July
31,
2022
iShares
Trust
iShares
ESG
MSCI
USA
Min
Vol
Factor
ETF
|
ESMV
|
NASDAQ
iShares
MSCI
USA
Min
Vol
Factor
ETF
|
USMV
|
Cboe
BZX
2022
Annual
Report
Dear
Shareholder,
The
12-month
reporting
period
as
of
July
31,
2022
saw
the
emergence
of
significant
challenges
that
disrupted
the
economic
recovery
and
strong
financial
markets.
The
U.S.
economy
shrank
in
the
first
half
of
2022,
ending
the
run
of
robust
growth
that
followed
the
reopening
of
global
economies
and
the
development
of
COVID-19
vaccines.
Changes
in
consumer
spending
patterns
and
a
tight
labor
market
led
to
elevated
inflation,
which
reached
a
40-year
high.
Moreover,
while
the
foremost
effect
of
Russia’s
invasion
of
Ukraine
has
been
a
severe
humanitarian
crisis,
the
ongoing
war
continued
to
present
challenges
for
both
investors
and
policymakers.
Equity
prices
fell
as
interest
rates
rose,
particularly
weighing
on
relatively
high-valuation
growth
stocks
and
economically
sensitive
small-capitalization
stocks.
While
both
large-
and
small-capitalization
U.S.
stocks
fell,
declines
for
small-capitalization
U.S.
stocks
were
steeper.
Both
emerging
market
stocks
and
international
equities
from
developed
markets
fell
significantly,
pressured
by
rising
interest
rates
and
a
strengthening
U.S.
dollar.
The
10-year
U.S.
Treasury
yield
(which
is
inversely
related
to
bond
prices)
rose
notably
during
the
reporting
period
as
investors
reacted
to
higher
inflation
and
attempted
to
anticipate
its
impact
on
future
interest
rate
changes.
The
corporate
bond
market
also
faced
inflationary
headwinds,
and
increasing
uncertainty
led
to
higher
corporate
bond
spreads
(the
difference
in
yield
between
U.S.
Treasuries
and
similarly-dated
corporate
bonds).
The
U.S.
Federal
Reserve
(the
“Fed”),
acknowledging
that
inflation
is
growing
faster
than
expected,
raised
interest
rates
four
times
while
indicating
that
additional
rate
hikes
were
likely.
Furthermore,
the
Fed
wound
down
its
bond-buying
programs
and
began
to
reduce
its
balance
sheet.
Continued
high
inflation
and
the
Fed’s
statements
led
many
analysts
to
anticipate
that
interest
rates
have
room
to
rise
before
peaking,
although
investors’
inflation
expectations
began
to
decline
near
the
end
of
the
period.
The
horrific
war
in
Ukraine
has
significantly
clouded
the
outlook
for
the
global
economy,
leading
to
major
volatility
in
energy
and
metals
markets.
Sanctions
on
Russia,
Europe’s
top
energy
supplier,
and
general
wartime
disruption
have
magnified
supply
problems
for
key
commodities.
We
believe
elevated
energy
prices
will
continue
to
exacerbate
inflationary
pressure
while
also
constraining
economic
growth.
Combating
inflation
without
stifling
a
recovery,
while
buffering
against
ongoing
supply
and
price
shocks,
will
be
an
especially
challenging
environment
for
setting
effective
monetary
policy.
Despite
the
likelihood
of
more
rate
increases
on
the
horizon,
we
believe
the
Fed
will
ultimately
err
on
the
side
of
protecting
employment,
even
at
the
expense
of
higher
inflation.
In
the
meantime,
however,
we
believe
that
we
are
likely
to
see
a
period
of
slowing
growth
paired
with
relatively
high
inflation.
In
this
environment,
while
we
favor
an
overweight
to
equities
in
the
long-term,
the
market’s
concerns
over
excessive
rate
hikes
from
central
banks
moderate
our
outlook.
Furthermore,
the
energy
shock
and
a
deteriorating
economic
backdrop
in
China
and
Europe
are
likely
to
challenge
corporate
earnings,
so
we
are
underweight
equities
overall
in
the
near-term.
We
take
the
opposite
view
on
credit,
where
higher
spreads
provide
near-term
opportunities,
while
the
likelihood
of
higher
inflation
leads
us
to
take
an
underweight
stance
on
credit
in
the
long-term.
