LOGO

  OCTOBER 31, 2021

 

 

   

 

   2021 Annual Report

 

 

iShares Trust

· iShares iBonds Mar 2023 Term Corporate ex-Financials ETF | IBCE | NYSE Arca

· iShares iBonds Mar 2023 Term Corporate ETF | IBDD | NYSE Arca


The Markets in Review

Dear Shareholder,

The 12-month reporting period as of October 31, 2021 was a remarkable period of adaptation and recovery, as the global economy dealt with the implications of the coronavirus (or “COVID-19”) pandemic. The United States began the reporting period as the initial reopening-led economic rebound was beginning to slow. Nonetheless, the economy continued to grow at a solid pace for the reporting period, eventually regaining the output lost from the pandemic. However, a rapid rebound in consumer spending pushed up against supply constraints and led to elevated inflation.

Equity prices rose with the broader economy, as the implementation of mass vaccination campaigns and passage of two additional fiscal stimulus packages further boosted stocks, and many equity indices neared or surpassed all-time highs late in the reporting period. In the United States, returns of small-capitalization stocks, which benefited the most from the resumption of in-person activities, outpaced large-capitalization stocks. International equities also gained, as both developed and emerging markets continued to recover from the effects of the pandemic.

The 10-year U.S. Treasury yield (which is inversely related to bond prices) had fallen sharply prior to the beginning of the reporting period, which meant bonds were priced for extreme risk avoidance and economic disruption. Despite expectations of doom and gloom, the economy expanded rapidly, stoking inflation concerns in early 2021, which led to higher yields and a negative overall return for most U.S. Treasuries. In the corporate bond market, support from the U.S. Federal Reserve (the “Fed”) assuaged credit concerns and led to solid returns for high-yield corporate bonds, outpacing investment-grade corporate bonds.

The Fed remained committed to accommodative monetary policy by maintaining near-zero interest rates and by reiterating that inflation could exceed its 2% target for a sustained period without triggering a rate increase. In response to rising inflation late in the period, the Fed changed its market guidance, raising the possibility of higher rates in 2022 and reducing bond purchasing beginning in late 2021.

Looking ahead, we believe that the global expansion will continue to broaden as Europe and other developed market economies gain momentum, although the Delta variant of the coronavirus remains a threat, particularly in emerging markets. While we expect inflation to remain elevated in the medium-term as the expansion continues, we believe the recent uptick owes more to temporary supply disruptions than a lasting change in fundamentals. The change in Fed policy also means that moderate inflation is less likely to be followed by interest rate hikes that could threaten the economic expansion.

Overall, we favor a moderately positive stance toward risk, with an overweight in equities. Sectors that are better poised to manage the transition to a lower-carbon world, such as technology and health care, are particularly attractive in the long-term. U.S. small-capitalization stocks and European equities are likely to benefit from the continuing vaccine-led restart, while Chinese equities stand to gain from a more accommodative monetary and fiscal environment as the Chinese economy slows. We are underweight long-term credit, but inflation-protected U.S. Treasuries, Asian fixed income, and emerging market local-currency bonds offer potential opportunities. We believe that international diversification and a focus on sustainability can help provide portfolio resilience, and the disruption created by the coronavirus appears to be accelerating the shift toward sustainable investments.

In this environment, 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,

 

 

LOGO

Rob Kapito

President, BlackRock, Inc.

LOGO

Rob Kapito

President, BlackRock, Inc.

 

Total Returns as of October 31, 2021
     
     6-Month   12-Month
   

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

     10.91%       42.91%
   

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

    1.85   50.80
   

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

    4.14   34.18
   

Emerging market equities
(MSCI Emerging Markets Index)

    (4.87)   16.96
   

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

    0.01     0.06
   

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

    1.59     (4.77)
   

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

    1.06     (0.48)
   

Tax-exempt municipal bonds
(S&P Municipal Bond Index)

    0.33     2.76
   

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

    2.36   10.53
Past performance is not an indication of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.

 

 

2  

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


Table of Contents

 

      Page  

The Markets in Review

     2  

Market Overview

     4  

Fund Summary

     5  

About Fund Performance

     9  

Shareholder Expenses

     9  

Schedules of Investments

     10  

Financial Statements

  

Statements of Assets and Liabilities

     22  

Statements of Operations

     23  

Statements of Changes in Net Assets

     24  

Financial Highlights

     25  

Notes to Financial Statements

     27  

Report of Independent Registered Public Accounting Firm

     34  

Important Tax Information (Unaudited)

     35  

Board Review and Approval of Investment Advisory Contract

     36  

Supplemental Information

     38  

Trustee and Officer Information

     39  

General Information

     41  

 

 

 


Market Overview

 

iShares Trust

U.S. Corporate Bond Market Overview

Short-term U.S. investment-grade corporate bonds posted slightly positive returns for the 12 months ended October 31, 2021 (“reporting period”). The Markit iBoxx USD Liquid Investment Grade 0 – 5 Index, a broad measure of short-term U.S. corporate bond performance, returned 0.49%.

The U.S. economy continued to recover from the effects of the coronavirus pandemic, growing at a brisk pace during the reporting period. Driven by strong consumer spending and significant fiscal and monetary stimulus, U.S. growth outpaced most other developed economies. An ongoing COVID-19 vaccination program helped accelerate the easing of pandemic-related restrictions, and consumers returned to activities that were previously curtailed, such as travel, restaurant dining, and in-person shopping. Spending on goods also remained elevated, leading imports to rise to an all-time high.

However, this robust consumer demand combined with continued pandemic-related disruptions to the global supply chain led to significantly higher inflation. Similarly, in the labor market, the reopening economy and pent-up demand meant that hiring accelerated, and the unemployment rate fell substantially. Nonetheless, total employment remained notably below pre-pandemic levels and job openings reached a record high despite rising wages. Elevated demand drove an increase in industrial production, although rising commodities prices and supply delays constrained growth, particularly late in the reporting period. The emergence of the highly contagious Delta variant, which was responsible for a significant rise in cases beginning late in summer 2021, also weighed on the economy.

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 purchasing program. The Fed indicated that it would begin slowing its bond buying activities late in 2021 and signaled that an interest rate increase could be 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.

Short-term investment-grade bonds benefited from a narrowing yield spread (the difference between yields on investment-grade corporate bonds and U.S. Treasuries). The shortest-term U.S. Treasury yields were nearly flat, as the Fed held its short-term interest rate range steady at 0.00% – 0.25%. For example, the three-month U.S. Treasury yield declined from 0.09% to 0.05%, while the one-year U.S. Treasury yield rose slightly from 0.13% to 0.15%. However, yields of longer-dated U.S. Treasuries within the short-term category, which are more sensitive to inflation, rose during the reporting period. The two-year U.S. Treasury rose from 0.14% to 0.48%, and the five-year U.S. Treasury rose from 0.38% to 1.18%.

Nonetheless, the improving economy meant that investors’ assessments of creditworthiness adjusted, and they became more willing to hold corporate bonds at relatively low interest rates. The compression of the yield spread led to the relatively stronger performance of short-term, investment-grade bonds compared with short-term U.S. Treasuries.

From a sector perspective, bonds issued by financial companies posted solid returns. Banks remained relatively financially healthy during the pandemic, supported by economic stimulus, strong balance sheets, and diverse revenue streams. 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.

Energy company bonds also gained, 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.

 

 

4  

2 0 2 1   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 October 31, 2021    iShares® iBonds® Mar 2023 Term Corporate ex-Financials ETF

 

Investment Objective

The iShares iBonds Mar 2023 Term Corporate ex-Financials ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. dollar-denominated, investment-grade corporate bonds, excluding financials, maturing after March 31, 2022 and before April 1, 2023, as represented by the Bloomberg 2023 Maturity High Quality Corporate Index (the “Index”) (formerly the Bloomberg Barclays 2023 Maturity High Quality Corporate 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
 

Fund NAV

    0.33      2.46      2.55       0.33      12.90      23.98

Fund Market

    0.33        2.42        2.55         0.33        12.71        24.01  

Index

    0.46        2.53        2.62               0.46        13.29        24.74  

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

 

LOGO

The inception date of the Fund was 4/17/13. The first day of secondary market trading was 4/19/13.

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

 

Actual

 

         

Hypothetical 5% Return

 

          

 

 

     

 

 

      
 

Beginning
Account Value
(05/01/21)
 
 
 
      

Ending
Account Value
(10/31/21)
 
 
 
      

Expenses
Paid During
the Period
 
 
 (a) 
           

Beginning
Account Value
(05/01/21)
 
 
 
      

Ending
Account Value
(10/31/21)
 
 
 
      

Expenses
Paid During
the Period
 
 
 (a) 
      

Annualized
Expense
Ratio
 
 
 
  $      1,000.00          $        999.90          $      0.50               $      1,000.00          $      1,024.70          $        0.51          0.10

 

  (a) 

Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). 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 “Shareholder Expenses” on page 9 for more information.

 

 

 

 

U N D   S U M M A R Y

  5


Fund Summary as of October 31, 2021   (continued)    iShares® iBonds® Mar 2023 Term Corporate ex-Financials ETF

 

Portfolio Information

 

ALLOCATION BY CREDIT QUALITY

 

   
Moody’s Credit Ratings*   Percent of   
Net Assets   

Aaa

  1.6%

Aa

  15.4   

A

  56.2   

Baa

  22.8   

Not Rated

  0.8   

Short-Term and Other Assets

  3.2   

FIVE LARGEST HOLDINGS

 

   
Security(a)   Percent of   
Net Assets   

Visa Inc., 2.80%, 12/14/22

  2.2%

QUALCOMM Inc., 3.00%, 05/20/22

  1.7   

Chevron Corp., 2.36%, 12/05/22

  1.7   

Oracle Corp., 2.50%, 10/15/22

  1.5   

BP Capital Markets PLC, 2.50%, 11/06/22

  1.4   
  *

Credit quality ratings shown reflect the ratings assigned by Moody’s Investors Service (“Moody’s”), a widely used independent, nationally recognized statistical rating organization. Moody’s credit ratings are opinions of the credit quality of individual obligations or of an issuer’s general creditworthiness. Investment grade ratings are credit ratings of Baa or higher. Below investment grade ratings are credit ratings of Ba or lower. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change.

 

 

  (a) 

Excludes money market funds.

 

 

 

6  

2 0 2 1   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 October 31, 2021    iShares® iBonds® Mar 2023 Term Corporate ETF

 

Investment Objective

The iShares iBonds Mar 2023 Term Corporate ETF (the “Fund”) seeks to track the investment results of an index composed of U.S. dollar-denominated, investment-grade corporate bonds maturing after March 31, 2022 and before April 1, 2023, as represented by the Bloomberg 2023 Maturity Corporate Index (the “Index”) (the Bloomberg Barclays 2023 Maturity Corporate 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
 

Fund NAV

    0.56      2.73      3.80       0.56      14.39      36.38

Fund Market

    0.53        2.62        3.79         0.53        13.82        36.27  

Index

    0.69        2.80        3.92               0.69        14.82        37.63  

 

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

 

LOGO

The inception date of the Fund was 7/9/13. The first day of secondary market trading was 7/10/13.

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

 

Actual

 

         

Hypothetical 5% Return

 

        

 

 

     

 

 

    
 

Beginning
Account Value
(05/01/21)
 
 
 
      

Ending
Account Value
(10/31/21)
 
 
 
      

Expenses
Paid During
the Period
 
 
 (a)(b) 
           

Beginning
Account Value
(05/01/21)
 
 
 
      

Ending
Account Value
(10/31/21)
 
 
 
      

Expenses
Paid During
the Period
 
 
 (a)(b) 
    

Annualized
Expense
Ratio
 
 
 
  $      1,000.00          $      1,000.50          $        0.45               $      1,000.00          $      1,024.80          $        0.46        0.09

 

  (a) 

Annualized expense ratio and expenses paid during the period do not include fees and expenses of the underlying fund in which the Fund invests.

 

 

  (b) 

Expenses are calculated using the Fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (184 days) and divided by the number of days in the year (365 days). 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 “Shareholder Expenses” on page 9 for more information.

 

 

 

U N D   S U M M A R Y

  7


Fund Summary as of October 31, 2021   (continued)    iShares® iBonds® Mar 2023 Term Corporate ETF

 

Portfolio Information

 

ALLOCATION BY CREDIT QUALITY
   
Moody’s Credit Ratings*   Percent of   
Net Assets   

Aaa

  0.3%

Aa

  8.5   

A

  43.1   

Baa

  36.2   

Ba

  1.4   

Not Rated

  6.2   

Short-Term and Other Assets

  4.3   
FIVE LARGEST HOLDINGS
   
Security(a)   Percent of   
Net Assets   

iShares iBonds Mar 2023 Term Corporate ex-Financials ETF

  4.6%

Bank of America Corp., 3.30%, 01/11/23

  1.0   

AbbVie Inc., 2.90%, 11/06/22

  0.7   

Morgan Stanley, 3.75%, 02/25/23

  0.7   

Morgan Stanley, 2.75%, 05/19/22

  0.7   
  *

Credit quality ratings shown reflect the ratings assigned by Moody’s Investors Service (“Moody’s”), a widely used independent, nationally recognized statistical rating organization. Moody’s credit ratings are opinions of the credit quality of individual obligations or of an issuer’s general creditworthiness. Investment grade ratings are credit ratings of Baa or higher. Below investment grade ratings are credit ratings of Ba or lower. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change.

 

 

  (a) 

Excludes money market funds.

 

 

 

8  

2 0 2 1   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


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.

