2022 Prospectus |
• | iShares
MSCI Water Management Multisector
ETF | IWTR | NASDAQ |
Ticker: IWTR | Stock Exchange: Nasdaq |
(ongoing expenses that you pay each year as a percentage of the value of your investments) | ||||||
Management Fees |
Distribution
and Service (12b-1) Fees |
Other Expenses1 |
Total
Annual Fund Operating Expenses | |||
1 |
1 Year | 3 Years | |||
$ |
$ |
■ | Manufacturing or licensing tobacco products (e.g., cigars, blunts, cigarettes, e-cigarettes, inhalers, smokeless or chewing tobacco, snuff), including companies that grow or process raw tobacco leaves; deriving 15% or more revenue from the distribution, retail sales or supply of products essential to the tobacco industry; or owning at least 20% of, or being 50% or more owned by, a company with involvement in tobacco. |
■ | Producing cluster bombs, landmines, depleted uranium weapons, chemical or biological weapons, blinding laser weapons, non-detectable fragments or incendiary weapons (collectively, “controversial weapons”); producing key components of cluster bombs, landmines, depleted uranium weapons, or chemical or biological weapons; owning 20% or more (50% for financial companies) of a controversial weapons or components producer; or being 50% or more owned by a company involved in controversial weapons or components production. Excluded companies may not have any identifiable revenue derived from this business activity. |
■ | Producing firearms or small arms ammunitions for civilian markets; deriving 5% or more revenue from the distribution (wholesale or retail) of such firearms or ammunition; or deriving $20 million or more revenue from the production or distribution (wholesale or retail) of such firearms or ammunition. This exclusion does not cover companies that cater to the military, government and law enforcement markets. |
■ | Deriving 5% or more revenue from thermal coal mining or sales to external parties, but excluding all revenue from metallurgical coal, coal mined for internal power generation, intra-company sales of mined thermal coal and coal trading. |
■ | Deriving 5% or more revenue from thermal coal-based power generation. |
■ | Deriving 5% or more revenue from oil sands extraction, but excluding all revenue from non-extraction activities (e.g., exploration, surveying, processing, refining), intra-company sales and ownership of oil sands reserves with no associated extraction revenue. |
■ | Companies that it determines are involved in “very severe” controversies related to the environmental, social or governance (“ESG”) impact of the company’s operations and/or products and services. The Index Provider defines a controversy as an instance or ongoing situation in which company operations and/or products allegedly have a negative ESG impact, including alleged violations of laws, regulations or accepted international norms. To evaluate ESG controversies, the Index Provider monitors across five categories of ESG impact – environment, human rights and communities, labor rights and supply chain, customers and governance – and 28 sub-categories. |
■ | Companies that it determines are involved in “noteworthy,” “severe” or “very severe” environmental controversies, which can relate to, among other things, toxic emissions and waste, water stress, biodiversity and supply chain management. |
■ | Companies belonging to the bottom 25% of the environmental pillar of the MSCI ESG Ratings framework, relative to their relevant ESG Ratings industry. ESG Ratings industries are peer groups based on GICS sub-industries in which companies face relatively similar key issues (e.g., water stress), as identified by the Index Provider. |
■ | Companies belonging to the bottom 25% of the water stress management score under the MSCI ESG Ratings framework, as determined by the Index Provider. A company’s water stress management score is based on its efforts to manage water-related risks and opportunities through employing water-efficient processes, alternative water sources or water recycling. |
■ | Companies that are assessed as “strongly misaligned” or “misaligned” to any of three United Nations Sustainable Development Goals (“SDGs”): SDG 6, Clean Water and Sanitation; SDG 12, Responsible Consumption and Production; and SDG 14, Life Below Water. MSCI scores SDG alignment on a scale of -10 to 10, where “strongly misaligned” means a score of -10 and “misaligned” means a score equal to or less than -2 and greater than -10. The SDG Alignment framework is built on the premise that companies may contribute to the goals in a variety of ways (positively and negatively) and across several impact areas. The alignment assessment considers revenues from products and services with positive or negative impact as well as operational and performance metrics. |
■ | For SDG 6, companies are assessed on factors including water consumption or withdrawal targets, water reduction programs in operations, water risk monitoring and measurement programs, business exposure to water-intensive or water-polluting operations and the production of water-polluting products such as pesticides and fertilizers. |
■ | For SDG 12, companies are assessed on factors including revenues from fossil fuels, water efficiency programs in operations or the supply chain, more than 20% of revenues from products with high packaging waste and freshwater withdrawal intensity trends. |
■ | For SDG 14, companies are assessed on factors such as revenues from wastewater treatment or environmental remediation, certified sustainable seafood sourcing and more than 20% of revenues from offshore drilling, fishing and aquaculture, products with high levels of packaging waste or marine transport, including cruises and freight transport. |
■ | First, all companies from the water utility GICS sub-industry are included. |
■ | Second, companies with a “business segment relevance” to water score of 25% or more, as determined by the Index Provider, are included. The business segment relevance score represents the percentage of a company’s total revenues derived from water-based business segments. The Index Provider considers a business segment to be water-based if 1) its name includes at least one instance of any of the key words “water,” “plumbing,” or “flow” or 2) the segment is assigned to one of the following Standard Industrial Classification codes: pumps and pumping equipment, plastics plumbing fixtures, plumbing fixture fittings and trim, totalizing fluid meters and counting devices, water well drilling, sewerage system, air and water resource and solid waste management, water supply, or refuse systems. |
