Table of Contents

 

LOGO

  AUGUST 31, 2022

 

 

  

2022 Annual Report

 

 

 

iShares Trust

 

·  

iShares Currency Hedged MSCI United Kingdom ETF | HEWU | NYSE Arca

 

·  

iShares MSCI United Kingdom ETF | EWU | NYSE Arca

 

·  

iShares MSCI United Kingdom Small-Cap ETF | EWUS | Cboe BZX


Table of Contents

The Markets in Review

Dear Shareholder,

The 12-month reporting period as of August 31, 2022 saw the emergence of significant challenges that disrupted the economic recovery and strong financial markets of 2021. The U.S. economy shrank in the first half of 2022, ending the run of robust growth that followed the reopening of global economies and the development of COVID-19 vaccines. Changes in consumer spending patterns and a tight labor market led to elevated inflation, which reached a 40-year high. Moreover, while the foremost effect of Russia’s invasion of Ukraine has been a severe humanitarian crisis, the ongoing war continued to present challenges for both investors and policymakers.

Equity prices fell as interest rates rose, particularly weighing on relatively high-valuation growth stocks and economically sensitive small-capitalization stocks. While both large- and small-capitalization U.S. stocks fell, declines for small-capitalization U.S. stocks were steeper. Both emerging market stocks and international equities from developed markets fell significantly, pressured by rising interest rates and a strengthening U.S. dollar.

The 10-year U.S. Treasury yield (which is inversely related to bond prices) rose notably during the reporting period as investors reacted to higher inflation and attempted to anticipate its impact on future interest rate changes. The corporate bond market also faced inflationary headwinds, and increasing uncertainty led to higher corporate bond spreads (the difference in yield between U.S. Treasuries and similarly-dated corporate bonds).

The U.S. Federal Reserve (the “Fed”), acknowledging that inflation is growing faster than expected, raised interest rates four times while indicating that additional rate hikes were likely. Furthermore, the Fed wound down its bond-buying programs and began to reduce its balance sheet. As investors attempted to assess the Fed’s future trajectory, the Fed’s statements late in the reporting period led markets to believe that additional tightening is likely in the near term.

The horrific war in Ukraine has significantly clouded the outlook for the global economy, leading to major volatility in energy and metals markets. Sanctions on Russia, Europe’s top energy supplier, and general wartime disruption have magnified supply problems for key commodities. We believe elevated energy prices will continue to exacerbate inflationary pressure while also constraining economic growth. Combating inflation without stifling a recovery, while buffering against ongoing supply and price shocks, will be an especially challenging environment for setting effective monetary policy. Despite the likelihood of more rate increases on the horizon, we believe the Fed will ultimately err on the side of protecting employment, even at the expense of higher inflation. In the meantime, however, we are likely to see a period of slowing growth paired with relatively high inflation.

In this environment, while we favor an overweight to equities in the long-term, the market’s concerns over excessive rate hikes from central banks moderate our outlook. Furthermore, the energy shock and a deteriorating economic backdrop in China and Europe are likely to challenge corporate earnings, so we are underweight equities overall in the near term. We take the opposite view on credit, where higher spreads provide near-term opportunities, while the likelihood of higher inflation leads us to take an underweight stance on credit in the long term. We believe that investment-grade corporates, U.K. gilts, local-currency emerging market debt, and inflation-protected bonds (particularly in Europe) offer strong opportunities for a six- to twelve-month horizon.

Overall, our view is that investors need to think globally, extend their scope across a broad array of asset classes, and be nimble as market conditions change. We encourage you to talk with your financial advisor and visit iShares.com for further insight about investing in today’s markets.

 

LOGO

Rob Kapito

President, BlackRock, Inc.

LOGO

Rob Kapito

President, BlackRock, Inc.

 

Total Returns as of August 31, 2022
     
     6-Month     12-Month
   

U.S. large cap equities

(S&P 500® Index)

  (8.84)%   (11.23)%
   

U.S. small cap equities

(Russell 2000® Index)

  (9.31)     (17.88)  
   

International equities

(MSCI Europe, Australasia, Far East Index)

  (13.97)     (19.80)  
   

Emerging market equities

(MSCI Emerging Markets Index)

  (13.30)     (21.80)  
   

3-month Treasury bills

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

  0.36    0.39
   

U.S. Treasury securities

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

  (9.71)    (13.27)  
   

U.S. investment grade bonds

(Bloomberg U.S. Aggregate Bond Index)

  (7.76)    (11.52)  
   

Tax-exempt municipal bonds

(Bloomberg Municipal Bond Index)

  (5.72)    (8.63)
   

U.S. high yield bonds

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

  (7.78)     (10.61)  
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  

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

Table of Contents

 

 

      Page  

The Markets in Review

     2  

Annual Report:

  

Market Overview

     4  

Fund Summary

     5  

About Fund Performance

     11  

Disclosure of Expenses

     11  

Schedules of Investments

     12  

Financial Statements

  

Statements of Assets and Liabilities

     23  

Statements of Operations

     24  

Statements of Changes in Net Assets

     25  

Financial Highlights

     27  

Notes to Financial Statements

     30  

Report of Independent Registered Public Accounting Firm

     39  

Important Tax Information

     40  

Board Review and Approval of Investment Advisory Contract

     41  

Supplemental Information

     45  

Trustee and Officer Information

     47  

General Information

     50  

Glossary of Terms Used in this Report

     51  

 

 

 


Table of Contents

Market Overview

 

iShares Trust

Global Market Overview

Global equity markets declined in U.S. dollar terms during the 12 months ended August 31, 2022 (“reporting period”). The MSCI ACWI, a broad global equity index that includes both developed and emerging markets, returned -15.88% in U.S. dollar terms for the reporting period.

For the first third of the reporting period, economic recovery supported stocks in most regions of the world. The global economy continued to rebound from the impact of restrictions imposed at the beginning of the coronavirus pandemic, as mitigation and adaptation allowed most economic activity to continue. However, substantial challenges emerged at the beginning of 2022 which negatively affected stock prices. Inflation rose significantly in many countries, reducing consumers’ purchasing power and leading many central banks to tighten monetary policy. Russia’s invasion of Ukraine presented a further challenge to the global economy, disrupting important commodities markets.

The U.S. economy grew briskly over the final half of 2021, powered primarily by consumer spending. Record-high personal savings rates allowed consumers to spend at an elevated level, releasing pent-up demand for goods and services. Growth subsequently stalled in the first half of 2022, and the economy contracted amid lower inventories and faltering business investment. Despite the economic downturn, unemployment declined substantially, falling to 3.7% in August 2022 while the number of long-term unemployed dropped below the pre-pandemic level. Although high inflation negatively impacted consumer sentiment, which declined significantly, consumer spending continued to grow.

Rising inflation led to a shift in policy from the U.S. Federal Reserve (“the Fed”). As the reporting period began, the Fed was using accommodative monetary policy to stimulate the economy. Short-term interest rates were kept at near-zero levels, and the Fed used bond-buying programs to stabilize debt markets. However, rising prices led the Fed to tighten monetary policy during the reporting period in an attempt to prevent runaway inflation. The Fed slowed and then ended its bond-buying activities, finally reversing course as it began to reduce its balance sheet in June 2022. In March 2022, the Fed began to raise short-term interest rates, followed by three more increases for a total increase of 225 basis points, the most rapid rise in decades. Interest rates rose significantly in response, leading to higher borrowing costs for businesses. In that environment, the U.S. dollar significantly appreciated relative to most foreign currencies.

Stocks declined in Europe in U.S. dollar terms as economic growth stalled and the euro declined sharply relative to the U.S. dollar. Significantly higher inflation and Russia’s invasion of Ukraine negatively impacted equities. Russia is an important trading partner with many European countries, and new sanctions imposed limits on certain types of trade with Russia. Investors became concerned that the sharp rise in energy prices during the reporting period would constrain economic growth, as Europe relies on imported energy for much of its industrial and heating needs. The European Central Bank (“ECB”) responded to elevated inflation by raising interest rates in July 2022, the first such increase in over a decade.

Despite relatively low inflation by global standards, Asia-Pacific stocks declined significantly in U.S. dollar terms. Chinese stocks faced significant headwinds amid regulatory interventions by the Chinese government and strict lockdowns following COVID-19 outbreaks. Japanese stocks also declined amid an economic contraction in the first quarter of 2022 and a sharp decline in the Japanese yen relative to the U.S. dollar. Emerging market stocks declined substantially, as higher interest rates and a strengthening U.S. dollar raised the cost of borrowing in many emerging economies.

 

 

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Table of Contents
Fund Summary as of August 31, 2022    iShares® Currency Hedged MSCI United Kingdom ETF

 

Investment Objective

The iShares Currency Hedged MSCI United Kingdom ETF (the “Fund”) seeks to track the investment results of an index composed of large- and mid-capitalization United Kingdom equities while mitigating exposure to fluctuations between the value of the British pound and the U.S. dollar, as represented by the MSCI United Kingdom 100% Hedged to USD Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. The Fund currently seeks to achieve its investment objective by investing a substantial portion of its assets in one underlying fund, the iShares MSCI United Kingdom ETF.

Performance

 

     Average Annual Total Returns             Cumulative Total Returns  
       1 Year        5 Years       
Since
Inception
 
 
              1 Year        5 Years       
Since
Inception
 
 

Fund NAV

     9.18      4.11      5.76         9.18      22.30      49.42

Fund Market

     9.19        4.11        5.76           9.19        22.32        49.49  

Index

     9.83        4.82        6.33                 9.83        26.53        55.24  

GROWTH OF $10,000 INVESTMENT

(SINCE INCEPTION AT NET ASSET VALUE)

 

LOGO

The inception date of the Fund was June 29, 2015. The first day of secondary market trading was July 1, 2015.