 

 

B O U T   F U N D   P E R F O R M A N C E  / S H A R E H O L D E R   E X P E N S E S

 

9


Schedule of Investments

October 31, 2021

  

iShares® iBonds® Mar 2023 Term Corporate ex-Financials ETF

(Percentages shown are based on Net Assets)

 

Security  

Par

(000)

     Value  

Corporate Bonds & Notes

    
Aerospace & Defense — 1.1%             

Boeing Co. (The), 2.70%, 05/01/22

  $ 70      $ 70,756  

General Dynamics Corp., 2.25%, 11/15/22 (Call 08/15/22)

        243        246,412  

Lockheed Martin Corp., 3.10%, 01/15/23 (Call 11/15/22)

    35        35,956  
    

 

 

 
       353,124  
Agriculture — 2.7%             

Altria Group Inc., 2.85%, 08/09/22

    30        30,543  

Philip Morris International Inc.
2.38%, 08/17/22 (Call 07/17/22)

    335        339,750  

2.50%, 08/22/22

    159        161,703  

2.63%, 03/06/23

    289        297,390  
    

 

 

 
           829,386  
Apparel — 1.0%             

Ralph Lauren Corp., 1.70%, 06/15/22

    135        136,116  

VF Corp., 2.05%, 04/23/22

    175        176,316  
    

 

 

 
       312,432  
Auto Manufacturers — 6.2%             

American Honda Finance Corp.
0.40%, 10/21/22(a)

    105        104,993  

1.95%, 05/20/22(a)

    85        85,765  

2.05%, 01/10/23

    250        254,612  

2.20%, 06/27/22

    267        270,268  

2.60%, 11/16/22

    90        91,955  

General Motors Financial Co. Inc.
3.25%, 01/05/23 (Call 12/05/22)

    50        51,358  

3.45%, 04/10/22 (Call 02/10/22)

    90        90,733  

3.55%, 07/08/22

    50        51,014  

PACCAR Financial Corp.
1.90%, 02/07/23

    25        25,444  

2.30%, 08/10/22(a)

    125        126,881  

2.65%, 05/10/22

    75        75,938  

Toyota Motor Credit Corp.
2.15%, 09/08/22

    230        233,468  

2.63%, 01/10/23

    248        254,247  

2.70%, 01/11/23

    75        76,965  

2.80%, 07/13/22

    75        76,298  

2.90%, 03/30/23

    24        24,809  
    

 

 

 
       1,894,748  
Beverages — 3.0%             

Constellation Brands Inc., 3.20%, 02/15/23 (Call 01/15/23)

    22        22,666  

Diageo Investment Corp.
2.88%, 05/11/22

    210        212,728  

8.00%, 09/15/22(a)

    85        90,593  

PepsiCo Inc.
2.25%, 05/02/22 (Call 04/02/22)

    195        196,607  

2.75%, 03/01/23

    269        277,153  

3.10%, 07/17/22 (Call 05/17/22)

    134        136,121  
    

 

 

 
       935,868  
Biotechnology — 1.4%             

Amgen Inc.
2.65%, 05/11/22 (Call 04/11/22)

    41        41,421  

3.63%, 05/15/22 (Call 02/15/22)

    61        61,544  

Biogen Inc., 3.63%, 09/15/22

    60        61,650  

Gilead Sciences Inc., 3.25%, 09/01/22 (Call 07/01/22)

    225        229,244  

Illumina Inc., 0.55%, 03/23/23

    21        20,941  
    

 

 

 
       414,800  
Chemicals — 1.6%             

Air Products and Chemicals Inc., 2.75%, 02/03/23

    66        67,912  
Security  

Par

(000)

    Value  
Chemicals (continued)            

Cabot Corp., 3.70%, 07/15/22

  $ 40     $ 40,844  

Celanese U.S. Holdings LLC, 4.63%, 11/15/22

    30       31,189  

Eastman Chemical Co., 3.60%, 08/15/22 (Call 05/15/22)

    41       41,657  

Linde Inc./CT
2.20%, 08/15/22 (Call 05/15/22)

    49       49,490  

2.70%, 02/21/23 (Call 11/21/22)

        159       162,676  

Mosaic Co. (The), 3.25%, 11/15/22 (Call 10/15/22)

    40       40,982  

Nutrien Ltd., 3.15%, 10/01/22 (Call 07/01/22)

    50       50,883  
   

 

 

 
          485,633  
Commercial Services — 1.0%            

Block Financial LLC, 5.50%, 11/01/22 (Call 05/01/22)

    8       8,182  

Cintas Corp. No. 2, 2.90%, 04/01/22 (Call 03/01/22)

    25       25,209  

Equifax Inc., 3.30%, 12/15/22 (Call 09/15/22)

    15       15,346  

Moody’s Corp.
2.63%, 01/15/23 (Call 12/15/22)

    100       102,245  

4.50%, 09/01/22 (Call 06/01/22)

    8       8,180  

PayPal Holdings Inc., 2.20%, 09/26/22

    43       43,709  

RELX Capital Inc., 3.50%, 03/16/23 (Call 02/16/23)

    100       103,633  
   

 

 

 
      306,504  
Computers — 4.8%            

Apple Inc.

   

1.70%, 09/11/22

    23       23,270  

2.10%, 09/12/22 (Call 08/12/22)

    21       21,279  

2.30%, 05/11/22 (Call 04/11/22)

    155       156,392  

2.40%, 01/13/23 (Call 12/13/22)

    59       60,289  

2.70%, 05/13/22

    255       258,236  

2.85%, 02/23/23 (Call 12/23/22)

    265       272,208  

Hewlett Packard Enterprise Co., 4.40%, 10/15/22 (Call 08/15/22)

    80       82,387  

HP Inc., 4.05%, 09/15/22

    45       46,316  

International Business Machines Corp.
1.88%, 08/01/22

    330       333,686  

2.88%, 11/09/22

    230       235,798  
   

 

 

 
      1,489,861  
Cosmetics & Personal Care — 2.7%            

Colgate-Palmolive Co., 1.95%, 02/01/23(a)

    150       152,906  

Procter & Gamble Co. (The), 2.15%, 08/11/22

    352       357,079  

Unilever Capital Corp., 2.20%, 05/05/22 (Call 04/05/22)

    325       327,603  
   

 

 

 
      837,588  
Diversified Financial Services — 2.2%            

Visa Inc., 2.80%, 12/14/22 (Call 10/14/22)

    665       680,634  
   

 

 

 
Electric — 9.1%            

Ameren Illinois Co., 2.70%, 09/01/22 (Call 06/01/22)

    46       46,627  

American Electric Power Co. Inc., Series F, 2.95%, 12/15/22 (Call 09/15/22)

    55       56,135  

Berkshire Hathaway Energy Co., 2.80%, 01/15/23 (Call 12/15/22)

    95       97,341  

CenterPoint Energy Houston Electric LLC, 2.25%, 08/01/22 (Call 05/01/22)

    41       41,385  

CenterPoint Energy Inc., 2.50%, 09/01/22 (Call 08/01/22)

    13       13,194  

Connecticut Light & Power Co. (The), 2.50%, 01/15/23 (Call 10/15/22)

    65       66,197  

Dominion Energy Inc., Series B, 2.75%, 09/15/22 (Call 06/15/22)

    41       41,569  

DTE Energy Co.
2.25%, 11/01/22

    13       13,210  

Series H, 0.55%, 11/01/22

    70       70,019  

 

 

10  

2 0 2 1   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)

October 31, 2021

  

iShares® iBonds® Mar 2023 Term Corporate ex-Financials ETF

(Percentages shown are based on Net Assets)

 

Security  

Par

(000)

    Value  
Electric (continued)            

Duke Energy Carolinas LLC
2.50%, 03/15/23 (Call 01/15/23)

  $     115     $ 117,704  

3.05%, 03/15/23 (Call 02/15/23)

    116       119,828  

Duke Energy Corp.
2.40%, 08/15/22 (Call 07/15/22)(a)

    100       101,403  

3.05%, 08/15/22 (Call 05/15/22)

    120       121,637  

Duke Energy Progress LLC, 2.80%, 05/15/22 (Call 02/15/22)

    100       100,688  

Edison International, 2.40%, 09/15/22 (Call 08/15/22)

    55       55,633  

Entergy Corp., 4.00%, 07/15/22 (Call 05/15/22)

    40       40,709  

Exelon Generation Co. LLC, 4.25%, 06/15/22 (Call 03/15/22)

    111       112,532  

Georgia Power Co., 2.85%, 05/15/22

    40       40,525  

ITC Holdings Corp., 2.70%, 11/15/22 (Call 10/15/22)

    23       23,451  

National Rural Utilities Cooperative Finance Corp.
2.30%, 09/15/22 (Call 08/15/22)

    75       76,112  

2.40%, 04/25/22 (Call 03/25/22)

    175           176,440  

2.70%, 02/15/23 (Call 12/15/22)

    55       56,297  

NextEra Energy Capital Holdings Inc.
0.65%, 03/01/23

    200       200,208  

2.80%, 01/15/23 (Call 12/15/22)

    54       55,343  

2.90%, 04/01/22

    50       50,528  

Northern States Power Co./MN, 2.15%, 08/15/22 (Call 02/15/22)

    165       165,899  

NSTAR Electric Co., 2.38%, 10/15/22 (Call 07/15/22)

    95       96,359  

Oncor Electric Delivery Co. LLC
4.10%, 06/01/22 (Call 03/01/22)(a)

    170       172,026  

7.00%, 09/01/22

    25       26,318  

Pacific Gas and Electric Co.
1.37%, 03/10/23 (Call 11/19/21)

    75       74,723  

1.75%, 06/16/22 (Call 11/19/21)

    120       119,876  

Progress Energy Inc., 3.15%, 04/01/22 (Call 01/01/22)

    41       41,180  

Public Service Enterprise Group Inc., 2.65%, 11/15/22 (Call 10/15/22)

    55       56,075  

Puget Energy Inc., 5.63%, 07/15/22 (Call 04/15/22)

    45       46,034  

Sempra Energy
2.88%, 10/01/22 (Call 07/01/22)

    61       61,907  

2.90%, 02/01/23 (Call 01/01/23)

    6       6,157  

Virginia Electric & Power Co., Series C, 2.75%, 03/15/23 (Call 12/15/22)

    45       46,134  
   

 

 

 
      2,807,403  
Electrical Components & Equipment — 0.5%            

Emerson Electric Co., 2.63%, 02/15/23 (Call 11/15/22)

    150       153,287  
   

 

 

 
Electronics — 1.9%            

Arrow Electronics Inc., 3.50%, 04/01/22 (Call 02/01/22)

    70       70,519  

Flex Ltd., 5.00%, 02/15/23

    100       105,188  

Honeywell International Inc.
0.48%, 08/19/22 (Call 11/19/21)(a)

    65       65,004  

2.15%, 08/08/22 (Call 07/08/22)

    300       303,774  

Jabil Inc., 4.70%, 09/15/22

    31       32,080  
   

 

 

 
      576,565  
Environmental Control — 0.2%            

Waste Management Inc., 2.90%, 09/15/22 (Call 06/15/22)

    60       60,929  
   

 

 

 
Food — 1.1%            

Campbell Soup Co.
2.50%, 08/02/22

    80       81,220  

3.65%, 03/15/23 (Call 02/15/23)

    21       21,798  

Conagra Brands Inc., 3.20%, 01/25/23 (Call 10/25/22)

    26       26,645  

General Mills Inc., 2.60%, 10/12/22 (Call 09/12/22)

    36       36,658  

McCormick & Co. Inc./MD, 2.70%, 08/15/22 (Call 07/15/22)

    27       27,431  

Mondelez International Inc., 0.63%, 07/01/22

    38       38,074  
Security  

Par

(000)

    Value  
Food (continued)            

Sysco Corp., 2.60%, 06/12/22

  $ 50     $ 50,638  

Tyson Foods Inc., 4.50%, 06/15/22 (Call 03/15/22)(a)

    69       70,052  
   

 

 

 
      352,516  
Gas — 0.1%            

National Fuel Gas Co., 3.75%, 03/01/23 (Call 12/01/22)

    35       36,064  
   

 

 

 
Health Care - Products — 0.4%            

DH Europe Finance II Sarl, 2.05%, 11/15/22

    17       17,270  

Zimmer Biomet Holdings Inc., 3.70%, 03/19/23 (Call 02/19/23)

        100       103,800  
   

 

 

 
          121,070  
Health Care - Services — 0.6%            

CommonSpirit Health, 2.95%, 11/01/22

    54       55,169  

Kaiser Foundation Hospitals, 3.50%, 04/01/22

    135       136,570  
   

 

 

 
      191,739  
Home Builders — 0.2%            

NVR Inc., 3.95%, 09/15/22 (Call 06/15/22)(a)

    70       71,400  
   

 

 

 
Household Products & Wares — 0.3%            

Church & Dwight Co. Inc., 2.88%, 10/01/22

    51       52,149  

Clorox Co. (The), 3.05%, 09/15/22 (Call 06/15/22)(a)

    48       48,757  
   

 

 

 
      100,906  
Internet — 3.8%            

Amazon.com Inc.
2.40%, 02/22/23 (Call 01/22/23)

    355       363,399  

2.50%, 11/29/22 (Call 08/29/22)

    151       153,590  

Baidu Inc.
2.88%, 07/06/22

    200       202,506  

3.50%, 11/28/22

    200       205,298  

Booking Holdings Inc., 2.75%, 03/15/23 (Call 02/15/23)

    201       206,598  

eBay Inc., 2.75%, 01/30/23 (Call 12/30/22)

    28       28,696  
   

 

 

 
      1,160,087  
Iron & Steel — 0.2%            

Nucor Corp., 4.13%, 09/15/22 (Call 06/15/22)

    59       60,311  
   

 

 

 
Machinery — 5.6%            

ABB Finance USA Inc., 2.88%, 05/08/22

    255       258,307  

Caterpillar Financial Services Corp.
0.25%, 03/01/23

    205       204,506  

1.90%, 09/06/22

    55       55,729  

1.95%, 11/18/22

    50       50,781  

2.40%, 06/06/22

    155       156,911  

2.55%, 11/29/22

    33       33,734  

2.63%, 03/01/23

    149       153,185  

2.85%, 06/01/22

    75       76,082  

Deere & Co., 2.60%, 06/08/22 (Call 03/08/22)

    328       330,680  

John Deere Capital Corp.
2.15%, 09/08/22

    38       38,554  

2.80%, 03/06/23

    360       371,171  
   

 

 

 
      1,729,640  
Manufacturing — 2.2%            

3M Co.
1.75%, 02/14/23 (Call 01/14/23)

    100       101,559  

2.00%, 06/26/22

    227       229,474  

2.25%, 03/15/23 (Call 02/15/23)

    159       162,587  

Eaton Corp., 2.75%, 11/02/22

    75       76,672  

General Electric Co.
2.70%, 10/09/22

    25       25,504  

3.10%, 01/09/23

    26       26,763  

 

 

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

  11


Schedule of Investments  (continued)

October 31, 2021

  

iShares® iBonds® Mar 2023 Term Corporate ex-Financials ETF

(Percentages shown are based on Net Assets)

 

Security  

Par

(000)

    Value  
Manufacturing (continued)            

Parker-Hannifin Corp., 3.50%, 09/15/22(a)

  $ 40     $ 41,030  
   

 