■ | Third, companies within the GICS sectors of materials, information technology, industrials and utilities are included if they have a “business description relevance” to water score of 75% or more, as determined by the Index Provider. For companies in the GICS sub-industries of diversified chemicals, specialty chemicals and electronic equipment, a “business description relevance” score of at least 25% is required for inclusion. The business description relevance score is based primarily on the frequency of the key words “water,” “plumbing” and “flow” as a percentage of the total number of words in the company’s business description. To arrive at the relevance score, a company’s key word frequency percentage is normalized relative to that of the company in the Parent Index with the highest key word frequency percentage greater than zero. |
■ | Fourth, companies that derive 25% or more revenues from “sustainable water” products and services (as defined above) are included. Revenue figures associated with “sustainable water” activities are sourced from publicly available information when available. Revenue figures may be estimated by the Index Provider when companies do not report exact revenue figures for “sustainable water” products and services; these estimates are based on certain assumptions, including that a given company's product lines are of equal weight in terms of revenue contribution in the absence of information indicating otherwise. |
■ | Governance and strategy (e.g., executive body responsible for water management strategy and performance, extent to which the company has successfully implemented water-efficient production processes to reduce water intensity, percentage of water consumption from alternative water sources such as gray water, rainwater and sewage); |
■ | Targets (e.g., existence of targets to improve water consumption performance and their aggressiveness in the context of current performance, detailed implementation strategy for reduction in water use, demonstrated track record of achieving water reduction targets); |
■ | Performance (e.g., water intensity trend (as a proportion of sales), water intensity vs. peers as measured by water consumption, water withdrawal and intensity trends); and |
■ | Water conflicts controversies (e.g., if a company is competing for water in a drought area). |
■ | General Impact. This outbreak has resulted in travel restrictions, closed international borders, enhanced health screenings at ports of entry and elsewhere, disruption of, and delays in, healthcare service preparation and delivery, prolonged quarantines, cancellations, supply chain disruptions, lower consumer demand, temporary and permanent closures of stores, restaurants and other commercial establishments, layoffs, defaults and other significant economic impacts, as well as general concern and uncertainty. |
■ | Market Volatility. The outbreak has also resulted in extreme volatility, severe losses, and disruptions in markets which can adversely impact the Fund and its investments, including impairing hedging activity to the extent the Fund engages in such activity, as expected correlations between related markets or instruments may no longer apply. In addition, to the extent the Fund invests in short-term instruments that have negative yields, the Fund’s value may be impaired as a result. Certain issuers of equity securities have cancelled or announced the suspension of dividends. The outbreak has, and may continue to, negatively affect the credit ratings of some fixed-income securities and their issuers. |
■ | Market Closures. Certain local markets have been or may be subject to closures, and there can be no assurance that trading will continue in any local markets in which the Fund may invest, when any resumption of trading will occur or, once such markets resume trading, whether they will face further closures. Any suspension of trading in markets in which the Fund invests will have an impact on the Fund and its investments and will impact the Fund’s ability to purchase or sell securities in such markets. |
■ | Operational Risk. The outbreak could also impair the information technology and other operational systems upon which the Fund’s service providers, including BFA, rely, and could otherwise disrupt the ability of employees of the Fund's service providers to perform critical tasks relating to the Fund, for example, due to the service providers’ employees performing tasks in alternate locations than under normal operating conditions or the illness of certain employees of the Fund's service providers. |
■ | Governmental Interventions. Governmental and quasi-governmental authorities and regulators throughout the world have responded to the outbreak and the resulting economic disruptions with a variety of fiscal and monetary policy changes, including direct capital infusions into companies and other issuers, new monetary policy tools, and lower interest rates. An unexpected or sudden reversal of these policies, or the |
ineffectiveness of such policies, is likely to increase market volatility, which could adversely affect the Fund’s investments. | |
■ | Pre-Existing Conditions. Public health crises caused by the outbreak may exacerbate other pre-existing political, social and economic risks in certain countries or globally, which could adversely affect the Fund and its investments and could result in increased premiums or discounts to the Fund's NAV. |
■ | Government intervention in issuers' operations or structure; |
■ | A lack of market liquidity and market efficiency; |
■ | Greater securities price volatility; |
■ | Exchange rate fluctuations and exchange controls; |
■ | Less availability of public information about issuers; |
■ | Limitations on foreign ownership of securities; |
■ | Imposition of withholding or other taxes; |
■ | Imposition of restrictions on the expatriation of the funds or other assets of the Fund; |
■ | Higher transaction and custody costs and delays in settlement procedures; |
■ | Difficulties in enforcing contractual obligations; |
■ | Lower levels of regulation of the securities markets; |
■ | Weaker accounting, disclosure and reporting requirements and the risk of being delisted from U.S. exchanges; and |
■ | Legal principles relating to corporate governance, directors’ fiduciary duties and liabilities and stockholders’ rights in markets in which the Fund invests may differ from or may not be as extensive or protective as those that apply in the U.S. |
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Email: | [email protected] |
Write: | c/o
BlackRock Investments, LLC 1 University Square Drive, Princeton, NJ 08540 |