Past performance is not an indication of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” for more information.

Expense Example

 

Actual           Hypothetical 5% Return           

 

 

     

 

 

      
 

Beginning
Account Value
(03/01/22)
 
 
 
      

Ending
Account Value
(08/31/22)
 
 
 
      

Expenses
Paid During
the Period
 
 
(a)  
           

Beginning
Account Value
(03/01/22)
 
 
 
      

Ending
Account Value
(08/31/22)
 
 
 
      

Expenses
Paid During
the Period
 
 
(a)  
      

Annualized
Expense
Ratio
 
 
 
  $ 1,000.00        $ 1,019.90        $ 0.00             $ 1,000.00        $ 1,025.20        $ 0.00          0.00

 

  (a) 

Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period shown). Other fees, such as brokerage commissions and other fees to financial intermediaries, may be paid which are not reflected in the tables and examples above. See “Disclosure of Expenses” for more information. The fees and expenses of the underlying funds in which the Fund invests are not included in the Fund’s annualized expense ratio.

 

 

 

U N D   S U M M A R Y

  5


Table of Contents
Fund Summary as of August 31, 2022  (continued)    iShares® Currency Hedged MSCI United Kingdom ETF

 

Portfolio Management Commentary

Stocks in the U.K. declined for the reporting period in U.S. dollar terms, as the country’s economy contracted in the second quarter of 2022 and inflation reached 40-year highs. The Bank of England raised interest rates multiple times and warned of a prolonged recession.

The industrials sector was the largest detractor from the Index’s return, as industrial production grew at a relatively slow pace. A multinational construction rental company with operations in the U.S. declined sharply despite benefiting from the relatively strong U.S. housing market. In addition, a multinational consumer credit rating agency declined despite strong earnings, as lower mortgage refinancing activity and declining consumer spending clouded the earnings outlook.

The financials sector also detracted from the Index’s performance. The insurance industry generally benefited from higher interest rates, but rising inflation led to uncertainty about cost increases and demand for insurance products. A large multinational insurer declined sharply as slower growth abroad and outflows from mutual funds weighed on earnings growth.

The consumer discretionary and consumer staples sectors also detracted from the Index’s return, as high inflation drove up input costs and tempered demand. Household durables stocks declined, as the cooling housing market and rising cost of living weighed on sales of big-ticket items. The personal products industry also weakened, largely driven by a multinational consumer products company, as inflation increased production expenses and sapped consumer demand. On the upside, the energy sector was a relatively large contributor in U.S. dollar terms due to rising oil and gas prices.

In terms of currency performance during the reporting period, the British pound depreciated by approximately 15% relative to the U.S. dollar. Rising interest rates in the U.S. along with high inflation and energy costs in Britain pressured the British pound.

The British pound’s negative performance meant hedging activity contributed to the Index’s return. A fully hedged investor seeks to bypass the currency fluctuations — both on the upside and on the downside — related to holding foreign-currency-denominated securities. The Index’s hedging activity offset the negative impact of the British pound’s performance relative to the U.S. dollar, resulting in an Index return that was relatively close to the return of British equities measured in British pounds.

Portfolio Information

 

PORTFOLIO COMPOSITION

 

   

Investment Type

   
Percent of
Net Assets
 
 

Investment Companies

    99.7

Short-term Investments

    4.4  
Forward foreign currency exchange contracts, net cumulative appreciation     6.4  

Other assets less liabilities

    (10.5

SECTOR ALLOCATION (of the UNDERLYING FUND)

 

   
Sector  

Percent of

Total  Investment(a)

 

Consumer Staples

    20.8

Financials

    17.4  

Energy

    14.2  

Health Care

    13.0  

Industrials

    10.5  

Materials

    8.9  

Consumer Discretionary

    5.2  

Utilities

    4.0  

Communication Services

    3.9  

Real Estate

    1.1  

Information Technology

    1.0  

 

  (a)

Excludes money market funds.

 

 

 

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Table of Contents
Fund Summary as of August 31, 2022    iShares® MSCI United Kingdom ETF

 

Investment Objective

The iShares MSCI United Kingdom ETF (the “Fund”) seeks to track the investment results of an index composed of U.K. equities, as represented by the MSCI United Kingdom Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index.

Performance

 

     Average Annual Total Returns             Cumulative Total Returns  
       1 Year        5 Years        10 Years                 1 Year        5 Years        10 Years  

Fund NAV

     (8.50 )%       0.80      2.48         (8.50 )%       4.08      27.79

Fund Market

     (8.36      0.76        2.43           (8.36      3.84        27.08  

Index

     (7.66      1.45        3.07                 (7.66      7.45        35.25  

GROWTH OF $10,000 INVESTMENT

(AT NET ASSET VALUE)

 

LOGO

Past performance is not an indication of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” for more information.

Expense Example

 

Actual           Hypothetical 5% Return           

 

 

     

 

 

      
 

Beginning
Account Value
(03/01/22)
 
 
 
      

Ending
Account Value
(08/31/22)
 
 
 
      

Expenses
Paid During
the Period
 
 
(a)  
           

Beginning
Account Value
(03/01/22)
 
 
 
      

Ending
Account Value
(08/31/22)
 
 
 
      

Expenses
Paid During
the Period
 
 
(a)  
      

Annualized
Expense
Ratio
 
 
 
  $ 1,000.00        $ 873.70        $ 2.36             $ 1,000.00        $ 1,022.70        $ 2.55          0.50

 

  (a) 

Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period shown). Other fees, such as brokerage commissions and other fees to financial intermediaries, may be paid which are not reflected in the tables and examples above. See “Disclosure of Expenses” for more information.

 

 

 

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Table of Contents
Fund Summary as of August 31, 2022  (continued)    iShares® MSCI United Kingdom ETF

 

Portfolio Management Commentary

Stocks in the U.K. declined for the reporting period in U.S. dollar terms, as the country’s economy contracted in the second quarter of 2022 and inflation reached 40-year highs. The Bank of England raised interest rates multiple times and warned of a prolonged recession. In addition, comparatively high interest rates in the U.S. and the U.K.’s dependence on foreign imports led to a sharp depreciation in the British pound relative to the U.S. dollar, which detracted from the Index’s return in U.S. dollar terms.

The industrials sector was the largest detractor from the Index’s return, as industrial production grew at a relatively slow pace. A multinational construction rental company with operations in the U.S. declined sharply despite benefiting from the relatively strong U.S. housing market. In addition, a multinational consumer credit rating agency declined despite strong earnings, as lower mortgage refinancing activity and declining consumer spending clouded the earnings outlook.

The financials sector also detracted from the Index’s performance. The insurance industry generally benefited from higher interest rates, but rising inflation led to uncertainty about cost increases and demand for insurance products. A large multinational insurer declined sharply as slower growth abroad and outflows from mutual funds weighed on earnings growth.

The consumer discretionary and consumer staples sectors also detracted from the Index’s return, as high inflation drove up input costs and tempered demand. Household durables stocks declined, as the cooling housing market and rising cost of living weighed on sales of big-ticket items. The personal products industry also weakened, largely driven by a multinational consumer products company, as inflation increased production expenses and sapped consumer demand. On the upside, the energy sector was a relatively large contributor due to rising oil and gas prices.

Portfolio Information

 

SECTOR ALLOCATION

 

   

Sector

   
Percent of
Total Investments
 
(a) 

Consumer Staples

    20.8

Financials

    17.4  

Energy

    14.2  

Health Care

    13.0  

Industrials

    10.5  

Materials

    8.9  

Consumer Discretionary

    5.2  

Utilities

    4.0  

Communication Services

    3.9  

Real Estate

    1.1  

Information Technology

    1.0  

 

  (a)

Excludes money market funds.

 

TEN LARGEST HOLDINGS

 

   

Security

   
Percent of
Total Investments
 
(a) 

Shell PLC

    9.5

AstraZeneca PLC

    9.2  

HSBC Holdings PLC

    5.9  

Unilever PLC

    5.6  

Diageo PLC

    4.8  

BP PLC

    4.8  

British American Tobacco PLC

    4.2  

GSK PLC

    3.1  

Rio Tinto PLC

    3.0  

Reckitt Benckiser Group PLC

    2.7  

 

 

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Table of Contents
Fund Summary as of August 31, 2022    iShares® MSCI United Kingdom Small-Cap ETF

 

Investment Objective

The iShares MSCI United Kingdom Small-Cap ETF (the “Fund”) seeks to track the investment results of an index composed of small-capitalization U.K. equities, as represented by the MSCI United Kingdom Small Cap Index (the “Index”). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index.

Performance

 

     Average Annual Total Returns             Cumulative Total Returns  
       1 Year        5 Years        10 Years                 1 Year        5 Years        10 Years  

Fund NAV

     (36.56 )%       (2.44 )%       3.81         (36.56 )%       (11.60 )%       45.40

Fund Market

     (36.66      (2.45      3.70           (36.66      (11.65      43.82  

Index

     (36.05      (1.79      4.48                 (36.05      (8.62      54.96  

GROWTH OF $10,000 INVESTMENT

(AT NET ASSET VALUE)

 

LOGO

Past performance is not an indication of future results. Performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares. See “About Fund Performance” for more information.