 

 
      663,589  
Media — 1.7%            

Comcast Cable Communications Holdings Inc., 9.46%, 11/15/22

        209       228,523  

Discovery Communications LLC, 2.95%, 03/20/23 (Call 02/20/23)

    14       14,413  

TWDC Enterprises 18 Corp., 2.35%, 12/01/22

    170       173,255  

Walt Disney Co. (The)
1.65%, 09/01/22(a)

    60       60,620  

3.00%, 09/15/22

    46       47,026  
   

 

 

 
          523,837  
Metal Fabricate & Hardware — 0.8%            

Precision Castparts Corp., 2.50%, 01/15/23 (Call 10/15/22)

    227       231,343  
   

 

 

 
Mining — 0.0%            

Newmont Corp., 3.70%, 03/15/23 (Call 12/15/22)

    14       14,445  
   

 

 

 
Oil & Gas — 8.3%            

BP Capital Markets PLC, 2.50%, 11/06/22

    435       443,513  

Canadian Natural Resources Ltd., 2.95%, 01/15/23 (Call 12/15/22)

    57       58,389  

Chevron Corp., 2.36%, 12/05/22 (Call 09/05/22)

    500       508,530  

Chevron USA Inc., 0.33%, 08/12/22

    21       21,001  

EOG Resources Inc., 2.63%, 03/15/23 (Call 12/15/22)

    300       306,798  

Exxon Mobil Corp.
1.90%, 08/16/22

    114       115,376  

2.73%, 03/01/23 (Call 01/01/23)

    277       284,138  

Phillips 66, 4.30%, 04/01/22

    95       96,542  

Shell International Finance BV
2.25%, 01/06/23

    244       249,068  

2.38%, 08/21/22

    245       248,964  

TotalEnergies Capital International SA, 2.70%, 01/25/23

    230       236,093  
   

 

 

 
      2,568,412  
Oil & Gas Services — 1.0%            

Baker Hughes Holdings LLC/Baker Hughes Co-Obligor Inc., 2.77%, 12/15/22 (Call 11/15/22)

    307       313,880  
   

 

 

 
Pharmaceuticals — 10.7%            

AbbVie Inc.
2.30%, 11/21/22(a)

    25       25,461  

2.90%, 11/06/22

    147       150,438  

3.25%, 10/01/22 (Call 07/01/22)

    55       55,977  

AmerisourceBergen Corp., 0.74%, 03/15/23 (Call 03/15/22)

    100       100,053  

AstraZeneca PLC, 2.38%, 06/12/22 (Call 05/12/22)

    38       38,405  

Bristol-Myers Squibb Co.

   

2.00%, 08/01/22

    212       214,608  

2.60%, 05/16/22

    105       106,331  

2.75%, 02/15/23 (Call 01/15/23)

    22       22,600  

3.25%, 08/15/22

    106       108,406  

3.25%, 02/20/23 (Call 01/20/23)

    154       159,230  

3.55%, 08/15/22

    110       112,677  

Cardinal Health Inc., Series 2021-4, 3.20%, 03/15/23

    60       62,023  

CVS Health Corp.
2.75%, 12/01/22 (Call 09/01/22)

    46       46,838  

3.50%, 07/20/22 (Call 05/20/22)

    83       84,374  

3.70%, 03/09/23 (Call 02/09/23)

    64       66,500  

4.75%, 12/01/22 (Call 09/01/22)

    26       26,892  

Eli Lilly & Co., 2.35%, 05/15/22

    194       196,225  

GlaxoSmithKline Capital Inc., 2.80%, 03/18/23

    230       237,217  

GlaxoSmithKline Capital PLC, 2.85%, 05/08/22

    372       376,765  
Security  

Par

(000)

    Value  
Pharmaceuticals (continued)            

Johnson & Johnson, 2.05%, 03/01/23 (Call 01/01/23)(a)

  $ 97     $ 98,824  

McKesson Corp., 2.85%, 03/15/23 (Call 12/15/22)

    46       47,080  

Merck & Co. Inc., 2.40%, 09/15/22 (Call 06/15/22)

    240       242,993  

Novartis Capital Corp.
2.40%, 05/17/22 (Call 04/17/22)

        275       277,670  

2.40%, 09/21/22

    325       331,026  

Viatris Inc., 1.13%, 06/22/22(b)

    45       45,162  

Zoetis Inc., 3.25%, 02/01/23 (Call 11/01/22)

    50       51,327  
   

 

 

 
          3,285,102  
Pipelines — 2.0%            

Enbridge Inc., 2.90%, 07/15/22 (Call 06/15/22)

    17       17,252  

Energy Transfer LP
3.45%, 01/15/23 (Call 10/15/22)

    41       41,943  

3.60%, 02/01/23 (Call 11/01/22)

    50       51,343  

4.25%, 03/15/23 (Call 12/15/22)

    56       58,071  

Energy Transfer LP/Regency Energy Finance Corp., 5.00%, 10/01/22 (Call 07/01/22)

    12       12,342  

Enterprise Products Operating LLC, 3.35%, 03/15/23 (Call 12/15/22)

    67       69,078  

Kinder Morgan Energy Partners LP
3.45%, 02/15/23 (Call 11/15/22)

    76       78,182  

3.95%, 09/01/22 (Call 06/01/22)(a)

    23       23,462  

Kinder Morgan Inc., 3.15%, 01/15/23 (Call 12/15/22)

    15       15,415  

MPLX LP, 3.38%, 03/15/23 (Call 02/15/23)

    70       72,370  

ONEOK Partners LP, 3.38%, 10/01/22 (Call 07/01/22)

    45       45,819  

TransCanada PipeLines Ltd., 2.50%, 08/01/22

    45       45,612  

Williams Companies Inc. (The), 3.35%, 08/15/22 (Call 05/15/22)

    81       82,231  
   

 

 

 
      613,120  
Real Estate Investment Trusts — 0.3%            

American Tower Corp., 3.50%, 01/31/23

    85       88,016  
   

 

 

 
Retail — 3.8%            

AutoZone Inc., 3.70%, 04/15/22 (Call 01/15/22)

    38       38,256  

Costco Wholesale Corp., 2.30%, 05/18/22 (Call 04/18/22)

    217       219,031  

Home Depot Inc. (The), 2.63%, 06/01/22 (Call 05/01/22)

    370       374,181  

Lowe’s Companies Inc., 3.12%, 04/15/22 (Call 01/15/22)

    100       100,571  

Starbucks Corp.
2.70%, 06/15/22 (Call 04/15/22)

    98       99,051  

3.10%, 03/01/23 (Call 02/01/23)

    26       26,811  

Walgreen Co., 3.10%, 09/15/22

    20       20,449  

Walmart Inc., 2.35%, 12/15/22 (Call 11/15/22)

    272       277,677  
   

 

 

 
      1,156,027  
Semiconductors — 5.1%            

Intel Corp.
2.35%, 05/11/22 (Call 04/11/22)

    125       126,119  

2.70%, 12/15/22

    375       384,364  

3.10%, 07/29/22

    225       229,601  

Maxim Integrated Products Inc., 3.38%, 03/15/23 (Call 12/15/22)

    40       41,313  

QUALCOMM Inc.
2.60%, 01/30/23 (Call 12/30/22)

    175       179,303  

3.00%, 05/20/22

    505       512,262  

Texas Instruments Inc., 1.85%, 05/15/22 (Call 04/15/22)

    110       110,785  
   

 

 

 
      1,583,747  
Software — 4.3%            

Adobe Inc., 1.70%, 02/01/23

    57       57,904  

Autodesk Inc., 3.60%, 12/15/22 (Call 09/15/22)

    40       40,967  

Fidelity National Information Services Inc., 0.38%, 03/01/23

    29       28,911  

Fiserv Inc., 3.50%, 10/01/22 (Call 07/01/22)

    51       52,017  

 

 

12  

2 0 2 1   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)

October 31, 2021

  

iShares® iBonds® Mar 2023 Term Corporate ex-Financials ETF

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  
Software (continued)            

Microsoft Corp.
2.13%, 11/15/22(a)

  $     199     $ 202,526  

2.65%, 11/03/22 (Call 09/03/22)

    183       186,536  

Oracle Corp.
2.50%, 05/15/22 (Call 03/15/22)

    175       176,332  

2.50%, 10/15/22(a)

    460       468,726  

2.63%, 02/15/23 (Call 01/15/23)

    30       30,764  

Roper Technologies Inc., 3.13%, 11/15/22 (Call 08/15/22)

    33       33,631  

VMware Inc., 2.95%, 08/21/22 (Call 07/21/22)

    31       31,520  
   

 

 

 
      1,309,834  
Telecommunications — 2.0%            

AT&T Inc.
2.63%, 12/01/22 (Call 09/01/22)

    145       147,480  

3.00%, 06/30/22 (Call 04/30/22)

    60       60,725  

Cisco Systems Inc.
2.60%, 02/28/23

    145       148,982  

3.00%, 06/15/22

    150       152,497  

Vodafone Group PLC, 2.95%, 02/19/23

    100       102,862  
   

 

 

 
      612,546  
Textiles — 0.1%            

Mohawk Industries Inc., 3.85%, 02/01/23 (Call 11/01/22)(a)

    30       30,944  
   

 

 

 
Transportation — 2.8%            

Burlington Northern Santa Fe LLC
3.00%, 03/15/23 (Call 12/15/22)

    190       195,365  

3.05%, 09/01/22 (Call 06/01/22)

    100       101,508  

Norfolk Southern Corp., 2.90%, 02/15/23 (Call 11/15/22)

    46       47,099  

Ryder System Inc., 3.40%, 03/01/23 (Call 02/01/23)

    55       56,900  

Union Pacific Corp.
2.95%, 01/15/23 (Call 10/15/22)

    45       46,016  

4.16%, 07/15/22 (Call 04/15/22)

    40       40,682  

United Parcel Service Inc.
2.35%, 05/16/22 (Call 04/16/22)

    20       20,185  

2.45%, 10/01/22

    339       345,627  
   

 

 

 
      853,382  
   

 

 

 

Total Corporate Bonds & Notes — 96.8%
(Cost: $29,420,293)

          29,810,719  
   

 

 

 
Security   Shares
(000)
    Value  

Short-Term Investments

   
Money Market Funds — 7.8%            

BlackRock Cash Funds: Institutional, SL Agency Shares, 0.05%(c)(d)(e)

    1,554     $ 1,554,362  

BlackRock Cash Funds: Treasury, SL Agency Shares, 0.00%(c)(d)

    859       859,000  
   

 

 

 
      2,413,362  
   

 

 

 

Total Short-Term Investments — 7.8%
(Cost: $ 2,412,858)

      2,413,362  
   

 

 

 

Total Investments in Securities — 104.6%
(Cost: $31,833,151)

      32,224,081  

Other Assets, Less Liabilities — (4.6)%

      (1,428,335
   

 

 

 

Net Assets — 100.0%

    $   30,795,746  
   

 

 

 

 

(a) 

All or a portion of this security is on loan.

(b) 

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.    

(c) 

Affiliate of the Fund.

(d) 

Annualized 7-day yield as of period end.

(e) 

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 October 31, 2021 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

 

 

   
    Affiliated Issuer   Value at
10/31/20
   

Purchases

at Cost

    Proceeds
from Sales
    Net Realized
Gain (Loss)
   

Change in
Unrealized
Appreciation

(Depreciation)

    Value at
10/31/21
   

Shares
Held at
10/31/21

(000)

    Income     Capital Gain
Distributions from
Underlying Funds
     
 

 

   
 

BlackRock Cash Funds: Institutional, SL Agency Shares

  $ 1,216,086     $ 338,640 (a)    $     $ (100   $ (264   $ 1,554,362       1,554     $ 2,120 (b)    $    
 

BlackRock Cash Funds: Treasury, SL Agency Shares

    529,000       330,000 (a)                        859,000       859       129          
         

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   
          $ (100   $ (264   $ 2,413,362       $ 2,249     $    
         

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

  (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.    

 

 

 

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

  13


Schedule of Investments  (continued)

October 31, 2021

  

iShares® iBonds® Mar 2023 Term Corporate ex-Financials ETF

 

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of financial instruments. For a description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, refer to the Notes to Financial Statements.

The following table summarizes the Fund’s financial instruments categorized in the fair value hierarchy. The breakdown of the Fund’s financial instruments into major categories is disclosed in the Schedule of Investments above.

 

 

 
     Level 1        Level 2        Level 3        Total  

 

 

Investments

                 

Assets

                 

Corporate Bonds & Notes

   $        $ 29,810,719        $        $ 29,810,719  

Money Market Funds

     2,413,362                            2,413,362  
  

 

 

      

 

 

      

 

 

      

 

 

 
   $   2,413,362        $ 29,810,719        $             —        $ 32,224,081  
  

 

 

      

 

 

      

 

 

      

 

 

 

See notes to financial statements.

 

 

14  

2 0 2 1   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

October 31, 2021

  

iShares® iBonds® Mar 2023 Term Corporate ETF

(Percentages shown are based on Net Assets)

 

Security  

Par

(000)

    Value  

Corporate Bonds & Notes

   
Aerospace & Defense — 0.9%            

Boeing Co. (The)
1.17%, 02/04/23 (Call 02/04/22)

  $     250     $     250,298  

2.80%, 03/01/23 (Call 02/01/23)

    50       51,187  

General Dynamics Corp., 2.25%, 11/15/22 (Call 08/15/22)

    183       185,569  

Lockheed Martin Corp., 3.10%, 01/15/23 (Call 11/15/22)

    110       113,005  
   

 

 

 
      600,059  
Agriculture — 0.7%            

BAT Capital Corp., 2.76%, 08/15/22 (Call 07/15/22)

    15       15,217  

Bunge Ltd. Finance Corp., 3.00%, 09/25/22 (Call 08/25/22)

    54       55,076  

Philip Morris International Inc.
2.38%, 08/17/22 (Call 07/17/22)

    25       25,355  

2.50%, 08/22/22

    180       183,060  

2.50%, 11/02/22 (Call 10/02/22)

    84       85,646  

2.63%, 03/06/23

    100       102,903  
   

 

 

 
      467,257  
Airlines — 0.1%            

Southwest Airlines Co., 2.75%, 11/16/22 (Call 10/16/22)

    50       51,001  
   

 

 

 
Apparel — 0.3%            

Ralph Lauren Corp., 1.70%, 06/15/22

    10       10,083  

Tapestry Inc., 3.00%, 07/15/22 (Call 06/15/22)

    60       60,784  

VF Corp., 2.05%, 04/23/22

    150       151,128  
   

 

 

 
      221,995  
Auto Manufacturers — 3.6%            

American Honda Finance Corp.
0.40%, 10/21/22(a)

    5       5,000  

1.95%, 05/20/22

    15       15,135  

2.05%, 01/10/23

    155       157,860  

2.20%, 06/27/22

    188       190,301  

2.60%, 11/16/22

    70       71,520  

General Motors Financial Co. Inc.
3.15%, 06/30/22 (Call 05/30/22)

    145       147,155  

3.25%, 01/05/23 (Call 12/05/22)

    150       154,076  

3.45%, 04/10/22 (Call 02/10/22)

    185       186,506  

3.55%, 07/08/22

    185       188,750  

PACCAR Financial Corp.

