iShares Trust

·  iShares 0-5 Year Investment Grade Corporate Bond ETF | SLQD | NASDAQ

·  iShares Global Green Bond ETF | BGRN | NASDAQ

Table of Contents

Market Overview

iShares Trust

Global Bond Market Overview

Global investment-grade bonds declined slightly for the 12 months ended October 31, 2021 (“reporting period”). The Bloomberg Global Aggregate Index, a broad measure of global bond market performance, returned -1.24% in U.S. dollar terms for the reporting period.

While the global economy continued its rebound from the impact of the coronavirus pandemic, the recovery was uneven and beset with challenges. The creation of multiple COVID-19 vaccines and the implementation of vaccination programs globally helped to mitigate the pandemic’s impact and led to the lifting of restrictions in many countries. However, while nearly half of the world’s population received at least one vaccine dose by the end of the reporting period, vaccine distribution varied substantially. The spread of the highly contagious Delta variant led to swift case increases in some areas, causing renewed restrictions and constraining global growth.

Bond performance differed by type, but in general corporate bonds gained more than government bonds, and lower-rated bonds gained more than higher-rated bonds. The improving economic environment and vaccination progress led to investor optimism about the lower-rated segments of the market. However, a notable rise in global inflation pressured bonds, which typically lose value in an inflationary environment.

Bonds in the U.S. established these global patterns, as corporate bonds, particularly high-yield bonds, posted solid returns, backed by strong investor demand for yield, while U.S. Treasuries declined, largely due to rising inflation. Bond issuance was high by historical standards, as corporations were eager to take advantage of low borrowing costs, while the federal government issued debt to finance stimulus and other spending. The U.S. Federal Reserve Bank (“Fed”) continued to keep short-term interest rates at near-zero levels and maintained a significant bond-buying program for U.S. Treasuries and mortgage-backed securities, although it discontinued its corporate bond purchase program. The Fed indicated that it would begin slowing its bond buying activities late in 2021, and their forecast showed that an interest rate increase is possible in 2022. However, the improving employment environment and a sharp rise in inflation led investors to anticipate a more accelerated tightening of monetary policy. Trading activity showed that investors view multiple interest rate increases as probable in 2022.

European bond prices declined overall, as supply chain frictions and increasing commodities prices, particularly for energy commodities, led to the highest Eurozone inflation rate in 13 years. In response, the European Central Bank (“ECB”) slowed the pace of its bond purchases, while keeping its benchmark interest rate at 0%. The E.U. issued €20 billion in common European bonds to partially finance its pandemic recovery fund, attracting high investor interest. Bond prices also declined in the U.K. amid a relatively early vaccination push and robust economic recovery. While the Bank of England kept interest rates at record lows, it signaled that it would soon raise interest rates to counter growing inflation.

In contrast, bonds in the Asia/Pacific region posted a solid gain overall, although gains were mostly concentrated in corporate bonds, particularly the lower-rated segment of the market. Japanese government bonds were nearly flat, as inflation concerns were much less prominent in Japan compared to other regions, and the Bank of Japan showed no signs of tightening monetary policy. Emerging market bonds also advanced, benefiting from higher yields compared with developed economies, as investors sought income in a low interest rate environment. However, concerns late in the reporting period surrounding China’s highly indebted property companies weighed on returns of some emerging market bonds.

Investment Objective

The iShares 0-5 Year Investment Grade Corporate Bond ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. dollar-denominated, investment-grade corporate bonds with remaining maturities of less than five years, as represented by the Markit iBoxx^® USD Liquid Investment Grade 0-5 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 10/15/13. The first day of secondary market trading was 10/17/13.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 9 for more information.

Expense Example

Portfolio Management Commentary

Investment-grade corporate bonds with remaining maturities of less than five years gained fractionally during the reporting period. Bond income and declining yield spreads (the difference between yields of investment-grade corporate bonds and U.S. Treasuries) benefited the Index’s return, offsetting the negative impact of rising interest rates.

Bonds issued by financial companies, which represented approximately 43% of the Index on average, contributed the most to the Index’s return. Banks remained relatively financially healthy during the coronavirus pandemic, supported by economic stimulus, strong balance sheets, and diverse revenue streams. The improving economy also helped financial companies, and many banks released reserves created to account for potential bad loans, boosting income as asset quality improved. Banks’ robust earnings and cash flows, as well as the relatively high yield of bank debt compared to other sectors, drove strong interest from investors. Issuance of bank bonds was high, as banks used debt refinancing to lower their borrowing costs and to meet regulatory requirements in the face of rising deposits. Non-bank finance company bonds also gained, including aircraft leasing companies, which benefited from the improving financial environment of their lessees.