Expense Example

 

Actual           Hypothetical 5% Return           

 

 

     

 

 

      
 

Beginning
Account Value
(03/01/22)
 
 
 
      

Ending
Account Value
(08/31/22)
 
 
 
      

Expenses
Paid During
the Period
 
 
(a)  
           

Beginning
Account Value
(03/01/22)
 
 
 
      

Ending
Account Value
(08/31/22)
 
 
 
      

Expenses
Paid During
the Period
 
 
(a)  
      

Annualized
Expense
Ratio
 
 
 
  $ 1,000.00        $ 766.60        $ 2.63             $ 1,000.00        $ 1,022.20        $ 3.01          0.59

 

  (a) 

Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period shown). Other fees, such as brokerage commissions and other fees to financial intermediaries, may be paid which are not reflected in the tables and examples above. See “Disclosure of Expenses” for more information.

 

 

 

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Table of Contents
Fund Summary as of August 31, 2022  (continued)    iShares® MSCI United Kingdom Small-Cap ETF

 

Portfolio Management Commentary

Small-capitalization stocks in the U.K. declined for the reporting period, as the country’s economy slipped into contraction in the second quarter of 2022 and inflation reached 40-year highs. The Bank of England raised interest rates to the highest levels in 13 years and warned of a prolonged recession. The declining value of the British pound relative to the U.S. dollar also diminished the value of U.K. stocks in U.S. dollar terms.

The consumer discretionary sector detracted the most from the Index’s return. Internet and direct marketing retail companies experienced declining sales due to a reduction in online spending by consumers. Additionally, persistent supply chain problems affected international deliveries from online retailers. In the restaurants industry, disruptions to supply precipitated by the war in Ukraine increased prices for energy and wheat, weighing on the profitability of makers of baked goods.

Industrials stocks also detracted from the Index’s performance, particularly in the trading companies and distributors industry. The costs of raw materials rose, pressuring sellers of building materials. Additionally, the U.K. housing market cooled as interest rates rose, weakening the prospects for new home construction. Retailers of home improvement materials were further impacted as worsening inflation led to a reduction in consumer spending on discretionary home renovation projects.

Financials stocks were another source of weakness for the Index’s return, driven by capital markets companies. Challenges for asset managers during the reporting period included increased market volatility, outflows from higher-growth stocks, and negative publicity surrounding the suspension of investments in Russia. In the real estate sector, office real estate investment trusts declined significantly as the increase in remote working during the coronavirus pandemic led to higher office vacancies and prompted investors to question the future viability of office investments.

Portfolio Information

 

SECTOR ALLOCATION

 

   

Sector

   
Percent of
Total Investments
 
(a) 

Industrials

    21.8

Financials

    16.0  

Real Estate

    13.0  

Consumer Discretionary

    12.9  

Information Technology

    8.2  

Health Care

    6.9  

Communication Services

    5.9  

Materials

    4.5  

Consumer Staples

    4.0  

Utilities

    3.4  

Energy

    3.4  

 

  (a)

Excludes money market funds.

 

TEN LARGEST HOLDINGS

 

   

Security

   
Percent of
Total Investments
 
(a) 

Meggitt PLC

    1.9

RS GROUP PLC

    1.6  

Rightmove PLC

    1.6  

Avast PLC

    1.5  

Centrica PLC

    1.4  

Intermediate Capital Group PLC

    1.2  

Dechra Pharmaceuticals PLC

    1.2  

Weir Group PLC (The)

    1.2  

DS Smith PLC

    1.1  

HomeServe PLC

    1.1  

 

 

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Table of Contents

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 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.

Disclosure of Expenses

Shareholders of each Fund may incur the following charges: (1) transactional expenses, including brokerage commissions on purchases and sales of fund shares and (2) ongoing expenses, including management fees and other fund expenses. The expense examples shown (which are based on a hypothetical investment of $1,000 invested at the beginning of the period and held through the end of the period) are intended to assist shareholders both in calculating expenses based on an investment in each Fund and in comparing these expenses with similar costs of investing in other funds.

The expense examples provide information about actual account values and actual expenses. Annualized expense ratios reflect contractual and voluntary fee waivers, if any. In order to estimate the expenses a shareholder paid during the period covered by this report, shareholders can divide their account value by $1,000 and then multiply the result by the number under the heading entitled “Expenses Paid During the Period.”

The expense examples also provide information about hypothetical account values and hypothetical expenses based on a fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses. In order to assist shareholders in comparing the ongoing expenses of investing in the Funds and other funds, compare the 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

The expenses shown in the expense examples are intended to highlight shareholders’ ongoing costs only and do not reflect any transactional expenses, such as brokerage commissions and other fees paid on purchases and sales of fund shares. Therefore, the hypothetical examples are useful in comparing ongoing expenses only and will not help shareholders determine the relative total expenses of owning different funds. If these transactional expenses were included, shareholder expenses would have been higher.

 

 

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

  11


Table of Contents

Schedule of Investments

August 31, 2022

  

iShares® Currency Hedged MSCI United Kingdom ETF

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  

Investment Companies

   
Exchange-Traded Funds — 99.7%            

iShares MSCI United Kingdom ETF(a)

    546,282     $ 15,793,013  
   

 

 

 

Total Investment Companies
(Cost: $17,851,040)

      15,793,013  
   

 

 

 

Short-Term Securities

   
Money Market Funds — 4.4%            

BlackRock Cash Funds: Treasury, SL Agency Shares, 2.07%(a)(b)

    700,000       700,000  
   

 

 

 

Total Short-Term Securities — 4.4%
(Cost: $700,000)

      700,000  
   

 

 

 

Total Investments in Securities — 104.1%
(Cost: $18,551,040)

      16,493,013  
Liabilities in Excess of Other Assets — (4.1)%         (654,899)  
   

 

 

 
Net Assets — 100.0%         $  15,838,114  
   

 

 

 

 

  (a) 

 Affiliate of the Fund.

 

 

  (b) 

 Annualized 7-day yield as of period end.

 

 

Affiliates

Investments in issuers considered to be affiliate(s) of the Fund during the year ended August 31, 2022 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

                   
Affiliated Issuer   Value at
08/31/21
   

Purchases

at Cost

   

Proceeds

from Sale

    Net Realized
Gain (Loss)
    Change in
Unrealized
Appreciation
(Depreciation)
    Value at
08/31/22
    Shares
Held at
08/31/22
    Income    

Capital

Gain
Distributions
from
Underlying
Funds

 

BlackRock Cash Funds: Treasury, SL Agency Shares

  $     $ 700,000 (a)     $     $     $     $ 700,000       700,000     $ 1,573     $  

iShares MSCI United Kingdom ETF

    8,253,193       22,033,423       (12,506,349     8,262       (1,995,516     15,793,013       546,282       686,595        
       

 

 

   

 

 

   

 

 

     

 

 

   

 

 

 
        $ 8,262     $ (1,995,516   $ 16,493,013       $ 688,168     $  
       

 

 

   

 

 

   

 

 

     

 

 

   

 

 

 

 

  (a) 

 Represents net amount purchased (sold).

 

Derivative Financial Instruments Outstanding as of Period End

Forward Foreign Currency Exchange Contracts

 

Currency Purchased                   Currency Sold      Counterparty    Settlement Date                           Unrealized
Appreciation
(Depreciation)
 

USD    

     23,266,281          GBP            19,105,000      Morgan Stanley & Co. International PLC      09/06/22        $ 1,070,376  

USD

     16,086,029          GBP            13,816,000      Morgan Stanley & Co. International PLC      10/04/22          26,243  
                     

 

 

 
                        1,096,619  
                     

 

 

 

GBP

     19,105,000          USD            22,285,614      Morgan Stanley & Co. International PLC      09/06/22          (89,709

GBP

     67,000          USD            77,944      JPMorgan Chase Bank N.A.      10/04/22          (63
                     

 

 

 
                        (89,772
                     

 

 

 
                        $1,006,847  
                     

 

 

 

 

 

12  

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Table of Contents

Schedule of Investments  (continued)

August 31, 2022

  

iShares® Currency Hedged MSCI United Kingdom ETF

 

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:

 

 

 
     Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

 

 

Assets — Derivative Financial Instruments

                    

Forward foreign currency exchange contracts

                    

Unrealized appreciation on forward foreign currency exchange contracts

   $      $      $      $ 1,096,619      $      $      $ 1,096,619  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities — Derivative Financial Instruments

                    

Forward foreign currency exchange contracts

                    

Unrealized depreciation on forward foreign currency exchange contracts

   $      $      $      $ 89,772      $      $      $ 89,772  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

For the period ended August 31, 2022, the effect of derivative financial instruments in the Statements of Operations was as follows:

 

 

 
     Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

 

 

Net Realized Gain (Loss) from

                    

Forward foreign currency exchange contracts

   $      $      $      $ 1,833,302      $      $      $ 1,833,302  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net Change in Unrealized Appreciation (Depreciation) on

                    

Forward foreign currency exchange contracts

   $      $      $      $ 915,285      $      $      $ 915,285  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

 

 

Forward foreign currency exchange contracts

  

Average amounts purchased — in USD

   $ 14,379,791      

Average amounts sold — in USD

   $ 27,861,354      

 

 

For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.