   

2.00%, 09/26/22(a)

    24       24,350  

2.30%, 08/10/22(a)

    25       25,376  

Toyota Motor Credit Corp.
0.35%, 10/14/22(a)

    200       200,042  

0.45%, 07/22/22

    200       200,104  

2.63%, 01/10/23

    195       199,912  

2.70%, 01/11/23

    105       107,751  

2.80%, 07/13/22

    250       254,327  

2.90%, 03/30/23

    320       330,781  
   

 

 

 
      2,458,946  
Banks — 27.4%            

Australia & New Zealand Banking Group Ltd./New York NY
2.05%, 11/21/22

    250       254,300  

2.63%, 11/09/22

    240       245,506  

Banco Santander SA
3.13%, 02/23/23

    210       216,516  

3.50%, 04/11/22

    210       212,749  

Bank of America Corp., 3.30%, 01/11/23

    675       697,430  

Bank of Montreal
2.05%, 11/01/22

    10       10,168  

2.35%, 09/11/22

    20       20,346  

2.55%, 11/06/22 (Call 10/06/22)

    300       306,042  
Security   Par
(000)
    Value  
Banks (continued)            

Bank of New York Mellon Corp. (The)
1.85%, 01/27/23 (Call 01/02/23)

  $     119     $     120,897  

1.95%, 08/23/22

    148       149,943  

2.95%, 01/29/23 (Call 12/29/22)

    156       160,468  

Bank of Nova Scotia (The)
1.95%, 02/01/23

    179       182,145  

2.00%, 11/15/22

    155       157,575  

2.38%, 01/18/23

    62       63,404  

2.45%, 09/19/22

    170       173,342  

Barclays Bank PLC, 1.70%, 05/12/22 (Call 04/12/22)

    205       206,265  

Barclays PLC, 3.68%, 01/10/23 (Call 01/10/22)

    285       286,679  

BBVA USA, 2.88%, 06/29/22 (Call 05/29/22)(a)

    250       253,698  

BNP Paribas SA, 3.25%, 03/03/23

    90       93,268  

Canadian Imperial Bank of Commerce, 2.55%, 06/16/22(a)

    183       185,549  

Citigroup Inc.
2.70%, 10/27/22 (Call 09/27/22)

    276       281,647  

2.75%, 04/25/22 (Call 03/25/22)

    309       311,985  

3.38%, 03/01/23(a)

    85       88,066  

4.05%, 07/30/22

    150       153,950  

Citizens Bank N.A./Providence RI, 3.70%, 03/29/23 (Call 02/28/23)

    250       260,085  

Cooperatieve Rabobank U.A., 3.95%, 11/09/22

    340       351,509  

Credit Suisse AG/New York NY, 2.80%, 04/08/22

    250       252,620  

Credit Suisse Group Funding Guernsey Ltd., 3.80%, 09/15/22

    295       303,372  

Deutsche Bank AG/New York NY, 3.95%, 02/27/23

    280       290,867  

Discover Bank, 3.35%, 02/06/23 (Call 01/06/23)

    250       257,810  

Fifth Third Bancorp., 2.60%, 06/15/22 (Call 05/15/22)

    195       197,256  

Goldman Sachs Group Inc. (The)
0.48%, 01/27/23 (Call 01/27/22)

    310       309,426  

0.52%, 03/08/23 (Call 03/08/22)

    110       109,793  

3.20%, 02/23/23 (Call 01/23/23)

    168       173,141  

3.63%, 01/22/23

    385       398,825  

Huntington National Bank (The), 1.80%, 02/03/23 (Call 01/03/23)

    250       253,570  

JPMorgan Chase & Co.
2.97%, 01/15/23 (Call 01/15/22)

    266       267,359  

3.20%, 01/25/23

    363       375,030  

3.25%, 09/23/22

    395       405,274  

KeyBank N.A./Cleveland OH, 1.25%, 03/10/23

    270       272,684  

Manufacturers & Traders Trust Co., 2.50%, 05/18/22 (Call 04/18/22)

    250       252,478  

Mitsubishi UFJ Financial Group Inc.
2.62%, 07/18/22

    270       274,209  

2.67%, 07/25/22

    256       260,173  

3.46%, 03/02/23

    255       264,685  

Mizuho Financial Group Inc., 2.60%, 09/11/22(a)

    200       203,674  

Morgan Stanley
2.75%, 05/19/22

    464       470,092  

3.13%, 01/23/23

    248       255,683  

3.75%, 02/25/23

    475       494,461  

4.88%, 11/01/22

    300       312,711  

MUFG Americas Holdings Corp., 3.50%, 06/18/22

    91       92,673  

MUFG Union Bank N.A., 2.10%, 12/09/22 (Call 11/09/22)

    250       254,102  

National Australia Bank Ltd./New York, 3.00%, 01/20/23

    250       257,690  

National Bank of Canada, 2.10%, 02/01/23

    275       280,038  

Natwest Group PLC, 6.13%, 12/15/22

    250       264,475  

PNC Bank N.A., 2.70%, 11/01/22 (Call 10/01/22)

    290       295,861  

PNC Financial Services Group Inc. (The), 2.85%, 11/09/22(b)

    190       194,630  

Royal Bank of Canada
1.95%, 01/17/23

    153       155,714  

 

 

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

  15


Schedule of Investments  (continued)

October 31, 2021

  

iShares® iBonds® Mar 2023 Term Corporate ETF

(Percentages shown are based on Net Assets)

 

Security  

Par

(000)

    Value  
Banks (continued)            

2.80%, 04/29/22

  $     100     $ 101,232  

Santander Holdings USA Inc., 3.40%, 01/18/23 (Call 12/18/22)

    125       128,673  

Santander UK Group Holdings PLC, 3.57%, 01/10/23 (Call 01/10/22)

    200       201,134  

Santander UK PLC, 2.10%, 01/13/23

    250       254,672  

Sumitomo Mitsui Financial Group Inc.
2.78%, 07/12/22

    342       347,783  

2.78%, 10/18/22

    255       260,661  

3.10%, 01/17/23

    310       319,253  

Synchrony Bank, 3.00%, 06/15/22 (Call 05/15/22)

    260       263,471  

Toronto-Dominion Bank (The)
0.25%, 01/06/23

    15       14,960  

1.90%, 12/01/22

    205       208,223  

Truist Bank
1.25%, 03/09/23 (Call 02/09/23)

    255       257,491  

2.45%, 08/01/22 (Call 07/01/22)(a)

    192       194,650  

2.80%, 05/17/22 (Call 04/17/22)

    225       227,536  

Truist Financial Corp.
2.20%, 03/16/23 (Call 02/13/23)

    190       194,112  

2.75%, 04/01/22 (Call 03/01/22)

    175       176,379  

3.05%, 06/20/22 (Call 05/20/22)

    115       116,717  

U.S. Bancorp., 2.95%, 07/15/22 (Call 06/15/22)

    190       193,051  

U.S. Bank N.A./Cincinnati OH, 1.95%, 01/09/23
(Call 12/09/22)(a)

    250       254,365  

Wells Fargo & Co.
3.07%, 01/24/23 (Call 01/24/22)

    400       402,324  

Series M, 3.45%, 02/13/23

    335       347,227  

Westpac Banking Corp.
2.00%, 01/13/23

    123       125,216  

2.50%, 06/28/22(a)

    108       109,550  

2.75%, 01/11/23

    155       159,222  
   

 

 

 
          18,751,810  
Beverages — 1.3%            

Beam Suntory Inc., 3.25%, 05/15/22 (Call 02/15/22)

    35       35,287  

Constellation Brands Inc., 3.20%, 02/15/23 (Call 01/15/23)

    108       111,268  

Diageo Investment Corp.
2.88%, 05/11/22

    181       183,351  

8.00%, 09/15/22(a)

    5       5,329  

Molson Coors Beverage Co., 3.50%, 05/01/22

    111       112,701  

PepsiCo Inc.
2.25%, 05/02/22 (Call 04/02/22)

    10       10,082  

2.75%, 03/01/23

    225       231,820  

3.10%, 07/17/22 (Call 05/17/22)(a)

    165       167,612  
   

 

 

 
      857,450  
Biotechnology — 1.4%            

Amgen Inc.
2.65%, 05/11/22 (Call 04/11/22)

    219       221,251  

3.63%, 05/15/22 (Call 02/15/22)

    211       212,880  

Biogen Inc., 3.63%, 09/15/22

    196       201,390  

Gilead Sciences Inc., 3.25%, 09/01/22 (Call 07/01/22)

    140       142,641  

Illumina Inc., 0.55%, 03/23/23

    210       209,412  
   

 

 

 
      987,574  
Chemicals — 1.0%            

Air Products and Chemicals Inc., 2.75%, 02/03/23

    25       25,724  

Celanese U.S. Holdings LLC, 4.63%, 11/15/22(a)

    100       103,963  

Eastman Chemical Co., 3.60%, 08/15/22 (Call 05/15/22)

    145       147,324  

Linde Inc./CT
2.20%, 08/15/22 (Call 05/15/22)

    115       116,149  

2.70%, 02/21/23 (Call 11/21/22)

    8       8,185  

Mosaic Co. (The), 3.25%, 11/15/22 (Call 10/15/22)

    109       111,677  
Security  

Par

(000)

    Value  
Chemicals (continued)            

NewMarket Corp., 4.10%, 12/15/22

  $ 58     $ 60,080  

Nutrien Ltd., 3.15%, 10/01/22 (Call 07/01/22)

    90       91,590  

PPG Industries Inc., 3.20%, 03/15/23 (Call 02/15/23)

    15       15,499  

RPM International Inc., 3.45%, 11/15/22 (Call 08/15/22)

    25       25,538  
   

 

 

 
      705,729  
Commercial Services — 1.1%            

Block Financial LLC, 5.50%, 11/01/22 (Call 05/01/22)

    75       76,705  

Cintas Corp. No. 2, 3.25%, 06/01/22 (Call 03/01/22)

    60       60,575  

Equifax Inc., 3.30%, 12/15/22 (Call 09/15/22)

    99       101,286  

Moody’s Corp., 2.63%, 01/15/23 (Call 12/15/22)

        155       158,480  

PayPal Holdings Inc., 2.20%, 09/26/22

    170       172,802  

RELX Capital Inc., 3.50%, 03/16/23 (Call 02/16/23)

    75       77,725  

Verisk Analytics Inc., 4.13%, 09/12/22

    75       77,230  
   

 

 

 
          724,803  
Computers — 2.8%            

Apple Inc.
1.70%, 09/11/22

    165       166,939  

2.10%, 09/12/22 (Call 08/12/22)

    5       5,066  

2.30%, 05/11/22 (Call 04/11/22)

    208       209,868  

2.40%, 01/13/23 (Call 12/13/22)

    20       20,437  

2.70%, 05/13/22

    160       162,030  

2.85%, 02/23/23 (Call 12/23/22)

    288       295,834  

Genpact Luxembourg Sarl, 3.70%, 04/01/22 (Call 03/01/22)

    200       202,032  

Hewlett Packard Enterprise Co., 4.40%, 10/15/22 (Call 08/15/22)

    203       209,058  

HP Inc., 4.05%, 09/15/22

    100       102,923  

International Business Machines Corp.
1.88%, 08/01/22

    350       353,909  

2.85%, 05/13/22

    205       207,808  
   

 

 

 
      1,935,904  
Cosmetics & Personal Care — 0.6%            

Colgate-Palmolive Co.
1.95%, 02/01/23(a)

    175       178,390  

2.25%, 11/15/22

    5       5,093  

Procter & Gamble Co. (The), 2.15%, 08/11/22

    100       101,443  

Unilever Capital Corp., 3.13%, 03/22/23 (Call 02/22/23)

    150       155,125  
   

 

 

 
      440,051  
Diversified Financial Services — 5.4%            

AerCap Ireland Capital DAC/AerCap Global Aviation Trust, 3.50%, 05/26/22 (Call 04/26/22)

    210       212,886  

Air Lease Corp.
2.25%, 01/15/23

    5       5,091  

2.63%, 07/01/22 (Call 06/01/22)

    15       15,176  

2.75%, 01/15/23 (Call 12/15/22)

    237       242,325  

Ally Financial Inc., 4.63%, 05/19/22(a)

    35       35,769  

American Express Co.
2.50%, 08/01/22 (Call 07/01/22)

    435       440,973  

2.65%, 12/02/22

    225       230,184  

2.75%, 05/20/22 (Call 04/20/22)

    245       247,729  

3.40%, 02/27/23 (Call 01/27/23)

    208       215,349  

Capital One Bank USA N.A., 3.38%, 02/15/23

    315       325,713  

Capital One Financial Corp., 3.20%, 01/30/23 (Call 12/30/22)

    80       82,434  

Charles Schwab Corp. (The), 2.65%, 01/25/23 (Call 12/25/22)

    170       174,299  

CME Group Inc., 3.00%, 09/15/22

    156       159,616  

Discover Financial Services
3.85%, 11/21/22

    50       51,686  

5.20%, 04/27/22

    10       10,228  

Intercontinental Exchange Inc., 2.35%, 09/15/22 (Call 08/15/22)

    136       138,082  

International Lease Finance Corp., 5.88%, 08/15/22

    215       223,890  

 

 

16  

2 0 2 1   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)

October 31, 2021

  

iShares® iBonds® Mar 2023 Term Corporate ETF

(Percentages shown are based on Net Assets)

 

Security  

Par

(000)

    Value  
Diversified Financial Services (continued)            

Invesco Finance PLC, 3.13%, 11/30/22

  $     115     $ 118,214  

Jefferies Group LLC, 5.13%, 01/20/23

    115       121,062  

Nasdaq Inc., 0.45%, 12/21/22 (Call 12/21/21)