We
believe
that
investment-grade
corporates,
U.K.
gilts,
local-currency
emerging
market
debt,
and
inflation-protected
bonds
(particularly
in
Europe)
offer
strong
opportunities
for
a
six-
to
twelve-month
horizon.
Overall,
our
view
is
that
investors
need
to
think
globally,
extend
their
scope
across
a
broad
array
of
asset
classes,
and
be
nimble
as
market
conditions
change.
We
encourage
you
to
talk
with
your
financial
advisor
and
visit
iShares.com
for
further
insight
about
investing
in
today’s
markets.
Sincerely,
Rob
Kapito
President,
BlackRock,
Inc.
The
Markets
in
Review
Rob
Kapito
President,
BlackRock,
Inc.
Total
Returns
as
of
July
31,
2022
Past
performance
is
not
an
indication
of
future
results.
Index
performance
is
shown
for
illustrative
purposes
only.
You
cannot
invest
directly
in
an
index.
6-Month
12-Month
U.S.
large
cap
equities
(S&P
500
®
Index)
(7.81%)
(4.64%)
U.S.
small
cap
equities
(Russell
2000
®
Index)
(6.42)
(14.29)
International
equities
(MSCI
Europe,
Australasia,
Far
East
Index)
(11.27)
(14.32)
Emerging
market
equities
(MSCI
Emerging
Markets
Index)
(16.24)
(20.09)
3-month
Treasury
bills
(ICE
BofA
3-Month
U.S.
Treasury
Bill
Index)
0.21
0.22
U.S.
Treasury
securities
(ICE
BofA
10-Year
U.S.
Treasury
Index)
(6.38)
(10.00)
U.S.
investment
grade
bonds
(Bloomberg
U.S.
Aggregate
Bond
Index)
(6.14)
(9.12)
Tax-exempt
municipal
bonds
(Bloomberg
Municipal
Bond
Index)
(3.95)
(6.93)
U.S.
high
yield
bonds
(Bloomberg
U.S.
Corporate
High
Yield
2%
Issuer
Capped
Index)
(6.58)
(8.03)
2
This
Page
is
not
Part
of
Your
Fund
Report
Table
of
Contents
Page
3
The
Markets
in
Review
...................................................................................................
2
Annual
Report:
Market
Overview
.......................................................................................................
4
Fund
Summary
........................................................................................................
5
About
Fund
Performance
..................................................................................................
9
Disclosure
of
Expenses
...................................................................................................
9
Schedules
of
Investments
.................................................................................................
10
Financial
Statements:
Statements
of
Assets
and
Liabilities
.........................................................................................
19
Statements
of
Operations
................................................................................................
20
Statements
of
Changes
in
Net
Assets
........................................................................................
21
Financial
Highlights
.....................................................................................................
22
Notes
to
Financial
Statements
...............................................................................................
24
Report
of
Independent
Registered
Public
Accounting
Firm
..............................................................................
31
Important
Tax
Information
(Unaudited)
.................................................................................................
32
Board
Review
and
Approval
of
Investment
Advisory
Contract
...........................................................................
33
Supplemental
Information
.................................................................................................
37
Trustee
and
Officer
Information
..............................................................................................
38
General
Information
.....................................................................................................
40
Glossary
of
Terms
Used
in
this
Report
..........................................................................................
41
Market
Overview
4
2022
iShares
Annual
Report
to
Shareholders
iShares
Trust
Domestic
Market
Overview
U.S.
stocks
declined
for
the
12
months
ended
July
31,
2022
(“reporting
period”),
when
the
Russell
3000
®
Index,
a
broad
measure
of
U.S.
equity
market
performance,
returned
-7.35%.
Equities
advanced
early
in
the
reporting
period
as
strong
household
balance
sheets
and
robust
job
growth
supported
rising
consumer
spending.
Increased
economic
activity
led
to
strong
corporate
earnings
as
companies
reaped
the
benefits
amid
a
recovery
from
the
effects
of
the
coronavirus
pandemic.
However,
significant
challenges
emerged
as
the
reporting
period
continued,
including
high
inflation,
rising
interest
rates,
slower
economic
growth,
and
the
impacts
of
Russia’s
invasion
of
Ukraine.
These
factors
drove
stock
prices
sharply
lower,
erasing
prior
gains
and
leading
to
significantly
negative
performance
for
the
reporting
period
overall.
The
U.S.
economy
grew
briskly
over
the
final
half
of
2021,
powered
primarily
by
consumer
spending.