Derivative Financial Instruments - Offsetting as of Period End

The Fund’s derivative assets and liabilities (by type) were as follows:

 

 

 
     Assets      Liabilities  

 

 

Derivative Financial Instruments:

     

Forward foreign currency exchange contracts

   $ 1,096,619      $ 89,772  
  

 

 

    

 

 

 

Total derivative assets and liabilities in the Statement of Assets and Liabilities

     1,096,619        89,772  

Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)

             
  

 

 

    

 

 

 

Total derivative assets and liabilities subject to an MNA

     1,096,619        89,772  
  

 

 

    

 

 

 

The following tables present the Fund’s derivative assets and liabilities by counterparty net of amounts available for offset under an MNA and net of the related collateral received and pledged by the Fund:

 

 

 

Counterparty

   


Derivative

Assets

Subject to

an MNA by
Counterparty

 

 

 


 

     

Derivatives
Available

for Offset

 
 

(a) 

 



 

Non-Cash
Collateral
Received


 
 

 



 

Cash
Collateral
Received


 
 

     

Net Amount
of Derivative
Assets
 
 
(b) 

 

 

Morgan Stanley & Co. International PLC

             $ 1,096,619                $ (89,709              $         —                $         —                $ 1,006,910  
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

    

                   

 

 

Counterparty

   


Derivative

Liabilities

Subject to

an MNA by
Counterparty

 

 

 


 

     

Derivatives
Available

for Offset

 
 

(a) 

   

Non-Cash
Collateral
Pledged
 
 
 
   

Cash
Collateral

Pledged

 
 

 

     

Net Amount
of Derivative
Liabilities
 
 
(c) 

 

 

JPMorgan Chase Bank N.A.

             $ 63                $                $                $                $ 63  

Morgan Stanley & Co. International PLC

      89,709         (89,709                        
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 
    $   89,772       $ (89,709     $         —       $     —       $ 63  
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

 

 

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

  13


Table of Contents

Schedule of Investments  (continued)

August 31, 2022

  

iShares® Currency Hedged MSCI United Kingdom ETF

 

Derivative Financial Instruments - Offsetting as of Period End (continued)

 

  (a) 

The amount of derivatives available for offset is limited to the amount of derivative assets and/or liabilities that are subject to an MNA.

 

 

  (b) 

Net amount represents the net amount receivable from the counterparty in the event of default.

 

 

  (c) 

Net amount represents the net amount payable due to the counterparty in the event of default.

 

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

           

Investment Companies

   $ 15,793,013      $      $      $ 15,793,013  

Money Market Funds

     700,000                      700,000  
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 16,493,013      $      $      $ 16,493,013  
  

 

 

    

 

 

    

 

 

    

 

 

 

Derivative financial instruments(a)

           

Assets

           

Forward Foreign Currency Exchange Contracts

   $      $ 1,096,619      $      $ 1,096,619  

Liabilities

           

Forward Foreign Currency Exchange Contracts

            (89,772             (89,772
  

 

 

    

 

 

    

 

 

    

 

 

 
   $      $ 1,006,847      $      $ 1,006,847  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Derivative financial instruments are forward foreign currency exchange contracts. Forward foreign currency exchange contracts are valued at the unrealized appreciation (depreciation) on the instrument.

 

See notes to financial statements.

 

 

14  

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Table of Contents

Schedule of Investments

August 31, 2022

  

iShares® MSCI United Kingdom ETF

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  

 

 

Common Stocks

   
Aerospace & Defense — 1.7%            

BAE Systems PLC

    4,946,331     $ 44,547,152  

Rolls-Royce Holdings PLC(a)

    13,048,795       11,629,326  
   

 

 

 
      56,176,478  
Banks — 10.6%            

Barclays PLC

    26,241,327       50,034,103  

HSBC Holdings PLC

    31,501,158       193,002,637  

Lloyds Banking Group PLC

    109,142,757       55,308,733  

NatWest Group PLC, NVS

    8,385,527       23,929,487  

Standard Chartered PLC

    3,953,639       27,383,499  
   

 

 

 
      349,658,459  
Beverages — 4.9%            

Coca-Cola HBC AG, Class DI

    315,897       7,208,561  

Diageo PLC

    3,584,566       155,736,437  
   

 

 

 
      162,944,998  
Capital Markets — 3.0%            

3i Group PLC

    1,523,839       21,449,996  

abrdn PLC

    3,304,161       5,615,263  

Hargreaves Lansdown PLC

    560,731       5,308,539  

London Stock Exchange Group PLC

    516,513       48,449,712  

Schroders PLC

    195,039       6,066,909  

St. James’s Place PLC

    848,239       10,857,410  
   

 

 

 
      97,747,829  
Chemicals — 0.7%            

Croda International PLC

    218,708       17,047,182  

Johnson Matthey PLC

    290,966       6,788,472  
   

 

 

 
      23,835,654  
Commercial Services & Supplies — 0.5%            

Rentokil Initial PLC

    2,921,104       17,641,923  
   

 

 

 
Diversified Financial Services — 0.3%            

M&G PLC

    4,036,785       9,161,219  
   

 

 

 
Diversified Telecommunication Services — 0.6%        

BT Group PLC

    10,896,460       19,061,181  
   

 

 

 
Electric Utilities — 1.0%            

SSE PLC

    1,673,315       32,065,266  
   

 

 

 
Electronic Equipment, Instruments & Components — 0.4%  

Halma PLC

    595,002       14,312,747  
   

 

 

 
Equity Real Estate Investment Trusts (REITs) — 1.1%        

British Land Co. PLC (The)

    1,375,500       6,861,283  

Land Securities Group PLC

    1,097,768       8,279,815  

Segro PLC

    1,893,587       20,664,671  
   

 

 

 
      35,805,769  
Food & Staples Retailing — 1.5%        

J Sainsbury PLC

    2,735,546       6,456,869  

Ocado Group PLC(a)

    906,232       7,616,085  

Tesco PLC

    11,831,200       34,171,700  
   

 

 

 
      48,244,654  
Food Products — 0.3%            

Associated British Foods PLC

    558,599       9,865,415  
   

 

 

 
Health Care Equipment & Supplies — 0.5%        

Smith & Nephew PLC

    1,365,687       16,064,220  
   

 

 

 
Health Care Providers & Services — 0.0%            

NMC Health PLC, NVS(b)

    122,262       1  
   

 

 

 
Security   Shares     Value  

 

 
Hotels, Restaurants & Leisure — 3.0%  

Compass Group PLC

    2,795,854     $ 60,141,767  

Entain PLC

    922,012       13,565,219  

InterContinental Hotels Group PLC

    287,373       15,600,378  

Whitbread PLC

    314,446       9,113,702  
   

 

 

 
          98,421,066  
Household Durables — 0.9%            

Barratt Developments PLC

    1,607,092       7,956,370  

Berkeley Group Holdings PLC

    173,809       7,357,869  

Persimmon PLC

    499,669       8,549,888  

Taylor Wimpey PLC

    5,585,255       7,006,895  
   

 

 

 
          30,871,022  
Household Products — 2.6%            

Reckitt Benckiser Group PLC

    1,120,688       86,474,060  
   

 

 

 
Industrial Conglomerates — 0.9%            

DCC PLC

    154,785       8,908,552  

Melrose Industries PLC

    6,862,242       10,828,973  

Smiths Group PLC

    587,724       10,153,422  
   

 

 

 
          29,890,947  
Insurance — 3.3%            

Admiral Group PLC

    281,299       6,919,619  

Aviva PLC

    4,434,076       21,510,780  

Legal & General Group PLC

    9,357,342       27,408,310  

Phoenix Group Holdings PLC

    1,173,237       8,194,573  

Prudential PLC

    4,308,868       45,222,273  
   

 

 

 
          109,255,555  
Interactive Media & Services — 0.3%            

Auto Trader Group PLC(c)

    1,477,329       11,154,836  
   

 

 

 
Machinery — 0.4%            

Spirax-Sarco Engineering PLC

    115,626       14,115,203  
   

 

 

 
Media — 1.2%            

Informa PLC

    2,296,678       14,530,260  

Pearson PLC

    1,050,199       10,510,368  

WPP PLC

    1,711,557       14,741,721  
   

 

 

 
          39,782,349  
Metals & Mining — 7.7%            

Anglo American PLC

    1,991,511       63,996,140  

Antofagasta PLC

    619,660       7,884,486  

Glencore PLC

    15,452,008       84,484,782  

Rio Tinto PLC

    1,762,151       97,288,880  
   

 

 

 
          253,654,288  
Multi-Utilities — 2.2%            

National Grid PLC

    5,715,157       71,164,280  
   

 

 

 
Multiline Retail — 0.4%            

Next PLC

    205,418       13,833,221  
   

 

 

 
Oil, Gas & Consumable Fuels — 14.0%            

BP PLC

    30,281,347       154,735,440  

Shell PLC

    11,657,895       308,561,630  
   

 

 

 
          463,297,070  
Paper & Forest Products — 0.4%            

Mondi PLC

    757,317       12,855,774  
   

 

 

 
Personal Products — 6.2%            

Haleon PLC(a)

    7,960,119       23,936,571  

Unilever PLC

    3,999,448       181,424,247  
   

 

 

 
          205,360,818  

 

 

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

  15


Table of Contents

Schedule of Investments  (continued)

August 31, 2022

  

iShares® MSCI United Kingdom ETF

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  

 

 
Pharmaceuticals — 12.3%            

AstraZeneca PLC

    2,428,407     $     300,375,341  

GSK PLC

    6,374,313       101,893,475  

Hikma Pharmaceuticals PLC

    260,006       3,962,669  
   

 

 

 
      406,231,485  
Professional Services — 4.1%            

Experian PLC

    1,443,131       43,792,485  

Intertek Group PLC

    252,944       11,609,774  

RELX PLC

    3,017,002       79,121,215  
   

 

 

 
      134,523,474  
Software — 0.6%            

AVEVA Group PLC

    187,391       6,076,804  

Sage Group PLC (The)

    1,591,810       13,194,021  
   

 

 

 
      19,270,825  
Specialty Retail — 0.4%            

JD Sports Fashion PLC

    4,066,003       5,318,457  

Kingfisher PLC

    3,182,406       8,548,794  
   

 

