
Investing involves risk, including possible loss of principal.
The iShares Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by FTSE International Limited or MSCI Inc., nor do these companies make any representation regarding the advisability of investing in the iShares Funds. BlackRock is not affiliated with the companies listed above
©2023 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc. or its subsidiaries. All other marks are the property of their respective owners.
iS-AR-708-0723
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