Record-high
personal
savings
rates
allowed
consumers
to
spend
at
an
elevated
level,
releasing
pent-up
demand
for
goods
and
services.
Growth
subsequently
stalled
in
the
first
half
of
2022,
and
the
economy
contracted
amid
lower
inventories
and
faltering
business
investment.
Despite
the
economic
downturn,
indicators
were
mixed,
showing
evidence
of
a
slowdown
in
some
areas
while
others
remained
positive.
Hiring
continued
to
increase
as
businesses
restored
capacity,
and
unemployment
declined
substantially,
falling
to
3.5%
in
July
2022
—
identical
to
the
pre-pandemic
rate
in
February
2020.
Although
high
inflation
negatively
impacted
consumer
sentiment,
which
declined
significantly,
consumer
spending
continued
to
rise.
The
rapid
increase
in
consumer
spending
drove
a
significant
rise
in
inflation.
Supply
chains
for
many
goods
were
disrupted
by
the
pandemic
and
could
not
quickly
adapt
to
the
rapid
rebound
in
demand.
Oil
prices
also
rose
significantly
as
demand
increased
and
a
lack
of
investment
constrained
the
supply
of
oil.
The
strong
job
market
led
to
higher
wages,
particularly
at
the
lower
end
of
the
market.
These
factors
drove
prices
higher
in
many
areas
of
the
economy.
Rising
inflation
led
to
a
shift
in
policy
from
the
U.S.
Federal
Reserve
(“the
Fed”).
As
the
reporting
period
began,
the
Fed
was
using
accommodative
monetary
policy
to
stimulate
the
economy.
Short-term
interest
rates
were
kept
at
near-zero
levels,
and
the
Fed
used
bond-buying
programs
to
stabilize
debt
markets.
However,
rising
prices
led
the
Fed
to
tighten
monetary
policy
during
the
reporting
period
in
an
attempt
to
prevent
runaway
inflation.
The
Fed
slowed
and
then
ended
its
bond-buying
activities,
finally
reversing
course
as
it
began
to
reduce
its
balance
sheet
in
June
2022.
In
March
2022,
the
Fed
began
to
raise
short-term
interest
rates,
followed
by
three
more
increases
for
a
total
increase
of
225
basis
points,
the
most
rapid
rise
in
decades.
Interest
rates
rose
significantly
in
response,
leading
to
higher
borrowing
costs
for
businesses.
The
effect
of
higher
inflation
and
interest
rates
on
equities
varied
significantly
based
on
equity
class.
Growth
stocks,
which
derive
much
of
their
value
from
expectations
of
future
growth,
declined
significantly
more
than
value
stocks.
Russia’s
invasion
of
Ukraine
in
late
February
2022
led
to
substantial
disruptions
to
the
global
economy
and
increased
uncertainty
in
financial
markets,
exacerbating
inflation
and
impacting
U.S.
businesses
with
operations
in
Russia.
The
invasion
was
met
with
widespread
condemnation,
and
many
countries
imposed
sanctions
on
the
Russian
state,
businesses,
and
individuals.
As
Russia
is
a
top
producer
of
both
oil
and
natural
gas,
global
supply
concerns
led
to
sharp
volatility
in
U.S.
energy
markets.
iShares
®
ESG
MSCI
USA
Min
Vol
Factor
ETF
5
Fund
Summary
Fund
Summary
as
of
July
31,
2022
Investment
Objective
The
iShares
ESG
MSCI
USA
Min
Vol
Factor
ETF
(the
“Fund”)
seeks
to
track
the
investment
results
of
an
index
composed
of
U.S.
large
and
mid
capitalization
equities
that,
in
aggregate,
have
lower
volatility
characteristics,
reduced
carbon
exposure
and
improved
environmental,
social
and
governance
(ESG)
quality
characteristics
relative
to
the
parent
index,
as
represented
by
the
MSCI
USA
Minimum
Volatility
Extended
ESG
Reduced
Carbon
Target
Index
(the
“Index”).
The
Fund
invests
in
a
representative
sample
of
securities
included
in
the
Index
that
collectively
has
an
investment
profile
similar
to
the
Index.
Due
to
the
use
of
representative
sampling,
the
Fund
may
or
may
not
hold
all
of
the
securities
that
are
included
in
the
Index.
Performance
GROWTH
OF
$10,000
INVESTMENT
(SINCE
INCEPTION
AT
NET
ASSET
VALUE)
The
inception
date
of
the
Fund
was
November
2,
2021.