    40       39,958  

ORIX Corp., 2.90%, 07/18/22

    142       144,313  

Visa Inc.
2.15%, 09/15/22 (Call 08/15/22)

    123       124,760  

2.80%, 12/14/22 (Call 10/14/22)

    315       322,406  
   

 

 

 
          3,682,143  
Electric — 5.7%            

AEP Texas Inc., 2.40%, 10/01/22 (Call 09/01/22)

    5       5,076  

Ameren Illinois Co., 2.70%, 09/01/22 (Call 06/01/22)

    110       111,500  

American Electric Power Co. Inc., Series F, 2.95%, 12/15/22 (Call 09/15/22)

    85       86,754  

Berkshire Hathaway Energy Co., 2.80%, 01/15/23 (Call 12/15/22)

    35       35,862  

CenterPoint Energy Houston Electric LLC, 2.25%, 08/01/22 (Call 05/01/22)

    10       10,094  

CenterPoint Energy Inc., 2.50%, 09/01/22 (Call 08/01/22)

    80       81,194  

Dominion Energy Inc., Series B, 2.75%, 09/15/22 (Call 06/15/22)

    75       76,041  

DTE Energy Co.
2.25%, 11/01/22

    135       137,184  

Series H, 0.55%, 11/01/22

    30       30,008  

Duke Energy Carolinas LLC, 3.05%, 03/15/23 (Call 02/15/23)

    140       144,620  

Duke Energy Corp.
2.40%, 08/15/22 (Call 07/15/22)

    5       5,070  

3.05%, 08/15/22 (Call 05/15/22)

    170       172,319  

Duke Energy Progress LLC, 2.80%, 05/15/22 (Call 02/15/22)

    175       176,204  

Edison International
2.40%, 09/15/22 (Call 08/15/22)

    30       30,345  

2.95%, 03/15/23 (Call 01/15/23)

    68       69,565  

3.13%, 11/15/22 (Call 10/15/22)

    55       56,037  

Entergy Corp., 4.00%, 07/15/22 (Call 05/15/22)

    120       122,126  

Evergy Metro Inc., 3.15%, 03/15/23
(Call 12/15/22)(a)

    68       69,885  

Exelon Corp., 3.50%, 06/01/22 (Call 05/01/22)

    146       148,114  

Exelon Generation Co. LLC, 4.25%, 06/15/22 (Call 03/15/22)

    190       192,622  

Georgia Power Co., 2.85%, 05/15/22

    99       100,300  

ITC Holdings Corp., 2.70%, 11/15/22 (Call 10/15/22)

    75       76,472  

National Rural Utilities Cooperative Finance Corp.
2.40%, 04/25/22 (Call 03/25/22)

    11       11,091  

2.70%, 02/15/23 (Call 12/15/22)

    95       97,240  

NextEra Energy Capital Holdings Inc.
0.65%, 03/01/23

    315       315,328  

1.95%, 09/01/22(a)

    100       101,258  

2.80%, 01/15/23 (Call 12/15/22)

    10       10,249  

2.90%, 04/01/22

    175       176,848  

Northern States Power Co./MN, 2.15%, 08/15/22 (Call 02/15/22)

    10       10,055  

Oncor Electric Delivery Co. LLC
4.10%, 06/01/22 (Call 03/01/22)(a)

    70       70,834  

7.00%, 09/01/22

    84       88,427  

Pacific Gas and Electric Co.
1.37%, 03/10/23 (Call 11/09/21)

    200       199,262  

1.75%, 06/16/22 (Call 11/09/21)

    385       384,604  

Public Service Enterprise Group Inc., 2.65%, 11/15/22 (Call 10/15/22)

    125       127,443  

Puget Energy Inc., 5.63%, 07/15/22 (Call 04/15/22)

    76       77,746  

Sempra Energy
2.88%, 10/01/22 (Call 07/01/22)

    137       139,037  

2.90%, 02/01/23 (Call 01/01/23)

    25       25,654  
Security   Par
(000)
    Value  
Electric (continued)            

Virginia Electric & Power Co., Series C, 2.75%, 03/15/23 (Call 12/15/22)

  $     135     $ 138,401  
   

 

 

 
          3,910,869  
Electrical Components & Equipment — 0.0%            

Emerson Electric Co., 2.63%, 02/15/23 (Call 11/15/22)(a)

    15       15,329  
   

 

 

 
Electronics — 0.6%            

Arrow Electronics Inc., 3.50%, 04/01/22 (Call 02/01/22)

    75       75,556  

Avnet Inc., 4.88%, 12/01/22

    43       44,836  

Flex Ltd., 5.00%, 02/15/23

    75       78,891  

Honeywell International Inc.
0.48%, 08/19/22 (Call 11/09/21)(a)

    63       63,004  

2.15%, 08/08/22 (Call 07/08/22)

    100       101,258  

Jabil Inc., 4.70%, 09/15/22

    74       76,577  
   

 

 

 
      440,122  
Environmental Control — 0.2%            

Waste Management Inc., 2.90%, 09/15/22 (Call 06/15/22)

    131       133,028  
   

 

 

 
Food — 1.2%            

Campbell Soup Co.
2.50%, 08/02/22

    25       25,381  

3.65%, 03/15/23 (Call 02/15/23)

    125       129,749  

Conagra Brands Inc., 3.20%, 01/25/23 (Call 10/25/22)

    82       84,035  

General Mills Inc., 2.60%, 10/12/22 (Call 09/12/22)

    45       45,823  

Kroger Co. (The)
2.80%, 08/01/22 (Call 07/01/22)

    160       162,539  

3.40%, 04/15/22 (Call 01/15/22)

    8       8,049  

McCormick & Co. Inc./MD, 2.70%, 08/15/22 (Call 07/15/22)

    85       86,357  

Mondelez International Inc., 0.63%, 07/01/22

    60       60,118  

Sysco Corp., 2.60%, 06/12/22

    50       50,638  

Tyson Foods Inc., 4.50%, 06/15/22 (Call 03/15/22)

    191       193,911  
   

 

 

 
      846,600  
Gas — 0.2%            

Atmos Energy Corp., 0.63%, 03/09/23 (Call 11/15/21)

    25       24,996  

CenterPoint Energy Resources Corp., 0.70%, 03/02/23 (Call 11/29/21)(a)

    35       34,933  

National Fuel Gas Co., 3.75%, 03/01/23 (Call 12/01/22)

    75       77,280  

ONE Gas Inc., 0.85%, 03/11/23 (Call 11/29/21)

    25       24,999  
   

 

 

 
      162,208  
Health Care - Products — 0.4%            

DH Europe Finance II Sarl, 2.05%, 11/15/22

    75       76,190  

Zimmer Biomet Holdings Inc.
3.15%, 04/01/22 (Call 02/01/22)

    175       176,130  

3.70%, 03/19/23 (Call 02/19/23)

    10       10,380  
   

 

 

 
      262,700  
Health Care - Services — 1.9%            

Aetna Inc., 2.75%, 11/15/22 (Call 08/15/22)

    180       183,125  

Anthem Inc.
2.95%, 12/01/22 (Call 11/01/22)

    5       5,119  

3.30%, 01/15/23

    385       397,674  

Humana Inc.
2.90%, 12/15/22 (Call 11/15/22)

    29       29,684  

3.15%, 12/01/22 (Call 09/01/22)(a)

    140       143,007  

UnitedHealth Group Inc.
2.38%, 10/15/22

    44       44,838  

2.75%, 02/15/23 (Call 11/15/22)

    215       220,020  

2.88%, 03/15/23

    230       237,330  

3.35%, 07/15/22

    15       15,321  
   

 

 

 
      1,276,118  

 

 

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

  17


Schedule of Investments  (continued)

October 31, 2021

  

iShares® iBonds® Mar 2023 Term Corporate ETF

(Percentages shown are based on Net Assets)

 

Security  

Par

(000)

    Value  
Holding Companies - Diversified — 0.2%            

Ares Capital Corp., 3.50%, 02/10/23 (Call 01/10/23)(a)

  $     108     $ 111,334  

FS KKR Capital Corp., 4.75%, 05/15/22 (Call 04/15/22)

    36       36,638  
   

 

 

 
      147,972  
Home Builders — 0.4%            

DR Horton Inc.
4.38%, 09/15/22 (Call 06/15/22)

    10       10,230  

4.75%, 02/15/23 (Call 11/15/22)

    25       26,018  

Lennar Corp., 4.75%, 11/15/22 (Call 08/15/22)

    100       103,264  

NVR Inc., 3.95%, 09/15/22 (Call 06/15/22)

    104       106,080  
   

 

 

 
      245,592  
Household Products & Wares — 0.4%            

Church & Dwight Co. Inc., 2.88%, 10/01/22

    125       127,815  

Clorox Co. (The), 3.05%, 09/15/22 (Call 06/15/22)

    143       145,256  
   

 

 

 
      273,071  
Insurance — 1.9%            

Alleghany Corp., 4.95%, 06/27/22(a)

    65       66,841  

Aon Corp., 2.20%, 11/15/22

    200       203,326  

Berkshire Hathaway Finance Corp., 3.00%, 05/15/22

    135       136,939  

Berkshire Hathaway Inc.
2.75%, 03/15/23 (Call 01/15/23)

    275       282,538  

3.00%, 02/11/23

    145       149,631  

Chubb INA Holdings Inc.
2.70%, 03/13/23

    115       118,458  

2.88%, 11/03/22 (Call 09/03/22)

    125       127,546  

Fidelity National Financial Inc., 5.50%, 09/01/22

    50       52,004  

Markel Corp., 4.90%, 07/01/22

    15       15,417  

Marsh & McLennan Companies Inc., 3.30%, 03/14/23 (Call 01/14/23)

    18       18,589  

Primerica Inc., 4.75%, 07/15/22

    75       77,203  

Principal Financial Group Inc., 3.30%, 09/15/22

    15       15,365  
   

 

 

 
          1,263,857  
Internet — 1.4%            

Amazon.com Inc.
2.40%, 02/22/23 (Call 01/22/23)

    135       138,194  

2.50%, 11/29/22 (Call 08/29/22)

    151       153,590  

Baidu Inc., 3.50%, 11/28/22

    200       205,298  

Booking Holdings Inc., 2.75%, 03/15/23 (Call 02/15/23)

    150       154,177  

E*TRADE Financial Corp., 2.95%, 08/24/22 (Call 07/24/22)(a)

    25       25,447  

eBay Inc., 2.75%, 01/30/23 (Call 12/30/22)

    191       195,750  

TD Ameritrade Holding Corp., 2.95%, 04/01/22 (Call 02/01/22)

    100       100,634  
   

 

 

 
      973,090  
Iron & Steel — 0.1%            

Nucor Corp., 4.13%, 09/15/22 (Call 06/15/22)

    85       86,889  
   

 

 

 
Machinery — 2.5%            

ABB Finance USA Inc., 2.88%, 05/08/22

    185       187,399  

Caterpillar Financial Services Corp.
0.25%, 03/01/23

    230       229,446  

0.95%, 05/13/22

    10       10,037  

1.90%, 09/06/22

    5       5,066  

1.95%, 11/18/22

    214       217,343  

2.40%, 06/06/22

    30       30,370  

2.55%, 11/29/22

    110       112,446  

CNH Industrial Capital LLC, 4.38%, 04/05/22

    11       11,170  

Deere & Co., 2.60%, 06/08/22 (Call 03/08/22)

    221       222,806  

John Deere Capital Corp.
0.25%, 01/17/23

    30       29,912  

0.55%, 07/05/22

    150       150,231  

1.95%, 06/13/22

    100       101,006  
Security  

Par

(000)

    Value  
Machinery (continued)            

2.15%, 09/08/22

  $ 96     $ 97,400  

2.80%, 01/27/23

    50       51,439  

2.80%, 03/06/23

    259       267,037  
   

 

 

 
          1,723,108  
Manufacturing — 1.4%            

3M Co.
1.75%, 02/14/23 (Call 01/14/23)

        200       203,118  

2.00%, 06/26/22

    225       227,453  

Carlisle Companies Inc., 3.75%, 11/15/22 (Call 08/15/22)

    15       15,379  

Eaton Corp., 2.75%, 11/02/22

    243       248,416  

General Electric Co.
2.70%, 10/09/22

    96       97,935  

3.10%, 01/09/23

    165       169,841  

Parker-Hannifin Corp., 3.50%, 09/15/22(a)

    20       20,515  
   

 

 

 
      982,657  
Media — 1.9%            

Charter Communications Operating LLC/Charter

   

Communications Operating Capital, 4.46%, 07/23/22 (Call 05/23/22)

    455       464,600  

Comcast Cable Communications Holdings Inc., 9.46%, 11/15/22

    150       164,012  

Discovery Communications LLC, 2.95%, 03/20/23 (Call 02/20/23)

    159       163,689  

Time Warner Entertainment Co. LP, 8.38%, 03/15/23

    134       147,760  

TWDC Enterprises 18 Corp., 2.35%, 12/01/22

    167       170,198  

Walt Disney Co. (The)
1.65%, 09/01/22

    25       25,259  

3.00%, 09/15/22

    150       153,345  
   

 

 

 
      1,288,863  
Metal Fabricate & Hardware — 0.2%            

Precision Castparts Corp., 2.50%, 01/15/23 (Call 10/15/22)

    155       157,965  
   

 

 

 
Mining — 0.1%            

Newmont Corp., 3.70%, 03/15/23 (Call 12/15/22)

    24       24,763  

Southern Copper Corp., 3.50%, 11/08/22

    55       56,504  
   

 

 

 
      81,267  
Oil & Gas — 2.7%            

BP Capital Markets PLC, 2.50%, 11/06/22

    130       132,544  

Canadian Natural Resources Ltd., 2.95%, 01/15/23 (Call 12/15/22)

    223       228,435  

Chevron Corp., 2.36%, 12/05/22 (Call 09/05/22)

    325       330,544  

Chevron USA Inc., 0.33%, 08/12/22

    5       5,000  

EOG Resources Inc., 2.63%, 03/15/23 (Call 12/15/22)

    155       158,512  

Exxon Mobil Corp., 2.73%, 03/01/23 (Call 01/01/23)

    215       220,541  

Phillips 66, 4.30%, 04/01/22

    318       323,161  

Shell International Finance BV
2.25%, 01/06/23

    60       61,246  

2.38%, 08/21/22

    212       215,430  

TotalEnergies Capital International SA, 2.70%, 01/25/23

    179       183,742  
   

 