 

 
      13,867,251  
Textiles, Apparel & Luxury Goods — 0.4%            

Burberry Group PLC

    625,291       12,648,818  
   

 

 

 
Tobacco — 5.0%            

British American Tobacco PLC

    3,375,778       135,209,198  

Imperial Brands PLC

    1,415,056       31,119,685  
   

 

 

 
      166,328,883  
Trading Companies & Distributors — 2.8%            

Ashtead Group PLC

    693,062       34,048,634  

Bunzl PLC

    529,235       17,551,636  

Ferguson PLC

    336,062       38,918,708  
   

 

 

 
      90,518,978  

Security   Shares     Value  

 

 
Water Utilities — 0.8%            

Severn Trent PLC

    391,424     $ 12,643,613  

United Utilities Group PLC

    1,063,698       13,036,996  
   

 

 

 
      25,680,609  
Wireless Telecommunication Services — 1.7%        

Vodafone Group PLC

    41,870,921       56,058,958  
   

 

 

 

Total Long-Term Investments — 98.7%
(Cost: $4,112,544,533)

      3,257,845,583  
   

 

 

 

Short-Term Securities

   
Money Market Funds — 0.0%            

BlackRock Cash Funds: Treasury,
SL Agency Shares, 2.07%(d)(e)

    120,000       120,000  
   

 

 

 

Total Short-Term Securities — 0.0%
(Cost: $120,000)

      120,000  
   

 

 

 

Total Investments in Securities — 98.7%
(Cost: $4,112,664,533)

 

    3,257,965,583  

Other Assets Less Liabilities — 1.3%

      41,876,432  
   

 

 

 

Net Assets — 100.0%

    $   3,299,842,015  
   

 

 

 

 

(a) 

Non-income producing security.

(b) 

Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy.

(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.

 

Affiliates

Investments in issuers considered to be affiliate(s) of the Fund during the year ended August 31, 2022 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

 

 
Affiliated Issuer    Value at
08/31/21
       Purchases
at Cost
       Proceeds
from Sale
     Net Realized
Gain (Loss)
       Change in
Unrealized
Appreciation
(Depreciation)
       Value at
08/31/22
       Shares
Held at
08/31/22
       Income       

Capital

Gain
Distributions
from
Underlying
Funds

 

 

 

BlackRock Cash Funds: Treasury, SL Agency Shares

   $ 1,420,000        $        $ (1,300,000 )(a)     $        $        $ 120,000          120,000        $ 8,491        $  
               

 

 

      

 

 

      

 

 

           

 

 

      

 

 

 

 

  (a) 

Represents net amount purchased (sold).

 

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

 

 

 
Description    Number of
Contracts
       Expiration
Date
       Notional
Amount
(000)
       Value/
Unrealized
Appreciation
(Depreciation)
 

 

 

Long Contracts

                 

FTSE 100 Index

     493          09/16/22        $ 41,805        $ (104,944
                 

 

 

 

 

 

16  

2 0 2 2   H A R E S  N N U A L  E P O R T   T O  H A R E H O L D E R S 


Table of Contents

Schedule of Investments  (continued)

August 31, 2022

  

iShares® MSCI United Kingdom ETF

 

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:

 

 

 
     Commodity
Contracts
       Credit
Contracts
       Equity
Contracts
       Foreign
Currency
Exchange
Contracts
       Interest
Rate
Contracts
       Other
Contracts
       Total  

 

 

Liabilities — Derivative Financial Instruments

                                

Futures contracts

                                

Unrealized depreciation on futures contracts(a)

   $        $        $ 104,944        $        $        $        $ 104,944  
  

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

Net cumulative unrealized appreciation (depreciation) on futures contracts are reported in the Schedule of Investments. In the Statements of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss).

 

For the period ended August 31, 2022, the effect of derivative financial instruments in the Statements of Operations was as follows:

 

 

 
     Commodity
Contracts
       Credit
Contracts
       Equity
Contracts
       Foreign
Currency
Exchange
Contracts
       Interest
Rate
Contracts
       Other
Contracts
       Total  

 

 

Net Realized Gain (Loss) from

                                

Futures contracts

   $        $        $ 1,153,160        $        $        $        $ 1,153,160  
  

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

Net Change in Unrealized Appreciation (Depreciation) on

                                

Futures contracts

   $        $        $ (196,244      $        $        $        $ (196,244
  

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

 

 

Futures contracts

  

Average notional value of contracts — long

   $ 28,737,361      

 

 

For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.

Fair Value Hierarchy as of Period End

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

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

 

                                                                                                   

 

 
     Level 1        Level 2        Level 3        Total  

 

 

Investments

                 

Assets

                 

Common Stocks

   $ 23,936,571        $ 3,233,909,011        $ 1        $ 3,257,845,583  

Money Market Funds

     120,000                            120,000  
  

 

 

      

 

 

      

 

 

      

 

 

 
   $ 24,056,571        $ 3,233,909,011        $ 1        $ 3,257,965,583  
  

 

 

      

 

 

      

 

 

      

 

 

 

Derivative financial instruments(a)

                 

Liabilities

                 

Futures Contracts

   $        $ (104,944      $          $ (104,944)  
  

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

Derivative financial instruments are futures contracts. Futures contracts are valued at the unrealized appreciation (depreciation) on the instrument.

 

See notes to financial statements.

 

 

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

  17


Table of Contents

Schedule of Investments

August 31, 2022

  

iShares® MSCI United Kingdom Small-Cap ETF

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  

 

 

Common Stocks

   
Aerospace & Defense — 3.3%            

Avon Protection PLC

    3,738     $ 34,979  

Babcock International Group PLC(a)

    31,572       120,414  

Chemring Group PLC

    35,404       128,733  

Meggitt PLC(a)

    97,209       900,937  

QinetiQ Group PLC

    71,937       290,670  

Senior PLC(a)

    51,317       77,738  
   

 

 

 
          1,553,471  
Air Freight & Logistics — 0.8%            

Royal Mail PLC

    94,858       302,658  

Wincanton PLC

    15,667       61,478  
   

 

 

 
      364,136  
Airlines — 0.8%            

easyJet PLC(a)

    37,781       156,976  

JET2 PLC(a)

    19,949       197,556  
   

 

 

 
      354,532  
Auto Components — 0.1%            

TI Fluid Systems PLC(b)

    41,275       69,955  
   

 

 

 
Automobiles — 0.1%            

Aston Martin Lagonda Global Holdings PLC(a)(b)

    8,594       44,368  
   

 

 

 
Banks — 1.5%            

Bank of Georgia Group PLC

    4,625       107,410  

Close Brothers Group PLC

    18,592       219,952  

TBC Bank Group PLC

    5,183       106,814  

Virgin Money UK PLC

    160,863       278,147  
   

 

 

 
      712,323  
Beverages — 1.3%            

AG Barr PLC

    11,775       68,944  

Britvic PLC

    33,247       302,032  

C&C Group PLC(a)

    48,142       96,133  

Fevertree Drinks PLC

    13,045       138,010  
   

 

 

 
      605,119  
Biotechnology — 1.5%            

Abcam PLC(a)

    26,954       397,728  

Avacta Group PLC(a)(c)

    30,907       45,096  

Genus PLC

    8,133       237,715  

Oxford Biomedica PLC(a)

    8,807       46,756  
   

 

 

 
      727,295  
Building Products — 0.6%            

Genuit Group PLC

    30,932       128,919  

Tyman PLC

    24,018       64,174  

Volution Group PLC

    24,787       100,301  
   

 

 

 
      293,394  
Capital Markets — 8.6%            

AJ Bell PLC

    38,365       130,851  

Alpha FX Group PLC

    3,924       82,965  

Ashmore Group PLC

    57,667       135,878  

Brewin Dolphin Holdings PLC

    33,829       201,212  

Bridgepoint Group PLC(b)

    81,748       237,797  

CMC Markets PLC(b)

    15,897       42,383  

IG Group Holdings PLC

    50,915       483,182  

Impax Asset Management Group PLC

    10,546       76,548  

IntegraFin Holdings PLC

    37,026       115,533  

Intermediate Capital Group PLC

    36,016       569,332  

Investec PLC

    86,511       417,276  

IP Group PLC

    127,769       103,901  

JTC PLC(b)

    16,417       145,716  
Security   Shares     Value  

 

 
Capital Markets (continued)            

Jupiter Fund Management PLC

    54,135     $ 61,128  

Liontrust Asset Management PLC

    8,060       85,603  

Man Group PLC/Jersey

    164,300       464,290  

Ninety One PLC

    50,665       116,244  

Numis Corp. PLC(c)

    7,656       21,727  

Polar Capital Holdings PLC(c)

    8,611       45,768  

Quilter PLC(b)

    165,842       202,773  

Rathbones Group PLC

    7,266       152,105  

TP ICAP Group PLC

    98,302       175,308  
   

 

 

 
          4,067,520  
Chemicals — 1.1%            

Elementis PLC(a)

    71,192       91,401  

Essentra PLC

    37,027       85,230  

Synthomer PLC

    46,312       105,738  

Victrex PLC

    10,753       218,118  
   

 

 

 
      500,487  
Commercial Services & Supplies — 3.4%            

Biffa PLC(b)

    37,943       177,371  

Finablr PLC(a)(b)(d)

    61,710       1  

HomeServe PLC

    37,583       517,810  

Johnson Service Group PLC(a)

    55,214       61,695  

Marlowe PLC(a)

    10,263       76,781  

Mitie Group PLC

    177,171       148,795  

Renewi PLC(a)

    9,797       88,210  

Restore PLC

    15,093       76,642  

Serco Group PLC

    149,252       302,728  

Smart Metering Systems PLC

    15,673       165,505  
   

 

 

 
      1,615,538  
Communications Equipment — 0.5%            

Spirent Communications PLC

    75,990       227,305  
   

 

 

 
Construction & Engineering — 1.1%            

Balfour Beatty PLC

    77,732       284,630  

Keller Group PLC

    9,134       74,595  

Kier Group PLC(a)

    54,527       45,354  

Morgan Sindall Group PLC

    5,228       104,376  
   

 

 

 
      508,955  
Construction Materials — 1.1%            

Breedon Group PLC

    189,375       131,119  

Forterra PLC(b)

    27,776       85,228  

Ibstock PLC(b)

    51,171       112,471  

Marshalls PLC

    28,261       109,601  

RHI Magnesita NV

    3,205       67,162  
   

 

 

 
      505,581  
Consumer Finance — 0.1%            

Provident Financial PLC

    29,188       58,491  
   

 

 

 
Containers & Packaging — 1.1%            

DS Smith PLC

    170,374       527,986  
   

 

 

 
Distributors — 0.9%            

Inchcape PLC

    46,745       410,475  
   

 

 

 
Diversified Financial Services — 1.0%            

Burford Capital Ltd.