The
first
day
of
secondary
market
trading
was
November
4,
2021.
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
Cumulative
Total
Returns
Since
Inception
Fund
NAV
.......................................................................................................
(6.83
)
%
Fund
Market
.....................................................................................................
–
%
(6.84
)
Index
..........................................................................................................
(6.71
)
Actual
Hypothetical
5%
Return
Beginning
Account
Value
(02/01/22)
Ending
Account
Value
(07/31/22)
Expenses
Paid
During
the
Period
(a)
Beginning
Account
Value
(02/01/22)
Ending
Account
Value
(07/31/22)
Expenses
Paid
During
the
Period
(a)
Annualized
Expense
Ratio
$
1,000.00
‌
$
961.20
‌
$
0.88
‌
$
1,000.00
‌
$
1,023.90
‌
$
0.90
‌
0.18
%
(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.
Fund
Summary
as
of
July
31,
2022
(continued)
iShares
®
ESG
MSCI
USA
Min
Vol
Factor
ETF
6
2022
iShares
Annual
Report
to
Shareholders
Portfolio
Management
Commentary
Investor
interest
in
the
environmental,
social,
and
governance
(“ESG”)
attributes
of
companies
was
mixed
during
the
reporting
period.
After
ESG
investments
reached
a
record
level
in
2021,
monthly
net
inflows
to
ESG-focused
investments
turned
negative
in
May
2022
for
the
first
time
in
three
years.
The
impact
of
the
COVID-19
pandemic
on
public
health
served
as
a
motivating
factor
for
many
businesses
to
reexamine
their
ESG
policies.
A
rule
proposed
by
the
Department
of
Labor
in
October
2021
would
expand
the
ability
of
retirement
plan
sponsors
to
offer
ESG
products,
reversing
the
stance
of
the
prior
administration.
In
March
2022,
the
SEC
proposed
a
rule
to
require
climate-
related
disclosures
from
public
companies.
However,
Texas
implemented
a
law
prohibiting
state
investments
in
businesses
with
certain
ESG-related
policies,
and
Florida
proposed
restrictions
on
ESG
considerations
in
state
investments.
In
this
environment,
stocks
with
improved
ESG
and
lower
volatility
characteristics
declined
during
the
reporting
period.
The
information
technology
sector
was
the
largest
detractor
from
the
Index’s
return,
led
by
the
software
industry.
Declining
earnings
and
investors’
concerns
about
the
high
valuations
of
some
technology
stocks
in
an
environment
of
high
inflation
and
increasing
interest
rates
worked
against
the
industry.
The
return
of
some
remote
workers
to
physical
offices
also
negatively
impacted
the
sales
growth
of
software
platforms
designed
to
facilitate
online
collaboration.
The
consumer
discretionary
sector
further
weighed
on
performance
as
growing
inventories
fueled
by
shifting
consumer
demand
led
to
more
markdowns
in
the
multiline
retail
industry
and
pressured
profits.
Stocks
of
streaming
content
providers
in
the
communication
services
sector
also
retreated
amid
stiff
competition.
On
the
upside,
the
consumer
staples
sector
contributed
to
the
Index’s
performance,
propelled
by
strength
in
the
food
products
industry
amid
international
growth
in
sales
of
snack
foods.
The
utilities
sector
also
gained,
driven
in
part
by
the
profitability
of
sustainable
energy
ventures.
In
terms
of
relative
performance,
the
Index
outperformed
the
broader
market,
as
represented
by
the
MSCI
USA
Index,
for
the
reporting
period.
The
Index
seeks
exposure
to
stocks
that
experience
lower
volatility,
which
were
in
high
demand
during
the
reporting
period
as
investors
sought
refuge
from
volatility
induced
by
elevated
inflation,
interest
rate
increases,
and
geopolitical
instability.
Portfolio
Information
SECTOR
ALLOCATION
Sector
Percent
of
Total
Investments
(a)
Information
Technology
............................
23.3‌
%
Health
Care
...................................
18.4‌
Industrials
.....................................
11.7‌
Consumer
Staples
...............................
11.2‌
Utilities
.......................................
8.0‌
Financials
.....................................
7.7‌
Communication
Services
...........................
7.3‌
Consumer
Discretionary
...........................
6.0‌
Real
Estate
....................................
2.8‌
Materials
.....................................
2.6‌
Energy
.......................................
1.0‌
a
a
(a)
Excludes
money
market
funds.
TEN
LARGEST
HOLDINGS