 

 
      1,859,155  
Oil & Gas Services — 0.2%            

Baker Hughes Holdings LLC/Baker Hughes Co-Obligor Inc., 2.77%, 12/15/22 (Call 11/15/22)

    125       127,801  
   

 

 

 
Packaging & Containers — 0.1%            

WestRock RKT LLC, 4.00%, 03/01/23 (Call 12/01/22)

    80       82,819  
   

 

 

 
Pharmaceuticals — 7.8%            

AbbVie Inc.
2.30%, 11/21/22

    417       424,685  

 

 

18  

2 0 2 1   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)

October 31, 2021

  

iShares® iBonds® Mar 2023 Term Corporate ETF

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  
Pharmaceuticals (continued)            

2.90%, 11/06/22

  $     500     $ 511,695  

3.20%, 11/06/22 (Call 09/06/22)

    178       181,964  

3.25%, 10/01/22 (Call 07/01/22)

    250       254,443  

AmerisourceBergen Corp., 0.74%, 03/15/23 (Call 03/15/22)

    250       250,133  

AstraZeneca PLC, 2.38%, 06/12/22 (Call 05/12/22)

    25       25,267  

Bristol-Myers Squibb Co.
2.00%, 08/01/22

    209       211,571  

3.25%, 08/15/22

    212       216,812  

3.25%, 02/20/23 (Call 01/20/23)

    133       137,517  

3.55%, 08/15/22

    242       247,890  

Cardinal Health Inc., Series 2021-4, 3.20%, 03/15/23

    60       62,023  

Cigna Corp., 3.05%, 11/30/22 (Call 10/31/22)

    109       111,756  

CVS Health Corp.
2.75%, 12/01/22 (Call 09/01/22)

    200       203,642  

3.50%, 07/20/22 (Call 05/20/22)

    265       269,386  

3.70%, 03/09/23 (Call 02/09/23)

    404       419,780  

4.75%, 12/01/22 (Call 09/01/22)

    10       10,343  

Eli Lilly & Co., 2.35%, 05/15/22

    120       121,376  

GlaxoSmithKline Capital Inc., 2.80%, 03/18/23

    288       297,037  

GlaxoSmithKline Capital PLC
2.85%, 05/08/22

    350       354,483  

2.88%, 06/01/22 (Call 05/01/22)

    10       10,127  

McKesson Corp.
2.70%, 12/15/22 (Call 09/15/22)

    75       76,375  

2.85%, 03/15/23 (Call 12/15/22)

    79       80,855  

Merck & Co. Inc., 2.40%, 09/15/22 (Call 06/15/22)

    177       179,207  

Novartis Capital Corp., 2.40%, 09/21/22

    326       332,044  

Viatris Inc., 1.13%, 06/22/22(c)

    170       170,612  

Zoetis Inc., 3.25%, 02/01/23 (Call 11/01/22)

    185       189,908  
   

 

 

 
          5,350,931  
Pipelines — 3.1%            

Boardwalk Pipelines LP, 3.38%, 02/01/23 (Call 11/01/22)

    46       47,085  

Enbridge Inc., 2.90%, 07/15/22 (Call 06/15/22)

    105       106,558  

Energy Transfer LP
3.45%, 01/15/23 (Call 10/15/22)

    65       66,496  

3.60%, 02/01/23 (Call 11/01/22)

    125       128,357  

4.25%, 03/15/23 (Call 12/15/22)

    115       119,253  

Energy Transfer LP/Regency Energy Finance Corp., 5.00%, 10/01/22 (Call 07/01/22)

    145       149,132  

Enterprise Products Operating LLC, 3.35%, 03/15/23 (Call 12/15/22)

    173       178,365  

Kinder Morgan Energy Partners LP
3.45%, 02/15/23 (Call 11/15/22)

    170       174,881  

3.95%, 09/01/22 (Call 06/01/22)

    250       255,025  

Kinder Morgan Inc., 3.15%, 01/15/23 (Call 12/15/22)

    15       15,415  

MPLX LP
3.38%, 03/15/23 (Call 02/15/23)

    90       93,046  

3.50%, 12/01/22 (Call 11/01/22)

    69       70,890  

ONEOK Partners LP, 3.38%, 10/01/22 (Call 07/01/22)

    150       152,730  

Plains All American Pipeline LP/PAA Finance Corp.
2.85%, 01/31/23 (Call 10/31/22)

    64       65,187  

3.65%, 06/01/22 (Call 03/01/22)

    110       111,071  

TransCanada PipeLines Ltd., 2.50%, 08/01/22

    165       167,242  

Williams Companies Inc. (The)
3.35%, 08/15/22 (Call 05/15/22)

    194       196,949  

3.70%, 01/15/23 (Call 10/15/22)

    25       25,709  
   

 

 

 
      2,123,391  
Real Estate Investment Trusts — 0.7%            

American Tower Corp., 3.50%, 01/31/23

    128       132,542  

Kimco Realty Corp., 3.40%, 11/01/22 (Call 09/01/22)

    150       153,444  
Security  

Par

(000)

    Value  
Real Estate Investment Trusts (continued)            

Office Properties Income Trust, 4.00%, 07/15/22 (Call 06/15/22)

  $     100     $ 101,868  

Public Storage, 2.37%, 09/15/22 (Call 08/15/22)

    25       25,384  

SL Green Operating Partnership LP, 3.25%, 10/15/22 (Call 09/15/22)

    84       85,796  
   

 

 

 
      499,034  
Retail — 1.7%            

AutoZone Inc.
2.88%, 01/15/23 (Call 10/15/22)

    10       10,212  

3.70%, 04/15/22 (Call 01/15/22)

    152       153,024  

Costco Wholesale Corp., 2.30%, 05/18/22 (Call 04/18/22)

    15       15,140  

Home Depot Inc. (The), 2.63%, 06/01/22 (Call 05/01/22)

    196       198,215  

Lowe’s Companies Inc., 3.12%, 04/15/22 (Call 01/15/22)

    143       143,817  

Starbucks Corp.
1.30%, 05/07/22

    125       125,621  

2.70%, 06/15/22 (Call 04/15/22)

    30       30,322  

3.10%, 03/01/23 (Call 02/01/23)

    170       175,301  

Walgreen Co., 3.10%, 09/15/22

    104       106,335  

Walmart Inc., 2.35%, 12/15/22 (Call 11/15/22)

    177       180,694  
   

 

 

 
          1,138,681  
Savings & Loans — 0.2%            

People’s United Financial Inc., 3.65%, 12/06/22 (Call 09/06/22)

    95       97,268  
   

 

 

 
Semiconductors — 1.4%            

Intel Corp.
2.70%, 12/15/22

    380       389,488  

3.10%, 07/29/22

    15       15,307  

Maxim Integrated Products Inc., 3.38%, 03/15/23 (Call 11/04/21)

    75       77,461  

QUALCOMM Inc.
2.60%, 01/30/23 (Call 12/30/22)

    135       138,320  

3.00%, 05/20/22

    200       202,876  

Texas Instruments Inc., 1.85%, 05/15/22 (Call 04/15/22)

    106       106,757  
   

 

 

 
      930,209  
Software — 2.7%            

Adobe Inc., 1.70%, 02/01/23

    118       119,872  

Fidelity National Information Services Inc., 0.38%, 03/01/23

    125       124,616  

Fiserv Inc., 3.50%, 10/01/22 (Call 07/01/22)

    145       147,893  

Microsoft Corp.
2.13%, 11/15/22

    50       50,886  

2.65%, 11/03/22 (Call 09/03/22)

    120       122,318  

Oracle Corp.
2.50%, 05/15/22 (Call 03/15/22)

    413       416,143  

2.50%, 10/15/22

    409       416,759  

2.63%, 02/15/23 (Call 01/15/23)

    133       136,385  

Roper Technologies Inc.
0.45%, 08/15/22

    100       100,007  

3.13%, 11/15/22 (Call 08/15/22)

    25       25,478  

VMware Inc., 2.95%, 08/21/22 (Call 07/21/22)

    215       218,603  
   

 

 

 
      1,878,960  
Telecommunications — 1.7%            

America Movil SAB de CV, 3.13%, 07/16/22

    235       238,995  

AT&T Inc.
2.63%, 12/01/22 (Call 09/01/22)

    151       153,582  

3.00%, 06/30/22 (Call 04/30/22)

    290       293,506  

Cisco Systems Inc.
2.60%, 02/28/23

    90       92,471  

3.00%, 06/15/22

    10       10,167  

Rogers Communications Inc., 3.00%, 03/15/23 (Call 12/15/22)

    50       51,254  

Telefonaktiebolaget LM Ericsson, 4.13%, 05/15/22

    125       127,199  

 

 

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

  19


Schedule of Investments  (continued)

October 31, 2021

  

iShares® iBonds® Mar 2023 Term Corporate ETF

(Percentages shown are based on Net Assets)

 

Security   Par/
Shares
(000)
    Value  
Telecommunications (continued)            

Vodafone Group PLC, 2.95%, 02/19/23

  $     190     $ 195,438  
   

 

 

 
      1,162,612  
Textiles — 0.1%            

Mohawk Industries Inc., 3.85%, 02/01/23 (Call 11/01/22)(a)

    85       87,676  
   

 

 

 
Transportation — 1.4%            

Burlington Northern Santa Fe LLC
3.00%, 03/15/23 (Call 12/15/22)

    105       107,965  

3.05%, 09/01/22 (Call 06/01/22)

    85       86,282  

Norfolk Southern Corp.
2.90%, 02/15/23 (Call 11/15/22)(a)

    83       84,983  

3.00%, 04/01/22 (Call 01/01/22)

    105       105,451  

Ryder System Inc.
2.88%, 06/01/22 (Call 05/01/22)

    10       10,120  

3.40%, 03/01/23 (Call 02/01/23)

    158       163,457  

Union Pacific Corp.
2.95%, 01/15/23 (Call 10/15/22)(a)

    70       71,580  

4.16%, 07/15/22 (Call 04/15/22)

    102       103,739  

United Parcel Service Inc., 2.45%, 10/01/22

    246       250,809  
   

 

 

 
      984,386  
   

 

 

 

Total Corporate Bonds & Notes — 91.1%
(Cost: $61,691,268)

          62,478,950  
   

 

 

 

Investment Companies

   
Exchange Traded Funds — 4.6%            

iShares iBonds Mar 2023 Term Corporate ex-Financials ETF(d)

    129       3,179,850  
   

 

 

 

Total Investment Companies — 4.6%
(Cost $2,974,253)

      3,179,850  
   

 

 

 
Security  

    

Shares

(000)

    Value  

Short-Term Investments

   
Money Market Funds — 7.8%            

BlackRock Cash Funds: Institutional, SL Agency Shares, 0.05%(d)(e)(f)

    2,408     $ 2,408,783  

BlackRock Cash Funds: Treasury, SL Agency Shares, 0.00%(d)(e)

    2,924       2,924,000  
   

 

 

 
      5,332,783  
   

 

 

 

Total Short-Term Investments — 7.8%
(Cost: $5,331,216)

      5,332,783  
   

 

 

 

Total Investments in Securities — 103.5%
(Cost: $69,996,737)

      70,991,583  

Other Assets, Less Liabilities — (3.5)%

      (2,417,208
   

 

 

 

Net Assets — 100.0%

    $   68,574,375  
   

 

 

 

 

(a) 

All or a portion of this security is on loan.

(b) 

Step coupon security. Coupon rate will either increase (step-up bond) or decrease (step-down bond) at regular intervals until maturity. Interest rate shown reflects the rate currently in effect.

(c) 

Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors.

(d) 

Affiliate of the Fund.

(e) 

Annualized 7-day yield as of period end.

(f) 

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

Affiliates

Investments in issuers considered to be affiliate(s) of the Fund during the year ended October 31, 2021 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

 

 

   
    Affiliated Issuer   Value at
10/31/20
    Purchases
at Cost
    Proceeds
from Sales
    Net Realized
Gain (Loss)
    Change in
Unrealized
Appreciation
(Depreciation)
    Value at
10/31/21
    Shares
Held at
10/31/21
(000)
    Income     Capital Gain
Distributions from
Underlying Funds
     
 

 

   
 

BlackRock Cash Funds: Institutional, SL Agency Shares

  $ 1,692,164     $ 717,094 (a)    $     $ (65   $ (410   $ 2,408,783       2,408     $ 4,141 (b)    $    
 

BlackRock Cash Funds: Treasury, SL Agency Shares

    1,454,000       1,470,000 (a)                        2,924,000       2,924       331          
 

iShares iBonds Mar 2023 Term Corporate ex- Financials ETF

    3,235,320                         (55,470     3,179,850       129       66,005          
         

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   
          $ (65   $ (55,880   $ 8,512,633       $ 70,477     $    
         

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

  (a) 

Represents net amount purchased (sold).

 
  (b) 

All or a portion represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.

 

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of financial instruments. For a description of the input levels and information about the Fund’s policy regarding valuation of financial instruments, refer to the Notes to Financial Statements.

 

 

20  

2 0 2 1   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)

October 31, 2021

  

iShares® iBonds® Mar 2023 Term Corporate ETF

 

Fair Value Hierarchy as of Period End (continued)

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  

 

 

Investments

                 

Assets

                 

Corporate Bonds & Notes

   $        $ 62,478,950        $        $ 62,478,950  

Investment Companies

     3,179,850                            3,179,850  

Money Market Funds

     5,332,783                            5,332,783  
  

 

 

      

 

 

      

 

 

      

 

 

 
   $   8,512,633        $ 62,478,950        $             —        $ 70,991,583  
  

 

 

      

 

 

      

 

 

      

 

 

 

See notes to financial statements.