    22,992       215,081  

Plus500 Ltd.

    12,192       240,256  
   

 

 

 
      455,337  
Diversified Telecommunication Services — 0.5%        

Gamma Communications PLC

    10,208       127,683  

 

 

18  

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Table of Contents

Schedule of Investments  (continued)

August 31, 2022

  

iShares® MSCI United Kingdom Small-Cap ETF

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  

 

 
Diversified Telecommunication Services (continued)  

Helios Towers PLC(a)

    91,010     $     130,424  
   

 

 

 
      258,107  
Electrical Equipment — 0.6%            

Ceres Power Holdings PLC(a)

    15,421       115,828  

ITM Power PLC(a)(c)

    52,953       120,678  

Luceco PLC(b)

    10,424       9,485  

Volex PLC

    14,323       44,509  
   

 

 

 
      290,500  
Electronic Equipment, Instruments & Components — 1.4%  

Renishaw PLC

    4,526       193,591  

Spectris PLC

    13,424       434,042  

Strix Group PLC(c)

    25,539       43,909  
   

 

 

 
      671,542  
Energy Equipment & Services — 0.6%            

Hunting PLC

    17,155       57,495  

John Wood Group PLC(a)

    86,431       129,400  

Petrofac Ltd.(a)

    54,085       74,957  
   

 

 

 
      261,852  
Entertainment — 0.2%            

Cineworld Group PLC(a)(c)

    116,670       4,578  

Frontier Developments PLC(a)(c)

    2,943       49,876  

Team17 Group PLC(a)

    13,551       62,812  
   

 

 

 
      117,266  
Equity Real Estate Investment Trusts (REITs) — 10.8%  

Assura PLC

    367,150       277,877  

Balanced Commercial Property Trust Ltd.

    89,936       111,083  

Big Yellow Group PLC

    21,674       333,867  

Capital & Counties Properties PLC

    90,387       125,611  

Civitas Social Housing PLC

    76,681       63,336  

Custodian Reit PLC

    51,934       61,780  

Derwent London PLC

    12,491       352,392  

Empiric Student Property PLC

    76,002       85,113  

Great Portland Estates PLC

    26,921       155,369  

Hammerson PLC

    451,526       114,068  

Home Reit PLC

    98,649       134,999  

Impact Healthcare Reit PLC

    39,222       52,217  

LondonMetric Property PLC

    115,541       291,535  

LXI REIT PLC

    234,007       400,157  

Picton Property Income Ltd. (The)

    69,150       72,700  

Primary Health Properties PLC

    157,181       249,094  

PRS REIT PLC (The)

    65,278       77,805  

Regional REIT Ltd.(b)

    50,482       40,562  

Safestore Holdings PLC

    26,164       334,943  

Shaftesbury PLC

    23,925       114,410  

Supermarket Income Reit PLC

    153,750       216,120  

Target Healthcare REIT PLC

    77,785       99,941  

Tritax Big Box REIT PLC

    231,851       447,298  

UK Commercial Property REIT Ltd.

    95,289       78,288  

UNITE Group PLC (The)

    42,271       515,371  

Urban Logistics REIT PLC

    58,681       115,889  

Warehouse REIT PLC

    49,383       88,806  

Workspace Group PLC

    17,961       108,735  
   

 

 

 
      5,119,366  
Food & Staples Retailing — 0.7%            

Marks & Spencer Group PLC(a)

    242,918       343,268  
   

 

 

 
Food Products — 1.9%            

Bakkavor Group PLC(b)

    21,268       19,741  

Cranswick PLC

    6,617       236,913  
Security   Shares     Value  

 

 
Food Products (continued)  

Greencore Group PLC(a)

    65,297     $ 64,515  

Hotel Chocolat Group PLC(a)

    7,561       11,946  

Premier Foods PLC

    80,751       100,938  

Tate & Lyle PLC

    49,903       441,902  
   

 

 

 
          875,955  
Health Care Equipment & Supplies — 1.3%            

Advanced Medical Solutions Group PLC

    26,439       92,450  

ConvaTec Group PLC(b)

    202,551       511,024  
   

 

 

 
      603,474  
Health Care Providers & Services — 1.2%            

CVS Group PLC

    8,813       185,684  

Mediclinic International PLC

    50,396       292,847  

Spire Healthcare Group PLC(a)(b)

    34,354       92,555  
   

 

 

 
      571,086  
Health Care Technology — 0.5%            

Craneware PLC

    3,261       59,855  

EMIS Group PLC

    7,092       155,133  
   

 

 

 
      214,988  
Hotels, Restaurants & Leisure — 3.8%            

888 Holdings PLC

    47,488       68,076  

Carnival PLC(a)

    18,108       151,761  

Domino’s Pizza Group PLC

    48,903       134,073  

Greggs PLC

    12,629       269,952  

Gym Group PLC (The)(a)(b)

    19,857       33,310  

J D Wetherspoon PLC(a)

    11,782       65,984  

Marston’s PLC(a)

    77,591       32,774  

Mitchells & Butlers PLC(a)

    32,951       58,931  

On the Beach Group PLC(a)(b)

    20,229       30,029  

Patisserie Holdings PLC, NVS(d)

    6,053        

Playtech PLC(a)

    28,319       147,000  

Rank Group PLC(a)

    25,590       22,385  

Restaurant Group PLC (The)(a)

    94,520       44,866  

SSP Group PLC(a)

    98,179       240,580  

Trainline PLC(a)(b)

    59,367       238,418  

TUI AG(a)(c)

    143,893       220,640  

Young & Co’s Brewery PLC, Series A

    2,699       36,873  
   

 

 

 
      1,795,652  
Household Durables — 2.4%            

Bellway PLC

    15,356       363,083  

Countryside Partnerships PLC(a)(b)

    58,840       164,777  

Crest Nicholson Holdings PLC

    32,238       87,614  

Redrow PLC

    36,959       217,114  

Victoria PLC(a)(c)

    7,965       31,794  

Vistry Group PLC

    27,571       247,266  
   

 

 

 
      1,111,648  
Independent Power and Renewable Electricity Producers — 0.9%  

ContourGlobal PLC(b)

    24,951       74,584  

Drax Group PLC

    49,682       366,482  
   

 

 

 
      441,066  
Insurance — 3.6%            

Beazley PLC

    75,639       510,387  

Direct Line Insurance Group PLC

    163,380       389,131  

Hiscox Ltd.

    43,055       449,053  

Just Group PLC

    129,883       108,457  

Lancashire Holdings Ltd.

    30,335       174,059  

Sabre Insurance Group PLC(b)

    30,590       40,796  

Saga PLC(a)

    13,709       23,873  
   

 

 

 
      1,695,756  

 

 

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

  19


Table of Contents

Schedule of Investments  (continued)

August 31, 2022

  

iShares® MSCI United Kingdom Small-Cap ETF

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  

 

 
Interactive Media & Services — 1.9%            

Moneysupermarket.com Group PLC

    66,814     $ 152,732  

Rightmove PLC

    104,082       731,592  

Trustpilot Group PLC(a)(b)

    27,857       20,623  
   

 

 

 
          904,947  
Internet & Direct Marketing Retail — 1.0%            

AO World PLC(a)(c)

    52,471       27,528  

ASOS PLC(a)(c)

    8,543       68,730  

Auction Technology Group PLC(a)

    11,288       108,185  

boohoo Group PLC(a)

    123,250       59,649  

Deliveroo PLC(a)(b)

    109,786       103,153  

Moonpig Group PLC(a)

    27,210       61,570  

THG PLC(a)

    89,639       57,167  
   

 

 

 
      485,982  
IT Services — 2.7%            

Capita PLC(a)

    207,617       62,383  

Computacenter PLC

    9,943       285,305  

Kainos Group PLC

    9,945       157,353  

Keywords Studios PLC

    9,036       260,424  

NCC Group PLC

    38,006       86,890  

Network International Holdings PLC(a)(b)

    62,372       174,478  

Softcat PLC

    16,066       240,919  
   

 

 

 
      1,267,752  
Leisure Products — 0.7%            

Games Workshop Group PLC

    4,064       334,646  
   

 

 

 
Life Sciences Tools & Services — 0.4%            

Ergomed PLC(a)

    4,877       63,185  

Oxford Nanopore Technologies PLC(a)