Energy company bonds also contributed to the Index’s return, helped by rising prices for energy commodities. The prices of oil, natural gas, and coal all increased substantially during the reporting period as the global economic rebound led to higher demand for energy. Bonds of consumer cyclicals companies advanced as automotive company debt gained despite production cuts due to a semiconductor shortage.

From a credit quality perspective, most credit rating categories in the Index contributed to the Index’s performance. Lower-rated Baa bonds were the top contributors, as the improving economy tempered concerns about credit quality.

Portfolio Information

Investment Objective

The iShares Global Green Bond ETF (the “Fund”) seeks to track the investment results of an index composed of global investment-grade green bonds that are issued to fund environmental projects, while mitigating exposure to currency fluctuations versus the U.S. dollar, as represented by Bloomberg MSCI Global Green Bond Select (USD Hedged) Index (the “Index”) (formerly the Bloomberg Barclays MSCI Global Green Bond Select (USD Hedged) 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 11/13/18. The first day of secondary market trading was 11/15/18.

Past performance is no guarantee of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” on page 9 for more information.

Expense Example

Portfolio Management Commentary

Green bonds seek to raise funds for projects that aim to positively affect the environment, typically by promoting energy efficiency or reducing carbon emissions. Projects using green bonds included investments in renewable energy generation, wastewater collection and treatment, sustainable forest management, and upgrading equipment to improve energy efficiency. Despite the impact of the coronavirus pandemic, investor interest in green bonds grew significantly, and proceeds from issuance in the first six months of 2021 exceeded the entirety of 2020. Green bonds helped to fund pandemic recovery efforts, as the E.U. issued €12 billion to finance sustainable projects that are a part of its coronavirus recovery fund, the largest single green bond issuance to date. The E.U. also led efforts to systematize the definition and measurement of green bond principles. Its proposed taxonomy, which is currently voluntary pending the approval of member states, requires impact reporting and an external review to ensure compliance.

Investment-grade green bonds declined for the reporting period. Non-U.S. government bonds detracted the most from the Index’s performance, particularly bonds issued by European countries, which use green bonds to finance their sustainability-related activities. French government bonds led the decline in an environment of rising yields (which move inversely to prices) on French sovereign debt. Investor anticipation that the ECB will reduce bond purchases to counter rising inflation pressured French bonds, in addition to government bonds issued by other notable detractors, including the Netherlands and Belgium.

Bonds of foreign agencies also detracted from the Index’s return. This category included agencies such as the Société du Grand Paris, which uses green bonds to finance the extension of Parisian railway networks.

In terms of relative performance, the Index underperformed the broader market, as represented by the Bloomberg Global Aggregate Bond Index (USD Hedged). The Index invests only in bonds that meet Green Bond Principles as verified by MSCI ESG Research, resulting in a mix of bonds that can differ substantially from the broader market. The Index held an overweight position in government-related bonds, particularly foreign agency and supranational bonds, and underweight positions in non-U.S. government bonds and securitized bonds. Security selection in non-U.S. government bonds detracted the most from relative performance, while an overweight to corporate bonds benefited the Index compared to the broader market.

Portfolio Information

About Fund Performance

Past performance is not an indication of future results. Financial markets have experienced extreme volatility and trading in many instruments has been disrupted. These circumstances may continue for an extended period of time and may continue to affect adversely the value and liquidity of each Fund’s investments. As a result, current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at iShares.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are redeemed or sold in the market. Performance for certain funds may reflect a waiver of a portion of investment advisory fees. Without such a waiver, performance would have been lower.

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

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

Shareholder Expenses

As a shareholder of your Fund, you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of fund shares and (2) ongoing costs, including management fees and other fund expenses. The expense example, which is based on an investment of $1,000 invested at the beginning of the period (or from the commencement of operations if less than 6 months) and held through the end of the period, is intended to help you understand your ongoing costs (in dollars and cents) of investing in your Fund and to compare these costs with the ongoing costs of investing in other funds.

Actual Expenses – The table provides information about actual account values and actual expenses. Annualized expense ratios reflect contractual and voluntary fee waivers, if any. To estimate the expenses that you paid on your account over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled “Expenses Paid During the Period.”

Hypothetical Example for Comparison Purposes – The table also provides information about hypothetical account values and hypothetical expenses based on your Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions and other fees paid on purchases and sales of fund shares. Therefore, the hypothetical examples are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.