 

 

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

  21


 

Statements of Assets and Liabilities

October 31, 2021

 

   

iShares

iBonds Mar
2023 Term
Corporate
ex-Financials
ETF

   

iShares

iBonds Mar

2023 Term
Corporate

ETF

 

 

 

ASSETS

   

Investments in securities, at value (including securities on loan)(a):

   

Unaffiliated(b)

  $ 29,810,719     $ 62,478,950  

Affiliated(c)

    2,413,362       8,512,633  

Cash

    7,218       8,355  

Receivables:

   

Investments sold

          125,116  

Securities lending income — Affiliated

    201       381  

Dividends

    4       11  

Interest

    222,076       474,224  
 

 

 

   

 

 

 

Total assets

    32,453,580       71,599,670  
 

 

 

   

 

 

 

LIABILITIES

   

Collateral on securities loaned, at value

    1,552,760       2,406,576  

Payables:

   

Investments purchased

    102,494       613,273  

Investment advisory fees

    2,580       5,446  
 

 

 

   

 

 

 

Total liabilities

    1,657,834       3,025,295  
 

 

 

   

 

 

 

NET ASSETS

  $ 30,795,746     $ 68,574,375  
 

 

 

   

 

 

 

NET ASSETS CONSIST OF:

   

Paid-in capital

  $ 31,283,864     $ 67,794,805  

Accumulated earnings (loss)

    (488,118     779,570  
 

 

 

   

 

 

 

NET ASSETS

  $ 30,795,746     $ 68,574,375  
 

 

 

   

 

 

 

Shares outstanding

    1,250,000       2,550,000  
 

 

 

   

 

 

 

Net asset value

  $ 24.64     $ 26.89  
 

 

 

   

 

 

 

Shares authorized

    Unlimited       Unlimited  
 

 

 

   

 

 

 

Par value

    None       None  
 

 

 

   

 

 

 

(a) Securities loaned, at value

  $ 1,506,521     $ 2,337,453  

(b) Investments, at cost — Unaffiliated

  $ 29,420,293     $ 61,691,268  

(c)  Investments, at cost — Affiliated

  $ 2,412,858     $ 8,305,469  

See notes to financial statements.

 

 

22  

2 0 2 1   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 Operations

Year Ended October 31, 2021

 

    iShares
iBonds
Mar 2023
Term
Corporate
ex-Financials
ETF
       

iShares

iBonds Mar

2023 Term
Corporate

ETF

 

 

 

INVESTMENT INCOME

     

Dividends — Affiliated

  $ 129       $ 66,336  

Interest — Unaffiliated

    618,256         1,453,356  

Securities lending income — Affiliated — net

    2,120         4,141  
 

 

 

     

 

 

 

Total investment income

    620,505         1,523,833  
 

 

 

     

 

 

 

EXPENSES

     

Investment advisory fees

    29,461         72,309  

Miscellaneous

    173         173  
 

 

 

     

 

 

 

Total expenses

    29,634         72,482  

Less:

     

Investment advisory fees waived

    (467       (4,476
 

 

 

     

 

 

 

Total expenses after fees waived

    29,167         68,006  
 

 

 

     

 

 

 

Net investment income

    591,338         1,455,827  
 

 

 

     

 

 

 

REALIZED AND UNREALIZED GAIN (LOSS)

     

Net realized gain (loss) from:

     

Investments — Unaffiliated

    61,948         293,038  

Investments — Affiliated

    (100       (65

In-kind redemptions — Unaffiliated

            163,014  
 

 

 

     

 

 

 

Net realized gain

    61,848         455,987  
 

 

 

     

 

 

 

Net change in unrealized appreciation (depreciation) on:

     

Investments — Unaffiliated

    (552,337       (1,448,450

Investments — Affiliated

    (264       (55,880
 

 

 

     

 

 

 

Net change in unrealized appreciation (depreciation)

    (552,601       (1,504,330
 

 

 

     

 

 

 

Net realized and unrealized loss

    (490,753       (1,048,343
 

 

 

     

 

 

 

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS

  $ 100,585       $ 407,484  
 

 

 

     

 

 

 

See notes to financial statements.

 

 

I N A N C I A L   S T A T E M E N T S

  23


Statements of Changes in Net Assets

 

    iShares
iBonds Mar 2023 Term Corporate
ex-Financials ETF
           iShares
iBonds Mar 2023 Term Corporate
ETF
 
 

 

Year Ended
10/31/21

          

 

Year Ended
10/31/20

          

 

Year Ended
10/31/21

          

 

Year Ended
10/31/20

 

 

 

INCREASE (DECREASE) IN NET ASSETS

                

OPERATIONS

                

Net investment income

  $ 591,338        $ 648,162        $ 1,455,827        $ 2,127,916  

Net realized gain

    61,848          49,002          455,987          1,018,734  

Net change in unrealized appreciation (depreciation)

    (552,601        404,799          (1,504,330        504,719  
 

 

 

      

 

 

      

 

 

      

 

 

 

Net increase in net assets resulting from operations

    100,585          1,101,963          407,484          3,651,369  
 

 

 

      

 

 

      

 

 

      

 

 

 

DISTRIBUTIONS TO SHAREHOLDERS(a)

                

Decrease in net assets resulting from distributions to shareholders

    (600,797        (680,553        (1,531,453        (2,161,736
 

 

 

      

 

 

      

 

 

      

 

 

 

CAPITAL SHARE TRANSACTIONS

                

Net increase (decrease) in net assets derived from capital share transactions

    3,732,889          1,255,736          (2,684,666        (8,441,497
 

 

 

      

 

 

      

 

 

      

 

 

 

NET ASSETS

                

Total increase (decrease) in net assets

    3,232,677          1,677,146          (3,808,635        (6,951,864

Beginning of year

    27,563,069          25,885,923          72,383,010          79,334,874  
 

 

 

      

 

 

      

 

 

      

 

 

 

End of year

  $ 30,795,746        $ 27,563,069        $ 68,574,375        $ 72,383,010  
 

 

 

      

 

 

      

 

 

      

 

 

 

 

(a) 

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

See notes to financial statements.

 

 

24  

2 0 2 1   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

(For a share outstanding throughout each period)

 

    iShares iBonds Mar 2023 Term Corporate ex-Financials ETF  
 

 

 

 
   
Year Ended
10/31/21
 
 
   
Year Ended
10/31/20
 
 
   
Year Ended
10/31/19
 
 
   
Year Ended
10/31/18
 
 
   
Year Ended
10/31/17
 
 

 

 

Net asset value, beginning of year

  $ 25.06     $ 24.65     $ 23.44     $ 24.47     $ 24.80  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income(a)

    0.50       0.61       0.65       0.66       0.66  

Net realized and unrealized gain (loss)(b)

    (0.41     0.44       1.22       (1.04     (0.33
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) from investment operations

    0.09       1.05       1.87       (0.38     0.33  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributions(c)

         

From net investment income

    (0.51     (0.64     (0.66     (0.65     (0.66
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions

    (0.51     (0.64     (0.66     (0.65     (0.66
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net asset value, end of year

  $ 24.64     $ 25.06     $ 24.65     $ 23.44     $ 24.47  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Return(d)

         

Based on net asset value

    0.33     4.33     8.07     (1.54 )%      1.37
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ratios to Average Net Assets

         

Total expenses

    0.10     0.10     0.10     0.10     0.10
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses after fees waived

    0.10     0.10     0.10     0.10     0.10
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income

    2.01     2.46     2.71     2.76     2.72
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Supplemental Data

         

Net assets, end of year (000)

  $ 30,796     $ 27,563     $ 25,886     $ 44,535     $ 47,716  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio turnover rate(e)

    9     9     9     5     10
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(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) 

Portfolio turnover rate excludes in-kind transactions.

See notes to financial statements.

 

 

I N A N C I A L   H I G H L I G H T S

  25


Financial Highlights (continued)

(For a share outstanding throughout each period)

 

    iShares iBonds Mar 2023 Term Corporate ETF  
 

 

 

 
   
Year Ended
10/31/21
 
 
   
Year Ended
10/31/20
 
 
   
Year Ended
10/31/19
 
 
   
Year Ended
10/31/18
 
 
   
Year Ended
10/31/17
 
 

 

 

Net asset value, beginning of year

  $ 27.31     $ 26.89     $ 25.53     $ 26.66     $ 26.90  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income(a)

    0.55       0.70       0.76       0.76       0.77  

Net realized and unrealized gain (loss)(b)

    (0.40     0.43       1.36       (1.12     (0.25
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) from investment operations

    0.15       1.13       2.12       (0.36     0.52  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributions(c)

         

From net investment income

    (0.57     (0.71     (0.76     (0.77     (0.76
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions

    (0.57     (0.71     (0.76     (0.77     (0.76
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net asset value, end of year

  $ 26.89     $ 27.31     $ 26.89     $ 25.53     $ 26.66  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Return(d)

         

Based on net asset value

    0.56     4.27     8.43     (1.37 )%      2.01
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ratios to Average Net Assets

         

Total expenses(e)

    0.10     0.10     0.10     0.10     0.10
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses after fees waived(e)

    0.09     0.10     0.10     0.10     0.10
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income

    2.01     2.59     2.89     2.95     2.92
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Supplemental Data

         

Net assets, end of year (000)

  $ 68,574     $ 72,383     $ 79,335     $ 59,995     $ 87,963  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio turnover rate(f)(g)

    13     13     5     3     12
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(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) 

The Fund indirectly bears its proportionate share of fees and expenses incurred by the underlying fund in which the Fund is invested (“acquired fund fees and expenses”). This ratio does not include these acquired fund fees and expenses.

(f) 

Portfolio turnover rate excludes in-kind transactions.

(g) 

Portfolio turnover rate excludes the portfolio activity of the underlying fund in which the Fund is invested. See the underlying fund’s financial highlights for its respective portfolio turnover rates.

See notes to financial statements.

 

 

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Notes to Financial Statements

 

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  

 

iBonds Mar 2023 Term Corporate ex-Financials

     Diversified    

iBonds Mar 2023 Term Corporate

     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. Upon notification from issuers or as estimated by management, a portion of the dividend income received from a real estate investment trust may be redesignated as a reduction of cost of the related investment and/or realized gain. Interest income, including amortization and accretion of premiums and discounts on debt securities, is recognized daily on an accrual basis.

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.

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. The character and timing of distributions are determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP.

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. Each Fund determines the fair values of its financial instruments using various independent dealers or pricing services under policies approved by the Board of Trustees of the Trust (the “Board”). 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 a policy approved by the Board as reflecting fair value. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) is the committee formed by management to develop global pricing policies and procedures and to oversee the pricing function for all financial instruments.

Fair Value Inputs and Methodologies: The following methods and inputs are used to establish the fair value of each Fund’s assets and liabilities:

   

Fixed-income investments for which market quotations are readily available are generally valued using the last available bid price or current market quotations provided by independent dealers or third-party pricing services. Pricing services generally value fixed income securities assuming orderly transactions of an institutional round lot size, but a fund may hold or transact in such securities in smaller, odd lot sizes. Odd lots may trade at lower prices than institutional round lots. The pricing services may use matrix pricing or valuation models that utilize certain inputs and assumptions to derive values, including transaction data (e.g., recent representative bids and offers), market data, credit quality information, perceived market movements, news, and other relevant information. Certain fixed-income securities, including asset-backed and mortgage related securities may be valued based on valuation models that consider the estimated cash flows of each tranche of the entity, establish a benchmark yield and develop an estimated tranche specific spread to the benchmark yield based on the unique attributes of the tranche. The amortized cost method of valuation may be used with respect to debt obligations with sixty days or less remaining to maturity unless the Manager determines such method does not represent fair value.

 

 

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  27


Notes to Financial Statements  (continued)

 

   

Exchange-traded funds and closed-end funds traded on a recognized securities exchange are valued at that day’s last traded price or official closing price, as applicable, on the exchange where the fund is primarily traded. Funds traded on a recognized exchange for which there were no sales on that day may be 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.

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 Global Valuation Committee, in accordance with a policy approved by the Board as reflecting fair value (“Fair Valued Investments”). The fair valuation approaches that may be used by the Global 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 Global Valuation Committee, or its delegate, 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 Global Valuation Committee, or its delegate, deems relevant and consistent with the principles of fair value measurement. The pricing of all Fair Valued Investments is subsequently reported to the Board or a committee thereof on a quarterly basis.

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 Global 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 Global 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.

 

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 BlackRock Fund Advisors (“BFA”), the Funds’ investment adviser, 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.

 

 

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Notes to Financial Statements  (continued)

 

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

    

Market Value of

Securities on Loan

 

 

      

Cash Collateral

Received

 

(a)  

    

Non-Cash Collateral

Received

 

 

       Net Amount  

 

 

iBonds Mar 2023 Term Corporate ex-Financials

               

Barclays Bank PLC

   $ 84,907        $ 84,907      $        $  

Goldman Sachs & Co. LLC

     417,811          417,811                  

J.P. Morgan Securities LLC

     633,589          633,589                  

Morgan Stanley

     192,113          192,113                  

Wells Fargo Securities LLC

     178,101          178,101                  
  

 

 

      

 

 

    

 

 

      

 

 

 
   $ 1,506,521        $ 1,506,521      $        $  
  

 

 

      

 

 

    

 

 

      

 

 

 

iBonds Mar 2023 Term Corporate

               

Barclays Bank PLC

   $ 73,763        $ 73,763      $        $  

BofA Securities, Inc.

     183,144          183,144                  

Goldman Sachs & Co. LLC

     214,540          214,540                  

J.P. Morgan Securities LLC

     876,909          876,909                  

Morgan Stanley

     805,403          805,403                  

Toronto Dominion Bank

     183,694          183,694                  
  

 

 

      

 

 

    

 

 

      

 

 

 
   $ 2,337,453        $ 2,337,453      $        $  
  

 

 

      

 

 

    

 

 

      

 

 

 

 

  (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 each Fund is disclosed in the Fund’s statement of assets and liabilities.

 

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.

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 each Fund, BFA is entitled to an annual investment advisory fee of 0.10%, accrued daily and paid monthly by the Funds, based on the average daily net assets of each Fund.

Expense Waivers: A fund may incur its pro rata share of fees and expenses attributable to its investments in other investment companies (“acquired fund fees and expenses”). The total of the investment advisory fee and acquired fund fees and expenses, if any, is a fund’s total annual operating expenses. Total expenses as shown in the Statement of Operations does not include acquired fund fees and expenses.

BFA has contractually agreed to waive a portion of its investment advisory fee for each Fund through the termination date of such Fund, in an amount equal to acquired fund fees and expenses, if any, attributable to each Fund’s investments in other funds advised by BFA or its affiliates.

These amounts are included in investment advisory fees waived in the Statements of Operations. For the year ended October 31, 2021, the amounts waived in investment advisory fees pursuant to this arrangement were as follows:

 

   
iShares ETF   Amounts waived  

iBonds Mar 2023 Term Corporate ex-Financials

  $ 467     

iBonds Mar 2023 Term Corporate

    4,476  

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. 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

 

 

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  29


Notes to Financial Statements  (continued)

 

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.