    40,971       130,039  
   

 

 

 
      193,224  
Machinery — 3.6%            

Bodycote PLC

    23,779       151,624  

IMI PLC

    32,380       430,663  

Judges Scientific PLC

    651       57,476  

Morgan Advanced Materials PLC

    35,649       109,953  

Rotork PLC

    106,648       305,953  

Vesuvius PLC

    27,150       109,571  

Weir Group PLC (The)

    32,181       541,979  
   

 

 

 
      1,707,219  
Marine — 0.3%            

Clarkson PLC

    3,420       119,533  
   

 

 

 
Media — 2.8%            

Ascential PLC(a)

    54,634       128,692  

Euromoney Institutional Investor PLC

    13,521       227,910  

Future PLC

    14,224       256,713  

ITV PLC

    449,080       334,196  

Next Fifteen Communications Group PLC

    10,259       102,101  

Reach PLC

    36,797       31,590  

S4 Capital PLC(a)

    35,313       54,275  

Tremor International Ltd.(a)(c)

    11,266       43,027  

YouGov PLC

    13,190       153,228  
   

 

 

 
      1,331,732  
Metals & Mining — 1.2%            

Atalaya Mining PLC

    14,148       36,570  

Centamin PLC

    143,860       150,868  

Central Asia Metals PLC

    21,540       57,553  

Ferrexpo PLC

    36,011       61,943  

Greatland Gold PLC(a)

    501,704       46,102  

Hill & Smith Holdings PLC

    9,963       120,362  
Security   Shares     Value  

 

 
Metals & Mining (continued)            

Hochschild Mining PLC

    37,429     $ 28,180  

Pan African Resources PLC

    213,890       45,432  

SolGold PLC(a)(c)

    140,327       32,441  
   

 

 

 
          579,451  
Multi-Utilities — 1.7%            

Centrica PLC(a)

    733,284       643,139  

Telecom Plus PLC

    7,835       177,001  
   

 

 

 
      820,140  
Multiline Retail — 1.1%            

B&M European Value Retail SA

    117,928       505,698  
   

 

 

 
Oil, Gas & Consumable Fuels — 2.8%            

Capricorn Energy PLC(a)

    39,982       107,850  

Diversified Energy Co. PLC

    105,704       162,582  

Energean PLC(a)

    15,422       231,830  

EnQuest PLC(a)

    186,031       64,550  

Genel Energy PLC

    18,716       30,852  

Gulf Keystone Petroleum Ltd

    26,930       75,398  

Harbour Energy PLC

    57,449       316,974  

Pantheon Resources PLC(a)(c)

    89,681       138,819  

Serica Energy PLC

    25,047       108,428  

Tullow Oil PLC(a)

    140,617       78,970  
   

 

 

 
      1,316,253  
Personal Products — 0.1%            

PZ Cussons PLC

    29,240       65,934  
   

 

 

 
Pharmaceuticals — 1.9%            

Alliance Pharma PLC

    63,551       69,988  

Dechra Pharmaceuticals PLC

    13,442       543,634  

Indivior PLC(a)

    87,300       292,516  
   

 

 

 
      906,138  
Professional Services — 1.5%            

Hays PLC

    205,842       279,097  

Pagegroup PLC

    40,660       204,226  

RWS Holdings PLC

    38,703       155,026  

SThree PLC

    15,618       63,755  
   

 

 

 
      702,104  
Real Estate Management & Development — 2.1%            

CLS Holdings PLC(c)

    22,404       48,697  

Grainger PLC

    92,178       287,197  

Helical PLC

    13,508       61,200  

IWG PLC(a)

    94,127       175,446  

Savills PLC

    17,844       195,971  

Sirius Real Estate Ltd

    146,468       138,333  

Watkin Jones PLC

    28,211       62,072  
   

 

 

 
      968,916  
Road & Rail — 1.0%            

Firstgroup PLC

    93,355       124,336  

Go-Ahead Group PLC (The)(a)

    5,123       91,901  

National Express Group PLC(a)

    64,208       130,313  

Redde Northgate PLC

    28,568       113,667  
   

 

 

 
      460,217  
Semiconductors & Semiconductor Equipment — 0.1%        

Alphawave IP Group PLC(a)

    33,799       52,693  
   

 

 

 
Software — 3.4%            

Argo Blockchain PLC(a)

    56,042       27,162  

Avast PLC(b)

    83,779       688,096  

Bytes Technology Group PLC

    26,856       130,098  

 

 

20  

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Table of Contents

Schedule of Investments  (continued)

August 31, 2022

  

iShares® MSCI United Kingdom Small-Cap ETF

(Percentages shown are based on Net Assets)

 

Security   Shares     Value  

 

 
Software (continued)            

Darktrace PLC(a)

    26,226     $ 155,438  

FD Technologies PLC(a)

    2,917       53,948  

GB Group PLC

    29,777       154,137  

Kape Technologies PLC(a)

    20,117       66,604  

Learning Technologies Group PLC

    73,856       97,810  

Micro Focus International PLC

    41,505       249,895  
   

 

 

 
      1,623,188  
Specialty Retail — 2.1%            

Currys PLC

    133,531       98,351  

Dunelm Group PLC

    13,917       111,312  

Frasers Group PLC(a)

    20,890       194,509  

Halfords Group PLC

    26,786       40,493  

Pets at Home Group PLC

    61,852       227,776  

WH Smith PLC(a)

    16,235       269,124  

Wickes Group PLC

    32,564       45,169  
   

 

 

 
      986,734  
Textiles, Apparel & Luxury Goods — 0.7%            

Coats Group PLC

    180,840       126,040  

Dr. Martens PLC

    74,592       203,353  
   

 

 

 
      329,393  
Thrifts & Mortgage Finance — 1.1%            

OSB Group PLC

    55,153       351,640  

Paragon Banking Group PLC

    30,122       187,232  
   

 

 

 
      538,872  
Trading Companies & Distributors — 4.8%            

Diploma PLC

    15,477       450,289  

Grafton Group PLC

    27,894       234,142  

Howden Joinery Group PLC

    71,382       471,968  

RS GROUP PLC

    58,383       734,436  

SIG PLC(a)

    90,271       35,077  

Travis Perkins PLC

    26,055       256,245  

Yellow Cake PLC(a)(b)

    21,707       105,833  
   

 

 

 
          2,287,990  

Security   Shares     Value  

 

 
Water Utilities — 0.8%            

Penno Group PLC

    32,968     $ 356,957  
   

 

 

 
Wireless Telecommunication Services — 0.4%            

Airtel Africa PLC(b)

    116,052       178,165  
   

 

 

 

Total Long-Term Investments — 99.5%
(Cost: $71,154,951)

      46,997,672  
   

 

 

 

Short-Term Securities

   
Money Market Funds — 1.5%            

BlackRock Cash Funds: Institutional, SL Agency Shares, 2.42%(e)(f)(g)

    684,987       685,192  

BlackRock Cash Funds: Treasury, SL Agency Shares, 2.07%(e)(f)

    20,000       20,000  
   

 

 

 

Total Short-Term Securities — 1.5%
(Cost: $704,597)

      705,192  
   

 

 

 

Total Investments in Securities — 101.0%
(Cost: $71,859,548)

      47,702,864  
Liabilities in Excess of Other Assets — (1.0)%         (462,944)  
   

 

 

 
Net Assets — 100.0%         $  47,239,920  
   

 

 

 

 

(a) 

Non-income producing security.

(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) 

All or a portion of this security is on loan.

(d) 

Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy.

(e) 

Affiliate of the Fund.

(f)

Annualized 7-day yield as of period end.

(g) 

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 August 31, 2022 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

                   
Affiliated Issuer   Value at
08/31/21
    Purchases
at Cost
    Proceeds
from Sale
    Net Realized
Gain (Loss)
    Change in
Unrealized
Appreciation
(Depreciation)
    Value at
08/31/22
    Shares
Held at
08/31/22
    Income    

Capital

Gain
Distributions
from
Underlying
Funds

 

BlackRock Cash Funds: Institutional, SL Agency Shares

  $ 2,279,475     $     $ (1,593,514 )(a)    $ (813   $ 44     $ 685,192       684,987     $ 56,564 (b)    $  

BlackRock Cash Funds: Treasury, SL Agency Shares

    50,000             (30,000 )(a)                   20,000       20,000       144        
       

 

 

   

 

 

   

 

 

     

 

 

   

 

 

 
        $ (813   $ 44     $ 705,192       $ 56,708     $  
       

 

 

   

 

 

   

 

 

     

 

 

   

 

 

 

 

  (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

  21


Table of Contents

Schedule of Investments  (continued)

August 31, 2022

  

iShares® MSCI United Kingdom Small-Cap ETF

 

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

 

 

 
Description    Number of
Contracts
       Expiration
Date
       Notional
Amount
(000)
       Value/
Unrealized
Appreciation
(Depreciation)
 

 

 

Long Contracts

                 

FTSE 250 Index

     5          09/16/22        $ 222        $ (12,294
                 

 

 

 

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:

 

 

 
     Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

 

 

Liabilities — Derivative Financial Instruments

                    

Futures contracts

                    

Unrealized depreciation on futures contracts(a)

   $      $      $ 12,294      $      $      $      $ 12,294  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Net cumulative unrealized appreciation (depreciation) on futures contracts are reported in the Schedule of Investments. In the Statements of Assets and Liabilities, only current day’s variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in accumulated earnings (loss).