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 October 31, 2021, the Funds paid BTC the following amounts for securities lending agent services:

 

   
iShares ETF  

Fees Paid

to BTC

 

iBonds Mar 2023 Term Corporate ex-Financials

  $ 890     

iBonds Mar 2023 Term Corporate

    1,744  

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 October 31, 2021, 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)
 

iBonds Mar 2023 Term Corporate ex-Financials

  $      $ 26,652      $ 1,331     

iBonds Mar 2023 Term Corporate

             111,939        4,218  

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.

 

6.

PURCHASES AND SALES

For the year ended October 31, 2021, purchases and sales of investments, excluding short-term investments and in-kind transactions, were as follows:

 

     
iShares ETF   Purchases      Sales  

iBonds Mar 2023 Term Corporate ex-Financials

  $   2,551,588      $ 2,908,089     

iBonds Mar 2023 Term Corporate

    8,950,914          11,516,095  

For the year ended October 31, 2021, in-kind transactions were as follows:

 

     
iShares ETF   In-kind
Purchases
    

In-kind

Sales

 

iBonds Mar 2023 Term Corporate ex-Financials

  $   3,657,930      $     

iBonds Mar 2023 Term Corporate

    5,276,288          7,755,203  

 

7.

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.

 

 

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Notes to Financial Statements  (continued)

 

Management has analyzed tax laws and regulations and their application to the Funds as of October 31, 2021, 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.

U.S. GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or NAV per share. As of October 31, 2021, permanent differences attributable to realized gains (losses) from in-kind redemptions were reclassified to the following accounts:

 

     
iShares ETF   Paid-in Capital      Accumulated
Earnings (Loss)
 

iBonds Mar 2023 Term Corporate

  $ 163,014      $ (163,014 )   

The tax character of distributions paid was as follows:

 

iShares ETF   Year Ended
10/31/21
     Year Ended
10/31/20
 

iBonds Mar 2023 Term Corporate ex-Financials

    

Ordinary income

  $ 600,797      $ 680,553  
 

 

 

    

 

 

 

iBonds Mar 2023 Term Corporate

    

Ordinary income

  $ 1,531,453      $   2,161,736  
 

 

 

    

 

 

 

As of October 31, 2021, 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  

iBonds Mar 2023 Term Corporate ex-Financials

  $ 49,429      $ (917,495   $ 379,948     $ (488,118 )   

iBonds Mar 2023 Term Corporate

    108,068        (294,559     966,061         779,570  

 

  (a) 

Amounts available to offset future realized capital gains.

 
  (b) 

The difference between book-basis and tax-basis unrealized gains (losses) was attributable primarily to the tax deferral of losses on wash sales and amortization methods for premiums and discounts on fixed income securities.

 

For the year ended October 31, 2021, the Funds listed below utilized the following amounts of their respective capital loss carryforwards:

 

iShares ETF   Utilized  

iBonds Mar 2023 Term Corporate ex-Financials

  $ 60,770     

iBonds Mar 2023 Term Corporate

      278,618  

As of October 31, 2021, 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)
 

iBonds Mar 2023 Term Corporate ex-Financials

  $   31,844,133      $ 388,134      $ (8,186   $ 379,948     

iBonds Mar 2023 Term Corporate

    70,025,522        986,933        (20,872     966,061  

 

8.

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.

 

 

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  31


Notes to Financial Statements  (continued)

 

Market Risk: Each Fund may be exposed to prepayment risk, which is the risk that borrowers may exercise their option to prepay principal earlier than scheduled during periods of declining interest rates, which would force each Fund to reinvest in lower yielding securities. Each Fund may also be exposed to reinvestment risk, which is the risk that income from each Fund’s portfolio will decline if each Fund invests the proceeds from matured, traded or called fixed-income securities at market interest rates that are below each Fund portfolio’s current earnings rate.

An outbreak of respiratory disease caused by a novel coronavirus has developed into a global pandemic and has resulted in closing borders, quarantines, disruptions to supply chains and customer activity, as well as general concern and uncertainty. The impact of this pandemic, and other global health crises that may arise in the future, could affect the economies of many nations, individual companies and the market in general in ways that cannot necessarily be foreseen at the present time. This pandemic may result in substantial market volatility and may adversely impact the prices and liquidity of a fund’s investments. The duration of this pandemic and its effects cannot be determined with certainty.

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 the Manager 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.

Concentration 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.

Certain 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.

The Funds invest a significant portion of their assets in fixed-income securities and/or use derivatives tied to the fixed-income markets. Changes in market interest rates or economic conditions may affect the value and/or liquidity of such investments. Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall and decrease as interest rates rise. The Funds may be subject to a greater risk of rising interest rates due to the current period of historically low rates.

LIBOR Transition Risk: The United Kingdom’s Financial Conduct Authority announced a phase out of the London Interbank Offered Rate (“LIBOR”). Although many LIBOR rates will be phased out by the end of 2021, a selection of widely used USD LIBOR rates will continue to be published through June 2023 in order to assist with the transition. The Funds may be exposed to financial instruments tied to LIBOR to determine payment obligations, financing terms, hedging strategies or investment value. The transition process away from LIBOR might lead to increased volatility and illiquidity in markets for, and reduce the effectiveness of new hedges placed against, instruments whose terms currently include LIBOR. The ultimate effect of the LIBOR transition process on the Funds is uncertain.

 

9.

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.

Transactions in capital shares were as follows:

 

 

 
   

Year Ended

10/31/21

    

Year Ended

10/31/20

 
 

 

 

    

 

 

 
iShares ETF   Shares     Amount      Shares     Amount  

 

 

iBonds Mar 2023 Term Corporate ex-Financials

        

Shares sold

    150,000     $ 3,732,889        50,000     $ 1,255,736  
 

 

 

   

 

 

    

 

 

   

 

 

 

iBonds Mar 2023 Term Corporate

        

Shares sold

    200,000     $   5,421,288        550,000     $ 14,794,345  

Shares redeemed

    (300,000     (8,105,954      (850,000     (23,235,842
 

 

 

   

 

 

    

 

 

   

 

 

 

Net decrease

    (100,000   $ (2,684,666      (300,000   $ (8,441,497
 

 

 

   

 

 

    

 

 

   

 

 

 

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.

 

 

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Notes to Financial Statements  (continued)

 

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.

 

10.

SUBSEQUENT EVENTS

Management has evaluated the impact of all subsequent events on the Funds through the date the financial statements were available to be issued and has determined that there were no subsequent events requiring adjustment or additional disclosure in the financial statements.

 

 

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 iShares iBonds Mar 2023 Term Corporate ex-Financials ETF and iShares iBonds Mar 2023 Term Corporate ETF

Opinions on the Financial Statements

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of iShares iBonds Mar 2023 Term Corporate ex-Financials ETF and iShares iBonds Mar 2023 Term Corporate ETF (two of the funds constituting iShares Trust, hereafter collectively referred to as the “Funds”) as of October 31, 2021, the related statements of operations for the year ended October 31, 2021, the statements of changes in net assets for each of the two years in the period ended October 31, 2021, including the related notes, and the financial highlights for each of the five years in the period ended October 31, 2021 (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 October 31, 2021, 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 October 31, 2021 and each of the financial highlights for each of the five years in the period ended October 31, 2021 in conformity with accounting principles generally accepted in the United States of America.

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 October 31, 2021 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinions.

/s/PricewaterhouseCoopers LLP

Philadelphia, Pennsylvania

December 21, 2021

We have served as the auditor of one or more BlackRock investment companies since 2000.

 

 

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Important Tax Information (unaudited)

 

The Funds hereby designate the following amounts, or maximum amounts allowable by law, as interest income eligible to be treated as a Section 163(j) interest dividend for the fiscal year ended October 31, 2021:

 

   
iShares ETF   Interest Dividends  

iBonds Mar 2023 Term Corporate ex-Financials

    $   596,195     

iBonds Mar 2023 Term Corporate

    1,416,368  

The Funds hereby designate the following amounts, or maximum amounts allowable by law, as interest-related dividends eligible for exemption from U.S. withholding tax for nonresident aliens and foreign corporations for the fiscal year ended October 31, 2021:

 

   
iShares ETF   Interest-Related
Dividends
 

iBonds Mar 2023 Term Corporate ex-Financials

    $   521,780     

iBonds Mar 2023 Term Corporate

    1,151,630  

 

 

M P O R T A N T  A X  N F O R  M A T I O N

  35


Board Review and Approval of Investment Advisory Contract

 

iShares iBonds Mar 2023 Term Corporate ex-Financials ETF, iShares iBonds Mar 2023 Term Corporate ETF (each 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 and approve the Investment Advisory Agreement between the Trust and BFA (the “Advisory Agreement”) 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 7, 2021 and May 14, 2021, 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 15-16, 2021, 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 another fund in which the Fund invests (if applicable), and waivers/reimbursements (if applicable) of the Fund in comparison with the same information for other ETFs (including, where applicable, funds sponsored by an “at cost” service provider), objectively selected by Broadridge as comprising the Fund’s applicable 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 overall fund expenses (net of waivers and reimbursements) for the Fund were lower than the median of the overall fund expenses (net of 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, 2020, to that of 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 recent and proposed enhancements 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. 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, which were provided at the May 7, 2021 meeting and throughout the year.

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.

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

 

 

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Board Review and Approval of Investment Advisory Contract  (continued)

 

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 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, were within a reasonable range in light of the factors and other information considered.

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, 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 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 also considered the “all-inclusive” nature of the Fund’s advisory fee structure, and the Fund’s expenses borne by BFA under this arrangement. The Board 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 (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 also noted the revenue received by BFA and/or its affiliates pursuant to (i) 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 and (ii) other technology-related initiatives aimed to better support the iShares funds. The Board further 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.

 

 

O A R D  E V I E W  A N D  P  P R O V A L  O F  N V E S T M E N T  D V I S O R Y  O N T R A C T

  37


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.

October 31, 2021

 

       
    Total Cumulative Distributions
for the Fiscal Year
          % Breakdown of the Total Cumulative
Distributions for the Fiscal Year
 
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
 

iBonds Mar 2023 Term Corporate ex-Financials

  $   0.511670     $     $     $   0.511670         100             100

iBonds Mar 2023 Term Corporate

    0.573522                   0.573522               100                   100  

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.

 

 

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Trustee and Officer Information

 

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 375 funds as of October 31, 2021. With the exception of Robert S. Kapito, Salim Ramji and Charles Park, 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. Park is c/o BlackRock, Inc., Park Avenue Plaza, 55 East 52nd Street, New York, NY 10055. The Board has designated Cecilia H. Herbert 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 (Age)    Position(s)   

Principal Occupation(s)

During the Past 5 Years

   Other Directorships Held by Trustee
Robert S. Kapito(a)
(64)
   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)

(51)

   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 (Age)    Position(s)   

Principal Occupation(s)

During the Past 5 Years

   Other Directorships Held by Trustee
Cecilia H. Herbert
(72)
   Trustee
(since 2005);
Independent Board Chair
(since 2016).
   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) and Investment Committee (since 2011); Chair (1994-2005) and Member (since 1992) of the Investment Committee, Archdiocese of San Francisco; Trustee of Forward Funds (14 portfolios) (2009-2018); Trustee of Salient MF Trust (4 portfolios) (2015-2018); Director (1998-2013) and President (2007-2011) of the Board of Directors, Catholic Charities CYO; Trustee (2002-2011) and Chair of the Finance and Investment Committee (2006-2010) of the Thacher School; Director of the Senior Center of Jackson Hole (since 2020).    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 2016); Trustee of Thrivent Church Loan and Income Fund (since 2019).
Jane D. Carlin
(65)
   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
(66)
   Trustee
(since 2017); Audit
Committee Chair
(since 2019).
   Partner, KPMG LLP (2002-2016).    Director of iShares, Inc. (since 2017); Trustee of iShares U.S. ETF Trust (since 2017).

 

 

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

  39


Trustee and Officer Information  (continued)

 

Independent Trustees (continued)
       
  Name (Age)    Position(s)   

Principal Occupation(s)

During the Past 5 Years

   Other Directorships Held by Trustee
John E. Kerrigan
(66)
   Trustee
(since 2005); Nominating
and Governance
and Equity Plus
Committee Chairs
(since 2019).
   Chief Investment Officer, Santa Clara University (since 2002).    Director of iShares, Inc. (since 2005); Trustee of iShares U.S. ETF Trust (since 2011).
Drew E. Lawton
(62)
   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).
John E. Martinez
(60)
   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
(57)
   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 (Age)    Position(s)   

Principal Occupation(s)

During the Past 5 Years

Armando Senra
(50)
   President
(since 2019).
   Managing Director, BlackRock, Inc. (since 2007); Head of U.S., Canada and Latam iShares, BlackRock, Inc. (since 2019); Head of Latin America Region, BlackRock, Inc. (2006-2019); Managing Director, Bank of America Merrill Lynch (1994-2006).
Trent Walker
(47)
   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.
Charles Park
(54)
   Chief Compliance
Officer
(since 2006).
   Chief Compliance Officer of BlackRock Advisors, LLC and the BlackRock-advised Funds in the BlackRock Multi-Asset Complex and the BlackRock Fixed-Income Complex (since 2014); Chief Compliance Officer of BFA (since 2006).
Deepa Damre Smith
(46)
   Secretary
(since 2019).
   Managing Director, BlackRock, Inc. (since 2014); Director, BlackRock, Inc. (2009-2013).
Scott Radell
(52)
   Executive Vice
President
(since 2012).
   Managing Director, BlackRock, Inc. (since 2009); Head of Portfolio Solutions, BlackRock, Inc. (since 2009).
Alan Mason
(60)
   Executive Vice
President
(since 2016).
   Managing Director, BlackRock, Inc. (since 2009).
Marybeth Leithead
(58)
   Executive Vice
President
(since 2019).
   Managing Director, BlackRock, Inc. (since 2017); Chief Operating Officer of Americas iShares (since 2017); Portfolio Manager, Municipal Institutional & Wealth Management (2009-2016).

 

 

40  

2 0 2 1   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


General Information

 

Electronic Delivery

Shareholders can sign up for email 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 Company’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.

 

 

E N E R A L   I N F O R M A T I O N

  41


 

 

 

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 Bloomberg Index Services Limited, nor does this company make any representation regarding the advisability of investing in the iShares Funds. BlackRock is not affiliated with the company listed above.

©2021 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-1007-1021

 

 

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