 

For the period ended August 31, 2022, the effect of derivative financial instruments in the Statements of Operations was as follows:

 

 

 
     Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

 

 

Net Realized Gain (Loss) from

                    

Futures contracts

   $      $      $ (74,252    $      $      $      $ (74,252
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net Change in Unrealized Appreciation (Depreciation) on

                    

Futures contracts

   $      $      $ (46,794    $      $      $      $ (46,794
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

 

 

Futures contracts

  

Average notional value of contracts — long

     $539,413      

 

 

For more information about the Fund’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.

Fair Value Hierarchy as of Period End

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

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

 

 

 
    Level 1        Level 2        Level 3        Total  

 

 

Investments

                

Assets

                

Common Stocks

  $ 12,766,840        $ 34,230,831        $ 1        $ 46,997,672  

Money Market Funds

    705,192                            705,192  
 

 

 

      

 

 

      

 

 

      

 

 

 
  $ 13,472,032        $ 34,230,831        $               1        $ 47,702,864  
 

 

 

      

 

 

      

 

 

      

 

 

 

Derivative financial instruments(a)

                

Liabilities

                

Futures Contracts

  $        $ (12,294      $        $ (12,294
 

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

Derivative financial instruments are futures contracts. Futures contracts are valued at the unrealized appreciation (depreciation) on the instrument.

 

See notes to financial statements.

 

 

22  

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Table of Contents

 

Statements of Assets and Liabilities

August 31, 2022

 

   

iShares

Currency

Hedged

MSCI United
Kingdom

ETF

   

iShares

MSCI United

Kingdom ETF

   

iShares

MSCI United
Kingdom
Small-Cap

ETF

 

 

 

ASSETS

     

Investments, at value — unaffiliated(a)(b)

  $     $ 3,257,845,583     $ 46,997,672  

Investments, at value — affiliated(c)

    16,493,013       120,000       705,192  

Cash

    966       2,279       8,130  

Foreign currency, at value(d)

          7,224,847       71,601  

Foreign currency collateral pledged for futures contracts(e)

          2,565,360       15,102  

Receivables:

     

Investments sold

    262,199       11,344,671       171,353  

Securities lending income — affiliated

                2,015  

Dividends — unaffiliated

          33,246,933       133,382  

Dividends — affiliated

    437       836       51  

Tax reclaims

          101,425       22,664  

Unrealized appreciation on forward foreign currency exchange contracts

    1,096,619              
 

 

 

   

 

 

   

 

 

 

Total assets

    17,853,234       3,312,451,934       48,127,162  
 

 

 

   

 

 

   

 

 

 

LIABILITIES

     

Cash received as collateral for OTC derivatives

    690,000              

Collateral on securities loaned, at value

                686,282  

Payables:

     

Investments purchased

    969,852       10,567,464       174,120  

Variation margin on futures contracts

          532,253       1,173  

Capital shares redeemed

    265,496              

Investment advisory fees

          1,510,202       25,667  

Unrealized depreciation on forward foreign currency exchange contracts

    89,772              
 

 

 

   

 

 

   

 

 

 

Total liabilities

    2,015,120       12,609,919       887,242  
 

 

 

   

 

 

   

 

 

 

NET ASSETS

  $ 15,838,114     $ 3,299,842,015     $ 47,239,920  
 

 

 

   

 

 

   

 

 

 

NET ASSETS CONSIST OF

     

Paid-in capital

  $ 22,161,181     $ 4,680,864,658     $ 84,980,480  

Accumulated loss

    (6,323,067     (1,381,022,643     (37,740,560
 

 

 

   

 

 

   

 

 

 

NET ASSETS

  $ 15,838,114     $ 3,299,842,015     $ 47,239,920  
 

 

 

   

 

 

   

 

 

 

NET ASSET VALUE

     

Shares outstanding

    660,000       114,200,000       1,550,000  
 

 

 

   

 

 

   

 

 

 

Net asset value

  $ 24.00     $ 28.90     $ 30.48  
 

 

 

   

 

 

   

 

 

 

Shares authorized

    Unlimited       Unlimited       Unlimited  
 

 

 

   

 

 

   

 

 

 

Par value

    None       None       None  
 

 

 

   

 

 

   

 

 

 

(a) Investments, at cost — unaffiliated

  $     $ 4,112,544,533     $ 71,154,951  

(b) Securities loaned, at value

  $     $     $ 579,076  

(c)  Investments, at cost — affiliated

  $ 18,551,040     $ 120,000     $ 704,597  

(d) Foreign currency, at cost

  $     $ 7,432,548     $ 72,742  

(e) Foreign currency collateral pledged, at cost

  $     $ 2,735,340     $ 16,261  

See notes to financial statements.

 

 

I N A N C I A L  T A T E M E N T S

  23


Table of Contents

 

Statements of Operations

Year Ended August 31, 2022

 

   

iShares

Currency

Hedged

MSCI United

Kingdom

ETF

   

iShares

MSCI United

Kingdom

ETF

   

iShares

MSCI United

Kingdom
Small-Cap

ETF

 

 

 

INVESTMENT INCOME

     

Dividends — unaffiliated

  $     $ 148,980,863     $ 2,430,926  

Dividends — affiliated

    688,168       8,491       267  

Securities lending income — affiliated — net

                56,441  

Foreign taxes withheld

          (362,104     (53,063
 

 

 

   

 

 

   

 

 

 

Total investment income

    688,168       148,627,250       2,434,571  
 

 

 

   

 

 

   

 

 

 

EXPENSES

     

Investment advisory fees

    94,905       16,873,143       508,497  

Professional fees

    217       217       217  
 

 

 

   

 

 

   

 

 

 

Total expenses

    95,122       16,873,360       508,714  

Less:

     

Investment advisory fees waived

    (95,122            
 

 

 

   

 

 

   

 

 

 

Total expenses after fees waived

          16,873,360       508,714  
 

 

 

   

 

 

   

 

 

 

Net investment income

    688,168       131,753,890       1,925,857  
 

 

 

   

 

 

   

 

 

 

REALIZED AND UNREALIZED GAIN (LOSS)

     

Net realized gain (loss) from:

     

Investments — unaffiliated

          (49,778,617     (4,129,877

Investments — affiliated

    (164,882           (813

In-kind redemptions — unaffiliated(a)

          251,619,889       1,853,126  

In-kind redemptions — affiliated(a)

    173,144              

Futures contracts

          1,153,160       (74,252

Forward foreign currency exchange contracts

    1,833,302              

Foreign currency transactions

          (2,960,266     (31,615
 

 

 

   

 

 

   

 

 

 
    1,841,564       200,034,166       (2,383,431
 

 

 

   

 

 

   

 

 

 

Net change in unrealized appreciation (depreciation) on:

     

Investments — unaffiliated

          (676,150,540     (37,482,994

Investments — affiliated

    (1,995,516           44  

Futures contracts

          (196,244     (46,794

Forward foreign currency exchange contracts

    915,285              

Foreign currency translations

          (1,105,637     (10,705
 

 

 

   

 

 

   

 

 

 
    (1,080,231     (677,452,421     (37,540,449
 

 

 

   

 

 

   

 

 

 

Net realized and unrealized gain (loss)

    761,333       (477,418,255     (39,923,880
 

 

 

   

 

 

   

 

 

 

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

  $ 1,449,501     $ (345,664,365   $ (37,998,023
 

 

 

   

 

 

   

 

 

 

 

(a) See Note 2 of the Notes to Financial Statements.

     

See notes to financial statements.

 

 

24  

2 0 2 2   H A R E S  N N U A L  E P O R T   T O  H A R E H O L D E R S 


Table of Contents

 

Statements of Changes in Net Assets

 

   

iShares

Currency Hedged MSCI United Kingdom

ETF

   

iShares

MSCI United Kingdom ETF

 
 

 

 

   

 

 

 
          Year Ended
08/31/22
    Year Ended
08/31/21
    Year Ended
08/31/22
    Year Ended
08/31/21
 

 

 

INCREASE (DECREASE) IN NET ASSETS

         

OPERATIONS

         

Net investment income

    $ 688,168     $ 243,737     $ 131,753,890     $ 121,383,125  

Net realized gain (loss)

      1,841,564       (1,213,157     200,034,166       37,132,219  

Net change in unrealized appreciation (depreciation)

      (1,080,231     3,026,264       (677,452,421     562,344,983  
   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in net assets resulting from operations

      1,449,501       2,056,844       (345,664,365     720,860,327  
   

 

 

   

 

 

   

 

 

   

 

 

 

DISTRIBUTIONS TO SHAREHOLDERS(a)

         

Decrease in net assets resulting from distributions to shareholders

      (688,249     (243,738     (144,252,025     (95,207,591
   

 

 

   

 

 

   

 

 

   

 

 

 

CAPITAL SHARE TRANSACTIONS

         

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

      6,810,679       (3,967,299     210,576,943       762,464,858  
   

 

 

   

 

 

   

 

 

   

 

 

 

NET ASSETS

         

Total increase (decrease) in net assets

      7,571,931       (2,154,193     (279,339,447     1,388,117,594  

Beginning of year

      8,266,183       10,420,376       3,579,181,462       2,191,063,868  
   

 

 

   

 

 

   

 

 

   

 

 

 

End of year

                 $ 15,838,114     $ 8,266,183     $ 3,299,842,015     $ 3,579,181,462  
   

 

 

   

 

 

   

 

 

   

 

 

 

 

(a)

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

See notes to financial statements.

 

 

I N A N C I A L  T A T E M E N T S

  25


Table of Contents

 

Statements of Changes in Net Assets  (continued)

 

   

iShares

MSCI United Kingdom Small-Cap ETF

 
 

 

 

 
    Year Ended
08/31/22
    Year Ended
08/31/21